Okay. Good morning, everyone, and thank you for joining us on uh for Northstar Technologies' Q2 2026 results webcast.

I'm Josh from Kin Communications, and I'll be hosting today's call. Joining me today are Aidan Mills, Northstar's President and CEO, and Linda Pennanen, Northstar's CFO.

During today's call, management will review Northstar's second-quarter results, provide an update on operations at Empower Calgary, and discuss the company's priorities for the balance of 2026. This will be followed by an audience Q&A period.

Attendees can ask a question at any time by using the Q&A button at the bottom of the screen. A recording of today's event will be available shortly after the conclusion of this call.

Before we begin, I'd like to remind everybody that today's discussion may include forward-looking information and statements that are subject to risks and uncertainties. Actual results may differ materially from those expressed or implied.

Please refer to the company's public disclosure filings for a more complete discussion of these risks and other factors. With that, I'll turn it over to Aidan.

Thanks, Josh. Um and thanks for the for the for the intro.

Um and all, great uh great to be on. Welcome welcome to the call.

Um so, today's call is all about Calgary. Um and as you've seen from the PR, which has just been released, uh as we've talked about in the last couple of quarters, the focus for 2026 for Northstar is to get is to deliver an operating facility in Calgary.

Today, that's exactly what we're going to talk about. We're going to cover four things.

Uh we're going to talk about the Q2 financials, and Linda, um who's here, we're in the office with me, will will talk about that. The 10,000-foot summary with respect to that is it's pretty much the same as Q1 with one huge difference, and that is that we have first product sales revenue.

Secondly, we'll talk about the Calgary operation um to show the huge progress that we've made there. As you've saw seen from the PR, we've hit the operational targets as set out by ERA for Milestone 4.

We produced a record of over 160 tons a day at the facility, and we've had consistent production through uh through June and July. The third thing we'll talk about is the path forward for Calgary, the maintenance that we did in uh in August, and the and the path forward over the next couple of months.

Then lastly, I will do a quick update on the patent PR um that we issued um last week. We haven't really talked about technology development or patents uh for for a long time, wanted to give you guys a an update on that.

Um so as Josh mentioned, forward-looking statements as always. Um and then I'll uh we've now got uh the Q2 uh financials, and I will hand over to Linda to take us through those.

Okay. Thanks, Aidan.

Second-quarter financial results continue to reflect Northstar's transition from commissioning and ramp-up towards commercial operations at Empower Calgary. Starting with revenue, the first chart on the top left-hand side, total revenue was approximately $209,000 in the quarter, relatively consistent with the first quarter.

Importantly, Q2 included approximately $35,000 of product revenue. Now, this is revenue from asphalt sales, representing the first product revenue under our agreement with McAsphalt.

Tipping fee revenue remained the primary component of revenue during the quarter. As production volumes increase, we expect product sales or asphalt sales to become a more meaningful component of the company's revenue mix alongside tipping fees.

Gross profit was approximately $54,000 in the second quarter compared with approximately $84,000 last quarter. The decrease primarily reflects lower tipping fee revenue, which is higher margin, together with the introduction of cost of sales associated with our product revenue that we've disclosed.

During the current stage of the Calgary facility ramp-up, a significant portion of facility operating expenditures continue to be recorded as what we call precommercial operating costs rather than cost of sales. As the facility progresses towards commercial production, the composition of both revenue and cost of sales will continue to revolve.

Turning to the bottom line, comprehensive loss, the company recorded a approximately $3 million loss during the quarter. The reported results include both cash and non-cash items.

In particular, the company recorded a non-cash fair value gain of approximately $2 million related to the derivative liability associated with US-dollar-denominated convertible debentures. That's a mouthful.

Because this liability is remeasured each period, changes in its fair value may result in meaningful period-over-period volatility in reported earnings. Lastly, Northstar ended the second quarter with approximately $6.2 million in cash and cash equivalents, and this compares with approximately $12.7 million at the end of Q1.

The approximately $6.5 million decrease in cash during the quarter reflects several factors, including a meaningful normalization of working capital following the March financing. Approximately $3.5 million was used to reduce accounts payable that had had accumulated through the preceding quarters.

Cash was also used to support operations at Empower Calgary as well as ongoing corporate costs. $800,000 of capital expenditures and approximately $1.3 million of interest and debt-related payments during the quarter.

It's important to note that interest related to convertible debentures is heavily weighted to the second and the fourth quarters. Cash used for financing activities will obviously be higher in those two quarters.

These uses of cash were partially offset by $1.4 million received on the second tranche of the US convertible debenture financing and $800,000 of warrant exercise proceeds that were that were received in the quarter. It's important to note that Q2 included a greater-than-normal working capital outflow as the company reduced outstanding payables following the financing completed late in the first quarter.

The cash usage in Q2 was not representative of a typical quarter. As Empower continues through its ramp-up, the company expects to continue allocating capital towards facility operations, reliability improvements, and corporate requirements as it works towards sustained commercial production.

The financial results therefore continue to reflect a business in transition. We are beginning to see product revenue enter the income statement, while the near-term financial profile continues to reflect the investment required to bring Empower Calgary to sustained operating levels.

Turn it back to Aidan to discuss the operating progress.

Hello. Thanks, Linda.

Um Hm. Okay.

Uh so, the uh so the operating update. Let's focus in in kind of, June June and July.

Um so, we had during, late June and and through July consistent front-to-back production that enabled us to hit the ERA Milestone 4 target. We had regular production of over 160 tons per day on on on the peak day.

Most importantly, and kind of reflected in the Q2 and you will obviously see reflected more in Q3, we had regular asphalt deliveries, and therefore, product revenue coming in the door. We had, if people had uh been being near the site, we had draw down of uh of shingle inventory at site obviously to maintain those uh those production levels.

Now, at the end of July and August, we were able to fast-track one of the updates that we had identified, or oh sorry, upgrades that we had identified for material handling. Um so, as when we chatted um in the last quarter, that's a key thing that we had identified was the material handling at the site on the front end.

Uh and this is one of the system the the system uh elements that we had identified earlier in the year. We were able to carry that out in uh in late July and early August.

Then for the balance of August, we carried out the first maintenance on the hydrocarbon system, um which, as produced first oil last year. Um and so, we carried out maintenance on that, which took us through uh the balance of August.

The whole system from front to back is now restarting this week. Let's just talk a little bit about ERA.

Um as you can see, the the grant the the technical ERA technical team uh has signed off uh has signed off the delivery of the milestone. It's gone you know forward now for for for funding.

We expect the grant funding to be coming in the in the near term. The award for that is is for or the request for that is $488,000.

Once they take the the project holdback of 10%, that will mean a delivery to to Northstar of about $440,000. The project holdback has been the same at every single stage through the project.

The and when the milestone payment comes out, the ERA hold back 10%. That's paid in a holdback payment at the very end of the project.

That's will come after the facility upgrade, which is planned, at the end of the year, and then when we deliver the final project report in Q1. That holdback of $708,000 uh across 1,000 across the whole of the project will be will be delivered in Q1.

We pointed out the holdback um just to be able to be clear about how the ERA process worked. Now, we also expect the second TAMKO debenture um at the same time uh as that payment.

As you guys know, that's a $2.8 million USD payment, um which should follow um alongside that uh that um that Milestone 4 payment. Um okay.

Then let's talk about moving forward. Um oh.

We've got the interim processing as we chatted about through July, the reliability upgrade and maintenance in August. Now, we move into uh the the next phase, which is, again, interim processing um through till the upgrade uh the upgrade in uh in uh Q4.

Just to be super clear about this, now we have done uh the the uh the reliability upgrade and the maintenance that was carried out in August, we expect increased reliability, increased yield, increased throughput, increased operating hours, and increased product delivery all the way through now to the uh to to the upgrade at the end of the year. The target, as we've said before, is over 100 tons a day, and we're very confident with the ability of the facility to produce exactly that.

We've done it for the, delivery of of ERA through late June and into into late July. We expect exactly the same thing now with the operations team as we as we move into September.

All the way to the full upgrade uh at the end of Q4, that's what we expect. The Q4 upgrade, as we've talked about before, is the final step for the Calgary facility.

Equipment's ordered, the work is scheduled, and in my opinion, it's the last step towards profitability for the facility as we move into 2027. We expect to see the September performance reflected in the Q3 results.

Also, as we move through Q4, we expect to see, additional revenues arising from a financial performance perspective to deliver as we go in to uh into profitability in uh in in 2027. The intellectual property update.

You saw the PR that we popped out last week, which was the addition of the fourth US patent. We've updated this slide as well to kind of give a a bit of a a status as as we are with with uh with all of the patents.

In Canada, as two patents have been awarded. Um we have one additional follow-on um and one new patent uh filed in in Canada um that are under review.

Um in the US, we have one additional follow-on um that is uh that is under review. Um and uh for for the for internationally, we we originally filed the PCT, as in uh in 2023, a while ago.

Now, we're progressing specific um the country-specific payments or or or uh patents, and they are uh divided into a couple of different countries that we've applied for internationally. Um and a couple of those are just in progress.

In actual fact, have just been filed. Um but one of them, um we actually have had feedback from the examiners in in in the country and are now answering that.

We may have an international patent um hopefully awarded as we uh as as we come out of the year. In summary for Q2, we believe we've made huge progress for the facility and the technology.

This is the first quarter I have sat here or and and and Linda as well to talk about product revenue in our results. Um so, that's a kind of a landmark timing for for that to be delivered.

Um we've enabled full front-to-back processing. All the things that we've talked about in the last, kind of six months to to the year where we had bottlenecks or we had material handling issues, we believe we have solved.

The last step of that is the final upgrade, which is uh which is scheduled for for Q4. We've delivered the Emissions Reduction Alberta Milestone 4 production objectives.

That's a third-party validation that the that the facility is actually doing what we, hoped and expected it to do. Um and now, we've carried out accelerated upgrade and maintenance for us to, as we believe, to really drive through with operational performance through to to the upgrade.

We have huge confidence moving into Q4 here. We've got huge confidence in the facility upgrade.

We have got huge confidence in moving in to profitability as we as we head into 2027. Right.

Josh, I think that's uh that's the summary.

Excellent. Just a reminder again, uh you can use the Q&A button at the bottom of the screen to submit any questions you may have.

With that, we'll just jump to our first question. Um the first question is um, it's great that you're focusing on Calgary, still curious if there's any updates or anything to look out for with respect to Baltimore and Hamilton expansion?

There is. Sorry, I did actually Somebody just pulled me up.

I did make a mistake uh with respect to the to the TAMKO follow-on payment. Um I actually said $2.8 million uh US, not $1.8 million.

Sorry. Just to be absolutely clear, in along with the uh along with the Emissions Reduction Alberta payment, um we would expect the associated TAMKO payment for Milestone 4 to come in at the same time, and that's $1.8 US, not $2.8.

Apologies. Mis- misread that.

Um so yeah, Josh, a great question. Um yeah.

Obviously, with with the production at Calgary and and um uh and the ERA Milestone 4, we we focused this call um com- completely on on the Calgary operation. Yes, both uh Baltimore and Hamilton uh continue continue to develop.

Um site development and uh, ready ready for next steps um once the the sites are are are completely signed up um uh and leased um to to start um to start planning. Yes, both progressing um in parallel with the with the work that's been been been done at Calgary.

Um and both progressing to a point whereby, construction at the second half of of 2027, as as we kind of signaled before, uh we still think will uh will be will be achievable.

Great. Thank you for that.

Uh we've got a question about the upgrades here. I guess, two-part question: uh can you speak a bit to what the benefit was of getting some of the winter upgrades done earlier in August, and also uh will those upgrades allow the plant to continue processing during that final upgrade in winter?

Um so,

let's answer the second one first. Um we think there'll be minimum disruption.

The way that we've planned the upgrade is that the upgrade is likely to come in um on a separate skid, um so not require significant kind of retrofit work in the uh in or or kind of, squeeze in. For anybody who's done the, any of the investors who have done the site walkabout, they know that inside the building uh is is pretty tight with respect to equipment.

Um so, the upgrade is going to going to be delivered on a skid and and which will then be connected into the into into the facility, kind of pipes coming in and coming out. Um so, that's relatively straightforward to do.

Now, it always does need, safety-wise, shutdown, et cetera, et cetera, or or, a bit of time to be able to tie uh tie pipework in and tie electrics in, et cetera. Um but it's not going to be, a a material time to to be able to have to shut the shut the process down.

We should be able to minimize the the disruption to to production is kind of like the overall goal um that that we see, not a significant shutdown to to to the plant. Um and the first Oh, yeah.

Then, so as we kind of stepping back and looking at the 10,000-foot view, the we we identified a number of different sections as we do as we looked at with respect to the material handling. Um one of those sections, I mean a couple of those sections have been in the plant, and have already been addressed.

Um and one of the sections that was in the plant, um we were able to uh almost fast-track procure the the the equipment. Um so, that was ready and available to to install in uh kind of at at the end of July there.

Um and so, that was that was how we took the advantage of of the acceleration, and it was really due to the speedy delivery of the equipment enabled us to to address it straight away. That was the advantage.

Sorry, the the upgrade that's coming as, towards the end of the year, that has involves more complicated equipment and therefore just longer lead time for delivery, and that's really the thing that's driven this, not um uh no no other constraint, just about uh equipment delivery lead time. When we were able to get stuff that was quicker, we were we were able to install it almost straight away.

Perfect. The next question is with respect to the ERA milestone.

Can you confirm sort of the uh the requirements to meet that milestone in terms of how many days of operation and also what the tonnage-per-day requirement was?

The tonnage per day was in the order of 100 tons a day. What we had to demonstrate was, and obviously when you're running a facility, sometimes you'll have 90 tons a day, sometimes you'll have 120, sometimes you'll have 75, et cetera, et cetera.

It was it it it was more around consistent, steady production kind of day after day in in the in the area of of 100 tons a day. That's what uh that's what we had.

Also, as you saw, the record production day was 162, I think. Um but and again, that kind of that demonstrated the the the front-end capability of of the facility.

Yeah. That was the production target for ERA for Milestone 4 was was more about kind of sustained, repeatable production, which is what we delivered, which is actually key in terms of moving forward as well, because we've now demonstrated the plant can run day after day after day.

Look, a number of people, we've had feedback whereby if we just announce a a production target, that's fine if you hit a a a good production number, but then you're down for the next, kind of four weeks, that's kind of irrelevant from a from an operation um and kind of sustainable delivery performance. As we move into, start the plant up actually tomorrow, um that post-maintenance, um that is the target.

It's really important to have a realistic target of 100 tons a day. Um but it's also really important to continue to extend operating hours and um therefore deliver, sustained operational delivery um as we go through.

That's that's the target now as we uh as we move forward. Was obviously for ERA, and will be will be moving forward.

Great. Just just one follow-on to that: was there a specific number of days the 100 tons per day needed to be achieved?

20.

20?

Yeah.

Perfect. Um the next question I think you've answered on on previous presentations, but um for our new listeners, um are asphalt sales tied to the price of crude, or is it a contracted sales price?

Um

both. It's a it's a contracted sales price um that has both um exposure to the asphalt price, and has exposure to the crude oil price.

As crude oil moves, the asphalt price in our contract will move. The contract is is combined and made up of uh of those main elements.

Great. Thank you.

That is actually all the questions from today's presentation. I'll hand it back to you for any closing remarks.

Just to remind everybody, a replay will will be available shortly after this call through the link you joined by and will be up on our YouTube channel um sometime tomorrow morning.

Listen, thanks, Josh, for hosting and, running through the questions. Thanks, everybody, for joining.

Um great to be able to have a quarter um that although although, to all intents and purposes looks exactly like Q1, um but with the huge difference of of of asphalt product revenue um in there. Uh and great to have, demonstrated continued to move the technology forward, continued to move the facility forward, uh and continued to, demonstrate um the the realization of of moving this business towards uh towards profitability um with uh with throughput.

We're hoping as we jump on the on the next investor call to be able to describe the financial performance of that in Q3 and also how the how the production has gone through from now to to to the upgrade at the end of the year. Great.

Thank you.