Xtract One Technologies Inc. (TSX: XTRA) (OTCQX: XTRAF) (FRA: 0PL)
(“Xtract One” or the “Company”) a leading technology-driven threat
detection and security solution that prioritizes the patron access
experience by leveraging AI, is pleased to announce its first
quarter results for the three months ended October 31, 2023. All
information is in Canadian dollars unless otherwise indicated.
The following press release should be read in
conjunction with the Company’s Unaudited Condensed Consolidated
Interim Financial Statements, prepared in accordance with
International Financial Reporting Standards (“IFRS”) and the
Company’s Management’s Discussion and Analysis for the periods
ended October 31, 2023 and 2022, which can be found under the
Company’s profile on SEDAR+ at www.sedarplus.ca.
“This has been a record quarter on all key
performance indicators for the business. Total contract value of
new bookings as well as revenue for the Platform operating segment
has nearly doubled from the previous quarter driven by strong
demand for our products along with investments we made to increase
manufacturing and deployment capacity,” stated Peter Evans, Chief
Executive Officer of Xtract One. “The results from this quarter
demonstrate a continuation of the growth trends that we have been
experiencing over the last 12 months and provides another proof
point of the exceptional value that we provide to our
customers.”
Company financial highlights for the
fiscal quarter ended October 31, 2023
The following is a summary of the key financial
highlights for the first quarter ended October 31, 2023:
- Total contract value of new
bookings1 was $9.6 million as of October 31, 2023, as compared to
$2.9 million for the three month period ended October 31, 2022,
representing an increase of 231%;
- Platform contractual backlog was
$9.3 million as of October 31, 2023, as compared to $1.9 million as
of October 31, 2022, representing an increase of 393%. The Platform
backlog as of October 31, 2023 excludes an additional $10.6 million
in signed agreements pending installation1 representing an increase
of 169% over the last year, when the signed agreements pending
installation balance was $4.0 million;
- Accelerated topline growth for our
Platform operating segment with $3.0 million of revenue for the
three month period ended October 31, 2023 as compared to $0.4
million for the same three month period ended October 31, 2022,
representing a 602% increase; and
- Gross margin of 67% for our
Platform operating segment for the three month period ended October
31, 2023 as compared to 55% for the same three month period ended
October 31, 2022.
Company business highlights for the
fiscal quarter October 31, 2023
The following is a summary of the key business
highlights for the first quarter ended October 31, 2023:
- Continued expansion into the
healthcare market vertical, as chosen by the U.S. Department of
Veteran Affairs Medical Centers in Virginia to create a more
efficient healthcare environment while ensuring the safety of
patients and staff;
- Entered into a partnership with the
American Association of Professional Baseball as the exclusive
preferred supplier to enhance venue security and guest experiences
at games;
- Announced the next phase of growth
through selective international expansion with three multinational
companies, one of which is a global entertainment organization that
entered into a three year contract totaling over $5.1 million
USD;
- Subsequent to the period, partnered
with Kansas City Current of the National Women’s Soccer League to
secure entrances at the new CPCK Stadium, which will make history
as the world’s first and only purpose-built stadium for a women’s
professional sports team; and
- Subsequent to the period, announced
that the Company had been selected by Community Health Network to
protect key hospital locations, with the strategic partnership
further underscoring a commitment to enhance hospital safety and
improve healthcare facility security.
Unaudited Interim Statements of Loss and
Comprehensive Loss for the Periods Ended October 31, 2023, and
2022
The following table is extracted from the
Company’s unaudited condensed consolidated interim financial
statements and presented in Canadian dollars to demonstrate the
Statements of Loss and Comprehensive loss for the periods ended
October 31, 2023, and 2022:
|
Three months ended
October 31, |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
Revenue |
|
|
|
Platform revenue |
$ |
2,996,206 |
|
|
$ |
426,538 |
|
Xtract revenue |
|
120,147 |
|
|
|
220,268 |
|
Total revenue |
$ |
3,116,353 |
|
|
$ |
646,806 |
|
|
|
|
|
Cost
of revenue |
|
|
|
Platform cost of revenue |
$ |
978,562 |
|
|
$ |
193,184 |
|
Xtract cost of revenue |
|
53,380 |
|
|
|
114,491 |
|
Total cost of revenue |
$ |
1,031,942 |
|
|
$ |
307,675 |
|
|
|
|
|
Gross profit |
$ |
2,084,411 |
|
|
$ |
339,131 |
|
|
|
|
|
Operating expenses |
|
|
|
Selling and marketing |
$ |
1,507,657 |
|
|
$ |
1,490,359 |
|
General and administration |
|
1,647,816 |
|
|
|
1,577,218 |
|
Research and development |
|
1,726,191 |
|
|
|
2,135,775 |
|
Total operating expenses |
$ |
4,881,664 |
|
|
$ |
5,203,352 |
|
|
|
|
|
Loss
from operations |
|
(2,797,253 |
) |
|
|
(4,864,221 |
) |
|
|
|
|
Other expenses (income) |
|
|
|
Unrealized loss on investments |
|
- |
|
|
|
65,625 |
|
Interest and other income |
|
(96,040 |
) |
|
|
(11,662 |
) |
|
|
|
|
Loss and comprehensive loss for the period |
$ |
(2,701,213 |
) |
|
$ |
(4,918,184 |
) |
|
|
|
|
Weighted average number of shares |
|
198,354,825 |
|
|
|
163,179,222 |
|
|
|
|
|
Basic and diluted loss per share |
$ |
(0.01 |
) |
|
$ |
(0.03 |
) |
|
|
|
|
Unaudited Interim Statements of
Financial Position as at October 31, 2023 and July 31,
2023
The following table is extracted from the
Company’s unaudited condensed consolidated interim financial
statements and presented in Canadian dollars to demonstrate the
Company’s financial position as at the periods ended October 31,
2023, and July 31, 2023:
|
October 31, 2023 |
|
|
July 31, 2023 |
|
Assets |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
$ |
5,290,181 |
|
|
$ |
8,327,449 |
|
Receivables |
|
1,621,802 |
|
|
|
847,429 |
|
Prepaid expenses and deposits |
|
528,320 |
|
|
|
1,026,668 |
|
Current portion of deferred cost of revenue |
|
165,020 |
|
|
|
- |
|
Inventory |
|
1,510,019 |
|
|
|
1,602,971 |
|
|
|
|
|
|
|
9,115,342 |
|
|
|
11,804,517 |
|
|
|
|
|
Property and
equipment |
|
2,185,477 |
|
|
|
2,063,817 |
|
Intangible
assets |
|
4,642,225 |
|
|
|
4,843,700 |
|
Non-current
portion of deferred cost of revenue |
|
261,627 |
|
|
|
- |
|
Right of use
assets |
|
263,439 |
|
|
|
286,796 |
|
|
|
|
|
Total assets |
$ |
16,468,110 |
|
|
$ |
18,998,830 |
|
|
|
|
|
Liabilities |
|
|
|
Current liabilities |
|
|
|
Accounts payable and accrued liabilities |
$ |
2,428,392 |
|
|
$ |
2,519,350 |
|
Deferred revenue |
|
1,347,595 |
|
|
|
1,379,741 |
|
Current portion of lease liability |
|
226,242 |
|
|
|
232,483 |
|
|
|
|
|
|
|
4,002,229 |
|
|
|
4,131,574 |
|
|
|
|
|
Non-current portion of lease liability |
|
94,193 |
|
|
|
124,358 |
|
|
|
|
|
|
$ |
4,096,422 |
|
|
$ |
4,255,932 |
|
|
|
|
|
Shareholders' equity |
|
|
|
Share capital |
$ |
135,906,165 |
|
|
$ |
135,823,337 |
|
Contributed surplus |
|
14,667,434 |
|
|
|
14,420,259 |
|
Accumulated deficit |
|
(138,201,911 |
) |
|
|
(135,500,698 |
) |
|
|
|
|
|
$ |
12,371,688 |
|
|
$ |
14,742,898 |
|
|
|
|
|
Total liabilities and shareholders' equity |
$ |
16,468,110 |
|
|
$ |
18,998,830 |
|
|
|
|
|
Unaudited Interim Statements of Cash
Flows for the Periods Ended October 31, 2023 and 2022
The following table is extracted from the
Company’s unaudited condensed consolidated interim financial
statements and presented in Canadian dollars to demonstrate the
Company’s cash flows for the periods ended October 31, 2023, and
2022:
|
Three months ended
October 31, |
|
|
2023 |
|
|
|
2022 |
|
Cash
flow used in operating activities |
|
|
|
Loss and comprehensive loss for the period |
$ |
(2,701,213 |
) |
|
$ |
(4,918,184 |
) |
Adjustment for: |
|
|
|
Share-based compensation |
|
276,416 |
|
|
|
150,471 |
|
Depreciation |
|
286,845 |
|
|
|
194,267 |
|
Amortization |
|
201,475 |
|
|
|
201,475 |
|
Finance cost |
|
6,547 |
|
|
|
13,013 |
|
Unrealized loss on investments |
|
- |
|
|
|
65,625 |
|
|
|
|
|
|
|
(1,929,930 |
) |
|
|
(4,293,333 |
) |
Changes in
non-cash working capital |
|
|
|
Receivables |
|
(774,373 |
) |
|
|
(5,348 |
) |
Prepaid expenses and deposits |
|
498,348 |
|
|
|
235,519 |
|
Inventory |
|
(680,192 |
) |
|
|
(366,111 |
) |
Deferred cost of revenue |
|
13,752 |
|
|
|
- |
|
Accounts payable and accrued liabilities |
|
(90,958 |
) |
|
|
521,657 |
|
Deferred revenue |
|
(32,146 |
) |
|
|
(37,890 |
) |
|
|
|
|
Cash used in operating activities |
|
(2,995,499 |
) |
|
|
(3,945,506 |
) |
|
|
|
|
Cash
flow used in investing activities |
|
|
|
Purchase of property and equipment |
|
- |
|
|
|
(32,539 |
) |
|
|
|
|
Cash used in investing activities |
|
- |
|
|
|
(32,539 |
) |
|
|
|
|
Cash
flow from financing activities |
|
|
|
Proceeds on issue of share capital |
|
53,587 |
|
|
|
- |
|
Lease payments |
|
(95,356 |
) |
|
|
(93,192 |
) |
|
|
|
|
Cash used in financing activities |
|
(41,769 |
) |
|
|
(93,192 |
) |
|
|
|
|
Net decrease
in cash for the period |
$ |
(3,037,268 |
) |
|
$ |
(4,071,237 |
) |
|
|
|
|
Cash beginning of the period |
|
8,327,449 |
|
|
|
6,277,321 |
|
|
|
|
|
Cash end of the period |
$ |
5,290,181 |
|
|
$ |
2,206,084 |
|
|
|
|
|
Conference Call Details
Xtract One will host a conference call to
discuss its annual results on Thursday, December 7, 2023, at 5:30
pm EST. Peter Evans, Xtract One CEO and Director, and Karen Hersh,
CFO and Corporate Secretary, will provide an overview of the
interim financial results along with management’s outlook for the
business, followed by a question-and-answer period.
Investors may register for the live conference
call by clicking this link. Participants should dial in at least 10
minutes prior to the start of the call. A recording of the call
will be available on the Company’s website after the conference
call concludes.
About Xtract One
Technologies
Xtract One Technologies is a leading
technology-driven threat detection and security solution leveraging
AI to provide seamless and secure patron access control
experiences. The Company makes unobtrusive threat detection systems
that enable venue building operators to prioritize and deliver
improved patron experiences while providing unprecedented safety.
Xtract One’s innovative AI-powered Gateway product enables
companies to covertly screen for weapons at points of entry without
disrupting the flow of traffic. Its AI-based Xtract One Vision
allows venue and building operators to identify weapons and other
threats inside and outside of facilities, and Xtract One Insights
provides valuable intelligence for optimizing operations. For more
information, visit www.xtractone.com or connect on Facebook,
Twitter, and LinkedIn.
For further information, please contact:
Xtract One Inquiries
info@xtractone.comhttp://www.xtractone.com/
Media ContactKristen Aikey, JMG Public
Relationskristen@jmgpr.com - 347-394-8807
Investor Relationsxtract1@rbmilestone.com
1 Supplementary
Financial Measures:
The Company utilizes specific supplementary
financial measures in this earnings release to allow for a better
evaluation of the operating performance of the Company’s business
and facilitates meaningful comparison of results in the current
period with those in prior periods and future periods.
Supplementary financial measures do not have any standardized
meaning prescribed under IFRS and therefore may not be comparable
to measures presented by other companies. Supplementary financial
measures presented in this earnings release include ‘Agreements
pending installation’ and ‘Total contract value’ of new bookings.
Agreements pending installation reflects total value of signed
contracts awarded to the Company that has not been installed at the
customer site. ‘Total contract value of new bookings’ is comprised
of all new contracts signed and awarded to the Company, regardless
of the performance obligations outstanding as at the end of the
reporting period. Total contract value is the aggregate value of
sales commitments from customers as at the end of the reporting
period without consideration of the Company’s completion of the
associated performance obligations outlined in each contract.
CAUTIONARY DISCLAIMER STATEMENT:
This news release contains forward-looking
statements within the meaning of applicable securities laws
relating to system sales, product development, licensing,
commercialization and regulatory compliance issues and other
statements that are not historical facts. Forward-looking
statements are often identified by terms such as “will”, “may”,
“should”, “anticipates”, “expects”, “believes”, and similar
expressions or the negative of these words or other comparable
terminology. All statements other than statements of historical
fact, included in this release are forward-looking statements that
involve risks and uncertainties. There can be no assurance that
such statements will prove to be accurate and actual results and
future events could differ materially from those anticipated in
such statements. Important factors that could cause actual results
to differ materially from the Company’s expectations include but
are not limited to: results of operational activities, completion
of contracts; the Company’s limited profitability; dependence on
management; the Company’s need for additional financing and the
effects of financial market conditions and other factors on the
availability of capital; competition, including that of better
funded competitors; the impact of the Russia-Ukraine and
Israel-Palestine conflict on the global economy; the continued
impact of the COVID-19 pandemic on the global economy; the need to
build alliances and partnerships, including with customers and
suppliers; and other risks detailed from time to time in the
filings made by the Company with securities regulations. The reader
is cautioned that assumptions used in the preparation of any
forward-looking information may prove to be incorrect. Events or
circumstances may cause actual results to differ materially from
those predicted, as a result of numerous known and unknown risks,
uncertainties, and other factors, many of which are beyond the
control of the Company. The reader is cautioned not to place undue
reliance on any forward-looking information. Such information,
although considered reasonable by management at the time of
preparation, may prove to be incorrect and actual results may
differ materially from those anticipated. Forward-looking
statements contained in this news release are expressly qualified
by this cautionary statement. The forward-looking statements
contained in this news release are made as of the date of this news
release and the Company will update or revise publicly any of the
included forward-looking statements only as expressly required by
applicable law.
No securities exchange or commission has
reviewed or accepts responsibility for the adequacy or accuracy of
this release.
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