Good day, and welcome to the Xtract One Technologies Fiscal 2026 Third Quarter Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw the question, please press star and then two. Please note this event is being recorded. I would now like to turn the conference over to Chris Witty, Investor Relations Advisor. Please go ahead. Good morning, everyone, and welcome to Xtract One's Fiscal 2026 Third Quarter Conference Call. Joining me today is the company's CEO and Director, Peter Evans, and CFO, Karen Hersh. Today's earnings call will include a discussion about the state of the business, financial results, and some of Xtract One's recent milestones, followed by a Q&A session. This call is being recorded and will be available on the company's website for replay purposes. Please see the presentation online that accompanies today's discussion. Before we begin, I would like to note that all dollars are Canadian unless otherwise specified, and provide a brief disclaimer statement as shown on slide two. Today's call contains supplementary financial measures, including the addition of adjusted EBITDA this quarter. These measures do not have standardized meanings and guidance prescribed under IFRS, and therefore may not be comparable to similar measures presented by other reporting issuers. These supplementary financial measures are defined within the company's filed management's discussion and analysis. A reconciliation for adjusted EBITDA was included in yesterday's press release, as well as in the back of this morning's earnings presentation. Today's call may contain forward-looking statements that are subject to risks and uncertainties, which could cause actual results, performance, or developments to differ materially from those contained in the statements and are not guarantees of future performance of the company. No assurance can be given that any of the events anticipated by the forward-looking statements will prove to have been correct. Also, some risks and uncertainties may be out of the control of the company. Today's call should be reviewed along with the company's consolidated financial statements, management's discussion and analysis, and earnings press release issued June 10, 2026, available on the company's website and its SEDAR+ profile. Now it is my pleasure to introduce Peter Evans, Chief Executive Officer of Xtract One. Peter? Well, good morning, thank you, Chris. As always, welcome to all of our investors, our analysts, and others that are joining us today. Let's start by turning to slide number four. It's a pleasure to begin today's call on a high note. It's a wonderful day to start a Thursday. Our performance this quarter was outstanding. As I look at that outstanding performance, it's a reflection of what we've been building as a business coming together at the right time. Xtract One posted record revenues of CAD 10.3 million, almost triple of what we did in the third quarter of fiscal 2025, which to me is just unbelievable. We also achieved for the first time in the company's history a positive adjusted EBITDA with minor adjustments. Perhaps most importantly, we're continuing to experience an increase in demand across all of our product lines, while concurrently we've expanded our product capabilities to expedite the pace of installments and drive margin expansion. Happy advocates and not customers are advocates, though that is the most exciting thing to me and makes me most happy about what we've done in this past quarter. This position that we've put ourselves in sets us up very well to continually increase our revenue base and particularly our recurring revenues, as we hit and continue to deliver cash flow break even in the future. As previously committed to our investors, I'm extremely pleased with how successfully our team has risen to the task of cost effectively scaling up our business operations, while at the same time satisfying our customers as well as our shareholders. As mentioned earlier, we focus on advocates, not customers. Advocates are our business, that continues throughout this quarter and every other quarter that we've delivered so far. Stated another way from our business, we are directionally well-positioned based on positive key financial outcomes for Q3, being strong revenue growth year-over-year, continued margin expansion sequentially year-over-year, while judiciously continuing to manage our OpEx growth with a very scalable business model. I previously discussed that the business objective is to deliver a predictable, high-growth, high-profit business model that is built for scale, this quarter has shown everything coming together that we've invested in the business and delivering upon that. Our backlog remains strong as just over CAD 45 million, providing continued confidence in the outlook for the remainder of fiscal 2026 and beyond. Our deployments during the quarter were roughly evenly split between our two products, illustrating what we've previously said, that our SmartGateway and Xtract One Gateway products are very complementary and uniquely serve unique market segments, each which has critical capabilities required for those markets. Our objective is to continue to be the innovation leader and deliver those must-have features that are unique to each market, and that makes us the default choice for each of those markets. SmartGateway continues to increase its market penetration, particularly across healthcare and entertainment segments. While the Xtract One Gateway orders have been accelerating in places like schools, offices, buildings, and other segments, as both product lines are gaining traction in their respective target markets. Let's talk a little bit further about the Xtract One Gateway, as shown in slide number five. Last quarter, I discussed and promised that we would continue to expand our production capabilities and ramp up our manufacturing and deliveries for the Xtract One Gateway, converting the strong backlog to revenue, and more importantly, converting that backlog to delighted customer advocates. I'm very happy to report that we've achieved these outcomes with a record number of customer installations occurring in this quarter. As stated in the past, the main hurdle to more rapid deployments of our systems to converting that backlog into revenue has been acceleration of the production process. The initial demand for the Xtract One Gateway far exceeded our projections for the first year of deployment for a new product introduction. This is a great problem to have, and one I'd welcome any day. By working closely with our suppliers, we've significantly increased our manufacturing capabilities and, in tandem, the pace of installations. I'm very pleased that we have in place the operations model to address future projected demand at a much higher level than we originally forecasted. While deployments are certainly still dependent on customers being ready to take delivery or oftentimes delivering in a phased manner, given their own unique security and operating parameters, our enhanced production capacity has resulted in more efficient delivery and deployment of units, reducing our time to market and the cost of delivery of the systems. The market response for this product has been tremendous as customers are not only pleased with Xtract One Gateway's advanced capabilities, but also our ability to fast-track their delivery and installation timelines. This is particularly helpful as we move into the busy summer months when schools are looking to deploy security solutions or upgrade their existing security solutions. It's also very satisfying that customers using the Gateway have become very, very strong promoters, advocates, and references to other companies, as recently demonstrated in a school security safety conference where one of our customers was expanding upon the outcomes that they have seen in their schools. We're very pleased with how those customers are looking for new solutions or to replace existing solutions and finding the One Gateway a perfect fit for their needs. During the quarter, our Xtract One Gateway accounted for almost half of all year-to-date bookings, which is quite impressive given that we started our commercial rollout of this fresh new product just a few quarters ago. To us, it's a clear testament to our ability to deliver unique, technology-driven innovation solutions to a market that addresses customers' defined priorities versus force-fitting customers with multi-box products. We see a strong upside demand for the Gateway given its broad applications across our target industries and schools, particularly when a system is needed to detect threats in an environment where individuals are carrying numerous electronic devices, and without disrupting their experience and crowd flow. Some customers are reporting an ingress pace of almost 66 people per minute with this solution or about 4,000 people for a single-lane system with single-digit alert rates in these complex operational environments. We believe our product is best in class and is driven by customer-defined innovation with increasing number of clients. More clients are requesting demonstrations and installations, and I'm proud of how our team has stepped up to the challenge of meeting demand and ensuring excellent customer satisfaction. This is what led us to win recent contracts such as those couple that we've announced with Granville County Schools in North Carolina, Morgan County Schools in Alabama, just to name a few, along with many financial institutions, major manufacturing companies, and others. We now have over $110 million USD in our qualified sales pipeline across both of the product lines, with opportunities approximately evenly split between the two solutions, the SmartGateway and the One Gateway. These opportunities are moving through the sales funnel. As we approach the end of fiscal 2026, we remain optimistic about our growth trajectory, and we're sitting at a fulcrum point of profitability. Our backlog expansion is expected to continue, as should our revenue growth, setting us up for a very strong fiscal 2027 and beyond. The company is not only on track for its best year ever, but has also built a solid foundation to continue to accelerate that trajectory for top line, for gross margin, for increasing profitability next year and years after. The summary to me is we've done what we set out to do, design the most innovative, effective weapons detection technology, increased our production capabilities, executed on our business model in a way that will continuously improve results and increase returns to our investors. I'm very, very proud of how far we've come, and I look forward to the future and what the next quarters and years will bring. Once again, I'd like to thank our employees for their unbelievable passion and dedication to what we do, the focus on creating advocates, and thank our investors for their continued patience and interest as we get to this fulcrum point for the business. Our customers who choose excellence have also been someone that I've been very pleased to work with. They look for great outcomes for their patrons, for their students, and for the employees as a priority, that's the company that we've made as a powerhouse that we know it now to be. Right now, I'm going to turn it over to Karen to provide a more detailed discussion of the actual financial results, then we'll take questions. Karen? Thanks, Peter. I'm happy to review the financial highlights for our third quarter of fiscal 2026, a period of strong growth and performance. Turning to slide seven. Total revenue was a record CAD 10.3 million for the third quarter versus CAD 3.5 million in the prior year period, or nearly triple the amount in fiscal 2025. A significant portion of revenue in the quarter was from the high volume of installations for our Xtract One Gateway product as we continue to address the backlog of orders for this product. During the quarter, we delivered Xtract One Gateways to 16 different customers and are now at a point where we're pleased with the turnaround time for deliveries for this product. This was also a strong quarter for installations for our SmartGateway, with a majority of the revenue for this product coming from the healthcare and entertainment markets. As shown on the graph, a significant portion of these installations were upfront purchases, which helped drive the large increase in revenue year-over-year. These upfront purchase deals boost near-term performance and reduce cash burn, as we saw this past quarter, while still contributing to monthly recurring revenue via extended support terms. Revenue for the third quarter was again spread across numerous customers and industries, in particular the education, healthcare, and entertainment sectors. We also continue to see sales growth across both our products, as evidenced by the fact that the deployments in the quarter were roughly evenly split between SmartGateway and Xtract One Gateway. We continue to see a healthy mix of new customer logos, as well as a solid book of business from existing customers who are not only renewing their maintenance and subscription contracts, but often purchasing additional units at the same time. As Peter indicated, based on our year-to-date results, we're optimistic that the positive market trends we experienced in Q3 will continue going forward, putting us on track for a record year of revenue and greatly improved bottom line. Our gross profit margin improved from 57% in the prior year quarter to 61% in the current quarter. Our margins are starting to improve as predicted, due to higher production volumes and increased economies of scale, particularly with regard to Xtract One Gateway, as we work through the initial hurdles and the costs associated with launch of this new groundbreaking product. As previously indicated, we expect margins will continue to improve going forward due to greater operating leverage and further efficiencies in our supply chain. Now, turning to slide eight. New bookings for the quarter were CAD 9.1 million compared to the prior year quarter of CAD 4.6 million. In contrast to recent trends, almost 80% of bookings this quarter were subscription contracts, which lays the foundation for higher future recurring revenues after deployment. Year-to-date bookings were split approximately 60/40 towards upfront contracts versus subscription contracts. We expect to continue to see some fluctuation between our upfront and subscription deals, depending on customer preferences and seasonality. Based on the activity that we've seen thus far for Q4, we believe the 60/40 split is a reasonable proxy for how we will likely end the year. Changing slightly quarter-by-quarter, our orders continue to cover a broad range of industries and market verticals, providing stability and diversity to our business model. Moving beyond our core target markets, we're starting to see new markets and applications for our products where there has previously been no satisfactory weapon detection solution. One example of this would be commercial office buildings, which interestingly represented approximately 11% of our year-to-date bookings. We're also starting to see accelerated adoption abroad as the global market is ripe for growth, but to date has relatively low market penetration. The regulatory impact of mandates such as Martyn's Law in the U.K., as well as customer references such as the recently announced British Museum, is driving new market interest where we have a unique differentiated value. We are well-positioned to address this market with established product certifications, channel partnerships, local sales coverage, and reference customers. In particular, our SmartGateway product is particularly well-suited for this market due to its superior capabilities for small knife detection, which is a main priority in Europe and Asia. Moving to slide nine. Our contractual backlog and signed agreements pending installation collectively totaled CAD 45.1 million versus CAD 36.5 million last year. The fiscal 2026 backlog was comprised of CAD 17.9 million of contractual backlog with an additional CAD 27.2 million worth of signed agreements pending installation. The pending backlog comprises just over 200 units to a wide variety of customers and is slightly weighted towards upfront deals, representing approximately 60% of the total contract value of the backlog. We anticipate the majority of agreements pending installation to be deployed within the next 12 months. The slight dip in our total backlog from Q2 levels primarily points to a more rapid deployment of systems converting prior backlog into revenue as we move into a faster, more predictable cadence of backlog conversion. As we enter the summer months, our backlog may start to grow despite our conversion of orders into revenue based on the strong qualified sales pipeline, which we are highly focused on converting to bookings. We remain bullish on the year ahead, including expected growth in fiscal 2027 and beyond. Now let's turn to slide 10, which shows third quarter operating costs year-over-year for each of our key expense categories. Sales and marketing expenses were CAD 2.1 million in the quarter versus approximately CAD 1.6 million in the prior year period, reflecting higher business development expenses tied to growing the company. Costs associated with R&D rose to CAD 2 million from CAD 1.6 million in fiscal 2025, as we remain committed to being an innovation leader in our industry. General and administrative expenses were approximately CAD 2.4 million for the quarter versus CAD 1.9 million last year. Overall, expenses rose to support the growth in the company, and we anticipate future quarters to be more reflective of current levels. As the business continues to scale, our disciplined cost structure will allow us for stronger bottom-line results and cash flow generation. Moving to slide 11. This slide shows a recent history of quarterly adjusted EBITDA. As a reminder, a full GAAP to non-GAAP reconciliation for this measure is provided in our earnings release and the back of this presentation. It's noteworthy that for the first time in our history, we have a positive adjusted EBITDA of CAD 0.6 million. This is a significant financial milestone for the company and demonstrates our capability of leveraging the business and improving the operating fundamentals as the company grows. Moving to slide 12. During the quarter, the company operated at near breakeven level on an operating cash basis with a nominal usage of approximately CAD 30,000, compared to a cash usage of CAD 3.4 million in fiscal 2025. Excluding working capital changes, we achieved another milestone by generating operating cash for the first time ever of approximately CAD 0.7 million versus a usage of CAD 2.2 million in the prior year period. We ended the third quarter of fiscal 2026 with a cash balance of CAD 15.6 million, virtually unchanged from the previous sequential quarter. In closing, we remain on track for record results this year and are very pleased with our performance thus far, which, as anticipated, reflected strong demand, improved production capabilities, and the successful execution of our strategic growth plan, which equated to positive adjusted EBITDA and operating cash flow excluding working capital this past quarter. We are highly focused on continuing our growth journey and remain optimistic as we finish off the fiscal year and heading into 2027. With that, as always, Peter and I welcome any questions that investors may have. Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star and then two. At this time, we'll pause momentarily to assemble the roster. The first question will come from Gianluca Tucci with Haywood Securities. Please go ahead. Hi. Good morning, guys. Congrats on the quarter. If I could just ask, firstly, what's getting the pace of conversion from pending installation into recognized revenue? Is it production throughput, capacity on the deployment side, or is it scheduling? It's a couple of things. Thank you for the question, and thanks for joining us today. It's a couple of things. We've obviously, as I think you've heard in the last couple of analyst calls or the last couple of quarters, been working to get certain foundational things in place, one of them being production capacity. The demand for the One Gateway far outstripped our original forecasted demand for the first year, and so that created a lot of backlog. A great problem to have, but we had to catch up a little bit on the supply chain. We had to catch up a little bit on the production capacity, and so we put our nose down in the last quarter or so, the last two quarters, and got that righted, and now we're seeing the results of that. Much faster deliveries, as well as the ability to deliver at the demand capacity much beyond what we forecasted. Okay, I appreciate that insight, Peter. Perhaps a question for Karen. Given Q3 did show accelerated conversion, can you quantify how much of the CAD 27.2 million that you expect to recognize in Q4, as opposed to rolling into fiscal 2027? Well, we don't provide that information, and it really depends on scheduling and a lot but based on our customer needs. We work very closely with our customers to decide when we're going to do installations for our backlog. In terms of our contractual backlog, that part is laid out quite nicely in the financial statements in terms of what we'll recognize in the next 12 months. Again, on the pending backlog side, there are a number of factors that come into play in terms of scheduling and our customer needs, so we're not able really to provide that kind of information at this time. Okay. No problem. I appreciate it. Second question I had, just on the leverage in the model. Gross margins seem like they're heading in the right direction. Sounds like there is more upside there. Can you speak to the OpEx growth? How much of that is one time as opposed to run rate OpEx? That's a great question, and I think we're being judicious but realistic about our growth, and we want to ensure that we're continually focused on top-line growth. But we think that we've certainly had an increase in operating expenses this quarter. We think that that's a pretty good run rate going forward for the next year. In other words, there's nothing that is particularly necessary that will cause a large jump in our operating expenses as we scale up. We have a good scalable model as it is in place today. Okay. Thank you. I will pass the line. Congrats again. Thank you. Thanks so much. The next question will come from Scott Buck with H.C. Wainwright. Please go ahead. Hi. Good morning, guys. Thanks for the time. Congratulations on achieving that positive adjusted EBITDA inflection point. Peter, I'm curious, is maintaining positive adjusted EBITDA a priority moving forward, or are you willing to sacrifice some near-term profitability to benefit the top line? It's a great question, Scott, and I think actually I've got a unique answer for you. As Karen alluded to, we've talked about before, we've built a very scalable operational model. It was alluded to in the prior question. While we, we will increase OpEx, but not as significantly in order to serve our customer, it's not a linear growth. We can drive aggressive top-line growth with a very scalable OpEx model that we've got. I think we're going to be in a very unique position where we can maintain or be very close to cash flow breakeven or very cash flow positive while continuing to have aggressive top-line growth. Great. That's very helpful, Peter. Then second, can you guys talk about the degree of difference in the lifetime value of a customer being an upfront, whether it's upfront sales or subscription? I personally don't see too much difference, Scott, because we don't have a very high churn rate at all. The only couple of customers, and I could count them on one hand, that we've churned out have been because they have not gotten grant funding, for example, for a non-profit organization. Customers are renewing, so whether it's a subscription model or whether it's upfront, we have numerous customers who've been renewing after their three-year or four-year contracts, and they're either renewing and upgrading to the latest version of technology, or they're continuing down the path that they've been on before. It's almost equivalent, to be quite honest, because there's no churn. All right, perfect. Last one for me, hopefully I didn't miss this in the prepared remarks, but a nice uptick in the gross margin. I'm curious how much of that is mix driven versus some stronger efficiencies on your side. Well, I've got my thoughts, but I'm going to let Karen go first. Yeah. I mean, I would say a big part of the change in the gross margin sequentially would relate obviously to the Xtract One Gateway. We're early in our journey with that product. We're still working out different elements to our BOM and the supply chain program that we have in place. That's going to continue going forward. I think this is really important for the health and scalability of the business. That's certainly a big part of it, but we're always looking for opportunities to continue to improve the product and our associated gross margin. Not sure if that answers your question, Scott. Yeah. It does. Scott, let me add on to Karen's thoughts. Every new product, particularly hardware, the gross margin initially is lower. If we look at the history of the SmartGateway, it was probably in mid to low 50s gross margin. Over time, as you get more critical mass, you get more market efficiencies, you get more supply chain efficiencies, manufacturing efficiencies. You start to look at ways to increase the BOM or lower the cost of the BOM. So over time, your gross margin improves. We've seen the same thing with the OneGateway. As the mix moves forward, we expect the same sort of trajectory with the gross margins for the OneGateway that we experienced with the SmartGateway. Perfect. Well, I appreciate the added color, guys. This has been great. Thank you. Thank you. The next question will come from Mike Latimore with Northland Capital Markets. Please go ahead. All right. Good morning. Yeah, congrats on the strong revenue growth here. Just curious on a couple revenue segments. You talked about, I think, office or commercial being 11% of bookings. Within the pipeline, does it represent a higher percent than that? Should this continue to expand as a percent of the bookings? I think, Mike, the answer to that question is, I think we'll start to see it level out because while we're seeing this new growth in commercial office spaces, the schools, hospitals, and other market segments, international markets, are continuing to accelerate also. I think the mix will start to flatten out, and all markets are continuing to accelerate evenly or equally. Okay, great. In terms of the units booked, what's the rough mix of units from new logos versus kind of current customers expanding? That's a good question. Go ahead, Karen. It's certainly obviously more driven towards new logos. We're certainly seeing, because primarily the size of the deals are much bigger for new logos as well. It's their initial purchase, the deals are growing in size, particularly with the Xtract One Gateway product. But we're definitely seeing repeat and new business from existing customers. It's a smaller portion of the mix, I would say. Certainly a substantial one, and we take pride in it because I think it's the best testament to show happy customers when they're coming back and purchasing more. We're really pleased with that, and perhaps as we get more stability going forward, we'll provide some maybe metrics along the line to let investors understand just what percentage of the mix relates to existing customers. Yeah. Okay, great. How should we think about just seasonality in bookings? Is the pipeline diverse enough now that it wouldn't be overly seasonal in any one quarter or how should we think about seasonality in bookings? Yeah. It's a great question, Mike. I think to your point or your question, we are starting to see that seasonality smooth out as we're getting more diversity across more segments. Of course, across the two product lines, there are seasons, as you well know, for example, for the schools waiting on their budgets or some of the professional sports teams, beginning of July becomes an interesting month. It's getting nicely tempered with organizations like manufacturing, distribution, hospitals, office buildings, as you mentioned, who have just a continuous pace of demand throughout the year. So, that seasonality is smoothed out quite a bit. Okay. Excellent. Well, congratulations. Best of luck this year. Thank you. Thank you. Again, if you have a question, please press star and then one. The next question will come from Andrew Berger with Berger Capital Management. Please go ahead. Thanks. Congratulations, Peter and Karen, on a great quarter. I was just thinking, with the step function in sales, both on a year-over-year basis and a quarter-over-quarter basis, is it a one-time good quarter, or is this really a result of the past year's work and start of a new trend at these type of revenue levels? Yeah. Great question, Andrew, and it's great to hear your voice. Thank you for joining us. I see this as a reflection of the work we've put in for a period of time, particularly the last year, getting manufacturing capacity in place, getting our brand awareness up, building out the channel model and the direct model for sales, our ability to deliver with great customer support behind it. So, there's been a lot of invested activity to kind of put that foundation in place at a new level of production for the business. I see this as the new norm, not a one-time blip. Awesome. Keep up the good work. Thank you. Showing no further questions in the queue, this will conclude our question and answer session. I would like to turn the conference back over to Mr. Peter Evans for any closing remarks. Well, again, thank you everyone for joining us today. It's always nice to wake up on a Thursday and have this kind of a call. I expect that we will continue to have great calls like this in the future. I really want to thank all of our investors, on all aspects of investors who continue to support the company and continue to drive us to do better for our customers. I particularly want to thank all of our customers. We do not believe, as I said earlier, in customers, we only believe in advocates, and we think we've proven that to many of those. And most importantly, I want to thank everyone in our company. We have a great, wonderful, passionate group of people who are just amazing to work with on a day-to-day basis, and it causes me to love what I do every single day. So, thank you, everyone, and I look forward to talking to everyone in the next coming days, weeks, and of course, the next earnings call. Thank you very much. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.