Good afternoon, and thank you for joining us for Replenish Nutrients conference call to discuss its financial results for the second quarter ended June 30th, 2026. Before we begin, I want to let everyone know that today's call is being recorded and participants are currently in listen-only mode. If you have a question, please enter it into the Q&A box at the bottom of your screen at any point during the presentation. We will address questions after management's prepared remarks. Joining us today are Replenish Nutrients CEO, Neil Wiens, CFO Matthew Greenberg, and Chairman Tim Close. Before I turn the call over to management, I would like to remind everyone that certain statements made during today's call may be forward-looking in nature. These statements include comments regarding the company's expected production ramp, facility commissioning, licensing agreements, future capacity margins, market opportunities, and outlook.
Forward-looking statements are subject to known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied. For additional information regarding forward-looking statements and the risks facing the company, please refer to Replenish Nutrients financial statements and MD&A for the quarter ended June 30th, 2026, available on SEDAR+. Unless otherwise stated, all dollar amounts discussed today are in Canadian dollars. With that, I will turn the call over to Replenish Nutrients CEO, Neil Wiens.
Thanks, Sean, and thanks to everyone joining us today. This is Replenish's first quarterly earnings call. So before Matt gets into the numbers, I want to spend a few minutes giving some background on who we are, what we have built, and why we believe we are reaching an important point in the company's development. I co-founded Replenish roughly eight years ago. The basic idea behind the company came from something I had seen repeatedly throughout my career in ag. We had become very good at supplying crops with the traditional nitrogen, phosphorus, and potassium needed to maximize yield, but we had paid far less attention to the biological health of the soil itself. Our view was that there had to be a better way to deliver the nutrients a crop needs, while also supporting the biological systems responsible for making those nutrients available to the plant.
That became the foundation for Replenish. Today, we manufacture regenerative fertilizer products that combine mineral nutrients, organic matter, and biological material through proprietary and patented manufacturing processes. I always like to make the distinction that we are not an organic fertilizer company serving a small niche of the market. The overwhelming majority of our products are sold into conventional commercial agriculture. Our customers are the same farmers buying fertilizer every year to grow wheat, canola, corn, soybeans, potatoes, and other major crops across the globe. Our goal is to give the farmer a better nutrient solution. I think it would be helpful for everybody on this call to understand why the company's historical financial statements look the way they do, including Q2. For most of the past eight years, we were not worried about making a quick buck or just the next quarter. We had a longer-term view.
We were creating a product, building the channels, and proving that we had a better, more sustainable model for farms and crops to succeed versus the heavy reliance on synthetic water-soluble fertilizers being used globally. First, we had to prove that the products worked agronomically. Then we had to establish the raw material supply chain. Fertilizer is a physical business. We needed reliable sources of rock phosphate, elemental sulfur, potash, compost, and the other inputs that go into our formulations. We had to refine the manufacturing process and protect the parts of that process that we believe are proprietary, and probably most importantly, we had to establish distribution. Agriculture is a very much relationship business, folks. It really is that. You do not develop a new fertilizer product one year and expect growers to put it across thousands of acres the next.
Farmers need to see it work, agronomists need to understand it, and the dealers need confidence that they can recommend it to their customers. Those relationships take years to build. Our legacy blended fertilizer business played an important role in that process. It allowed us to develop the right formulations, establish customers, build our supply chain, and get significant quantities of product into the field. But blended fertilizer is a relatively low margin and difficult to scale efficiently. The next step was turning those same formulations into a consistent granulated or pelletized product that could move through the same infrastructure farmers already use for conventional fertilizer. That is where the business is today. We are transitioning from proving the product and building the foundation of the business to scaling production and commercializing what we have built.
Going forward, the key question for us is not simply how much fertilizer we can produce, it is whether we have the demand and distribution in place to absorb that production at scale, and that is where we are increasingly encouraged. Over the past several years, we have spent a significant amount of time building those relationships with independent dealers, distributors, cooperatives, and growers. Those relationships are difficult to establish in agriculture, but once a product has been proven in the field and a dealer is comfortable recommending it, they can become very durable. We are now starting to see that work translated into stronger commercial demand. Granulated sales have increased materially. Distributors are taking more product, and we are seeing repeat business from growers who have already used Replenish products time and time again. Importantly, not trying to create an entirely new buying category.
Farmers already need potassium, sulfur, phosphorus, and other nutrients every year. Our job is to provide those nutrients in a form that perform well agronomically while also supporting long-term soil health. The Farmers Union relationship is a good example of how we think about the opportunity. It gives us access to an established ag network representing more than 70 million acres in their membership, along with the distribution infrastructure and farmer relationships required to actually reaching that acreage. Similarly, our existing dealer network in Canada and the Northern U.S. gives us an established channel through which additional production can be sold. As we add capacity at Beiseker, the Colony facility, Farmers Union, MJ Ag, and eventually the new 150,000 ton Beiseker expansion, the objective is not to build capacity and then go looking for customers. We want production to follow demonstrated market demand. That is an important distinction.
We believe the distribution network is developing, farmers are responding to the product, and the next phase is about matching that growing demand with significantly more production. With that background, I will turn the call over to Matt to briefly review the second quarter results.
Great. Thanks, Neil, and good afternoon, everyone. Given that our full financial statements and MD&A are available on SEDAR+, I am going to keep my comments at a fairly high level and focus on the numbers and operating metrics that we believe are the most relevant to understanding where the business is heading in the coming quarters. For the second quarter, Replenish generated total revenue of approximately CAD 980,000, compared with approximately CAD 1.5 million in the second quarter of 2025. Consolidated revenue and margins declined compared to the prior year, which was expected and largely reflects the continued transition away from predominantly blended fertilizer sales and toward the commercial scale production of higher margin granulated and pelletized products. What is more important is happening underneath the headline revenue number.
During the quarter, granulated fertilizer sales increased by more than 1,200 metric tons compared with the same period last year. On a year-to-date basis, the increase was more than 1,600 tons. Granulated sales in both the second quarter and year-to-date period also significantly exceeded the volume sold in the first quarter of 2026. Accordingly, we believe this provides a better indication of our progress than consolidated revenue during this transition period. Moving over to gross margins. Gross margins on granulated products were slightly below our targeted 25%-35% range during Q2, coming in at 19%. We do not view these margins as a change in the underlying economics of the business, as the quarter continued to include commissioning and ramp-up costs being absorbed over production and sales volumes below the expected capacity of our facilities.
As throughput increases, certain fixed and startup costs will be spread across a much larger production base, and we therefore continue to expect unit economic margins in the 25%-35% range once we reach full operating capacity. These gross margin targets apply to both our Beiseker granulation facility and the Beiseker Colony pelletization facility, with Beiseker granulation capacity expected to reach 2,000 tons / month and Beiseker Colony capacity expected to reach 1,600 tons / month. Moving over to our adjusted EBITDA results. The company recorded an adjusted EBITDA loss of CAD 842,000 during the quarter, compared to a loss of CAD 460,000 for Q2 2025. As previously noted, these results still reflect a business in transition. The company is carrying various corporate and manufacturing costs required to support substantially more production than we are currently producing, and therefore expect unit economics to improve as production increases.
Overall, our owned facilities, I should say, overall, as our owned facilities move toward full operating capacity and the MJ Ag and Farmers Union facilities begin contributing licensing revenues, we expect the financial profile to begin changing more noticeably in the fourth quarter and into fiscal 2027. Higher production volumes and improved utilization should support increasing revenues, margins, and cash flows as those operations scale and reach full capacity. We also continue to maintain a base level of blended fertilizer sales, where our blended product remains the most efficient solution for our customers. On a run rate basis, we continue to target gross margins before other direct costs of approximately 10%-15% for that blended business.
Moving to our balance sheet, at June 30th, the company had approximately CAD 260,000 of cash, CAD 1.2 million of AR, CAD 6.5 million of inventory offset by CAD 7.5 million of AP and CAD 7 million of debt and leases. Importantly, and subsequent to quarter end, our balance sheet and working capital position improved materially when Replenish closed the CAD 15 million strategic investment with SRC Agrominerals. Tim will discuss the strategic rationale in a moment, but financially, this transaction provides us with significantly greater flexibility to fund both working capital requirements in the existing business while also setting us up for the next phase of growth at our Beiseker expansion facility. I do not want to spend too much time walking through individual financial statement lines that investors can read themselves. Happy to answer any specific questions at the end of the call in this regard.
The main takeaway for Q2 is that the transition is becoming visible in the operating data, and we have secured key strategic financing with SRC Agrominerals to facilitate our continued growth. With that, I will hand the call over to Tim.
Thanks, Matt, and good afternoon. For those who may not know me, I recently joined the Replenish board as Chairman following SRC Agrominerals' strategic investment in the company. I would like to spend a few minutes providing some context for that investment and why we are excited about the next phase of growth for Replenish. SRC's resource is a naturally occurring carbonatite containing calcium, potassium, phosphate, and magnesium, along with other trace minerals, and importantly, a robust community of beneficial microbes. Located near Sudbury in Northern Ontario, our quarry operation has millions of tons accessible at surface. SRC's carbonatite is a product for the moment. Decades of intensive crop production have depleted many soils of essential micro and trace nutrients, as well as the beneficial microbes that work symbiotically with plants. Restoring these elements supports crop emergence and growth and strengthens resilience to disease and drought.
Now, I've seen the growth challenge facing Replenish firsthand during my roughly 15 years working in agriculture around the world. My experience is across the agricultural supply chain, including fertilizer and seed through to ag retail and to the farm, as well as post-harvest to grain handling and storage, animal feed, and food production. That experience has reinforced the importance of combining an effective product along with market-leading processing or manufacturing capabilities, distribution networks, and the trusted relationships required to be successful at the farm. At SRC, we have invested years demonstrating the value of our resource as an important addition to farm fertility programs. Our focus is now on scaling the processing and distribution needed to deliver that great product to farms. Processing and distribution are valuable capabilities in any industry, but they are especially critical in agriculture. Farmers do not grow crops alone.
They rely on a trusted team that includes agronomists and ag retailers to assess their soils, develop effective crop plans and fertility programs, and provide the many products needed in a season. Over the past eight years, Neil, Kevin, and the Replenish team have built an outstanding product processing and distribution platform. By delivering solutions that strengthen soil health and improve farm profitability, Replenish has earned the trust of distributors and farmers and established a strong position in their markets. That foundation is very valuable and is ready to scale. Our investment gives Replenish the capital to accelerate its next stage of development, along with secure access to a strategic input that complements and further differentiates its product portfolio. The strategic fit is clear. Replenish gains long-term access to SRC's carbonatite resource, while SRC gains a proven manufacturing platform, deep product expertise, and an established distribution network.
The next few years will be defined by disciplined execution. By combining the strengths of our teams and products, we will accelerate progress in production and distribution and convert this strategic opportunity into commercial growth. In summary, Replenish has the products, infrastructure, market relationships, and strategic resources to capitalize on the growing global focus on soil health. We all now have a clear path forward and will work alongside the Replenish team to scale the platform, expand its market reach, and create lasting value for farmers and shareholders. With that, I'll turn the call back to Neil to discuss where capacity stands today and what investors should watch for with coming quarterly.
Hey, thanks, Tim. Just for those of you who don't know me, my background is very much animal nutrition and balanced nutrition. So when we made the deal with SRC Agrominerals, it was all about that overall underlying balanced nutrition that the plant needs, which then inevitably ends up in our food chain. So there is always an extra reason on why we do things, and it's been a very good relationship so far. The way I want to do this is finish off by making the production roadmap as straightforward as possible, because this is really how we think investors should follow the business from here. We now have several different facilities moving through production or commissioning, which each one has different economics, but together they demonstrate how we can scale Replenish from a relatively small fertilizer producer into a much broader production platform.
First is our flagship Beiseker granulation facility. This is our owned operation and the facility that we spent the last several years refining the commercial granulation process. At full production, Beiseker is designed to produce approximately 2,000 tons/ month or 24,000 tons annually. Our target gross margin remains 25%-35% at commercial scale. As Matt mentioned, margins during Q2 went below that range because we are still absorbing commissioning costs over relatively low volumes. Important point that the production process itself continues to perform as expected, and we believe the economics improve materially as we move to that production level of 2,000 tons. The milestone we are focused on is achieving that level consistently. That is not just a production milestone. It is an important financial milestone because the contribution from that level of throughput begins to absorb a meaningful portion of the company's existing cost base.
Our focus is therefore very simple: run consistently, maintain product quality, and continue selling through the production. The second facility is the Beiseker area Hutterite Colony pelletization facility. This opportunity has actually become larger since we last reported. We originally expected the facility to produce approximately 1,000 tons / month. Following the addition of a second pelletizer, though, we now expect capacity of approximately 1,600 tons/ month or roughly 19,000 tons annually. That increases capacity by more than 50% from what we originally envisioned from this location. We expect initial production and sales in the fourth quarter of 2026. As volumes ramp, we still continue to target the same 25%-35% gross margin. Pelletization is important because it is a simpler manufacturing process than granulation.
We use the same underlying formulations, the equipment is readily available, relatively straightforward to operate, and already used extensively throughout the ag feed industry around the globe. The Colony relationship is therefore important beyond the additional 19,000 tons of potential capacity. If this operating model works as expected, it provides a template that could potentially be replicated through other colonies and regional ag operators across Canada. Third is our MJ Ag facility. It is a smaller scale Canadian licensing model that has developed approximately 10,000 tons of annual pelletizing capacity. The economics here are different from an owned plant. MJ Ag provides the facility and ultimately bears the manufacturing capital requirement, while Replenish provides the formulation, intellectual property, and support. As production ramps, Replenish earns licensing revenue tied to gross margins on tons sold.
Construction and commissioning continue to advance during Q2, and we currently expect initial commissioning production by the fourth quarter while the facility is scaling toward its 10,000 annualized capacity by the end of 2026. It is smaller than the Farmers Union, but strategically it matters because it provides an early test of whether a production model can be successfully replicated by a regional third-party operator. The fourth facility, and probably the most important near-term validation point for our licensing strategy, is Farmers Union Enterprises in Minnesota. The initial configuration is designed for approximately 50,000 tons of annual production. Those 50,000 tons represent one operating shift. If demand supports it, the same facility can move towards approximately 100,000 tons annually by just adding another shift. Farmers Union fully funded the physical facility. That is exactly why we like the licensing model.
Rather than Replenish spending the capital to build another U.S. plant ourselves, we can provide the technology, the formulation, while partnering with an organization that already has the capital, the infrastructure, and the established relationship with partners. During Q2, Farmers Union continued to achieve construction and commissioning milestones. We currently expect initial commissioning production by Q4, with the facility working toward its 50,000 ton annualized production capacity by year end. I was there last week, and they are definitely on that schedule, folks. Very cool facility. The addressable market is much larger than the first facility. Farmers Union membership across its five states represent more than 70 million acres of farmland. As a rough rule of thumb, 1 ton of our product can service approximately 10 acres, depending on the crop and application.
A 100,000 ton facility would only cover approximately 1 million acres, or in the case of the Farmers Union, approximately 1.5% of their membership acres. Lots of room to grow. The opportunity is clearly there. Our job now is to prove adoption. That means commissioning the plant, getting consistent product into the field, supporting our distribution partners, and generating repeat orders. We have also been working with the universities and ag institutions in the U.S. to provide the independent agronomic validation that farmers in those markets rely on when evaluating a new input. When the first Farmers Union facility performs the way we expect, the opportunity is not simply to add a second shift. It is to begin looking at how this model could be replicated elsewhere within that network.
After a transition period where Replenish will have a more direct hand in the production and sales process and record a larger share of the margins, we expect the licensing model to generate approximately $40 /ton-$ 60 / ton of royalty economics to Replenish with limited incremental corporate cost. Finally, the 150,000 ton Beiseker expansion is the biggest new piece of the roadmap. Following the SRC investment, we announced plans for a new 150,000 ton a year pelletization facility at Beiseker. This is a significant step up from anything Replenish has operated historically, but there are several reasons why we believe Beiseker is the right place to do it. Between our existing Beiseker granulation facility and the expanded Hutterite Colony pelletization operation, we are now building toward approximately 3,600 tons /m onth of manufactured capacity in the Beiseker area before the new facility is even considered.
There are several reasons Beiseker is the right location. We already operate there. We understand the logistics and raw material supply chain. We have people and infrastructure in place, and the larger facility will use the palletization model we are already putting into commercial production at FUE and at the Colony. The capital required to build the facility is already largely in place. Now that we have secured the CAD 15 million financing with SRC, the company is working with Emissions Reduction Alberta to see how funding can be applied to the Beiseker expansion and look forward to providing further details as that process advances. Overall, investors should not look at this as a 150,000 ton growth opportunity that requires another large equity financing just to get it started.
Based on the current capital plan, we believe the equity requirements for the facility are already in place, and those requirements will be complemented by a combination of the ERA grant and traditional term debt financing. The new facility is currently expected to be completed in Q1 2028, and we are targeting gross margins in the same 25%-35% range as our Beiseker granulation facility and the Beiseker Colony facility. To put the scale into context, as an illustrative selling price of CAD 600 / ton, 150,000 tons represents approximately CAD 90 million of annual product revenue once we get to full utilization. That is not guidance, but it is a suggestion that the plant will immediate run at full utilization when commissioned. We will build production as the market pull develops. That is how we have always operated.
We would rather have customers asking us for more product than build inventory and hope somebody buys it. But it illustrates what the SRC transaction has made possible and what our roadmap has actually achieved. If you step back, the pieces now fit together clearly. We have 24,000 tons of annual capacity at the Beiseker granulation facility. 19,000 tons from the Beiseker Colony palletization facility, up from the 12,000 tons we previously expected. 10,000 tons from MJ Ag. Initial 50,000 tons from Farmers Union with one shift, with the potential to hit 100,000 with a second shift. Then another 150,000 tons planned through the new Beiseker palletization expansion. At the initial Farmers Union configuration, that represents approximately 253,000 tons of annual owned and licensed capacity. If Farmers Union expands to 100,000 tons, that capacity moves to 308,000 tons.
That does not include the legacy blended business or additional Farmers Union facilities and other long-term expansion opportunities, including the DeBolt or Bethune. The key point is not simply the nameplate capacity. We still have to execute, which means we need to successfully commission and operate the facilities and establish and sell the product across our current and new distribution channels. What has changed is we now have a significant capital injection of CAD 15 million to accelerate this growth and the long-term strategic partner in SRC that can help us grow in the future. As shareholders look at Replenish Nutrients over the next several quarters, I would focus on five things. First, Beiseker production. We will complete commissioning and demonstrate consistent production during that 2,000 ton monthly level. Second, Beiseker Colony ramp-up.
With the addition of the second pelletizer, that facility now has the potential to contribute another 1,600 tons / month, making it considerably more important to our near-term financial story. Third, MJ Ag and Farmers Union commissioning. Both are expected to begin initial commissioning production in Q4, giving investors their first opportunity to see the licensing model move from agreements and construction into actual production. Fourth, sell-through and repeat orders. Capacity does not matter if the product sits in the warehouse. We are going to continue matching production to demonstrated demand. Fifth, progress on the 150,000 ton Beiseker expansion. The timing here is important. Q2 still reflects the financial impact of running below commercial scale utilization while carrying commissioning costs. In Q4, we expect several of these pieces to begin coming together at the same time.
Higher volumes in Beiseker, initial Colony sales, and commissioning production from MJ Ag and Farmers Union. As that occurs, we expect revenue, margins, and cash flow to increasingly reflect the operating platform we've spent the last several years building. We've spent a long time building the foundation for this company. We believe the next phase is about turning that foundation into volume, revenue, and ultimately a much more scalable business model. We are excited about where the business is today, but we also recognize that our credibility will come from execution. That is what the team is focused on. With that, I'll turn the call back to Sean, and we'll be happy to take questions. You can quit listening to me ramble for a few minutes.
Okay. Thanks, Neil, Matt, and Tim. We have a number of questions here. As a reminder, you can submit a question by clicking the Q&A tab at the bottom of the webinar. The first question. You've talked, I guess, a lot about a significant amount of capacity coming online. The first question is, what gives you confidence there'll be enough demand to ultimately absorb the additional demand for all this new capacity? How long do you think it will take before this new capacity is fulfilled?
Yeah, I'll answer that for sure. On the distribution side, we deal with a variety of independent dealerships and of course this large Farmers Union for right now and in the future. Really the way the capacity is, and we met one of these guys last night with our shareholders, that is, they alone touch 2 million acres. Remember my 1 ton does 10 acres scenario. One group that we're already dealing with that loves to have more of our production touches 2 million tons or 200,000 tons. Of course, that's not all PKS, but it's a very good number. That really is what gives us that capacity thought process, Sean.
Okay, great. Next question. For future licensing deals, when you're looking at growth, will this mostly be in the U.S. or Canada? We read about the U.S. Midwest universities' testing programs, but haven't heard too much about Canada.
Yeah. On the licensing side, Farmers Union is a very good fit. We have mentioned that they have five states that are part of their union, being Montana, South Dakota, North Dakota, Minnesota, and Wisconsin. That licensing model that they have developed, I have been in those board meetings, and they want to do it in all their states. That is definitely something we will pursue. Canada, a little bit different. It is one of those things where we know our margins are better, our return is better if we have capital to play with. If Tim and Matt and myself and Kevin have the ability to physically still drive there and help things go, we would still like to look at production models in Canada as more of an owned type facility.
The next one. Will the CAD 15 million capital raised allow you to grow to cash flow positive in your base case? Meaning no additional equity dilution is foreseen in 2027 or 2028.
I will let Matt answer that one.
Yeah. No, thanks for the question. Yeah. As our slides indicated here, and I think as Neil addressed in his remarks, we believe the equity portion of the expansion, and obviously our base operations here, is fully covered off. As we noted, we believe there are complementary sources of capital, that being the ERA grant and traditional term debt financing. But we do not, at this time, see any need to go back to the market on the equity side for our current base case.
Okay, great. Since we are talking about financials, can you talk a little bit about CapEx going forward now that we have this SRC investment?
Yeah, for sure. As Neil mentioned, we are pulling together those exact capital plans right now. We are not yet ready to share exact CapEx numbers and the exact timing of that, but obviously these facilities cost money. We definitely plan to put those numbers out, put them forward so everybody can see them and have a bit more detail on timing. But right now, there is no specific CapEx guidance that we are sharing today, but you can look forward to that in the near future.
Being that the ag sector is so seasonal and sales can be lumpy, this question, it says CapEx, but I think it means working capital. How are you going to manage working capital along with this cyclicality?
What is great-
Yeah. You want to go?
Yeah, I'll go on this one. What's great about the fertilizer industry and the way that Nutrien and Mosaic and Simplot and really every manufacturer has developed is in order to actually deal with ensuring that everyone has fertilizer, everybody has to find a way to find room for that production level over the season. Because you just can't stop and start in the middle of the summer and hope to goodness you're going to keep up. So they've developed one heck of a distribution network that all of our independent distributors are a part of, where they buy product during our slower months, and that's all upfront as it leaves the scale. It's a great model that the big guys have developed, and we're just going to follow suit.
How many other Hutterite Colonies could you be working with across? This person suggests that there's over 300 colonies. I'm not sure if that's correct or not. But I guess the question is really how many additional Hutterite Colonies could you work with, and is that a big growth opportunity, or have you kind of tapped that out?
It's a fantastic growth opportunity. The colonies exist throughout Western Canada and throughout the Northern U.S. As they mentioned, there are a lot of colonies, and they own a lot of land. What I do love the most about colonies is their ingenuity. They are a overall mixed farm, and they know they're going to be doing this for the next 100 to 200 to 300 years. So they are concerned about soil health. They are concerned about what they're going to leave to their next generation. Other farmers are, too, don't get me wrong. But these folks in particular just have that mantra, and they understand the requirements of balanced nutrition. Are there more opportunities? 100%. And it's just a matter of really regionality on where the place of each place would be.
All right. Into Canada, U.S. again. Are your inputs likely to be affected by the recent U.S.-Canada tariff dispute? Is there any cross-border transport of materials?
Yeah. No, for sure there is. We supply elemental sulfur, which predominantly comes out of Northern Alberta, so that one definitely comes from the Canada side. Potash, same thing. It comes out of Saskatchewan, as the majority of folks would know. So that also comes out of the Canada side. The strategic piece of this, and it is funny, I checked it out a little bit earlier. Just as we, of course, every day there is a different Trump tariff. At the same token, finding out what makes the most sense and our strategic investment in having a licensing deal with Farmers Union really does work into the way of keeping these tariffs just moving raw material instead of a higher value finished good, which then would have a higher tariff cost.
What does SRC do most for you? How do they support your vision and execution other than just providing capital?
I think I will let Tim announce that. I talked about it a little bit when Tim was done there and saying it really does give most to us as far as the overall balanced nutrition, the extra biological support. But I will let Tim also give you a little bit more as he is more versed in the SRC side of it.
Yeah. Look, there's a fantastic fit on the product side. I'd say fundamentally, as I mentioned, it further differentiates the end products that it's in. I think we've got very aligned goals and the fit is clear on the scale-up. Our capital is there to accelerate the business plan. We very much believe in both the platform and foundation that Neil and the team have built, but also the scale-up. We want to see that grow. We want to see capacity grow at Beiseker. Certainly into the U.S., there's a question around Canada. We see expansion into other markets across Canada. Of course, we're going to need much more than the capacity we're talking about here.
This is a multi-year phase of ramping up, executing on the plans we have, the expansion that we've talked about here, and then looking at opportunities to continue to increase that capacity and build those distribution partnerships. When you get into some parts of the market, you need to have a substantial amount of product available to bring on larger distribution partners. That's part of our thinking as we look at growth down over the next several years.
Okay, we got looks like maybe a couple more here. Have you looked at or considered partnering with a company like Nutrien to establish distributing outlet, like distributing globally?
That's probably very much in line with the comment I just made. Nutrien moves millions of tons. We're very small in comparison right now. Though, in part of the market, this focus on sustainability and regenerative ag and nutrient density is very much a growing theme. It's certainly on the radar of the Nutrien and beyond. As we execute and grow, I'm sure we'll increasingly be on those radar screens.
Okay. I think there are no further questions here. If you have any questions that come up later, please contact us. We are happy to answer any further questions that might come to you at a later time. I will now turn the call over to management for closing remarks.
Awesome. So yeah, I appreciate that, Sean, and thanks for everybody for your questions. And really, I thank everybody who has been long-term shareholders, current shareholders, understanding where our vision is, and I have had a lot of fun talking to a lot of you. We will continue to do that. But at the end of the day, I would like to thank you for doing our first earnings call. But I will leave you with this one last thought. For most of Replenish's history, we were proving things, proving that the product worked, proving the process, proving the supply chain, and proving that farmers would buy it. We are now moving into the different stage. Q2 started to show that transition more clearly. Granulated sales increased materially.
The existing Beiseker plant moved closer to full commissioning, and Colony capacity increased from what we previously expected, with both our initial licensing partners continued toward commissioning. Subsequent to the quarter, the SRC investment gave us the capital and strategic support to accelerate that opportunity further. We now have a pathway toward more than 250 million tons of identified annual capacity at the initial Farmers Union configuration and more than 300,000 tons when the Farmers Union expands to a second shift. There is a lot of work in front of us, but the opportunity is also considerably larger than it was even a year ago. Our focus is straightforward, produce consistent product, sell what we produce, scale intelligently, and continue demonstrating the economics of the platform.
Matt, Tim, and I appreciate your support along with Kevin on the COO side, and we look forward to updating everyone again next quarter. Thank you.
This concludes Replenish Nutrients' second quarter 2026 financial results conference call. Thank you for joining us.