Lowering Discount Rates on Sustained De-Risking; Raising Target Price to C$5.72. We are lowering the discount rates applied in our sum-of-the-parts (SOTP) net asset value for First Phosphate by 100 basis points - 10.5% for the mine (earlier 11.5%) and 12.5% for the phosphoric acid plant (earlier 13.5%). In our view, the adjustment reflects meaningful project de-risking over the past several months, including the Nasdaq ADR uplisting and broader access to U.S. capital, Filon’s inclusion in Quebec’s fast-track permitting framework, and the expanded definitive mineral resource estimate, which clears the path for advancement toward feasibility. 

Q2 Below Expectations, but Momentum Building. Faraday Future Intelligent Electric, Inc (FFAI) recently announced Q2:26 results that fell shy of our expectations, but momentum in the business is extremely encouraging. FFAI is the first U.S. company to have achieved scaled deliveries of both humanoid and bionic robots, providing the Company with a certain first-mover advantage in the market. The Company exited Q2 with healthy liquidity and solid deposits for new orders. 

Forget Headlines. Revenue Growth Arrives: FY 2027 looks to beat transformational FY 2026 on new Meta partnership and defense/robotics/space/healthcare market penetration. Indeed, the Company announced fiscal Q1:27 revenue that handily exceeded expectations (though technically down YOY on prior year’s legacy order backlog). Profit fell on higher SG&A and mainly non-cash interest expense, though those factors should diminish on a relative basis as revenue ramps. The Company’s market-leading, patent-protected, AI-driven, multi-use growth strategy (i.e., consumer, defense, robotics/space/healthcare) combined with recurring software licensing and gaming income and several new positive developments (e.g., new Meta partnership and defense M&A potential) bodes well for growth in calendar year 2026 and especially beyond.

2026 Growth Recovery/Expansion is Here: Long-term accomplished founder and management have shepherded SBC from a solo clinic in 2000 to a dominant global cosmetic treatment center franchiser and cash generation machine with little debt. H1:26 has already demonstrated post-2025 revenue growth recovery, which we expect to continue. However, it is the impact of AI efforts in H2:26 that could turn recovery into strong growth. Accordingly, the Company should likely begin to grow anew going forward with additional prospects, global and Japanese M&A targets, and AI as well as Longevity initiatives. Steps have also been taken over the last several months to increase free float, as management remains confident in their operating strategy. 

Nasdaq ADR Uplisting Without Capital Raise; Expands U.S. Access. We view the ADR uplist as a high-quality, non-dilutive catalyst that materially widens First Phosphate's investor base while rewarding existing holders. Executing a self-sponsored uplist to Nasdaq without a capital raise reflects a strong balance sheet, with over C$30 million of cash and access to C$21.5 million of non-repayable federal contributions, and a runway of approximately 24 to 36 months that fully funds the Company through FID.