Patriot One Technologies Inc

TSX:PAT

Hi, everyone. Welcome to Xtract One's Live Second Quarter Earnings Call for Fiscal 2023. This is Will Maze from RB Milestone Group. For those of you who aren't already familiar, Xtract One Technologies, formerly known as Patriot One Technologies is an emerging disruptor in the stadium and public space security industry and has developed an unobtrusive artificial intelligence-driven weapons and threat detection system. The company's shares are traded on the TSX under the symbol XTRA and on the OTCQX under the symbol XTRAF.

Joining us today is the company's CEO and Director, Peter Evans; and CFO, Karen Hersh. Today's call will include a discussion about the state of the business, fiscal quarter results and some of Xtract One's recent milestones. This will be followed by a question-and-answer session based on questions investors have sent in prior to and during the webcast. This call is being recorded today, March 9, 2023, and will be available on the company's website after the call at xtractone.com.

Before we start today's call, I'd like to note that all dollars are in Canadian dollars unless otherwise specified. Today's call will also contain forward-looking statements. They're subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements and they're not guarantees of future performance of the company. No assurance can be given that any of the events anticipated by forward-looking statements will occur or if they do occur, what benefits the company will obtain from them.

Also some risks and uncertainties may be out of control of the company. Xtract One has a full disclaimer contained in their presentation. Today's call should be reviewed along with the company's interim condense financial statements, management's discussion and analysis and the earnings press release issued today, March 9, 2023, and is available on the company's website and SEDAR profile.

Lastly, RBMG is not a registered investment adviser or a broker-dealer. For more information, please visit rbmilestone.com. And now it's my pleasure to introduce Mr. Peter Evans, Chief Executive Officer of Xtract One. Peter, the floor is yours.

Well, thank you very much, Will, and thank you to all our investors for joining us today. I'm very excited to be speaking with everyone today and really looking forward to sharing more information about our second quarter results and key milestones we set for ourselves and how we've achieved those. As well as recent activities, including a strategic investment from Madison Square Garden Sports or MSG Sports and the planned deployments that will occur with Madison Square Garden's entertainment.

We had a very strong quarter -- is our strongest quarter, in fact, for customer deployments to date and added new sales to our bookings backlog, which will convert to revenue in future periods as these products are shipped and deployed and installed at customer facilities. Based on these results, we continue to be very optimistic about our outlook for fiscal 2023.

I'd like to start by giving our investors a quick update on the business and a handful of the questions that we've received from our investors about things that are important to them and most importantly, some of the key milestones, as I mentioned, that we have set out for ourselves, and we're tracking our performance against.

Later, Karen will take us through whole financial results and the key financial trends. There are several key highlights this quarter, I think, are worth mentioning. One, that I often forget is the fact that we branded the company very, very successfully in this past fiscal quarter. Very pleased with those results and the positive feedback. Most importantly, too, is our strategic partnerships and expansion with those.

In October, we announced a strategic partnership with the Oak View Group, where we continue to develop key customer relationships in the sports and entertainment industry through OVG's extensive network of OVG-managed facilities and venues and their alliance to arena members.

Some of OVG's new customers that were deployed some -- excuse me, some of the new OVG customers that were deployed in this fiscal quarter including Total Mortgage Arena and Acrisure Arena in Palm Desert, California.

Additionally, in February, we announced another strategic partnership with MSG Sports, who invested $8.4 million with us and then with the approval of our shareholders, plan to invest another $5 million to advance venue security and enhance patron experience across North America and beyond.

I will talk about this key partnership in a few more minutes here. We really look forward to working with both of these groups, and we'll continue to develop and announce other important strategic partnerships that we are focused on.

On the business momentum side, in the first half of this fiscal year, we made sales equal to or slightly above 125% of all of the fiscal 2022 Platform sales combined. The company has nearly doubled the numbers of systems deployed into the field this quarter and installed with customers. That's driving an increase in our contractual backlog significantly, which Karen will speak to later during this call.

We're also excited with the direction of companies headed and expect this trajectory to be steady and remain throughout the of the year or accelerate. This year has been the focus on scale and we think about that as a key milestone -- I talked about this in our last earnings call. We continue to drive efficiencies across the entire business, whether it's building qualified pipeline or sales conversions from that pipeline to revenues, all the way through cost effectively scaling manufacturing and installation and ongoing customer support models. Again, both Karen and myself will be coming back to as seen throughout our call. This is the year that we've established ourselves and are scaling as aggressively as we can, as shown in the results where we essentially doubled the installed base this past quarter.

Last month, we are pleased and excited to report on and announced the $13.4 million strategic investment from MSG Sports. These -- the MSG Sports is the owner of the NBA's New York Knicks and the NHL's New York Rangers as well as other activities. MSG Sports has been an invaluable partner over the past number of months and has provided vast amounts of feedback to us to help us continuously drive innovation and accelerate the improvement of our portfolio month after month after month. This has provided all sorts of innovation and opportunities for us to shape our product road map better to serve those customers in the sports and entertainment industry better.

We're thrilled to have one of the most elite players and one of the strongest brand names in sporting to be one of our supporters and our investors. This didn't come easy. We have to prove ourselves to probably one of the most stringent environments on the planet. We're very excited to be partnering with this company that also shares our focus on innovating and enhancing the fan experience.

If you look at any of the MSG properties, you can see their vision for what innovation looks like both short term and long term. And their endorsement is us as a key component of drive map speaks volumes to me. I look forward to weigh in to many ways that MSG Sports can and has already helped to up-level our engagements through their network of connections and influence across the industry.

We're also very excited to work with MSG Entertainment to deploy our SmartGateway solution across MSG Entertainment's portfolio of iconic venues. These iconic venues include New York's Madison Square Garden, The Theater or some known to call it the Hulu Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre, The Chicago Theatre. And most interesting to me personally is the MSG Sphere in Las Vegas, which is expected to open in September of this year. We look forward to building upon our relationship with MSG Entertainment to promote our positive fan experience while protecting patrons with a touchless, frictionless security solution in all of these venues.

MSG Sports continues to provide us with immense support, whether it's through their investment which will again allow us to further innovate our security products and accelerate growth into new markets and new market segments or the feedback, guidance, insights and partnership they've shown us to allow us to introduce our product and also the immense influence on branding that they have brought into the sports industry.

This partnership continues to contribute to the efficacy of our company's security solutions, and it's setting a standard for excellence in the entire sports industry and the adoption of technologies like ours. All of the conversations that we have had with industry sports senior executives has confirmed to me that they are here to support Xtract One for the long run because this is about changing the industry.

MSG Sports has committed to -- provision that an additional $13.4 million of investment, of which $8.4 million has been completed already. And with the approval of our shareholders, MSG Sports will contribute a further $5 million. These funds will primarily be used for supporting the continued acceleration of our selling and marketing efforts and also to fund at this continued innovation and the vision we have together.

Not only does this benefit the company in terms of obtaining funding to accelerate our growth, MSG has an immense brand that has incredible value for us, and they have a keen focus on delivering best-in-class security and a mindset to innovation. This has validated our position as a leading company in the space of frictionless security technology.

As part of the process with MSG Sports and MSG Entertainment, we took dozens and dozens of tests and retest in all sorts of different venues under all sorts of different environments. And with these results, we've been able to leverage this relationship and the brand power to accelerate new sales opportunities with several customers that have mentioned to us very specifically and very bluntly that the validation by MSG Sports has drawn into our solution.

To coin a phrase, it's New York. If you can make it there, you can make it anywhere. We've already seen the significant impact in many ways that the MSG Sports as an investor and a partner has had upon our company. Good things will come from this relationship, and I strongly encourage our shareholders to continue to work with us and work with the company to vote in support of the additional $5 million investment which will help us continue to accelerate on our path, accelerate our growth in sales, leverage the relationship with MSG and will allow us to focus on efficiently scaling the business towards a state of profitability.

Moving forward a little bit, we are also seeing continued growth and momentum in the Platform business overall. During the last quarter of fiscal 2022, in the first 2 quarters of this fiscal year, the company has produced record booking numbers following the release of the SmartGateway. We're very delighted to say that the second quarter of fiscal 2023 was our largest period of installations where we increased the number of deployed units by about 80% or perhaps a little bit more from the prior quarter, nearly doubling our deployments in 3 months. It's a great milestone, and it's a trajectory that we expect to continue on.

This was possible due to the increased rate of sales, which were made during the prior periods and also do the efforts made to scale our manufacturing capacity. With a very healthy backlog, we're going to continue to focus on manufacturing deployment and conversion of the bookings to revenue. While there have been many positives with a number of metrics for the business, I personally am not satisfied with the actual bookings number for fiscal Q2. We had a large number of opportunities including Madison Square Garden Entertainment that we fully expected to close in Q2 due to things like the seasonality of the business, right? Tons of people are away during the holiday season at the beginning of fiscal years. These opportunities took a little bit longer for us to work through and close those contracts, a little longer than we expected.

What I am happy to say and I'm very confident in is that none of these expected opportunities have gone away. They aren't lost. And we fully expect to continue to close those and are closing those in Q3.

Earlier, I mentioned that in the last 6 months, the Platform sales were 125% of all sales for the last fiscal year. This again is a result of a direct result of our accelerated sales and marketing efforts during the past 12 months where we showcased -- we focused on showcasing our products to customers in live environments.

Reference ability is a key characteristic requirement, and it's critical for the security industry. CSOs talk to each other. With high, high levels of customer satisfaction and no customer churn or cancellations, our existing customers are now hosting prospects to view the product line and interact with the systems in their environments. This has significantly accelerated our sales processes and it provides incredible referenceability and endorsements from customers, particularly those such as Madison Square Garden who have gone and rigorously tested our products side by side with others.

We continue to see the growth in our sales pipeline, which has increased by about 25% over the last quarter. It now totals in excess of $90 million and a portion of that associated with the Platform business is about $57 million. The continued interest of customers in sports, entertainment and manufacturing distribution and public settings such as schools and hospitals and government agencies continues to grow.

Our record number of deployments is also possible due to the support of our supply chain and manufacturing partners. Working with those partners over the last month -- several months, we've been able to secure a large volume of key componentry, many of those, which would have had long lead times in delivery. Actively sourcing these components has been critical for us in order to meet the demand that we're seeing for our products and to continue on a pace that's allowed us to increase installations so successfully.

We continue to work with these manufacturing partners to increase our production capacity so that by the end of the fiscal year, in response to demand and expected bookings, we have very little lag in deployment. This increase in capacity will help ensure that we can quickly convert all sales into deployed systems and convert that then to revenue-generating installations.

In summary, we've made significant strides in the first half of the fiscal year, growing the business, including partner with 2 key players as strategic partners to innovate the patron experience in sports and entertainment industry. While I'm pleased for these first 6 months, the ongoing activities and the new engagements make me even more excited and more confident about what's to come in the second half of the year and I look forward to continuing more of these key milestones with the shareholders and our success in achieving them along the same track record is what we've delivered so far.

At this point, I'm going to turn it over to Karen, who can take investors through the second quarter financial details. Thank you very much.

Thanks, Peter, and hello, everyone. I'm happy to be speaking to you all again, and I'm excited to share our second quarter financial results for fiscal 2023. First, let's talk about the continued growth in revenue generated from Platform sales.

For the first half of the year, revenue from the Platform operating segment was $1.1 million, which was almost 50% more than platform revenue for all of last year. In Q2 alone, the platform revenue increased by nearly 70% relative to last year and was more than triple the revenue recognized in the second quarter of last year. This positive trend can be attributed to the significant increase in the number of Platform customers compared to prior periods.

As Peter mentioned, we almost doubled the number of deployed systems in the second quarter relative to last quarter, which has considerably improved our monthly recurring revenue. We'll continue to benefit from this annuity revenue in future periods as our platform subscribers continue to pay over the duration of their contract terms. These trends demonstrate real momentum and keep us optimistic for our financial performance for the remainder of the year.

During the quarter, Xtract's innovation team continued to duly focus on supporting the internal platform development efforts while also developing the AI-based solutions contracted to public sector agencies. Revenue from this operating segment was approximately $313,000 for the first half of fiscal 2023, which is down quite a bit from the $1.5 million for the same period last year. This reflects the timing of certain contracts, including the $1 million contract with the Canadian Department of National Defense, or DND, which took place last year and was completed in March 2022.

We continue to be selective about which innovation contracts we accept, ensuring that only new contracts that we take on are synergistic to the Platform business.

In tandem with the increase in revenue, we also continue to see significant improvements in our total contractual backlog and signed agreements, which totaled about $6.9 million at the end of the second quarter. I should also mention that this excludes the signed commercial agreement with MSG Entertainment, which occurred subsequent to the period. We continue to build the company's backlog of sales commitments, which at quarter end was over $3.9 million with an additional $3 million pending installation. This contractual backlog represents revenue that will be recognized in future periods as we fulfill our obligations over the duration of the underlying contracts.

Given the progress that we've made with deployments this year with the help of our supply chain and manufacturing partners, we deployed a record number of systems this quarter which translated into a 79% increase in the total value of our contractual backlog for the Platform segment compared to the balance at the end of last quarter.

In addition to this, Xtract, our AI partner division maintained a backlog of signed or awarded contracts of approximately $600,000 and continues to build a pipeline of opportunities at an ever expanded -- ever-expanding set of capabilities.

Looking forward, subsequent to the quarter, we entered into the commercial agreement with MSG Entertainment for the deployment of our SmartGateway solution across MSG Entertainment's portfolio of iconic venues.

Looking at expenses. Although the company has been focused on top line growth and continues to invest in targeted sales and marketing activities to drive revenue for the business, we're also working towards achieving operational efficiencies and gross margin improvements. Where appropriate, we've begun redesigning internal processes with the aim of improving our operational efficiencies to either reduce expenses or to enhance our cash conservation cycle. The goal for these changes is to ensure that we are able to scale in an efficient manner as the company focuses on reaching profitability.

Sales and marketing expenses were $1.2 million for the first 6 months of the year, which is 30% higher than the same period last year. This increase relates to the company's intensified sales efforts and certain onetime expenses occurred in the first quarter of fiscal 2023. In general, we expect sales and marketing expenses will remain steady or increased slightly compared to prior years as sales activities continue to be a focus for us.

Research and development expenses, excluding the impact of grant funding, remained relatively consistent at $3.5 million for the first 6 months of fiscal 2023, decreasing about 4% relative to last year. The company continues to invest in R&D activities to refine, improve and expand our platform solutions based on our technology road map and feedback that we receive from customers.

Personnel costs were $1.2 million for the 3-month period ended January 31, 2023, as compared with $1.1 million for the same period in 2022, representing an increase of 9%. The change is primarily related to the increase in the size of our sales and customer support teams as we continue to focus on revenue-generating activities and providing exceptional customer service.

We've made great strides in the last year and in particular, in the last 2 quarters in building up a solid backlog of contracts. As we grow the company, we'll continue to focus on improving operational efficiencies as we continue to scale the business. This will be a key focus for us for the remainder of the year.

Turning to our cash flow now. During the first half of the year, the company had a cash outflow of $5.3 million compared to $3.2 million last year. During the quarter, the company focused on cash management and specifically focused on reducing operating expenses. During the second quarter, cash for used in operating activities was $1.1 million compared to $3.9 million in the first quarter of fiscal 2023.

It's important to note that during the first half of last year, the company recorded $3.3 million of non-dilutive funding which offset certain expenses in that period. In the current year, we didn't receive such funding and didn't have any offsets to our expenses.

In February of this year, we announced a private placement investment with Madison Square Garden Sports Corporation or MSG Sports. We expect that the full investment of $13.4 million commitment will allow the company to focus on continued growth of our Platform business and to expand into new markets where we see a strong fit for our products.

We're thrilled to have partnered with MSG Sports on this investment. They've shown a strong commitment to the company over the last several months, performing extensive product testing of our products, providing executive introductions to context in their extensive network and continuing to provide us with specific and detailed feedback to help us serve the sports and entertainment market.

This investment demonstrates to us their support and belief in us as a company and our ability to alter the industry with our leading-edge solutions. We believe this relationship will provide immense benefits to the company, both in terms of improving our balance sheet and through the ancillary benefits of being associated with the MSG Sports brand and their network.

In summary, we're very pleased with the traction that we've made during the first half of fiscal 2023. We see ourselves on an upward trajectory in terms of the number and value of contracts signed and units deployed. Our focus for the next few quarters continues to be on scaling the business by accelerating top line growth while containing expenses. Customer support is key, and we will continue to concentrate on customer engagement and providing exceptional customer service.

In time, we expect to continue to build a solid backlog of sales commitments to provide our investors with predictable recurring revenue in order to ensure that we can get to this state as soon as possible, I encourage our shareholders to vote in favor of the second tranche investment from MSG Sports at the Extraordinary Meeting of Shareholders on April 11, 2023. And with that, Peter, and I are pleased to answer any questions that you might have.

Well, thanks, Karen. And as Karen mentioned, we'll now go into the question-and-answer period. And that was a great way to conclude because we have had several questions come in on the MSG relationship. The question is essentially around the Madison Square Garden Sports and their investment first question relates to the upcoming Extraordinary Meeting for Shareholders and investors are asking why they should vote in favor of the second $5 million tranche.

Peter, you're on mute.

Some would say that's a good thing. So that's a great question, Will. To think about that for a second. There's probably 3 or 4 ideas that come to mind when I think about why you vote in favor of the tranche. The first is, let's face it, Madison Square Garden and Madison Square Garden Ent is a globally recognized brand and company. Their iconic venues are second to none. Being associated with a name like that, the validation they've done around our solutions and how they're sharing that information with others is provided instant credibility and validation to that, and we just want to add more fuel to that fire.

The second thing that's most compelling to me is I've had the pleasure of -- the opportunity and the pleasure to meet with the most senior executives through the MSG organization, both on the sports and the entertainment side. It's absolutely clear to me that they've got a vision and a commitment to the vision of changing the whole sports entertainment, live entertainment environment. They have to. They're in New York. There's so many competitive options so they have to stay ahead.

Anyone who's looked at The Sphere in Las Vegas and has seen what that is doing. It's an order of magnitude change in the experience that we all have. And they lead that kind of vision. They're in it for the long run, not for a quick flick of share price and make a quick buck, to think about what does the world look like in 6 months, a year, 2 years, 3 years, 4 years from now. And they see us as an integral part of that, right? Not just based on what we can do with what on screening today, but to promise what the AI platform could do tomorrow.

So I'd encourage the investors to think about this in terms of investing in that long-term vision in that trajectory. The final -- I guess the third thought that comes to this is momentum. There's been some very interesting momentum for our company in many aspects since the announcement of the agreement with Madison Square Garden Sports. That momentum can only continue. We're on a great trajectory. MSG has put fuel in the rocket. We're going on a great rocket ride right now. Why not put more fuel into it and take advantage of that.

I guess the last point I would say is like from my point of view, personally, the influence that MSG has in the sports industry in the U.S. and the ability to open doors with their network of connections through all the pro sports leagues, I would rather prefer something like that, who is a market maker in our target industry. The [ Sun ] software guy whose 6 steps removed for making investment in the wrong horse. So that's kind of my view on what I think about and why we should continue to accelerate the momentum at MSG.

Thanks, Peter. The next question actually also pertains to MSG Sports investment. The investors are asking how to -- how long will MSG Sports hold on to their investments, particularly given that their investment is already well above the $0.60 exercise price. And also maybe you could address the perceived discount.

Sure. I think I can address that one. And there are several points to talk about here and just take a step back and reiterate some of the comments that Peter said.

First, in all of our conversations with MSG Sports and their venture group, they made it very clear that they share a vision for the future of the patron experience and live entertainment and where innovation can be used to reinvent industries. We believe that this is an investment in the future of the industry and where they see it heading. And it's a much more compelling long-term strategy than a look for a quick profit on a share, as Peter mentioned.

In this regard, we believe MSG Sports wants to see us grow and succeed, and they were willing to invest in us in a time when frankly, the capital markets have been tough, and there continues to be a lot of uncertainty in the global market. The attractive pricing that MSG Sports receive reflects, I think, the elevated risks and uncertainties in the broader market and as well accounts for the vast reach that they possess in the target market that we're trying to tackle right now.

I think it also reflects the ongoing commitment that they've made to work with us directly to help us grow and ultimately, will help us execute on our business plan. We believe that the market will continue to recognize the value of this relationship as it already has and shareholders have experienced since we've announced this investment.

To specifically addresses $0.60 warrant, the MSG Sports investment was structured in a manner to support the company's future growth plans. The investment includes the ability for MSG Sports to provide the company with an additional $19.2 million through the exercise of the share purchase lines. The rationale being that these proceeds could be used to fund future growth opportunities as they arise.

And finally, I'll finish by saying that from a regulatory perspective, there is a 4-month hold that MSG Sports is not allowed to trade, to hold for securities and the private placement roles. But as I mentioned before, this is a long-term strategy for MSG Sports. They're not looking to do short-term trading of our stock, in my opinion.

Thanks, Karen. The next question is also regarding your strategic relationships. And this one is -- includes the Oak View Group and MSG. The question is, can Xtract One be profitable with the OVG and MSG ventures stand-alone. Maybe Karen, you can shed some light on that.

Sure. Interesting question. Let me start by saying that these commercial agreements with MSG and the OAK what these agreements do tell us. These commercial agreements allow us a lot more visibility on future revenue. We know what the venues are current -- what they currently own and manage through these organizations, and we know or we can reasonably estimate the total contract value that could be realized through their existing portfolio of venues.

What we don't know, and specifically for the Oak View Group and the alliance group that associated with OVG is the timing and the extent of future sales since each revenue has its own P&L and business priorities to manage. And we work with each venue on a case-by-case basis to help them best design when they're ready to move to a new solution. But regardless, I think it's fair to say that these 2 strategic partnerships have and continue to help advance our business plan, both in terms of the commercial agreements that we've signed with each of these organizations but also the valuable investment that we received in the marketplace.

Okay. Great. Next question is actually on a separate topic. And this investor is hoping to gain some insight on the company sales pipeline. The question is, can you please compare the sales pipeline, including composition, sales cycle, length and other pertinent metrics from where the company is today versus 18 months ago, when new management, Peter and Karen came on board.

Well, it's a great question, Will, and like a rock salt soften out all day. If you look to our investor deck, we actually have a chart that talks about where we were some number of months ago and where we are today. Some number of months ago, our pipeline was under $8 million, of which half of that was one customer, a large group of churches of I believe or something like that. Our bookings backlog was under $1 million, and there was nothing in there that really, I think, had any chance of actually closing.

We had no pilots. We had very few installs. It was really negligible. Nothing that I would be proud about. Fast forward to where we are, particularly since the introduction of SmartGateway, which is a reflection of what the market told us that they saw in the marketplace, what they liked, what they didn't like, what they needed us to overcome. We're on a whole new trajectory. We have about some $57 million for the Platform of qualified opportunities, so not names on list, people we've engaged with and have discussions with. People have a budget, have a need, these sorts of things. We've got a healthy in excess, almost $7 million of pipeline backlog which will convert to revenues over time.

So if you look at that alone, the pipeline backlog that was 6 months into the year, we're doing very, very well compared to where we were 12 months ago, for example. So that all is looking very healthy. From a pipeline construction point of view, about 50% of our pipeline is in our target markets of sports live entertainment. The other 50% -- and that's where we're focused, the bulk of our outbound activities because there's such a perfect fit for our product. And other things that make those markets highly appealing to us in terms of making good decisions about effective use of our time.

Other markets, such as distribution, manufacturing, schools and health care, make up about 50% of our pipeline also. And interesting to me, organizations that we've announced, such as Kia, Hyundai and others, we're not organizations that we are aggressively marketing to. They found us because they had a need and they started to hear the feedback in the marketplace about the quality of our product and the ability to fit in their business needs.

When we look at things like the pipeline though, the thing that's most interesting to me is the sales cycle itself. Sometimes, we're seeing a shortening of the sales cycle, not as short as I'd like it to be. But a lot of that comes from things like referenceability and testimonials, as I mentioned earlier. So with more installed base of customers, with more happy customers with no churn, with more customers are actually do rigorous testing of our products in the marketplace and have those results and can speak to those, that significantly helped our pipeline conversion ratios and our speed to close deals.

We do have agreements in place with people like OVG through a master service agreement, which actually does speed up the sales cycle because it removes the need for negotiating a contract on a per venue basis, negotiating pricing, going through demonstrations, going through pilots. All these things that have been completed and pre-conditioned by OVG at the master level.

We're also focusing our sales efforts a little bit and starting to see a lot more larger deployment opportunities with larger installations. Initially, a lot of the initial pipeline might have been smaller venues and smaller deployments for our few lines. But we're starting to find more and more of these holistic opportunities where somebody wants to protect an entire manufacturing plant at the same time.

And so we're very pleased to start to see those larger deals, which, quite frankly, take about the same amount of time is to close this is a smaller deal. We're not going to ignore the smaller deals. We'll continue to serve and support those because they round out the business model.

All in all, we are finding that we're getting a good quality pipeline because we do a high level of qualification. We understand great applications for our technology and poor applications. We will walk away from some business. If it's just a poor application and it's going to lead to a frustrated customer. We'd rather deal with high-quality opportunities that create excited and just delighted customers as opposed to kind of force fit something that really is poor for the customer and poor for us.

Thanks, Peter. We are pressing up against time, but I want to get one more question in here. This question is asking really about the future outlook. And what investors can look forward to going forward, some of the near-term milestones or catalysts.

Yes, great question. We're not yet putting out specific financial forecasting because we still feel there's a little choppiness in the ability to close and convert. But we're seeing a lot of smoothing out of the curve and actually conversion of bookings to revenue. So I'm pleased with that. We're going to continue to focus on aggressive growth in revenue backlog and bookings. Those numbers are reported quarterly. And as I mentioned earlier, I see no reason why we won't stay on the same sort of trajectory. We're adding about $2 million per month of quality, qualified pipeline additions and trying to convert that as fast as we can into bookings and then into revenue.

Securing the DHS Safety Act award is something that I hear about often and frequently. We have submitted to the DHS. We're working through that process. And quite frankly, device to DHS, they were so pleased with the volume of quality installations that we had and the testing and validation that we've done with our customers that they actually recommended to us that we pre-submit at a much higher level than we had previously submitted for a higher-level award. So we will continue to work through that very aggressively with the DHS as fast as we can and as fast as the government will move.

Growth in all trends are key to our milestones. We have metrics we hold ourselves to in terms of revenue backlog, bookings, deployment, customer success and customer satisfaction, and we expect those trends to continue that we've talked about today through the balance of fiscal 2023.

Most importantly, the one thing that I'm most proud of right now, which is reflected, I guess, in zero churn is we're doing this without sacrificing our brand or our customer trust or our integrity in the marketplace. This is security, and it's important that we deliver well. And so we're very, very focused on maintaining a quality brand and being a respected company in that industry.

So with that, Will, that's really kind of my milestones that I think about them for the year and the metrics that we hold ourselves against more tightly internally.

Well, thanks, Peter, and thanks, Karen, and thanks, everyone, for joining today's earnings presentation. The recording of today's call will soon be made available on Xtract's one's website, again, that's xtractone.com. I know there's a number of questions here that we weren't able to get to. So if you have additional questions, please e-mail them to us at xtract1@rbmilestone.com. Again, that Xtract, the #1 @rbmilestone.com. So that concludes today's call. And I hope everyone has a great rest of the day. Thank you.