iFabric Corp. ($IFA)

All right. Good morning and good afternoon, depending on where you're dialing in from. Thanks for joining us today. We have a very exciting update with iFabric. They just put out their Q4 and full year 2025 numbers, which were fantastic and offered some guidance on Q1 '26 as well. With me today I have Hylton Karon, CEO; Hilton Price, CFO; and Giancarlo Beevis, COO. We are going to work off a presentation. The format will be a quick overview of the company for anyone that's new to the story then we're going to get right into the financial numbers and then open it up for Q&A. There is a Q&A box at the bottom of your screen. So feel free to use that. And even though we're not working off a presentation, this session will contain forward-looking statements. If you'd like to know more about those. You can find them on the presentation of the company's website. With that out of the way, I'd like to introduce and hand the mic over to Giancarlo Beevis, who's COO of the company and CEO of Intelligent Fabrics Division. Thanks, Giancarlo.

Thanks, Deb, very much. Hi, how are you?

I'm good, I'm good. Yes, why don't you tell us a little bit about the company for people that are less familiar.

Sure. Thanks, everyone, for taking the time to join us. So as Deb said, for anyone who's new to the iFabric story, I'll kind of give you the quick version as best I can. I think at our core, we're really a company that makes everyday products more intelligent and harder working without making life more difficult. So really, what we do is we operate 2 unique divisions, Intelligent Fabric Technologies that develops proprietary performance chemistries and treatments for textiles. If you think of antimicrobial protection, master management, cooling, UV protection, those types of things. We then bring those technologies to life in real finished product rather would that be with major brands or with private label programs and major retailers across North America. Our other division is Coconut Grove Intimates, which has spent more than 30 years really developing and distributing solution-driven intimate apparel and accessories, where we really fuse fashion and function. We distribute all those items again through all major retailers throughout North America and some over in the EU and U.K. So really, if you want to know how we think of iFabric today, we're really a global company with proprietary technology, clinically proven technology. Our business is expanding across health care, sports, travel and other consumer markets. We have powerful retail relationships. We have accelerating revenue and a massive runway ahead for us to continue to build on. So we like to say that we're innovation without boundaries, and we quite literally mean it. It's chemistry to check out is how we think about it. So we're really using our different apparel items and other items across multiple categories to deliver our unique proprietary technologies to the marketplace. So all that in a nutshell, really readers digest version of who we are and what we do. I'll turn it over to Hilton Price, who talked about fiscal 2025, which was a fantastic record year for the company. Hilton?

Just a second -- sorry, I couldn't mute. I don't know what happened. Good afternoon, everyone. As is my usual preamble, I would say that we did a very comprehensive press release on the Q4 and annual results for 2025. And the full version is available on our website and also on SEDAR if do you want to look at it. So what I'm going to do in this segment is just focus on a few key elements for important aspects of our financials, I think bring clarity to the numbers and where we headed as a company. So starting off with revenue. For fiscal '25, our revenues were $32.9 million compared to $27.3 million in the prior year, 20% increase, a record year for the company. Quarter 4 in 2025 was $11 million compared to $10.5 million, a very small 5% increase, nevertheless, a record. But I want to bring some perspective to that. The revenues would have actually been a lot bigger in that quarter. We had around $1 million in product that we shipped late December that only reached the customer warehouses shortly after year-end. I don't know what the delay was. We thought that would arrive before year-end. But unfortunately, it wasn't the case. Now normally, we have a situation where we deliver inventory product to our customers' shipping companies, we would recognize as revenue because the risk is passed. But unfortunately, in relation to Costco, they've got an exceptional rule in their agreement that they don't recognize the risk until the goods are received in their warehouse. Accordingly, we were forced to move this $1 million in product that shipped in December into Q1, which is one of the reasons why we amended our guidance for that quarter. So that $1 million added on to Q4 would have made for a much better record, unfortunate, but fortunately, we'll see a much bigger Q1. Gross margins. This is an important thing because our margins on the face that reduced from 41% last year to 32% in the current year. And in Q4, in particular, went down from 40% in '24 to 26% in '25. There's a couple of reasons for that. I mean the obvious one is U.S. tariffs, which impacted U.S. sales of about $17 million, almost half our revenues. And the good news is the IEEPA tariffs have been struck down by the courts and have been replaced by a new -- a new 10% tariff, which for us is far more manageable. Now that we have clarity on this, I think we're hopeful that we'll be able to reprice goods going forward to the level that we'll be fully be able to recover the 10%. We weren't able to do that in the prior year as we were committed on pricing. So we took the strategic decision to share the tariff cost with our suppliers. So basically, we ate half and our suppliers ate half. That's going to change. The good news is we're lodging a refund claim of about $600,000 for illegal tariffs charged to us. And in fact, the U.S. has started to reimburse companies. They are backed up. I don't know how long it's going to take. Our agents seem to think it will be this year. But nevertheless, the amount of USD 600,000, which translates to about CAD 800,000. And we'll recognize that when we receive it, it will be a bonus for whichever quarter that's applicable to. The other major consideration will factor that impacted margins was the fact that we stopped shipping intimate apparel in the fourth quarter. And that was pursuant to the fact that we did not renew the Maidenform license agreement that we were using to supply apparel to our major customers. We replace that with our own brand, which Giancarlo can speak to. I believe the own brand is doing quite well, and it's been accepted by all our major customers. So we'll be able to resume -- in fact, we have resumed shipping in Q1 of intimate apparel. Unfortunately, intimate apparel or fortunately carries the highest margins in the business. So when there's a fall off in intimate apparel sales, it will impact our margins or our blended margins quite significantly. So with the resumption of sales of those products, I would expect margins to increase, obviously, with lower tariffs all impact the margins, and we've seen improvement. The other major benefit of launching our own brand is we don't have to pay royalties. And that will be a significant cost setting for us going forward in that division. We are paying around 10% with the advertising contribution, I believe. So they're all going to be saved to go to the bottom line. And I believe our new brand is selling better than Maidenform. So all good. Selling and administrative costs. We saw an increase of about $1 million in 2025. And royalties is one of the biggest components of that. as it's variable in relation to sales, higher sales, more royalties. We also spent about $200,000 on our new ERP system, which is a one-off cost that's not going to be repeated. We've paid most of the costs in '25. I think we have a small residual cost in '26, but the bulk of our cost is in '25. We were hoping to put the system in place in Q1, '26, unfortunately, that didn't happen due to the commitment required by staff to deliver and execute on the massive quarter. So I've delayed the implementation till quarter 2 or Q2, and it will bring a lot of efficiencies to the way we operate. especially in analyzing our sales, our product and our inventory. I think we'll see a good deal of efficiencies later in the year. EBITDA. Adjusted EBITDA was $1.9 million in '25 compared to $2.7 million in 2024. And the main reason is obviously the reduction in gross margins. So with a number of one-off costs behind us, such as the ERP systems with a reduction in tariffs, the resumption of the apparel business savings in royalties, I would expect earnings aided to significantly improve going forward. Cash credit lines. Our cash increased to $3.8 million from $2.1 million last year. At the same time, we utilized our bank line to the extent of $6.7 million to pay for inventories. And I'm asked why wouldn't use the cash to reduce inventories. And the short answer is that most of our cash is carried in U.S. dollars to convert to Canadian and back to U.S. where we needed for U.S. settlement would have cost us more in exchange differences than the interest that we pay on our credit line. And the final item that I'd like to discuss is our inventories. If you look at the balance sheet, you'll see that our inventory has increased to $21 million at the end of '25 from $10.1 million as to -- and this represents the inventory that's been brought in to support this massive Q1 that we've just had, for which we've already provided guidance in the press release, and we expect revenues for the quarter to be in the range of $25 million to $27 million. That's it. I'll be happy to take your questions.

Okay. I see some questions here. So could you quantify the Q1 '26 revenue guidance? Is it mostly related largely in fulfilling the additional Walmart stores? Does it include the $8 million related to the roots contract? And how much is related to the fulfillment of the existing 500 Walmart stores?

Giancarlo, do you want to take it or you want me to answer?

No. Sure, I can answer. So part of it is fulfilling the additional 1,000 Walmart stores, but it's not all of it. We've obviously launched the new brand for the intimate apparel segment at 2 major retailers. That's in the quarter, which is great. We also have another intimate apparel program that's launching at another major retailer in their private label brand. We've also expanded our leakproof underwear program at Walmart into think about 5 -- 4 or 5 new styles and into an expanded store count. So it's kind of a mix of all things. Does it include the $8 million related to routes? No, only part of it. We shipped part of that in Q4, and we shipped part of that in Q1. And then how much is related to the fulfillment of the existing -- I think I answered that part already. So it's really kind of a nice mix of all programs across both divisions.

And then I guess a related question. Guidance for Q1 was quite strong. Is this primarily attributed to scrubs growth? Do you anticipate this year will be first half heavy? Or do you see -- or do you foresee strong orders shipping in the second half of the year as well?

So again, part of it is attributed to scrubs, but we expect that to grow. We're working on true store expansion for that going into the end of the year as well. So I think that obviously, while this is a fantastic quarter, I don't think every quarter will be that. But Q1, Q4 is obviously always a great quarter for us, so we expect that to be large again. We're seeing some expansion in Q3. And I think Q2 will be a great quarter as well, maybe not to the extent of $25 million to $27 million, but we are seeing some good numbers.

So expecting growth quarter-over-quarter, but not sequentially?

Yes.

And then how much in tariffs did the company pay last year? And what's the potential refund amount?

I think I gave that USD 600,000.

Okay.

CAD 800,000.

Okay. And then you spoke about this a bit with the Intimates segment. Margins declined to 26.3% from 30.2% last quarter and 38.7% last year. Can you expand on the margin reasons as to why it could expand again?

Yes. Well, intimates carries the highest margin in the business. We stopped shipping intimate apparel in Q4. So when we stop shipping intimate apparel, our blended margin will drop. When we start shipping it again, we'll get the blended margin back up to normal range of around about 35% to 37%.

I would like to jump in here and say something, excuse me, everyone. I just had mouth surgery, so I'm talking a little slurred. I think in addition to what Hilton just said, in order for us to get a lot of new positioning in retailers in the United States. We had to give some assistance to get some competitors out of the shelf space. So Hilton, I think that the other thing that we have...

Yes. You're [indiscernible].

I'm always right. So I just want the market to understand that we did spend in the tunes of a few hundred thousand for us to be able to do multiple millions a year for many years to come. So I think that that's an additional hit to the margin that was a strategic management decision because these -- the retailers came to us. We refreshed the whole program. It's a whole new dynamic way of marketing these products, and we invested in '25 for the future. So I think that's critical for the market to understand that.

That will be one of the factors that will bring up the margins to historic level.

What growth rate do you see for the intimate apparel segment? Should we assume that apparel revenue is likely to be very small over '26? Or will delivery start mid-2026?

No, I think it will be a good growth year for the intimate apparel. I mean the new brand has taken off quite well, and we've seen some great traction so far, and we're only looking to expand it from there. I think that we had been held back in some sense using our previous brand that we just jettisoned for our new brand and we're after a new demographic where a lot of these sales are happening. So we're already seeing that in the early reads that we have programs that are selling much over planned, like in the tune of 100%, 200% over what we planned. So we would expect to see that, that growth to be quite strong over 2026.

And margin as well given your royalties?

Yes, yes, exactly.

No royalties.

Once again, I'm going to jump in. I think what needs to be said is by us doing our own branding and our own positioning boding restricted in the Maidenform license to the products that we were able to sell because they did sell traditional lingerie. It is now open season for us. We now can do any product because being directed. So besides the fact that we more competitive because there's no royalty, we are now open to sell any lingerie product. So this is actually very dynamic and very strategic for us for the long-term future. And I think in the months and years to come, this is something that's very exciting for us because it be no longer restricted in what we can offer to the lingerie department, whereas under the Maidenform license, we were severely restricted. So this is another very important reason why we did the investment in because this is going to allow us to expand the lingerie business and as Hilton Price said, it at some of the higher-margin business that we do in the company. and we will look at it. It's not going to have the growth opportunity that IFTNA has, but it's certainly going to be a nice contributor in the big picture to the whole of the company.

And how much higher are the gross margins out of your branded product versus native form?

Well, I would say that everything in the lingerie department is probably the margin is in the mid-40s to low 50s margin, whereas IFTNA has got exponentially higher volumes and the margins are either in anything from 35% to 40%. So when you look at the corporation, we like to achieve 40% as a GP for the corporation or better, and we're going to get back to that, and we've elaborated as to why we took the knock in '25, but there's no reason between tariffs contributions. And I would like to just add another thing that we have not brought to the fall. In 2025, we've spent multiple hundreds of thousands putting in a new ERP system. We know the company is growing. We've proven it now with the revenue growth, and we had to put in what's probably in totality or $0.5 million investment and a lot of it was paid out in '25. This is a onetime investment for the future, but it is a complete new operating system. So once again, for the investment community, understand we've invested for the future in '25. So that was also a hit to the margin. So if one understands we've invested in '25 with strategic growth in mind knowing the exponential growth the company is enjoying into the future, and we've put systems in place to help us run a far bigger company.

I just want to add something there. You've got to differentiate between items that affect EBITDA and items that affect margin. Yes, the system had a big cost, but those are operational costs. Those will affect G&A and EBITDA. Obviously, the higher margins in intimate apparel will bring up the margins. So one shouldn't confuse the two. Royalties as well as a selling expense. It doesn't directly impact margins. It certainly impacts the bottom line.

Got it. what is your adjusted EBITDA margin objective for the next 2 to 3 years?

I'm trying to get to 15% in 2026 and hopefully, as high as 20% in '27 because a lot of our cross-sell fixed costs, our variable costs or incremental cost to execute on higher revenues are not that large. So at significantly higher revenues, you're going to see a lot more dropping to the bottom line.

Just trying to group these together a little bit. Can you give a little color on expenses going into 2026 and will selling expenses increase faster than G&A.?

That's not going to be the case. I mean, let's -- you will look at it after Q1, you'll see that, that absolutely isn't going to be the case.

That I know you talked about Q4 versus Q1 -- Q4 versus Q1 '26. Do you expect Q4 to be just as strong? Or do you think Q1 was an anomaly because of some of the orders that slipped into the quarter?

No. Q4 won't be as strong as Q1, but it will be significantly. And we are working on other stuff. We're not a mature company. Any one of these things that we are working on can come to fruition in the next few months and could be a Q4 delivery and it might be that Q4 is as good as Q1. It could be the case. We don't know. We're working on staff. Giancarlo?

Yes. No. I mean we are working on things that could be, as you say, if any one of them pop could give us one of those record over record quarters. So as we move through the year, we'll see how those come. Some of them are looking good. Let's see what the year holds.

Could you discuss the rollout of scrubs via Walmart and what might happen over the next couple of years with this product?

So we were given a test and I think it was about 367 odd stores. Obviously, it was well received in the first handful of weeks of selling, which we announced that we were getting an additional 1,000 stores. So we're in -- we call that 1,367. It's only about 20% of Walmart stores in the United States. So if we extrapolate that just on purely door growth to the rest of the 4,400-odd stores in the U.S., we have substantial runway organically just with expanding into different stores. And we are seeing the sales continue on a good trend. Obviously, we're the only technology in the store with clinically proven are the only scrubs in the store with full clinically proven technologies and actually counting it. So the market is accepting it. People are looking for these types of goods, and we're the only ones who can supply it to them. So it is going well. I saw a question there on -- are we expanding to other retailers beyond costs go in Walmart because that's what we've talked -- that's what we've spoken about. Yes, of course, we don't want to sit here and spend 20 minutes listing out of the customers we're selling to, but we are expanding that -- we're not just a 2-trick pony, keep your eyes to -- on stock. You'll see some announcements coming out in the coming months that will list some of the new retailers that we're working with.

And what is the path for getting the scrubs sold directly to hospitals?

So we're currently working with the hospital group that did the click trial in California on multiple different paths doing it, whether that's through a buying group, whether that's a direct relationship that encompasses iFabric, Walmart and the hospital group themselves. So that they can be directed to a B2B portal directly with Walmart that will supply our doctor's choice scrubs. But obviously, we're also working through the nurses unions to see if we can get their kind of a seal of approval because once the nursing union is going to handle on this kind of technology, they're going to insist that their nurses are protected by using that, which kind of forces the hospital's hands. So there's many different routes. We're trying all of them. And again, stay tuned, we'll see where we can get within the next 12 months.

And are you pursuing European or Asian distribution for the scrubs?

At this point, we haven't. We've expanded some of our technologies as we released in Marks & Spencers. But yes, we're pushing into the EU, but not as quite as fast a pace as we are in North America.

And do you have an update on the EPA kill claim?

We're still working. We're still doing the leaching study. And hopefully, we get that completed in the short term. I think the positive news is that what we can show is that the clinical trial has been fully worth the wait, and everyone was -- all the investment community always wanted to know why it was taking us so long to do that. But we did achieve it, as we said we would. And once we did achieve it, we can clearly see what growth came just from that. So our expectation is that once we get the EPA full claim, we'll have that expanded both continue to show up with nickel claim as well as the clinical trial as kind of a double-edged sort.

And are the royalties for these of doctors' choice named the scrubs in the high single digits or higher. Can you comment?

Single digits.

Okay.

I'm going to just comment on this. I think that certain investors are asking Minus questions. We, as a business, and I think we've touched on this, Deborah, is we, as a company, mandates to ourselves as management to have a minimum revenue and a minimum margin. So we take -- the royalty is only one component of a costing. So to focus just on one part of it a total costing is just not important. The whole package has to work for the business or we're not going to take the business. We don't change -- chase revenue. In fact, I think it's one of the lower royalty programs that we run. But it's not whether it's higher or over. We just make sure that at the end of the day, any program we take it's going to give the right return to the customer -- for us to invest the kind of money we're investing.

Just growing through these trying to find new questions. On April 8, Trump posted a country supplying military weapon styrene will be immediately tariffed on any and all goods sold to the United States 50% effective immediately. There will be no exclusions or exemptions, potential targets, I believe, to be China? How long before the company can diversify its supply chain out of China?

So just quickly on that. I mean, everyone wants to be out of China so quickly, and then he changes the mind and everyone wants to move back to China so quickly. China has got consistency. China has got supply, they've been doing it forever, and we have infrastructure there. So we are quite comfortable with producing in China. Having said that, we have, obviously, since the beginning of last year, started to diversify our supply chain. We already can make anything we make in China and other places in the world, whether that be Vietnam, whether that be Bangladesh, whether that be India, we do have backup plans. If he does -- if you passes that 8 p.m. deadline, and he puts the new tariffs in and he wants to do whatever he wants to do, we can maneuver quite quickly, stuff that's already in process, will be stuff that's already in process, but we do have a strategic plan in place to make sure that we don't get caught.

I think people must also ask themselves question. China is the primary source of fabric. So all these other countries with people who don't know our business. It's easy to ask the question where you're sourcing from. But at the end of the day, everybody is getting their fabric from China. So I think this is a -- it's a great conversation, and it makes a wonderful chatter. But at the end of the day, our competitors and us, we're all in the same boat and to get resupply of the kind of volume we get to flick a switch and buy it from another country would take 3 to 5 years to develop. So this is really a new conversation. Us and our competitors, we're all in the same boat. We're all in the same industry, and it really -- we wanted obviously. We will be pricing it. The buyers are well aware of where we're sourcing from. And so I just don't think this is a major issue and something that needs to be overly stressed about.

Okay. The market cap sitting around $100 million and a record break in Q1 coming up. What are the primary hurdles you're -- you see to scaling the intelligent fabrics division beyond its current retail footprint? Are you seeing any white space in defense or professional service sectors for your antimicrobial treatments?

We've got saving opportunities.

Yes. I mean there's tons of opportunities. I'll address that first. Obviously, military has always been something of interest to us. It's just a longer -- much longer cycle to get anything adopted. So it's something we've always been interested. We've always had discussions about never mind military. Hylton and I even in the beginning days went to do NASA work. But it's great to go do all that work and spend all that money and they make 7 space suits. So we really kind of focused ourselves in other areas. But obviously, the defense part of life and with all the funding that's currently going into those programs with all the regimes around the world, it's an important thing for us, and we are cognizant of that and we are looking at every route that we could get into the defense sector of life. We also are looking at hospitality and travel. As you see by the signing of TUMI, it's antimicrobials in particular, are very critical in the travel industry. So we are working and have been for years working with many different hospitality companies to try and get our technology into that. I think as we pivoted from just being a technology company to making products to utilize the technology, I think that in the coming months, you'll see some product categories that we get into that really hit that home and hospitality market that we're all talking about.

And I think we're at the point that we can really refocus on the Canadian market, Giancarlo. We've discussed that. I mean it's a big market opportunity for us. And I think we've now got tools that we can bring to bear to start ramping up in Canada, which could be a very nice business for us.

Agreed. Yes. And sorry, Deborah, I don't -- I forgot the first part of his question.

Just...

That's okay. I think I got most of it.

Yes, I think you're fine. I guess a follow-on, are you looking at industrial operators like fast food or slaughterhouse or butchery to see if there's other verticals related to these sectors?

Yes. So as we've announced previously, we've been working on this hard surface coating, which would go for all of those types of places from health care facilities to daycares to schools, to slaughter houses to all those kinds of things. When you get into food industries, there's obviously a lot more regulatory work around that, which we have done a little bit of a deep dive into. And as we work through the protocol and doing a hard service coding, all of those factors will be taken into consideration. So we do have a product for those specific industries.

Great. And then I've got a number of questions on how you plan to scale, whether you need working capital, whether you're adding employees?

I mean, beautiful part about some of the business that we're doing. So Walmart gives us 300 stores or 1,000 stores or 4,000 stores. We don't need to hire anyone else to do that extra business. And as much as those numbers seem big to us when we're talking about a fabrication and manufacturing a in China. It's still small numbers for them. We have factories that have been in business for 50, 60-plus years. do programs on a bigger scale than what we're doing right now. So I'm not worried about supply chain capacity. We also have multiple factories across all the different fabrications that we do. So I think we're pretty safe there. I mean, obviously, if we're going to take on new business and new categories, where we need a handful of new designers, will we need a handful of new dosing people perhaps, but the expenditure won't be substantial.

Our balance sheet is very underleveraged. I mean we've got the capacity to take on debt. We've got the EDC that will guarantee increased bank lines if we need them. It's not ideal. We don't always feel comfortable doing using too much debt. And maybe at some point, we'll have to consider supplementing our capital by doing raise, but those are all things that are on the table.

And to what degree do you have visibility into sales to end consumers. And can you talk about retail pull through?

I mean we only see what the retailers tell us. We can't really see much of the end-use consumer data. But what we can see is that the consumer is recognizing the value of our products and really looking for our solutions in multiple categories. I mean that's as best we can see from a consumer end of life. But they're obviously looking for what we have and every time we give it to them, it seems to do well.

And then with doctor's choice program now in 1,000 stores, can you help understand -- I guess the same question, reorder dynamics scrub seem like a year-round staple for health care workers rather than seasonal category, does that steady demand help smooth out some of the quarter seasonality we've seen historically?

So the program's 52-week replenishment. We get, obviously, a major set when we set stores to make sure shelves are full and then we replenish weekly from there based on demand. And that when we get additional stores, you'll see that big spike again. So when we talk about where these quarters lie, and if we will see big quarters again, let's say, for Q3, they want to add another 1,000 stores. Well, obviously, you're going to see a spike because we got to fill 1,000 more stores worth of goods. So that's part of it. And then again, adding different retailers, we'll be able to see that if one hospital group orders, that could be Q4 where we have to manufacture all of those for the entire hospital system. So all of those things are on the table. But we are actively -- to this point, it is a year-round business, so it will help stabilize some of our quarters. And we're also trying to get into new categories that help keep that quarterly flow even throughout the year. So we're not -- Q4 is heavy for us for swim. Q2 is heavy for us -- or Q1 is heavy for us for intimate apparel because people are buying it for weddings and problems and all that kind of stuff. So we're actively seeking new categories that help even out our year quarter after quarter.

And then one of your Directors, Cameron Groome, has joined the Board of Directors of a company with the Dermasettle ultraviolet product does IFA have a potential interest in using its filters in combination with it to, create a 1-2 punch?

Quite honestly, I don't know enough about that other company. It could be something we explore, but I don't know enough about what they do. The challenge with ultraviolet product is it's like hand sanitizer. It's good for about 3 seconds so you use it and then you touch something and get germs on it again, there's no residual kill to it. Whereas what we're working on in our hard surface coating and what we do in our textile technology is its continual kill. So it's there for the life of the product. It's not something that has to be flashed every 15 minutes to refresh it. So listen, to be open for discussion, but not that we've had a discussion at this stage.

And tell you about routes. So if roots was to be sold to another party, how protected are you from a possible change of control?

Our license agreement has renewals and things of that nature, but that's our protection as we have multiple renewals, auto renews if we hit certain dollars, which we generally do. So outside of that, that's the protection we have.

And how vulnerable is the company to the rise in oil and natural gas prices, given you synthetic fibers and import from China?

As vulnerable as anyone who make any petroleum-based product in the world.

Yes. And how do you go about educating consumers on the technology and claims for the scrubs?

So all the scrubs that are listed in store have signage everywhere and have QR codes that are directly on every garment and every hand tag so that they can be directed right to the journal in the study. And then obviously, we're trade shows and other kinds of social media messaging. We're also trying to get all that story out as best we can. The biggest thing, I think, for us on that side of life will be the nursing unions trying to get it in their hands so they can thread it to their community and have them push for it on their end.

I'll...

Sorry, go ahead, Hylton.

Sorry, just to that point, Giancarlo, I think you've made a good point. I think that these codes and these pop-ups not only talk up to the success of the clinical trial, but also to the fact that it's peer reviewed and published in a journal. So these things carry weight to the medical community working in the medical community. So these people understand exactly what we've got and it's not to be taken likely when Giancarlo says, that all the retailers, there's no other product besides ours that can talk about it clinically proven and peer reviewed. So we really have a 1-2 punch that none of our competitors have got nobody else.

Also just sorry to go back to the question about petroleum-based costs rising, anyone can make a 100% polyester shirt. All of our shirts are might be 100 polyester, but they give something. So we're not necessarily just trying to sell based on price on a polyester shirt, which is what other people are doing. There is a premium to our product. And cost get out of control, we're able to kind of counteract that by offering something premium that offers a benefit to the customer instead of just a petroleum-based textile shirt or pant or whatever it may be.

And what's the status of your partnership with the lid collective? Will we see product launches in 2026? How can you enter the hospital at health care nursing channels? Will this be with -- the live collective and iFabric's need to have a dedicated sales team to push this product?

So I mean, once we have something to announce, we'll announce I can't -- I don't think I can give anything further on that, but we are obviously actively working with the lab collective on getting those programs launched SAP. It's a great product they have some technical functional patent protected features that go along with our fabric technology that gives you something that is just not available in the betting sector. So we're very, very excited about that partnership, and we think that from a retail side of life, that will really yield a great response for us in many retailers. So again, stay tuned on that as soon as we have something to announce, we will. From a health care and health care and nursing channels for TLC, I mean bedding is something that we want to do in health care. I don't know how it will relate to TLC, but it is a business that we're actively pursuing from an IFA perspective with or within the TLC side of life. We've been working on that for years, and I think that will come to fruition shortly.

Right. Well, I think we've exhausted the Q&A. Hylton, you said that you wanted to have some final remarks.

Thanks, Deborah. Well, first, thanks, everyone, for taking the time to listen to the results. I just want to complement Giancarlo, Hilton Price and the whole team I think what we've done in '26 and the end of '25 doesn't come without a lot of hard work. And as we say, keep watching, these are not anomalies. I'm so proud of what we've achieved, and I think we are on a new trajectory, and we can't -- we're so excited to show the market what we're going to do for the rest of '26 and into '27 and beyond. We've got a lot of scope for growth. I think we've touched on the fact that margins in '25 were an anomaly. So -- and as Hilton Price simply put it, the bottom line is only going to get better and better because of margins and volumes. So we're excited and very proud of what we've been able to achieve and the future is looking really, really strong. Thank you.

Great. Well, thank you to the team. Congratulations on an incredible year and an incredible start to 2026. Thank you to the audience for your participation and your questions. If you have any further questions, feel free to reach out, and I can get those answered. Or if you'd like a one on one call with management, please feel free to reach out. And yes, thanks, everyone. Have a great afternoon.

Thanks very much.

Thanks everyone.