Xtract One Technologies Inc.

Good morning and welcome to the Extract One Technologies Fiscal 2026 Second Quarter Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. 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, Investor Relations Advisor. Please go ahead.

Good morning, everyone, and welcome to Extract One's fiscal 2026 second 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, 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 meetings 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 discussion and analysis. Today's call may also include forward-looking statements that are subject to risk and uncertainties, which may 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 consolidated financial statements, management's discussion and analysis, and earnings press release issued March 4th, 2026, available on the company's website and its Cedar Plus profile. It's now my pleasure to introduce Peter Evans, Chief Executive Officer of Extract One. Peter?

Well, thank you, Chris, and thank you, and welcome to all of our investors and analysts that are joining us today. Let's start by opening up with slide number four. With slide four here, I'm pleased to say that we start off by saying that we had normally expect the second quarter to be relatively slow. Typical slowdown to American Thanksgiving, people slowing down as they head to the holidays, as they're waiting for new budgets in January. However, our second quarter turned out to be a very busy one for us for both bookings and deployment of our product lines, which comes as no surprise to me, given that our current commitment to deliver on our backlog and continually convert that over to revenue and onboarding new customers. We remain on a solid trajectory for this to be our very best year ever, with record revenue anticipated as growth continues into the second half of fiscal 2025. Revenue in the second quarter rose by 70% year over year, and our backlog remained strong at a near record level of around $49 million or so. This reflects advance for both of our innovative product lines, both the Smart Gateway and the One Gateway, across a wide variety of end markets. And we believe that we're well-poised to see a continued influx of new orders and increased numbers of installations. I'm pleased that we should continue to see that to this day. As we turn the corner into spring, we see more and more opportunities in front of us. Alongside the successful deployment of numerous Extract One gateway systems, we also continue to see a healthy interest for the smart gate, purpose-built for particular markets, and particularly those markets being healthcare and entertainment sectors. Our production levels continue to grow, matching our demand from the marketplace, as we'll discuss in a moment, which leaves us feeling very upbeat about the coming quarters. Given the size of our backlog, given the improved pace and growing pace of deployments, and a strong balance sheet, along with expanding our manufacturing capabilities on a continuous basis, we have better visibility than ever before into our fiscal 2026, which has been has categorized previously a transformational year for us and for the company. Let's move on to slide five a little bit and dig into the details on the XTRACT-1 Gateway. The XTRACT-1 Gateway continues to gather momentum in North America and is now garnering interest outside of the United States. As our bookings and total backlog indicates, we are very pleased with the rollout of this exciting new product and the overall success we're seeing across a number of markets. I'm in the UK right now, and we're starting to get inbound interest on the OneGateway as an example from the UK. It's an all-important education sector, though, is where we're really making our mark with the OneGateway. Given the ongoing threat level that unfortunately exists in the world today, which we read about almost every single day, it should come as no surprise that more and more institutions are reaching out to us for information about these groundbreaking AI-driven innovations and applications of both of our solutions. The heightened interest has been steady and sometimes, quite frankly, overwhelming. That said, there is usually a period of test and evaluation that goes into reviewing our technology. Many of the customers who are inbounding to us and many of the school boards, those customers tend to be Fortune 500-type companies, and they take the time to meet and make decisions and run demonstrations of the products and look through all the contractual terms, scheduling phased appointments, as well as in the case of schools, obtaining grant funding. This takes time, but we're very pleased that we're seeing positive impacts to our pipeline and to our average deal size overall. This quarter, we actively engage with numerous schools and other customers to deploy the XRAC1 Gateway, continuing to ramp that backlog to revenue, and with the additional institutions and installations, we're looking for the next phases that they're planning for this fiscal year. We already have orders for almost 150 XRF1 gateways with roughly $21 million, with approximately a third of that already delivered and installed by the end of Q2. Our products can now be found spread across almost every state and in numerous school districts throughout the country. And although we believe that this is just the tip of the iceberg for this product, As we benefit from word of mouth from one school district to another, as an example, and that strong referenceability from the positive impact that we're having on those students and those school environments, we continue to get more and more increased exposure and more and more inbound interest for the solution, and we're seeing much higher demand throughout North America, including with larger metropolitan school districts that sometimes comprise dozens of buildings or more. We're also tracking legislation. a question that's often asked of the company, such as the legislation that recently passed in Georgia and Pennsylvania and is expected with similar mandates in other states. This legislation is key, and mandates in schools will be required to screen for weapons. Similar to how building codes require mandates in sprinkler systems or smoke detectors and other systems, and where people have done the risk-benefit analysis, we're seeing the same thing applying to weapons detection. And we believe it will become a similar standard mandating weapons detection in every building, in every school district, in every hospital across the country. We look forward to the continued contracts and the rollout of Extract One Gateway, which we see accelerating as the year progresses. Just when we thought we couldn't get busier, the demand continues to increase more and more. And particularly, we see that expanding as we continue to expand our production capabilities accordingly. As a reminder, we're ramping up manufacturing and deliveries in a very efficient and phased approach in order to match client demand, manage our cash flow, and also to manage the installation requirements and forecasts that we get for each of the future coming quarters. Let me add that our suppliers are on track with regard to expanding and increasing the product throughput, as evidenced by our increased deployment of record revenue for this quarter, and we expect this trend to continue as we move further and further into the second half of fiscal 2026. As we see the ramp in demand, we are also investing in ramping our sales channel and support channels in both North America and markets like the UK and Mexico, where we're seeing a tenfold increase in inbound interest in those regions for both of our solutions. We're ramping through both experienced sales staff and selectively chosen partners who are leaning into the market opportunity versus waiting for it to come to them. The example of this expansion that we're seeing was recently announced with our win with the British Museum. For those who are unfamiliar, this is one of the world's most iconic venues. It's not a stuffy, dusty museum, but a venue that greets almost 7 million visitors from all over the world. And to put that in context, that is two times more than what Madison Square Garden does in a year in terms of patronage, and almost as much as a major Disney theme park. Also, because of who they are, The British Museum is a target for both terrorist and protester activities, and as such has some of the most stringent security standards. When organizations actually care about security or innovation and ongoing innovation, they choose Extract One. This landmark win sets the stage for more wins that we believe will follow the British Museum's leadership not only throughout the UK, but throughout the world. We now have over... $105 million U.S. in our qualified sales pipeline across both product lines, amount that continues to grow, and that amount is approximately split evenly between our two solutions, the smart gateway and the extract one gateway. Given increasing traction with our unique, innovative AI-driven systems and the expanding market demand and our ongoing and continuously improved production capabilities, we remain very upbeat about the outlook for fiscal 2026 and beyond. We are very well positioned to make this year the best ever for extract one. I could not be happier about the trajectory we're on, and it's putting us on track for even better results thereafter. The strong balance sheet, near record-breaking backlog, increasing demand and accelerating production. We are truly, as I said earlier, in a transformational year for the company. Now I'm going to turn over to Karen to provide more details around the financial results. Karen, over to you.