Good morning, everyone. Thank you for coming to hear me talk about Progressive Planet. My name is Stephen Harpur. I am the CEO and the Chair of the Board. I am going to give you five seconds to do all your legal review, and then we are going to pass through this slide. Defining, pardon me, Progressive Planet. Who we are. A profitable, vertically integrated clean tech manufacturer focused on eco-friendly, silicate-based consumable products. Cash flow funds our innovation pipeline.
We have patent-pending solutions poised to disrupt the cement industry. Ownership of mineral assets is a key advantage. It reduces supply chain risk. Decades of branded consumable products. We have some of our brands, Can Dry, since 1989, which is a chemical-free absorbent for cleaning up liquid spills. We are actively seeking accretive opportunities to grow. We right now have very strong momentum.
We had record annual revenues in our fiscal year that ended April 30th, 2024. We did CAD 23.2 million. The prior three years, we did about CAD 19.6 or CAD 19.5. More than CAD 5.6 million available in unused credit. As of July 31st, at the end of our first quarter, we had over CAD 2.5 million in cash. I am going to talk a little bit more about one-time slotting fees, but no further one-time slotting fees budgeted.
We did have a slotting fee of just over CAD 500,000 to place three new SKUs or three new products in 2,434 stores in every state in continental U.S. We have four major capital projects that are being wrapped up by April 30th, 2027, and no further major capital projects currently anticipated for fiscal 2028.
As a company, when we bought Absorbent Products in February of 2022, they had not invested a lot in upgrading their property, plant, and equipment for about a decade, and we have made all those investments now. The slotting fee that we, with 20/20 hindsight, it was a good move for us. You see the three different products, which are a new brand, Pure DE, that we have the exclusive rights to that brand in Canada, as well as to one major U.S. retailer.
We won three new listings with that retailer, 2,434 stores. Again, CAD 500,000, and we have done over CAD 1.9 million in that since November 1st, 2025, when we introduced those three new SKUs. We recovered the slotting fee on the margin we made in less than a year. That is not an annual fee, that is a one-time fee.
Just talking a little bit about the capital projects underway. Four major capital projects underway to be finished in the current fiscal year. PozGlass phase II, major CapEx completed by December 31st, 2026. All the major components are now landed, and no major equipment left to purchase. Then starting in January, we will switch to operating costs versus CapEx.
The other thing to note is that when you run a pilot plant, there are very strict rules about capitalizing pilot plants because they are not long-term assets. We had major increase in R&D over the last three quarters as we expensed much of the cost of the pilot plant. My messaging today is the CapEx is done and the major R&D expenses associated with not being able to capitalize a pilot plant are nearing completion.
Lightweight cat litter line, installation of the permanent line to be completed by December 31st, 2026. Again, all of the capital has been. It is now just installation. Automated valve pack line, which reduces our labor cost significantly for hand placing. Valve pack bags are the bags that you would know for ready-mix concrete if you go into Home Depot or Canadian Tire and you buy a bag.
It is a paper bag which has a valve that you probably do not notice because the valve gets sealed and you just tear it open. We do a lot of products in similar format to a ready-mix concrete bag. Since 1989, we have been hand placing each one of those bags onto the valve, and now with this new automated system, that does not occur anymore. Then finally, our fine grinding line. I think we will actually finish that before February 28th.
There is a CAD 1 million grant that we will get from FortisBC, that as soon as we show the paperwork that we have completed this fine grinding line, there is CAD 1 million of grant money to be received. That fine grinding line, it has increased our fine grinding capacity by a factor of 10. The grinding line that we had, a roller mill, was actually manufactured in 1946. These old roller mills, they just do not wear out, but it is just too small for our operation.
Just a little more on the critical infrastructure updates. Basically nearing completion. Absorbent Products spent minimally on infrastructure and equipment in the decade before acquisition. We acquired them in February of 2022. The investment to scale capacity is now in place in Western Canada. Current capital program is committed and on track for completion. Our next focus is deploying capital beyond Kamloops.
We are focused on two areas, the Pacific Northwest and of course, right here in central Canada are our focus. On the PozGlass pilot plant, we had 39 electric motors to be tested. We have already processed 40 tons of glass and we will start making our own sandblasting media in November. Late November, early December, we will actually start to make PozGlass as well. Bringing the CanBlast production in-house for nearly two decades.
CanBlast, our house brand of crystalline silica-free abrasives, used to remove rust and paint and so on from steel surfaces, very common in industrial repairs and manufacturing. We have had it made by another company for 20 years, and we will start to make it ourselves in November. Just briefly covering tariffs. We have not been affected by tariffs to date.
The named categories in the most recent increase, motor vehicles, alcoholic beverages, dairy obviously we are not in that. Then there is a broader annexed list. Again, we are not in that. Where we stand, our diatomaceous earth, our absorbents, our animal health products are not listed in the current proclamation, so they have had minimal impact to date on our operations. The trade environment is obviously fluid.
We will continue to monitor with our customs broker, but to date, I think there was one day in the last year where we paid $3,000 in tariffs on a truck, but that is the extent, and that was a day there was a lot of confusion as to what was going on. We actively engage experts to evaluate the European market for our Activated Barn Fresh, which is our U.S. patented product that mitigates the formation of ammonia in broiler house barns.
We are also interested in acquisition activity and in growth activity being Pacific Northwest. We procure a diatomaceous earth in Eastern Oregon right now, and we have had, as you saw, over CAD 1.9 million in sales of our new branded product. We also have another branded product that we have had since 2018 called Red Lake Earth, and those sales are also growing from that product that comes from Eastern Oregon. I briefly discussed the R&D costs.
We received grant funding, which reimburses 49.86% of our pilot plant costs. We report that as a separate line item, so that is not to be confused, pardon me, with our regular revenue and expenses. It is a separate line item. Under IFRS, development costs for a pilot plant can only be capitalized once a number of specific criteria are met.
When we do our annual audit, we discuss with our auditors what is the appropriate assignment to expense versus capitalizing. As anyone following closely would see over the last several quarters, we have had significantly higher R&D costs as many of those costs are not capitalized. We will scale back on the R&D by December 31st as we move from building the plant to operating the plant. I am going to go back. I did not really talk.
We are in significant planning with Amrize to deploy significant amounts of the PozGlass SCM powder in April and May of 2027 into the marketplace in the lower mainland of B.C. We are growing. We actually, pardon me, on Q4 of 2026, we had a record of CAD 6.5 million, and then we beat that again in Q1 with CAD 7.3 million.
Do not expect linear growth quarter-over-quarter. We do have some seasonality. We have exceptionally high sales in Q1 every year of our Red Lake Earth, and that is our diatomaceous earth, which essentially dehydrates ants, and we have massive consumption of that product to kill fire ants and place it on anthills. If you actually go onto YouTube and Google Red Lake Earth, I will see who is checking their phone instead of listening to me now.
If you go on YouTube and type in Red Lake Earth fire ants, you will actually see people do studies with mortality rates and pictures of inactive mounds. We do really strong sales up until the end of October, which is the end of fire ant season in the U.S. We did highest annual revenue ever in 2026, CAD 23.2 million.
Certainly, if you look at, it is not just the Pure DE line, just based on when it came in. We only started selling that in November, and our fiscal year ended April 30th. We only had six months in the year of selling those SKUs, and we had CAD 3.7 million increase in sales. We are growing across other categories as well. It is not just the one new branded SKU. Pretty simple cap table, CAD 111 million shares out, CAD 6 million options, CAD 117 million shares fully diluted.
We have been on a bit of a tear winning awards over the last two years. Last week, we were nominated for four different awards with the Kamloops Chamber of Commerce, and we won all four. I had not written any speeches. I had to give four impromptu speeches in one night, and they all had to be different.
I tried some stand-up comedy that went over pretty good. But on a national level, the award that I'm most proud of is the Carbon Capture Canada Award. September of 2025, our CTO, Dr. Doug Brown, and I accepted this award for innovation in carbon capture, utilization and storage technology of the year for Canada. Just to tell you some of the companies that we beat for that, BASF, biggest chemical manufacturer in Europe.
Petronas, top 10 oil company in the world. Svante, massive carbon capture company out of France. They were all finalists for this award, and Progressive Planet was the winner. That was a real big deal. Then most recently, I was in Toronto two weeks ago to accept a Delta Clean50 Top Project Award for the PozGlass pilot plant. Again, a very prestigious award in clean tech. Investment highlights.
We're profitable, we're vertically integrated. We make products that are very easy to understand. Cash flow funds our innovation pipeline. We got a clean cap table, no warrants, no convertible debt. We have a series of patent pending solutions poised to disrupt the cement industry. We own most of our mineral assets, with the exception being the mineral that we extract from a third party in Eastern Oregon.
Then we've got a disciplined management team, and we're looking to have our next major deployment of capital in an acquisition. We're actively looking right now. The last acquisition that we did, and our principal and primary acquisition was in February of 2022. When we bought Absorbent Products in the first quarter, our gross margins were 12.7%. They're now well over 30. And we have a very strong management team, chemists, engineers, plant operators, millwrights. We have a phenomenal sales team.
We have, actually, one of our sales executives, Ivo Todorov, is here in the room today. He's here in Toronto. And Ivo, wave your hand to everyone, and they can pester him and ask him all the difficult questions when we're done. But we hired him two and a half years ago, and he's been phenomenal for us. We also have Randy Gue, a Director here. And my lovely wife, Sydney, is also here. And that's it, and we have lots of time for questions.
Talk about the,
Bob, I knew you were going to be the first one.
You talked about a reduction in. Sorry, you talked about a reduction in R&D because of you switching from pilot plant over to production. Can you talk about the total dollars swing? Would it be CAD 3 million per year in changing from pilot to production?
You are putting me on the spot. I do not want to give a number because we do have some small new R&D, but they are nothing close to what we have spent. I prefer not to put a hard number on that.
Okay. Since it is public disclosure, there is no big mystery to this update.
There's no mystery. You've seen the increased R&D. It's primarily associated with construction of the pilot plant. Every single capital piece of equipment is procured, paid for, sitting on site. The R&D costs left will be associated with installation, fabrication, and installation of equipment, most of which is done, and commissioning of the plant, which is labor intensive, and that's underway right now.
We don't have a calendar year-end, but by the end of calendar year-end, December 31st, 2026, we will see minimal incremental R&D associated with the pilot plant, other than the labor cost of essentially two operators, 10 hours a day, five days a week. That's our cost to operate the plant. You get a second question.
Yeah. On the bagging stuff, you suggested we're basically going to end up saving a bunch of labor on the kind of bagging equipment that you've installed. Any insights you can share on that?
I don't want to get into our cost of wages, et cetera, in a public discussion. But essentially, we have two operators full-time, and now we will have one operator half-time that just places these valve pack bags into an automated filler. When we look at automation, I take comfort in the fact that as we reduce manual labor,
We increase the number of people that are fixing robots and that are doing millwright activities. So we will have a reduction in our manual labor costs, and people are not designed to lift. It's not a great form of employment to lift 40 or 44-pound bags all day long in a repetitive motion, and that's the type of labor reduction that will transpire in short order.
You talk about the insights with regard to disruptive patents in the cement industry. How soon might that be unleashed, and what kind of Fisher-Price summary of what you're up to would be described? I assume it's adding glass to cement, increased strength, and some other stuff. Please give us some color.
We have, I believe it's 28 countries that we've filed patents for PozGlass. We've received patents in South Africa, and we're patent pending in the other countries, but typically, a lot of those will happen at the same time in Europe. We received a favorable opinion from the International Patent Office that wet grinding of glass is novel, and the 46 claims that we made are novel.
Patents take time, but we are comfortable that we have protected intellectual property with respect to the wet grinding of glass. We are less advanced in the patenting for Planet LCD, which is our second cement. We successfully demonstrated that we can replace up to 50% of Portland, and at 28 days, we're 11% or 111 strength activity index. These are spectacular numbers. A pass is 75% of the strength at 20% replacement.
We've done a 50% replacement with the Planet LCD, which is our second cement. Again, we've entered the patent application process, and it takes years to get them. I don't know, Bob, if that answered your question.
We had Fisher-Price terms of cement, three-quarters the cost of a bag of concrete.
Sorry, could you repeat that?
Sure. Cement, sand, and stone go into a bag of concrete. How much would cement be in a typical bag of Sakrete that I might buy at Home Depot? Would it be one-third of the overall cost?
I'm going to have to get back to you on that exact. I don't know the answer to that question. I will get back to you on that.
I had a question.
Thanks. On your acquisition strategy, are you looking to buy product, are you looking to buy facilities or a customer base? Is this an area that's consolidating in your industry? What type of multiples do you think you'd pay for your acquisitions?
We are interested in buying industrial manufacturers of consumables. We're not interested in getting into the food grade or human area that we don't have expertise there. The pet industry, animal health, cements, aggregates, these are all areas that are of strong interest to us. We prefer to de-risk the demand side, so we're interested in buying businesses typically that are operating over a decade.
The multiple that we see is 3 to 5 x EBITDA in the private sector. We would hope to get a lift on that as we integrate that into a public company. There are specifics associated with different. Sometimes you've got an asset heavy. Sometimes there's a lot of real estate that'll allow you to take on long-term debt and be less dilutive if you're acquiring a lot of physical assets, land, plant, et cetera.
Is there another part to your question, Marcel?
Yeah. Just overall, are you seeing some sort of,
Oh, there's absolutely. There are a very. Over the last month, I've met three different companies that are mineral processors where the management team or the owners are in their 1950s, 1960s, or even 1970s. There is certainly a lot of room for consolidation in the sector. We see that, and oftentimes in these industries, succession planning, oftentimes the children of the founders are not interested in taking over the family business. We've seen that all over Canada and the U.S.
You've talked about sales of PozGlass into Lower Mainland B.C. Can you talk about the capacity of that plant if it was running flat out? What kind of CAD dollar sales could potentially come out of that? What kind of margin relative to the 30% you've talked about as the upgrade relative to your acquisition, above or below that kind of margin?
I have said repeatedly that when we receive grants from government, the pilot plant is not meant to be a profit center. It was built at a scale where it would not contribute meaningfully to our margins. I would not consider it to be something that will enhance our revenue in a meaningful way. It is meant for us to demonstrate scale-up of the technology and to project the economics of a full-scale plant. One more? One more. One more.
Yeah. I'm just going to answer the question. The cost of the cement in a bag would roughly come out to about 85%-90% of the cost of that Sakrete bag.
Thanks for rescuing me there, Randy. Bob never gives me any easy questions. Thank you very much for your time, everyone.