Posabit Systems Corp

Good day, ladies and gentlemen, and welcome to the POSABIT Systems Corporation first quarter 2022 earnings call. All participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. I would now like to hand the call over to James Carbonara, Investor Relations at POSABIT. James, please go ahead.

Thank you, and once again, welcome. With me on this call are Ryan Hamlin, Chief Executive Officer of and Matthew Fowler, Chief Financial Officer. I would like to begin the call by reading the Safe Harbor Statement. This statement is made pursuant to the Safe Harbor for forward-looking statements described in the Private Securities Litigation Reform Act of 1995. All statements made on this call, with the exception of historical facts, may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although the company believes that expectations and assumptions reflected in these forward-looking statements are reasonable, it makes no assurances that such expectations will prove to have been correct. Actual results may differ materially from those expressed or implied in the forward-looking statements due to various risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those expressed or implied in the forward-looking statements, please see risk factors detailed in the company's annual report, and subsequently filed reports as well as in other reports that the company files from time to time with CDAR. Any forward-looking statements included in this earnings call are made only as of the date of this call. We do not undertake any obligation to update or supplement any forward-looking statements to reflect subsequent knowledge events or circumstances. The company will also be citing adjusted EBITDA in today's discussion. Adjusted EBITDA is a non-IFRS measure used by management that does not have any prescribed meeting by IFRS. and may not be comparable to similar measures presented by other companies. The company defines adjusted EBITDA as net income or loss generated for the period as reported before interest, taxes, depreciation, and amortization. It's further adjusted to remove changes in fair values and expected credit losses, foreign exchange gains, and or losses and impairments. The company believes this is a useful metric to evaluate its core operating performance. Now I would like to turn the call over to Ryan Hamlin, Chief Executive Officer. Ryan, please proceed.

Thanks, James, and thanks, everyone, for joining the call today. We have a few prepared remarks, and then we'll open up at the end for some questions. Before I jump into our Q1 results, I want to reiterate a few Q points we shared just a few weeks ago in our special Q&A session we held on May 3rd, which I'm hoping many of you attended online. As you remember, during the Q&A call, we discussed that we had more than 100 contracted retail locations queued up to go live over the next 60 days. Since that time, we have already onboarded nearly half of those contracted locations. They are now fully operational and represent an estimated $50 million in annual transactional sales volume. By the end of Q2, we expect to stand up the remainder of those 100-plus retail locations. we are well on our way to achieving our commitment of 100 locations live in 60 days. Just as important, since early May, we have increased our funnel of new contracted stores by approximately 20%, adding nearly 30 additional store locations that we expect to go live over the next 75 days, further increasing our visibility on revenue and reinforcing our confidence in our 2022 guidance. Now turning our attention to an overview of our first quarter financial results. As a reminder, all numbers that we're reporting today are in U.S. dollars. During the first quarter, we continued to onboard new merchants, focusing on high volume stores and MSO locations. First quarter revenue was 6.4 million, up 79% year over year, and essentially flat on a sequential basis. Our transactional sales volume increased 61% to 103 million year over year, and decreased 3% sequentially compared to the fourth quarter of 2021. Sequential trends over the last two quarters have been the primary drivers, and there are two key factors. First, industry-wide headwinds impacted transactional sales volumes beginning in the third quarter of last year and continued through most of the first quarter of this year. Lower demand and lower average order sizes led to an overall decline across the industry. We speculate that this was due to both the loss of government subsidized checks, as well as a significant reduction in cannabis consumption industry-wide. So, the market dynamics are clearly one factor in the current slowdown. However, beginning with the month of March, pricing began to stabilize, and many MSOs reported that demand is coming back. In fact, we saw evidence of this in our own transactional sales volume. We began accelerating again toward the end of first quarter. our March volume increased more than 20% compared to February, representing the largest volume month in our corporate history. And as we headed into second quarter, April outperformed March in terms of transactional volume and revenue. The second key variable for us in Q1, and not surprising, is that our revenue growth has become more of a stair-step function, and some would say even lumpy, given our focus on high, high volume MSOs where we tend to onboard in clusters, which generally takes longer to onboard than single store operators. We are encouraged by the improving market conditions and the speed at which our teams are standing at new retail locations. We are on pace to install more than 50 new payments and POS stores in May and even more in June. As of today, we have grown our store count to more than 450 stores that use our payments and our POS. and our sales pipeline is as healthy as it's ever been. The cadence of our installations, coupled with anticipated growth at existing stores and our pipeline of new business opportunities, reinforces our optimism for another year of exponential growth in 2022. Before I turn it over to Matt to give a detailed report of our Q1 financials, I want to share some exciting news that we reported on this morning. We have expanded our leadership team with appointment of Julie Solomon to the role of Chief Revenue Officer. Julie has more than 25 years of experience in the FinTech space. She comes to us from SyncTerra, a leading FinTech banking provider. Julie has worked in a number of sales and executive leadership roles during her accomplished career and has had great success leading teams to high growth. With Julie coming on board, we are now consolidating our sales, marketing, and customer support teams all into one organization under her leadership. This move strategically unifies our customer-facing resources and supports a single go-to-market strategy with one voice messaging to help fuel the next phase of our growth. I know Julie is listening on the call today, so I just want to say hello to her and let her know how excited we are for her to start in June. With that, I'll now turn the call over to Matt Fowler, our CFO, for a more detailed review of our financial results for the quarter ending March 31st, 2022. Thank you, Ryan.