Operator: Good day, and thank you for standing by. Welcome to the Pyrogenesis second Quarter 26 Business Update Conference Call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Steve McCormick, Vice President of Corporate Affairs. You may begin.
Steve McCormick: Thank you, operator, and good morning to everyone. I am Steve McCormick, Vice President of Corporate Affairs for Pyrogenesis. And thank you for joining Pyrogenesis 26 second quarter financial results and business update conference call. On the call with me today is Mr. Andre Mainella, the company's Chief Financial Officer. The company issued a press release on Thursday, August 6, 2026. Containing the financial results and a business update for the second quarter ended June 30, 2026. Which can be viewed at the company's website at pyrogenesis.com If you have any questions after the call or would like any additional information about the company, please email the investor relations department, and we will try as best as possible to answer questions that are of a public nature and which are allowable by financial market regulations. The email address is ir@pyrogenesis.com. We will shortly provide prepared remarks reviewing the operational and financial results for the second quarter. But first, a reminder that this discussion may include forward looking information that is based on certain assumptions, which are subject to risk and uncertainties that could cause actual results to differ materially from historical results or from results conveyed by the forward-looking information. The forward looking information provided in this call speaks only as of the date of this call and is based on the plans, beliefs, estimates, projections, expectations, opinions, assumptions of management as of today's date. There can be no assurance that this forward-looking information will prove to be accurate and undue reliance should not be placed on this information. Pyrogenesis disclaims any obligation to update any of the forward-looking information or to explain any material difference between subsequent actual events such forward-looking information, except as required by applicable law. In addition, during the course of this call, there may also be references to certain non-IFRS financial measures. Including references to EBITDA, modified EBITDA and backlog. Which do not have standardized meaning under IFRS and therefore may not be comparable to similar measures or information presented by other companies. For more information about both forward-looking information and non-IFRS financial measures, including a reconciliation of EBITDA and modified EBITDA, please refer to the company's management discussion and analysis which along with financial statements will be available on the company's website at pyrogenesis.com and on the SEDAR site at sedarplus.ca. Finally, a reminder that pyrodensis follows Canadian Generally Accepted Accounting Principles or GAAP where revenue is accrued and reported not on sales but on a model that reflects a percentage of the work completed, for a given project during the reporting period. And this can vary based on both the nature of the projects and on a client's own scheduling and logistical decisions. Both of which can impact production milestones and the company's ability to book revenue from 1 quarter to the next. As stated in previous reports, the company's revenues are likely to be irregular quarter to quarter, based on project timing as stated above or sometimes due to cash on hand, In this continually fluctuating economic landscape, clients can face their own cash flow and scheduling challenges, which may have an effect on PyroGenesis revenue from time to time. And with that, I will start off with a quick review of some of the company's top line results for the quarter, followed by a summary of some of the key business activities that occurred during the quarter before turning the call over to our Chief Financial Officer, Mr. Andre Mainella, for the second quarter of 26. The company exited the quarter with revenues of $4.4 million, an increase of 47% year over year. This result was the company's best revenue number for our second quarter since 2022. And is the second best overall quarter since Q3 of 22 exceeded only by the first quarter of this year. For the first 6 months of 26, the company is outpacing 2025 by 55% and has already surpassed the revenue totals for the first 9 months of 25. For gross margin, for the first quarter, gross margin was at 32%. As always, we like to provide context for margin using comparisons to some of the industries that the company serves. In general, across much of heavy industry and manufacturing in Q2 margins continued to be compressed as companies grapple with rising input costs, especially for energy and commodities. Industries that rely on metal alloys, for instance, has seen prices spike significantly especially for copper which is up by more than 50%, and aluminum, by more than 25% on the year. Supply chains were disrupted again with international shipping lanes facing severe challenges as both the Suez Canal and the Strait of Hormuz faced security threats over these past few months. Across all industries, gross margins are being reported at 33%. Specifically, iron and steel is reporting 18%. Aerospace and defense, 8%, chemical manufacturing, 32%, industrial machinery and components is 33%, metal mining is 40, aluminum is 14%, and general manufacturing is reporting a 13% margin. Andre will provide more details regarding the rest of the Q2 financials later in this call. Now on to backlog. PyroGenesis' backlog stands at $40 million down from $43.1 million reported during the Q1 earnings. This shows continuing strength in the company's order book, also indicating that company is having success in driving revenue from its project backlog during the quarter. For those that need clarity on backlog, backlog describes the outstanding revenue across all signed or awarded contracts that is yet to be recorded because the projects are still underway. This provides visibility on future revenues for the company that will be added to the financial results over subsequent quarters under the percentage completion model as these projects reach various production milestones. In management's opinion, a strong backlog helps to show the strength of the long term outlook while also illustrating the wide variety and the different types of contracts that the company can secure. What the company often refers to as a multi legged stool approach. And now on to some key production highlights for the quarter. Please note that projects or potential projects previously announced, but which do not appear in this summary update or within the MDA or the outlook should not be considered at risk. Noteworthy developments can occur at any time based on project stages and the information presented is a reflection of some of that information on hand for some but not all projects. Projects not mentioned, may have simply not yet begun, not past milestones, worthy of discussion, or not had their project status changed during the last reporting quarter. Starting with a brief reminder of the company's business strategy, PyroGenesis leverages 35 years of expertise in ultra high temperature processes and plasma technology. To create technology solutions for heavy industry and defense. From early stage lab tests to pilot projects to full commercialization, the company's technology solution set is concentrated under 3 business segments. Energy transition, materials production and waste processing. So first, in the materials production business segment, which encompasses the development of chemical free material production systems, and the production of in demand materials for manufacturers. In April, the company announced a contract towards a titanium powder supply distribution agreement with an Asian materials company. Initial contract is for the supply of 3 powder cut sizes ranging from fine to coarse. The customer is a materials company supplying the Asian electronics market specifically for cell phone components. This contract will allow the client to perform final testing and analysis of titanium powder across 3 different particle sizes, 20 to 63 microns, 53 to 106 microns, and 53 to 150 microns. Once this process is complete and assuming all regulatory and trade agreements are certified, the client has indicated it will require multiple tons of PyroGenesis titanium powder per year. With final volumes to be determined. Separately, the client is negotiating to be a supplier of pyrogenesis titanium powder to Asian electronics medical, and aerospace industries. Also in April, PyroGenesis had 2 consecutive announcements regarding carbon First, the company announced the successful production of battery grade carbon black and hydrogen from a proprietary pyrogenesis plasma torch system using both a natural gas and a methane powered plasma torch. As the primary feedstock. Subsequently, the company announced successful production of high quality battery grade graphite. From that same carbon black using a proprietary plasma process. Also, in April, the company announced a corporate update on its next gen titanium metal powder strategy. As stated in this release, the company has been positioning additive division over the next over recent years for the next level of growth. Which would be an operational scale up several times larger than what is currently in place. Along with a goal to attract capital to finance the operational scale up. The positioning for this growth is being executed within the context of continuous improvement of production processes, reducing operational costs, building critical mass across the product range by developing repeat customers, expanding the customer base across key segments, developing additional products from existing production runs, and derisking product offerings by expanding powder suitability across 3 specific applications, laser bed powder fusion, electron beam melting, and direct energy deposition. The company's outline of the business lines momentum included being approached by a corporation interested in securing distribution or production for the Middle East region? Potentially as a joint venture? The company signing a contract towards a supply agreement in Asia, previously mentioned, and several recent contract announcements, including repeat orders from the same additive companies. And finally, to the waste processing vertical, which provides for the safe emission free destruction, processing, and valorization of industrial, chemical, agricultural, municipal waste on land and at sea In June, the company announced the delivery of a new technology to convert contaminated biomass to syngas, The successful treatment of biomass increases the--amount of overall amount of biomass feedstock available for syngas production. Contaminated biomass can contain paint, solvents, and a variety of other chemicals and materials such as melamine that can get mixed into the biomass in the landfills or were added to wood products, for instance, during manufacturing and prior to being recycled. Pyrogenesis high temperature waste to energy gas technology allows for the treatment of contaminants in the produced syngas The syngas can be used to generate electricity or in the production of a variety of different products including chemicals, fertilizers, methanol, ammonia, synthetic fuels, renewable diesel and gasoline, and others. The project is a collaboration with its client, Innofiber, a CCTT, or College Center for the Transfer of Technologies at the Cégep de Trois-Rivières. The CCETT is focused on the paper and biorefining industry in Quebec. And pyrogenesis technology was included during the launch of Innofiber's new $14 million pilot and pre commercial facility. The center is the only 1 of its kind in North America equipped to operate under conditions mimicking those of industrial production. To read about these and other events and updates as well as some of the many other ongoing projects not discussed on this call, please refer to the corresponding section of yesterday's news release or to the management discussion and analysis document in particular the outlook sections of each. I will be back at the end for some final thoughts, but at this point, I would like to turn the call over to the company's chief financial officer, Andre Mainella, to provide more details about the second quarter financials. Andre?
Andre Mainella: Thank you, Steve, and good morning, everyone. Thanks for joining us today. I will walk you through PyroGenesis' financial results for the second quarter and first 6 months ended June 30, 2026. Overall, the first half of 26 continued the positive momentum we have been building. While our results remain influenced by project timing, and long term contract execution, we have delivered meaningful revenue growth while mitigating costs. Revenue for the second quarter totaled $4.4 million, an increase of $1.4 million compared with $3 million in the second quarter of 25. And for the first 6 months of 26, revenue reached $9.3 million compared with $6 million last year, an increase of over 55%. The increase reflects continued execution across our core product lines. During the quarter, growth was driven by Spark revenue, which increased $700 thousand as commissioning and on-site support activities advanced. Torch Systems, which increased $400 thousand through continued fabrication, delivery, installation, and commissioning. DROSRITE increased $500 thousand driven by spare parts sales and storage revenue and U. S. Navy development and support activities, which increased $300 thousand due to ongoing site support. These gains were partially offset by lower revenue from biogas upgrading and pollution control systems. Primarily reflecting project timing. Year to date, the same trends remain evident. With growth led by Spark, Torch Systems, DROSRITE, and US Navy programs partially offset by lower contributions from biogas upgrading projects. Overall, we are encouraged by the continued diversification of our revenue base. With multiple technology platforms contributing to growth. As we have noted previously, quarterly revenue will continue to fluctuate based on project milestones, fabrication progress, equipment delivery, and commissioning activities. Turning briefly to backlog. As of August 6, 2026, backlog totaled $40 million and 88% of that is denominated in US dollars. This backlog is expected to be recognized over approximately the next 3 years as we satisfy our performance obligations under long term customer contracts. Although backlog declined modestly as projects progress, it continues to provide strong revenue visibility and reflects the strength of our commercial pipeline. Turning to gross profit. The revenue generated gross profit for the second quarter totaling $1.4 million compared to $1.7 million last year. And for the first 6 months, gross profit increased to $3 million compared to $2.5 million last Gross margin was 32% throughout 2026 and in the expected range for the quarter and year to date. And in line with the project mix. The comparative quarter, it did include a 1-time subcontracting adjustment as well revenue recognized whereby minimal cost needed to be incurred. The current period did not include any 1-time adjustment. As we consistently noted, quarterly gross margin can vary depending on project type and stage of execution. These results were consistent with management's expectations. Selling, general, and administrative expenses totaled $3.1 million during the second quarter compared to $3.6 million last year. A reduction of 14%. However, the actual reduction is even better when you consider only cash fixed costs. And exclude credit loss and depreciation. In reality, that reduction is approximately $1 million or 25%. And for the first 6 months, SG&A totaled $5.4 million compared with $7.3 million, a reduction of 27%. Particularly pleased with the results because it demonstrates that while revenue has grown significantly, we have continued to reduce and manage overhead costs. The quarterly improvement was driven primarily by lower employee compensation resulting from less headcount, and better use of our existing workforce during the year. We also benefit from lower office and general expenses. Higher government grant recoveries, and reduced insurance costs. Namely from the DNO program. The elimination of a long term lease for a manufacturing site resulted in lower right of use asset depreciation. These improvements were partly offset by modest increases in professional fees, travel, depreciation on production assets, and share based compensation. Expected credit loss resulted in a recovery of $100 thousand compared with a $700 thousand recovery last year. While this creates an unfavorable comparison, it reflects changes in accounting estimates rather than cash expenses or deterioration in customer quality. Foreign exchange was essentially neutral during the quarter compared with a loss of $200 thousand in the prior year. And furthermore, year to date, lower employee compensation, stronger government grant recoveries, and continued cost discipline remain the primary drivers for the reduction in SG&A. Overall, we are encouraged that increasing revenue are being accompanied by lower overhead demonstrating improvements in operating leverage. Net research and development expenses totaled $100 thousand during the second quarter. Compared with $400 thousand last year. And for the 6 months of the year, net R&D expense totaled $300 thousand versus $700 thousand last year. The reduction reflects lower spending on materials, equipment, and employee compensation, while investment tax credits increased modestly, providing additional recovery of these development costs. Our R&D spending continues to reflect the timing and progression of individual technology rather than any reduction in our long-term commitment to innovation. Turning now to net finance expenses. For the second quarter, net finance expenses totaled $300 thousand compared with a net finance income of $800 thousand during the same period last year. And also for the first 6 months, net finance expense totaled $500 thousand compared to a net finance income of $500 thousand for the first half of 25. The year over year comparison is primarily due to a nonrecurrence of a $1 million 1-time finance income recognized during 2025. Related to the revaluation of the balance due on business combination. Excluding that item, financing costs remain consistent with the company's evolving capital structure. Including higher secured loan financing, offset by lower costs associated the convertible debentures and lease liabilities. Overall, finance costs were in line with management's expectations. Turning to strategic investments. Changes in the fair value of our strategic investments were not significant during either the quarter or the first 6 months of 2026. This compares with the substantial loss recorded during 2025, related to our investment in HPQ Silicon, whereby the shares and warrants were recorded at their mark to market adjustments or from the sale of such common shares. Accordingly, the year-to-year comparison reflects the absence of those unusually large losses. Looking now to other income. During both the second quarter and first 6 months of 2025, the company recognized $900 thousand related to the modification of a lease for our Turcot manufacturing facility. The right of use asset and corresponding lease liability for the property were terminated, and a net gain resulted. We also recognize $80 thousand of gain from the sale of equipment whereby proceeds exceeded the net book value. Together, these items contributed positively to our reported earnings during both the quarter and year to date period. Regarding the overall financial performance, the second quarter of 26, comprehensive loss improved to $1.1 million compared to $3.1 million in Q2 of 25, representing an improvement of $2 million. For the first 6 months, comprehensive loss totaled $2.2 million compared to $7.5 million for the same period last year. An improvement of $5.3 million. These improvements were driven primarily by stronger revenues across our core commercial businesses. Lower SG and A expenses resulting from better control on overhead costs, and gains recognized within other income. Overall, the first half of 26 reflects continued improvements in our underlying operating performance. Turning now to EBITDA. Second quarter EBITDA improved to a loss of $600 thousand compared with a loss of $3.6 million for the second quarter of 25, And for the 6 month EBITDA, it improved to a loss of $1.1 million compared with a loss of $7.3 million for the first half of last year. The improvement reflects stronger operating performance. Higher revenue, lower SG and A, and other income recorded in the year. Turning finally to modified EBITDA. And as a reminder, the modified EBITDA excludes share based compensation expense, and changes in the fair value of strategic investments to provide an additional performance metric. For the second quarter, modified EBITDA improved to a loss of $500 thousand compared with a loss of $2.1 million for the same period last year. And for the 6 month period, an improvement to a loss of $800 thousand compared to a loss of $5.1 million during the first half of 25. The year over year improvement reflects stronger operating performance, improved gross profit, and lower SG and A expenses and adjust for the loss on prior year strategic investments. Before I conclude, I would like to leave you with a few overall observations regarding our financial--our first half of 26. The first half of the year demonstrated operational and financial progress. Revenue increased 55% reflecting continued execution across multiple technology platforms. At the same time, SG and A expenses declined 27% despite the higher level of commercial activity demonstrating the leverage we are beginning to realize as the business continues to scale. These improvements transition directly into stronger financial performance. Compared with the first half of last year comprehensive loss improved by more than $5 million. EBITDA improved by more than $6 million, and modified EBITDA improved by more than $4 million. We While quarterly results will continue to fluctuate due to project timing, commissioning activities, and revenue recognition under long term contracts, We believe the first 6 months of 2026 demonstrate that the company continues to move in the right direction. As always, our focus remains on execution of the backlog, advancing our commercial opportunities maintaining disciplined cost management, and creating long term value for our shareholders. Concludes my financial review. And I will now turn back the call to Steve. Thank you.
Steve McCormick: Thanks very much, Andre. And to wrap up, as PyroGenesis President and CEO Peter Pascali stated in the news release yesterday, PyroGenesis closed the second quarter with a very strong 47% year over year revenue increase continuing the company's strong start to the year. As of Q1, the second quarter is the company's best since 2022. And with only half the year complete, we have already surpassed revenue for the first 3 quarters of 25. Strong execution across our diversified technology portfolio and a continued focus on operational efficiency and cost savings enabled meaningful progress on project milestones and a tremendous improvement in our modified EBITDA We have removed millions of dollars from our recurring cost base over the past few years and continue to identify opportunities to further streamline our production operations and improve our bottom line. After a strong first half of 26, we are carrying the momentum into Q3 by driving new business across more customer sectors and executing against our forward order book. In closing, on behalf of our CFO, Andre Mainella, our president and CEO, Peter Pascali, and the Board of Directors, I want to thank our investors for their continued support We look forward to providing additional updates in the very near future. A reminder to email any questions you may have about the company and its projects to our investor relations department at ir@pyrogenesis.com. Thank you again, and good morning. Operator, please end the call.
Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.