Welcome everyone to the Nanalysis Scientific Annual General Meeting. Everybody is in a mute mode. I would request that you please do stay in a muted mode until the question and answer session, which is gonna be after the presentation, which is after the formal meeting. I will also send a note to everyone in a chat box where you can send questions to me, and I'll read them off later. Again, thank you for joining us. With that, I am gonna turn the meeting over to Martin Burian, Chairman and Director of the company. He also will be acting as the chairman of the meeting. With that, Martin, the floor is yours.
Thank you. Morning, ladies and gentlemen, and welcome to the Annual and Special General Meeting of Nanalysis Scientific Corp. I'm Martin Burian. I'm the chairman of the board of directors. I will be the chairman for this meeting. I'd like to thank everyone for their attendance. In terms of the agenda today, after the formal part of the meeting, we'll have CEO Sean Krakiwsky do a presentation, and he and the CFO Randall McRae will be willing to answer any questions. Before starting, I'd also like to. Those two gentlemen are in the physical boardroom in Calgary, and the rest of the directors are joining us, similar to myself, virtually. I'll just tell you who they are.
We've got Werner Gartner, Michal Okoniewski , Guido Cloetens, Dr. René Lenggenhager , and Kham Lin. Thanks everyone for attending. Okay, the meeting will now come to order, and I will ask the corporation's Corporate Secretary, Robert Borkowsky , to act as secretary of the meeting. Also, Gloria Gherasim and Nicola Murtagh of Odyssey Trust Company will act as scrutineers of the table. I request the secretary to table proof of delivery of the notice of meeting, instrument of proxy, management information circular, and accompanying documents to the registered shareholders of the corporation. Thank you, Robert.
Proof of mailing of the notice following the meeting and accompanying documents has been duly filed, and I direct a copy of this notice with proof of delivery to be kept by the secretary with the records of this meeting. The second in business is quorum. I've received the scrutineer's report, and the required quorum is present at this meeting.
Thank you, Sean. Thank you, Robert. Next, I am able now to declare the meeting as regularly called and properly constituted for the transaction of business. The next item on the agenda is the financial statements. This item is to receive and consider the audited financial statements from the corporation for the year ended December 31st, 2022, and the report of the auditors thereon. I'll ask the secretary of the meeting to present these financial statements to the meeting. I will also note that they've been filed and are available on SEDAR.
Copy of the financial statements and reports to the auditor thereon have been mailed to each registered shareholder, and they have had an opportunity to review these documents. I will request a resolution dispensing with the reading of the auditor's report. Sean, can you do that for me, please? Pardon me to unmute.
I, Sean Krakiwsky, move that the reading of the report of the auditor and the financial statements be dispensed with.
Thank you.
I, Robert Borkowsky, second the motion.
Thank you. All those in favor? I will just advise everyone that this meeting is being conducted in the old style format, which is, you're entitled to be in the room, attend the meeting, and of course, you're entitled to send in your proxy. We have received all the voting on the business items by proxy and ballots that have been submitted. Thank you for that. Given that, I will declare the motion carried. Next item of business is the size of the board of directors. With this item, we are bringing a motion to set the size of the board of directors at seven members. I will now request a motion to fix this number.
I, Robert Borkowsky, move that the board of directors of the corporation to be elected at the meeting to be fixed at seven members.
I, Sean Krakiwsky, second the motion.
Gentlemen, all those in favor? I think I saw. Any opposed in the room? No. Okay, thank you. The motion is then carried. Election of directors is the next business item. We'll now proceed with. Seven directors will be elected at this time to hold office until the next annual general meeting or until their successors are elected or appointed. Could I have the nominations, please?
I, Sean Krakiwsky, nominate Martin Burian, Sean Krakiwsky, Werner Gartner, Michal Okoniewski , Guido Cloetens , Dr. René Lenggenhager , and Kham Lin for election as directors of the corporation to hold office for the ensuing year unless his office is earlier vacated in accordance with the articles of the corporation.
Thank you. Seconder?
I, Robert Borkowsky, second the motion.
Thank you very much. Is there any further nominations in the room? Thank you. Not seeing any, I now declare the nominations closed. In order to accurately record the voting results, the vote on this resolution will be conducted by ballot. All those persons physically present at the meeting are and are entitled to vote will have received a ballot. My understanding is that you will have submitted that ballot by now to the scrutineer. Of course, we've also received proxies and ballot returns in electronic formats to the deadline.
Okay. Sorry, and the scrutineer, you've gathered them all. Any change to what we had tabulated before the meeting? No, I don't believe so. Great. Thank you. Having now reviewed the ballots with the scrutineer, I declare that the following persons have been duly elected directors of the corporation to hold office until the next annual general meeting or until their office is vacated. That would be Sean Krakiwsky, myself, Martin Burian, Werner Gartner, Michal Okoniewski , Guido Cloetens, Dr. René Lenggenhager, and Kham Lin. If any shareholder is interested in the exact number of votes cast in this, in for the directors, you can request such information from the secretary after the meeting. Just as a side note, I believe our practice has been to publish those in a news release. Thank you. Next item of business is the appointment of the auditor.
Management information circular and instrument of proxy prepared for the purpose of this meeting contemplates the appointment of Ernst & Young LLP Chartered Accountants as auditor. Could we have a motion with regard to the appointment of the auditor until the next annual general meeting? Could this motion provide that the auditor's remuneration be fixed by the board of directors?
I, Sean Krakiwsky, move that Ernst & Young LLP Chartered Accountants be reappointed as auditor of the corporation until the next annual meeting or until a successor is appointed, that Ernst & Young LLP's remuneration be fixed by the board of directors.
Could we have a seconder, please?
I, Robert Borkowsky, second the motion.
Thank you. All in favor of those in the room. Great. Any opposed? Thank you. I'll declare that motion carried. Next item of business is the reappointment, reapproval, sorry, of the company stock option plan. The stock option plan was set out in the information circular. I will note it's a fairly plain Jane plan in conformance with the TSX Venture Exchange policy. It's what you'd call a rolling 10% plan. Could I have a motion, please, put on the floor?
I, Robert Borkowsky, move that the resolution, as more particularly set forth in the management information circular prepared for the purpose of the meeting relating to the reapproval of the stock option plan of the corporation be approved and adopted.
Thank you. Seconder?
I, Sean Krakiwsky, second the motion.
Great. Thank you. In the room, all in favor, can you signify? Thank you. Any to the contrary? No. Great. I'll declare that motion carried. Thank you, everyone. Finally, we'll we now come to the termination of the meeting. There being no further business indicated to me, then I will ask for a motion to terminate. Sean, will you do that?
I, Sean Krakiwsky, move that the meeting be terminated.
The seconder?
I, Robert Borkowsky, second the motion.
Okay. I take it we're all in favor of that. Yes? Anyone not? No. Okay. Thank you very much. I declare the meeting is now terminated and closed. Over to Sean, I think.
Yeah. So, t hat concludes the formal part, and we'll turn over to Sean Krakiwsky for a presentation.
Thank you very much. Thank you, Martin, for chairing the formal part of the meeting. Now I will give a presentation that's a little bit of year in, year in review since the last AGM in June of 2023. I'm sure everybody on this call knows that we make portable NMR and MRI technology for industrial and healthcare applications. I'm the founder and CEO. We do seek safe harbor for forward-looking statements. You know, I believe we just have an absolutely fabulous management team. For example, Julien Mueller , our CTO, who came to us, by the way, via our first acquisition that we closed just before the pandemic.
He's a great guy with our team, has a really unique vision for the future of magnetic resonance. Most of you know that Randall McRae has been with us now for approximately a year, and has really done an absolutely fabulous job taking over from the previous CFO, who's still connected with the company and helping us out in various capacities. Really thankful to Randall for the great job that he's done. He's gonna speak on a couple of the slides towards the end. I think most of you know me. I'm the founder and CEO and I'm an electrical engineer, but really I'm a tech startup guy. I'm really proud of what we've built here with our company. I'm not really proud about the current stock price, to be honest.
But, you know, I think we've done a lot of fabulous things and I think, you know, there's optimism in store for us with regard to our valuation. Just a little bit of an update on our cap table. We have about 100 million outstanding shares. Where our stock price is trading at right now, we have a market cap of approximately CAD 50 million. In 2022 we did CAD 25 million in revenue. You know, we're very confident that we're gonna continue to grow that for many years to come. I feel like we're a compelling story in terms of valuation, but also in terms of growth. We're a category creator in terms of portable NMR.
Just recently we've complemented our product sales with recurring very sticky service re-revenue stream as well. You know, it's been a challenging year for us, you know, but we've got tremendous conviction in what we're doing. We're staying the course. Our conviction is based on an absolutely fabulous foundation that we've built, you know, over 14 years with technology innovation, operational excellence, a great access to capital. A lot of talented people working very hard on our strategic vision. You know, we've got a lot of short-term tactical building blocks that we've created that we think is gonna result in tremendous shareholder value as we execute our mission and drive towards our vision. I'm just gonna go through some of the things that we've accomplished in the last 12 months.
We've digested three, our most recent three acquisitions of K'(Prime), the sales and services company, One Moon Scientific Software, and then of course the 43% investment in a high-field NMR company in Switzerland called Quad Systems. I feel like we've made tremendous progress on the integration side. In terms of that last investment, we successfully launched a full high-field NMR system at the most prestigious NMR conference in Monterey, California just recently. We're really excited about the revenue that's gonna be generated from that, and you know, our positioning in the NMR market because of that product. We continue to innovate. We filed more patents that, full patents and provisional patents. We develop a tremendous amount of IP associated with our products every single day.
Of course, we've got this great services business that we built via the K'(Prime) acquisition. The leader of that group, Kham Lin, has just done a fabulous job, not only winning that contract, but executing on it. Since we had this AGM, we've hired about 110 people specifically associated with that. We've gone from zero revenue per month on that project to well over CAD 500,000 per month on that project, and it continues to ramp, and we continue to have confidence that we're gonna be profitable on that project this fall. Our CFO will make some more detailed comments about that contract towards the end of the conversation here. You know, we've made tremendous gains on the performance of our 100 MHz product.
We've built a prototype next generation 60 MHz product, which is gonna be very important for some partnerships that we have in the pipeline, and also in terms of increasing our average selling price and that sort of thing. Really proud about what we've done, both with our 100 MHz and 60 MHz in the last year. You know, we have a fabulous finance and accounting department. We continue to show that we have great access to capital. Our CFO has been in the process of doing some great work with regards to restructuring our credit facility. We do have several very important cost reduction initiatives underway in our company to get us oriented towards the next phase of our business, which is about profitability.
This is a look at our full product portfolio. You know, our sales organization, which is growing, has many things to be able to sell today in magnetic resonance, both on the MRI side, also on the NMR spectroscopy side. We have a tremendous suite of accessories as well that go along with our core products. Then as is indicated by the bottom part of the screen, and it looks like this last little bit has been cut off, but I've indicated there again this emphasis on service, which is becoming a significant part of our business.
That's maybe, you know, one of the main themes is that, you know, we used to be a sort of a capital equipment only company, but now it's about our technology and products working synergistically with our service. I know many of you believe that the service part of our business has gotten, you know, quite a bit bigger than originally expected quicker.And, t hat is true. Regardless, it's definitely part of our vision to have products complement services and vice versa. Really proud about the progress that's been made there in terms of contract wins, but also in terms of some pretty impressive execution. We're just in a fabulous market space.
You know, when I founded this company 14 years ago, scientific instrumentation or test and measurement equipment wasn't really a sexy place to be, it definitely is now. You know, everybody knows that you need scientific equipment, whether you're looking for detective, explosive or narcotics at an airport, or whether you're an R&D lab, or whether you're trying to manufacture efficiently. Really excited about the general market space that we're in and about the state of our TAM and how we feel it's gonna continue to grow, and our stable of high-quality customers that we've built up over the years. Now I'll look forward a little bit.
One of our short-term objectives is to exit the current fiscal year as a profitable and growing company, and our CFO is doing a fabulous job on positioning us for that. You know, some of you have expressed to me your thoughts about how our balance sheet has looked sort of over the last year, and it's our intention to begin a phase in our company where you see our balance sheet strengthen, you know, not from raising money, but from operating cash flow. We expect to make high-field NMR via our Quad Systems partnership and investment to become a material part of our revenue. We continue to expand our sales organization with prioritizing the United States, of course, but also for the rest of the world.
It's our objective to establish some value-added benchtop NMR partnerships that will, you know, allow us to penetrate deeper into certain verticals like food and pharma and so on. We continue to have an objective of acquiring the remaining 57% of Quad Systems, our acquisition. I'm gonna talk about that in a slide, and I welcome any questions later on that topic. In terms of our investor relations, Randall and Matt and I are working very hard, as is also our Chairman, Martin, to get us in front of more analysts and get increased coverage of our company. We continue to have an objective to, you know, graduate to a major exchange, probably the TSX Venture.
I'm not gonna rush that. You know, there's a lot of very important foundational things that we need to do before we do that, but eventually, we think that's gonna benefit shareholders and our company as well. I just wanted to be clear with everybody that, you know, we've done a lot of acquisitions recently. That is not in the cards. It says 2023, 2014. That's a typo. Sorry. I meant to say 2023, 2024. So you're not gonna see us do that. Our original sales pipe, acquisition pipeline for our vision, it is my objective to resume that once, you know, our stock price recovers, once our balance sheet gets stronger.
You know, you can think of it in terms of, yeah, I still have specific MRI acquisitions that I wanna do that will take us towards an FDA-approved human medical imaging product that's application-specific and prevention-centric. But that's not in the cards for the next 18 months, so there'll be no dilutive activity in that regard. It is part of our vision. It's just been an absolutely fabulous ride here over the last 10-14 years. We got a lot of exciting short-term catalysts and medium-term catalysts. We think our next 10 years are gonna be even better and more exciting than our first 10 years. This is just a specific slide on the Quad Systems acquisition because many of you have inquired about that.
We did have a contractual option to acquire the remaining 57% of the company before July 1st. We are not going to exercise that option. You know, the sort of state of the equity markets and all our valuations and that sort of thing have changed since we initiated that deal approximately 18 months ago. However, our intentions remain the same. We have a great partnership going there that's gonna generate revenue, and there's a lot of strategic synergies. We remain in ongoing negotiations. Again, our intentions have not changed, but the timing definitely has changed. Again, happy to answer more questions on that.
Now I'm gonna turn it over to our CFO, Randall MacRae, who's been very involved in this CAD 160 million CATSA project. He'll make a few statements about how that project is going. Randall?
Thanks, Sean. And thanks to everybody for being on the call and the meeting today. Talking about our CATSA contract, as many of you already know, we won a CAD 160 million service contract to maintain and service detection equipment at Canadian airports, so your airport security equipment. We signed that contract May 25th, 2022. It goes all the way to June 2028. There's actually two renewal options at the customer's discretion in that. It's typically renewed for an additional five years, but there's a theoretical renewal period up to 15 years from the original signing. It's a preventative and corrective maintenance contract primarily, but there's a significant component as well for special projects as requested by the customer, which we're already actually working on for them.
It's maintaining all of the scientific and detection equipment in Canadian airports, so what we call the above ground, where passengers go through. The phase-in period, which is, generally speaking, the first year of the contract, is ending soon. We currently have an active presence in all 81 locations required by the customer, and we'll have a complete presence in all the locations by the end of 2024. Revenue has commenced on the contract. We began earning revenue in late 2022. Excuse me. Sorry, let me. I misspoke on the first one. We're expected to be in all the airports by the end of 2023, not 2024. We commenced revenue in 2022. We're, as Sean said, running over CAD 500,000 a month in revenue right now and increasing on the contract.
It's expected to go further than that and average about CAD 25 million a year from 2024 to 2027 once we're fully operational in every location. We're targeting strong margins on this contract. You know, we've got a good handle internally on what this type of service business should look like in terms of its structure, in terms of profitability, and we're targeting that actively from the outset. You know, this is a staff-based business. We've got a large workforce of over 100 employees. We're over 90% hired on those employees right now and significantly through the long and important training process to get them up to speed.
Once everybody is fully out, we are billing people out between CAD 228 and CAD 304 an hour to our customer and expect to have strong operating margins as a result and ultimately strong earnings before tax and net income off of this contract. It's important to note that there's global opportunity with regards to maintaining detection equipment. This is, you know, a Canadian contract, but these types of equipments are used in all G7 nations in a variety of applications that go beyond airport security. This type of equipment is very analogous to our scientific equipment and our NMR equipments.
As we grow the business globally, as we expand with our Quad acquisition into high field, we're going to need an agile and technically based service force to be able to maintain the needs of that part of our business as well. That's what Sean speaks to with regards to the long-term integration of our service operations and our NMR operations.
Thanks very much, Randall. That's essentially the end of our presentation other than to emphasize that we feel like we've built a fabulous company that's a compelling investment. Now I'll open up the call back to Matt Selinger, our IR manager, who will turn this into a question and answer session. Thanks very much to all those of you who joined the meeting today.
Yeah. Thank you, Sean and Randall. If people do have questions, depending on your Zoom skill set, one nice way we could do this is there's the button called Reactions. You can raise your hand, and we can pick it from there. Otherwise, you could send me a message. I did send a message to everybody. Or you can come off mute and just ask a question. We tended to have been orderly in the past. With that, why don't we open up for some questions? Maybe we have none. Yeah. Such a good presentation, Sean and Randall. I'm not seeing any questions as of now. You know, everybody, you do know how to get a hold of us. If you do have questions, please follow up with myself. We appreciate everyone taking the time today to join us for our annual general meeting.