Greetings, welcome to the Blackline Safety presentation. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. You can submit your questions anytime by typing them in the Ask a Question field on your screen. If anyone should require operator assistance during the conference, if connected by phone, you can press star zero on your telephone keypad. On the webcast, click the question mark icon on the upper right-hand corner of your screen for any technical assistance. Please note that the conference is being recorded. I will now turn the conference over to our host, Glen Akselrod, President, Bristol Capital. Thank you. You may begin. Thank you, Diego, and thank you, everybody, for joining our webcast today with Blackline Safety. The purpose of today's presentation is to give our audience a better understanding of the business through a presentation and then more questions with management. The presentation is going to be led by Cody Slater, CEO, who is also joined by Shane Grennan, CFO. You should see the presentation in the webcast. If you'd like a copy of this deck, simply email me at glen@bristolir.com. I'll be happy to send you a copy. When we do break for questions at the end of the presentation, we ask that you only submit questions using the question-and-answer text box. If you're listening over the telephone, please access the web link that we sent earlier to ask that question. Remember, you can submit a question using the text box within the portal at any time. I'll ask the questions on the air for everyone to hear, and then Cody and Shane will answer. I'm not going to reference any names, but simply read the questions asked. As we have a fairly large audience today, if I can't get to your question online, and it has not yet been addressed during the call and can be, I'll come back to you by email. I'm not going to read the forward-looking statements, but I state that they do apply, and I ask you to refer to them on page two and page three of this PowerPoint. With that said, once again, thank you for joining us. Remember, this is fairly informal, and we encourage those questions to help you better understand the business and its growth path. Now I'll turn the call over to Cody to start his part of the discussion and presentation. Thank you very much, Glen, and welcome, everyone. As Glen said, we're here today to talk to you about Blackline Safety. Really underneath that, what we're talking about is, we say, connecting the industrial workforce. We all think we live in this world, and we do, that everything is connected. Your watch is connected, your phone's connected. You know what's happening, you know, around the globe, to, from friends, to news, to people. We work in a part of the world where that it doesn't exist, and that's the heavy industrial workplaces. We'll talk about some of the different applications and markets, but these are all areas where products are required to be what are called intrinsically safe. Your iPhone doesn't meet that standard. Your Apple Watch does not meet that standard. Blackline is the first company developing wearables and technology around that to connect that industrial workforce. As Glen mentioned, the disclaimers, we won't spend any additional time on that. I'd like to spend a little bit of time on, you know, what a lot of companies talk about, their purpose and their vision. In Blackline, this really does come down to the heart and the culture of the company. The purpose is to ensure every worker has the confidence to get the job done and return home safe. What we do saves people's lives. This is the first time for many of these workers that if there's a safety incident, they're exposed to gas, they've had an injury, somebody else knows about it because of what we do, and that drives a very strong purpose through and culture throughout the company. The vision, though, is to transform enterprise workplaces through connected safety technology. If you think about it, we have hundreds of thousands of workers in industrial applications around the globe. The devices they're wearing are there to protect them when there's an incident. In the meantime, they're constantly sending data and information. We can use that data and information to make those workplaces safer places, more efficient, more effective places. That's a lot of where the enterprise companies you see adopting our technology are being driven is by that test, by that data and that vision there. Looking sort of at the business overall and the markets we're in, we'll touch on each of these topics a little bit more as we get into some of the detail here. Keeping in mind a couple of things. On the business model, this is a high-margin, recurring revenue growth model. It's very sticky services. Once companies adopt our services, we're making their workforces safer, better. We just simply don't lose customers once they're there. We have customers across 70 countries around the globe, about 800% growth since we launched our core product, our G7 product. This is a rapidly growing market, the connected worker marketplace. Different ways you can look at connected worker, you know, a 20% CAGR is a reasonable number from most of the outside views looking in. Really, this is a hardware-enabled software model, software-as-a-services model. Hardware drives that service revenue. Every device we sell has a service plan attached to it. Those service plans have gross margins attached that are actually topping 75% at this point in time. With something that'd be a, you know, industry-leading 118% net dollar retention, just shows the value customers place on the services we provide for them. Really different than our competitors. The, the core of what we do is in the world of, again, industrial safety around gas detection. Our competitors are not connected well. They have a couple of aspects of connectivity, but very minor. We really are unique in what we do, and that differentiation is what's allowing us to grow 5x faster than our peers. It's got a good, strong background. You can understand how we got where we are. I myself come from a company called BW Technologies, Canadian-based company that became the world's largest producer of portable handheld gas detection, now owned by Honeywell. The company itself, that you'll see as we go through the presentation, the industry awards and accolades it's won, really because of the kinds of changes we're bringing to technology and safety in the marketplace. Talking about that technology and safety, one of the core things in what we do, when you're talking about safety and these added values for an industrial customer. It's really important that they have a single source provider. Blackline, we do everything. We build the connected devices, those real-time wearable devices, we design and manufacture those. Our portal, our infrastructure system, which is based on AWS. We handle all the communication from those devices into our AWS infrastructure. Our cloud-based web hosting platform allows you to see your people, your data, your information, drive that optimization, allow you to respond to alerts, but it's right up to the level where we will actually offer a service that's, we call it a personal 911. It actually is where we will actually respond to those issues in the field for your personnel, and we're the ones driving that, safety response, saving the company's money at the same time as really providing that overall service. You know, that if you go into the industrial world and talk to somebody about safety, the term they'll come back to you is one throat to choke. They want one company responsible for it all, and that's really the approach we've taken there. Just touch a little bit on sort of what the products are. We manufacture the design that drives that, service revenue. What you're seeing on the left-hand side of your screen here is a range of our, wearable devices, our handheld devices. The three that are sort of beside the large, device are what we call our G7 wearables. They're all really one device with a series of different cartridges put on top. That's where you see the four holes or one hole, the, one with the bar. This is really just, addressing different needs and different applications. Every customer has needs for devices that have pumps in them, that have five sensors, two sensors, one sensor. You need a range of products to be able to drive the adoption of those enterprise customers. The larger device there is called an EXO. That's an area monitor, great for monitoring, for plant construction, turnarounds. All of these feed data into that portal you see behind there. What you're seeing on this side, on the right-hand side, is industry awards, whether it be the Innovation in France, whether it be occupational health and safety. Every single year, Blackline products are winning industry awards for best in class and best new technology. As I said, those devices all drive the ARR, every one of those devices has a service plan attached to it. The base of the service plan with everything we do is around the base of what you need to do with your gas detection. You need, by law, to be able to prove that people are using it, they're wearing it, they're what's called bump testing it, calibrating it. It's a huge cost for companies with disconnected devices, the standard device today, because they've got to get that device in from the field. They've got to hook it up to a computer, download data, try to understand what it means. All that's automated with us. Once you have that, then you're layering on additional services. You're layering on real time, two-way voice, emergency response. All of those services allow us to upscale the price points at which we charge our customers. Each new service has a new value to it. That's what helps drive that 118% net dollar retention. On that whole ARR side, we're looking at a little over CAD 42 million at this point in time. I touched before on the market size itself. The market is really two portions. The portion on the left is the hardware portion of the industrial gas detection market. This is an established market, about half a dozen leading players in the marketplace. CAD 1.43 billion worth of hardware is purchased every year. Most of these devices last about four or five years in the field. That replacement cycle is what our competitors are really after. For us, it's really the other side of this chart, because it's the services that go along with it. If you think every device we sell, every year is generating those services, it's not a one-time event. That's what that CAD 1.75 billion SaaS market, that's what covers costs like that compliance cost, costs like the, and then the other value services, like the emergency response, like the two-way voice, push-to-talk radios, et cetera. How does that break down? If you think about the business model itself, we sell our base devices, our core G7 devices, for around CAD 600. Currently, we're at around a 25% gross margin on our hardware. We see that moving up to about 35% by the year end. Services for us are about a 75% gross margin. We see that also moving up more into the higher 70s over the year. If you think about it, again, the device has a 5-year life, if you look at it, not from the context... Clear from the context of revenue, CAD 600 worth of hardware drives an average of about CAD 2,200 worth of service value over that lifetime, 5-year hardware cycle. On the margin side, the service margin is totally dominant. It's that 75% gross margin drives 90% of the value of we get out of that contract from the customer. 100% logo retention is something we're really proud of. We don't lose customers. Any customer of scale that's adopted our products, has kept them, and generally speaking, what it means is they're continually expanding that, helping drive that net dollar retention. You know, getting us to that ARR levels, into those CAD 40+ million, and you'll see as we talk about that a little bit further going down. Only last point I'd make here is we always talk about a five-year lifetime cycle for a new customer. The reality is, at the end of five years, they just buy new hardware. This whole cycle just starts again. We now have had our G7 and the product in the field for 6 to 7 years, and every one of those customers that are hitting that 4 to 5-year lifespan, just buy new product and start that whole cycle again. Touch on some of the financial aspects here, a little more detail. Looking at a trailing 12 months, you can see the revenue in the company was up about 30%, gross margins up as well on the hardware side. Services side grew about 38%, so faster the growth than the hardware over that period of time. Gross margins averaged over the year, 72%. We'll talk about where we're at at the latest quarter in the next slide. All driving that growth in revenue, growth in gross margin, and really, the one metric that I think people looking at this company should really focus on is to watch that ARR as that grows, because that really is driven both by our new customer acquisition and by the quality of the services we provide, and that retention level we get from customers. Maybe a little more detail. If we look at our last quarter, which was just announced, we're on a little bit of a strange year-end. Our year-ends are October 30th, but this is our Q2 here we're talking about. You can see that our total revenue was up 45%. Total gross margin actually up 77%. I think it's really important to look, we grew our total revenue by 45%, but we're able to bring our OpEx down by 10%. We'll take a look at some of the detail of how we're doing that a little bit later, but that drove a just dramatic change in our adjusted EBITDA, down by 62% as we move towards hitting an adjusted EBITDA positive inflection point at the end of this fiscal year, which is the company's target. You can see from those charts that we're well on that path. We have strong competition, and I wanted to make just a couple points within here. There are some very good companies in the world of gas detection. We have some very solid competitors. My old business is the yellow one on the corner that says Honeywell. That's BW Technologies. Mine Safety Appliances, as the name implies, they have a huge relationship in the mining industry, but lots of other spaces they have strength in. Industrial Scientific is now a company owned by Fortive. Again, US-based, very strong, good quality products, good quality, huge penetration in the marketplace. Dräger is a German-based company. You could say the same about them all. These are the real leaders in the industry. They each are, you know, have a core presence in the marketplace, but they're producing products that are no different than they were 10, 15, 20 years ago, frankly. They're devices that alert the individual that they're in trouble. They beep and flash when there's an exposure to gas. Hopefully, you can get out of the area. Every one of our devices has that connected aspect, where if that alert occurs, somebody else knows about it right away. Someone's got your back. It also allows us to do those layering of services. Most of our competitors, only one or two of our competitors' devices even have GPS in them. Even if you did get the data from them, you don't really have any value to that data because you don't know where it was generated. They're all moving down the path of connectivity. Both MSA and Industrial Scientific each have an offering that has a direct-to-cloud connectivity. In MSA's case, it's a four-gas device that truly is direct-to-cloud, but has no two-way voice, no push-to-talk radio. Makes it very difficult to compete against the kinds of products we have. Industrial Scientific has an accessory for one of its devices that can allow you to be connected. Our view is that they're all going to move down this path, we're so far down the path already. We have data lakes that have hundreds of billions of points in them. We have customers in industries around the globe. It really becomes difficult. They're going to have to build their entire product infrastructure to be connected and all the background to it. They'll get there, but we're there first. Here, I want to touch on some personal aspects here, though. There's a couple of things. This is a gentleman by the name of Nick. We call it Nick's story. This is sort of the core use case you can think of from a safety standpoint. This gentleman was working in an environment. He was exposed to gas, hydrogen sulfide. Hydrogen sulfide, the first thing it does if you're hit by a large level, is you're paralyzed and knocked down. There's an alert comes through our portal. The people see that it's a gas exposure. The individual is down. We're able to actually vector a nearby worker to get the proper safety apparatus before they enter, get in, get Nick out, and Nick's, you know, the rescue took place in time that Nick is alive today. Same here. This is things you don't think about. We talk about gas. Again, this is something no other competitor do. This is an individual on the top here from Marmon that fell from a ladder. He was working on a ladder. He collapsed. Our device has fall detection. The fall detection goes off. We're monitored, in this case, by our Safety Operations Center. They see what's happening. They try to reach out to the individual. No response. They direct a nearby responder, coworker, to that person. All this gets recorded. You can hear the call. You can hear the individual screaming, "Call 911!" As she comes around the corner and sees her coworker lying there. When the ambulance got to the site, they said if they were 5-10 minutes later, they would not have been able to resuscitate this gentleman. When you look at these brands, the reason both of those two people are alive today is because the company they work for chose Blackline Safety over a competing product to provide their safety. None of our competitors would have been able to do what we did in those cases, that's where you see industry leaders across this logo deck. One thing I'd like to point out as well, too, when you talk about the industries here, we are a Canadian-based company. We do make safety-based products. A lot of time, people think, well, that people think that, well, means we're an oil and gas services kind of company. Oil and gas is a great market for us. It's a very, you know, it's one of the more significant ones in the world. In Canada, it's about 60% of our business. In the U.S., a bit more than 40%. In Europe, it's probably 5%-10%. You know, every one of these verticals is a core marketplace for us with interesting names and applications. Consumer goods, food and food packaging, companies like Tyson are big, big customers for us. Danone's in India. Amazon, it's every warehouse where they use refrigeration. Refrigeration uses ammonia. We monitor their worker safety in every basically, every Amazon worker, every Amazon facility in the globe that has refrigeration, It's a small portion of their workforce, I wanna be clear, but it, you know, shows the strength of the application of the product. Left-hand side, you talk about those industrials, water, wastewater in Europe is a big thing. In North America, these are regional. Cities run their own water and wastewater. In Europe, it's regions. In UK, there's 12 regions. Each one puts out an RFP every few years to replace their gas detection. There's been six RFPs led in the last four years. We've won six of them. There'll be six more or less within the next six years. We'll win the next six. They're so specified to what we do now, it's almost impossible for a competitor to get into there. British Aerospace builds nuclear submarines. FedEx, it's their wing tank entry people, aircraft maintenance. It's a nice, diverse market, both industry-based and geography-based. That diversity helps with our growth because you might have one industry that's in a down cycle, one industry that's in an up cycle. I think that sort of helped to level trust. If you look here, what we're looking at is the growth in the company since we launched our core gas detection line of products, the G7 products. The red line is our hardware, the top line is the services. You can see the hardware takes a little bit before it takes off, and that's because this is a totally new technology. It's a new company in a very established industry. Started to really take off, and then where you see the dip, that's something called COVID. You know, all of a sudden, we're in a position where you can't get on a customer site, you can't do field trials, et cetera. Our hardware sales actually dipped for a little bit there, but this company continued to grow. We've had 24 quarters in a row of year-over-year growth, driven by that ARR and that business model of every device driving a new service plan at the end of the day. Just touching on some of the numbers, you know, 4.5-fold growth over the last five years. It's more, you know, again, about that retention and that diversity. If you look at the right-hand side, you know, bluntly, five years ago, this company was a company that was a Canadian company with most of its business in Canada and most of its business in oil and gas. You can see the shift in that diversity. The US is our biggest market. That rest of the world, that tiny little slough up at the top, you can watch that for the next year or two. That's going to be a dramatic growth sector for us, as we've really put all the pieces in place to be established in markets like the Middle East, like some South American and other markets that are core for us to grow into the future. Touched a couple of times on ARR, or annual recurring revenue. Again, just a chart to take a look and see over the last couple of years how that's changed and shifted. You know, the interesting elements here are not only the overall growth, but the growth in that top-line number, where you're looking at that sequential growth quarter-on-quarter. We're going from being, you know, 7% to 8% to 9% over time, as we see that additional retention of new services, new feature sets come into place. This really comes from the fact that our products and our people do a good job. The customers we have are serviced well. They likely to see value in what we do, they're likely to not only renew, but renew at a higher level for more services as we go forward. Just a little bit on that shift in the operational expenses, this is something a lot of tech firms did. Go to you, three quarters back now, we took a shift in approach to saying we're going to be purely growth focused, to getting that focus to be more on hitting an EBITDA number in a more rapid period of time. You can see sort of what's here, what's happened here over the last small period, last period, last three quarters. Again, product revenue up, service revenue up, but every cost base structure, general and admin, sales and marketing, product development, all down, leading to that, you know, significant improvement in the adjusted EBITDA. Again, something that we're targeting to see shift into positive territory at the end of this fiscal year for us. Touch on saying this is a, I mean, a team, there's a pretty deep team in this company and lots of people who, you know, again, customer facing. We have just a whole culture here that's all about that customer, getting that person home safe at the end of the day, led by a very, very strong team at the top, I'd say. Little BW logos you see on some of these, are that little BW, those would be people who were from my old business, BW. Mentioned we manufacture our own product. Kevin started the manufacturing in BW when we were doing CAD 15 million, left when they were doing about CAD 200 million. Christine Gillies is one of the more recent additions to our management here. A really strong understanding of that marketing from the software side and from the people side. We're more of a, you know, engineering tech firm, so we needed that human side, I think, to the company as well, too. Just good, strong strength, Pre- Sean, as a President and CEO, he is President and Chief Growth Officer here. He's one of the people in the industry, I'd say, who, along with myself, know this market as well as anybody in the world. Backed up by a strong board of directors. Just mention a couple. We've got good strength in accounting and in legal from Bob and Michael. Barbara and Cheemin came with, on with us about two years ago, bringing a really good background in software services. Barbara comes out of Microsoft's education department. You're not gonna get any better software than Microsoft. Jason's from a most recent director here from a company called Sierra Wireless. Strong tech success in Canada, in the in that IT world. Brad Gilewich is the representative of our single largest shareholder, which would be BAK Capital here out of Edmonton. Shane, I'll just ask you Yeah, certainly, Cody. Thank you, everyone. As Cody mentioned earlier, our fiscal year end is an October year end. The numbers that we've referenced here are from our April results, which were released mid-June. Our July third quarter, those results will be released mid-September. On the left-hand side, in terms of our holdings and insiders, including our largest shareholder, plus management and boards, is around 32% of our shareholding, with institutional investors holding the vast majority of the remainder. Our cash and investments at the end of our second quarter was just CAD 22 million. From a debt facility point of view, we have a CAD 50 million facility with a financial institution in Canada, ATB Financial. We've drawn down CAD 7 million of that, with CAD 8 million remaining. We also have a new lease securitization facility, which we announced in April. We sell our products and services through two mechanisms. One is through bundles, paying your hardware upfront and the service paid upfront over a period of time. Around 25% of our product revenues comes through the lease offering that we give to our customers, which is paying monthly over a four-year period. Around 25% of our quarterly revenues on average come through that facility. The lease offering has been extremely successful for Blackline over that period of time, ensuring our customers are on board for at least a four-year period. That has been successful, obviously from a sales point of view, but has been challenging or from a working capital management perspective. We put in place that securitization facility, which is over CAD 50 million available to us on that, and that has certainly improved and normalized the cash funding facility, whereas the cash funding for our products is received upfront now through that facility with Canadian Western Bank. Our ARR, as Cody mentioned, has grown exponentially over the last number of years, and today is at CAD 42.4 million. Analyst coverage, we have nine analysts that currently cover Blackline Safety, and eight of those are Canadian-based coverage with one of those being based out of the United States. Thanks, Shane. I'd just like to finish it up today with the final slide here, to touch a little bit on the remainder of this fiscal year for us. As you said, this is a year we've focused on that path to profitability. We're anticipating exiting generating positive adjusted EBITDA in our final quarter here. That's really based on the scale we've put into the business in the past, implemented cost rationalizations. It's well above that growth and that expansion of the optimized margins as well, which are, you're seeing our margins in both service and hardware move up, based on price increases that were put in place, but also just based on the scale of manufacturing and, you know, focus on that cost side. We've launched a new product called our G6, which is entering a new market for us. This is a single gas, what's called a zero maintenance. It's more for contractors on large sites. That's a CAD 200 million annual market. You'll start seeing an impact from that in our Q4, then really some significant impact into fiscal 2024. As Shane mentioned, you know, strong balance sheet, strength in our balance sheet, particularly with that lease securitization, which, you know, is a great thing for us in normalizing that business model. We like selling the lease model. It's a higher margin, longer retention model. This makes it easy for us to do that without it putting a strain on cash. There's still large opportunities for us to start further monetizing services, data, all that information our devices fit into the background. As you look into 2024, you'll see the company focusing on continued growth, scalability, improved margins throughout as we go down through the path of taking a greater and greater market share and, you know, securing our position as that dominant player in the industrial connected workforce. With that, I'll hand it over to Glen for questions. Super. Thanks, guys. We do have quite a few questions in the queue already. To our audience, if you have a question, please use the question box to log in your question. I'll just get going, and I'll sort of augment some of these questions and combine them with some others. First question is on technology. If you could just give a little bit more color on this, Cody, what exactly is the technology? Is it mass spectrometry? I'll add to that: What is the additional benefit of the new G6 technology? The core, I mean, every one of our devices has, you know, series of aspects that make up its core technology. In the context of sensing, there's a wide variety of different sensing technologies we utilize to sense different gases. You need chlorine dioxide if you're going into water, wastewater. You need hydrogen if you're going into steel. Those are sensors that are either optically based sensors, they're chemically based sensors, photoionization detection sensors. A range of technologies that allow us to have that breadth of. We monitor 26 different gases, can be combined into different aspects. The real core of the technology in the device itself, everything we do is a connected device, either cellular or satellite, similar technology to what's in your mobile phone. The real tech behind that, though, comes in the software side, on the, in the operating the back-end infrastructure, the alert structure, the data management structures are all part of that. All of that's, you know, wrapped into a single piece that's easy to use, take it out of the box, turn it on, and it works. When you talk about the G6 and the difference in its technology, this is a market that's been dominated by a product, you know, BW, I designed back in the BW days. It's what's called zero maintenance. The big thing with that is, there's no training in giving it to an employee, so I can just give it to them, tell them to wear it. To be able to do that, one of the things you have to be able to do is not charge it every day. You, it's like, to get into that market is like having a Apple Watch that lasts a year, and that's sort of where the technology has changed in that whole connected world, where you can use newer technologies to connect IoT devices that have much lower power consumption. It's enabled us to bring out a device that has a single gas sensor, but still has that connected aspect and has a year-long battery life enter into that space. It's really, I think, the key two things to think about is it's understanding where to apply that technology for each individual market and the different vertical aspects in those markets. Okay, thank you for that. Next question. You've highlighted your competitive lead versus the market as being hinged on the massive amount of data that you've connected. How do you use that data to create a moat? Can you do it or develop that competitors can't without the massive data lakes? Yeah, I mean, I'd start with the moat that we're developing against our competitors is first starts with the suite of connected devices. I've mentioned some of our competitors, like MSA, has a single, what's called a four gas device out that has connectivity, direct-to-cloud. I'd say again, with all respect, I think they made a mistake in not including two-way voice. It's hard to, you know, it's hard to do some of the things you want to do with the products without that. Having said that, they've got one device that is connected. If you look at those large logos on the logos on that customer site, none of those would be able to buy just you could not satisfy any of those customers with that device. You need also a pump instrument, the five gas instrument, the one gas instrument. The moat starts with the devices, the next portion of it really is the trust in the field. Does your connected system work? This is brand new. Then backed up all by the data. We do have a few 100 billion dollar, billion data points in our data lakes. That data is owned by us, it's really about how you leverage that provider to the customer. How can you show them that you can improve time on tool, time on site? How can you look at intrinsic safety elements? It's about leveraging that data, and frankly, customers are more attuned to that than we are almost. It's more often the drive from the customer where that question of how can we value proposition the data comes from. It's that whole everything together makes it very difficult for our competitors to, you know, catch up with where we are in the world today. Thank you. Next question: Do these devices need to be regularly calibrated? If so, how often? Is that a revenue opportunity that is included in ARR, then? That's a great question. The devices need to be, dependent on which particular device, they need two types of things to happen to them. One is they need to be what's called bump tested. That's where I basically put gas to it and see that it still beeps and flashes. It's really, varies depending on the customer and the industry, but you can say typically every week or two weeks, I'd be doing that. With some customers, it's daily. Calibration is based on the particular sensor technology. Usually, that's every 60 days, every 100, every 90 days. Again, it depends on the particular sensor technology. We already do leverage that, the aspect of being able to tell the customer that those things have been done properly, so that if there is an incident, they don't have to worry about when occupation health and safety takes that device and downloads the data. They know that device is in compliance. It's been bump test maintained. The actual delivery of the gas, and actually having that as a portion of the revenue generating aspect is something we're going down the path of, where our devices will be able to monitor your gas usage so that the device can actually tell you, the system can tell the distributor to bring more gas to that location. That's something we haven't deployed yet, but it's absolutely a potential revenue-generating portion for the business. Thank you. What percentage of the market are greenfield opportunities versus competitive, versus a competitive situation? Has this changed over the past few years? In general, you'd say that 90% of the market is, competi- like, greenfield would be 10% or sub 10%. Greenfield's new applications. In other words, the markets we work in are areas where primarily gas detection as a safety device is a legislative requirement or it's a corporate requirement, so we are almost always. If you look at those customers, in almost every case, we're replacing an existing system or solution. What we do find is that customers expand the use of the gas detection, often in the markets, in their particular application, because of the added value of the connected. They can now get some data, some information, the two-way voice. We think we can. That's why I say there is a portion of the market, but it's really an expansion within those customers. Thanks, Cody. Next question. What are the secular trends that are driving adoption of Blackline's products? Are there countries where the importance of worker safety is increasing? The trends are, Well, let's just say it this way: Quality companies always care about their employees. They want to provide a safe working environment. I think the first thing you say is that there is regulation that drives that. There's regulation that says you need to have gas detection, you need this, you need that. What I do find is the larger companies, like a Dow Chemical or an ExxonMobil, they don't really. Their safety is based on their view of what's the best way they can handle that. They at least meet the minimum of the regulations, and they're not so dependent. Whatever country they're operating in, they operate at the same level of safety, I guess, what I'm trying to say there, Glen. The trend is, comes around, you know, people, companies from the safety standpoint want things that are better. You know, the number of times I've heard someone say, "I don't want to have to call a person's spouse again and tell them that their partner has died." That's part of what drives this, always the improvement in safety. I'd say the data side and that information side is a huge driver for us now, too. Companies being able to see that. Just to be able to turn on a screen and see where every one of your workers are on site around the globe, is a huge, powerful element. That connected side is really driving the adoption from the visibility, data, all those kinds of aspects. Okay, thank you. Next question: Do you always sell the 5-year life hardware upfront, or is it also offered in an annual plan that doesn't have upfront hardware costs, like Axon's body cameras? Yes, it's sold in both a bundled upfront plan, where the hardware is paid upfront, plus the service plan over one, two, three, four-year period, depending on the customer needs. And we also sell that through a new program in recent times through a rental facility as well, which we can do. Thank you. The lease as well, too. A lease program as well, too, where the customer is paying a monthly fee for the bundle of hardware and services. Okay, thank you. I have a number of questions around competition, so I sort of, I guess, put it to you in 1 or 2 statements, and then maybe let you address it. The general gist is, why haven't the legacy companies gotten to the connected devices at the same speed that you have, especially given these are bigger, more cash-rich companies? From those other companies, who would you say is the best competitor? I have to think about how many of our competitors are listening in on the call before I answer the second half of that. You know, I think there's a series of different reasons. This is a market that's been very, you know, it's been pretty staid and stable. The products they've been making, they sell. They each own their portion of the market. It doesn't change. There isn't a lot of shift within that. Most of our competitors are really large. Gas detection is not necessarily the big driver. If you look at Honeywell, gas detection is a tiny portion of Honeywell. If you look at Fortive, gas detection is a small portion of Fortive. There's MSA, during the pandemic, they were making a ton of money selling reading apparatus and emergency responder equipment. For most of our core competitors, gas detection isn't the core of their business. This is a very different approach. It needs different technology. There is a lot to develop. They all have the money to do it, but it's also a different method of selling. You need to change your sales infrastructure. You can't sell it the same way you sell. It's a much more technical sale, much more involved. I think there's just a lot of inertia. They're all going to work down towards this path, and they will all get there, and they'll all own a portion of this marketplace, you know. I really do believe it's just timing and inertia here that are keeping them, you know... They're not fast at what they do in this space, but they know where we're leading the way, they know where they need to go, and eventually they'll get there. Thank you. If a potential customer does not select Blackline, what is a typical reason? The biggest things are what I've bought before. The first thing you're always battling against is typically you'll find an ISC customer may have been an ISC customer for 20 years. There's relationships, there's history from a purchasing standpoint. It's easy to buy what I bought before. The other side can be cost, I think on cost, to be clear, it's a lack of understanding what your cost of the operating of your gas detection is. Like, we've won those water waste waters primarily on cost because they calculate and know how much it costs them to get that compliance information. That means they have to get these devices from the field back to a central location, download data, process the data, figure out what it means, get it back to the supervisors. If one truly understands what the costs are, we believe we provide a cheaper overall operating cost. If someone's just looking at the, you know, single point of a quote, that might be the case. You know, it's generally speaking, once we're down a path that you have the Sorry, I'll finish off by saying, look, the other reason, it's been probably the biggest reason people don't buy our product is because they didn't see us. That's less and less today. If you go back three years ago, every customer we had, was one we acquired, you know, in an outbound base. More and more, you're seeing that our customers are inbound, and that's because we're known in the market, we have scale in the market, and that's probably the biggest shift for us. Okay, thank you. Next question. Can you talk a little bit about the application and your TAM expansion opportunities for your solutions, like the Amazon cold storage ammonia example? I mean, if I'm understanding the question right, the, you know, from the standpoint of the applications for the device use itself, I mean, that grows every time we look at a new vertical segment, you're looking at something new that requires to get into well. We're adding radiation in the near future to our area monitor. That will take us into homeland defense, into fire and emergency responders, into new applications with basically the same technology, one new sensor. It's really, if you think about, you know, if Amazon's a good example, can you broaden that case into other workers in their space? FedEx is a great example of that. FedEx is already looking with us at other applications than their aircraft maintenance. It's often very much understanding the use and the particular application and seeing if, you know, what we have is the right product at that point in time. Okay, thank you. A couple of questions, around, I guess, your sales and your sales strategy. First off, if you could talk about, how you address your current sales strategy. Do you have your own team? Are you expanding teams? Are you using third parties? Just a little bit of color on that. Sure. I mean, the core, if you think about we have regional sales managers around the world. We have about 55 RFMs. They have, in each of those territories, there'll be distribution as well. The distribution functions a little differently depending on the market, and in Europe, more of our the distributors are more likely to lead a sale than in North America. They're a bit more technically oriented, but so each market, it would be regional sales manager, distribution supporting that, and then on top of that, a business development group that looks at taking those relationships from the field level of the company, you know, like they're going to Shell or something like that, and taking it to the corporate level. Okay, thank you. Can you provide some color on your sales cycle, how long your sales cycle, and has this changed over the last few years? Yeah, great. I love that question because if you go back five years ago, our sales cycle could be as long as two years. Like, literally from introducing them to a company, you know, again, something totally new, never seen a connected gas detector before. What does it do? Does it work? Don't know the company. Don't know who you are. Today, you know, the sales cycle is still long for us. It's still probably typically 6-12 months on large scale sales, but moving more into that 6-9-month territory. Okay, thank you. Clarification question here: During your formal remarks, did you say that you have a securitization facility, and if so, what are you securitizing? Yes, that's correct. We're securitizing our products that we sell through our bundled lease arrangements. We bundle for a monthly fee, both the product and the service offering, and we're directly securitizing the handhelds and area monitors that we sell through the lease program. Okay, thank you. You've seen strong growth across all geographic segments over the last few quarters, specifically in the Middle East. Given it's a rather new geographic segment for you, what are the opportunities you're seeing there? Middle East is a great market to look at and sort of how the company views these things. We first put feet on the ground in the Middle East, almost going back three years ago now. It's... The Middle East is a very complex marketplace. There's special requirements, particularly for connected devices, that are exist nowhere else in the world. You've got a lot of boxes to tick, relationships to build before investments to make, before you can start seeing the revenue generation. You're seeing that now in the last few quarters, I mean, it's a huge market opportunity for us. It's a very, you know, there's some very large corporations there, largest in the world. They're very brand... They're very focused on their overall operations. A little different market than, say, a lot of the North American companies into the oil and gas space, where you might be going site by site. There, it's much more, sort of a top surface level. There's some scale opportunities. You know, it's moved from being a nothing percentage market, you know, that rest of world, we call it, to 7%. It will, even though the rest of the business is growing, it will start growing, it will be growing faster for the next 2, 3 years at the very least. Okay, thank you. next question. Do all of your customers have to purchase or lease the hardware from you in order to provide the services part of the revenue? Can customers only use the hardware or use their existing hardware from other, I guess, providers, and only use your services revenue for reporting, analytics, professional services from other devices? You know, it's solely the customer has to buy our devices for two reasons. That's our business model. Our competitors' devices don't have that connectivity, so can't provide the data. Even, so there are other aspects of data from customers we'll take into our data lakes, that we can use some of the data they generate from other things, but in the context of that core wearable, it's all Blackline-provided product. Okay, super. Thanks. We do still have quite a few questions in the queue, but I would encourage anybody else who has a question to please use the question text box to ask that question now. Next question: What are your ultimate profitability goals as a percentage of revenue? At what business mix and revenue level do you foresee this occurring? The goals really for us are to hit 30% EBITDA, and the mix would be about 75%, at that point 75% services, 25% hardware. Okay, thank you. Can you give an example of how you could potentially further monetize services and data? Sure. A good example on the services side is a service we brought out not that long ago, it's called push-to-talk, or PTT, that allows the device to operate as a walkie-talkie. We're actively working on modifying some of the way that functions and works on people so that you could monetize that to a greater degree. In other words, in that case, it's a bit of a shift in how the hardware functions to enable it to be easier utilized on the service side. That's a significant uptick on the services side. Things like our Safety Operations Center are an interesting one to look at. Our Safety Operations Center is that top level where we monitor people's workforce directly. We're the ones who dispatch either their own local responder or 911. That's primarily a North American-focused service. We have our own people in North America that do that run the Safety Operations Center. In Europe right now, it's two third parties. Through third parties, it's never as successful a sale, we will be moving that internally. We'll be putting our own people in France, Italy, Germany, et cetera, to be doing that Safety Operations Center response. When we did that in North America, our tip, our uptick from SOC, when it was third party, was 10%, now it's about 40%-50%. If you look at it on the data side, it's all about these different dashboards we can provide, that you can look at things like time on site, time in productive territories. A lot of these are big things for companies where you've got a lot of third-party workers on your site. We've got aspects where you can look at things like worker-to-craft ratio or craft-to-supervisor ratio. Helps understand predictive safety. Background gas heat maps are things that dependent on, like, in production and manufacturing facilities, tell you a lot about the operational base of your facility. It really is... I don't want to say the sky's the limit, because that just sounds like a, you know, a bit of a grandiose statement to say, but it, you know, anything that you can leverage that is from the context of where a worker is and what's happening around them is part of that opportunity down the path. Thank you. Can you touch on your customer concentration in terms of potentially what is the largest account in terms of a% of your overall revenue? I'd summarize that to say we don't have such a concentration. We don't have any customers that are greater than 5% of our revenues. Thank you. Next question for you. Is there any regulation, either present or on the horizon that could help improve or accelerate your business? Certainly, the, like, again, the core adoption of gas detection is something that's heavily regulated right now, and that is part of what drives our business. I think it's interesting to look at that regulation side and see what happens down in the future. Like, Do the regulatory bodies shift from saying it's enough to have a gas detector that goes beep and flash, to say, now that the technology is readily available, you need to have a gas detector that tells somebody else that that person's in trouble? The basis of the whole industrial gas detection market came about when it became reasonable enough cost to build a multi-gas detector for confined space entry, that when OSHA said in the US, "Okay, now we're going to legislate this." I don't see that necessarily on the horizon, but they should be looking at that. Like, this is a definite, you know, once the technology is available and you can prove that it's that much better, the regulations should follow. Thank you. next question is, you guys have clearly done this before. first, I guess I'm going to combine a couple of questions here in my own way. first is, did you guys have to deal with any non-compete, when you started Blackline, given the past history? given that you've done this before, I guess, how do you think about potential future M&A for the business, both as potential an acquirer or as being acquired? Well, I mean, I'd speak to that, obviously, from mine, but no non-compete issues at all. I left BW long before got involved with Blackline here and started down this path. I think that if I look at the differences, to me, there's such a fundamental difference between the two businesses. BW was BW is a great company. It was growing during its whole lifetime, at 30%, when none of our competitors were growing more than 5%. It was by innovating in the marketplace, bringing out those products like that zero maintenance, et cetera. Blackline's, to me, that's the same on steroids. We're innovating in so many different ways and with so much additional value, that that's what's really driving the growth and the opportunities here. I think the two different business models drive different, you know. In my old days in BW, we were eventually acquired by a company called First Eco out of the U.K. and then acquired by Honeywell. Really all industrial companies. As a board, I think we turned down five offers for acquisition before we felt one was reasonable for the company. If you look at Blackline, I think the biggest difference in the context of someone, you know, our focus is we want to own this industry, and we want to keep seeing that top line and bottom line growth. That's what everybody here is focused on. I think the difference here is, though, that people who might be interested in this company are going to be broader than those core industrials. It's not just going to be Honeywells or, you know, the standard industrial players. It's when people understand the value of that data, and that, and even better maybe than we do. For Blackline acquisitions, right now, that's definitely not a focus. I mean, our focus is on that EBITDA and seeing that grow and moving the margins forward. There will be points at time, not really in the fixed or hardware world, but there's potential different bolt-on and additions of software that might make sense somewhere down the line, but nothing on the near horizon. Super. Thank you. One more question for you, and then I'll just ask you for some closing remarks. Next question is, Can you talk a little bit about your manufacturing capacity, where you manufacture? Do you outsource? Do you have your own manufacturing? Just whatever color you could provide on that to our audience. Sure. We manufacture the hardware all here in Calgary, Alberta. We do that from the surface mount level up. We design all the materials, the tooling for the plastics, everything else. The plastics are run here or in China as well, but the manufacturing, surface mount lines and the assembly lines are all here. Current facility, we feel we can about treble our current manufacturing capacity and, you know, something we can scale quite readily without a lot of capital infrastructure behind it. Having that control and doing our own manufacturing has, you know, makes that easier for us to be able to see that future and expand within it, so it's all internal. Perfect. Just some closing remarks for you. We'll end the call. All right. Well, I'd just like to say I appreciate everybody's time today and the questions. It's always great when something like this is truly engaged. You know, obviously, we're pretty big supporters of Blackline here, so is everybody who works here, and that's, there's over 400 of us that make up this company. It's not just a couple of people. I'd really say watch, you know, if I were to leave with final remarks, it's watch this space. This is going to be an exciting ride for the next few years, both for ourselves, our investors, and our customers. Perfect. Thank you very much, Cody. Thank you, Shane. Thank you for our audience. This concludes this presentation. Thank you. All parties may now disconnect.