Xtract One Releases Second Quarter Fiscal 2024 Results

Xtract One Technologies Inc.

Strong Year-over-Year Growth; Company on Track for Record Performance

TORONTO, March 07, 2024 (GLOBE NEWSWIRE) -- 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, today announced fiscal second quarter results for the three and six month periods ended January 31, 2024. All information is in Canadian dollars unless otherwise indicated.

Second Quarter Financial Highlights

• Revenue of $2.9 million for the three months ended January 31, 2024 versus $0.8 million in the same period in the prior year.
  
  

• Gross margin of 61.1% for the second quarter as compared to 47.1% for the same period last year.
  
  

• Announced several new customer wins across multiple market segments during the quarter, including with the Baird Center, Wisconsin’s largest convention center, CPKC Stadium, the first stadium purpose-built for a professional women’s soccer team, H-E-B Centre at Cedar Park home of the Texas Stars, and the Community Health Network.
  
  

• Total contract value of new bookings¹ was $5.1 million for the three months ending January 31, 2024 as compared to $1.1 million for the same period last year.
  
  

• Platform contractual backlog of $12.2 million as of January 31, 2024 as compared to $3.4 million as of January 31, 2023; excludes an additional $10.0 million of agreements pending installation¹ versus approximately $3.0 million of agreements pending installation last year.
  

“I’m pleased to announce another solid quarter for Xtract One, with strong margins and top line growth setting the stage for our best year ever,” stated Peter Evans, Chief Executive Officer of Xtract One. “Quarterly revenue rose to nearly $3 million – more than triple that of fiscal 2023 – and we continued to build our backlog of sales commitments, now over $22 million versus approximately $7 million last year. While the fiscal second quarter is typically impacted by seasonal factors, we remain on track for record-setting performance, with strong results anticipated in the second half of the fiscal year. We are committed to meeting the increasing demand of our expanding customer base and look forward to growth acceleration this year and beyond.”

Financial Results for the three month period ended January 31, 2024

Consolidated revenue was $2.9 million for the three months ended January 31, 2024 as compared to $0.8 million for the same period in fiscal 2023. Revenue from the Platform operating segment was $2.8 million for the three month period ended January 31, 2024 as compared to $0.7 million for the same period in fiscal 2023, reflecting new business contract wins and overall increasing demand. Revenue for the Xtract operating segment was $0.2 million for the three months ended January 31, 2024 as compared to $0.1 million for the same period in fiscal 2023.

Loss and comprehensive loss was $3.3 million for the three month period ended January 31, 2024 as compared to $4.3 million for the same period in fiscal 2023. The decrease was primarily attributable to the increase in Platform revenue and corresponding higher gross profit, while total operating expenses remained relatively flat year-over-year.

This 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 January 31, 2024 and 2023, which can be found under the Company’s profile on SEDAR+ at www.sedarplus.ca.

Conference Call Details

Xtract One will host a conference call to discuss its results on Friday, March 8, 2024, at 10:00 am 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.

The webcast and presentation will be accessible on the company’s website. The webcast can be accessed here and the telephone number for the conference call is 877-317-6789 (412-317-6789 for international callers).

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 View 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.com, http://www.xtractone.com    
Media Contact: Kristen Aikey, JMG Public Relations, 212-206-1645, kristen@jmgpr.com
Investor Relations: Chris Witty, Darrow Associates, 646-438-9385, cwitty@darrowir.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 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 the risks detailed from time to time in the continuous disclosure 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.

Unaudited Interim Statements of Loss and Comprehensive Loss for the Three and Six Month Periods Ended January 31, 2024, and 2023

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 three and six month periods ended January 31, 2024, and 2023:

			Three months ended January 31,								Six months ended January 31,
				2024				2023				2024				2023
Revenue
Platform revenue			$	2,750,418			$	721,334			$	5,746,624			$	1,147,872
Xtract revenue				169,640				93,590				289,787				313,858
Total revenue			$	2,920,058			$	814,924			$	6,036,411			$	1,461,730
Cost of revenue
Platform cost of revenue			$	1,081,337			$	385,866			$	2,059,899			$	579,050
Xtract cost of revenue				55,049				53,711				108,429				168,202
Total cost of revenue			$	1,136,386			$	439,577			$	2,168,328			$	747,252
Gross profit			$	1,783,672			$	375,347			$	3,868,083			$	714,478
Operating expenses
Selling and marketing			$	1,299,727			$	961,095			$	2,807,384			$	2,451,454
General and administration				1,693,019				1,810,887				3,340,835				3,388,105
Research and development				2,058,606				1,696,094				3,784,797				3,831,869
Loss on inventory write-down				107,013				314,103				107,013				314,103
Loss on retirement of assets				-				81,274				-				81,274
Total operating expenses			$	5,158,365			$	4,863,453			$	10,040,029			$	10,066,805
Loss from operations				(3,374,693	)			(4,488,106	)			(6,171,946	)			(9,352,327	)
Other income
Unrealized gain on investments				-				182,292				-				116,667
Interest and other income				56,543				34,444				152,583				46,106
Loss and comprehensive loss for the period			$	(3,318,150	)		$	(4,271,370	)		$	(6,019,363	)		$	(9,189,554	)
Weighted average number of shares				198,495,594				163,181,255				198,463,158				163,180,233
Basic and diluted loss per share			$	(0.02	)		$	(0.03	)		$	(0.03	)		$	(0.06	)

Unaudited Interim Statements of Financial Position as at January 31, 2024 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 January 31, 2024, and July 31, 2023:

			January 31, 2024				July 31, 2023
Assets
Current assets
	Cash and cash equivalents		$	4,192,460			$	8,327,449
	Receivables			2,151,527				847,429
	Prepaid expenses and deposits			626,186				1,026,668
	Current portion of deferred cost of revenue			308,474				-
	Inventory			1,767,167				1,602,971
				9,045,814				11,804,517
Property and equipment				2,319,476				2,063,817
Intangible assets				4,440,750				4,843,700
Non-current portion of deferred cost of revenue				479,926				-
Right of use assets				212,119				286,796
Total assets			$	16,498,085			$	18,998,830
Liabilities
Current liabilities
	Accounts payable and accrued liabilities		$	2,423,277			$	2,519,350
	Deferred revenue			4,558,185				1,379,741
	Current portion of lease liability			199,652				232,483
				7,181,114				4,131,574
Non-current portion of lease liability				63,420				124,358
			$	7,244,534			$	4,255,932
Shareholders' equity
	Share capital		$	135,954,748			$	135,823,337
	Contributed surplus			14,818,864				14,420,259
	Accumulated deficit			(141,520,061	)			(135,500,698	)
			$	9,253,551			$	14,742,898
Total liabilities and shareholders' equity			$	16,498,085			$	18,998,830

Unaudited Interim Statements of Cash Flows for the Six Month Periods Ended January 31, 2024 and 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 cash flows for the six month periods ended January 31, 2024, and 2023:

				Six months ended January 31,
					2024				2023
Cash flow used in operating activities
	Loss and comprehensive loss for the period			$	(6,019,363	)		$	(9,189,554	)
	Adjustment for:
		Share-based compensation			445,167				529,942
		Depreciation			608,308				414,539
		Amortization			402,950				402,950
		Finance cost			12,212				24,413
		Loss on inventory			107,013				314,103
		Loss on retirement of assets			-				81,274
		Other income			-				(20,000	)
		Unrealized gain on investments			-				(116,667	)
					(4,443,713	)			(7,559,000	)
	Changes in non-cash working capital
		Receivables			(1,304,098	)			1,250,527
		Prepaid expenses and deposits			400,482				140,322
		Inventory			(1,838,646	)			(818,202	)
		Deferred cost of revenue			74,264				-
		Accounts payable and accrued liabilities			(96,073	)			1,697,862
		Deferred revenue			3,178,444				205,832
	Cash used in operating activities				(4,029,340	)			(5,082,659	)
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				84,849				950
	Lease payments				(190,498	)			(186,384	)
	Cash used in financing activities				(105,649	)			(185,434	)
Net decrease in cash for the period				$	(4,134,989	)		$	(5,300,632	)
Cash beginning of the period					8,327,449				6,277,321
Cash end of the period				$	4,192,460			$	976,689