Vext Science Inc

Thank you for standing by. This is the conference operator. Welcome to the VEX Science first quarter and full year 2025 financial results conference call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then 0. I would now like to turn the conference over to Priyam Chakraborty. Please go ahead.

Priyam Chakraborty Thanks, operator. Good morning, everyone, and thank you for joining us today. WEXT's fourth quarter and fiscal year 2025 financial results were released earlier this morning. The press release, financial statements, and MD&A are available on CDAR+, as well as on the WEXT website at wextscience.com. We would like to remind listeners that portions of today's discussion include forward-looking statements and that forward-looking statements are included in today's findings. There can be no assurance that these forward-looking statements will prove to be accurate or that management's expectations or estimates of future development, circumstances, or results contained therein will materialize. Risks and uncertainties that could affect future developments Circumstances or results are detailed in the MD&A and VEX other public filings that are made available on CEDAW+. And we encourage listeners to read those risk factors in conjunction with today's call. As a result of these risks and uncertainties, the development circumstances or results predicted in forward-looking statements may differ materially from actual developments, circumstances, or results. This call also includes non-IFRS financial information, and such non-IFRS financial measures are subject to disclosure and reconciliation, included in our press release disseminated earlier today, as well as the MD&A. Forward-looking statements made during this conference call are made as of the date of this call. VEST disclaims any intention or obligation to update or revise such information, except as required by applicable law. VEX financial statements are presented in U.S. dollars, and the results discussed during this call are in U.S. dollars. I will now pass the call over to Eric Oppenberger, Chief Executive Officer of VEX.

Thanks, Priyam. Good morning, everybody, and thank you for joining our fourth quarter and fiscal year 2025 financial results conference call. I'm joined today by Trevor Smith, VEX DFO. 2025 was a year of solid execution and meaningful transition for VEX. We made important progress across both of our core markets while continuing to build and organize the business for the next phase of growth. The key takeaway from the quarter and the year is that our strategy is working. As we've said consistently, our focus on owned retail gives us greater control over the customer experience and supports cash flow generation over time. We've been focused on building a retail-led platform, and in 2025, that focus translated into strong revenue growth, improving cash generation, and record operating cash flow. In the fourth quarter, revenue was 13.7 million, up 35% year over year, with operating cash flow of 3.2 million, driven by continued strength in Ohio. For the full year, revenue grew 43% year-over-year to 51.4 million, and we generated 11.7 million in operating cash flow, up 256% year-over-year. I want to address Q4 EBITDA directly. Reported Q4 EBITDA was negative 3 million, reflecting a $5 million non-cash impairment on one of our Columbus, Ohio dispensaries. The impairment is primarily driven by revised cash flow expectations following significant growth in competing dispensary accounts in the Columbus market since our original acquisition, and not by the store's operating performance, which remains at the state per store average. Excluding the impairment, Q4 adjusted EBITDA was 2.1 million. The underlying performance of the business remains strong and continues to reflect the effectiveness of our retail strategy. What stands out to me is that we delivered this performance while operating across two very different markets. Navigating both with discipline isn't easy, and I'm very pleased with how our team executed across both this year. Turning first to Ohio, Ohio continues to be the primary growth engine for Vax. and a key driver of our financial performance. 2025 marked the first full year of the adult use market in the state, with total cannabis sales exceeding $1 billion statewide. While the competitive landscape expanded meaningfully, with the number of licensed dispensaries increasing by nearly 50% over the course of the year, Ohio remains a highly controlled and structurally defensible market with a capped retail model, discipline rollout of new stores, and regulatory safeguards that support long-term pricing and margin stability. Within this framework, we continue to see a clear opportunity to scale our presence with high-quality retail locations. We made significant progress expanding our retail footprint in 2025, growing our Ohio retail presence from two stores to five operational locations. During the year, our Ohio retail operations accounted for over half of consolidated revenue, with sales increasing over 120% year over year. The majority of our stores performed at or above the statewide per store average. Looking ahead, our focus is on completing our build out to the eight store license cap. We expect to open our sixth location in the second quarter of 2026. We are particularly excited about this Fairfield location which is positioned in a high visibility quarter and includes a drive-through format that has already been well received at some of our other stores. We expect Fairfield to ramp efficiently and become a meaningful contributor to revenue and cash flow as it stabilizes. Beyond that, our seventh location is currently under construction and expected to be operational in 2026 with an eighth and final location anticipated to open in early 2027. As these additional doors come online, we expect them to further support revenue growth, operating leverage, and cash flow generation across the Ohio platform. As we complete the Ohio retail expansion, we are actively redeploying capital toward vertical integration and cultivation expansion to support that network. This includes advancing plans to expand cultivation capacity at our Jackson facility and further develop our manufacturing capabilities. Overall, we believe Ohio provides a clear path to scale with our existing license structure. Turning to Arizona, Arizona remains a mature and competitive market with continued pricing pressure driven by excess supply. In fiscal 2025, total cannabis sales in the state declined approximately 3% while average item prices were down seven to 8% year over year. Despite this backdrop, our performance remained resilient. Our retail locations performed above the statewide per store average for most of the year, supported by strong cultivation yields and disciplined execution across the business. That said, the fundamental economics in the Arizona cultivation market are clear and we are taking decisive action. As announced in March, we are transitioning to a lean retail first model in Arizona. This includes exiting cultivation through the shutdown and decommissioning of the Eloy facility during the second quarter of 2026. The property will then be marketed for sale with proceeds expected to reduce debt and further strengthen the balance sheet. Third-party supply will begin replacing Eloy output in the middle of the second quarter with the full transition reflected in the third quarter, which is a seasonally slower period in Arizona and aligns well with the timing of this shift. We expect that this shift will remove the internal sell-through constraints that impacted pricing and product mix in 2025. Going forward, Arizona will be focused on maximizing performance at our two Phoenix area dispensaries, while expanding our manufacturing and distribution capabilities through a more capital-light model, including third-party distribution and contract manufacturing. Arizona will be operated with a focus on cash generation and margin optimization rather than capacity investment. We also continue to evaluate discipline M&A opportunities with a focus on strengthening our position in core markets and maintaining flexibility to pursue opportunities that meet our return thresholds. As we look ahead to 2026, we are entering the year with a more focused footprint and a clear capital allocation framework. Our priorities are straightforward. Completing the Ohio retail build out, expanding cultivation capacity to support that network, and continuing to optimize our Arizona operations With capital directed toward our highest return opportunities, we expect to drive continued margin expansion, strong cash flow generation, and long-term shareholder value. Before I close my remarks, I would like to note last week's announcement from the DEA regarding the reclassification of state licensed medical cannabis at the federal level. While still early, this represents a constructive step that could support both efficiency and better access to financing for solid players in the industry, while further aligning federal policy with the framework already established across many states. Our view internally is that it will continue to be a state-by-state market, but this news was a long time coming and a step in the right direction. With that, I'll turn it over to Trevor for a closer look at the financials. Trevor?