XTRA Xtract One Technologies Inc

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 first quarter results for the three months ended October 31, 2024. All information is in Canadian dollars unless otherwise indicated.

First Quarter Highlights

• Quarterly revenue of $3.6 million for the three months ended October 31, 2024 versus $3.1 million in the prior-year period.

• Gross margin of 64% for the first quarter of fiscal 2025 versus 67% in the prior year period.

• Total contract value of new bookings1 was $4.2 million for the three months ending October 31, 2024 as compared to $9.6 million for the same period last year. The total contract value of new bookings in the prior-year period also included $5 million from a large global entertainment organization.

• Contractual backlog was $14.0 million at the end of the first quarter as compared to $9.5 million in the prior-year period, excluding an additional $12.9 million of agreements pending installation1 versus approximately $10.6 million at the end of the first quarter of fiscal 2024.

“As expected, first quarter revenue, while up year-over-year, was a little lighter in new bookings than recent periods reflecting order timing, as we focused on bringing Xtract One Gateway to market and actively engaged in business development initiatives to build our pipeline for the remainder of fiscal 2025,” stated Peter Evans, Chief Executive Officer of Xtract One. “We continue to win customers outside of our core sports and live entertainment markets, welcoming new clients in the Education, Healthcare, and Manufacturing sectors, which made up 67% of the total contract value of new bookings this quarter. Demand remains strong as evidenced by our growing sales pipeline, and we’ve been pleased with the initial response of our newly announced Xtract One Gateway, particularly in high-traffic facilities like schools, convention centers, and commercial properties where we offer a highly differentiated solution. We expect to see revenue accelerate as the year progresses and continue to make progress on our path to profitability.”

Financial Results for the Three Month Period Ended October 31, 2024

Consolidated revenue was $3.6 million for the three months ended October 31, 2024 as compared to $3.1 million for the same period last year, reflecting new business contract wins and a greater number of installations. Gross profit was $2.3 million, or a margin of 64%, in the fiscal 2025 first quarter versus $2.1 million, or 67% of sales, in the prior-year period.

Comprehensive loss was $2.7 million for the three month period ended October 31, 2024 as compared to $2.7 million for the same period in fiscal 2024. This reflects higher revenue and gross profit, largely offset by an increase in operating expenses.

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 three month periods ended October 31, 2024 and 2023, which can be found on the Company’s website and 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 tomorrow, December 6, 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 844-481-3016 (412-317-1881 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 facility building operators to prioritize and deliver “Walk-right-In” experiences while providing unprecedented safety. Xtract One's innovative portfolio of AI-powered Gateway solutions excels at allowing facilities to discreetly screen and identify weapons and other threats at points of entry and exit without disrupting the flow of traffic. With solutions built to serve the unique market needs for schools, hospitals, arenas, stadiums, manufacturing, distribution, and other customers, Xtract One is recognized as a market leader delivering the highest security in combination with the best individual experience. 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.comMedia Contact: Kristen Aikey, JMG Public Relations, 212-206-1645, kristen@jmgpr.comInvestor 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 of 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 Months Ended October 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 months ended October 31, 2024 and 2023:

		Three months ended October 31,
		2024				2023
Revenue		$	3,627,837			$	3,116,353
Cost of revenue			1,313,430				1,031,942
Gross profit		$	2,314,407			$	2,084,411
Operating expenses
	Selling and marketing	$	1,663,159			$	1,507,657
	General and administration		1,864,192				1,647,816
	Research and development		1,799,611				1,726,191
Total operating expenses		$	5,326,962			$	4,881,664
Loss before the undernoted			(3,012,555	)			(2,797,253	)
Other income
	Interest and other income		74,919				96,040
Net loss for the period		$	(2,937,636	)		$	(2,701,213	)
Other comprehensive income for the period
	Currency translation differences for foreign operations		282,819				-
Comprehensive loss for the period		$	(2,654,817	)		$	(2,701,213	)
Weighted average number of shares			218,397,852				198,354,825
Basic and diluted loss per share		$	(0.01	)		$	(0.01	)

Unaudited Interim Statements of Financial Position as at October 31, 2024 and July 31, 2024

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 October 31, 2024 and July 31, 2024:

		October 31,2024				July 31,2024
Assets
Current assets
	Cash and cash equivalents	$	6,119,805			$	8,628,521
	Receivables		3,693,439				3,862,199
	Prepaid expenses and deposits		957,697				949,012
	Current portion of deferred cost of revenue		371,299				371,309
	Inventory		3,985,644				3,688,246
			15,127,884				17,499,287
Property and equipment			2,154,875				2,135,956
Intangible assets			4,890,908				4,465,755
Non-current portion of deferred cost of revenue			405,027				496,868
Right of use assets			1,117,504				344,304
Total assets		$	23,696,198			$	24,942,170
Liabilities
Current liabilities
	Accounts payable and accrued liabilities	$	3,868,761			$	3,991,292
	Current portion of deferred revenue		3,987,315				3,443,524
	Current portion of lease liability		171,312				190,400
			8,027,388				7,625,216
Non-Current liabilities
	Non-current portion of deferred revenue		2,903,270				3,155,579
	Non-current portion of lease liability		1,021,537				190,526
		$	11,952,195			$	10,971,321
Shareholders' equity
	Share capital	$	144,379,881			$	144,372,452
	Contributed surplus		16,584,492				16,163,950
	Accumulated deficit		(149,503,189	)			(146,565,553	)
	Accumulated other comprehensive income		282,819				-
		$	11,744,003			$	13,970,849
Total liabilities and shareholders' equity		$	23,696,198			$	24,942,170

Unaudited Interim Statements of Cash Flows for the Three Months Ended October 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 three month periods ended October 31, 2024 and 2023:

			Three months ended October 31,
			2024				2023
Cash flow used in operating activities
	Loss for the period		$	(2,937,636	)		$	(2,701,213	)
	Adjustment for:
		Share-based compensation		423,225				276,416
		Depreciation		347,318				286,845
		Amortization		207,808				201,475
		Finance cost		10,663				6,547
				(1,948,622	)			(1,929,930	)
	Changes in non-cash working capital
		Receivables		196,478				(774,373	)
		Prepaid expenses and deposits		(6,457	)			498,348
		Inventory		(416,490	)			(680,192	)
		Deferred cost of revenue		91,851				13,752
		Accounts payable and accrued liabilities		(130,246	)			(90,958	)
		Deferred revenue		258,663				(32,146	)
	Cash used in operating activities			(1,954,823	)			(2,995,499	)
Cash flow used in investing activities
	Internally developed intangible assets			(445,912	)			-
	Acquisition of right of use asset			(5,028	)			-
	Cash used in investing activities			(450,940	)			-
Cash flow used in financing activities
	Proceeds on issue of share capital			4,745				53,587
	Lease payments			(78,920	)			(95,356	)
	Cash used in financing activities			(74,175	)			(41,769	)
	Effect of exchange rate changes on cash and cash equivalents			(28,778	)			-
Net decrease in cash for the period			$	(2,508,716	)		$	(3,037,268	)
Cash beginning of the period				8,628,521				8,327,449
Cash end of the period			$	6,119,805			$	5,290,181