Welcome to the XS Financial Inc T hird Quarter 2022 Results Conference Call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to David Kivitz, CEO. Please go ahead, David. Thank you all for attending our 2022 Third Quarter Earnings Call. We welcome everyone to our updates. We are excited to continue our engagement, correspondence, and dialogue on the operations of the company and appreciate your attendance. As always, I would encourage everyone to visit the investors section of our website, xsfinancial.com/investors, which has our most up-to-date corporate presentations, news, and upcoming events. We have filed our 2022 third-quarter financial statements and MD&A, which can be found on sedar.com. We will be taking questions at the end of the call. Please feel free to send in any questions you might have. The third quarter of 2022 was highlighted by continued growth in revenues and operational performance, with particular emphasis on expanded funding relationships with several existing customers and new customer additions. The company generated positive cash flow or net distributable earnings of approximately $184,000, representing our first positive cash flow quarter since the company's inception. Our business is hitting its stride, and our focus on industry-wide recognition as a better alternative for non-dilutive CapEx and equipment financing has seen positive reinforcement throughout the quarter and also subsequent to quarter-end. We continue to see increasing demand from the market for our product, and our pipeline is as robust as ever. Equity valuations for plant-touching cannabis companies continue to see challenges, and our unique financing is a welcome solution. As states continue to expand from medicinal markets to adult use and new states legalize, different capital solutions are being explored from our current partners and new prospects. We believe that our competitive non-dilutive financing to purchase CapEx and equipment nationwide continues to see a significant runway as one of the only institutional platforms for companies in our industry. Results to date have solidified that assumption. Furthermore, we continue to ride the regulatory tailwinds as new states such as Missouri and Maryland transition to recreational use, which increases our sales pipeline and the improving prospects of SAFE Banking add more community banks to our lending funnel. Currently, our pipeline exceeds $280 million in CapEx financing demand. In 2022, we are committed to fund our current customers to ensure they can meet their operational goals. In addition, our organization continues to focus on customer acquisition and an expansion of our origination channels. Our experienced team is working hard with potential partners to deploy our resources in a risk-appropriate manner and with a return profile that fits within our company's parameters. We are thrilled to have closed our new $24 million credit facility with two bank syndication partners, which has a borrowing rate of prime + 100 basis points. We are proud to be one of the few companies to solidify a credit facility from a commercial bank syndicate in the cannabis space, which is a testament to our underwriting capabilities, portfolio strength, and employee talent. As always, we continue to evaluate internal favorable financing opportunities to fund our growth and ensure that we are growing our business responsibly and at a risk-reward ratio that will be sustainable in the long term. Our current funding capacity has set us up with a long runway for scaling through the end of the year and into 2023. Our Q3 2022 continued our historically strong trends, which delivered increased revenue growth and monthly recurring customer payments, along with the diversification of customers. At the end of Q3, we had 139 active lease schedules compared to 51 as of the end of Q3 2021. Q4 is off to a fast start as we have a total of 151 active leases through October 31, 2022. We are pleased to announce that to date, we have not had any defaults, missed payments, or other issues with any of our active leases, which is evidence of our strong underwriting policies. Our investment committee and credit team evaluate every new partnership through detailed diligence as well as qualitative and quantitative analyses. Thus far in 2022, we continue to see frequent and larger drawdowns from our existing customers as they move into new markets and expand in existing states. As expected, and as our business continues to scale, we are seeing increased potential for yield expansion with our preferred equipment vendors as we bring scale to our business and purchase larger volumes through our transactions. Currently active in 16 states, we have achieved broad diversification across several existing markets, and we are ensuring that our infrastructure will support our partners wherever the market is headed. As cultivators, processors, and manufacturers seek out alternative financing solutions, our trustworthy, transparent, and reliable funding for CapEx needs is continually relevant and sought out. We're off to a fast start through the year. As of 10/31, we have a total funding capacity of $12 million under our Needham Bank credit facility. We are confident in our ability to upsize our recently closed bank financing to fund future opportunities as needed. Our management team continues to focus on executing our 2022 plan to increase our number of closed leases, fund additional commitments, and add new customers to diversify our portfolio while monitoring our capitalization in preparation for future needs, while continuing to expand and strengthen our existing internal team. With that covered, I would like to turn the call over to Stephen Christoffersen, who will walk us through our Q3 2022 results in further detail. Thank you, David. I'll walk through the key points for our financial results for Q3 2022. We continue to build our strong revenue numbers in Q3 and have achieved quarter-over-quarter revenue growth every quarter since inception. Our third-quarter revenues were approximately $2.1 million, compared to $1 million for the same quarter last year, representing a 108% increase. The increase of approximately $1.1 million for the three months ended September 30, 2022, as compared to 2021, was attributable to revenue recognized from the financing income associated with 43 new financing leases added during the quarter. At the end of September, we had 139 active leases compared to 51 active leases a year ago. Growth of closed leases continued subsequent to the quarter end as our active lease count has moved up to 151 leases as of October 31st. Monthly recurring lease payments continue to increase quarter-over-quarter. We closed out our Q3 with $2.4 million of recurring monthly lease payments. The weighted average maturity of our portfolio is currently 46 months, providing consistent and reliable monthly cash flows for our operations and reliability to our long-term forecasts. Administration expenses for 3 months ending September 30, 2022, were $1,845,000 compared to $1,089,000 for the 3 months ended September 30, 2021. The increase was largely driven by a catch-up in non-cash incentive compensation of approximately $1.2 million, which will normalize in coming quarters. The company's loss for the three months ending September 30, 2022, was $2,417,709 compared to a loss of $628,546 for the three months ending September 30, 2021. The increase in net loss was primarily attributable to an increase of approximately $901,000 in financing expense and $781,000 in non-cash accretion expenses associated with new debt arrangements entered into in 2021. This was offset by a gain from the change in fair value of derivative liabilities of $2,377,000 for the quarter. Additionally, the company had non-cash gains of approximately $2.6 million related to foreign currency translations, which resulted in positive comprehensive income of $134,562 for the quarter. Our net distributable earnings, which is calculated as operating income, adjusted to exclude depreciation, amortization, non-cash equity compensation, and interest less interest expense for the quarter was a + $184,069. This is compared to a -$266,632 in Q2 2022. Our robust sales pipeline, along with our cheaper cost of capital, should further improve our net distributable earnings in the coming quarters. As a snapshot, our portfolio gross receivables have increased from thirty-eight and a half million in Q3 2021 to $99.1 million in gross receivables as of the end of Q3 2022. As of 10/31, our total funding available, which includes our cash on hand, undrawn credit facilities, and estimated reoccurring payments through the balance of the year, was approximately $19.6 million. Our focus for the remainder of the year is securing lease schedules that utilize our current working capital and undrawn credit facilities and continue our prudent underwriting standards as we navigate with this tough market climate. To date, we are pleased to have a 0% default rate across our portfolio. Our third quarter of 2022 has resulted in very positive and consistent quarter-over-quarter results. I look forward to sharing our fourth quarter and annual results and making myself available to investors or prospective investors as needed. I will now send it back to David. Thank you, Stephen. With that, we will now open the floor for audience questions. Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We will pause for a moment as callers join the queue. Once again, if you have a question, please press star then one now. The first question comes from Mike Regan of MJResearchCo. Please go ahead. Mike Regan, your mic is open. Please go ahead. Sorry, I was muted. Could you please, I guess, help us understand, sort of your underwriting criteria and how that may have changed as the, you know, overall cannabis market has weakened, as you're looking forward into fourth quarter in 2023? Thanks. Mike, appreciate the question. There are several factors, you know, that we look at when underwriting a potential transaction, and understanding that, you know, our primary collateral is the equipment and CapEx that we're funding. You know, we don't take an all asset lien on a company. We do have an unsecured guarantee that we receive from whichever the consolidating or holding company entity is. Generally speaking, we work and look to fund essential use equipment that is being utilized by the customers that we're financing. An example of that might be, you know, if we're financing a large scale cultivator, certainly we're gonna be looking to fund their cultivation equipment versus if they're expanding as a first-timer into manufacturing or processing. Several of our customers operate multiple segments of the value chain. If the liquidity that they have on hand, their operating performance, including gross margins, the ability to service debt and looking at, you know, overall and total debt that they have on the business now and how that debt amortizes or matures, those are just some of the factors that we're looking at to make sure that a company can ultimately handle the addition of our lease payments on top of their existing expenses. I would say in addition to that, we look to maximize the amount of exposure that we have to a business as a percentage of their overall revenue. You know, the size of a company and their scale, their ability to generate, recurring operating performance and ultimately their ability to service our debt by virtue of either producing cash flow through operations or, significant liquidity are just some of the things that we look at, when underwriting a customer. You know, one thing that I think you had alluded to that comes up quite often for us is, you know, are there markets, specific states that we have a preference of financing in? I would say to a certain extent, yes. There are certainly states and markets that are more challenging to fund than others. However, if an operator, and a prospective borrower excels in that market, and even in tough markets there, tend to be companies that stand above the rest. We're still looking for best in class, best in market companies that we can finance, be it across numerous markets, like some of our MSO customers or in individual markets such as our larger single state operators. We're really looking at the credit quality across all of their markets at their parent company. That's what we're underwriting when determining who we'd like to finance. All right. Great. Thank you very much. The next question comes from Walter Ramsley from S2. Please go ahead. Hey, thanks. Congratulations, David. Way to go turning profitable. What more can you ask for? Got a couple of questions. Can you give us a brief overview on what the competitive environment looks like at the moment, and then follow that up with what you think might happen if the SAFE Banking regulations actually go into effect? Thank you, Walter Ramsley. Appreciate the questions. I guess we'll start with the first one, the competitive landscape. You know, I would say we have seen things shift somewhat dramatically over the last 6-9 months in terms of the funding and competitive landscape in our industry. I'll start by saying we are still for the target customers that we're focused on in the rate range that we are really profiling for the borrowers that we're after, we still do not have any direct competition. You know, we're still the market-leading CapEx and equipment funding company, and certainly the only one that can fund a significant scale to what we believe to be the biggest, the best credit sort of risk profile companies in our industry. You know, directly, we do not typically see another bidder or competition in the deals that we're after. Now, that said, we do compete with other forms of capital. You know, a company may choose to take on additional senior debt. They may choose to cover if, for example, they have a real estate financier that would be willing to cover some of the CapEx or equipment that we might cover under a real estate financing, they may choose to go that direction. In most cases, we believe, and what we try and explain to our borrowers, is that it makes a lot more sense to fund those items through us, even if there are other alternative forms of capital. There are several reasons for that. Ultimately, we're funding depreciating assets, and you would typically wanna see yourself paying down debt alongside these types of items that we're financing, and that's how our financing is structured versus, you know, longer term real estate financing obligations that may span 20 or 30 years that you don't wanna see escalators paying into. As much as there is competition for dollars, we feel that the way that we structure our leases and some of the flexibility that is provided to our borrowers is really optimal not only for us but for them as well. As we've continued to add large scale borrowers who have other forms of financing in their capital structure, I think that's becoming more evident. For a long time, our product did not exist at scale. Now that it does, we're seeing that through customer wins and expansion of our existing borrowers. You know, I think that sort of speaks to the need for the type of financing that we provide. The, the more macro backdrop for the industry right now is, you know, given what's happening in the broader markets outside of cannabis, rates rising, you know, sort of across the world really. Specific to the US, you know, there have been significant layoffs, slowdown coming, rates rising, and all of that is creating more skittish lending and a pullback in lending from banks, to a certain extent, private credit, and that is causing a reduction in available capital to the cannabis industry. Whereas there used to be, you know, no direct competition but other types of funding available, what we are seeing now is a broad pullback in all types of funding to the industry. We feel, you know, certainly we are putting a tremendous focus on our operating performance and, you know, appreciate the compliment. We're very pleased by our quarterly results and showing, you know, positive performance in terms of producing cash flow. That's gonna be a requirement, you know, to a certain extent for most companies moving forward, if they want to continue finding access to capital to then, you know, deploy into the industry. You know, I think moving forward, depending on, you know, how things go in the broader economy, it will have an impact on our industry. We are pleased to say, you know, we still have existing capacity under our bank line to continue funding new deals. We are working to expand that bank line and find access to incremental capital so that we can continue funding. Thus far, we've been very successful in sourcing and closing that type of financing that's accretive, as evidenced by our results, so that we can keep funding the customers in our industry. Certainly, you know, I think we are taking a harder look at opportunities. The amount of capital generally is lower than it was in the past, and I think we anticipate that that's gonna be the conditions around our space for the foreseeable future. Walter, I guess to address the secondary question regarding SAFE Banking Act. You know, one, I think it depends on what form and certainly, you know, the specifics of ultimately what gets passed, if something gets passed. Obviously, you know, seems to be there's tailwind to get something done in the lame-duck session this time around, but, you know, we've seen sort of this exuberance before. You know, given that we've been in the industry for a while, we try not to get too excited about any federal regulation coming. Generally speaking, you know, we have always and I think the market has always viewed our business as being, you know, cannabis adjacent, but not a cannabis company. We're not taxed like a cannabis company. We run a more traditional finance business. Accordingly, given the scale that we've achieved to date, you know, we anticipate being funded, almost exclusively moving forward through bank financing. The passage of SAFE Banking for a company like ours, we think would have an outsized benefit, relative to the other companies in our space. We think our funding access would open up, much faster than some of the other companies in the industry. We hope that it passes. We think that it will bring incremental benefit to us. We think that it will bring incremental benefit to our borrowers. Frankly, it may bring, even some competition, which ultimately we view as a positive. We are hopeful that it will gain traction, but, not necessarily optimistic that something will get passed. Well, thanks for going through all of that. That was really helpful. Congratulations again, David. Thank you. Once again, if you have a question, please press Star, then one. The next question comes from Anthony Wong, Private Investor. Please go ahead. Hey, guys. Great quarter here. Congratulations. Just a quick question. On the future here of net distributable earnings, do you guys foresee this becoming the norm for XS Financial? The second question, in terms of your future financings, how do you plan on funding that in the future? Thank you. Hey, David. I'll take the question regarding the net distributable earnings. Thanks for the question. L ooking forward, you know, obviously we're very pleased to kind of pass this inflection point of positive net distributable earnings in Q4. You know, the business continues to grow and sort of with that, we've made a couple key hires here in Q4. We do expect there to be sort of some, you know, sort of increased OpEx here in the coming quarter, with, you know, some increased head count and kind of some year-end cash compensation in form of bonuses to the extent that we, you know, hit the KPIs that we sort of mapped out at the beginning of the year. L ooking out into Q1, Q2 and the balance of, you know, 2023, you know, there's some really nice predictability within the business, right? T he average maturity of our portfolio right now is 46 months. That does provide a nice steady state bankability, helps us with the budgeting process. A s David alluded to in the call, the pipeline's pretty massive. It's just sort of a function of getting a lot of these commitments and that we've announced publicly, our customers going through and actually drawing against those commitments. W here we sit right now with a portfolio of right around $100 million, and we have a committed amount that's greater than that number. For us, it's just doing a lot of project planning with our customers to make sure that they actually take the money that they've been approved for, that we've gotten through our investment committee. Assuming that 2023 looks a lot like 2022 in the form of folks drawing down on those committed lines, we see this positive net distributable earnings only net distributable earnings generally, just continuing to get better. T hat's obviously we do have some mechanisms within our contracts for the new contracts that we're underwriting. There is a variable rate component where a lot of these leases are priced off of kind of whatever the latest three-year Treasury is. Our financing facility is also based off of the prime rate + 100 basis points, like we've disclosed. There is some sort of implicit hedging there. As rates continue to increase we actually aren't gonna bear the full brunt of that. T hat's something that we're very focused on and pretty pleased with. I guess the second question about the increase, how we think we're gonna finance the future business going back to David's comments about straight banking. W hat this has done is it's increased a lot of the conversations that we're having with various community banks. Our syndicate banking partners, along with some other banks that have sort of reached out and shown interest in our product and helping the company fuel its growth. We feel very confident that we're gonna be able to grow this business almost entirely off of debt financing. W e feel good about the cash on hand the steady state of the business, the cash comes in every month and a lot of the conversations that we're having about upsizing the existing facility to fund future growth. W e do think that we can grow this business in a non-dilutive fashion. Thanks for the question. David, anything you wanna add? No, I think you covered it well. Thank you, Stephen. Thanks, guys. Thank you. This concludes the question and answer session. I would like to turn the conference back over to David Kivitz for any closing remarks. Thanks everybody for attending our Earnings Call today. Appreciate everyone's attendance and time, and look forward to bringing everyone up to speed for year-end results at our next quarterly earnings call. Thank you. This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.