Nanalysis Scientific Corp.

And gentlemen, the Q3 press release will be out any minute, and we will start shortly. Once again, the Q3 press release will be out any minute, and we will start shortly. Please stand by. Thank you so much. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Good afternoon, ladies and gentlemen, and welcome to Dean Analyst's third quarter 2023 conference call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. I would now like to turn the conference over to Matthew Selinger. Please go ahead.

Thank you, Operator, and welcome everyone to an Analysis Scientific's third quarter 2020 conference call. Before we begin, I would like to remind everyone that our remarks and responses to your questions today will contain forward-looking statements that are based on current expectations of management. These assumptions involve inherent risks and uncertainties that could cause actual results to differ materially from our responses. Certain material factors and assumptions were considered and applied in making the forward-looking statements These risk factors are included in our filings for the year ended December 31st, 2022. Forward-looking statements on this call may include but are not limited to statements and comments with respect to future growth in the company's business, the ability to graduate to a senior exchange, the company's acquisition strategy, the ability to develop future products, and the possible associated results. The company's actual performance and financial results in the future could differ materially from any estimates or projections of future performance implied by the forward-looking statements. The forward-looking statements made on this call speak only as of today, and Analysis Scientific assumes no obligation to update any such forward-looking information as a result of new information, future events, or otherwise, except expressly required by applicable law. For additional information, I do encourage everyone to review our public filings and press releases, which are posted on the CDAR filing system at www.cdrfiling.org. So on the call with me today are an analysis founder and CEO, Mr. Sean Krakiewski, and analysis CFO, Mr. Randall McRae. So with that, I would like to turn the call over to analysis CFO, Randall McRae.

Thanks, Matthew. It's a pleasure to join and speak with everyone on the call today. I'll first dive into the financial results for the quarter ending on September 30th, 2023. All amounts referenced are in Canadian dollars. Financial highlights for the three months ended September 30, 2023 include for the three months ended September 30, the company reported consolidated revenue of $7.0 million, an increase of $158,000 from the comparative period in 2022. This includes $3.9 million in product sales and $3.1 million of service revenue, predominantly related to security services. Gross profit margins on product sales were 43% for the three months ended September 30, 2023. Bench top NMR margins continue to be compressed in the quarter due to downward pressure on selling prices as a result of a slow scientific instrumentation market and higher costs related to post COVID supply chain issues, as well as ongoing inflation. Starting in the second and into the third quarter, the company began cost cutting measures, including the reduction of its manufacturing labor force to better align with its current manufacturing requirements. This is expected to have a positive effect on margins going forward. Additionally, The company continues to analyze its supply chain to manage its material costs. Service gross profit margins were negative 2.6%, which was an improvement from the negative 15% last quarter as the successful rollout of the CASA project continued. We believe that EBITDA will turn positive with increased utilization in Q4 and continue forward. Revenue is also expected to continue to grow as the project ramps to full capacity. As at the release date, the company had a presence in every single airport required and had approximately rolled out approximately 76% of the project. There was continued training for the CASA project that began in the first quarter of 2023, resulting in net training expenses of 2.6 million for the nine months ending September 30, 2023. As stated previously, while training will be an ongoing part of the company's security service group, expected training costs are coming down and are not expected to continue at this pace once the CASA project ramp up is complete. The company has a presence in all airports, however, wages related to airports not yet being fully serviced by the company, continued to be deferred as prepaid expenses, with the company capitalizing $912,000 of wages during the quarter. Loss before other items for the three months ended September 30, 2023, was negative $1.4 million, compared to $618,000 from the same period in the prior year. That loss for the three-month period ended September 30, 2023, was $6.3 million as compared to the three-month loss for September 30, 2022 of $2.6 million. Included in this net loss is a $2.8 million loss related to the deconsolidation of Quad and associated revaluation of the company's investment, as well as an additional $256,000 loss from Associate in Q3 2023. Effective this quarter and going forward, quad results will no longer be consolidated in the financial statements of the company and will be represented by the company's investment in associate on the balance sheet and income or loss from associate on the statement of profit and loss. Finally, during the quarter, the company continued its cost reduction plan, including layoffs in some of its segments, which started in the second quarter, to better align its resources and reduce its fixed costs. This is expected to generate annualized fixed cost savings in excess of $2.5 million. The company continues to explore other fixed cost reductions not related to labor reductions to further increase annualized cost savings. So far, in conjunction with this initiative, the company recognized total restructuring expenses at $437,000 in Q2 and Q3 of 2023. The company had cash on hand of $1.2 million, an undrawn available credit facility of $5 million, working capital of $5.6 million, and undrawn government contribution funding of $1.1 million as of September 30, 2023. With the bulk of the capital-intensive portion of the CASA project behind us, we feel we're in a good financial position and are poised now to reap the benefits of this long-term project. While there will be ongoing training costs, they are expected to be a fraction of the initial phase. So with that, I'd like to now turn the call over to our founder and CEO, Sean Kurkiewski.