Quorum Information Techs

Good day and thank you for standing by. Welcome to the Quorum Information Technology's third quarter 2025 results. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message inviting your hand as raised. To withdraw your question, please press star 11 again. Please realize that today's conference is being recorded. I'll now hand the conference over to your first speaker today, Maury Marks, President and CEO. Please go ahead.

Thank you, Marvin. Hello, everybody, and thank you for attending Quorum Information Technologies Q3 2025 Results Conference Call and Concurrent Webcast. Joining me is our Chief Financial Officer, Marilyn Bowne. Quorum offers innovative and robust technology solutions and services to vehicle dealerships and original equipment manufacturers, or OEMs, across North America. Offering 13 of the 25 most common categories of software solutions that automotive dealerships utilize, our uniquely integrated product suite of 13 essential solutions are used in whole or in part by approximately 1,400 dealership customers across North America. There is at least one Quorum software solution installed in 40% of the franchised automotive dealerships in Canada. I'm proud to say Our team delivered another quarter of disciplined execution with its second consecutive quarter of cash EBITDA growth in Q3 2025, reflecting the success of our profitability improvement plan initiated in Q1 2025. Cash EBITDA increased to $1.5 million in Q3 2025 from $1.4 million in Q2 and $1 million in Q1. Quorum also delivered 2% year-over-year organic growth in annualized reoccurring revenue. Q3 2025 was also an extremely exciting quarter, making an important milestone in our history as we announced the proposed acquisition of Quorum by an affiliate, the purchaser, of Valsoft Corporation Inc., or Valsoft. The purchaser will acquire all of the issued and outstanding common shares of Quorum for $0.80 per share in cash pursuant a statutory plan of arrangement. Completion of the transaction is subject to shareholder approval at a special meeting scheduled for November 26, 2025, as well as court and regulatory approvals and other customary closing conditions. The transaction is expected to close on or before December 15, 2025. Faussoft is the ideal partner for Quorum, bringing long-term investment and a collaborative approach that empowers our team to continue delivering exceptional service. We are indeed excited about the road ahead. Marilyn will now review our Q3 2025 financial results, after which I will follow up with additional comments on the quarter and the proposed transaction. We will then open the floor to your questions. Marilyn, please go ahead.

Thank you, Maury, and good day, everybody. Thank you for being here with us today. I would like to remind everyone that certain statements in this presentation are forward-looking in nature. These include statements involving known and unknown risks, uncertainties, and other factors outside of management control that cause actual results to differ materially from those expressed in the forward-looking statements. Quorum is not assuming responsibility for the accuracy and completeness of the forward-looking statements and does not undertake any obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. For additional information on possible risks, please refer to our annual MD&A, dated December 31, 2024, on the CDARplus.ca website. As Maury mentioned, we are pleased to report that Q3 2025 results reflected another steady quarter of solid financial performance. Quorum delivered its second consecutive quarter of cash EBITDA growth in Q3 2025, reflecting the success of our profitability improvement plan initiated in late Q1 2025, with cash EBITDA rising from $1 million in Q1 to $1.4 million in Q2 to $1.5 million in Q3 2025. Quorum also delivered 2% organic growth in annualized recurring revenue, led by a 10% increase in BDC revenue year-over-year, primarily due to new customer revenue. Year-over-year, Q3 2025 results as compared to Q3 2024 results were total revenue increased by 1% to 10 million, SAS revenue decreased by 1% to 7.2 million, and as mentioned, BDC revenue increased by 10% to 2.7 million due to new customer revenue. Recurring SAS and BDC revenue equated to an annual revenue run rate of 39.5 million and represented 99% of Quorum's revenue. Overall, gross margin increased by 1% to $5 million, or 50% of total revenue, primarily due to operational efficiencies for the BDC cost structure. Adjusted EBITDA was $1.9 million in Q3 2025, or 19% of revenue, a decrease of $0.3 million, primarily attributable to expensing more software development costs and increases in research and development expenses, as well as higher third-party costs related to SAS revenue. Cash EBITDA increased by 1% to $1.5 million, or 15% of total revenue. Forum's focus on profitable growth has also resulted in improved balance sheet, as total debt as of September 30, 2025, decreased by $1.4 million compared to December 31, 2024. Subsequent to September 30, 2025, Quorum made a prepayment of $0.4 million in principal and interest, resulting in a current balance of $2.5 million on the BDC Capital mezzanine loan facility. Quorum will continue to prepay 15% of the balance on an annual basis until maturity in August 2027. Note that paying more than the 15% on an annual basis would result in significant penalties to Quorum. As of September 30th, 2025, Quorum had networking capital of $5.4 million, cash and cash equivalents of $5 million, and as a result of Quorum's reduced debt, total debt to cash EBITDA ratio has improved from 1.2 times in Q3 2024 to 0.8 times in Q3 2025. Regarding the proposed acquisition of Quorum by the purchaser, through the arrangement agreement transaction, there is no material impact from this arrangement agreement on the financial position of the company as at September 30th, 2025, or on financial performance or cash flow, the interim period then ended. The impact on subsequent periods is not known at this time. Under the terms of the transaction, shareholders will receive 80 cents in cash per share held. The transaction will be subject to the approval of at least two-thirds of the votes cast by shareholders present in person or represented by proxy at a special meeting of shareholders scheduled for November 26, 2025. Completion of the transaction is subject to shareholder approval as well as court and regulatory approvals and other customary closing conditions. The transaction is expected to close on or before December 15, 2025. Upon completion, Quorum's common shares will be delisted from the TSX Venture Exchange and Quorum will cease to be a reporting issuer under Canadian securities laws. The transaction is not subject to a financing condition. Further details of the transaction and the arrangement agreement have been set out in the Management Information Circular that was prepared and mailed to shareholders in connection with the special meeting. The management information circular is also available under the government section of Quorum's investor relations website at quoruminformationsystems.com and under Quorum's issuer profile on Cedar Plus at cedarplus.ca. With that, I'd like to pass it back to Maury.