Ladies and gentlemen, welcome to the annual and special meeting, the meeting of the shareholders of Omni-Lite Industries Canada Inc, a corporation. My name is David Robbins, CEO of Omni-Lite Industries Canada Inc. I would like to welcome all of you here today on behalf of the corporation, and thank you for attending. I'd like to introduce Roger Dent, who will act as the chair of the meeting. Thank you, Dave. The The meeting will now come to order. I will ask Andrew Armstrong of Peterson McVicar LLP to act as secretary of the meeting. I've requested that Elissa Rojo and Qaisar Sheikh, representatives from Computershare Investor Services Inc, the registrar and transfer agent for the corporation shares, serve as scrutineer for the meeting. Is anyone here who is not registered with the scrutineer? Would you please do so now. I have the scrutineer's preliminary written report on attendance, which indicates a quorum of not less than two persons who are entitled to vote as required by Section 1011 of the corporation's bylaws. Unless there are any objections, I will dispense with reading of the report. Before commencing with the business of the meeting, I would like to comment on the voting procedures. Shareholders will be asked to pass certain resolutions. A simple majority of affirmative votes cast in person or by proxy will be required to pass the ordinary resolutions to be heard today at the meeting. A super majority representing 2/3 of affirmative votes cast in person or by proxy will be required to pass the special resolutions to be heard today at the meeting. Unless a poll is requested or otherwise required, voting will be conducted by saying, "Aye," and each shareholder entitled to vote will have one vote. Shareholders wishing to raise questions or comments pertaining to the business before the meeting should speak up, and when recognized by the chairman, address their comments to the chairman. There will be additional time for general questions following the conclusion of the formal meeting. The notice calling this meeting was sent on August 29th, 2023, to the registered shareholders and non-objecting beneficial owners of record as of August 21st, 2023. I approve the mailing and is available for inspection on request. Unless there are any objections, I'll dispense with reading of the notice of meeting. I now declare the meeting to be recalled and properly constituted for the transaction business. As set out on page 14 of the corporation's information circular, first item of business is for shareholders to receive the audited financial statements for the year ended December 31st, 2022, together with the auditor's report thereon, copies of which were mailed to shareholders who so requested. I now place these before the meeting. Unless anyone objects, I will now ask that someone move and second a resolution that the auditor's report be taken as read. I so move. I second. I will ask for those in favor to signify by saying aye. Aye. Opposed, if any? Motion has been carried. As said on page 14 circular, the next item of business is to fix the number of directors. Unless anyone objects, I will now ask that someone move that the number of directors be fixed at five. I so move. I second. I'll ask all those in favor to signify by saying aye. Aye. Opposed, if any? Motion has been carried. As said on pages 14 and 15 of the circular, the next item of business is the election of directors. Names of the five nominees to the board of directors for the ensuing year are set out in the corporations information circular. I declare David Robbins, Charles Samkoff, Roger Dent, Patrick Hutchins, and Jan Holland to be nominated for election to the board. Only of those persons named in the corporation's information circular may be voted for by proxy. Wherein the shareholders present at the meeting cast their votes for the election of any other person nominated on the floor, other than management's nominees named in the circular. For this meeting, no one has been nominated in accordance with the procedures set out in the company's advance notice bylaw. Accordingly, no further nominations will be accepted. I hereby declare the nominations closed. Does someone move therefore resolution to election of the persons nominated as directors? I so move. I second the motion. Motion is now open for discussion. If there's no discussion, I'll ask all those in favor to signify by saying aye. Aye. Opposed, if any? Motion has been carried. There being only five nominees and the five positions to be filled, and there now being eight proxies to elect those nominees, I now declare David Robbins, Charles Samkoff, Roger Dent, Patrick Hutchins, and Jan Holland to be elected as directors of the corporation. Hold office until close of the next annual meeting of the corporation or until their successors are duly elected or appointed in accordance with the provisions of the corporation's bylaws. As said on page 16 of the circular, the next item of business is the appointment and remuneration of auditors of the corporation. May I have a motion that MNP LLP, the chartered accountants, be and they are hereby appointed the corporation's auditors until the next annual meeting of shareholders following this meeting, with remuneration to be approved by the board of directors. I so move. I second the motion. Motion is now open for discussion. If there's no discussion, I will ask those in favor to signify by saying aye. Aye. Opposed, if any? The motion has been carried. As said on page 16 of the circular, the next item of business is to ratify and approve the continuation of the corporation's stock option plan. The option plan is a 10% rolling stock option plan whereby the number of common shares available for issuance is equal to 10% of the issued and outstanding common shares. May I now have a motion for the approval of the corporation's option plan? I so move. I second the motion. Motion is now open for discussion. There is no discussion. I will ask all those in favor. Opposed, if any? Motion has been carried. We have concluded formal business of the meeting. Is there any other matter the shareholder wishes to raise? If there's no further business to be brought before the meeting, I will now call for a motion that the meeting be terminated following which we'll be available to address shareholders' questions. I so move. I second the motion. Motion's open for discussion. There's no discussion. All those in favor to signify by saying aye. Aye. Opposed, if any? Declared the motion carried, and the meeting terminated. Thank you for attending. Well, I'd like to take the opportunity to say a few words. Omni-Lite continues finishing our third quarter on an upward trajectory, driven by demand for domestic and aerospace defense hardware and electronics. The major drivers for this are aerospace recovery and expansion for precision engineered fasteners, growing missile defense electronics for Patriot capability, and newly developed missile sensor electronics. Additionally, aerospace and defense castings for engine components and defense-related electronics and structural and sensors castings. These are connected to larger global needs for growing commercial air transport, growth in fleet and fleet modernization, national defense and security needs, an increasing unstable world, and recent industrial automation robotics. We feel that Omni-Lite is well-positioned to capitalize with our expertise in manufacturing on these growing trends. With that, I'll open up for any questions or comments. I have a question here. John Teckhams, shareholder. This is a question to the board of directors that have lower stock ownership in the company. If you care to disclose your position and, you kinda share what you like in the company, you know, in order to invest more personally in company. It's not to put you on the spot, it's to, you know, gather insights that'd be valuable to David. Sure. I guess on the call today, I think we have Charles Samkoff and Jan Holland. I assume that the question is probably not directed at Jan 'cause he's a very significant shareholder and together with his family. In my own case, I don't know the number offhand. I think it's about 175,000 shares that I have together with my family, which I think is, you know, in a range that, you know, is material and I think is not an unreasonable shares for being a shareholder for many, many years. I'm not sure that the question is directed at me, but if it is, you know, for, I guess more it probably relates to larger market questions rather than Omni-Lite questions at this stage. You know, it probably for me be an improvement in general tone in the small cap market as opposed to anything related to the company specifically, which, you know, I think at this stage, you know, we're after, you know, a couple of tough years. I think we're now looking at a much more interesting future. Jan Holland, I see you put your camera on. I don't know if you want to answer at this stage or Charles Samkoff if you're there. Jan here. Happy to jump in. So I support totally what Dave and the team inside of Avalon or sorry, inside Omni-Lite, my apologies. I think the track they're on and the whole stewardship of the running of the business is outstanding. I also like the fact that they are considering, you know, potential acquisitions and things of that sort. I think the team is on a very constructive path. I think as Roger just alluded to, when the marketplace gets a little more friendly, I think you're gonna see between management actions and marketplace environment, the business is gonna go forward really well. I think you got three really strong operating visions that have a good future, and I know they're looking to add things to that. Charles Samkoff. Charles Samkoff. Just to, just to add to Roger and Jan's comments. I too also echo what's occurring at Omni-Lite, both at DP Cast out in West Coast, out in Northeast and Nashua. I think we've come out of the consequences of COVID and the, you know, what was the exogenous event of commercial aerospace. I think, fully supportive and I have very good, you know, perspective that things are improving. I think Q2, and as Dave alluded to, I think Q3 will be a further indication. I've been a long-term option and warrant holder, and so I do, myself, my family will continue to increase our position in Omni-Lite. As I said, I think we've got the right team, we've got the right assets, and ultimately, I think we're in a great position to exploit what is a cycle in the, in the industry to deliver where others are not. Roger, can you hear me? Yes, go ahead. It's Patrick Hutchins. Yeah, I'm Patrick Hutchins. I'm on the West Coast, so I'm in proximity to Omni-Lite, and I've been involved for several years. That's been a foundation for forge factory. It's the foundation of our business relationship with aerospace industry. I'm from the aerospace industry. I wouldn't be involved unless I felt like we had a strong foundation to grow our business. I mean, sorry. Castings with the military defense. Also still the market's strong feeling towards our trajectory. My position in the company is, I think, approximately 50,000 shares purchased during COVID. Don, does that answer your question? Additional question, Dave. speaking of acquisitions, could you give us a little more color on, how things are developing at DP Cast? Well, we've been quite active and the marketplace is pretty open. I think, you know, coming out of COVID and now seeing the recovery of aerospace, there's been a softening, I think, a more realization of the future. You know, it's a fertile marketplace. We've been in discussions with several companies and, you know, the investment thesis is if it expands and augments our current precision manufacturing capabilities. You know, the profile would be, you know, smaller to a mid-sized company that has some technology that, you know, would expand our business and add to our platform of precision manufacturing capabilities for aerospace and defense. Yeah. No, I was actually asking more about the DP Cast and whether that might be turning profitable anytime soon. We, we're certainly on that trajectory to be profitable. We, we like I think I mentioned back at a conference call one or two or below, is that we have many, many examples of the same kind of profit margin, our profit margin target, at DP Cast for some very high performance precision casting. It's our model, and I believe that we'll get there because we have many, many examples of it within the company. The reputation is well received at customers. A customer is, you know, is perceiving that high quality and they're looking for more castings. Our quoting has been very robust. You know, that should give me the confidence that they'll be a contributor. Yeah, I know a rather, you know, a tough turnaround. Would you wait until you have been totally successful with DP Cast before you make any other acquisitions? Or how do you know, feather that in new acquisitions with a previous acquisition that's not yet viable? Well, I certainly am a believer that it be a contributor. With that belief and experience tell me that with some confidence in that we've been out looking because we feel like it's that close, that this isn't a project that is going to be years in the more years in the making. They're close. How would you fund acquisitions that you're looking at? Very creatively. Yeah. Sure. Well, every deal, you know, has its, you know, the seller has notions and what it wants, and we certainly have many levers to pull. There's not one size, you know, fits all. I think you have to go into, you know, to the target, what their needs are, certainly, you know, what our equity value is at that time. You know, there's no one answer. Yeah. That's the point I was getting at. I certainly wouldn't encourage you to use equity for an acquisition. Well, yeah. At this point. Yeah. Yeah. We're, you know, we're hopeful that we're not gonna be in this place for that much longer, but, you know, we have to deal with what we have to deal. Certainly we would look at all mechanisms, you know, to fund a deal. Yeah. No, I, yeah, I just, you know, you're as kind of a broken record on this, but before you do any acquisitions, I think it's important to understand how attractive your own equity is, and establish, at least, consider some sort of a buyback. You've heard that from me before, so that's okay. Well, no, we, you know, it's something that the board has, you know, has and will continue to consider. It's, it's a, it's another mechanism, certainly in that whole, in that whole range of finance. Thanks. Just a follow-up question as it relates to, if you could speak to the company's cash position and then also kind of speak to, you know, kind of the, you know, share premium, whatever you wanna call it. You know, that, you know, the market recognizing the company in a better spot, whether it's CAD 1.40 per share or CAD 1.50 per share, that's the kind of the sweet spot to do acquisitions in the future. So if you could kind of speak to, you know, kind of how you look at cash at this stage, you know, with the market. You know, you've seen signs that are moving. There's also those kind of behind the scenes talks of, you know, recession coming this, not at the end of this year, but potentially 2024, et cetera. Also kind of just, you know, how you kind of view, as it relates to, you know, the company that you ran in the past, using equity as a tool to kind of drive those acquisitions. I understand there's probably some, you know, middle ground obviously with, in terms of acquisitions. Can you speak to the cash and also just the kind of share price and when you, when you can use it more efficiently, so. Reflecting back to Q2, we were, you know, virtually sort of neutral in cash. You know, we're looking to generate cash as part of the part of, you know, getting DP Cast group to contribute. We'll contribute to that. We're looking to, you know, be cash positive. We're running, you know, I would say, you know, we're structured, you know, lean in order to generate cash. Most of our growth is coming from core products that, you know, we're not, you know, we're not spending a lot on R&D or taking unnecessary risks. It's, we're methodical. You know, our expectation is to be cash generating and not consume cash as we head into 2024. Part two is just in terms of being able to leverage the share price at some point in time in the future. You know, any color around that, how you've kind of worked, I can't recall if the past company that you ran was private. I think it was public. Maybe just kind of how you're gonna, you know, leveraging, you know, the share, you know, when the share price rises, et cetera, kind of in the future. Yeah. The private, you know, previous company was public. We did, you know, market conditions there, you know, we mostly used debt. In that case, while there was some, there was some equity used, one deal, primarily debt, but it's a different landscape today. Part of our, you know, our focus is to be able to use our stock as currency and doing things that, taking activities to make that happen. Can I ask about your holding in California Nanotechnologies? The stock there has, I think, been doing fairly well recently. If, if you are looking at potential acquisition opportunities, could your holdings in California Nanotechnologies, whether it's on the debt side or the equity side, be monetized in order to fund any acquisitions strongly? It's something we would look at. We haven't changed our position there. Certainly, you know, we're happy to see that Cal Nano is doing better. We have some insight to believe that that would happen, so gratifying to see that it's coming along nicely. It's something we would consider. Sure. Just quickly, you wouldn't be able to divest of your 20%. You need a strategic buyer basically to take that large of a stake. Well, I, there wasn't any immediate plan to do anything. Cal Nano is in the market currently trying to raise funds. The deal is in marketing. It hasn't closed. Okay. We're seeing very strong interest. Okay. If Omni-Lite wanted to sell shares, it might quite well be possible. You know, Cal Nano has found, you know, some good interest in recent months, and one of the challenges is that there's no stock for anyone to buy. Okay. I think it is something that would potentially be possible and wouldn't necessarily be a strategic buyer. It's not obvious to me who the strategic buyer would be. It seems to be a customer or maybe some manufacturing entity, but that's, you know, it's a interesting but esoteric solution. Is there any strategic reason at this point for Omni-Lite to have a financial investment in Cal Nano? There's no, you know, there's no business strategic. Purely financial related. Yeah. Okay. I think, you know, Cal Nano certainly aspires to be a debt-free typical growth company. You know, we would like to pay that debt off. I can't say when it's going to happen. I mean, it's obviously been a very long-standing situation, but we have made some progress over the course of the last couple of years. We aspire to grow and raise equity to expand our operations. Whether it will happen, you know, that's, you know, remains to be seen. Like to get that one gone. The financing that Cal Nano's in the market with right now, the use of proceeds for that financing is for growth capital or is it to repay the debt? No, it's not to repay the debt. There may be a partial conversion of debt to equity by Omni-Lite because otherwise it would be diluted. You know, Cal Nano hopes to grow in capacity, and that requires capital. Growing capacity, given order lead times, you know, that might be a couple of year process. We want to be in a position that if we choose to grow and we have to add facilities, if we have to make deposits on purchases, you know, we're in a position to do that. We also just, you know, in the last year or two, we've finally been in a position to add people. We added someone who, you know, has made some great contributions to market development. We'd like to be able to invest in that. You know, the company spent its entire life with kind of no cash. Right. It's, you know, it's finally got the luxury of having a balance where it can invest. You know, just something we would like to be able to do. Sorry about that. You mentioned that Omni-Lite can convert a portion of its debt in Cal Nano into equity. Is it in conjunction with this financing? Yeah, it's in the press release. Okay. It's in the press release that Cal Nano-. Why would that happen? I think it has a number of benefits. I mean, first of all, it avoids a dilution, and it ultimately, you know, it breeds the future company. We wouldn't want to suffer a dilution. The debt is currently carried on the books at nil. Right. If Omni-Lite converts debt to equity, it would then be carried on the books at the market value of the Cal Nano share price. It creates an equity gain for us if we do a conversion. Okay. At what terms would the conversion happen? The approval from the TSX Venture is CAD 0.15 per, CAD 0.15 per share. The TSX Venture Exchange would not approve t he unit deal that is being marketed, but they did agree to the same price of common shares. obviously CAD 0.15 conversion price also looks quite attractive. The net would convert at CAD 0.15 a share, and the stock is now at. Yeah, but we're only talking about a public conversion price. Oh, okay. I think the press release speaks to a, I believe it's CAD 180,000 cap. Okay. You know, we're only talking about a small amount. Just to keep Omni-Lite at 20% ownership. Yeah. Okay. There is a relationship between Cal Nano and Omni-Lite, sort of characterized, you know, in a nurturing way, locating in the same building in California. There is, you know, occasionally some shared resources. In many times there are some common customers. Maybe not a, a direct, uh, relationship, but you know, one more of nurturing and helping each other grow. You know, we're sort of Omni-Lite may be a little bit of the big brother, but, you know, that's sort of characterized the relationship too. Question about precision casting. Specifically, I guess aerospace casting sound very high tech and exotic, but my last experience with a precision aerospace casting company was called Haley Industries. They made magnesium castings, very complex, for BLACK HAWK Helicopters. They finally got taken out by Magellan Aerospace at a discount to book value. I'm wondering is, given that you're a very small, presumably like a tier three supplier to much bigger companies, is it intrinsically a profitable industry to be in? Well, I do believe that's why my comment saying that. Yeah. Modeling, I believe it's a profitable endeavor. I think if you stick to what you know how to do. If we were talking about casting some new metals that had no heritage, I think you could find yourself spending a lot of money not getting traction. We're casting the same materials that the company was founded on in many, many ways. Has a long heritage on many airborne platforms. What we're finding, you know, it's in the news recently, it was some castings that had found their way into some jet engines that were counterfeit. Some of that happens because the drive to resource castings and other precision things internationally. There's definitely a push for more domestic production. Some of these parts, they're not millions in quantity. Quantities might be hundreds or several hundred. It can be a nice niche business, where, you know, where you have a local, you know, a big customer is Pratt. So, you know, it very much I think models to a profitable business. If you stick to, which we are sticking to what we know how to do. And leveraging, you know, those needs that are coming back from internet today and suppliers. The most recent quarterly MD&A, I think, mentioned that the overhead expenses were down partly as a function of lower labor expenses. There was no explanation as to, you know, which division or is it firm. What would that be? Actually, yeah, we don't really try to necessarily break it out, although it is what it is. When we say lower overhead, that's people. Lower overhead, people. I guess in my comment of saying, you know, we try to run lean is we try to leverage our business systems. Our business systems include, you know, product, availability and pricing and costing models and methods to engage customers and customer engagement. If you have some good systems, you can do more with less. That's been a, you know, a strategic sort of platform is how to run lean on the top of a company. I just asked on the acquisitions, as you mentioned, you'd be looking at businesses that complement your precision manufacturing capabilities. Like, the company is already three quite different, I guess, manufacturing modalities and geographically pretty disseminated for a company your size. I mean, would you be looking at getting into another kind of vertical in terms of type of manufacturing and geographically? Does it make sense to start to try to add some heft to the businesses you're sort of already in, or are you looking to, you know, expand geographically and- Well- Yeah. Well, I think the best example would be one which are complementary to one of the three we have. Electronics, castings, metal forming, for example, let's say a machining center that would really could complement both forge, forming and casting. Okay. They work, you know, very few parts as cast will wind up on a jet engine. There's some machining and processing. That would be a good example of, you know, leveraging your capability on two, in that particular case, two manufacturing competencies. There are others that could involve, let's say, casting and electronics, where a small sensor that has a very densely packed electronics along with a very precision casting could be a very interesting sort of play too. I think ideally you would look to, and I think there's gonna be chances that it would involve two of our, you know, basic manufacturing. I mean, that's what I have in the test is that it's really a core base manufacturing competency because it will work with others. 'Cause I guess I just worry about, you know, you being stretched too thin, like the operations are too different and they're too spread out. If you start adding a fourth one, that's something totally different from what you're already doing. Like, this is just stretched too thin. One thing we do to narrow that feeling of, I guess, distance is, you know, we make full use, as a lot of companies do now with, you know, with video conferencing we're doing here. Not just video conferencing, but sharing best practices. Actually, our business systems, we're running on the same platform. In many cases of, you know, some of the same real, not just let's say you were running [SAP], you know, but using it totally differently. Our business systems very, very integrated. You know, all of your visions are AS9100 to almost be on the same AS certificate because we're so closely. That's just to shrink that, you know, that feeling of footprint. There's a lot of shared best practices. You know, I think that tends to. It's very easy to manage because back data, you know what you're looking at, it makes consolidation and looking at financials and financial modeling very easy too. Any further questions? Yeah. It's an overarching question. In this environment, what do you view as a, as a decent return for shareholders? You know, a lot of us have been shareholders for quite a few years. We've had ups and downs. You know, there was a time that, you know, the share buyback started at CAD 1.60 per share, many, remember many years ago, the former CEO. Kind of what do you view, kind of as we kind of finish off, 2020? I know that there's, kind of a nice trajectory about the year, just kind of any comments you want to make on that? Well, certainly a billion-dollar question, right? Certainly with our trajectory of having now some back in the positive EBITDA territory, you know, I would say we would look to what is, you know, reasonable multiples, you know, on our EBITDA. Which would be how we were, you know, basically looking at a goal. You know, in this market, our size, it's not always easy to attain that. You know, there's where, you know, we look at our activities to see what we can do to make sure that we're noticed. Thank you. What are you doing to get noticed by investors? Right now, I think the biggest thing is to improve our performance. Top line and bottom line decrease is probably the single biggest thing we can do before we start. You know, that's the base. I think we can pivot quickly when we start, you know, demonstrating that track record of consistency. And we've, you know, we like the, you know, we like the fact this year is playing out. Of course, it, you know, could have been better on the bottom line, certainly the metrics and the trajectory are showing that, and our belief is that we can, you know, we're gonna sustain this. All right. Yeah, that was an interesting comment you made, Roger. You seem to imply that the earnings that you're going to have this year are not what you had thought you would have at the beginning of the year. I may have read too much into that. I would guess that the reason for that, to a large part, would be the slowness of the DP Cast turnaround. Am I totally off base on that? No, I think I, you know, we previously said that it's been a little more sluggish than would have necessarily anticipated. You know, we model it, and we're very optimistic about, you know, I think it's the same thread that you were talking about earlier, Frank. Any more questions? Okay. Thank you all for attending. Okay. Thank you. Bye.