战略方案

The board met on June 1, 2026. Prior to the meeting, a briefing was distributed on four proposed projects. The meeting's agenda: (1) Consider the four proposed strategic alternatives; (2) Discuss any other business.

Additional items discussed: Doris requested KYC guidance on the processes for terminating employees without cause under the BFC proposal — specifically, how to assess who gets terminated, how the meeting should proceed, how the company-wide announcement should be made, and what should be in the HR policies. Doris also noted that a government grant audit would be required and asked KYC to detail the nature of this audit, what the auditor would be required to do, and the nature of the final opinion. Philippe requested information on the R&D tax treatment. Henri asked KYC to research adopting AI machine learning in RAM mill production, explaining how it might be used to improve product quality and the challenges of implementing this technology. Anita raised that one of STC's high-end apparel manufacturer customers uses a third-party manufacturer that exploits child labour, and asked KYC whether it is illegal and/or unethical that STC has sold to this customer and what actions should be taken.

Bio Friendly Cotton Ltd. (BFC) is a start-up that mechanically processes pre-consumer waste (industrial waste scraps from the production of virgin cotton textiles, and semi-finished products and cutting scraps from apparel manufacturers) into recycled cotton fibres. BFC is interested only in recycling all-natural cotton textiles that have not been dyed, bleached, or treated, and already has several contracts with producers and apparel manufacturers. BFC is looking for a textile mill that would purchase its recycled cotton fibres, spin them into a yarn blended with virgin cotton, and weave the new blended yarn into a new recycled fabric. The proposed brand name for this new product is "EnviRyc Cotton."

Key discussion points: Anita believes this proposal addresses many of STC's current issues, introducing a new product and new target market, with current capacity confirmed sufficient by Henri. Philippe and Henri both support the proposal for its positive environmental impact. Doris is reluctant to terminate 10 employees and concerned about morale. Hugo is cautious about the capital expenditure and concerned about reliance on BFC as a single supplier given BFC's start-up status. Doris is concerned about using TVI as a sourcing agent, believing in STC's direct-selling approach. Anita argues that using an agent is necessary given that the Quebec mill has not gained any new customers since 2020.

Control Sediment Systems Inc. (CSS) is a well-known and respected manufacturer of specialized silt fences used for controlling sediment run-off caused by flooding and mudslides. Municipal and provincial governments and construction companies are looking for a Canadian-made silt fence with better properties than those currently on the market. CSS owner Blair Watson — a civil engineer and Henri's university friend — has approached STC to collaborate on developing a new synthetic textile that CSS would then purchase for use in manufacturing improved silt fences. There is an increasing demand from governments and construction companies for improved silt fences due to climate change and increased rainfall.

Key discussion points: Henri and Philippe both fully support this proposal as an ideal R&D project aligned with Philippe's expertise, with potential for STC to be first to market. Anita likes that the proposal allows STC to diversify its product line and customer base. Doris is concerned about STC's lack of experience in this industry and reliance on Blair. Hugo is concerned about upfront capital requirements and cash flow during the R&D phase with no revenue being generated. Hugo also does not like several terms of the contract, believing they favour CSS, and asks KYC to review the draft terms for pros and cons from STC's perspective and give recommendations on changes to request.

Brooke Beauvais is a Kanyen'kehà:ka (Mohawk) artist from Kahnasatà:ke who started the Indigenous Fabric Artist Collective (IFAC) two years ago. Brooke has noticed an increase in demand for Indigenous-designed fabrics and is looking to partner with a mill. The idea is that the collective would authenticate the designs, and STC would print them on the cotton it is producing. Because of IFAC's commitment to a healthy environment, the collective wants her designs used only in textiles made from organic or in-conversion cotton.

Brooke has already lined up potential customers including a well-known international fabric retailer that owns a chain of stores throughout Canada and the United States, and some home furnishing manufacturing companies. Doris proposes that STC provide financial support to existing supplier farmers as they convert their crops to organic cotton during the three-year conversion period. This proposal also involves applying for a provincial-federal grant program that provides a forgivable loan of up to $450,000 for strategic partnerships between Indigenous and non-Indigenous businesses.

Key discussion points: Doris and Anita are supportive, seeing it as an opportunity to expand into new customer segments and products while supporting the local Indigenous community. Hugo likes that it requires minimal upfront investment, with the possibility of transferring a RAM mill printer to the Quebec mill. Henri and Philippe are concerned about being tied to a small artist collective that is just a few years old. Anita raises concerns about Indigenous IP being quite different than the IP STC is used to working with and asks KYC to do some preliminary research on this, and also to inform STC on what terms and conditions it can expect from the IFAC's perspective.

Philippe proposes converting the RAM mill into a research facility with a leading research team with expertise in synthetic fibrous materials. The objective of this research facility is to perform basic research as well as development work on behalf of other mills that do not have these capabilities and manufacturers that need new or upgraded materials with specific properties. What will make STC unique is that it will not only develop the prototype but also test it on the machines to assess how quickly it can be scaled for commercialization and what costs might be required to do so. Chanda Shahid, a chemist with experience at an international company providing technical support from concept to prototype and marketing these services, will be one of Philippe's first hires and has proposed a financing arrangement.

Key discussion points: Henri fully supports it, believing the time is right as demand for specialized synthetic fibre R&D is increasing. Anita likes the proposal as it allows STC to diversify further, while acknowledging that RAM mill customer losses are inevitable regardless. Hugo believes this proposal is far too risky — asking existing customers to go elsewhere will negatively impact STC's reputation, and failure to complete contract objectives will result in unsatisfied customers. Doris is concerned about letting go of many production and selling people. Hugo and Doris are firmly against increasing debt or using Quebec mill cash flows to fund this proposal. Anita asks KYC to discuss recommendations for governance changes if Chanda has a seat on the board, and also identifies a potential impairment issue with the RAM mill brand and patent.