How Xtract One is Setting a New Standard for Public Security and Weapons Detection Worldwide

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• Xtract One (XTRA.TO) (XTRAF) exited fiscal Q2 2026 with CAD$48.8 million in combined contractual backlog and signed agreements pending installation, fuelled by surging demand for its newly launched Xtract One Gateway product.
• The company continues to announce marquee wins across all four of its major market segments (healthcare, schools, arenas and entertainment venues, and manufacturing and distribution), with new customers consistently being added across North America and international markets.
• Xtract One is capitalizing on two powerful catalysts: rapid international expansion, bolstered by the British Museum, where SmartGateway detected three times more weapons than prior methods; and accelerating adoption of the Xtract One Gateway, purpose-built for the more than 130,000 U.S. schools seeking frictionless, non-invasive weapons screening.
• Ventum Capital Markets rates the stock a Buy with a CAD$1.05 price target, while management has guided to cash-flow break-even within “quarters, not years.” That trajectory is set against a striking backdrop: bookings have grown roughly tenfold since 2021, in a market that remains less than 4% penetrated.

Disseminated on Behalf of: Xtract One Technologies Inc.

The continuing issue of weapons threats and incidents in society has revealed a demand for modern solutions to address a real-world and growing problem.

Xtract One delivers a frictionless, fast, non-invasive manner for individuals to walk right into a facility, identifying weapons without the need for divesting personal items.

The requirement for weapons screening is now moving from a nice-to-have to a building-code expectation and requirement. California’s AB 2975 will require hospitals to install automated weapons detection at main public entrances, emergency departments, and labour and delivery entrances by 2027. The United Kingdom’s Martyn’s Law, which received Royal Assent in April 2025, will impose new counter-terrorism duties on venues and events of 200 people or more, with enhanced obligations including bag searches and vehicle checks for those with capacity of 800 or more. School districts and state legislatures across the United States have followed with their own funding commitments and screening mandates.

In the same way smoke detectors and sprinkler systems became standard, AI-powered weapons detection is moving in the same direction.

That is where Xtract One Technologies Inc. (TSX: XTRA | OTCQX: XTRAF | FSE: 0PL) now finds itself.

The Toronto-based company has spent five years rebuilding itself into one of the few credible AI-native players in physical security. Its flagship SmartGateway anchors high-throughput venues like stadiums and arenas, hospitals, and manufacturing facilities. The newer Xtract One Gateway, launched in fiscal 2025, has opened up schools, corporate offices, and convention centres.

The shift is showing up in the numbers. Combined contractual backlog and signed agreements pending installation reached CAD$48.8 million at the end of fiscal Q2 2026, up from CAD$37.2 million a year earlier. Q2 revenue of CAD$5.8 million was up 70% year over year, and management has guided to a “very best year ever” as production capacity scales.

"We're playing in a market with hardly any competitors and no one driving the same level of innovation we can. Huge market, massive TAM (Total Addressable Market), great tailwinds, and a moat around what we're doing." — CEO Peter Evans

From turnaround to inflection point

When Evans and CFO Karen Hersh took over in late 2020, the company (then known as Patriot One Technologies) had three or four months of cash, no scalable product, and effectively no customers.

What it did have was AI technology that could detect concealed weapons without the queues, pat-downs, and theatre of traditional metal detectors. The new leadership team rebuilt the business around that core, narrowed the focus to arenas and stadiums first, and expanded methodically as the product matured.

The discipline shows. Since fiscal 2022, revenue has roughly quadrupled and bookings have grown roughly tenfold. The backlog has grown approximately sevenfold.

"It was a real turnaround. When we came in, there was zero revenue, no product that had been properly brought to market. A great technology that existed, but no ability to operate in the real world." — CFO Karen Hersh

That foundation is now translating into operating leverage. SmartGateway gross margins moved from the mid-50s toward roughly 70% as volumes scaled. Management has signalled the same trajectory for the newer Gateway product as manufacturing throughput increases through the back half of fiscal 2026.

The Gateway opens new markets

The Xtract One Gateway is the catalyst behind the recent acceleration. The product was designed for environments that had no good answer before—places where a TSA-style checkpoint isn’t acceptable, but where the security stakes are real.

"Every entrance looked like a TSA checkpoint. Do I really want my emergency room entrance, where you're profusely bleeding, to look like a TSA checkpoint? Probably not." — Peter Evans

Gateway changes the calculation. Individuals walk through with backpacks and water bottles. The system identifies guns and knives in real time while ignoring laptops, phones, and other everyday items. By the end of fiscal Q2 2026, Xtract One had secured orders for nearly 150 Gateway units representing roughly CAD$21 million in contract value, with approximately one-third already delivered and installed.

K-12 schools alone represent a market Evans pegs at roughly USD$25 billion to USD$30 billion, with more than 130,000 schools across the U.S. actively seeking solutions. State-level momentum is following the demand, with multiple states funding school safety programs or weighing legislation that would make weapons screening a requirement rather than an option.

A Canadian healthcare wave

The most concrete proof of the value of the product is unfolding in Canadian hospitals. Following strong success in the U.S. healthcare markets, Xtract One has signed four provincial health authorities, with Health PEI joining Manitoba’s Shared Health and Nova Scotia Health in April 2026. Others are expected to be announced. Healthcare overall, and provincial healthcare in Canada, has become one of the company’s most reliable revenue engines outside the U.S.

The numbers from existing deployments are striking. At Manitoba’s Health Sciences Centre alone, two initial weapons scanners detected more than 1,500 potential weapons over an eight-month period in 2025, according to a CBC News report based on a freedom of information request. Nova Scotia Health has now deployed AI-powered weapons detection at four hospitals, with an initial order of 25 SmartGateway systems announced in December 2025. The first five scanners deployed detected over 4,500 weapons within the first three months.

"Everyone knew weapons were getting in. They didn't know how much, or how significant the problem and the risk was. The data proved the problem to be more significant than previously believed, and the urgency drove fast adoption.” — Peter Evans

The driver, according to Evans, has been front-line nursing unions. Throughout the U.S., nursing staff are striking for better protection from violent, weapons-related incidents. The same pattern has played out across Canadian provinces, where nurses’ unions have pushed administrators to act after specific incidents, including a Christmas Eve firearms incident at one Manitoba hospital chapel.

The British Museum and a global wedge

In late February 2026, Xtract One announced that the British Museum had selected SmartGateway to protect all entrances at one of the world’s most-visited cultural institutions. The Museum manages roughly 6.5 million visitors annually. Testing showed over three times faster ingress, with peak throughput of approximately 750 people per 15-minute interval per lane, along with detection of more than three times the number of weapons detected with previous screening methods.

As a highly iconic venue, the British Museum is a target of terrorist and protest activities, and as such, must maintain the highest standards of security. The win matters less for its dollar value than for what it signals. SmartGateway competed and won in the exact use case where it should be most differentiated: high traffic, high scrutiny, operationally complex.

It also reinforces that Xtract One is not just a North American story. Martyn’s Law in the U.K. and similar legislation in other global markets are pulling international demand forward, with the rest of the world running roughly 12 to 24 months behind North American adoption curves.

Capital, competition, and the path to profitability

Xtract One closed a CAD$11.5 million bought-deal financing in November 2025 and ended fiscal Q2 2026 with CAD$15.7 million in cash and no debt.

That position, management argues, is enough to reach cash-flow break-even.

"We don't think it's years to that cash-flow break-even. It's a matter of quarters." — Karen Hersh

Sell-side coverage is starting to recognize the trajectory. Ventum Capital Markets carries a Buy rating on the stock with a CAD$1.05 price target, citing accelerating bookings momentum and a path to positive EBITDA inside fiscal 2026. The broader market remains less than 4% penetrated, leaving a substantial runway ahead as adoption accelerates.

Evans frames the competitive landscape with a now-familiar analogy. Walk-through metal detectors, in his view, are the flip phone. The largest funded competitor, which raised roughly USD$400 million via a SPAC, is the BlackBerry: dominant for a moment, but slow to innovate, and eventually replaced. Xtract One is leading with innovation, similar to how the iPhone paced the smartphone market, replacing older technology. 

"Anybody who truly cares about security tends to buy us. Major airlines, major retailers, major manufacturing organizations, major healthcare organizations like the VA hospitals." — Peter Evans

Madison Square Garden Sports Corp., through its venture arm, is among the company’s largest shareholders following a multi-tranche investment that closed in 2023. This investment followed extensive testing, a requirement of one of the world’s most iconic venues, and recognition of the innovative stance that Xtract One has established. The position doubles as both validation and customer reference, with MSG venues already operating SmartGateway systems.

What investors are watching

The next 12 months will be defined by execution, not discovery. The backlog is built. The product is in market. The question is conversion.

For Evans, the metrics that matter are simple: continued bookings growth, faster conversion of backlog to revenue, expanding gross margins, and a visible line of sight to cash-flow break-even.

In a sector defined for decades by walk-through metal detectors and security guards, the digital transformation has finally arrived. Xtract One is one of the few public-market ways to own it.

About Xtract One Technologies Inc.

Xtract One Technologies (TSX: XTRA | OTCQX: XTRAF | FSE: 0PL) is a leading technology-driven provider of threat detection and security solutions leveraging AI to deliver seamless and secure experiences. The company makes unobtrusive weapons and threat detection systems that are designed to assist facility operators in prioritizing and delivering improved “Walk-right-in” experiences while enhancing safety.

Learn more at xtractone.com.

Follow Xtract One on LinkedIn, X, Facebook, and YouTube.

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