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Xtract One Releases Second Quarter Fiscal 2024 Results

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

“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

1Supplementary 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    
               

 


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