Greetings. Welcome to POSaBIT Systems Corporation Fourth Quarter and Full Year 2024 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Oscar Dahl, Chief of Staff at POSaBIT. Oscar, you may begin. Thank you, Operator. With me on this call are Ryan Hamlin, Chief Executive Officer, and Chelsea Bolander, POSaBIT's Corporate Controller. I would like to begin the call by reading the Safe Harbor Statement. This statement is made pursuant to the Safe Harbor for Forward-Looking Statements described in the Private Securities Litigation Reform Act of 1995. All statements made on this call, with the exception of historical facts, may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although the company believes that expectations and assumptions reflected in these forward-looking statements are reasonable, it makes no assurances that such expectations will prove to have been correct. Actual results may differ materially from those expressed or implied in the forward-looking statements due to various risks and uncertainties. For discussion of such risks and uncertainties, which could cause actual results to differ from those expressed or implied in the forward-looking statements, please see risk factors detailed in the company's annual report and subsequent filed reports, as well as in other reports that the company files from time to time with SEDAR. Any forward-looking statements included in this call are made only at the date of this call. We do not undertake any obligation to update or supplement any forward-looking statements to reflect subsequent knowledge, events, or circumstances. The company will also be setting adjusted EBITDA, adjusted revenue, and adjusted gross profit in today's discussion. Adjusted revenue, adjusted gross profit, and adjusted EBITDA are non-IFRS measures used by management that do not have any prescribed meaning by IFRS and may not be comparable to similar measures presented by other companies. The company defines adjusted revenue as gross revenue minus license support revenue plus actual licensing cash received as part of POSaBIT's licensing deals. The company defines adjusted gross profit as adjusted revenue less company cost of goods sold. The company defines adjusted EBITDA as net income or loss generated for the period as reported before interest, taxes, depreciation, and amortization, and further adjusted to remove changes in fair values and expected credit losses, foreign exchange gains, and/or losses and impairments. The company believes these non-IFRS measures are useful metrics to evaluate its core operating performance and uses these measures to provide shareholders and others with supplemental measures of its operating performance. The company also believes that securities analysts, investors, and other interested parties frequently use these non-IFRS measures in the evaluation of companies, many of which present similar metrics when reporting their results. We caution that adjusted revenue, adjusted gross profit, and adjusted EBITDA are not substitutes for gross revenue, gross profit, or profit loss, respectively. Now, I would like to turn the call over to Ryan Hamlin, Chief Executive Officer. Ryan, please proceed. Thanks, Oscar, and good afternoon, everyone. As a reminder, today, all the numbers that we'll be discussing are going to be in US dollars. POSaBIT finished 2024 in a position of strength due to the hard work and tough decisions we made as a company throughout the year. At the end of 2023 and into the beginning of 2024, we, as an industry, experienced an industry-wide pandemic payment shutdown. That That significantly impacted our revenue. We were forced to switch out our entire payment platform, but ultimately, this has now set up POSaBIT for a brighter and more sustainable future. The new payment offering no longer includes merchant fees, so this reduced our top-line revenue, but also reduced our cost of goods due to the fact that most of those merchant fees were rebated back to our merchants in our past solution. Top-line revenue went down, but so did our costs. Our new solution now results in a lower gross revenue number, but a much higher gross profit percentage due to this change, as well as our overall product mix shift, meaning basically more POS revenue. Speaking of POS revenue, I now want to focus on our strong point of sale growth in 2024. Our point of sale had an incredible year. We grew our total base by over 50% year over year and continue to build a moat around our home state of Washington, where we now have our POS in over 70% of all stores and run over 85% of all sales in the state through our POS. This represents billions in sales, which down the road will be huge for us when credit card processing is allowed. We continue to expand into more states, most notably Oregon and New Mexico, where we are gaining a nice foothold and are looking to repeat the same playbook that made us dominant in Washington. A couple of important notes about our POS. First, we are executing this growth while still seeing almost zero churn. Any churn we do see is almost entirely due to dispensaries closing down shop for good, so really nothing to do with our product or our performance. The flip side of that is, given the state of the industry right now, all of our new point of sale stores are existing dispensaries, meaning we are aggressively taking over point of sale businesses from our competitors. The market keeps telling us that we have a superior product to the competition. Installing a new point of sale is no easy feat, especially in cannabis. It takes a lot to convince the store to move to a new system, and we are doing that in a grand scale. Finally, I need to make this extremely clear. Point-of-sale merchants aren't just great for recurring revenue. They represent massive future revenue potential in the form of credit card payments. Once rescheduling happens, or federal legalization, or simply a change of heart or policy from the big credit card brands, we will immediately see a drastic increase in payments revenue from these point-of-sale stores. To put this into perspective, the majority of our point-of-sale locations are currently cash only, and the ones who use non-cash payments rarely eclipse 20% total usage of their transactions. Once credit card payments become normalized in the industry, we expect those numbers to reflect a typical retail environment, which means 90% of all transactions will run through POSaBIT's own credit and debit processing. If we just look at the current processing volume we have with our point-of-sale base today, switching to credit card payments due to legalization or rescheduling, POSaBIT would see an immediate $15 million-$20 million increase in top-line revenue and $10 million-$15 million increase in gross profit dollars. You can see why we are so bullish on POSaBIT moving forward. Keep in mind, this is what we mean when we say setting POSaBIT up for the future. Another key achievement in 2024 for POSaBIT was the launch of our e-commerce menu products. We released our beta in Q3 and have now signed up nearly a quarter of our POS base. This was a major undertaking for our product and dev teams, and the response from merchants has been nothing short of phenomenal. This has and will continue to drive additional recurring revenue for POSaBIT, as we expect to add another 100 new e-commerce customers in 2025. This is an additional service for our point-of-sale merchants who pay around $300-$400 per month for their monthly e-commerce subscription. This add-on is another great example of how POSaBIT is increasing our recurring revenue stream per merchant on an annual basis. Now, I want to talk a little bit about our cost savings efforts in 2024. I mentioned getting healthy earlier. I talk about it quite a bit with our team. Probably the easiest way to see this is in our operating expenses from 2024. Last year, our OPEX was $12.2 million versus $18.8 million in 2023, representing a decrease of 35% in OPEX year over year. This decrease can be attributed to various cost-cutting measures, including a slight reduction in staff, better optimization of overall expenses, including things like cloud hosting, travel, marketing, and more. Our number one priority remains the overall financial health of the company as we build toward the future. Growth in recurring revenue is obviously great, but equally important is our focus on cost control and ensuring we are as lean and efficient as possible. Before I hand it over to Chelsea, I'm going to talk briefly about some of our financial numbers. Revenue for 2024 was $15.3 million versus $43.6 million last year. Now, obviously, those numbers may be jarring, but the drop is almost entirely due to a decrease in how we pass through fees charged to the merchants for payment services. To that point, while revenue dropped 65%, our gross margin dollars only decreased 24% year over year. To further emphasize that point, our actual dollars in gross profit were $7 million in 2024 versus $9.2 million in 2023. The thing I really want to point out is our adjusted gross profit dollars actually grew year over year to $10.6 million last year in 2024 versus $8.7 million in 2023, which is a 19% increase year over year. While 2024 was a difficult year, our overall cash only went down $500,000 throughout the year, demonstrating that POSaBIT remains roughly cash flow neutral, a testament to both our cost-cutting measures and ability to adapt to market disruption. In 2024, we also focused on paying off aged payables, and we settled an outstanding lawsuit paying out $275,000 in 2024. These additional costs we incurred were the primary driver and difference from a cash flow positive versus a slightly negative cash flow year in 2024. We talk a lot about adjusted revenue and adjusted gross profit because we believe it is a better indicator of our overall actual health and growth of the company. Our adjusted revenue, which means we're adding back in the cash from our licensing deal, was actually $18.6 million this year, as mentioned already, and our adjusted gross profit was $10.6 million. It's important to include this cash in our adjusted numbers so our investors can see the cash impact of this licensing deal that is not represented fully in our top-line revenue numbers. This is due to us recognizing the majority of the $20 million licensing deal back in 2022 when the original deal was signed. With that now said, I will turn the call over to Chelsea Bolander, our Corporate Controller, for a more detailed review of our financial results. Thank you, Ryan. Adjusted revenue was approximately $4.1 million in the Q4 of 2024, compared to approximately $5 million in the prior quarter. We define adjusted revenue as gross revenue as reported minus license support revenue plus actual cash received and the current period asset receivable for the licensing contract. Adjusted gross profit was $2.6 million in the fourth quarter of 2024, or 64% of adjusted revenue. This is compared to an adjusted gross profit of $2.7 million in the prior quarter, or 54% of adjusted revenue. Adjusted EBITDA was a loss of approximately $761,000 in 2024. Gross profit, as reported in the current year, was approximately $7 million, or 46% of revenue, compared with $9 million, or 21% of revenue in the prior year. The increase in gross margin% compared to the prior year is primarily the result of a change in product mix in the current year, resulting in lower cost of goods sold. Operating expenses were $12.2 million in 2024, compared to $18.8 million in the prior year. The primary drivers of the decrease in operating expenses were administrative expenses and share-based compensation. Administrative expenses were approximately $9 million in 2024. The largest driver of administrative expenses are people costs. These were $7.4 million in the current year, compared to $10.9 million in the prior year. The decrease year over year is primarily driven by a reduction in force. Net loss was approximately $5.7 million for 2024. This compares with a net loss of $13.8 million in 2023. Cash on hand at December 31st 2024, was approximately $1 million. This compares to $1.5 million as of December 31st 2023. Our debt balance remains low at $5 million of debt, consisting of an SBA loan and a five-year term loan payable in 2028. With that, I'll turn the call back to you, Ryan, for closing remarks. Thanks, Chelsea. As I mentioned already, when we entered 2024, we knew it would be a year focused on getting healthy as a company. The end of 2023 saw the industry-wide pandemic shutdown, and even throughout 2024, the payments landscape remained pretty chaotic and volatile. At POSaBIT, we pride ourselves on our flexibility and our adaptability. We have now set ourselves up for the future by honing in on our sustainable and predictable revenue. We are very happy with our performance and execution over the past year, and we will continue to focus on our long-term point of sale growth while operating as a cash flow positive and adjusted EBITDA positive company in 2024. The cannabis industry continues to push for descheduling and better banking regulations to allow for more traditional merchant services. Unfortunately, we do not foresee any significant changes to the regulatory environment this year, but are very hopeful that there will be some movement by early 2026. All right, now we are going to jump into the QA portion of the call. In our press release, we announced to please submit questions ahead of time. This is the same format we have used in our prior calls, and it has been received very well for those people that are not able to attend the call. After answering the questions that were sent in, we have a couple, I believe, we will open up the phone lines for additional questions. Oscar, let's go ahead and start our QA. If you can ask the questions that were sent in, that would be great. Yep. All right, question one. Ryan, can you explain again quickly why the top-line revenue in 2024 versus 2023 dropped so much? Yeah. Again, it's a bit jarring. Like I said, when you first, you got to look past the original top line and really dig under the covers to understand what happened. This is not due to some sort of a massive churn of customers or a major change in how we are doing business. This simply is one of the payment methods that we used before and our primary method in prior years. We charged both merchant fees and consumer fees. And then we would recognize all those fees at the top line, and then a lot of the merchant fees would be issued back as rebates to the merchant to help offset their costs. What you saw was nice big top-line numbers, but you would see an equally large cost of goods or cost of sale number that would take away a lot of that top-line revenue. That's why years past, we were at about 21% or something like that for our gross profit percentage. As you can see now, those gross profit percentage numbers are more in line with traditional payments businesses in the 50's into the 60's when you look at the adjusted numbers. Again, I would caution our investors that are just focusing on top line. We believe our investors care the most about our gross profit dollars. That's what we use to operate our company. More importantly, even the adjusted gross profit, because that includes a lot of the cash that we get from our licensing business that isn't fully represented in top line. Of course, at the end of the day, we run our business with our cash to help offset OPEX and whatnot. All right, question two. Ryan, previously, you've talked about having good success with your point of sale business, and it seems to be growing significantly. Do you see that continuing, and how else might you be able to monetize this POS base? Yeah, the POS has always been a smaller part of our business if you look back over the last 10 years in our history. What we've noticed is just more and more customers are very pleased with our POS, and we're starting to see strong growth. In fact, as I mentioned, we grew 50% year over year. Really great growth with our POS, and it's nice to have that POS revenue because those are typically multi-year contracts that have reoccurring revenue. It's way more predictable than payments. As I mentioned, we are the POS of choice in Washington State and Oregon right now, and we're going to continue to expand that base as we go forward over the next 12-18 months. As far as expanding services, I point to the e-commerce business as one great example of how you have a very loyal customer base with our POS, and then we add a value-added service like a menu, and we can then charge an additional $300-$400 a month. That becomes recurring revenue and predictable revenue. To be honest, I would say, it's hard saying this, but I was surprised on how many of our customers moved to our POS menu right away. They're not afraid to give up Jane or Dutchie or whoever they might be using for their menus because they prefer a fully integrated solution like we have with POSaBIT. Frankly, we're priced competitively. I think our merchants are seeing it as a great opportunity to have an all-in-one solution at a fair price. I think, is that the two questions? Okay. Okay. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press Star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the Star keys. Once again, that's Star one on your phone if you wish to ask a question today. One moment, please, while we pull for questions. The first question today is coming from James Boglanis. James is a private investor. James, your line is live. Thanks. Hi, Ryan. Hey, James. In the press release, you mentioned a stable trend for revenue and gross profit and adjusted EBITDA in 2025. Can you expand on this comment and just maybe share how you're thinking about the year ahead? Yeah. Sorry, I think it was a little cut out, but I think you're asking about in the press release, we talked about '25 being cash flow positive and adjusted EBITDA positive. Yeah. Expanding on how you're thinking about the year ahead. Yeah. If you look in our press release, we wanted to show specifically our quarter- over- quarter. You can see Q3 and Q4, and you can see how both the last two quarters have been adjusted EBITDA positive. We envision that trend happening. I mentioned our cash flow situation got hit a little bit more. I say we're paying for sins of our past a little bit. We had to pay some aging receivable or payables, and we had a small lawsuit that we needed to settle with cash. Otherwise, we would have had a cash flow- positive year in 2024 as well. We feel confident about it. We feel the mix shift of product is better. You and I have spoken about this in the past, but the more POS business we have, that's reoccurring revenue. The more we can add surrounding services around it, like the e-comm menus. Those are all things that are much more predictable for us versus this payments business that, as you know, you've lived through this. It's kind of up and down and all over the place. We're looking forward to someday full legalization, and that isn't the case. In the interim, betting on products like our POS and the stability of the recurring revenue makes a ton of sense. Yeah. No, I think that all makes sense. From my perspective, the business has gotten structurally better as you've rationalized operating expenses and moved to a more recurring revenue model. Is it reasonable to think that you'll be growing Adjusted Gross Profit Dollars in 2025? Yeah. I mean, we aren't coming out with, we didn't put out formal guidance, but yes. I mean, if you look again, we can look at trending of how we exited the year, and then we can see now how we're beginning the year. It's always weird having these annual earnings call in April because we turn around and have our Q1 in less than 30 days. We will be back on the phone here in a month, and we'll be talking a little bit about our Q1 results. Yeah, I mean, we feel good that we'll continue to grow both adjusted revenue, our adjusted gross profit, as well as our adjusted EBITDA. Yeah. That's awesome. I look forward to the next call. My last question is, how are you thinking about building out your investor relations effort and ultimately improving awareness of POSaBIT as a business? No, good question. I get this from investors a lot. I mean, we haven't been as communicative as we probably should have or could have in the last 12 to 18 months. A lot of that is due to just, at the end of the day, I hope our investors really value us focusing on the business and making sure we execute. At the same time, I think I don't want to say that's an excuse. We want to do a better job putting out more press releases and letting our investors know. It's a real, we talk about this a lot. It's really frustrating. I mean, the stock and looking at the valuation of the company, and then you come out and we have what we view as positive earnings and a positive focus and a positive outlook. Yeah, it'll be our goal and Oscar's goal to do a little bit more outreach. Thank you, James, for the friendly reminder. Absolutely. Anytime. Looking forward to talking to you soon. All right. Thanks, James. Thank you.