Xtract One Technologies Inc.

Good morning and welcome to the Extract One Technologies fiscal 2024 third quarter earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Chris Witte, the investor relations advisor. Please go ahead.

Good morning, everyone, and welcome to the Extract One fiscal third quarter conference call. Joining me today is the company's CEO and director, Peter Evans, and CFO, Karen Hirsch. Today's earnings call will include a discussion about the state of the business, quarterly financial results, and some of Extract One's recent milestones, followed by a Q&A session. This call is being recorded and will be available on the company's website for replay purposes. Please see the presentation online that accompanies today's discussion. Before we begin, I would like to note that all dollars are Canadian, unless otherwise specified, and provide a brief disclaimer statement as shown on slide two. Today's call contains supplementary financial measures. These measures do not have any standardized meanings prescribed under IFRS and therefore may not be comparable to similar measures presented by other reporting issuers. The supplementary financial measures are defined within the company's filed management and discussion analysis. Today's call may also contain forward-looking statements that are subject to various risks and uncertainties, which could cause actual results, performance, or developments to differ materially from those contained in the statements and are not guarantees of future performance of the company. No assurance can be given that any of the events anticipated by the forward-looking statements will prove to have been correct. Also, some risks and uncertainties may be out of the control of the company. Today's call should be reviewed along with the company's interim condensed financial statements, management's discussion and analysis, and earnings press release issued yesterday, June 6, 2024, available on the company's website and its CEDAR Plus profile. And now it is my pleasure to introduce Peter Evans, the Chief Financial Officer, I'm sorry, Chief Executive Officer of Extract One. Please go ahead, Peter.

Well, thank you, Chris, and welcome to all our investors and analysts joining us today. And Chris, thank you for the promotion to the CFO of the company. Let's start by turning to slide number four in the chart deck. A lot has happened certainly since the last time we had our last earnings call with this group of people. Some highlights that are very compelling to me and very pleasing are as follows. First, we had another great, well, what's called outstanding quarter for the company. Our Q3 bookings were very strong, coming in at $9.5 million for the quarter, which is just a whisper away from a record quarter for us. We also did report record revenues of $4.7 million, more than five times the same prior period last year. As anticipated, the top line was much higher sequentially versus the prior quarter, which is typically a seasonally softer quarter for us, and we remain on track for our best year ever, setting us up for further growth in fiscal 2025 as we continue to make progress on our path to profitability. Secondly, we announced several new customer wins during the quarter, as well as being awarded the U.S. Department of Homeland Security Safety Act designation as a qualified anti-terrorism technology. This was significant and huge news for the company, opening a lot of doors for us and enabling us to sell into a multitude of new organizations who require Safety Act certification in order to do business with them. These include some of the professional sports leagues, such as Major League Baseball, amongst others. I'll speak more to this in a moment, but suffice to say that we've been working very, very hard for the past two years on securing the new clients, but we haven't always been able to put out press releases around those clients, or in some cases, closing business with those clients, in the second case, due to DHS. In the cases with winning new clients and not being able to put out press releases, this is primarily due to customer privacy policies and their approval practices. However, we hope to get some award news out soon as related to new contracts that we already have in hand. Yesterday, we announced three new not previously announced contracts. New customers not previously identified by the company as customers. We'll talk more about that in a moment. Last but not least, we recently raised gross proceeds of almost $10 million through an equity offering and a private placement with MSG Sports. MSG's continued participation and continued endorsement of the company seeks volume as their support and belief in the company continues to grow. We've now bolstered our balance sheet and are focused on continuing our rapid growth trajectory with what that new capital allows us to do. Let's turn to the next slide, please. I'd like to provide a little further color on what the DHS news means and how it will impact us and greatly expand our addressable market. Simply put, the DHS Designation Award recognizes the effectiveness of our technology and positions us as a trusted leader in touchless screening solutions. It's based on a longstanding law in the US that was called the Support Anti-Terrorism by Fostering Effective Technologies, or SAFETY Act, which provides incentives and liability protection to companies that demonstrate that they have an appropriate proven technology. The designation enables or establishes for us a liability cap or limit on the financial risk that we as a company would have to undertake or that our organization might face in the unlikely event of a terrorist attack. As part of our philosophy of continuing to deliver high quality solutions and product transparency and a solution that we can deliver with high integrity and and put our brand and name behind it, we're committed to performing third-party testing and validation of our systems. One of our core values is being very transparent with our customers. And we've done this in the past by testing multiple times with the NCS4 organization, the TSA, which is ongoing testing that we continue to do with them on a repeated basis, and now this award from the Department of Homeland Security. Achieving a designation status once again proves the quality and reliability of the Extract One security screening technology. And it further validates our commitment as a company to developing the most effective weapons detection systems for protecting people in high traffic venues. We prioritize security and safety first in balance with, and in the correct balance with, guest experience. In addition, this designation brings us and our customers several advantages. including the reduced risk and increased confidence of deploying our solutions. It also provides peace of mind to numerous organizations that look to the Safety Act as a validation of technology. On the slide are just some of the many companies, sports organizations and associations and other institutions that we can now sell to with this designation under our belt. It's truly a tremendous achievement. I want to thank all of the parts of the Extract One organization, who had to participate in this very robust application that we put into the DHS. After almost two years of effort, this is something we can be very, very proud of. As some of you may have also seen in yesterday's announcement, since receiving the award, we've already cemented new contracts with new previously unannounced teams that are tied to or in the NHL, NBA, and Major League Baseball. And there's many more of those on the way. We're very pleased with the work that we did with these teams Since they, along with us are also committed to quality security and, as such, are working with us to not only deploy our solutions, but also educate their communities schools hospitals and other businesses on the best practices that they should think about when executing quality security. let's turn to the next slide please. Demand for our solutions continues to accelerate significantly, and I'm very pleased with the new customers we've added during the quarter, which together resulted in the $9.5 million of total contract value that we bought. We announced a few of these wins, and we executed multiple deployments over the course of the 90-day quarter, including some with the Oakview Group to secure all of the entrants of the new Co-op Live Arena in Manchester, England, which opened in the past month. This amazing 23,500 capacity venue is the largest arena in the UK and, in fact, in all of Western Europe. And it's our first deployment with the Oak View Group overseas. It's a three-year contract and just at the start of what we see as limitless opportunities and many more wins and the current growth of our pipeline across the pond. We also announced that we've been chosen to protect all the entrances of the American Bank Centre in Corpus Christi, Texas. This is a very large, OVG-run, multi-purpose indoor activity center and convention space designed for concerts, sports, rodeos, and all sorts of other events, with a 10,000-seat arena and 130,000-square-foot convention center. Oakview Group continues to operate this venue, and it's another three-year partnership that we've established with them. It's truly, again, a great example of another large venue with multiple different venue spaces that have chosen our innovative technology to ensure they streamline the efficient security for thousands of people. I'd like to assure our listeners of one thing. These two announcements this quarter do not reflect the level of business activity or contract awards. As should be evident from our rapidly growing backlog, we're winning new customers on a regular basis in every vertical market space. Whether it's healthcare, schools, arenas, stadiums, manufacturing, distribution, we welcome 14 new clients this past quarter. However, many of our customers will not announce their security strategies or they will not publicize vendors of any kind, let alone security, for privacy reasons or as other business policies. Or they may take the time to assess and approve a news release until after, for example, with one customer, they've had the technology in place for a minimum of 12 months. We are busier than ever, and as you may expect, this has only increased since the DHS designation was announced. We have a number of customers who had tested all solutions, selected extract one, and were willing to wait for that DHS award. As previously discussed on these calls, our focus is on continuously and aggressively growing the business fundamentals. This is our measure for success, not the number of press releases. And I would ask our investors to focus on those business financial fundamentals, our growth and our performance, not the number of press releases, to gauge our success. The management team, myself, the whole company, we could not be more excited about the future of the engagements that we're currently in today and where we see ourselves going tomorrow. Before handing it over to Karen, I want to talk just a little bit more about the company's change in the past year. Let's move on to slide seven, please. Slide seven includes a snapshot of the total contract value of the new bookings in fiscal 2024, year to date, versus the same period in fiscal 2023. Not only has the balance grown significantly, but our industry presence has shifted and expanded quite significantly also. We are in many, many more markets today than we were just a few quarters ago, and this trend will only continue and only grow much more rapidly in the foreseeable future as I look into the specific details of our pipeline and our qualified opportunities. We're tapping into a huge demand for fast, advanced security systems, systems that are highly predictable in their performance, and where people prioritize security first, so that they can ensure the safety of patrons, other employees, and the individuals anywhere that high turnover is part of everyday life. Our systems have been proven to be superior in their technology and their security efficacy again and again, And again, over 40% of the new bookings came from outside our initial core market space of sports and entertainment. That's where we started in the business and got hyper-focused on that in prior quarters. And in this past quarter, we continue to see traction, not only in these other vertical market spaces, but with our channel partners who are starting to sign up more and more customers. We couldn't be prouder of where we stand today. I personally am very enthusiastic about everything that this team has delivered. and I'm very confident in what the future holds for us. We appreciate all of our investors' passion and their patience as we continue to achieve this record growth and get even closer and closer to profitability. Now I'm going to turn it over to Karen to provide a much more detailed discussion of our financial results for the quarter. Karen, over to you.