VSBLTY Groupe Technologies Corp.

Okay. Good afternoon, and welcome, everyone, to VSBLTY's earnings call.

This call is being recorded. [Operator Instructions] However, we may not be able to answer every question and suggest that you reach out to Investor Relations via our website.

Our call today will be led by VSBLTY's President and Chief Executive Officer, Jay Hutton. Before we begin our formal remarks, I would like to remind everyone that some of the statements on this conference call may be forward-looking statements.

Forward-looking statements may include, but are not necessarily limited to, financial projections or other statements of the company's plans, objectives, expectations or intentions. These matters involve certain risks and uncertainties.

The company's actual results may differ significantly from those projected or suggested and any forward-looking statements due to a variety of factors, which are discussed in detail in our regulatory filings. A recording of today's presentation will be available in the Investor Relations section of our website, www.vsblty.net.

I will now turn the call to President and CEO, Jay Hutton. Go ahead, Jay.

Thank you, Jonathan. Good afternoon, everyone.

And for those of you that are on the West Coast like me, good morning, and thank you all for joining us. Today's call covers our audited 2024 financial results and our performance through the end of 2025 third quarter.

I want to begin by acknowledging that the timing of our filings has been challenging. The audit is now complete, and we are focused on restoring full regulatory compliance and advancing the business with discipline and transparency.

Before turning to the numbers, I also wanted to address our audit relationship directly and out of the gate. The Board has made the decision to move forward with a new external audit firm, and we are in the final stages of that transition.

The decision was not taken lightly, while with respect to the capabilities of our current auditors, we do not feel the level of urgency and responsiveness aligned with the needs of our growing public company operating in dynamic markets. The Board concluded that a change was necessary to ensure that our reporting time lines were met and our strategic objectives were supported going forward.

This is about alignment and forward momentum. Now turning to fiscal 2024.

A reminder that we report exclusively in U.S. dollars and all numbers cited will be expressed in that currency.

For the year ended December 31, 2024, revenue increased to approximately $1.51 million compared to 869 in 2023 -- $869,000 in 2023. That growth was driven primarily by media management and professional services.

More importantly, gross performance improved materially. In 2024, we reported a positive gross profit of $61,000 compared to a gross loss in 2023.

That shift reflects improved deployment efficiency, better cost alignment and stronger execution discipline. Operating loss was reduced significantly year-over-year from approximately $8.95 million in 2023 to $5.45 million in 2024.

That is a reduction of more than $3.5 million. While we are not yet profitable, the direction of travel is clear.

And once we've sorted out the cost side of our business, the ability to get to profitability now is a much easier or at least well-understood task. Turning now to 2025.

For the 9 months ended September 30, 2025, revenue reached approximately $1.86 million for the first 9 months of 2025 compared to $968,000 in a similar period in 2024, effectively doubling year-over-year for the comparable period. Gross profit for that 9-month period improved to approximately $414,000, up from $236,000 in the prior year.

Net loss for the 9 months ended September 30, 2025, is approximately $4.96 million, reflecting continued investment in product development and deployment capacity while maintaining tighter cost controls than in earlier periods. Stepping back for a moment, I would summarize our financial progress in 3 ways: first, revenue momentum is improving; second, gross margins have stabilized and turned positive; third, operating discipline has materially strengthened.

Now I would like to address near-term revenue visibility. We are currently in advanced stages of closing 2 or 3 contracts across both retail media and security verticals.

These opportunities are at various stages of final documentation and commercial negotiation, while we remain disciplined in not recognizing revenue until contracts are executed and deployments begin, the level of activity gives us increasing confidence in near-term revenue growth. Assuming successful execution, we expect these engagements to begin contributing in the short term to the company's numbers.

Turning now to a more strategic update. In separate disclosures, we have updated shareholders on Winkel Media, our joint venture with Anheuser-Busch.

The Winkel network has recently added approximately 5,400 locations, further scaling its in-store retail media footprint across Latin America. As with any network expansion, there is a natural lag between install, activation, advertising onboarding and full revenue ramp.

However, we believe this recent expansion will have meaningful revenue impact in 2026, both at the joint venture level and indirectly for VSBLTY as the technology platform powering that network. This scale reinforces the long-term value of our retail media strategy and demonstrates that patient deployment can lead to substantial network expansion.

Now I'd like to speak separately about our strategic evolution within the company. Over the past year, we've been engaging with key channel partners who bring established enterprise and government relationships in regions, including India and the Middle East.

These engagements have introduced us to large-scale opportunities requiring deep integration across multiple systems. As a result, we have formally expanded our platform capabilities into the category of data fusion.

Computer vision remains foundational to our business. We interpret live video, detect objects, analyze behavior and generate contextual intelligence in real time.

Data fusion elegantly builds on that foundation. It integrates multiple data streams, video analytics, access control systems, IoT sensors, license plate recognition, environmental inputs, satellite connection and third-party data feeds into unified operational intelligence environment, particularly valuable to militaries and to smart cities.

Instead of asking what is happening in this camera, we ask what is happening across the entire environment. This capability is particularly relevant in smart cities, command centers, integrating traffic, safety and event analytics, critical infrastructure environments such as airports, port utilities and transportation hubs, multisite enterprise security operations, integrated traffic management systems, cross-system anomaly detection and alert prioritization.

The value proposition is contextualized intelligence, reducing noise, prioritizing actionable events and enabling faster operational decision-making. You can see the value that this would have for militaries, for example, that are overloaded with inbound data in silos in different databases.

The ability to merge them and make meaning of them with artificial intelligence is the opportunity. From a commercial standpoint, data fusion deployments tend to be broader in scope, longer in duration than single site and longer in duration than single-site analytics projects.

They embed our platform deeper into mission-critical workflows and expand our addressable market, making us stickier. To be clear, this is not a pivot away from our core business, it is a natural progression of it.

Our computer vision engine remains central. Data fusion expands the intelligence layer around it.

In closing, the last year tested this organization financially and operationally. What matters now is execution.

We are seeing improving revenue trends. We are entering late-stage commercial discussions that support long-term growth and near-term revenue.

Our Retail Media joint venture continues to scale meaningfully. And we are expanding our platform into higher-level applications through data fusion, both in civilian and military markets.

I remain confident in the relevance of our technology, the markets we serve and the discipline with which we are operating. VSBLTY has a remarkably committed assembly of management developers and strategic partners.

We are highly resilient and are convinced that our true value of -- the true value of this company will begin to be expressed in the near future. With that, Jonathan, I'll open the call for questions.

Thanks, Jay. First question, will Winkel Media revenue be recognized in VSBLTY's earnings soon?

Also, what is the status with that relationship?

Revenue recognition for a software company is always challenging because it always leads to some level of disagreement and point of view between the auditors and the company. The rules are the rules.

Of course, we've got to follow them. With respect to revenue recognition, since day 1 with Winkel Media, we have recognized not a single dollar from those contract, which means we have an embedded bank of dollars that the moment we're able to recognize it under the rules for IFRS, we will be able to recognize it.

That is projected to be this calendar year. The mechanism or the mechanics of recognition of revenue have to do with when that entity, the joint venture in this case, is reliably, predictably and repeatedly making payments against those debts.

Now we have 2 engagements at Winkel that are meaningful to this discussion and a third that is relevant with respect to the balance sheet. We have a large working capital loan to them in several million dollars.

That's one. Number two, we have a SaaS trailing revenue for Software as a Service, and that has gone into deferred revenue from the very beginning.

Not $1 of that has been recognized under the IFRS revenue recognition rules. And we have a third piece that's a managed services agreement that was transferred to us in February of '25.

That is being recognized. It's the only element of the 3 that is -- of the 2 that is being recognized.

Both on the debt service and on the SaaS recognition, we expect it to impact our balance sheet Q3, Q4 of this year.

Great. Thank you, Jay.

A follow-up question regarding other partnerships. Are there any other previously announced partnerships that are starting to show fruit or potential revenue growth going forward?

Well, the answer is yes, but I'm not going to disclose them at the moment because we're at various stages of contract agreements, deployments. And under the rules, we don't announce the revenue until that revenue is real.

In fact, there is a specific prohibition for public companies to talk about what a contract could be. We are governed very aggressively with the kind of language that we're allowed to use.

And at this moment, because the company is emerging from a very difficult time, I'm going to play by all the rules and not be creative in any regard.

Understood. Can you give an update on the number of projects that you've mentioned in the past, specifically like the cooler doors?

Sure. I mean, every company has to prioritize projects against the resources that we have.

And that particular category, if you're asking me specifically to speak about cooler doors, there are 3 or 4 large customers that are evaluating in some cases or at least in one case, engineering that board engineering that product into their current product category, adding our product to their product. None of those are at the point where I'm prepared to talk about either predictive revenue or current revenue, they remain in the development modality.

Great. Thank you.

A relevant one for today. When do we resume trading?

Since you're not profitable, would there be a capital raise on the horizon? And could you talk about the current cash burn and how much you need until profitability?

So there's a few questions in there. So maybe when do we resume trading?

And then if you could talk about any potential capital raise, and what does it look like for us to become profitable?

Well, if you look at the numbers, we're around $6.5 million on an annual basis, plus or minus, to turn net profit. So that would mean that you -- that our -- if we make more than $500,000 to $550,000 in a single month, we are, by definition, profitable.

I mean these are -- it's spiky. Some months are higher than others.

But on an annualized basis, our target is between $6 million and $7 million. And we have multiple projects in the pipeline at this moment.

Some of them sitting at a very high probability, almost completed kind of thing that would satisfy that requirement by themselves. That's the kind of contract we are pursuing, which is the reason why it takes -- one thing I've learned after almost 25 years, the bigger they are, the longer they take to get done.

So it is our expectation that at least a portion of and potentially all of our burn will be managed by or addressed by revenue. If, however, an occasion arises that in order to deliver the contracts flawlessly, we may need to get additional capital, we will do that.

But we have a couple of hidden secrets in VSBLTY. One of them is that between $0.09 a share and I believe $0.75 a share, we have more than $15 million in warrants.

And it is my hope that the stock price will create an environment where it makes sense for those to come in. I'm not Pollyanna about it.

I don't believe that 100% of the dollars are going to come in just based upon the movement of the stock price. But the mechanics are clear.

And once we get announcements out and we've got a few that we are expecting soon, we believe that the marketplace will respond because the announcements, none of them are modest. They're all pretty significant.

And should we be able to land them in the time frame that I expect we should and they're of the size that they appear to be at the moment, then we will have the benefit of being able to fund the company by way of revenue. And if we have to tap the public markets, it would be by way of warrants.

I'm not dismissing the idea of a small capital raise. We could do that, but we would only do that should we be seeking execution capital.

It's to enable the contracts that we have.

And then could you touch upon just -- obviously, there's a little bit of confusion on the back of the CSE's announcement earlier today about the resumption of trading for VSBLTY?

Yes. I think it was clumsy, quite honest with you.

They said that the company has satisfied all the requirements to resume trading, leaving the inference that we are resuming trading. Well, we're not.

They don't get to make that call. We are currently in the hands of an analysis or review that occurs with BCSC as the lead, but also involves other regulatory authorities.

But BCSE is the lead. We know who our analyst is.

She's working the file. And if she gets done quickly, we'll be trading quickly.

If they take their time, it will be a little bit longer. I think the reasonable expectation is between 2 to 6 weeks.

I'm on the front end of that from an expectation point of view because the company went through a continuous disclosure review, which happens once every several years for public companies in Canada, just standard fair. We went through one in January of '25.

So that would suggest we're pretty fresh on the items that they're going to review. What they're reviewing is that the company has adequately and completely disclosed all the major events that the insiders have behaved themselves.

So they'll review the insider filings that we've got update background checks. All of that we knew was coming in terms of the various things they would ask for.

And when we submitted our application to resume trading, we submitted it with all those things with the expectation that they were going to ask us for them anyway. So we're doing everything we can to shorten the process.

But ultimately, it is the decision of the regulator, which does not respond to our persuasion influence or anything. So it is -- it runs at their speed.

Great. So we have a question.

Is it safe to say that VSBLTY has ongoing deals and discussions in progress now regarding military and data fusion deals and partnerships?

Yes.

Okay. Staying with Data Fusion, Data Fusion does seem like a very organic expansion of VSBLTY's mission.

Is it possible for you to talk about a few concrete examples of the integration of services?

Yes. Yes.

But in my example, I am not specifying a current use case, I am specifying a sample use case. Borders and perimeters have always been important to VSBLTY.

A lot of what computer vision does and can be is the ability to protect borders for insurgent activity, illegal crossings, this sort of thing, both for vehicles, people, weapons, all of that. This is partly what computer vision is very good at doing and doing so in a way that is not necessarily attended by an operator, it is autonomous.

It can do that and then inform an operator as to something that needs to be addressed. But you would imagine in a border application, maybe it's a conflict zone, maybe it's just a standard nonconflicted border, there are other things going on, right?

There's a satellite above, maybe there's drones flying above. All of those entities or capabilities are producing data, and they're pushing that data down to the ground.

Radars are picking up signatures that are pushing that into a database. There may be voice traffic.

There may be mobile detection of devices, mobile devices. All these are data pods or data streams.

Data Fusion is the idea of taking those streams into a single ingestion layer and providing a visualization of what's happening. So you see multimodalities of what's happening in a specific threat area or border area or conflict area.

That's the opportunity. I don't like to say this with too much authority, but what VSBLTY is doing in the area of signals intelligence, computer vision intelligence, satellite intelligence and of course, streaming intelligence coming from drones and other things is like a little Palantir really because the primary value proposition of Palantir is taking structured and unstructured data, congesting it into an environment where it can be viewed and made sense of.

AI has made that whole domain far more reachable. And in terms of the use cases, you can imagine if you're sitting at a border location and all this data is coming into you, today, just understanding that data is overwhelming, like just too much.

But the idea of creating a Data Fusion layer and then running AI on top of that layer to provide for natural language query and all the things that we can do in AI databases now, that is compelling. And it's close proximity to our current marketplace.

I wouldn't view this to be a new direction for the company. I would say it's a natural extension of where we are today because we're one of those very many data sets, data streams.

Thanks, Jay. And then just the final question for today.

Is the Data Fusion being done with Blaze?

We've spent a long time. Our CTO, Gary Gibson, has poured a lot of energy along with the computer vision team and others to certify our platform on top of multiple silicon sets.

And at this moment, we are certified -- we have certified ourselves on Intel, Qualcomm, Blaze, and we're about to be certified on NVIDIA. What that means is that we get to ride the shirttails of the innovation and development in the silicon space.

Because the moment somebody comes up with something new, fascinating, exciting, either low power or high capacity, we are able to utilize that in a deployment that is relevant to us. And the conversation we just had about Data Fusion is very relevant because Data Fusion, when properly implemented, occurs at the edge of the network, right?

So we're -- we have now 3, 3.5, almost 4 options to do that, which means we can go to a systems integrator who is our likely go-to-market partner. And say, well, we've got lots of options with respect to silicon and let's together find out which is the best one for us from a price performance point of view, and we have that capability.

Our relationship with Blaze is strong. Our legacy relationship with Intel is very strong, has been for 10 years, and we're building new relationships now.

Qualcomm, 2 years old, 3 years old relationship now doing well, and there's more coming with Qualcomm as we're working on specific projects and initiatives together with Qualcomm. But both Qualcomm and Blaze have invested in this company.

So I would say that we're -- now is time for us to yield some of the benefit of that.

Great. Thank you, Jay.

That ends the Q&A session. I'll hand it back to you just to finish off the call.

Well, it would be wrong of me to have this call without clearly recognizing that it's been a tough 8 months. Ironically, within those 8 months, the progress of the business has been material.

And you'll see what I mean. I mean, I can't disclose that until it's disclosable, but I'm here because I continue to believe.

And what's very interesting about this is despite the fact that we've got a company that is facing significant challenges with respect to an external event, we don't -- we haven't lost a lot of people. We've got a bunch of people that are incredibly believing in the mission, incredibly -- they have incredible belief in the mission.

And because they're exposed to some of the momentum that I've been now referring to at a distance here, we all believe that we're going to get there. So my job in the next several months is to continue to be transparent about the company's progress to make it clear what we're doing specifically and with as much reference to revenue as possible and continue to broaden the appeal of the company.

I know we've got to rebuild our shareholder base, and I'm at that job in the moment we get back trading and possibly before.

Fantastic. Thank you, Jake.

Thank you for everyone that participated in the call today. Thank you.

Thank you, everybody.