Posabit Systems Corp

Greetings, and welcome to the Positbit Systems Corporation second quarter 2025 earnings call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. Please note, this conference is being recorded. It is now my pleasure to turn the floor over to your host, Oscar Dahl. The floor is yours.

Thank you, Operator. With me on this call are Ryan Hamlin, Chief Executive Officer, and Emily Egan, Senior Corporate Controller. 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 21 of the Security 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 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 subsequent 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 call are made only at 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 setting adjusted EBITDA, adjusted revenue, and adjusted gross profit in today's discussion. Adjusted revenue, adjusted gross profit, and adjusted EBITDA are non-IFRS measures used by management that do not have any prescribed meaning by IFRS and may not be comparable to similar measures presented by other companies. The company defines adjusted revenue as gross revenue minus license support revenue plus actual licensing cash received as part of POSBIS licensing deals. The company defines adjusted gross profit as adjusted revenue less company cost of goods sold. The company defines adjusted EBITDA as net income or loss generated for the period as reported before interest, taxes, depreciation, and amortization and further adjusted to remove changes in share values and expected credit losses, foreign exchange gains, and or losses and impairments. The company believes these non-IFRS measures are useful metrics to evaluate its core operating performance and uses these measures to provide shareholders and others with supplemental measures of its operating performance. The company also believes that securities analysts, investors, and other interested parties frequently use these non-IFRS measures in the evaluation of companies, many of which present similar metrics when reporting their results. We caution that adjusted revenue, adjusted gross profit, and adjusted EBITDA are not substitutes for gross revenue, gross profit, or profit loss, respectively. Now, I would like to turn the call over to Ryan Hamlin, Chief Executive Officer. Ryan, please proceed.

Thanks, Oscar, and welcome, everyone. As a reminder, all the numbers that I'll be talking about today are going to be in U.S. dollars. Q2 was a historic quarter for Positivate. You can see it clearly in the numbers we just released a half an hour ago. It's a testament to all the work we put into the company over the past 12 months, getting lean, improving efficiencies, focusing on operational excellence, and executing on all of our product goals. Not only are the numbers great, but our customers are very happy. I'll start with some key highlights in case you've missed the press release that came out 30 minutes ago. We had a massive adjusted EBITDA profit this quarter to the tune of $782,000, the most of any quarter in the history by 7x. A net income gain of $635,000 in Q2. Again, this is the first quarterly income gain in the history of positive income. and a huge 78% adjusted gross profit margin versus 61% in Q1 of this year, another record for POMS bid. And lastly, cash in hand grew quarter over quarter by 10%, and our accounts payable decreased by $2,000 versus Q1. So we are paying down our debt and still putting money in the bank. So I guess if you take one thing away from this call today, It's this, Positbit is profitable, we are growing, and we're putting cash in the bank. Now I'm going to update you on a few other details from the quarter. We installed our point of sale in over 50 new stores during Q2, continuing the incredible momentum with our core product offering. We continue to dominate in Washington State and are now seeing more and more stores in Oregon and New Mexico. We believe this is due to our continued improvements in our POS, adding more and more key features that our merchants greatly appreciate. Adding to overall reoccurring revenue with the POS is the continued success of our e-commerce menu, which brings in additional SaaS revenue deposit per store. We are seeing stores move away from third-party menus like Jane and Dutchie, which is opening the door for us to offer a complete all-in-one solution to our customers. We are very excited about the future of our e-com offerings. Product enhancements and new features will continue to be rolled out over the remainder of this year. I know we have talked about this many times in the past, but cannabis rescheduling is back in the news, and all indications this time are very positive. We believe there is a good chance we see rescheduling happening in the coming months. If and when this happens, it'll be a game changer for POSMIT. Our merchants will have more cash due to 280E going away and the potential of actual merchant services like credit card processing. We've always talked about the upside when credit card processing is available. We are already processing over $2 billion in cash sales annually through our POS, and the majority of that would shift to credit and debit cards when available. Our overall GMV will go up as our cost remains flat. This is the holy grail we've always talked about, but it's now finally looking like it is on the horizon. We'll share more to our investors as we learn how the Trump administration finalizes their ruling on rescheduling in the weeks and months ahead. Now, I'd like to turn it over to Emily Egan, our senior corporate controller, to dive a little bit deeper into our Q2 members. Emily?