Cybeats Technologies Corp

Good afternoon and thank you for joining us for Cybeats Technologies conference call to discuss its financial results for the second quarter in six months ended June 30th, 2026. My name is Sean Peskin and I handle the investor relations for the company and we'll be moderating the call today. From the company, we have Cybeats Chief Executive Officer Justin Leger and Chief Financial Officer Josh Bald. Justin will begin the call with an update on the business and some of the key developments during the quarter. Josh will then provide a brief overview of the financial results and we'll wrap up the prepared remarks with Justin discussing the outlook and we'll finish the call with Q&A. Today's call is being recorded and you're currently in a listen-only mode. If you have a question, please enter it in the question box at the bottom of the webinar at any time and we'll address questions at the end of the call. Before I pass the call to management, I'd like to remind everyone that certain statements in this call may be forward-looking in nature. Matters discussed on today's call, including our outlook for 2026 and beyond, involve known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements and reflect the company's judgment based on information available at the time of this call. Caveats about forward-looking statements and risk factors, please see our MD&A for the quarter ended June 30th, 2026, which can be found on our company profile on CDAR+. Unless otherwise stated, all dollar amounts are denominated in Canadian dollars. With that, I'd like to pass the call over to SideBeats Chief Executive Officer, Justin Leger.

Good afternoon, everyone. Thanks for joining the call. Thank you, Sean. For getting into the quarter, I want to spend a minute on some of the trends and events that we're seeing in the broader cybersecurity market, because I think it helps explain why the opportunity in front of Sybeats is so exciting. Software has become embedded in virtually everything from medical devices and industrial control systems to automobiles, telecommunications networks and critical infrastructure. At the same time, AI is dramatically increasing the speed at which new software can be developed and deployed. That creates enormous productivity benefits, but it also creates a much larger and more complex software environment that organizations need to secure and manage. AI is changing the other side of the equation as well. The same technologies helping developers write code faster are making it easier to identify and exploit vulnerabilities. One senior government official I spoke to on this topic believes the biggest financial beneficiaries of AI to date are cyber criminals. Security teams are being tasked with understanding increasingly complex software environments and respond to vulnerabilities faster than ever before. And that is why software supply chain visibility is so important. Organizations need to know what software they're running, what components are inside of that software, where vulnerabilities exist, whether those vulnerabilities actually affect product security, and can they be exploited by bad actors? And finally, what do they need to do about them? Fundamentally, that visibility is what an SBOM provides, and simply generating an SBOM is not enough. Enterprises need systems capable of managing, monitoring, and operationalizing that information across thousands of products and software components. At the same time, regulation is reinforcing this need. Requirements such as the EU Cyber Resilience Act are moving software transparency and vulnerability management from best practice toward a regulatory requirement. Against that backdrop, we believe the market is moving directly towards the problem Cybeats was built to solve. We're now clearly seeing this demand for our solutions in the market. Q2 was an important quarter for Sybeats, and I believe we're seeing the business begin to really accelerate. During the quarter, we signed a major enterprise agreement with the global leader in industrial software and critical infrastructure solutions. This is exactly the type of customer we want to win. Large, sophisticated organizations operating complex software environments where security, compliance, and software transparency are increasingly important. Our pipeline also remains strong across medical devices, industrial automation, defense, healthcare, telecom, automotive, and critical infrastructure. We're also seeing progress from both sides of our commercial strategy. Our direct sales team is advancing several opportunities while our channel and OEM partners are increasingly generating and winning opportunities on the road. And that second part is important. In Q1, we announced our OEM partnership with Keysight Technologies. And under that relationship, Keysight combined SideEats SBOM lifecycle management capabilities with its own binary composition analysis and SBOM generation capabilities, bringing the resulting solution to the market through its global sales team. The commercial terms are confidential, but strategically, the rationale is straightforward. SideEats gets access to a much larger sales organization, established enterprise relationships, and global markets without having to replicate that infrastructure internally. We're now seeing opportunities generated through our partner ecosystem progress through the sales process and translate into commercial success. Subsequent to the quarter end, one of our channel partners secured multiple commercial engagements, including a leading Japanese industrial control system provider. More broadly, the level of activity we're seeing from our partners gives us increasing confidence that channel-driven business will become a meaningful contributor to SyBee's growth. Second quarter of 2026 was our highest grossing quarter ever, driven by both new and existing account growth. Our revenue for the quarter reached just over $815,000. More broadly, this performance validates our long-term trajectory, keeping us firmly on track with a 37% compounded annual growth rate over the past 12 quarters. Another important indicator for us is what's happening with in our sales pipeline, particularly looking at proof of concepts or POCs. At the end of Q2, we had six active POCs. As of August 14th, that number has increased to eight active POCs with another six scheduled already within Q3 and Q4. For comparison, we had seven at the end of Q1 and five at year end 2025. A POC or proof of concept is essentially a structured trial where a prospective customer evaluates their technology in their own environment to confirm that it meets their technical and business requirements. In the SideBeats sales pipeline, a POC is an important step between that initial sales opportunity and demonstration and a commercial contract. It means the customer has moved beyond simply evaluating the solution and is actively validating it with the intention of making a purchase decision. These opportunities span medical device manufacturers, financial institutions, healthcare delivery organizations, and commercial good manufacturers, and include several large enterprises and reseller opportunities. The importance of the POC pipeline is that these are not simply top of funnel leads. They represent organizations actively evaluating our tech within their environments and provides an important indicator of potential future commercial activity. We've got a very strong track record with POC conversion and our conversion rate is around 80%. We're also seeing growth within our existing customer base. And we've had multiple contract expansions subsequent to quarter end leading to some very sizable contracts that we've grown over three or four years. Leading to today, our annual recurring revenue has increased to approximately $4 million. The combination of new enterprise opportunities, expansion within existing customers, and a growing channel pipeline gives us several different ways to grow that number. And there is one point I want to address. Some of the enterprise opportunities that we expected to close earlier in the year have taken longer than we initially anticipated. Enterprise procurement, particularly with large regulated organizations and government, can involve lengthy security reviews, procurement processes, and many internal stakeholders. And while these have taken longer, in some cases the opportunities with these customers has also grown. And we're confident that we will close a number of these in the near term. None of the opportunities we discussed in the last call have been lost. So while the timing has moved, our confidence in the underlying opportunity has not changed. I'd like to briefly talk about partnership activity over the last few months. Partner activity is becoming increasingly important contributor to our growth. Our partners have brought three new customers into the business with additional opportunities expected to close in the near term. These customers are in new verticals and geographies where Sybeats has not previously had meaningful access. So these are not simply opportunities that we would have otherwise have come into our direct sales channel. Our partners are expanding our reach into new markets and customer relationships that would have otherwise been almost impossible for us to access at this stage of our maturity, creating an incremental source of pipeline and growth. Before I hand things over to Josh, I want to spend a few minutes on one of the most important product developments that we've announced this year. In August, we introduced Raven, our new agentic AI intelligence layer for SBOM Studio. And the idea behind Raven is relatively simple. SBOM Studio gives an organization a governed system of record for its software supply chain. But when you're managing thousands of software components and potentially thousands of vulnerabilities, visibility alone does not solve the problem. Security teams need to know which vulnerabilities actually matter, why they matter, and what they should do next. Raven applies agentic AI reasoning to that governed data to assist with vulnerability triage, reachability analysis, and evidence generation. This is an important evolution of our platform because it moves Sybeats further from simply managing software transparency toward helping customers make security decisions based on that information at the speed of AI. Raven was designed around enterprise governance. Customers retain control over sensitive source code and intellectual property while the evidence and rationale supporting security decisions can be audited and stored within SBOM Studio. We believe that AI will dramatically increase both the amount of software being created and the complexity of securing it. Our view is that AI therefore represents not only a new technology opportunity for Sybeats, but another structural driver for the broader software supply chain security market. With that, I'll turn the call over to Josh to discuss our financial results.

Thanks, Justin. Today, I'll review our second quarter and six months ended June 30th, 2026. And then I'll pass the call back to Justin for our outlook. As Sean stated, all dollar amounts are in Canadian dollars. For more detailed information, please refer to the financial statements and management discussion and analysis filed on CDR Plus earlier today. Revenue for the quarter was $815,769 compared to $744,664 in Q2 2025. The net loss in Q1 2026 of $765,074 was lower than the $792,922 loss in Q2 2025. Cash expenses decreased slightly to $1,535,904 in Q2 2026 compared to $1,536,727 in Q2 2025. Cash at the end of the quarter was $261,643 compared to $1,072,900 at the end of Q1 2026. Subsequent to the quarter end, the company closed an oversubscribed non-brokered private placement for $1.9 million. The company's accounts receivable as of June 30, 2026 does not include amounts related to SaaS subscription renewals that are expected to become billable in future periods. As a result... As a result, the account's receivable balance at the period end may not fully reflect the company's anticipated near-term cash collections from existing customer relationships. Management expects upcoming subscription renewals, if renewed and billed in the ordinary course, may contribute positively to cash flow in subsequent periods. This concludes my financial summary for the second quarter of fiscal 2026. I will now pass the call back to Justin to discuss Outlook.