Mr. Peter Evans reports

XTRACT ONE RELEASES SECOND QUARTER FISCAL 2023 RESULTS

Xtract One Technologies Inc., formerly Patriot One Technologies Inc., has released its second quarter results for the three- and six-month periods ended Jan. 31, 2023.

The following 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, and its management's discussion and analysis for the periods ended Jan. 31, 2023, and 2022, which can be found under the company's profile on SEDAR.

"We continue to see accelerating growth in the business on multiple fronts, and I am pleased to share our second quarter results with investors for fiscal 2023. The platform segment continues to be our main driver of growth with an 80-per-cent increase in deployments compared to last quarter," stated Peter Evans, chief executive officer of Xtract One. "Throughout the year, our focus has been on expanding our presence in the marketplace and scaling the business to meet strong demand. We are also very excited to continue our collaboration with our newest strategic partner and recent investor, Madison Square Garden Sports Corp. With their support and the recently announced $13.4-million investment, along with the current trajectory we are heading, we are well capitalized to execute on our business strategy."

Company highlights for the three months ended Jan. 31, 2023

The following is a summary of the key business highlights for the three months ended Jan. 31, 2023:

• Accelerated top-line growth for its platform business unit with approximately $700,000 in revenue for the three months ended Jan. 31, 2023, representing a 212-per-cent over the same period in 2022 and a 69-per-cent increase over the previous quarter;
• Contractual backlog rose to $3.9-million, with an additional $3.0-million pending installation that will be recognized as revenues in future periods;
• Secured a contract with Oak View Group to protect all entrances at Total Mortgage Arena in Bridgeport, Conn., which is the home of the New York Islanders' AHL team, the Bridgeport Islanders;
• Secured a contract with Oak View Group to protect all entrances at Acrisure Arena in Palm Desert, Calif.; this $300-million world-class venue is the future home of the Seattle Kraken's AHL team, the Coachella Valley Firebirds;
• Signed a contract with Lakewood School District in Lakewood, N.J., to help ensure weapons are not brought into schools throughout the Lakewood township district;
• Signed a contract to secure entrances at Hyundai Transys in West Point, Ga., to protect workers and staff from weapons entering the manufacturing plant;
• The company completed its corporate rebranding, including changing the company's name to Xtract One Technologies;
• Expanded deployment with Tachi Palace Casino Resorts in Lemoore, Calif., to protect its 300,000-square-feet expansion, which encompasses a casino, hotel, resort, entertainment centre and more;
• Received two gold awards from American Security Today's Astors 2022 homeland security awards in the categories of best pedestrian entrance control and best metal/weapons detection.

Company highlights subsequent to the fiscal quarter ended Jan. 31, 2023

The following is a summary of the key business highlights subsequent to the fiscal quarter ended Jan. 31, 2023:

• Completed an investment of $8.4-million from Madison Square Garden Sports Corp., with a subsequent investment of $5-million being conditional on the approval of the company's shareholders and all applicable regulatory approvals;
• Entered into a commercial agreement with Madison Square Garden Entertainment Corp., which allows MSG Entertainment to deploy its SmartGateway solutions across MSG Entertainment's portfolio of iconic venues, including New York's Madison Square Garden, the Theater at Madison Square Garden, Radio City Music Hall and Beacon Theatre, the Chicago Theatre, and MSG Sphere in Las Vegas, which is expected to open in September, 2023.

Second quarter fiscal 2023 financial highlights:

• Total revenue was $800,000 and $1.5-million for the three- and six-month periods ended Jan. 31, 2023, as compared with $1.2-million and $1.9-million for the same periods in 2022.
• Platform revenue was $700,000 and $1.1-million for the three- and six-month periods ended Jan. 31, 2023, as compared with $200,000 and $400,000 for the same periods in fiscal 2022, representing an increase of 212 per cent and 173 per cent, respectively.
• Platform backlog was $3.4-million as of Jan. 31, 2023, as compared with $1.2-million as of Jan. 31, 2022, representing an increase of $2.1-million or 172 per cent. The platform backlog as of Jan. 31, 2023, excludes an additional $3.0-million in signed agreements that are pending installation.
• Loss and comprehensive loss were $4.3-million and $9.2-million for the three and six months ended Jan. 31, 2023, compared with $3.1-million and $4.2-million for the same periods in 2022. The increase in net loss pertains primarily to $3.3-million in non-dilutive financing received in the prior fiscal year and a decrease in revenue from the Xtract operating segment, as well as increases in certain non-cash expenses.
• Basic and diluted loss per share was three cents and six cents for the three- and six-month periods ended Jan. 31, 2023, compared with two cents and three cents for the same periods ended in 2022.

Conference call details

Xtract One will host a conference call to discuss its annual results on Thursday, March 9, 2023, at 5:30 p.m. EST. Peter Evans, Xtract One chief executive officer and director, and Karen Hersh, chief financial officer and corporate secretary, will provide an overview of the financial results, along with management's outlook for the business, followed by a question-and-answer period.

Investors may register for the live conference call. Participants should dial in at least 10 minutes prior to the start of the call. A recording of the call will be available on the company's website after the conference call concludes.

About Xtract One Technologies Inc.

Xtract One is a leading technology-driven threat detection and security solution leveraging artificial intelligence to provide seamless and secure patron access control experiences. The company makes unobtrusive threat detection systems that enable venue building operators to prioritize and deliver improved patron experiences while providing unprecedented safety. Xtract One's innovative multisensor Gateway product enables companies to covertly screen for weapons at points of entry without disrupting the flow of traffic. Its artificial-intelligence-based Xtract Vision allows venue and building operators to identify weapons and other threats inside and outside of facilities, and Xtract One Insights provides valuable intelligence for optimizing operations.

We seek Safe Harbor.