iFabric Corp.

I'm carrying on with a record year. So here to tell you more about that is Hilton Karon, CEO, Hilton Price, CFO, Giancarlo Beevis, COO. Before we get started, just so we're clear on the format, the gentlemen are going to provide a very brief overview of the quarter. And I think we have a lot of Q&A, so we'll just jump right into Q&A fairly quickly. I don't believe that we will be working off a presentation. Giancarlo Beevis

Good morning, everyone, and welcome. As I normally do, I'll start the webinar by saying that we put out a very comprehensive press release on the Q2 and six-month numbers and results. And the release, as well as the financial statements, management discussion analysis, can be viewed on our website at www.ifabriccorp.com. So I'm going to deal with what I consider the main or salient features of the results. I'll start with revenues. Q2 revenues came in at 9.6 million compared to 5.8 million in 2025, which was an increase of 3.8 million or 65%. There's one item I'd like to discuss here, and that is we provided $650,000 in advertising support to customers. And as required by IFRS, this is deducted from revenues. So in fact, our true amount invoice to customers was around $10.3 million. Hilton Price, Giancarlo Beevis Revenues, those came in at a record $37.1 million compared to $12.9 million in 2025, which is an increase of $24.2 million or 188%, an absolute record. I'd like to take a few moments to discuss the seasonal nature of our business. And in this regard, we have two kinds of programs, seasonal programs, and this would include products like swimwear, footwear. These are set programs and currently range in size from around 3 million to 8 million. They sell through fairly quickly, around two to three months. and these programs will normally ship in Q1 and Q4 and that's the reason why those are our biggest quarters historically. That may change in time as we get programs through the middle part of the year but at this point those programs generally go out in Q1 and Q4. Hilton Price, Giancarlo Beevis I don't believe we did any set programs. So if you look at the 65 increase growth year on year, that's a good indication of strong momentum in my mind. Gross margins. On the face of it, margins dropped from 37 last year to 30% in the current quarter. And here again, the $650,000 that we provided in advertising is deducted from margins. Because it's deducted from revenue, it flows down to margins. So the full 7% drop in margins is attributable to that $650,000 deduction for advertising. Going forward, we've taken the decision actually to provide less direct support to customers in favor of doing the advertising campaigns or the marketing ourselves in-house. We've hired specialists to do that. In our experience, retailers don't always spend the marketing dollars efficiently. I think actually we could do a better job. Hylton Karon, Hilton Price, Giancarlo Beevis Selling and administration expenses increased by 800k in the quarter compared to 20 to 5. Most of the increase is variable costs such as royalties and commissions as a result of the increased revenues. Although we did do a lot more traveling in the quarter and we have increased our staff complement year over year. So that is part of the increase, but the bulk of the increase is variable costs. and EBITDA. That came in at $715,000. Oh, let me just discuss one other thing before EBITDA. In the quarter, I'm pleased to report that we recognized $925,000 as sundry income in respect of the recovery of tariffs, Trump tariffs. This is net of our processing costs. The amount's been fully processed by US Customs. and to date we've already received 710,000 in cash. We've got 215 still to be received, which I believe will be received in the next quarter. EBITDA came in at $715,000, a turnaround of about a million from 2025. I was projecting break-even, so the tariff recovery obviously did provide us with some earnings. Hey, I'll take it. All gifts graciously received. EBITDA for the six months was $5.8 million compared to zero in 2025, and that's an absolute record for the company. I think that's it for the profit and loss account or the income statement. In terms of our balance sheet, our balance sheet has been beefed up by a very successful capital raise that we closed in June. We received and we banked net proceeds of around $21 million. and we finished the quarter with $25 million in cash after paying off our credit line and our working capital stood at around $45.1 million. So together with available credit lines of about $14 or $15 million between our trade credits and our regular bank line, I've calculated that we can push revenues well north of $100 million without the need for additional capital. Audit. I think that's all I really have to say. I'm happy to answer any questions.

Great. Thanks, Hilton. I had a bunch of questions come in in advance, so I'll start with those while the audience inputs any questions that they may have. So deposits paid to suppliers fell from 1.87 million in December to... Hilton Price, Giancarlo Beevis