Thanks, operator. Good morning, everyone.

Thank you for joining us today. Vext's third quarter 2025 financial results were released earlier this morning.

The press release, financial statements, and MD&A are available on SEDAR+ as well as on the Vext website at vextscience.com. We would like to remind listeners that portions of today's discussion include forward-looking statements and that forward-looking statements are included in today's filings.

There can be no assurance that these forward-looking statements will prove to be accurate or that management's expectations or estimates of future developments, circumstances, or results contained therein will materialize. Risks and uncertainties that could affect future developments, circumstances, or results are detailed in the MD&A and Vext's other public filings that are made available on SEDAR+.

We encourage listeners to read those risk factors in conjunction with today's call. As a result of these risks and uncertainties, the developments, circumstances, or results predicted in forward-looking statements may differ materially from actual developments, circumstances, or results.

This call also includes non-IFRS financial information and such non-IFRS financial measures are subject to the disclosures and reconciliations included in our press release disseminated earlier today as well as the MD&A. Forward-looking statements made during this conference call are made as of the date of this call.

Vext disclaims any intention or obligation to update or revise such information except as required by applicable law. Vext's financial statements are presented in US dollars and the results discussed during this call are in US dollars.

I will now pass the call over to Eric Offenberger, Chief Executive Officer of Vext.

Thanks, Priyam. Good morning, everybody, and thank you for joining our third quarter 2025 financial results conference call.

I am joined today by Trevor Smith, Vext CFO. Q3 was a solid quarter for Vext.

Our results reflect a mix of continued progress in Ohio and consistent execution in Arizona. Revenue was $12.7 million, up 41% year-over-year, driven by the full quarter contribution from our Athens and Jeffersonville dispensaries in Ohio and continued resilience in Arizona.

We once again generated positive operating cash flow, something we've done for the fourth consecutive quarter now, and continued to strengthen the foundation of our business. Across our two operating states, we're seeing very different market dynamics, and our model is proving resilient in both.

Ohio continues to gain momentum as adult-use sales expand and our retail footprint grows. We're positioning the business to capture more of the demand through continued retail expansion and improved cultivation output.

Arizona, on the other hand, remains a mature and competitive market that's working through excess supply and lower pricing. Our team continues to do a great job managing through it, consistently outperforming state averages, generating positive adjusted EBITDA, and protecting margins through a focus on efficiency and customer loyalty.

Turning first to Ohio. Ohio continues to stand out as a growth engine for Vext.

Revenue in the state was steady this quarter, with retail growth from the ramp-up of our third and fourth dispensaries in Athens and Jeffersonville offsetting intentionally lower third-party wholesale activity, consistent with our shift toward a more retail-focused model. Our four operating dispensaries continued to perform well, supported by steady customer traffic, strong customer retention, and ramping up store-level execution.

The addition of drive-thrus to select dispensaries has also been a clear success, driving convenience, higher visit frequency, and reinforcing the strength of our retail-centered vertical platform approach. We're adding drive-thrus across our retail platform wherever permitting allows, and results have been consistently positive.

During the quarter, we increased flower inventory in Ohio in anticipation of our next phase of retail growth. While the timing of our well-positioned Fairfield store opening has shifted into early 2026 due to permitting-related delays, we're excited to bring our three remaining locations online through 2026 and expect them to meaningfully contribute to our results.

Trevor will speak to the financial impact in more detail, but at a high level, we expect to monetize our excess inventory through the wholesale channel throughout the remainder of the year, enhancing cash generation. With Portsmouth consolidated as of October 1st and cultivation yields improving meaningfully, we expect to see strong revenue growth in quarter four as throughput increases and more of our retail network contributes for a full quarter.

Beyond that, we'll focus on completing construction of our three remaining locations to reach the state license cap of eight dispensaries during 2026. While initial opening timelines targeted early 2026, store launches will ultimately align with the pace of permitting and regulatory approvals.

As these milestones are achieved, we expect our larger footprint to meaningfully expand our reach, positioning Vext for continued growth in one of the country's most promising adult-use markets. Turning to Arizona.

Our operations continued to perform well, with our sales exceeding state averages on a per-store basis and demonstrating the strength of our retail execution and local customer base. The broader market, however, remained soft, with statewide sales down about 12% sequentially and 6% year-over-year due to pricing pressure and typical summer seasonality.

Our focus remains on efficiency and margin protection in what continues to be a competitive environment. Selling our own brands through our retail network, maintaining tight operational controls and strong yields from our Eloy cultivation facility, which continues to exceed market averages, have helped us maintain positive adjusted EBITDA despite multi-year revenue declines across the state.

We believe our above-average execution in Arizona is a clear indicator of our ability to not only sustain performance, but win in markets as they mature and grow increasingly competitive. Against this backdrop, we're entering year-end with momentum and a stronger foundation to build on.

In Ohio, we're continuing to see strong, high-margin growth as the adult-use market expands, while in Arizona, our team is proving we can stay profitable and efficient in a competitive environment. That balance between growth and stability, supported by our capital-light model and focus on vertically integrated, disciplined operations, has enabled us to deliver solid cash flow margins through the year.

With much of the heavy lifting on acquisitions and build-outs now behind us, our focus is on converting more of that growth into free cash flow, strengthening our balance sheet, and delivering steady, long-term value for our shareholders. Before handing the call over to Trevor, I want to thank our team for their continued hard work and focus.

Even in a tougher quarter with increased seasonality in Arizona, we delivered positive cash flow, kept expenses in line, and stayed on track with our growth plan in Ohio. With that, over to Trevor for a review of the financials.

Trevor?

Thanks very much, Eric. The third quarter reflected continued execution in a mixed market environment.

Revenue was $12.7 million compared with $13.4 million in the second quarter of 2025 and $8.9 million in the third quarter of 2024. On a year-to-date basis, revenue reached $37.6 million, up 46% from 2024, driven primarily by the expansion of our Ohio retail operations and steady performance in Arizona.

Behind these top-line results, we're seeing solid operational momentum, especially in cultivation. As noted last quarter, one of the areas we've been focused on is better aligning our cultivation footprint with retail demand to support margins across the business.

Those efforts are showing real progress. Over the past two years, our weighted average yields have steadily improved, up about 10% in the third quarter of 2024 compared to the prior year, and a further up 15% in the third quarter of this year.

More recently, two pilot programs we initiated to add incremental, capital-light cultivation capacity delivered test yields nearly 50% above our current averages. These early results highlight a meaningful opportunity to improve throughput and cost efficiency as the programs scale, and we look forward to keeping you updated.

As Eric outlined, it's worth noting that we intentionally built additional flower inventory in Ohio during the quarter in anticipation of the Fairfield store launch and had more sellable grams on hand at the end of Q3 versus Q2. With that opening delayed slightly into 2026, there was a short-term impact on working capital and operational cash flow in the quarter.

However, we remain well positioned to capture additional revenue and cash conversion over the next few months. Inventory stood at $8.3 million, a sequential decline.

The decrease in inventory valuation, despite the just-mentioned increase in sellable grams, reflects a realignment of our inventory with current market conditions and production efficiencies. Under IFRS accounting, this adjustment temporarily increased cost of goods sold in the quarter, and we expect margins to normalize as that inventory sells through in Q4.

Adjusted EBITDA came in at $2.1 million, representing a 16.7% margin. The decline in adjusted EBITDA compared to prior quarters was driven primarily by lower wholesale flower prices in Arizona, which compressed margins and reduced the IFRS fair value of biological assets.

It is important to note that these impacts were non-cash working capital adjustments tied to market pricing rather than operations. When adjusted for these temporary factors that are required under IFRS, our core profitability remained consistent with our run rate earlier this year.

Operating cash flow for Q3 was $1.26 million, or a 9.9% cash flow margin. The wholesale pricing movement I just mentioned created a working capital impact that drove much of the sequential decline in operating cash flow despite stable underlying demand.

Adjusting for the temporary working capital items, including the Ohio inventory build, combined with progress we made against legacy income tax payments, our operating cash flow would have been in line with our performance over the first half of the year, which speaks to the strength of our core operations. Operating expenses were down year-over-year and down as a percentage of revenue, reflecting continued cost discipline even as we expanded our retail footprint.

We're seeing operating leverage begin to show through and expect that to continue as new stores are consolidated. On the balance sheet, we ended the quarter with $3.7 million in cash.

Looking ahead, the pieces are in place for a stronger finish to the year. With Portsmouth now consolidated, cultivation yields improving, and a solid foundation in both states, we expect revenue, adjusted EBITDA, and cash flow to step up meaningfully in the fourth quarter.

Our focus remains on generating cash, maintaining cost discipline, and funding our Ohio expansion through steady, internally driven growth. Supported by growing momentum in Ohio, steady operational improvements in Arizona, and a disciplined capital-light strategy, we expect to deliver consistent financial performance through year-end and build on that strength heading into 2026.

Thank you, everyone, for joining us for our third quarter 2025 financial results conference call. I'll now turn it over to the operator for your questions.

Oh, thank you. Sorry, I was on mute.

Good morning, guys. Solid quarter.

Couple questions on Arizona. Any positive impacts from the enforcement on hemp-derived products?

Secondly, can you give us a better feel for the seasonality on traffic trends and average spend in the summer when the weather is in the triple digits? Thirdly, do you think the wholesale market has bottomed in Arizona?

Just give us a feel for wholesale prices and if you think they've bottomed out.

Thanks, Paul. As far as we can tell, the seasonal traffic was about the same patterns as last year.

We didn't really see an impact of customer base that was that significant compared to the pricing compression and what happened that way. I think really most of the issues are still price-driven.

That said, you also have more stores this year than last year, but not significantly. You did have some of that and people moving stores and doing some of those things that came online in the third quarter with the heat in Arizona.

As far as wholesale prices, my gut feeling tells me no, it's not bottomed out yet. Does it fall as fast as it has been?

I don't think so. I think some people are producing at below-cash numbers to generate cash.

It's a question of how deep their pockets are and how long they want to sustain that. I think that that really has created the problem of just strictly pure economics oversupply.

That's kind of our take on the whole thing.

Great. Switching over there to Ohio, where are you seeing the most upside in terms of your expectations on the traffic side or the average price and basket size?

What's the best case and worst case in terms of opening all eight stores into 2026? Then lastly, how many of the eight do you think can have drive-thrus?

When we get all done, I'll start with the last part. The seven out of the eight can have drive-thrus, and we think we'll be there by the end of the year with them as they come online.

Anything new is being built with a drive-thru. There's two that have to be retrofitted, and those are based upon state approvals and zoning.

That's it. As far as opening by the end of '28, it really gets down to is how do you do on permitting, where are you at with zoning, that type of stuff.

Fortunately, Scott, our in-house counsel, is very good at real estate transactions and knows the space very well within Ohio and does a good job getting them up and going for us. That's been a real real positive.

Ohio, what we see is traffic patterns are still pretty good in Ohio. Again, they're bringing on new stores and you're seeing some competition.

I think what's really happening from our store standpoint is with our vertical model, we're maintaining market share, but you're doing that at a price, right? The consumer is obviously getting a cheaper market, cheaper pricing than they have been getting.

With the cultivation cap in Ohio, I think that's been a positive. I think some of the brands that were primarily wholesaling are bringing some of their own retail online.

Lo and behold, they're starting to sell their brands through their own stores like everywhere else does, in order to maintain their margins and keep their margins solid. With Vext, we have good in-house brands, good product development.

We know we've always worked on it, and we always talked that we're not a brand company and we're really truly not, but we market our own brands and our own quality and ensure that into the store to help maintain the margin. We just don't see it as being a big wholesale play for us as much as to control your cost and like a private label.

The quality is there, the consistency, and getting the customer pattern, and then peppering it in with other products that we have with people we work with.

Great. Trevor, one quick one for you.

Do you view the operating cash flow margin as bottoming this quarter in terms of if you look out to remainder of the quarters in the year?

Yes, absolutely. Primarily function of that markdown in average selling price per gram.

That had a ripple effect through all the IFRS evaluations on inventory. Then we got caught up a bit on the legacy income tax payments of the almost $900,000, about two-thirds of it related to the 2017 and 2018 audits that have already been completed.

Great. Thanks for that detail.

Thanks, Eric. Thanks, Trevor.

Thanks, Paul.

Good morning. Thanks for taking my question.

I just want to go back to the margins. Obviously, we're seeing quite a bit of volatility in that over the past few quarters and even the past few years.

I don't know if this is a question for Trevor or Eric, but where would you expect the margins to stabilize? I know you indicated the first half of this year, but even then, margins were swinging around a fair bit quarter-on-quarter.

Maybe if you had any color or commentary on where you would expect the margins to stabilize once all the stores are open, your vertically integrated model is humming in Ohio, that would be helpful.

Sure. I still think it's probably going to revert back closer to the first half of the year.

You have some price compression that we don't necessarily see recovery overnight on, but at the same time, we do expect meaningful improvements in yield, which will help on the cost structure side. It's noisy and it has a lot to do with when we plant, how we plant, what day the end of the quarter ends on, the changes in valuation, and I think we're still one of the few companies under IFRS, we get a lot of noise on the biological assets.

I would expect margins, like I said, revert closer to the first half of the year, again mostly due to cost efficiencies.

Got it. Okay.

Then on the cultivation yields, we've been hearing yield improvements are kind of across the street from other operators, too. The quantum, I guess, that Vext is looking at there with kind of the 10% and 15% and testing at 50%, that seems to be a bit larger than some of the peers are doing.

Where do you think you stack up relative to peers? Is this you guys catching up, keeping pace, or do you think you're leapfrogging some folks?

Some context on kind of where you think you are on the yield side would be helpful.

Sure. I think historically the company may have been a bit of a laggard, but over the last couple years, we've caught pace.

I think if the pilot program widely adopts the way the two trial test runs have, we expect to leapfrog a fair amount of the pack.

Got it. Then finally, maybe just in terms of 2026, obviously opening three or looking to open three additional Ohio stores.

What else would be in your CapEx budget for next year? What kind of projects are you looking at?

I think at this point in time, Andrew, what we're doing is staying focused on opening the eight stores and generating cash and improving the balance sheet and looking for opportunities that make sense from an accretive standpoint and maximizing the shareholder value. We don't have anything that are jumping out at us or anything that we're not looking at, as a general rule.

That said, you follow the space as well as anybody, and we've always thought you do a great job with it. What's happening with AYR, PharmaCann, the Forefronts and stuff along those lines.

We're trying to see kind of how those assets get released into the market and what happens with them, and we think there's going to be some other ones. We think there's going to be some good opportunities and be prepared.

It's great color. Appreciate that, Eric and Trevor.

I'll get back into queue. Thanks for taking my questions.

Thank you. Hey, Eric.

Hey, Trevor. Congrats on the quarter.

I got a three-parter and then a single question if that's okay. On Ohio, I'm just wondering how you expect your wholesale business to trend as you continue to turn your stores online?

Second part: how much of your current internal capacity do you think your eight stores would utilize? Then, I guess going forward after that, what are your expectations for the Ohio wholesale business after those stores are online?

Josh, I'll get part of that, and then we'll let Trevor with the specifics because obviously that's his bailiwick. From a wholesale strategy, it's not going to be any different.

We're going to continue to support our stores and run the brands. We typically try to do at least 70% internal, 30% on the other ones as the stores come online and open and the efficiencies from the cultivation.

That really will support where the mix ends up. I think that's really been a good indication.

Today, that strategy is working well, and we'll continue with that strategy until we see a condition change in the market. I'll let Trevor address kind of the specifics within that answer.

Sure. Good morning, Josh.

Cultivation yields taking a step forward and the delay of the Fairfield opening, we're sitting on a fair amount of inventory in Ohio, more than we normally would in terms of sellable grams. I would expect that to get sold through in the fourth quarter retail promotion as well as wholesale sales.

Year-over-year we're already up about 50% from last year. I'd probably expect that to continue a little bit just because of the prior mentioned major leap forward in cultivation yields that we're expecting and when those will come in on the first harvest relative to when the new stores will open and ramp.

We're always constantly managing that supply-demand curve. I'd expect wholesale to be elevated for probably next several quarters.

Then as Eric mentioned, our long-term strategy is always to pair retail distribution with our cultivation production so we're not relying on the swings in the wholesale market. Long term, our facility is going to be designed to service all of those eight at those 70% internal measures that Eric was mentioning.

I think we'll kind of see how the Ohio market develops in the coming quarters before we're going to make any decisions beyond that.

Super. Appreciate the detail there.

On the accounts receivable line, that's an issue that operators have been noting for upwards of a year now. I'm just wondering, are you seeing any of the accounts receivable issues that some of your peers are mentioning?

No, thankfully. Our team is doing a really good job on that front.

As I mentioned, wholesale is up about 50% year-to-date. AR is only up about 35% and our current status for AR as we disclosed in our MD&A is still at 90%.

We feel pretty good about our relationships with our customers, appreciate their business. I think there's ample opportunity and we've carved out some shelf space there.

It is something that we are cognizant of has been kind of an industry-wide concern.

Forgive me if I try to sneak in a third question. I'm going to count my first one as one question.

For the remaining three stores left to open in Ohio, I know you've mentioned in the past maybe above-average expectations versus the state. I'm just wondering, does those expectations still hold given what you've seen in the market?

We're still very optimistic about where we were at. The strategy, the traffic patterns, where we're trying to put these stores and how they've been embraced.

As we've talked about before, the sixth store is something we're really excited to see open. We really are happy with the landlord and the location, we're really happy to see that.

We think store seven will be in the Columbus market, and hopefully we'll get the permitting and can get the provisionals done with the state here pretty quickly and get that up and going. Store eight, it'll be in the Cincinnati area.

We're happy with where that store is going to be located, too. Josh, I can't tell you how excited I am with what Scott's been able to accomplish in Ohio on the real estate front.

It's just been phenomenal. Everything, the expectations of when we brought him on and my past work with him, he's lived up to it and so has the team in Ohio.

Could not be happier with everybody's performance.

Appreciate the color. Thank you.