Q1 2027 Progressive Planet Solutions Inc Earnings Call

October 6, 2026

Speaker #1: Vous avez rejoint la réunion en tant que participant. Vous serez mis en sourdine pendant toute la durée de la réunion.

Speaker #3: Okay, I will get it going now, Steve.

[Company Representative] (Progressive Planet): OK, I will get it going now, Steve. Good afternoon, everyone, and welcome to Progressive Planet's fiscal Q1 2027 earnings call for the period ended 31 July 2026. The financial statements and MD&A have been filed and can be accessed through the SEDAR website. Today is 6 October. CEO Stephen Harpur will present the company's financial results and provide a business update. This will be followed by a Q&A session. Investors are encouraged to submit their questions via the Q&A box, and we will address them at the end of the session. Please make your questions clear and succinct. I remind everyone that certain statements made today may contain forward-looking statements that are subject to known and unknown risks, uncertainties, and other factors.

Speaker #1: Good afternoon, everyone, and welcome to Progressive Planet's fiscal Q1 2027 earnings call. For the period ended July 31, 2026, the financial statements and MD&A have been filed and can be accessed through the SEDAR website.

Speaker #1: Today is October 6th. CEO Stephen Harper will present the company's financial results and provide a business update. This will be followed by a Q&A session.

Speaker #1: Investors are encouraged to submit their questions via the Q&A box, and we will address them at the end of the session. Please make your questions clear and succinct.

Speaker #1: And a reminder, everyone, that certain statements made today may contain forward-looking statements that are subject to known and unknown risks, uncertainties, and other factors.

Speaker #1: For a complete description of these risks and uncertainties facing the company, please refer to the MD&A and other continuous disclosure filings, which are also available on the SEDAR website.

[Company Representative] (Progressive Planet): For a complete description of these risks and uncertainties facing the company, please refer to the MD&A and other continuous disclosure filings, which are also available on the SEDAR website. Steve, I will pass it over to you now.

Speaker #1: Steve, I'll pass it over to you now.

Speaker #4: Hello, Martin. Thanks for having me.

Stephen Harpur: Hello, Martin. Thanks for having me.

Speaker #1: All right.

[Company Representative] (Progressive Planet): All right.

Speaker #4: So, welcome everybody. Thank you for taking your precious time to listen to me for the next 45 minutes or so. I appreciate your time.

Stephen Harpur: Welcome everybody. Thank you for taking your precious time to listen to me for the next 45 minutes or so. I appreciate your time. I know it's valuable. We are going to talk today about the Q1 results of fiscal 2027. The Q1 ended on 31 July. I am having a little glitch here. Here we go. Our forward-looking statements. I am not going to read this, but I will be talking about future events, so please note same. I want to talk first about the financial position of the company. We are currently experiencing strong momentum. We had record annual revenues for the fiscal year that ended 30 April. We continue with that momentum, so our Q4 was our highest quarter ever until we exceeded that, and significantly exceeded that, with a record Q1.

Speaker #4: I know it's valuable. So, we're going to talk today about the first quarter results of fiscal 2027. The first quarter ended on July 31.

Speaker #4: And I am having a little glitch here. Here we go. Our forward-looking statements: I'm not going to read this, but I will be talking about future events, so please note the same.

Speaker #4: So, I want to talk first about the financial position of the company. We are currently experiencing strong momentum; we had record annual revenues for the fiscal year that ended April 30, and we continue with that momentum.

Speaker #4: So, our Q4 was our highest quarter ever, until we exceeded that—and significantly exceeded that—with a record Q1. We currently have more than $5.6 million available in unused credit facilities, and over $2.5 million in cash as of July 31.

Stephen Harpur: Currently have more than CAD 5.6 million available in unused credit facilities, over CAD 2.5 million in cash as of 31 July. I talked a lot in the last, just a few weeks ago, Martin, when we talked, no further one-time slotting fees budgeted. Also, no further major Canadian capital projects currently anticipated for this current fiscal year. Four major capital projects to be wrapped up by 30 April 2027. Capital projects underway right now, four major capital projects underway. They will all be finished two months before the end of our current fiscal year. The PozGlass phase 2, the major CapEx will be completed by 31 December. We just received yesterday our bagging line for the CanBlast abrasives that are made on the front end of that system, our lightweight cat litter installation that will occur before the end of the calendar year.

Stephen Harpur: Currently have more than CAD 5.6 million available in unused credit facilities, over CAD 2.5 million in cash as of 31 July. I talked a lot in the last, just a few weeks ago, Martin, when we talked, no further one-time slotting fees budgeted. Also, no further major Canadian capital projects currently anticipated for this current fiscal year. Four major capital projects to be wrapped up by 30 April 2027. Capital projects underway right now, four major capital projects underway. They will all be finished two months before the end of our current fiscal year. The PozGlass phase II, the major CapEx will be completed by 31 December. We just received yesterday our bagging line for the CanBlast abrasives that are made on the front end of that system, our lightweight cat litter installation that will occur before the end of the calendar year.

Speaker #4: I talked a lot in the last—just a few weeks ago, Martin—when we talked: no further one-time slotting fees budgeted. Also, no further major Canadian capital projects currently anticipated.

Speaker #4: For this current fiscal year, there are four major capital projects scheduled to be wrapped up by April 30, 2027. The capital projects underway right now include four major capital projects underway.

Speaker #4: They'll all be finished two months before the end of our current fiscal year, so the Pause Glass Phase Two, the major CAPEX, will be completed by December 31.

Speaker #4: We just received yesterday our bagging line for the CAN blast abrasives that are made on the front end of that system, which are lightweight cat litter installation.

Speaker #4: That will occur before the end of the calendar year. Our automated valve pack line is expected to be completed by February 28, and there's $1 million of grant money from Fortis that we will receive once we complete that.

Stephen Harpur: Our automated valve pack line, expected completion by 28 February, and there is CAD 1 million of grant money from Fortis that we will receive once we complete that. Sorry, pardon me, that is the fine grinding line. There is CAD 1 million of Fortis money for it, and the automated valve pack line, again, completed by 28 February 2027. Critical infrastructure. Absorbent Products spent minimally in infrastructure and equipment in the decade before acquisition. The company was for sale for many years before we actually completed the acquisition. The acquisition got delayed by about two years based on COVID. Absorbent Products needed a lot of money to invest in upgrading throughput, and so we have significantly increased the capacity since the acquisition, and these investments are now in place. Current capital program is committed and on track for completion in this fiscal year.

Speaker #4: And then our—sorry, pardon me—that is the fine grinding line. There's $1 million of Fortis money for it. And the automated valve pack line, again, completed by February 28, 2027.

Speaker #4: Critical infrastructure. We've now so absorbent, spent minimally in infrastructure and equipment in the decade before acquisition. The company was for sale for many years before we actually completed the acquisition.

Speaker #4: The acquisition got delayed by about two years because of COVID, and so Absorbent needed a lot of money to invest in upgrading throughput. We've significantly increased the capacity since the acquisition.

Speaker #4: And these investments are now in place. The current capital program is committed and on track for completion in this fiscal year. Any future capital allocation shifts will be directed toward growth and return-driven opportunities. We'll talk later in the presentation about a focus on the U.S. marketplace.

Stephen Harpur: And any future capital allocation shifts will shift to growth and return-driven opportunities. We will talk later in the presentation about a focus on the US marketplace. Commissioning underway now on the PozGlass pilot plant, our CanBlast abrasive line. We have been selling that for about 20 years, our brand, but co-packed by another company. Just received the bagging equipment yesterday. We will have that up and running and be bagging 50-pound bags of sandblasting abrasive media. We will be making our own by the end of October, and we will be commencing the production of PozGlass powder, so the wet grinding in November. We are now working with Amrize, formerly LafargeHolcim, for real-life projects with PozGlass, April, May 2027 in the lower mainland of BC. We want to talk about our research and development and our core business costs.

Stephen Harpur: Any future capital allocation shifts will shift to growth and return-driven opportunities. We will talk later in the presentation about a focus on the US marketplace. Commissioning underway now on the PozGlass pilot plant, our CanBlast abrasive line. We have been selling that for about 20 years, our brand, but co-packed by another company. Just received the bagging equipment yesterday. We will have that up and running and be bagging 50-pound bags of sandblasting abrasive media. We will be making our own by the end of October, and we will be commencing the production of PozGlass powder, so the wet grinding in November. We are now working with Amrize, formerly LafargeHolcim, for real-life projects with PozGlass, April, May 2027 in the lower mainland of BC. We want to talk about our research and development and our core business costs.

Speaker #4: So, commissioning is underway now on the Pause Glass pilot plant. Our CANblast abrasive line— we've been selling that for about 20 years. It's our brand, but it's co-packed by another company.

Speaker #4: Just received the bagging equipment yesterday. We'll have that up and running and be bagging 50-pound bags of sandblasting abrasives media, so we'll be making our own by the end of October.

Speaker #4: And we will be commencing the production of PozGlass powder, so the wet grinding, in November. And we are now working with Amrise, formerly Lafarge Holcim, for real-life projects with PozGlass in April and May 2027 in the Lower Mainland of B.C.

Speaker #4: So I want to talk about our research and development, and our core business costs. You saw elevated spending in the last fiscal year, and again in the first quarter, on the PozGlass pilot.

Stephen Harpur: You saw elevated spending in the last fiscal year and again in Q1 on the PozGlass pilot. I also want to talk about core inflation and how we have addressed it after Q1. We received grant funding, which reimburses 49.86% of the PozGlass pilot plant costs. We report that as grant income separately from our core business. Under IFRS rules, which apply to us as a public company, development costs for a pilot plant can only be capitalized once a number of specific criteria are met, and these are quite stringent. Many of our costs that normally could be capitalized are expensed with this pilot plant. The PozGlass pilot plant costs will scale back at the end of 2026 calendar year, so by 31 December 2026, as we move to operating the plant. I also want to talk about core business inflation.

Speaker #4: And I also want to talk about core inflation and how we've addressed it after Q1. We received grant funding, which reimburses 49.86% of the pause glass pilot plant costs.

Speaker #4: We report that as grant income separately from our core business. Under IFRS rules, which apply to us as a public company, development costs for a pilot plant can only be capitalized once a number of specific criteria are met.

Speaker #4: And these are quite stringent. Many of our costs that normally could be capitalized are expensed with this pilot plant. The PozzGlass pilot plant costs will scale back at the end of the 2026 calendar year, so by December 31, 2026, as we move to operating the plant.

Speaker #4: I also want to talk about core business inflation. We saw a significant increase—specifically, over $400,000—in our freight costs. Now, part of that increase was due to an increase in the amount of goods shipped, but there was a larger increase in freight costs than the growth of the company.

Stephen Harpur: We saw a significant increase, specifically over CAD 400,000 increase in our freight. Part of that increase was an increase in the amount of goods shipped, but there was a larger increase in the amount of freight than the growth of the company. We continue to see some margin compression in the short term, but we did implement a price increase in the current quarter. Some of our customers take up to 90 days to accept the price increase, but we implemented a price increase in August and September. Notification was given to our customers. We will focus now with the automation and the projects that you have seen that I have just discussed. We are also putting a major focus on increasing our revenue per employee with these CapEx investments.

Speaker #4: We continue to see some margin compression in the short term, but we did implement a price increase in the current quarter. Some of our customers take up to 90 days to accept the price increase, but we implemented a price increase in August and September. Notification was given to our customers.

Speaker #4: So, we will focus now on the automation and the projects that you've seen that I've just discussed. We're also putting a major focus on increasing our revenue per employee with these CAPEX investments.

Speaker #4: So, once you install an automated valve packer, you're not going to have the manual labor of manually filling the bags of Red Lake Earth, geothermal grout, etc.

Stephen Harpur: Once you install an automated valve packer, you are not going to have the manual labor of manually filling the bags of Red Lake Earth, geothermal grout, et cetera. Q1, you see the two gold bars here because we celebrated best ever quarter ever in Q4 with CAD 6.51 million, and then we had CAD 7.29 million and change rounded up to CAD 7.3 million for Q1 of fiscal 2027. There is some seasonality in our business. If you look to Q2 for the last two years, you can see those numbers, and you can see that there is some seasonality. But we are very excited about the continued growth of the company. I just do not want everybody to expect that every single quarter will exceed the prior quarter because we do have some seasonality in Q2.

Speaker #4: So Q1, you see the two gold bars here because we celebrated our best-ever quarter in Q4 with $6.51 million, and then we had $7.29 million and change, rounded up to $7.3 million for Q1 of fiscal 2027.

Speaker #4: Now, there is some seasonality. In our business, if you look at Q2 for the last two years, you can see those numbers. And you can see that there is some seasonality.

Speaker #4: But we are very excited about the continued growth of the company. I just don't want everybody to expect that every single quarter will exceed the prior quarter, because we do have some seasonality.

Speaker #4: In Q2, as we wind down, we have very, very prolific sales of Red Lake Earth, and one of the main things it's used for is killing fire ants.

Stephen Harpur: As we wind down, we have very prolific sales of Red Lake Earth, and one of the main things it is used for is killing fire ants. The fire ant season starts to wind down in Q2. So we do see some decline in sales of Red Lake Earth, and that is part. Then, of course, in Q3, we start to see our cat litter ramp up again. So Q2 is typically a weak quarter for us. I just bring that up to create realistic expectations that we will not constantly exceed every quarter from the quarter directly behind it. We do have some seasonality, but we are seeing very strong momentum in all segments of our business. Again, highest annual revenue was 2026. Anybody that takes Q1 and times it by 4 would immediately see that we are trending to do better than that.

Speaker #4: And the fire ant season starts to wind down in Q2, so we do see some decline in sales of Red Lake Earth. That's part of it, and then, of course, in Q3, we start to see our cat litter ramp up again.

Speaker #4: So Q2 is typically a weak quarter for us. So I just bring that up to create realistic expectations that we will not constantly exceed every quarter with the quarter directly behind it.

Speaker #4: We do have some seasonality, but we are seeing very strong momentum in all segments of our business. So again, highest annual revenue was 2026.

Speaker #4: Anybody who takes Q1 and multiplies it by four would immediately see that we're trending to do better than that. But again, I caution that there is some seasonality.

Stephen Harpur: But again, I caution that there is some seasonality, but also that we are seeing an uptick in all levels of our business, in all sectors. I want to talk about the elephant in the room. I often get teased. It is one of my favorite sayings, the elephant in the room. So what is the elephant in the room for us? Well, it is inflation and increased costs. If you look at the image to the left, you will see the three SKUs that we have. We have done roughly CAD 2 million in sales of those three SKUs since November 1st. They have been phenomenal for us. We sell them in 2,434 Tractor Supplies. The 20-pound bags, they are co-packed for us by a family business in Eastern Oregon. Then we bring back bulk bags of that, and we make these two products.

Speaker #4: But also, we are seeing an uptick at all levels of our business, in all sectors. I want to talk about the elephant in the room.

Speaker #4: I often get teased. It's one of my favorite sayings — the elephant in the room. So, what is the elephant in the room for us?

Speaker #4: Well, it's inflation and increased costs. So, if you look at the image to the left, you'll see the three SKUs that we have, and we've done roughly $2 million in sales of those three SKUs since November 1st.

Speaker #4: They've been phenomenal for us. We sell them in 2,434 Tractor Supplies. The 20-pound bags are co-packed for us by a family business in Eastern Oregon.

Speaker #4: And then we bring back bulk bags of that, and we make these two products. You see the image, and I'm also holding them up.

Stephen Harpur: You see the image, and I am also holding them up. Those are made in Canada. Unfortunately, two of those three SKUs that are part of our booming new brand, Pure DE, they do cross the US border twice, once when they come up to us, and secondly, when we bring them back for sale into the US. Our diesel costs, they are soaring. Freight costs rose from CAD 819 for the prior year, Q1, to CAD 1.233 million. I think most people recognize that globalism is in decline. There is strong incentive in the US to make products in the US that are sold in the US. So how are we going to address? So addressing the elephant, long-term solutions. Over 66% of our Q1 revenue came from the USA. Freight costs decline if products sold in the USA are made in the USA.

Speaker #4: Those are made in Canada. And so, unfortunately, two of those three SKUs that are part of our booming new brand, Pure DE, do cross the U.S. border twice.

Speaker #4: Once, when they come up to us, and secondly, when we bring them back for sale into the U.S. Our diesel costs—they're soaring. Freight costs rose.

Speaker #4: From 819 for the prior year, Q1, to 1.233 million. And I think most people recognize that globalism is in decline. There are strong incentives in the US to make products in the US that are sold in the US.

Speaker #4: So, how are we going to address this? Addressing the elephant in the room—long-term solutions. Over 66% of our Q1 revenue came from the USA. Freight costs decline if products sold in the USA are made in the USA.

Speaker #4: So, we are searching for opportunities to process more product in the USA, specifically in the Pacific Northwest, and we are seeking to avoid two border crossings with our new product lines.

Stephen Harpur: So we are searching for opportunities to process more product in the USA, specifically in the Pacific Northwest. We are seeking to avoid two border crossings with our new product lines. Red Lake Earth, Stall Dry, these products, Activated Barn Fresh, they will always be made with our Canadian DE. They are well-established brands that have a different color of diatomaceous earth. The Pure DE is a near white, and the Red Lake Earth, it is not quite red, but it is a sort of salmon-colored material, and people know its color. It is very much part of its identity. So we are also receiving strong inbound inquiries to partner to onshore other industrial mineral-based products with very large third-party companies. We are getting inbound interest from Europe and Asia.

Speaker #4: Red Lake Earth Stall Dry. These products, activated, burnt, fresh, they will always be made with our Canadian DE. They are well-established brands that have a different color of diatomaceous earth.

Speaker #4: The Pure DE is a near-white, and the Red Lake Earth is not quite red, but it's sort of a salmon-colored material, and people know its color.

Speaker #4: It's very much part of its identity. So we are also receiving strong inbound inquiries to partner to onshore other industrial mineral-based products with very, very large third-party companies.

Speaker #4: We're getting inbound interest from Europe and Asia. The European Union and Japan both signed new tariff agreements, which have fundamentally changed the profitability of legacy production of industrial mineral products in both Europe and Asia.

Stephen Harpur: The European Union and Japan both signed new tariff agreements, which have fundamentally changed the profitability of legacy production of industrial mineral products in both Europe and Asia. Our phone is ringing from people wanting to discuss toll processing or partnering on onshoring. As we look to move more production into the US, as you know, we have very strong brand now with the Pure DE being sold in Tractor. We are looking to establish bricks and mortar south of the border, not only to manage our own business, but also to enter into the business of toll processing. Ultimately, we are looking to build a multipurpose processing facility in the Pacific Northwest, similar to what we do in Canada. Share structure. We have just under 111 million shares, just under 6 million options, just under 117 million shares fully diluted.

Speaker #4: And so our phone is ringing from people wanting to discuss toll processing or partnering on onshoring. So as we look to move more production into the US, as you know, we've got a very, very strong brand now with the Pure DE being sold in Tractor.

Speaker #4: We are looking to establish bricks-and-mortar south of the border, not only to manage our own business but also to enter into the business of toll processing.

Speaker #4: So ultimately, we're looking to build a multipurpose processing facility in the Pacific Northwest, similar to what we do in Canada. Share structure: we have just under 111 million shares.

Speaker #4: Just under 6 million options. Just under 117 million shares, fully diluted. I want to talk about awards. These are third parties recognizing us, and the value of these awards is that they gain us credibility with larger companies, which are expressing interest in doing business with us.

Stephen Harpur: I want to talk about awards. These are third parties recognizing us, and a lot of the value of the awards is gaining credibility with larger companies expressing an interest in doing business with us. I think the one that is most near and dear to my heart is the Carbon Capture Canada. We won it September of last year. We beat multiple global players. Petronas, one of the biggest oil companies in the world based in Malaysia, was a finalist for the Carbon Capture Utilization and Storage Technology Award of the Year. BASF, the biggest chemical manufacturer in Europe, was a finalist. We beat them. These awards that we continue to be nominated as finalists, and stay tuned as award season is up and coming for the fall of this year. Investment highlights. We are a profitable, vertically integrated, clean tech manufacturer focused on eco-friendly silicate-based products.

Speaker #4: I think the one that's most near and dear to my heart is the Carbon Capture Canada. We won it in September of last year. We beat multiple global players. Petronas, one of the biggest oil companies in the world, based in Malaysia, was a finalist.

Speaker #4: For the Carbon Capture Utilization and Storage Technology Award of the Year, BASF, the biggest chemical manufacturer in Europe, was a finalist. We beat them.

Speaker #4: So, these awards—and we continue to be nominated as finalists—stay tuned as award season is up and coming for the fall of this year.

Speaker #4: Investment highlights: a profitable, vertically integrated clean tech manufacturer focused on eco-friendly silicate-based products. We have robust cash flow funding our innovation pipeline and a very clean cap table.

Stephen Harpur: We have robust cash flow funding our innovation pipeline, very clean cap table. Patent pending solutions poised to disrupt the cement industry, getting ready to start deploying PozGlass. The investments in upgrading Canadian operations are nearing completion, and we are now moving our long-term focus on growing business in the USA with more production in the USA. That is it, Martin, and I will hand it over to you for any questions.

Speaker #4: Patent-pending solutions poised to disrupt the cement industry are getting ready to start deploying POS glass. The investments in upgrading Canadian operations are nearing completion.

Speaker #4: And we're now moving our long-term focus to growing business in the USA with more production in the USA. And so that's it. Martin, I'll hand it over to you for any questions.

Speaker #1: Thanks, Steve. As a reminder, anyone with questions, please type them into the Q&A box in Zoom and we will read them out. Firstly, would PLAN help the co-packer buy new equipment so that you wouldn't bring the raw material to Camelops?

[Company Representative] (Progressive Planet): Thanks, Steve. As a reminder, anyone with questions, please type them into the Q&A box in Zoom, and we will read them out. Firstly, would PLAN help the co-packer buy new equipment so that you would not bring the raw material to Kamloops?

Speaker #2: We currently have a wonderful relationship with a co-packer, but they have a very small building on site. This is the material that we procure from a third party in Eastern Oregon.

Stephen Harpur: We currently have a wonderful relationship with a co-packer, but they have a very small building on-site. This is the material that we procure from a third party in Eastern Oregon. That production facility is simply too small to grow significantly to enable us to do more at that specific production facility. Would we welcome increased involvement with this wonderful family business? Absolutely. It still needs investment outside of the geographic location of the current production facility.

Speaker #2: That production facility is simply too small to grow significantly, to enable us to do more at that specific production facility. Would we welcome increased involvement with this wonderful family business?

Speaker #2: Absolutely. But it still needs investment outside of the geographic location of the current production facility.

Speaker #1: All right. You are not providing official revenue guidance, but can you give a sense of what level of growth we should expect year over year on a quarterly basis, while quarterly revenue may be seasonal?

[Company Representative] (Progressive Planet): All right. You are not providing official revenue guidance, but can you give a sense of what level of growth should we expect growth year-over-year on a quarterly basis? While quarterly revenue may be seasonal, should we generally expect growth from the prior year?

Speaker #1: Should we generally expect growth from the prior year?

Speaker #2: Yes, I believe that we should expect growth quarter over quarter for the next three quarters of the current fiscal year. If the current trajectory remains consistent, we've introduced a new product line. We only started doing sales in November of the Pure DE.

Stephen Harpur: Yes. I believe that we should expect growth quarter-over-quarter for the next three quarters of the current fiscal year if the current trajectory remains consistent. We've introduced a new product line. We only started doing sales in November of the Pure DE. We're seeing growth in our geothermal grout and we are seeing general increase across all of our business segments.

Speaker #2: We're seeing growth in our geothermal grout, and we are seeing a general increase across all of our business segments.

Speaker #1: Sir, you said you're expecting quarter-over-quarter growth for the next three quarters. Do you mean Q2 will be compared to Q2 versus the prior year?

[Company Representative] (Progressive Planet): You said you're expecting quarter-over-quarter growth for the next three quarters. Do you mean like Q2 will be bigger than Q1?

Stephen Harpur: I mean, Q2 versus the prior year Q2.

Speaker #2: I mean Q2 versus the prior year, Q2.

Speaker #1: Okay.

[Company Representative] (Progressive Planet): Okay.

Stephen Harpur: Q3 versus prior year Q3. I believe we will see. Of course, the only thing that is constant is that there is no constants right now in North America. So there are things that can, if we are all of a sudden tariffed. Currently we are not. I can only comment that in general we are seeing an uptick across our business lines, and I expect to continue to see that uptick.

Speaker #2: Q3 versus prior year, Q3. I believe we will see. Of course, the only thing that is constant is that there's no constants right now in North America.

Speaker #2: So there are things that can, if we are all of a sudden tariffed. Currently we are not, so I can only comment that in general we are seeing an uptick across our business lines, and I expect to continue to see that uptick.

Speaker #1: All right. Is your margin compression entirely due to rising costs, or are you facing pricing pressures as well?

[Company Representative] (Progressive Planet): All right. Your margin compression, is that all due to rising costs or are you facing pricing pressures as well?

Speaker #2: Rising costs. Our customers are not asking us to provide cheaper prices. On the contrary, we're able to get through most of the price increases that we implement.

Stephen Harpur: Rising costs. Customers are not asking us to provide cheaper prices. On the contrary, we are able to get through most of the price increase that we implement. We only do price increases once a year. We just did them, the bulk of them coming in September. But the margin pressure is very much on inflation, and it is not just diesel. Plastic bags cost more. Paper products cost more. Now, the other thing we are doing to mitigate that is looking to grow our revenue per employee with the investments in automation. So in particular, the automated valve pack is one. And continuous improvement is part of our DNA. You saw the margin grow in this company over the last three years.

Speaker #2: We only do price increases once a year. We just did them, with the bulk of them coming in September. But the margin pressure is very much on inflation.

Speaker #2: And it's not just diesel. Plastic bags cost more; paper products cost more. Now, the other thing we are doing to mitigate that is looking to grow our revenue per employee with the investments in automation.

Speaker #2: So, in particular, the automated valve pack is one, and we continue to improve—improvement is part of our DNA. You saw the margin grow in this company over the last three years.

Speaker #2: So, we will continue to focus on continuous improvement, but one of the biggest things for us is a real focus on revenue per employee. The investments that we've made enable us to grow our revenue per employee with automation.

Stephen Harpur: We will continue to focus on continuous improvement, but one of the biggest things for us is a real focus on revenue per employee and the investments that we have made enable us to grow our revenue per employee with automation. We just implemented, in the last year, the new robot that can feed two lines at once, but we have not seen the benefit because the second line for us, our valve pack line, is still manually fed. At the point that the automated valve packer works, our robot can work at full capacity, stacking two lines at once with the bottleneck being currently the manual filling of the valve pack bags in that second line.

Speaker #2: And we just implemented, in the last year, the new robot that can feed two lines at once, but we haven't seen the benefit because our second line, our valve pack line, is still manually fed.

Speaker #2: So, at the point that the automated valve packer works, our robot can operate at full capacity, stacking two lines at once, with the bottleneck currently being the manual filling of the valve pack bags in that second line.

Speaker #1: All right. The CAN blast line is expected to be operational by the end of October. Lightweight cat litter by the end of December, and then the valve pack in February or March, I guess, of next year.

[Company Representative] (Progressive Planet): All right. The CanBlast line is expected operational by the end of October, lightweight cat litter by the end of December, and then the valve pack in March, I guess, of next year. Will those have impact immediately on efficiencies, I presume?

Speaker #1: Year. Will those have impact immediately on efficiencies? I presume how long will they impact the revenue or the revenue potential and how long will that sort of growth potential take to be to show on the financials?

Stephen Harpur: Yes.

[Company Representative] (Progressive Planet): Will they impact the revenue or the revenue potential, and how long will that sort of growth potential take to show on the financials?

Speaker #2: So there are two things you need to grow. First of all, you need to have new sales. And secondly, you have to be able to produce the product and not grow your backlog.

Stephen Harpur: There are two things you need to grow. First of all, you need to have the new sales, and secondly, you have to be able to produce the product and not grow your backlog. If you grow your sales but you just grow your backlog as you grow your sales and do not increase your production, then you do not increase your revenue. We changed, two years ago, the compensation structure of our sales team, and that has now worked out very well. When you introduce a new product, it is typically nine to 12 months before that goes into a company, sometimes six months, but it is certainly not instant. The other thing is that the fourth capital project, the air swept mill, the fine grinding, that will increase our throughput by a factor of 10.

Speaker #2: If you grow your sales, but you just grow your backlog, as you grow your sales and don't increase your production, then you don't increase your revenue.

Speaker #2: So, we changed the compensation structure of our sales team two years ago, and that has now worked out very well. When you introduce a new product, it's typically nine to twelve months before that goes into a company.

Speaker #2: Sometimes six months, but it's certainly not instant. The other thing is that the fourth capital project, the Air-Swept Mill—the fine grinding—that will increase our throughput by a factor of 10.

Speaker #2: So currently, we produce a bunch of chipped products—small little chips of DE or of bentonite clay—and then we have byproduct powder.

Stephen Harpur: Currently, we produce a bunch of chipped product, so small little chips of DE or of bentonite clay, and then we have by-product powder. That by-product powder has to be ground smaller to have finished powder products. We have, for the last 30 years, not been able to make fine powder as fast as we generate coarse powder. We are subjected to going through a secondary step where we wet that powder, extrude it under pressure, press it back into rocks, goes back to the dryer, crushed and screened again, and that is a significant cost for us. With the introduction of the new air swept mill or the fine grinding line, and this is the one where we have CAD 1 million coming back from FortisBC when it is complete, and its target date is 28 February.

Speaker #2: That byproduct powder has to be ground smaller to produce finished powder products. For the last 30 years, we have not been able to make fine powder as quickly as we generate coarse powder.

Speaker #2: So then we're subjected to going through a secondary step where we wet that powder extruded under pressure, press it back into rocks, it goes back to the dryer, and then it's crushed and screened again.

Speaker #2: And that's a significant cost for us. With the introduction of the new air-swept mill, or the fine grinding line—and this is the one where we've got $1 million coming back from Fortis BC when it's complete, and its target date is February 28th—we will now be able to produce fine powder products as fast as we generate the coarse powder.

Stephen Harpur: We will now be able to produce fine powder products as fast as we generate the coarse powder. We can keep up because we have increased the throughput of that mill by a factor of 10. All of the powders are produced on the valve pack line, and the valve pack line currently is manually, someone literally picks up a bag and puts it on a spout. When it fills, they take it back, and then they put it onto a line where it goes over to the robot. There are two things holding up all of the products going through the valve pack. First of all, we could not make fine powder fast enough. That is now changed as of 28 February when we finish the fine grinding line.

Speaker #2: So we can keep up because we've increased the throughput of that mill by a factor of 10. So, all of the powders are produced on the valve pack line.

Speaker #2: And the valve pack line currently is manual. Someone literally picks up a bag and puts it on a spout. When it fills, they take it back and then put it onto a line, where it goes over to the robot.

Speaker #2: So, there are two things holding up all of the products going through the valve pack. First of all, we couldn't make fine powder fast enough.

Speaker #2: That has now changed. As of February 28th, when we finish the fine grinding line, we will be able to bag it significantly faster because it’s no longer manually done—a human putting an empty 40-pound bag in place, then taking a 40-pound bag off, and then placing it in line to go to the robot.

Stephen Harpur: Secondly, we will be able to bag it significantly faster because it is no longer manually a human putting an empty bag and then taking a 40 pound off and then placing it in line to go to the robot. That is all done automatically. The answer to your question is a qualified yes. We still have to go out and get more sales, but we have the ability to produce. As you are aware, our business is on an uptick. We are growing, so qualified yes.

Speaker #2: That's all done automatically. So the answer to your question is a qualified yes. We still have to go out and get more sales, but we have the ability to produce. And as you're aware, our business is on an uptick.

Speaker #2: We are growing, so qualified, yes.

Speaker #1: Okay, so your salespeople are incentivized to generate new sales to coincide with the ramp-up of production.

[Company Representative] (Progressive Planet): Okay, your salespeople are incentivized to generate the new sales to coincide with the ramp-up of production.

Speaker #2: Correct.

Stephen Harpur: Correct.

Speaker #1: And, okay, with the potential U.S. expansion, could this be achieved through an acquisition, or would this likely be done through a brownfield or greenfield investment?

[Company Representative] (Progressive Planet): With the potential US expansion, could this be achieved through an acquisition, or would this likely be done through a brownfield or greenfield investment?

Speaker #2: All of the above. We're evaluating multiple opportunities and we are considering all options. Obviously, I've been talking about this for maybe nine months now.

Stephen Harpur: All of the above. We are evaluating multiple opportunities. We are considering all opportunities, and obviously I have been talking about this for maybe nine months now, so this is not a new topic. Stay tuned as we progress with this initiative to produce more in the States, but all of the above are options for us.

Speaker #2: So this is not a new topic. Stay tuned as we progress with this initiative to produce more in the States. All of the above are options for us.

[Company Representative] (Progressive Planet): Margin hit in Q2 amounted to about 400 basis points. Due to all the factors you have discussed, do you see it stabilizing at this level? Could it improve, or could we see some additional weakness?

Speaker #1: Margin hit in Q2 amounted to about 400 basis points. Due to all the factors you've discussed, do you see it stabilizing at this level?

Speaker #1: Could it improve, or could we see some additional weakness?

Speaker #2: What I don't know is what the price of diesel is going to be. We see anecdotal evidence that crude oil is moving through the Strait of Hormuz at even higher than pre-war levels.

Stephen Harpur: What I do not know is what the price of diesel is going to be. We see anecdotal evidence that crude oil is moving through the Strait of Hormuz at even higher than pre-war levels. But diesel production has seen, we have seen destruction of processing capacity in Russia as well as in the Middle East. US and European and Asian diesel production is running at greater than 100% of nameplate. You cannot do that forever without damaging your facilities. We run industrial processing. We know a little bit about running at excess capacity. I cannot predict the price of diesel. So, I do see continued inflation right now, because it is not just the production of diesel, it is also the production of plastic, which is again, a petroleum product, and the price of plastic is increasing.

Speaker #2: But diesel production has seen—we've seen destruction of processing capacity in Russia as well as in the Middle East. And U.S., European, and Asian diesel production is running at greater than 100% of nameplate.

Speaker #2: You cannot do that forever without damaging your facilities. We run industrial processing. We know a little bit about running at excess capacity. I cannot predict the price of diesel.

Speaker #2: So, I do see continued inflation right now, because it's not just the production of diesel; it's also the production of plastic, which is, again, a petroleum product.

Speaker #2: And the price of plastic is increasing. I do envision that we will have continued inflation for the next 6 to 12 months. Even if everything ends tomorrow, there's a whole bunch of capacity that needs to be rebuilt.

Stephen Harpur: I do envision that we will have continued inflation for the next 6 to 12 months. Even if everything ends tomorrow, there's a whole bunch of capacity that needs to be rebuilt. I do see increased inflation for manufacturers as a whole. We have put through price increases, and we are investing and are nearly complete in the automation efforts. But I do not see margins rising significantly. With respect to what the other side is, it's a little bit of a crystal ball. I will say that the majority of our costs are our own products, and we own our own minerals. So we don't see inflation on the raw materials that represent the bulk of our products, which we own, which are our DE, our bentonite clay, our zeolite quarries. We own those.

Speaker #2: So, I do see increased inflation for manufacturers as a whole. We have put through price increases, and we are investing and are nearly complete in the automation efforts.

Speaker #2: But I do not see margins rising significantly. With respect to what the other side is, it's a little bit of a crystal ball. I will say that the majority of our costs are our own products, and we own our own minerals.

Speaker #2: So, we don't see inflation on the raw materials that represent the bulk of our products, which we own—our DE, our bentonite clay, our zeolite quarries.

Speaker #2: We own those. For people that buy those commodities from others, they are subject to more risks than us. So we do have some protection, but the price of chemicals—and we buy two chemicals—we buy food-grade citric acid and we buy soda ash.

Stephen Harpur: For people that buy those commodities from others, they are subject to more risks than us. So we do have some protection. But the price of chemicals, we buy two chemicals. We buy food-grade citric acid, and we buy soda ash, as well as the price of plastic and paper packaging and the price of freight. I don't see any relief in those in the very near term.

Speaker #2: As well as the price of plastic and paper packaging, and the price of freight, I don't see any relief in those in the very near term.

Speaker #1: Are you running 24/7 at the facility?

[Company Representative] (Progressive Planet): Are you running 24/7 at the facility?

Speaker #2: For the last couple of weeks, we're back to 24/5, and we move to 24/7 when needed.

Stephen Harpur: For the last couple of weeks, we're back to 24/5, and we move to 24/7 when needed.

Speaker #1: All right.

[Company Representative] (Progressive Planet): All right.

Speaker #2: We did have a significant backlog that we were able to work through, and our backlog is now more manageable. We have flexibility as we go through large seasonal demand.

Stephen Harpur: We did have a significant backlog that we were able to work through, and our backlog is more manageable. We have flexibility as we go through large seasonal demand. We can switch back and forth readily between 24/5 and 24/7, and we are doing that. We do not run 24/7 when we do not need to, but it is very easy for us to switch back and forth.

Speaker #2: We can switch back and forth readily between 24/5 and 24/7, and we are doing that. We don't run 24/7 when we don't need to, but it's very easy for us to switch back and forth.

Speaker #1: How does heat recovery return to the dryer?

[Company Representative] (Progressive Planet): How does heat recovery return to the dryer?

Stephen Harpur: That is very specific. We do not do that. We have some grant money from Fortis to implement that project. We are still deciding whether we are going to proceed, but we do not have any heat recovery in our core business right now.

Speaker #2: That's a very specific thing—we do not do that. We have some grant money from Fortis to implement that project. We are still deciding whether we're going to proceed.

Speaker #2: But we do not have any heat recovery in our core business right now.

Speaker #1: The Calgary R&D facility—how is that progressing as a revenue-generating operation? And can you give us a general update on that facility?

[Company Representative] (Progressive Planet): The Calgary R&D facility, how is that progressing as a revenue-generating operation, and can you give us a general update on that facility?

Speaker #2: So the core function of that facility is to work on commercializing our second cement, which is Planet LCD. We've done significant work on improving that recipe.

Stephen Harpur: The core function of that facility is to work on commercializing our second cement, which is Planet LCD. We have done significant work on improving that recipe. We have now successfully replaced 50% of Portland with Planet LCD and exceeded the compressive strength well over 100% at 28 days. As well, in my opinion, we have perfected a plasticizer to work with that. We are starting to evaluate a location for a pilot plant in Alberta for progressing Planet LCD. There is some revenue. I am not going to get into the specifics. I never comment on the individual lines for competitive reasons. We just do not do that. We share our margins as a whole, but we do not talk about what we do for any line of the business, and I am not going to start that now.

Speaker #2: We have now successfully replaced 50% of Portland with Planet LCD and exceeded the compressive strength—well over 100% at 28 days. As well as, in my opinion, we've perfected a plasticizer to work with that.

Speaker #2: So, we are starting to evaluate a location for a pilot plant in Alberta for progressing Planet LCD. There is some revenue; I'm not going to get into the specifics.

Speaker #2: I never comment on the individual lines. For competitive reasons, we just don't do that. We share our margins as a whole, but we don't talk about what we do for any line of the business.

Speaker #2: And I'm not going to start that now.

Speaker #1: For the Paws Glass pilot plant, what specific regulatory or occupancy permits remain outstanding for phase one?

[Company Representative] (Progressive Planet): For the PozGlass pilot plant, what specific regulatory or occupancy permits remain outstanding for phase I?

Speaker #2: We're still waiting on an occupancy permit. I will get an update. I just got back to the office today. As soon as I finish this call, I'm sitting down with the process engineer for Paws Glass.

Stephen Harpur: We are still waiting on an occupancy permit. I will get an update. I just got back to the office today. As soon as I finish this call, I am sitting down with the process engineer for PozGlass. We do not have it today, but I believe it is imminent, and as soon as we have it, we will put out a release announcing that. But we are working with the Tk'emlúps te Secwépemc, who are our landlords. We are on their First Nations land here. But I believe it is imminent, but I do not have an exact date.

Speaker #2: We do not have it today, but I believe it's imminent, and as soon as we have it, we'll put out a release announcing that.

Speaker #2: But we are working with the Tacoma Shwepney, who are our landlords. We're on their First Nations land here. But I believe it's imminent, but I don't have an exact date.

Speaker #1: When do you anticipate Amarise or Lafarge could begin taking initial volumes of Paws Glass?

[Company Representative] (Progressive Planet): When do you anticipate Amrize or Lafarge could begin taking initial volumes of PozGlass?

Speaker #2: So, we've got a very well-planned deployment. I'm not prepared to release powder to them until we've done about a dozen compression tests on different batches to ensure the quality is there day after day.

Stephen Harpur: We've got a very well-planned deployment. I am not prepared to release powder to them until we've done about a dozen compression tests on different batches to ensure the quality is there day after day. I envision starting to give them five-gallon buckets of material in January, then February, perhaps a little larger. But we are looking realistically at major pours in the Lower Mainland of ready-mix concrete utilizing PozGlass in April and May of 2027.

Speaker #2: And so I envision starting to give them five-gallon buckets of material in January, and then in February, perhaps a little larger. But we are looking, realistically, at major pours in the Lower Mainland of ready-mix concrete utilizing Paws Glass in April and May of 2027.

[Company Representative] (Progressive Planet): Recently, you announced Dave Barnett joined your board. He's got an impressive resume. Can you describe in which ways his skills most benefit Plan, and your plans for growth?

Speaker #1: Recently you announced Dave Barnett joined your board. He's got an impressive resume. Can you describe in which ways his skills most benefit the way his skills most benefit plan and your plans for growth?

Speaker #2: For sure. Our CFO has a similar level of education, a Chartered Business Valuator and a CPA, Chris Halsey brand. And then Dave's got a Chartered Financial Analyst.

Stephen Harpur: For sure. Our CFO has a similar level of education, a Chartered Business Valuator, and a CPA, Chris Halsey-Brandt, and then Dave's got a Chartered Financial Analyst. Chris had a little medical issue, and we expect him back in two to three weeks now. He's recovering nicely. But that whole incident forced me to look at redundancy in those skill sets. Dave was a pesky shareholder, and I say that tongue in cheek, he's probably listening and laughing. I've got to know him very well. He does an exceptional amount of due diligence before he invests, and he's got a very meaningful share position. So he started coming to our plant on multiple occasions, asking questions. Immediately prior to becoming the CEO of ZTEST, and that's a pub co that I'm a director of, so I also got to get to know Dave through ZTEST.

Speaker #2: Chris had a little medical issue, and we expect him back in two to three weeks now. He's recovering nicely. But that whole incident forced me to look at redundancy in those skill sets.

Speaker #2: And Dave was a pesky shareholder—and I say that tongue-in-cheek. He's probably listening and laughing. I've gotten to know him very well. He does an exceptional amount of due diligence before he invests.

Speaker #2: And he's got a very meaningful share position. So he started coming to our plant on multiple occasions, asking questions, immediately prior to becoming the CEO of Z-Test— that's a public company that I'm a director of. So I also got to get to know Dave through Z-Test.

Speaker #2: Dave worked in the insurance industry, and he would go on site to various large businesses and assess risk for underwriters of large insurance premiums—premiums that could exceed $20 million in cases of big businesses.

Stephen Harpur: Dave worked in the insurance industry, and he would go on site to various large businesses and assess risk for underwriters of large insurance premiums that could exceed CAD 20 million in cases of big businesses. Dave would assess business risk, generate a written report for the insurers, and actually bring them on site many times for site visits. He had an exceptional understanding of business operations. Probably the most respected designation in financial circles is Chartered Financial Analyst. You simply cannot fluff your way through. These exams are incredibly difficult. I believe, Martin, you're a CFA, so you could probably speak to that. He's got the CFA designation, had the experience, and was also a major shareholder. Dave also has been an exceptional microcap investor.

Speaker #2: So Dave would assess business risk, generate a written report for the insurers, and actually bring them on-site many times for site visits. So, he had an exceptional understanding of business operations.

Speaker #2: Probably the most respected designation in financial circles is Chartered Financial Analyst. You simply cannot fluff your way through these exams—they are incredibly difficult. I believe, Martin, you're a CFA.

Speaker #2: So you could probably speak to that. He’s got the CFA designation, has the experience, and is also a major shareholder. Dave has also been an exceptional microcap investor.

Speaker #2: He shared with me his 10-year returns, and I'm not going to talk about the actual numbers, but he's an exceptionally astute long-term investor.

Stephen Harpur: He shared with me his 10-year returns, and I'm not going to talk about the actual numbers, but he's an exceptionally astute long-term investor. For capital allocation, we now have a business that's running well, that's generating significant margins. We've made major investments in CapEx to increase our revenue per employee to allow us to grow. The most difficult decisions that we will make and that will build shareholder value going forward is how we allocate capital. Looking for the right acquisitions and having another bright financial mind other than Kyle Dickson, CPA, and Chris Halsey-Brandt, CPA, Chartered Business Valuator, we've now got Dave Barnett, CFA, as well. Just adding to that internal financial expertise at a time where capital allocation is going to be how well we allocate capital will dictate how well we perform as a company long term.

Speaker #2: And so, for capital allocation, we now have a business that's running well. It's generating significant margins. We've made major investments in capex to increase our revenue per employee, to allow us to grow.

Speaker #2: The most difficult decisions that we will make, and that will build shareholder value going forward, are how we allocate capital. And so, looking for the right acquisitions and having another bright financial mind, other than Kyle Dixon, CPA, and Chris Halsey Brand, CPA, Chartered Business Valuator, we've now got Dave Barnett, CFA, as well.

Speaker #2: So, just adding to that internal financial expertise at a time when capital allocation is going to be--how well we allocate capital will dictate how well we perform as a company long-term.

Speaker #2: That was a long-winded answer.

Stephen Harpur: That was a long-winded answer.

Speaker #1: That was a good one. That was a good one. You recently, there's a $4 million BDC pivot to grow loan facility. How will this cover all your CapEx needs and spending needs for the next 24 months, with the interest-only feature on the loan, without additional equity dilution required?

[Company Representative] (Progressive Planet): That's a good one. You recently, there's a CAD 4 million BDC Pivot to Grow loan facility. Will this cover all your CapEx needs and spending needs for the next 24-month interest-only feature on the loan without additional equity dilution required? What are the general expected uses of this CAD 4 million facility?

Speaker #1: And what are the general expected uses of this $4 million facility?

Speaker #2: So we're expecting about 2.8 of that to be advanced for projects we've already deployed capital. And then there's 1.2 for new. So 2.8 will recharge the treasury with cash.

Stephen Harpur: We are expecting about CAD 2.8 of that to be advanced for projects we have already deployed capital, and then there is CAD 1.2 for new. CAD 2.8 will recharge the treasury with cash. When the government looks to support Canadian manufacturers, and they offer you money at 4.55% with 12 years to repay the principal and interest only for 24 months, those rates are just unheard of. I received an email. I went to an investment conference, and I received an email from a CFA yesterday offering to lend money debt at between 10% and 15%. When we are offered money with those types of coupon rates, we take it, and we take it gratefully, and it is there for a reason, and that is to support Canadian manufacturing. With respect to use of proceeds, CAD 2.8 will be advanced in the next two weeks and will go direct to our bank account.

Speaker #2: When the government looks to support Canadian manufacturers, and they offer you money at 4.55%, with 12 years to repay the principal and interest-only for 24 months, those rates are just unheard of.

Speaker #2: I received an email. I went to an investment conference, and I received an email from a CFA yesterday offering to lend money—debt at between 10 and 15 percent.

Speaker #2: So when we're offered money with those types of coupon rates, we take it—and we take it gratefully. And it's there for a reason, and that's to support Canadian manufacturing.

Speaker #2: So, with respect to use of proceeds, $2.8 million will be advanced in the next two weeks and will go directly to our bank account. We'll put it in short-term treasuries.

Stephen Harpur: With respect to use of proceeds, CAD 2.8 will be advanced in the next two weeks and will go direct to our bank account.

Stephen Harpur: We will put it in short-term treasuries. Then there is CAD 1.2 available for new projects. We have other unused facilities as well, operating lines, et cetera. We do not currently need to go to the market for a placement. If we find a significant acquisition opportunity and we are focused stateside, then at that point we would consider, but at this point in time, we have no need for conducting a private placement.

Speaker #2: And then there's $1.2 million available for new projects. We have other unused facilities as well, operating lines, etc. We do not currently need to go to the market for a placement.

Speaker #2: If we find a significant acquisition opportunity and we're focused stateside, then at that point we would consider it. But at this point in time, we have no need for conducting a private placement.

Speaker #1: All right, Steve. That wraps up the question session. Any final comments or words before we wrap the presentation up?

[Company Representative] (Progressive Planet): All right, Steve. That wraps up the question session. Any final comments or words before we wrap the presentation up?

Speaker #2: We are a company, and I challenge anyone who is an investor or considering becoming an investor: look at any 36-month period and see what we've accomplished.

Stephen Harpur: We are a company that I challenge anyone that is an investor or considering to be investor, look at any 36-month period and see what we have accomplished. I welcome doing a Teams call to present our case as a long-term investment. Stay tuned. We are busy. We have our eyes on expanding. I know that we need to create a new location to manufacture outside of Kamloops to grow this into a CAD 100 million company in revenue. We cannot do that just staying in Kamloops. I still feel very healthy and young at heart, and I have no plans to retire, and I am looking at working for another 13 years or so and eventually calling it quits at 70. So very focused on the next round of growth. We have made all the investments that we need to make in the short and intermediate term in Canada.

Speaker #2: I welcome doing a Teams call to present our case as a long-term investment. Stay tuned—we're busy. We have our eyes on expanding. I know that we need to create a new location to manufacture outside of Kamloops to grow this into a $100 million company in revenue.

Speaker #2: We can't do that just staying in Kamloops. So I still feel very healthy and young at heart, and I have no plans to retire. I'm looking at working for another thirteen years or so.

Speaker #2: And eventually calling it quits at seventy. And so, very, very focused on the next round of growth. We've made all the investments that we need to make in the short and intermediate term in Canada, and now we're looking for growth opportunities.

Stephen Harpur: Now we are looking for growth opportunities. You saw that 66% of our revenue is stateside, and we are looking to reduce our cost by finding opportunities to produce more in the States and, of course, to sell more in the US.

Speaker #2: You saw that 66% of our revenue is stateside, and we're looking to reduce our costs by finding opportunities to produce more in the States and, of course, to sell more in the U.S.

[Company Representative] (Progressive Planet): Stephen, thank you very much. This concludes the Q1 conference call. We will now end it. Thank you.

Stephen Harpur: Thank you.

[Company Representative] (Progressive Planet): Au revoir.

[Company Representative] (Progressive Planet): [Foreign language].