PyroGenesis Inc. (PYR) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the PyroGenesis Canada First Quarter 2023 Business Update Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Rodayna Kafal, Vice President, Investor Relations. Please go ahead.

Good morning, and thank you for joining PyroGenesis 2023 First Quarter financial results and business update conference call. On the call with us today are Steve McCormick, Vice President, Corporate Affairs; Andre Mainella, Chief Financial Officer; and Peter Pascali, Chief Executive Officer. The company issued a press release Monday, May 15, 2023, containing a business update and financial results for the first quarter, which ended March 31, 2023, and which can be viewed on the company's website. If you have any questions after the call or would like any additional information about the company, please contact the IR department. The company's management will now provide prepared remarks reviewing the operational and financial results for the first quarter ended March 31, 2023. I would like to remind everyone that this discussion will include forward-looking information that is based on certain assumptions and is subject to risks and uncertainties that could cause actual results to differ materially from historical results or results anticipated by the forward-looking information. 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 forward-looking information will prove to be accurate, and you should not place undue reliance on forward-looking information. PyroGenesis disclaims any obligation to update any forward-looking information or to explain any material difference 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 be -- there may also be references to certain non-IFRS financial measures, including references to adjusted net loss and adjusted EBITDA, which do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other companies. For more information about both forward-looking information and non-IFRS financial measures, including a reconciliation of each of adjusted net loss and adjusted EBITDA to net loss, please refer to the company's management discussion analysis, which, along with the financial statements, are available on the company's website at www.pyrogenesis.com, and the company's corporate filings on SEDAR at www.sedar.com. With that, I will now turn the call over to Peter Pascali, CEO. Please go ahead, Peter.

Thank you, Rodayna, and thanks to everyone for joining us today on this call. I'm going to start off with a quick review of some business highlights before turning the call over to the company's CFO, Andre Mainella. The first quarter of 2023 focused on advancing the company's updated business strategy that the company first outlined in the 2022 year-end results. Specifically, in acknowledging that the company has grown from its earlier routes as a specialty engineering firm to today where the company is a provider of a growing technology ecosystem for heavy industry with a number of solutions in different stages from early pilot to full commercialization. The company has better concentrated its offerings under three verticals that align with economic drivers key to heavy industry. These three verticals are: first, energy transition and emission reduction. -- which focuses on fuel switching, helping heavy industry reduce their fossil fuel use and lower their greenhouse gas emissions by utilizing the company's electric-powered plasma torches and its biogas upgrading technology across varying processing steps. Second is waste remediation, which is the safe destruction of hazardous materials and the recovery and valorization of underlying substances such as chemicals and minerals that can be reused or resold. And third, commodity security and optimization, which is using the company's technology to aid in the recovery of valuable metals and in the optimization of production output. Both actions meant to improve the availability of critical mineral selling such as titanium, aluminum, magnesium and others that are essential for modern manufacturing. With respect to commodity security and optimization, there were several key developments that occurred that may have impact on the company throughout the rest of 2023, with 2 being a particular note and as part of the vertical, and I'd like to address these now. These and more developments were outlined by the way, in the news release and are available in the MD&A. The company received notice that Radian Oil and Gas services company has commenced transferring the USD 1.5 million or approximately CAD 2 million payment against the outstanding receivable of approximately USD 9.5 million under the company's existing CAD 25 million Drosrite contract. As previously announced, PyroGenesis agreed to a strategic extension of the payment plan by the customer and its end customer. geared to better align the pressure on the end users' operating cash flows, which have been created by increased business opportunities. Also, the companies in current negotiations with multiple companies for commercial orders of the company's titanium metal powders produced using the company's next-gen plasma atomization system. We expect these orders to be well in excess of $1 million. As stated in the past, the company has spent several years designing, developing and testing a brand-new system to produce what is planned to be among the highest quality titanium metal powders available for the 3D printing and additive manufacturing industries and more recently has evolved from producing initial test batches measured in grams to sample batches measured in kilograms and then hundreds of kilograms. Our next stated goal has been to book orders by the ton, and we're working hard towards that end. We will keep investors appraised of this and other events as they evolve, treat about additional key business line developments, please refer to the corresponding sections of the news release or MD&A as well as to other sections of the outlook of those documents. Turning now to ink quarter production during the first quarter of 2023, the company can highlight achievements in the following areas. Again, with respect to commodity security and optimization in January, the company announced that further to its press release is dated September 21, 2022, and November 2, 2022, all the findings and recommendations made by a global aerospace company as part of their on-site audit of PyroGenesis' next-gen metal powder production facility has been successfully completed and accepted. With that, PyroGenesis moved to the next and final step in a 2-year long supplier qualification process, namely for the client to test verify and confirm the chemical and mechanical properties of titanium metal of the titanium metal powders. As noted further down in the news release at FDA, that step is still ongoing. In February, the company provided an update on its Gen 3 PUREVAP quartz reduction reactor, pilot plant project. The update confirmed that process testing referred to in the press release from the client, HPQ Silicon dated January 19, 2023, is moving forward as expected and represents in PyroGenesis' management's opinion a key development in the overall project. The tests were geared to not only confirm that the technology works as expected, but also give input into the subsequent engineering study, which will be geared to determining amongst other things, the actual number of systems required for commercialization and the profitability of each. The PUREVAP process is an innovative patent process that will enable the one-step conversion of courts into high-purity silicon at reduced costs, energy input and carbon footprint that will propagate its considerable renewable energy potential. High Purity silicon is a key ingredient sought after by electric vehicle and battery manufacturers amongst other industries. PyroGenesis is the engineering and development producer but also as part of the terms of the contract of HPQ, PyroGenesis benefits from a royalty payment representing 10% of the client sales with set minimals. Now with respect to the energy transition and emission reduction segment, in January, the company announced that it has signed an initial energy transition contract with a major European multinational chemical, oil and gas conglomerate to assess the applicability of PyroGenesis' electric plasma torches for use in the client's chemical production process. This agreement outlined initial steps for supporting the clients energy transition goals with the first step being a computational fluid dynamic study to gather initial data to evaluate the use of plasma in chemical production boilers. Depending on the results, the client indicated that it may proceed to a live experimental validation study within their facilities using PyroGenesis plasma torches as per a separate to be negotiated agreement. Also in January, the company announced it had signed through Pyro Green-Gas, a whole-owned subsidiary Pyrogenesis, and emissions reduction contract with a North American lithium ion battery recycler. The contract was for delivery of system to decontaminate the dust generate during the battery cycling process, resulting in highly effective destruction of airborne contaminants with minimal energy use, reducing operating costs and environmental impact. Again, in January, the company provided an update on its iron ore pelletization projects. The update indicated the successful completion delivery of 4 1-megawatt plasma torch systems to a major international iron ore producer, client B, for use in the clients' iron ore pelletization furnaces, a key upstream process in the steelmaking industry that traditionally relies on fossil fuel burners. With the completion of this delivery, Client B now has all the necessary components related to the company's plasma torch systems on-site at one of their key integrated iron ore mining and processing locations allowing for the installation of trials, also known as Site Acceptance Testing or SATs, to then proceed at the client's discretion. The company has also reported the value of the contract has increased by approximately $0.5 million as a result of additional modifications requested by the client during manufacturing, with the total validate project now exceeding $6.5 million. The update also confirmed that the previously announced contract and planned trials of its plasma torch system with another very large global iron ore client, client A, continue to advance as the client inform PyroGenesis that despite the client's own operational delays, all objectives remain the same, and the trials will be going ahead as designed, but the client has already received the contract of plasma system prior genesis in advance of the trials. With respect to waste remediation. In January, the company signed a contract to provide the company's SPARC hazardous refrigerant waste destruction system to an entity in New Zealand that was subsequently revealed in February to be the trust for the destruction of synthetic refrigerants. -- who will use PyroGenesis SPARC system as the core technology for New Zealand's national Hazardous refrigerant collection and destruction initiative. The SPARC system will be managed and operated by a wholly owned subsidiary of the trust for used by the New Zealand government accredited product stewardship program known as Cool-Safe, which is run by the trust. Cool Safe under various previous names has been managing refrigerant gas collection and destruction in New Zealand since 1993. And they have a mission to be a significant factor in the New Zealand government stated goal to reduce synthetic refrigerant greenhouse gas emissions by 2035 by at least 35%. This will be achieved by implementing their own 90% reduction target for hazardous refrigerants. Up until now, any of the refrigerants collected by being shipped to Australia for safe destruction. With the purchase of PyroGenesis' SPARC system, New Zealand will have its own onshore destruction capabilities. As the company has reported in the past, with the relaunch ongoing marketing and switch from voluntary to mandatory adherence to the safe disposal of synthetic refrigerants. The organization has indicated that they may require another SPARC system as the initiative grows. In March, the company received an order for three waste destruction plasma torches from the U.S. Navy shipbuilders Newport News shipbuilding. The three plasma torches ordered are for the USS Gerald R. Ford aircraft carrier, the largest and most technically advanced warship ever built. These plasma torches are to be used in PyroGenesis proprietary plasma arc waste destruction system, we refer to as pods, that the company previously built and delivered to U.S. Navy and which is in operation on that same carrier. With respect to some key financials, the company's margin was 20.3% compared to 25% in the same quarter. I don't think that's a considerable decrease. Considering that the industries that the company primarily serves have had significant difficulty maintaining 2022 margins with aluminum industry margins well back of 2022 fall to below 10% from approximately 29% in 2022. Iron and steel is down to approximately 26% from 30%. Metal and Mining down to 30% from 41%; and Aerospace and Defense remaining under 50%, all Q1 versus Q1. Clearly, the difficult logistical and inflationary environment for heating the industry and their customers is taking its toll. In terms of the company-specific margin decline, Andre will have more information about a particular onetime event that was primarily responsible for adjusting our margin downward. As stated in previous reports, the company's revenues are likely to continue to fluctuate quarter-to-quarter as contract-related revenue fluctuates for variety of reasons. The first being that our revenue is accrued on a percentage of work completed model that varies based on both the nature of the project and he client's own scheduling or logistical disruptions that could impact PyroGenesis production cycle and milestones and ability to book revenue. During this period of continued supply chain logistical and inflationary challenges, these issues have been more frequent and exasperating. As noted in the 2022 Q4 report, some projects were indeed experiencing longer-than-expected client logistical or project management delays impacting the company's ability to conclude key aspects of the projects, such as commissioning which would advance revenue progression, further impacting anticipated revenue. And this has continued somewhat into 2023. Also noted in Q4 2022 report, with additional client caution occurring throughout project phases across the industry, especially for those contemplating significant technological or paradigm change in regard to fuel switching to electricity. As for overall revenue, the company experienced a 38% year-over-year decline for the quarter. Project backlog of signed and awarded contracts stands at a strong $30.6 million. At this point, I'd like to turn the call over to the company's Chief Financial Officer, Andre Mainella, to go over the financials in a bit more detail. Andre?

Thank you, Peter, and good morning, everyone. Total revenue for Q1 of 2023 was $2.6 million compared to $4.2 million for the same period last year. The revenue decrease was due to a decrease in sales related to draw strike and support related to the U.S. Navy. -- and a decrease in biogas upgrading and pollution control. This was caused by the Italian subsidiary and their customer agreeing to the final acceptance of a project prior to reaching the full completion, and this resulted in an adjustment to revenue. This was offset by an increase in sales of PUREVAP spare parts and to the recent contract related to the SPARC refrigerant destruction system. As of May 15, 2023, yesterday's filing, the company had a backlog of site and/or award a contract of $30.6 million. Gross profit for the current quarter was $526,000 or 20.3% of revenue compared to a gross profit of just over $1 million or 25% of revenue for Q1 of 2022. The decrease in gross margin profit as either dollars or percentage was mainly due to the adjustment to revenue from the Italian contract and also to reduce subcontracting as work was done in-house and less direct materials due to lower volume investment of percentage completion. Selling, general and administrative expenses for Q1 2023 were $7.6 million compared to $5.6 million for Q1 of 2022. The increase is partly due to employee compensation, mainly caused by additional headcount and offset by a decrease in share-based compensation. This share-based compensation expense decreased to $988,000 for Q1 of 2023 compared to $1.7 million for the same period last year. This was driven by the vesting structure of the stock option plan with options vesting between 10% and 100% on the grand date and therefore, may require immediate recognition of that cost. Professional fees for Q1 of '23 were greater due to an increase in additional legal fees, consulting services, public listing expenses and patent expenses. More important, in Q1 of 2023, and an allowance for expected credit loss and bad debt expense was evaluated an increase due to the credit allowance model utilized by the company and also to the reversal of an accounts receivable between the Italian subsidiary and their customer subsequent to both parties agreeing on the final acceptance of the contract prior to completion, both of these, which are noncash items. Research and development expenses for Q1 of '23 was $0.3 million compared to $0.5 million for Q1 of 2022. The variation in R&D expenses is related to a decrease in employee compensation, subcontracting and materials and equipment and offset by an increase in other expenses, which now totaled $0.2 million. The comprehensive loss for Q1 of the current quarter was $6.1 million, reflecting an increase of $2.1 million compared to Q1 of last year. This increase is attributed to factors such as the decrease in revenue and increased SG&A, as explained earlier but offset by a decrease in financial expense, which was favorable by $1.1 million versus the same quarter of last year. This was due to the reevaluation of the balance due on the business combination, whereby a milestone payment won't be required in connection again to the agreement of the Italian subsidiary and their customer. The loss was also impacted by the changes in the fair value of the strategic investments, which favorably impacted the income statement by $0.3 million in the current quarter but by $1.1 million in 2022. These factors were partially offset by the variation in cost of sales and the resulting gross margin and all contributed to the overall change in comprehensive loss. Finally, moving to modified EBITDA, which we consider a useful metric in measuring ongoing operations was at a loss of $5.9 million for the current quarter compared to a loss of $2.8 million in the same period of last year. Otherwise, it's an increase in the loss of $3 million. The increase was mainly due to the higher EBITDA loss, a lower share-based compensation expense of $0.7 million and a decline in the change in the fair value of the strategic investment of $0.9 million based on the fair value of such investments. As of March 31, 2023, the company finished the quarter with a $1.9 million of cash on hand. At this point, I'll turn the call back over to you, Peter.

Peter seems to be having some technical difficulties. This is Steve McCormick, Vice President of Corporate Affairs. In closing...

I'm back on. I'm back on. Sorry about that. In closing, the company is buoyed by several factors, not the least of which is the global industrial movement towards the decarbonization and reducing greenhouse gas emissions, which only continues to expand as certain key dates get closer, especially for those industries abiding by the Paris Agreement that set 2030 as a major decarbonization target. As was quoted in today's news release, the company remains intensely focused on its goal of demonstrating its expertise and capturing greater market share across the broad industrial decarbonization landscape. And more specifically, around the refined strategic verticals that the company introduced in Q4 of last year. Our belief in both our strategy and our technology have never been stronger and the expanding interest from customers throughout the world and in fast-moving industry speaks not just to our potential, but to our immediate future. The industrial world is changing. And while our quarterly revenues may fluctuate in this continued period of inflationary and logistical pressures, our customer-ready solutions will only gain more visibility as heavy industry races to meet decarbonization goals or maintain a competitive advantage. Beyond all else, the company remains committed to driving shareholder value and look forward to providing further updates as developments unfold. Thank you again for joining us today, and I'll pass the microphone over to Rodayna.

At this point, we have a short series of prepared questions to which we'd like to respond. Over the past few weeks, we've been collecting various questions posted online or sent in to the company via e-mail. Recent calls where we accepted live investor questions resulted in a few questions taking up a large amount of time, so we feel this approach allows us to answer far more questions in the same amount of time. Please note that while we will make every effort to provide updates on all projects if there are any project update that we do not specifically address, it is because those projects are progressing as planned without any significant news to report. Should you require any further information or clarification, please do not hesitate to reach out to our team. Please go ahead, Steve.

Thanks, Rodayna. We did receive a very large volume of questions. So I want to thank everybody for their participation and as Rodayna said, if you don't hear about a certain project that you questioned us about, it's nothing -- there's nothing at risk is just there's no info to report at this time. So I have a large series, and I'll get to them in no particular order. First, a question about 3D printing, question was asked about for 1 single tower, which is our plasma atomization system, printing TI-64, which is our titanium metal powders, how much needs to be sold in a year for this unit to be profitable. We will say the specific sales volumes required for a single tower to be profitable. It is confidential information. Unfortunately, that pertains to the internal operations of our company and our competitive advantage encompasses cost details and other sensitive data that cannot be disclosed. It's important to note, however, that as noted in the outlook, a number of developments underway regarding potential commercial orders and we will keep investors surprised as these developments evolve. Question two, to your knowledge, has the company ever gone this far into a powder qualification process and not been successful in being approved? Well, powder qualification processes vary across industries and clients. We are very proud to say that we have yet to this point, failed, we've never failed to meet the necessary standards and requirements that the client is asking of us. As part of this particular qualification process, we are very dedicated to ensuring that our products undergo a thorough and comprehensive process to meet or exceed those client expectations. To a specific point about other companies and their efforts, it's not something for which we are aware, and it's not really of our concern. Question 3, is the aerospace qualification with a Tier 1 aerospace company or an OEM in the prior reports, it was labeled as a Tier 1 aerospace but during the last conference call, Steve, and that's me labeled it as an OEM. So the company's use of the term Tier 1 in the past was somewhat colloquial as in top tier, top class, best-in-class. We recognize, however, that there are some who have a more specific use of the term and that the term Tier 1 is often used to describe various companies in aerospace and manufacturing in a more precise or formal manner. In that regard, and to reflect the particular precision implicit in this question, the client can best be described as an OEM. So Steve was accurate in his use of the term OEM, if measured against that more formal usage requirements. It's also important to keep in mind, as we've mentioned several times that client, that OEM has multiple suppliers and service centers who would also gain access to our powders if and when we are qualified. Some, if not most of those, may be defined formally as Tier 1 suppliers, though in this case, it's best left up to the companies themselves to define themselves. Again, with powders other powders currently being tested by the aerospace OEM. The qualification was supposed to end or to be end of 2022 or Q1 2023. Why the delay? And when can we expect an announcement? We will say that the qualification process moves at the behalf to the client based on their time lines and schedule. We have revealed along the way what we know about those time lines, when we know it. But like everything else, it could be subject to change as is the clients prerogative. Question 5. Is there any challenge in securing titanium wire as powder feedback -- or sorry, as powder feedstock with current supply chain issues around the world? Or is this material relatively easy to obtain. It's a good question. So while it is considered a critical mineral, there is no current difficulty in obtaining titanium wire from our particular suppliers who we have taken significant measures to partner and maintain very good working relationships with. So it's not something we are worried about. Question six, the takeover of Aubert & Duval by Safran and Airbus is now completed with power genesis have to undergo the same type of qualification process with these companies? Or could that change given that the powders were already approved by Aubert & Duval. Different companies -- here's our answer to this. Different companies have different qualification standards and approaches. But as we've stated several times, our approach has been to subject ourselves to the scrutiny on one of the world's most prominent and exacting companies, and this approach was taken partly to pre-address the qualification request of other firms. But to your specific point, there are no additional qualifications being asked of us as a result of the buyout of Aubert & Duval. Turning to some questions about iron ore palletization. Any updates on client A or B towards trials? Are they installed when will we hear more about those. We did address some of this in the outlook that was provided in today's news release and management discussion and analysis. Commissioning is underway with Client B, which also will include the SAT process. In general, Client A for those who are perhaps new to some of this information to client A and client B are 2 of the largest iron ore companies globally, and they have both invested -- both invested significantly in the past 2 years to explore the feasibility of using plasma as an alternative to traditional furnace burners powered by diesel and/or natural gas for iron ore pellet baking. Regarding Client B, as mentioned, the on site trial and testing will be conducted according to the [indiscernible] determined by the client. Commissioning is currently underway. We do not have any say or influence over the resourcing and logistical decisions for either of those clients. On the other hand, Client A has already initiated sorry, Client B, as I said, initiated the commissioning process. Our team has been present at the sites overseeing the installation, commissioning, start-up and site acceptance tests, which are expected to take place very soon, and further updates will be provided accordingly. In client A, we have no further info to report, but everything is moving as planned, and there is no risk to that project. Question 8. The cost estimate for client A, how long is it valid for? Our torch prices changing with inflation and material prices since a couple of years has passed. Absolutely, prices adjust to inflationary pressure, just as our own suppliers adjust their prices towards us. So that will be taken into consideration as things move forward. Question 9, what is the greatest competitor to plasma for this step in the steelmaking process. Has this changed in the last 2 years? I think this is very much determined on your perspective. From our perspective, the greatest competitor continues to be and likely will continue to be for a very long time, the inertia of current processes, which is the continued use of fossil fuels in burners. As with any process, there will always be a variety of potential methods. There's no guarantee, but we are confident our solution of using electric plasma torches will prevail. Question 10, how does the development of bio iron coal-free pellets, protect [indiscernible] iron affect PyroGenesis' offering in the industry to oppose a challenge? Or is pelletization process the same with these? We will say that the fact that the customers who have purchased our plasma torches are committing to major infrastructure changes and costs just for the trials and have not abandoned them for the options that you mentioned, that alone may help answer your question. The ultimate choice, of course, will be up to the customers and will likely be dependent on a variety of factors depending on the customer, including the pace at which they need to decarbonize the availability of materials, power, quality of materials and so forth. Some pelletization processes are relatively the same, regardless of pellet type. The companies themselves, some of them have generally stated that they will likely keep offering a broad array of pellet types throughout their existence simply due to the demands of the end clients who have each of them have their own preferences and time lines for change. Traditional blast furnaces that use pellets have a long lifespan and new furnaces continue to be built and brought to market. We have some questions around aluminum dross update on the dross payment. Now that the client is paying again. Peter talked about this. This was the payment from Radian Oil and Gas. So this was addressed in Peter's statements and also in the news release and the outlook. Number 12, what happened to the $40 million bidding opportunity in the Middle East that PyroGenesis was the front runner for. This was a long ago RFP that we found out the bidding opportunity that we were -- we had stated we are in the lead for. They experienced a number of significant delays and we have no further information. What we do know is that the RFP has never been canceled and may be revised at any time. But we will say that opportunity open many doors to additional prospects within our client base and other industry players, both upstream and downstream within the Middle East and a series of expanded business offerings. So while that particular RFP is yet to bear fruit in and of itself, it's brought other opportunities to the 4. Some questions about the U.S. Navy. Was the $700,000 order a new purchase order or under a prior contract. And this question is about, as Peter talked about, the three torches that were purchased by the Navy. This was a new purchase order it's being made for an existing customer. And for the existing aircraft carrier on which our pods, waste destruction system is already installed. But as mentioned in the -- I believe in the outlook, it was just the torches. It wasn't the additional peripheral materials, all the other power supplies, all the other components that make up in totality, the pods waste destruction system, it was just torches alone, which is why the price was reflected that way. Number 14, a contract with an advanced materials firm to supply SPARC land-based waste destruction system and the first payment of $2.2 million. Are there any other payments coming before the 18-month deadline of the project? Absolutely. As with all projects, there is a payment schedule based on production time lines throughout the project at different intervals. Okay. So some general questions, not specific to any particular business line, a question about potential delisting from NASDAQ. Can you provide more information? So we have repeatedly emphasized that the company's primary focus is on enhancing our financial performance and increasing sales and the day-to-day fluctuations in the stock price are influenced by a number of different factors beyond the company's control. We do recognize, though, that with the expiration of the initial 180 business days from the initial notification to regain the USD 1 minimum trading amount closes in, and there are now fewer than 10 business days remaining for trading. Therefore, the company intends to make the request for an additional 180-day extension or approximately 6 months and as time progresses, we will provide timely updates to keep everybody informed. Question 16, Peter Pascali has become much less active in the Investor Relations avenue for more than half a year now. He used to be very active in answering questions online and in addressing critics and the like, especially on Agoracom and other forums, as it posted, and some of the critics have taken over more or less the forums. It's been a long time since his last personal interview and other employees haven't taken up the slack in that area. Is there a conscious reason stopped his activity? Not particularly, as the company has evolved, our communication strategy has evolved as well. And Mr. Pascali is time is simply better spent elsewhere as the company's opportunities expand significantly. The company has no plans to continue on social media forums at this present time. #17, what actions are being taken or plan to improve overall project time lines. We get this question a lot. Large, heavy industry projects are long and often considered quite slow and those that are considered paradigm shifts away from fossil fuels, for instance, have proven to be understandably slower as those clients consider change rather cautiously. It's very difficult to force clients into faster action. Our role is to always be as ready as possible at all times. Which division has the easiest path to immediate success and which division do you feel will face the greatest challenges moving forward. We've addressed some of this in the outlook based on some of the comments we have about upcoming developments. It's difficult to ever put a finger on which one might surpass all the rest. Information and contracts occur at different times, and we feel very strongly about all our lines of business. But please refer to the outlook and the new developments that have been highlighted. Regarding PyroGenesis and Progressive Planet Solutions, could you provide an update on the contract for the POZGLASS optimization studies. We can indeed. So there was a 2 phase -- just let me grab my notes here. Thank you. Originally, a 2-phase project. The first phase was a feasibility study, which was completed and the outcomes were very promising. The second phase is the design, fabrication and testing. At present, we are in the final stages of completing the systems design and fabrication and moving very soon towards initiating testing. So that product is doing quite well, and we will have more information as it evolves as usual. So that's all for the questions. Again, if we didn't get to anything that you might have asked, it's simply because there are no -- there's nothing really to report and it shouldn't be considered as in jeopardy. So I'll send this back to Rodayna.

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