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Fab-Form Industries Ltd. Management Reports 2024
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Management Reports
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FAB FORM INDUSTRIES
FIRST QUARTER MD&A 2025
FAB-FORM INDUSTRIES LTD.
Management Discussion and Analysis
For the quarter ended 30 September 2024
(In Canadian Dollars rounded to nearest dollar)
FAB-FORM KEY MILESTONES
| 1986 | 1999 | 2002 | 2010 |
|---|---|---|---|
| Fastfoot® | |||
| Developed the fabric based Fastfoot footing form, which replaced bulky dimensional lumber with lightweight polyethylene. Fastfoot Trademarked in January 2024 | Fast-Pad | ||
| Developed the fabric-based Fast-Pad, which was used to seismically upgrade schools and homes damaged after the 1989 Loma Prieta earthquake in California. | Fast-Tube® | ||
| Introduced the fabric-based Fast-Tube, the world's first column form manufactured entirely of lightweight polyethylene fabric. Placing 100' of column form behind the contractor's seat was revolutionary. | Zont Bracing | ||
| Fab-Form introduced the Zont bracing system (Patent [9,045,912] for insulated concrete forms. Traditional ICF braces are heavy and cumbersome - the Zont brace weighs and costs about 10% of conventional systems. | |||
| 2022 | 2021 | 2017 | 2011 |
| Level-R® & Monopour HD | |||
| Development begins on new Level-R and Monopour HD. Upgrades to the Fast Yoke product that was developed in the 1990s. Upgraded design allows for drill adjustment and thread protection from concrete. Patent Application published on 18 Jan 2024. Initial batch order placed on 18 October 2024 | Fab-Slab | ||
| Fab-Form is developing the Fab-Slab System for insulated structural slabs. Initial design work is 50% completed. The project is on hold until the completion of the Fast-Tube 3.0. | ZAT Bracket | ||
| Introduced new ZAT catwalk bracket; an accessory to the Zont bracing system, which simplifies the construction of the walkway for foundations. | Monopour System | ||
| Fab-Form introduced the ICF Monopour System (Patent [8,286,398]. This made ICFs far more economic, as a single concrete pour greatly reduces costs and time onsite. | |||
| 2023 | 2024 | New Product SPACE-R® | |
| Fast-Tube® 2.0 | |||
| Production of Fast-Tube 2.0 using fabric from Hagihara in Japan was started in early October. Production and initial testing at the sites are successful. Fast-Tube Trademarked in January 2024 | Fast-Tube online store | ||
| Successfully launched online store for Fast-Tube, first online order received on March 8th 2024. Store will be expanded to all products later this year | |||
| Fast-Tube® 3.0 | |||
| In progress - Innovative new fabric design will lead to significant reduction in manufacturing costs. Other benefits to end user to be announced. | The SPACE-R addresses three challenges in creating reinforced concrete columns. Firstly, it replaces the traditional horizontal steel stirrup with a lightweight fiberglass component, significantly reducing shipping costs and eliminating corrosion issues. Secondly, it utilizes polypropylene clips to connect vertical rebar to the horizontal stirrup, reducing onsite labor and eliminating human error. Thirdly, it features polypropylene fins on the outside to ensure the reinforcement is correctly positioned within the column, a task typically accomplished with rebar wheels in the industry. (Patent pending) | ||
| New Product KLIP | |||
| The KLIP will correct the alignment of Fast-Tube, eliminating column wrinkling and ensuring consistent concrete coverage around reinforcement. This component will assist the global adoption of Fast-Tube by improving its ease of use and reliability. (Patent pending) | 2025 | ||
| World of Concrete | |||
| Las Vegas | |||
| Global Markets |
Page 2 of 15
Page 3 of 15
FAB-FORM INDUSTRIES LTD.
Management Discussion and Analysis
For the quarter ended 30 September 2024
(In Canadian Dollars rounded to nearest dollar)
Fab-Form Industries Ltd. ("Fab-Form" or the "Company") is a leading concrete formwork manufacturer located in Vancouver, BC Canada. Since its inception in 1986, the Company has invented, developed, and commercialized foundation products that are more sustainable for the building industry and that provide contractors with cost competitive solutions. See key new product milestones on page 2.
This Management Discussion and Analysis ("MD&A") covers the operations of Fab-Form Industries Ltd. for the quarter ended June 30, 2024. The financial statements for the year ended 30 September 2024 together with this MD&A are intended to provide investors with a reasonable basis for assessing the financial performance of the Company. The interim financial statements and the accompanying notes should be read in conjunction with the annual financial statements and the accompanying notes contained in our audited financial statement for the year ended 30 June 2024.
The interim financial statements and the accompanying notes have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods presented. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year or for any other future years or interim periods.
HIGHLIGHTS: QUARTER ENDED 30 SEPTEMBER 2024
| Profitability | Revenue: $1,433,820 – A decrease of 6.9% compared to the previous year's quarter. Gross Profit: $529,344 – a 4% reduction compared to 2023. Operating Income: $316,365, a 24% decline compared to 2023. Net Profit: $278,836, a 21% reduction compared to the previous quarter ended 30 September 2023. | The combination of high housing prices and increased mortgage rates has strained affordability, leading to a significant decrease in housing demand and a slowdown in housing starts. Increased costs for materials and labor have made new housing projects more expensive, leading to a slowdown in construction activities. Developers are facing challenges in maintaining profitability amid these conditions over last year. |
|---|---|---|
| Operations | The Company is focused on the implementation of a new ERP system to integrate website sales, customer contacts and manufacturing information. Two new engineers have been hired for the development of new products including SPACE-R and the full automation of existing production machines. | The Company is increasing sales of existing products by selling globally and obtaining patent protection on ancillary products such as the KLiP (used to align Fast-Tube®). New products such as SPACE-R™ glass fiber stirrup, Level-R™ footing form height adjuster and Monopour HD™ ICF forming bracket are all being introduced at the World of Concrete in January 2025. |
| Nudura has removed ICF exclusivity in territories, enabling the Company to expand into Washington, USA and the rest of BC. | Vancouver ICF, the operating division of Fab-Form will be duplicating this model to a new website called Washington ICF. All the current sales and marketing techniques will be mimicked in the new territory. |
FAB-FORM INDUSTRIES LTD.
Management Discussion and Analysis
For the quarter ended 30 September 2024
(In Canadian Dollars rounded to nearest dollar)
HIGHLIGHTS: QUARTER ENDED 30 SEPTEMBER 2024
| Liquidity | Cash generated from operations during the quarter ended 30 September 2024 was $333,605. Total liquid funds increased to $4,299,032 from $4,104,629 on the 30 June 2024. | Cash flow remains very healthy with 67% of corporate assets being liquid assets. Excess cash continues to be invested in interest-bearing instruments. |
|---|---|---|
SELECTED ANNUAL INFORMATION
The following table presents selected financial information for each of the most recent four fiscal years
| 30 June 2024 $ | 30 June 2023 $ | 30 June 2022 $ | 30 June 2021 $ | |
|---|---|---|---|---|
| Annual revenue | 4,681,956 | 5,710,975 | 5,434,743 | 3,448,075 |
| Net earnings | 771,875 | 1,086,547 | 1,097,411 | 412,794 |
| Basic and diluted earning per common share | 0.084 | 0.122 | 0.121 | 0.047 |
| Total assets | 6,057,534 | 5,204,367 | 4,434,162 | 3,292,127 |
| Long-term debt | - | - | - | - |
| Dividend | - | - | - | - |
SELECTED QUARTERLY INFORMATION
The following tables presents selected financial information for each of the most recent eight quarters:
| For the quarter ending | 30 Sep 2024 $ | 30 June 2024 $ | 31 Mar 2024 $ | 31 Dec 2023 $ |
|---|---|---|---|---|
| Quarterly revenue | 1,433,820 | 1,372,664 | 748,002 | 1,020,614 |
| Net earnings | 278,836 | 222,348 | 85,157 | 107,372 |
| Basic and diluted earning per common share | 0.030 | 0.024 | 0.009 | 0.012 |
| Total assets | 6,388,251 | 6,057,534 | 5,848,486 | 5,671,498 |
| Long-term debt | - | - | - | - |
| Dividend | - | - | - | - |
Page 5 of 15
FAB-FORM INDUSTRIES LTD.
Management Discussion and Analysis
For the quarter ended 30 September 2024
(In Canadian Dollars rounded to nearest dollar)
| For the quarter ending | 30 Sep 2023
$ | 30 Jun 2023
$ | 31 Mar 2023
$ | 31 Dec 2022
$ |
| --- | --- | --- | --- | --- |
| Revenue | 1,540,676 | 1,883,990 | 707,075 | 1,004,813 |
| Net earnings | 356,998 | 370,672 | 111,922 | 135,853 |
| Basic and diluted earning per common share | 0.039 | 0.040 | 0.012 | 0.015 |
| Total assets | 5,727,761 | 5,204,367 | 4,847,278 | 4,759,632 |
| Long-term debt | - | - | - | - |
| Dividend | - | - | - | - |
We look forward to working with all the stakeholders to reach our growth objectives. We continue to thank all our shareholders, employees for their trust in our Company and products.
Sincerely
Sgd
Joseph Fearn
President and CEO
28 November 2024
Sgd
Vishwanath Kumar
Chief Financial Officer
28 November 2024
Page 6 of 15
FAB-FORM INDUSTRIES LTD.
Management Discussion and Analysis
For the quarter ended 30 September 2024
(In Canadian Dollars rounded to nearest dollar)
This MD&A of the interim financial results of the Company should be read in conjunction with the interim financial statements for the quarter ended 30 September 2024 and the audited financial statements for the year ended 30 June 2024 and accompanying notes. The results reported herein have been prepared in accordance with IFRS Accounting Standards and are presented in Canadian dollars unless otherwise stated. MD&A has been prepared with reference to National Instrument ("NI") 51-102 Continuous Disclosure Obligations of the Canadian Securities Administrators. The following information prepared as at 28 November 2024. Additional information relating to the Company can be found on the Sedarplus (System for Electronic Document Analysis and Retrieval) website at www.sedarplus.ca.
FORWARD-LOOKING STATEMENTS
Some statements contained in this MD&A constitute "forward-looking statements" as is defined in applicable securities laws. These statements include, without limitation, the success of developing, manufacturing, and distributing new products and other similar statements concerning anticipated future events, conditions, or results that are not historical in nature, and reflect management's current estimates, beliefs, intentions, and expectations. These statements are not guaranteeing of future performance. The Company cautions that all forward-looking information is inherently uncertain, and that actual performance may be affected by several material factors, many of which are beyond the Company's control. Such factors include, among others, risks and uncertainties relating to product development; the ability of the Company to obtain additional financing; the Company's limited operating history; the need to comply with environmental and governmental regulations; potential defects in product performance; fluctuations in currency exchange rates; fluctuating prices of commodities; operating hazards and risks; competition; the uncertainty of capturing market share and other risks and uncertainties. Accordingly, actual future events, conditions, and results may differ materially from the estimates, beliefs, intentions, and expectations expressed or implied in the forward-looking information. These statements are made as of the Report Date and, except as required by law, the Company is under no obligation to update or alter any forward-looking information.
COMPANY DESCRIPTION
Fab-Form is a public company domiciled in Canada and incorporated under the Company Act of British Columbia. The address of the Company's head office is Unit 19, 1610 Derwent Way, Delta BC V3M 6W1. The Company develops, manufactures, and distributes proprietary technology to form concrete footings, columns, foundations, and walls for building structures. The Company also exclusively distributes Helix® micro rebar into the BC market and Nudura® insulating concrete form into BC and Washington. The Company has traded on the TSX Venture Exchange ("TSXV" under the symbol FBF) since 1999.
MD&A is presented in Canadian dollars, the Company's functional currency (rounded to nearest dollar).
FAB-FORM INDUSTRIES LTD.
Management Discussion and Analysis
For the quarter ended 30 September 2024
(In Canadian Dollars rounded to nearest dollar)
OPERATING RESULTS
| For the quarter ended 30 September | ||||
|---|---|---|---|---|
| 2024 | 2023 | Change | % | |
| $ (Unaudited) | $ (Unaudited) | |||
| Revenue | 1,433,820 | 1,540,676 | (106,856) | (6.94) |
| Cost of sales | (904,476) | (943,602) | 39,126 | (4.15) |
| Gross profit | 529,344 | 597,074 | (67,730) | (11.34) |
| Expenses | ||||
| General and administration | (166,232) | (131,777) | (34,455) | 26.15 |
| Selling and marketing | (46,747) | (47,898) | 1,151 | (2.40) |
| Total expenses | (212,979) | (179,675) | (33,303) | 18.54 |
| Earnings from operations | 316,365 | 417,399 | (101,033) | (24.21) |
| Finance cost | (1,695) | (2,263) | 568 | (25.10) |
| Other income | 42,511 | 68,632 | (26,121) | (38.06) |
| Earnings before taxation | 357,181 | 483,768 | (126,586) | (26.17) |
| Income tax expense | (78,345) | (126,770) | 48,425 | (38.20) |
| Earnings for the period/year ended and total comprehensive income | 278,836 | 356,998 | (78,161) | (21.89) |
Quarterly revenue declined by 6%, primarily due to a reduction in housing starts caused by higher interest rates. Although interest rates have eased, the number of housing starts remains low compared to the previous year.
Total administrative expenses increased, driven by higher IT-related costs and an increase in professional fees. However, the company maintained its selling and marketing expenses level for the quarter. The labor force grew during the quarter, with the R&D team expanding with the recruitment of two new engineers to accelerate the development of new products for market release in 2025.
Earnings before taxation fell by 22%, while tax expenses decreased proportionately. The annualized return on total capital employed during the quarter was 20.83%.
Page 7 of 15
FAB-FORM INDUSTRIES LTD.
FAB-FORM
Management Discussion and Analysis
For the quarter ended 30 September 2024
(In Canadian Dollars rounded to nearest dollar)
1. Product performance
| For the quarter ended 30 September | |||
|---|---|---|---|
| 2024 | 2023 | Change | % |
| $ (Unaudited) | $ (Unaudited) | ||
| 316,144 | 398,290 | (82,146) | (20.62) |
| 177,492 | 178,543 | (1,051) | (0.59) |
| 4,534 | 1,763 | 2,771 | 157.12 |
| 26,016 | 437 | 25,579 | 5,857 |
| 55,953 | 53,855 | 2,098 | 3.90 |
| 57,417 | 69,035 | (11,618) | (16.83) |
| 49,572 | 56,171 | (6,599) | (11.75) |
| 709,663 | 738,334 | (28,671) | (3.88) |
| 34,267 | 38,070 | (3,803) | (9.99) |
| 2,761 | 6,178 | (3,417) | (55.31) |
| 1,433,820 | 1,540,676 | (106,856) | (6.94) |
Bracing sales showed a decline of 20.6% while Fastfoot® performance was flat over same period in 2023. Fast-Tube® showed an exceptional growth of 5,857% as the company has been focusing on this innovative product. Nudura sales remained flat as the housing slump continues.
2. Analysis of cost of sales
| For the quarter ended 30 September | |||
|---|---|---|---|
| 2024 | 2023 | Change | % |
| $ (Unaudited) | $ (Unaudited) | ||
| 879,953 | 924,064 | (44,111) | (4.77) |
| 467 | 495 | (28) | (5.66) |
| 227 | 359 | (132) | (36.77) |
| 760 | 720 | 40 | 5.56 |
| 11,808 | 10,816 | 992 | 9.17 |
| 11,261 | 7,148 | 4,113 | 57.54 |
| 24,523 | 19,538 | 4,985 | 25.51 |
| 904,476 | 943,602 | (39,126) | (4.15) |
Total direct product COGS
Indirect product COGS
Waste disposal
Packing materials
Depreciation production equipment and tools
Warehouse lease rental
Variable overhead
Total indirect product COGS
Total Cost of sales
The reduction in direct product COGS is in line with the decline in revenue. The increase in lease rental expense was attributable to the landlord not accruing city property taxes.
FAB-FORM INDUSTRIES LTD.
Management Discussion and Analysis
For the quarter ended 30 September 2024
(In Canadian Dollars rounded to nearest dollar)
3. Analysis of General and Administration Expenses
| For the quarter ended 30 September | ||||
|---|---|---|---|---|
| 2024 | 2023 | Change | % | |
| $ (Unaudited) | $ (Unaudited) | |||
| Amortization & depreciation | 1,871 | 1,389 | 482 | 34.70 |
| Research and development expenses | 2,912 | 690 | 2,222 | 322.03 |
| Office rental and occupancy costs | 7,156 | 5,125 | 2,031 | 39.63 |
| Patent & TM maintenance fees | 546 | 1,416 | (870) | (61.44) |
| Pubco expenses | 24,122 | 10,207 | 13,915 | 136.33 |
| General expenses | 8,810 | 8,866 | (56) | (0.63) |
| Wages and benefits | 89,558 | 83,329 | 6,229 | 7.48 |
| Telecommunications & computers | 16,526 | 6,842 | 9,684 | 141.54 |
| Credit card processing fees | 14,103 | 14,811 | (708) | (4.78) |
| Provision/(reversal) for expected credit losses | 628 | (898) | 1,526 | (169.93) |
| Total administrative expenses | 166,232 | 131,777 | 34,455 | 26.15 |
The increase in Pubco expenses was due to the increase in audit related fees. The increase in R&D was due to the hiring to two new engineers. IT expenses increased due to new hirings. The overall administrative expenses increased by 26%.
4. Analysis of Selling and Marketing Expenses
| For the quarter ended 30 September | ||||
|---|---|---|---|---|
| 2024 | 2023 | Change | % | |
| $ (Unaudited) | $ (Unaudited) | |||
| Bracing | 9,216 | 12,614 | (3,398) | (0.27) |
| Fastfoot | 5,186 | 10,005 | (4,819) | (0.48) |
| Fast-Pad | 1,915 | - | 1,915 | 100.00 |
| Fast-Tube | 9,062 | 1,976 | 7,086 | 3.59 |
| Helix | - | 8 | (8) | (1.00) |
| Monopour | 1,296 | 3,044 | (1,748) | (0.57) |
| Nudura | 20,072 | 20,251 | (179) | (0.01) |
| Total selling & marketing | 46,747 | 47,898 | (1,151) | (2.40) |
Marketing expenses for the quarter ended 30 September 2024 remained flat over quarter ended in 2023. Marketing expenses will increase substantially in the coming year due to new sales staff to service global markets and the state of Washington.
Page 9 of 15
FAB-FORM INDUSTRIES LTD.
Management Discussion and Analysis
For the quarter ended 30 September 2024
(In Canadian Dollars rounded to nearest dollar)
- Liquidity, Cash Flow Position and Going Concern
The cash flow statement for the quarter ended 30 September 2024 reflects a strong financial position, with cash generated from operating activities amounting to $333,605 and a solid cash and cash equivalent balance at the end of the period $1,708,050. Short-Term investments of $2,590,982 ensure that the funds allocated to short-term investments yield satisfactory returns and remain accessible for operational needs.
Cash of $105,916 was used in other investing activities, consisting of cash used in acquisition of property plant and equipment of $29,623, investment in product development of $8,801 and intangible assets of $67,492 for two patent application and new SolidWorks licenses for the engineering team.
Cash used in financing activities of $30,609 consisted of lease payments for the offices and warehouses located in Delta BC. The Company is debt-free except for lease liability and has financial liquidity and flexibility.
The financial statements have been prepared based on accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realization of assets and settlement of liabilities, contingent obligations, and commitments will occur in the ordinary course of business of the Company.
- Critical accounting estimates and judgments
The Company makes estimates and assumptions about the future that affect the reported amounts of assets and liabilities. Estimates and judgments are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions.
The effect of a change in an accounting estimate is recognized prospectively by including it in comprehensive income or loss in the year of the change if the change affects that year only, or in the year of the change and future years if the change affects both.
- Off-Balance sheet arrangements
The Company has not engaged in any off-balance sheet arrangements: no obligations under guaranteed contracts, no retained or contingent interest in assets transferred to an unconsolidated entity, no obligations under derivative instruments, no obligations under a material variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to the Company and no engagement in leasing or hedging services with the Company.
- Events subsequent to 30 September 2024
None
Page 10 of 15
FAB-FORM INDUSTRIES LTD.
Management Discussion and Analysis
For the quarter ended 30 September 2024
(In Canadian Dollars rounded to nearest dollar)
9. Related party transactions
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities.
A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.
Key management personnel include the directors, chief executive officer ("CEO") and chief financial officer ("CFO"), who have the authority and responsibility for planning, directing and controlling the activities of the Company.
These amounts of key management compensation are included in the amounts shown in profit or loss for the following period/years.
| Quarter ended 30 September 2024 | Quarter ended 30 September 2023 | Year ended 30-June 2024 | |
|---|---|---|---|
| Key management compensation | $ (Unaudited) | $ (Unaudited) | $ (audited) |
| Management remuneration | 83,749 | 43,667 | 315,585 |
| Directors' fees | 3,250 | 6,000 | 24,000 |
| Related party transactions | |||
| Shape Energy Inc. – Consultancy Fees | 974 | - | - |
10. Risk Management
Management of Capital
The Company considers its capital to consist of all components of its shareholders' equity of $5,633,099 (30 September 2023: $4,939,386, 30 June 2024: $5,354,263).
The Company's objectives for managing capital are to safeguard its ability to continue as a going concern in order to pursue the design, development and marketing of new products to service the concrete forming industry. There were no changes in the Company's approach to capital management during the quarter ended 30 September 2024 and the Company does not have any externally imposed capital restrictions.
The board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
Page 11 of 15
FAB-FORM INDUSTRIES LTD.
Management Discussion and Analysis
For the quarter ended 30 September 2024
(In Canadian Dollars rounded to nearest dollar)
Fair value measurements of financial instruments are required to be classified using a fair value hierarchy that reflects the significance of inputs used in making the measurements. The levels of the fair value hierarchy are defined as follows:
Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 Unobservable inputs for the asset or liability, relying on the entity's own assumptions about market participant pricing.
The following table sets forth the Company's financial asset measured at fair value by level within the fair value hierarchy:
| 30 September 2024 | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Cash & cash equivalent | $1,708,050 | - | - | $1,708,050 |
| Short-term investments | $2,590,982 | - | - | $2,590,982 |
| $4,299,032 | $4,299,032 | |||
| 30 September 2023 | Level 1 | Level 2 | Level 3 | Total |
| Cash & cash equivalent | $1,992,299 | - | - | $1,992,299 |
| Short-term investments | $1,709,095 | - | - | $1,709,095 |
| $3,701,394 | $3,701,394 | |||
| 30 June 2024 | Level 1 | Level 2 | Level 3 | Total |
| Cash & cash equivalent | $1,547,112 | - | - | $1,547,112 |
| Short-term investments | $2,557,517 | - | - | $2,557,517 |
| $4,104,629 | $4,104,629 |
There were no changes to the Company's risk exposures during the quarter ended 30 September 2024. The Company has exposure to the following risks from its use of financial instruments:
a) Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company manages its credit risk on by holding cash and cash equivalent and short-term deposits in high credit quality banking institutions in Canada. The Company also has credit risk as a result of its trade receivables and supplier rebates. Trade receivables and supplier rebates consists of a large number of customers, spread across diverse industries. The concentration of credit risk is limited due to the fact that the customer base is large and unrelated. As such, the Company does not anticipate any significant credit losses.
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FAB-FORM INDUSTRIES LTD.
Management Discussion and Analysis
For the quarter ended 30 September 2024
(In Canadian Dollars rounded to nearest dollar)
b) Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Company achieves this by maintaining sufficient cash. As at 30 September 2024, the Company had cash and cash equivalents of $1,708,050 (30 September 2023: $1,992,299, 30 June 2024: $1,547,112). The Company's financial liabilities, based on contractual undiscounted payments at 30 September 2024, were $685,408 (30 September 2023: $783,900, 30 June 2024: $603,291). Management believes that future cash flows from operations will be adequate to support the financial liabilities. Trade payables are non-interest bearing and are normally settled on 30-day term.
c) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return on capital.
i) Currency risk – Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. As of 30 September 2024, the Company is exposed to USD, and if the USD exchange rate had fluctuated by 10% the net earnings would have had an impact of $61,287 (30 September 2023: $220,616, 30 June 2024: $93,406). The management has taken necessary steps to minimize the effect from subsequent valuation by reducing the overall exposure to USD.
ii) Interest rate risk – The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company does not have any short- or long-term borrowings or deposits that are directly exposed to interest rate risk.
iii) Other price risk – The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer or by factors affecting all similar financial instruments traded in the market. The Company is not exposed to significant other price risk.
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FAB-FORM INDUSTRIES LTD.
Management Discussion and Analysis
For the quarter ended 30 September 2024
(In Canadian Dollars rounded to nearest dollar)
11. Common Shares
The Company had the following securities issued and outstanding:
| 28-Nov-24 | 30-Sep-24 | 30-Jun-24 | 30-Jun-23 | 30-Jun-22 | 30-Jun-21 | |
|---|---|---|---|---|---|---|
| Common shares | 9,174,507 | 9,174,507 | 9,174,507 | 9,174,507 | 9,084,036 | 8,822,055 |
| Fully and diluted shares | 9,174,507 | 9,174,507 | 9,174,507 | 9,174,507 | 9,084,036 | 8,822,055 |
12. New Products Update
a) SPACE- R®
On the 11 July 2024, the company applied for a US patent on the fiberglass stirrup, now trademarked as SPACE-R®. This product achieves three functions:
- Holds vertical column rebar in an exact position, using injection moulded rebar slots (50A, B, C, D)
- Provides sufficient tensile and shear strength to the concrete, using glass fiber reinforcing.
- Provides spacers to ensure there is adequate concrete cover over the steel rebar, using injection moulded spacers (52A, B, C).
The company is currently developing the technology to manufacture Space-R and will be showing prototypes at the World of Concrete in Las Vegas, January 2025.
FIG. 4
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FAB-FORM INDUSTRIES LTD.
Management Discussion and Analysis
For the quarter ended 30 September 2024
(In Canadian Dollars rounded to nearest dollar)
Additional financial information on the Company can be found on SEDAR at www.sedarplus.com.
Approved: "Board of Directors"
28 November 2024
FAB-FORM INDUSTRIES LTD., headquartered in Delta BC, is a manufacturer and distributor of green and cost-effective concrete forming products for the building industry. Its common shares trade on the Toronto Venture Exchange under the symbol "FBF".
For additional information, please contact:
Joey Fearn
Chief Operating Officer
[email protected]
Rick Fearn
Chief Technology Officer
[email protected]
Vishwanath Kumar
Chief Financial Officer
[email protected]
FAB-FORM INDUSTRIES LTD.
Unit 19, 1610 Derwent Way
Delta, BC V3W 6W1, Canada
(604)596-3278
Shareholders and interested investors should visit:
www.fab-form.com/investor/overview.php
www.vancouvericf.com
www.steelfiberswest.com
