Pyrogenesis Canada Inc

TSX:PYR

Earnings Call Transcript

[Operator]

Good day, and thank you for standing by. Welcome to the PyroGenesis Third Quarter 2025 Business Update Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I'd now like to hand the conference over to Steve McCormick, Vice President of Corporate Affairs. Please go ahead.

[Steve McCormick, executive]

Thank you, Liz, and good morning to everyone. I'm Steve McCormick, Vice President of Corporate Affairs for PyroGenesis, and thank you for joining PyroGenesis 2025 Third Quarter Financial Results and Business Update Conference Call.

On the call with me today is Mr. Andre Mainella, the company's Chief Financial Officer; and Mr. Peter Pascali, the President and CEO of PyroGenesis. The company issued a press release on Tuesday, November 11, 2025, containing the financial results and the business update for the third quarter ended September 30, 2025, which can be viewed on 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 e-mail 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 e-mail address is [e-mail].

We will shortly provide prepared remarks reviewing the operational and financial results for the third quarter. But first, a reminder that this discussion may include forward-looking information that is based on certain assumptions, which are subject to risks and uncertainties that could cause actual results to differ materially from historical results or from results anticipated 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 and 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 forward-looking information or to explain any material differences between subsequent actual events and 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, modify 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 the financial statements, are available on the company's website at pyrogenesis.com and on the SEDAR website at sedarplus.ca.

Finally, a reminder that PyroGenesis follows Canadian generally accepted accounting principles or GAAP, where revenue is accrued 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 in-house and on a client's own scheduling and logistical decisions, both of which can impact project 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 a regular quarter-to-quarter based on the project timing as stated above or sometimes due to cash on hand and is continuously fluctuating economic landscape, clients can face their own cash flow and CapEx scheduling challenges, which can have an impact on PyroGenesis revenue.

I'll start off the business overview 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 CFO, Andre Mainella. Later in the call, the company's President and CEO, Peter Pascali, will answer a series of investor questions that have been submitted during the quarter.

Starting with revenue. For the third quarter of 2025, the company exited the quarter with revenues of $3.25 million, which represents a decrease of 18.7% year-over-year. For gross margin, for the quarter, gross margin was at 24% versus 42% a year previous. While lower than average, on a 9-month basis, the company's margin remains ahead of 2024 and currently sitting at 35% compared to 31% in the 9 months for the previous year. Andre will provide additional details regarding these numbers later in this call.

As always, to provide context for margins using comparison to some of the industries that the company serves or supports in the aluminum sector, second quarter margins are being reported at 10.4%. Aerospace and defense is at 11.6%. Iron and steel is at 25%. The mining -- the metal mining industry is showing 38% margin for the quarter, as is industrial machinery and components also at 38%.

In general, across much of heavy industry in Q3, continuing tariff costs, higher energy prices in Europe and demand swings, especially in the Far East have contributed to higher input prices for many of these industries as commodities face shifting global ties and as energy sectors work to bring more electricity and renewables capacity online while phasing out coal.

Now on to backlog. PyroGenesis backlog stands at $51.6 million, showing continuing strength in the company's order book. For those that need clarity on backlog, backlog is defined as signed or awarded contracts and outlines future revenues for the company that will be added to the financial results over subsequent quarters as projects are started, or as product milestones are reached on a percentage of work completed basis.

A management's opinion, a strong backlog helps to show the strength of the long-term outlook, while also illustrating the wide variety of different types of contracts that the company can secure or what the company often refers to as its multi-legged stool identity. So backlog shows the minimum future revenue for the company as these projects progress towards completion.

And now on to some key production highlights for the second -- for the third quarter, excuse me. Please note that projects or potential projects that were previously announced, but which do not appear in this summary update or within the MD&A or 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 not -- may simply not have passed milestones worthy of discussion or had their project status changed since the last reporting quarter. Starting with a brief reminder of the company's business strategy. PyroGenesis leverages expertise in ultra-high temperature processes to create technology solutions for heavy industry and defense. From early stage pilot to full commercialization, the company's technology solution set is concentrated under three business verticals: energy transition, materials production and waste processing.

These three verticals were recently reframed to better match the company's offerings and to account for changes in the business landscape. As PyroGenesis has evolved over the past 5 years, new technologies were introduced, certain industry terminology became more identifiable and normalized and future opportunities for the company within each business vertical became clearer.

So first, for the energy transition vertical, which provides primarily, plasma-based fuel switching solutions to help heavy industry electrify their high-temperature processes, modify their energy mix and lower emissions. In August, the company announced the signing of a contract with Constellium, one of the world's largest aluminum transformation and recycling companies. For the purchase of plasma torch technology and related components to be implemented and aluminum remelting furnace. This contract marked the launch of the Phase 2 industrial implementation portion of the two companies' collaboration agreement from April 2024, which outlined Constellium's stated plan to use PyroGenesis plasma torches and associated processes as potential replacement heating sources in aluminum remelting furnaces at Constellium's aluminum cast houses.

In September, the company announced a $1.2 million contract with a European cement industry customer for the supply of a plasma torch system for use in a calcination furnace. A calcination furnace, also known as a calciner, can be used for various steps in the cement process, including for high-temperature processing of limestone, quicklime and trona to produce lime, clinker and soda ash, all of which can be key components of cement contributing to its binding properties strength and durability. Fossil fuel combustion and CO2 released during the calcination process are major sources of emissions in the cement industry. In fact, approximately 40% of greenhouse gas emissions in cement production comes from the combustion of fuel needed to generate the heat required in the calcination process.

Switching to the materials production business vertical, which encompasses the development of chemical-free material production systems and the production of in-demand materials for manufacturers. During the quarter, the company issued a series of announcements regarding its fumed silica reactor pilot plant known as the FSR. For those who are unfamiliar, fumed silica is one of the most widely used industrial materials and can be found in thousands of products, including cosmetics, toothpaste, pet litter, powdered food, milk shakes, instant coffees, pharmaceuticals, paints, inks, thermal insulation batteries, just to name a few.

It is often used as a thickening agent or to stabilize and improve the texture consistency and flow of end product. The fumed silica reactor was designed by PyroGenesis to produce commercial-grade fumed silica from courts in a single eco-friendly system, while eliminating the use of the harmful chemicals used in the conventional production method. PyroGenesis has been engaged to develop and build the FSR for HPQ Polvere Inc., a subsidiary of PyroGenesis Client HPQ Silicon Inc. PyroGenesis has a 50% interest in Polvere and an exclusive arrangement to be the sole supplier of equipment relating to any future commercialization of this process.

A sequence of developments during the quarter help move the FSR closer to commercialization. In early July, the company announced improved quality, purity and consistency of the material across multiple production cycles of the pilot plant. These results were verified by a leading global fumed silica manufacturer, who had previously requested, tested and verified first-stage material samples produced in the FSR pilot plant under the terms of a letter of intent.

Later in the month, the company announced the confirmation from a third-party analysis of those previously announced results, further validating the key technical metrics for material samples generated by the pilot plant. And in September, the company announced that the August performance trials and modifications to the pilot plant resulted in a 3x increase in material surface area and significant progress across a number of essential product parameters.

These results were provided by a global manufacturer of fumed silica who conducted analysis on the fumed silica sample materials submitted by PyroGenesis after the latest series of operational tests. With these results, the surface area of fumed silica produced by the reactor met the requirement for several of the commercial grades of fumed silica products, while also showing total elimination of carbon impurities.

Also in July, the company announced the receipt of a contract for titanium metal powder produced by PyroGenesis next-gen plasma atomization process. from a European engineering and material science firm specializing in the additive manufacturing industry. The client had previously received and tested samples of PyroGenesis metal powder, and the contract marks the first commercial order with this customer. The order is for a Ti-64 coarse cut titanium powder.

And finally, to the waste processing vertical, which provides for the safe emission-free destruction, remediation and valorization of industrial, chemical, agricultural and municipal waste on land and at sea. In July, the company announced a $600,000 contract with one of the world's largest integrated environmental services companies for the engineering and testing of an advanced waste management solution, targeting both nonrecyclable plastics and other forms of hazardous liquid waste in Europe using PyroGenesis plasma gasification technology as the platform.

And finally, also in July, the company announced the completion of a previously announced $9.3 million coke oven gas valorization and hydrogen production project. For Tata Steel, one of the world's largest diversified steel producers. The systems developed by PyroGenesis subsidiary, Pyro Green-Gas, are in continuous 24-hour day operation at the Tata Steel facility in Kalinganagar, India, and the newly reformed hydrogen produced by the system is being reused by other applications around the facility.

To read about these and other updates and events, as well as some of the many 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'll be back at the end for some final thoughts.

But at this point, I'd like to turn the call over to the company's Chief Financial Officer, Andre Mainella, to provide more details about the third quarter financials. Andre?

[Andre Mainella, executive]

Thank you, Steve, for the detailed overview. And thank you to the listeners for joining the call. Now I'd like to continue with a review of PyroGenesis financial for Q3 2025, while providing a little more insight into the main revenue and expense items. For Q3 2025, PyroGenesis recorded revenue of $3.3 million, a decrease of $0.7 million when compared with the $4 million recorded in Q3 of 2024. The main product line response for this was torch sales, which decreased by $0.6 million.

This was due to the reduced project activity and resulting from the completion of several significant projects in the prior year that did not repeat in the current period and also to 2025 projects, which are still in their early stage.

In the biogas upgrading product line, revenue was up $0.3 million as the company continues to make progress on a significant gas desulfurization project. For year-to-date revenue, it closed a $9.3 million, down by $2.2 million versus 2024. This decrease is explained by the same reasons of the quarter and further extending to our revenue decrease in system supply to the U.S. Navy. The biogas upgrading category offset this decrease by adding $3.2 million of revenue in the 9-month period, which is $2.3 million more than it did for the same period of 2024.

We expect that the improvements in revenue as project stages advance with more momentum and greater revenue being recorded in the coming quarters. As of November 11, the date that these financial payments were released, our backlog of science and/or awarded contracts stands at $51.6 million, and is expected to be recognized into revenue over the next 3 years.

It's important to note, the majority of this backlog is in foreign currency, with greater than 80% being in U.S. dollars. Gross profit for the quarter is $0.8 million or $3.2 million year-to-date, and this represents a gross margin of 24% and 42%, respectively. The Q3 margins are affected by the current project stages and therefore, the nature of expenses being incurred. Employee compensation decreased and more reliances placed on external subcontractors.

These stages also incurred additional material costs, which generated lower margins. This is a reverse of what occurred in the prior quarter, whereby project stages generate higher margins with small incremental direct costs. We also want to mention that the company continues to control costs and product sourcing on an ongoing and proactive basis as seen in the past years.

Now let's turn to operating expenses. Selling, general and admin expenses totaled $2.6 million in Q3 2025 and $5 million for 2025 year-to-date. In Q3 of 2024, provisions for credit losses were recorded, and a portion of those expenses were reversed in that quarter due to these accounts receivables being collected. SG&A expenses decreased across additional categories as we continue to monitor costs, the largest of these favorable quarterly variations were once again seen in employee compensation, $400,000, professional fees down $250,000, as well as insurance, other expenses and depreciation.

For the year-to-date SG&A, we experienced the same anomaly with the comparative figures. But again, if we exclude the impact of the credit reversal, which was $3.3 million in 2024, the year-to-date SG&A expenses are actually down by $2.6 million. And once again, the main drivers for these reductions are employee compensation due to less headcount, share-based compensation, professional fees, along with insurance and other expenses. Again, we've continued to execute our cost optimization across all categories and improved sourcing.

Net R&D expenses for Q3 2025 totaled $0.2 million and is comparable to Q3 of 2024. Year-to-date, closed at $0.9 million and quite comparable to the $2.7 million we had for 2024. The company continues to benefit from client funded R&D projects, which qualify for SR&ED tax credits, while further supporting and developing new technologies.

Next, let's look at the quarterly net financial cost, which is $245,000 for the quarter. This expense is well within expectations. The interest expense and accretion expense on the secured loan issued in May 2025, are new for the current quarter, but offset similar expenses from the prior convertible loan, which is now fully reimbursed.

2024 also was negatively impacted by an expense for the balance due on the business combination. The year-to-date financial expense before considering net financial income is also well within expectations of $800,000 to $900,000 for the 2025 and 2024 year-to-date periods. The fair value adjustments of strategic investments resulted in a minimal expense in both the current quarter and comparative 2024 period. This was based on the decrease of the share price of HPQ common shares, which directly affects the value of the investment and also the fair value of the warrants owned by PyroGenesis.

Moving on to our comprehensive loss, which, as a result of the items discussed is a loss of $2.5 million compared to $3.9 million loss in 2024, a favorable variation of $1.4 million. Now, although sales and gross profit were lower, the lower SG&A expense generated a smaller loss from operations and was further improved by less net financial expenses.

On a year-to-date basis, the loss is $3.1 million greater than 2024 due to the noncash loss from change in fair value of strategic investments, and the fact that 2024 had a $1.2 million gain from a legal settlement. The improved quarterly comprehensive loss leads to an improvement in both EBITDA and modified EBITDA by $1.1 million.

Now this metric helps investors to better understand the financial performance of our operations, while excluding elements outside of our control and other noncash items. This wraps up the financial portion of Q3 2025.

I'll now hand it back to Steve. Thank you.

[Steve McCormick, executive]

Thanks so much, Andre. We will now proceed with a series of prepared answers to questions that were submitted to the company during the quarter. To answer those questions is Mr. Peter Pascali, President and CEO of PyroGenesis. Go ahead, Peter.

[Photis Pascali, executive]

Thanks a lot, Steve. I've got a finally got a speaking role, ladies and gentlemen. Thank you very much. And what I'm going to be doing here is answering a series of questions that we see frequently or specifically came up recently.

Question number one, what can you tell us about the super high temperature torches, the 4.5 megawatts and 20-megawatt torch specifically that were announced a couple of years ago?

Well, for those that are new to the story, back in August 1, 2023, we announced a contract for a 4.5-megawatt plasma torch for a client, who is a prime contractor for the U.S. government, as well as for public and private customers in aeronautics and defense industries. The project is moving along quite nicely. Both the engineering and fabrication have been completed. The torch is undergoing assembly. I saw it recently at our factory. It's about 6 to 7 feet long. And we actually plan to deliver the torch and have it tested at our client facility in early 2026.

As for the 20-megawatt torch, that contract was announced just a little bit over a year ago. It's for the same client, it's about a 3-year project, and it's also progressing and is in the engineering and electrical design phase as we speak. We also noted that at the time of the announcement and based on our own research, this 20-megawatt torch -- plasma torch has never been produced commercially. So this is a huge leap in power and performance for us or for anyone for the industry. Back in 2020, a 900-kilowatt torch was our highest output. So well, since that time, in just 5 years, we've advanced the torch power by more than 20 times with this particular project.

Question number two, what can you tell us about the hazardous refrigerant destruction system that was sold to New Zealand?

So again, as background, back in late 2022, early 2023, we announced the sale of one of our large, what we call SPARC systems. SPARC stands for Steam Plasma Refrigerant Cracking technology. It's a system used to safely destroy hazardous and end-of-life synthetic refrigerants such as CFCs, HFCs and HCFCs from -- typically from air conditioners and fridges. The sale was to an organization in New Zealand has been passed with the collection and disposal of these type of refrigerants.

It's important for New Zealand as there currently is no existing method on the island. So these hazardous materials must be stored before being shipped to, I think, Australia, for disruption. The client built a stand-alone facility to house our SPARC system, which has been under construction for a while. And the project is now nearing the end. We have actually people on site right today, as I'm speaking, in New Zealand, doing the final assembly and commissioning. And the goal is to process the first batch of hazardous refrigerants before the year-end, year-end 2025, that is.

Question number three, what is going on with the titanium metal powders business line? There hasn't been any news in quite a while. Also, you were recently certified for your coarse cut powder, but what has come about with respect to the fine cut? So first thing I'll say about that is that some investors have noticed that we haven't put out any project news just generally in a little bit. And the reason is, and I'm going a little bit off side here, but a little bit is due to the private placement we're currently in. This is a private placement that's been publicized. I think I'd put in roughly $3.5 million. I think that -- I think I bought the speaking role basically. I mean, I'm allowed to speak now after I put in $3.5 million, it seems. But anyway, that financing hasn't yet completed. And the regulators don't particularly want you putting out news of any sort while you're doing a financing because they are a concern that some people may be trying to get the audience excited about the stock and this news might affect people in a positive way.

So unless something is really, really material. I mean really significantly material, which we will have to press release right away. It's found upon issuing news during this period of time. So having said that, we haven't issued a general news for that reason. It's not that we're going quite or anything.

As for the titanium powders in general, you can rest assured there's been a lot of activity which hopefully we'll be announcing over the next little bit. We get a lot of comments and questions, particularly after having been named an official supplier to a very large global aerospace leader. And then the question why there hasn't been any follow-up news. Again, as a side point, you may notice that we don't use their name in public announcements.

It's important to note that we don't appear to be -- it's important that we -- it's important to them that we don't use their name and appear to be writing their coattails to generate publicity. So the current themselves have the very strict control over the use of their name. And to do so repeatedly, we've been -- we'd have to continue to get approval from them every time, and it just takes too long. So to avoid using their name altogether, we don't use their name. Specifically, we use a general description that way we don't need to get approval.

As for what's happening since being certified by them, aerospace companies are -- they're very large companies, and they have multiple divisions and business groups. Each with their own protocols and has taken several months as a newly appointed supplier to have our official status circulated across the customers' various lists and project hubs and such.

And certification, certification is not guarantee orders. It just puts us in a really good position to get them. It puts us on the list of approved suppliers. For each project that requires the metal powder and RFQ, or request for quote is issued, just to give you a sense of what happens. And with the certification allowing us to bid on the project against other companies. 3D printed metal parts are still in the very early days of use even with this global leader. And as such, usage grows, we are -- and as such as usage grows, we're going to be in an excellent position to service them.

In fact, we recently received our first RFQ from them for a potential powder order, and we've responded and we hope to have an announcement very soon. Regarding coarse versus fine cut. Yes, our fine cut powder is still in the certification path. Our coarse power got approved. But the fine powder is still in the certification path. And some of you may remember that the fine cut was originally intended to be the first powder qualified with this customer.

However, they changed the technical specification of the powder requiring all suppliers to meet the new specification and so it set the process back a bit. Without getting too technical, the allowable properties of the metal was made is significantly different, and each supplier of the metal because they each use different technology had to figure out a way to adapt to the change. We eventually figured this out for our next-gen system to meet this requirement.

In the interim, the popularity of coarse cut powder has grown quite a bit over the last years. To a point where the two cuts may have -- have almost equal demand, which is significant for us because it means that the fine cut is not like the best cut and the other one we just had on the side store.

Now in a powder run, we have equal demand -- a demand for equal amounts. So it's a lot better for us when we start getting orders and doing powder runs. And a printer hardware has actually improved to allow for coarser grades of material to be used as effectively as the finer grade. So it's not as important to being certified with fine cut as it once was regardless.

We'll be providing another round of samples of our fine cut powder to the customer shortly for final testing and analysis and if everything goes as it has before, it should end up in a positive fashion. I guess it goes without saying we've also been knocking on the doors of several other potential clients and for those we also hope to have announcements very soon.

How is the overall energy transition movement going -- sorry, question number -- whatever question number 4. How is the overall energy transition movement going specifically with respect to what looked like an opportunity with the mining and iron ore sectors, but which seems to have cooled?

This is actually an excellent question because it speaks to a number of things that I'm quite passionate about. So the issue with the iron core business is that it fluctuates a lot and quite dramatically. Demand goes up and down as do prices. It's a very volatile industry based on the ebbs and flows of global steel demand, supply issues, geopolitical disruptions.

And with that volatility, those companies' willingness to spend. So they will often slow or stop their capital expenditures in tune with the wider volatility. Keep in mind, these are gigantic sprawling global companies that have been around for a century or more. They play the long game. So a few year cycle where they slowed down their capital spending means nothing to them, it's just a blip.

For those investors a little new to the company, it was the iron-ore industry that first kicked off with us the potential for widespread use of plasma in industrial furnaces. That was the first time we got a taste of how our torches could be deployed in this particular fashion. The iron ore business has a process called palletization that uses a furnace to heat their small or pellets and testing was done back around 2020 or so for the use in those furnaces. And we subsequently signed contracts with leading global or firms to trial our plasma torches and one customer is still conducting tests on a live furnace in their facility.

At that time, we really had no idea that this was an indication of a broader industrial movement for decarbonization. And this is what the -- this is a key aspect to the question being asked. A key aspect of my answer. The pelletization furnace opportunity was somewhat of an isolated pursuit for us, but what it really did was it showcase to other industries and ourselves that plasma was really in a general sense, an alternative to gas burners.

And as you can see, that's been a real kicker for us over the recent past year, in particular. And these other industries, especially aluminum and cement have surpassed the iron ore pelletization opportunity simply because they have more individual processes that can utilize -- that can utilize plasma.

Our recent -- our largest energy transition contracts have been announced with the giants of the aluminum sector, Norsk Hydro, Constellium to name two. GE Vernova also figures in that. And this year has seen the rise of the cement industry and their various processes, especially calcination, which is a high-temperature process of raw materials like limestone, processing raw materials like limestone also have visibility for us. So we still see great opportunities in the iron ore and the broader mining sector. But until they get it together and move into their next cycle of spending, aluminum and cement and also chemical and steel will have really shown what's possible in heavy industry in so far as plasma torches are concerned.

And hopefully, we'll have announcements on this shortly. But this speaks to something that some of our long-term investors or people who follow the company have heard me say, one of the unique things about PyroGenesis is this multi-legged stool approach that we have. So when you look at PyroGenesis, which you're looking at are some multiple uses independent of each other, uses of plasma torch. So it's like a multi-legged stool. And when one slows down, we have the other ones that we can rely on.

And so in a sense, you're -- we're derisking the company by having that approach. And when you look at PyroGenesis, essentially what you're looking at is a mini fund of plasma opportunities. And the reason I bring this up here because this is how it speaks out, the iron ore pelletization are slowing down on their capital investments. But because we have a small tool the other ones, Constellium and Norsk Hydro are kicking off and showing great opportunity. I think I answered that question. I can't remember what the question was.

Anyways, question number 5. It's been noticed in recent news releases that you are highlighting the term defense to go along with heavy industry? Is that purposeful? And can you elaborate?

So yes, it was definitely purposeful. Over the past few years, interest in our technology from the defense and military industries has increased considerably to the point where identifying this as a unique target market is definitely justified. In fact, their interest encompasses an array of our offerings, including opportunities across waste destruction and specifically chemical warfare agents, high-temperature propulsion and protection and titanium metal powders, believe it or not.

Obviously, there could be a lot of secrecy involved in defense applications. So very often, we'll have to be discrete and how we discuss these opportunities and any contracts that appear, but we see this as a major leg for the company moving forward. As we have indicated in the outlook section of the Q3 earnings documents, we recently signed a teaming agreement with a major defense contractor for the potential sale of chemical weapons destruction systems. There's more to this, and we hope to explain more in the near future, but confidentially -- but the confidential cause will probably prohibit any significant detailed descriptions, but we will communicate in as much detail as we can, how this progress is.

Question number six. You are presenting at an industry event in March based on the speaker abstract, it appears that finding for a project that Pyro did in conjunction with two major aluminum companies will be presented. Can you shed any light on this?

Yes, the two aluminum companies that they're talking about is our Alcoa and Rio Tinto. And it's quite interesting how this gets around. Yes, one of our top engineers will be attending the annual conference of the Minerals and Metals Society or TMS.

TMS, by the way, is one of the oldest organizations in heavy industry, I think dating back to like the 1870s. He will be part of a group revealing the results. It will be a group of himself, Alcoa and Rio Tinto, revealing the results of major test campaign we conducted for use of plasma in aluminum melting and casting furnaces.

And as I said, this is what we did, the three of us together, PyroGenesis, Alcoa and Rio Tinto. Two of the biggest aluminum companies in the world. Executives from those companies will be at the TMS conference, and one of them will be presenting the findings on behalf of the group. We've written a technical paper. It will be released, I believe, the day before the event, which runs between March 15 to March 19 in San Diego.

It's all very exciting for several reasons. But effectively, we have a gag order on the specifics. We can't talk about it. They want it to be done at that time. And unfortunately, we don't want to spur the presentation. But the abstract is available on the tms.org website, if you want to go find out a little bit more about yourself, but it won't give you enough of the details, but I think there's a positive statement, a general positive statement about something in there, but it won't give you the huge details. But this is what the question is referring to. And we're very proud to be part of that group, and we're very happy with the results.

Question six. The film silicon reactor project has built up a lot of momentum, but are you confident you can reach the targeted material surface areas that are the minimum standards for commercial fumed silica? If it does succeed, how will it roll out, will you sell your systems? Or is there a license agreement involved, et cetera, et cetera, et cetera?

Okay. I believe HPQ came out with a press release this morning talking about some recent results. I really hope so because it's not going to be shortly. So definitely, it's been a momentum, and I'm definitely confident about the future results. I believe our method for producing fumed silica is one of the best things we've ever developed. Period. It's really, really good. And my hats off to my engineers and the group, having done it quite in a record time. We're getting great results. We're getting great attention.

As for the future, look, all options are on the table for commercialization. The flexibility of the technology and its design allows us to consider multiple approaches. It's too early to say which one will eventually be the primary approach, but you can be certain that the choice will be about maximizing shareholder value for sure. We have our -- I think what came out was our test Series 7 test results. And if not, they will be coming out very soon.

General question, question number, I think we're on number 8 or so. We typically are asked this question over and among some other silly questions. And yes, there are silly questions in the world. You can go to some of the websites that ask these questions and you can see them. But we often get questions with respect to when they hear about our torches or large orders, what is our production capacity? And do we have the resources? And when do we have to buy -- build a new full manufacturing plant to scale and things like this.

And we outsource a lot of our manufacturing. And we do it in such a way that nobody really knows what they're doing, then we assemble it somewhere either at our facility or most often at our clients' facility. To give you an example on DROSRITE, one of our business lines, I can't remember the last time we built a DROSRITE system in Canada.

I mean all the ones that we shipped to Saudi Arabia, I think there's about 7 to 10 were all built somewhere else and shipped to Saudi. So given that kind of strategy with respect to manufacturing, our current facilities can serve us for a long time. We can go into -- I believe we haven't done the numbers, but hundreds of millions of dollars would not surprise me before we start talking about expansion. personally, and I think my Board is on side with me on this, we don't particularly like engaging our own manufacturing facilities because there's this pressure to keep it full all the time.

And the ebbs and flows of industry, it's better to use other people's manufacturing capabilities, particularly when there's manufacturing availability space out there. It works well for us. Anyways, overall, with respect to questions answered, we received and continue to get a lot of questions on specific projects.

But because of the phases they're in, we cannot provide a comment yet. I mean, but keep your questions coming in, and we'll try our best when we see there's a common question to try and answer it. If it's confidential, we haven't press released it, we'll try to incorporate it in one of our future press releases if the question is frequent enough.

But I want to again, thanks to everyone who submits questions, keep sending them in. If we don't respond to you, it's because you've asked a question where the answer can't be shared with just one person. And as I said, we'll try and remedy that. If it's asked enough, we'll try and structure it into a press release on the subject or oftentimes, it's where capital markets prohibit us from responding for one reason or another. So that's it for the question-and-answer period. I thank you for attending this call.

And now I'll turn the call back over to Steve. Thanks, Steve.

[Steve McCormick, executive]

Peter, thanks so much. It's great to hear you and to get some insight on the projects that are happening. So in closing, on behalf of the Board and on behalf of Peter, the company would like to express its continued confidence in its strategic path. As Peter stated in yesterday's news release, centering the company on innovation is the correct strategy.

Being a small cap or a microcap company in the industrial technologies sector certainly presents its challenges, but the company firmly believes that this innovation first approach drives the type of bold decisions that lead to development of advanced technologies that we believe have a long future ahead from producing titanium powder and fumed silica to creating hyper powered plasma torches for ever more demanding industrial and now aerospace applications to designing systems that safely eliminate a growing range of hazardous materials to protect both people and the environment. These are breakthrough technologies that are built on more than 34 years of research effort, and we are not stopping.

For Q4, buoyed by the recent financing, the company is focused on delivering a strong finish to the year and setting the stage for 2026. So stay tuned for more information over the coming days and weeks. We look forward to providing you with additional updates in the very near future.

And a reminder, as Peter said, to e-mail any questions you may have about the company and its projects to our Investor Relations department, using the e-mail address [e-mail]. I want to thank you again for listening in, and have a good afternoon. Operator, please end the call.

[Operator]

This concludes today's conference call. Thank you for participating. You may now disconnect.