Milestones aside, the cannabis industry is still full of challenges, but we've not taken our eyes off what we view as Aurora's greatest opportunity, solidifying our position and focusing on resources on the global medical segment will remain the number one Canadian LP. There is and will continue to be real and profitable growth opportunities in the global medical market for companies such as Aurora. We have been able to sustain and grow our high margin medical cannabis revenue over time and our diversified presence affords us some resilience to macroeconomic and regulatory risks. Our view is that the momentum for top line expansion and profitability remains very strong. And as we've said many times, Aurora's expertise in managing the complexity of multiple jurisdictions regulatory frameworks, our unwavering commitment to science, breeding and genetics sets us apart in this industry.

And these are the capabilities that will position us to win new business in medical and for that matter, recreational markets as they open up. Our ability to invest and grow is supported by our strong balance sheet, which we've worked hard to improve over the last few years. We believe we're among a very small group of LPs and MSOs that have a robust balance sheet and net cash position. And this gives Aurora a staying power and the necessary capital to be targeted and opportunistic in the midst of rapid industry rationalization. Let's now briefly touch on the quarter before Glen does a more complete financial review. Our international medical revenue represents a global portfolio of profitable markets, where we remain a leading cannabis provider.

As part of our commitment to bring high-quality, consistent and innovative cannabis products for these patients, we recently introduced two Canadian grown high THC cultivars that are popular in Canada to German patients. These proven products get physicians even more options to prescribe patients individually tailored treatments. While the German market for rec is exciting and something the industry is eagerly awaiting, any enhancements to the current medical industry will have a more immediate impact. In particular, the German government is currently working to deschedule cannabis in the first part of the Legalization Bill. With Aurora's leadership position in the German medical cannabis industry, we are well-positioned to benefit from these proposed changes.

Staying on the topic of Germany as one of only three companies with a medical domestic production license in that country, Aurora will have a significant advantage and role when the German adult use regulatory framework is developed. Turning to the Canadian medical market, our focus remains on serving insured patient groups, which represents some 82% of our Q3 Canadian medical cannabis net revenues, up 100 basis points from Q2 and up 500 basis points from Q3 last year. Our industry-leading share remains at about 25%, roughly double that of our closest competitor. Looking forward, you may have read that we launch new program for Canadian patients that is designed to support and empower cannabis patients on their wellness journey. Alongside the advice of a healthcare professional, Aurora patients can use the award-winning Strainprint app by logging their symptoms and consumption habits to better understand, which strains, THC, CBD levels and doses best work for them.

This is technology and innovation at work, all for the sake of better patient outcomes. Switching to Canadian adult rec, despite ongoing macro challenges that are impacting this industry, Aurora has been able to maintain our net revenue position compared to Q2, while also increasing our gross margins by 5%. When comparing to Q3 of last year, we are seeing net revenue increase by $4.1 million. We've been able to do this by leveraging our science-driven cultivation advantages, while continuing to invest in product innovation and product availability. Finally, let's discuss Bevo, one of the largest suppliers of propagated vegetables and ornamental plants in North America. Q3 plant propagation revenue represented a significant increase in Q2 as we entered prime seasonality as the segment delivers its highest revenues in the late winter and spring months as orders are fulfilled.

Photo by CRYSTALWEED cannabis on Unsplash

We have also completed repurposing the 800,000 square foot Aurora Sky facility for orchid and vegetable propagation. We expect to see revenues generated from the Sky facility in the final quarter of calendar 2023. And once executed, Bevo’s financial contribution could be significant. This rapid expansion serves to increase Bevo’s production capability and extend its shipping range in Canada and the U.S. Now that we expect to see positive adjusted EBITDA on an annual basis, we see our next financial milestone as maintaining a net cash position and generating positive free cash flow. And with that, I would now like to turn the call over to Glen for our financial review.

Glen Ibbott: Thank you, Miguel. Good morning, everyone. I will walk through the Q3 P&L momentarily, but first, let's review our balance sheet. Aurora already has one of the strongest balance sheets among Canadian LPs. As of Monday, June 12th, we have approximately $230 million of cash and cash equivalents. And this should be more than sufficient to fund operations until we reach positive free cash flow, which we are working to achieve by the end of calendar year 2024. Miguel noted our plan to capture an additional $40 million in annualized cash flow savings this fiscal year. We've already put into motion most of the actions to achieve these savings, including the closure of production at our facility in Denmark, further targeted reductions to external SG&A and operations costs and a number of other initiatives and investments.

In Q3 2023, our operations used a net $15.1 million, excluding changes in working capital. The $15.1 million includes about $2.1 million in nonrecurring termination costs. So our rate of operating cash use for planning purposes is approximately $13 million per quarter. To be a bit more prescriptive, this fiscal year we're working on taking out a minimum of $5 million quarterly from operations as we eliminate less efficient operations and focus on supplying the globe from our very low-cost yet high-quality production facilities. Removing a minimum of $5 million quarterly through a number of defined and targeted efficiency and cost reduction initiatives in operations and in SG&A. Combined, these will bring us down to low single-digit quarterly cash used in operations during this fiscal year, with nine months remaining for the end of the calendar 2024 to achieve the remainder.

Of course, this is all before considering revenue growth. In addition, compared to Q3, we'll also save approximately $2 million a quarter in interest as we pay off the remainder of our convertible debt. Currently standing at about CAD80 million and intend to pay that off by the end of this fiscal year. Finally, quarterly capital expenditures were $3.6 million in Q3, on par with the previous quarter. For fiscal 2024, we've also pulled in CapEx, but that required to keep our facilities maintained and working efficiently. We expect to hold quarterly maintenance CapEx at an average of $2 million in fiscal 2024. That will save over $1 million a quarter compared to Q3. We're seeing the benefit of alignment of production and sales volumes as significant excess inventory is an issue we seem to have put behind us.

At the same time, we are realizing the benefit of our long term commitment to science and quality cultivation. And that demand for our products globally is beginning to outpace supply. So we see upside opportunity, but are expanding capacity prudently and smartly. Revenue growth, as it arrives, is incremental on our path to positive cash flow and could accelerate the timing of reaching our goal. This road to positive free cash flow, while also preparing to realize incremental revenue opportunities. Certainly, distinguishes Aurora during the period of intense and rapid industry change and rationalization. Aurora is positioned with balance sheet strength and realistic growth prospects to thrive over the long term as the global cannabis market expands.

The actions I just outlined are the starting point on our journey to reach positive free cash flow by the end of calendar 2024. To make sure that we can be opportunistic, during this period of industry rationalization, we will exclude any growth CapEx from our free cash flow target. That is discretionary, but that we might deploy to increase shareholder value even further. We currently have approximately CAD80 million remaining on our convertible notes due in 2024. Subsequent to our year end of March 31, we repurchased about $50.9 million in aggregate principal amount of convertible senior notes. The total cash consideration was approximately $46 million. And we issued 6.4 million common shares in settlement of a further $4 million of principal on this debt.

And we will settle the remaining convertible debenture balance by maturity next year. We do not intend to refinance the notes. I should remind you that we continue to have access to approximately $241 million under our Base Shelf Prospectus. During Q3, we issued 4.7 million shares for net proceeds of $3.6 million. And we filed a new shelf in March as the previous one was expiring. Note that our intentions regarding further share issuances would only be for strategic purposes and that includes debt repayment. Now let's review the P&L in each of our businesses. Q3 total net revenue grew 4% to $64 million as compared to $61.7 million last quarter and up 27% compared to the year ago period. For the second consecutive quarter, we achieved a modest positive adjusted EBITDA, which we attribute to both revenue growth and cost containment.

Overall, Aurora's Q3 adjusted gross margin before fair value adjustments was 48% versus 45% in Q2, which remains among the industries best. Canadian medical revenue was $24.2 million in Q3, down 6% from Q2. The business is steady, but the revenue trend was impacted due to the timing of shipments at the end of Q1, which resulted in higher Q2 sales. Again, demonstrating the value of our diversified portfolio of global medical businesses as markets developed. International medical revenue is $13.8 million, steady compared to last quarter. With continuing growth in our export business to Australia, offsetting a slight [Technical Difficulty] we have made the decision to close our Nordic production facility in Denmark and we'll supply our very important European business from our Canadian footprint, where we have much lower per unit costs, higher quality and a much more reliable supply.

We believe this change in addition to reduced cost will allow us to compete even more effectively in the growing European market where we already have a substantial leadership position. As usual, driven by our focus and leadership in global medical markets, medical cannabis representing about 71% of Q3 cannabis revenue and 86% of Aurora's adjusted cannabis gross profit. Medical adjusted gross margin was 60% down only slightly from 61% from the prior quarter and within our target range of 60% above. We expect the supply of Europe from Canada will improve European medical margins over the next fiscal year. The stability and strength of our medical adjusted gross margins is an important gross profit driver that truly distinguishes Aurora from its major competitors.

Consumer cannabis net revenue is $14.5 million, steady compared to last quarter, which we view favorably. This demonstrates our Aurora’s agility and deliver compelling product even with ongoing macro challenges in the consumer market. Adjusted gross margin before fair value adjustments on consumer cannabis net revenue is 25% in Q3 compared to 20% in the prior quarter. The increase from Q2 was primarily driven by a shift in mix towards core segment brands as consumers responded to our product innovation. And in the plant propagation segment, our controlling stake in Bevo enabled us to recognize $10.8 million in net revenue during Q3, up from $6.6 million in Q2. As a reminder, Bevo has a seasonal cadence with two-thirds of Bevo's annual revenue and adjusted EBITDA being realized in the period from January to June.

On an annualized basis, Bevo business is steady and predictable and supports our ability to generate positive adjusted EBITDA and eventually positive free cash flow. Adjusted gross margin before fair value adjustments on plant propagation was 36% in Q3 compared to 15% in Q2. This was expected as the seasonality of the vegetable and ornamental plant industry in the late winter and spring months yield higher margins relative to the rest of the year as there's a high volume of production and orders being fulfilled in these months. Finally, adjusted SG&A was $28.4 million and adjusted R&D is just below $2 million, reflecting our ongoing commitment to keeping SG&A well controlled. This was accomplished through the successful execution of our business transformation plan that included rationalizing our operations footprint and focusing our core business essentials.

And a quick look ahead as we're closing in on the end of Q1 fiscal 2024. We expect cannabis net revenue for fiscal Q1 2024 to be largely similar to fiscal Q3 2023. With the geographic mix weighted slightly more heavily towards the International Medical segment. For plant propagation, we expect to see a seasonally strong quarter as we reach our peak selling period. Furthermore, adjusted gross margins are projected to be consistent with fiscal Q3 2023. And we also expect to maintain our stated objective of quarterly SG&A expense run rate below $30 million. To close and sum up Aurora's financial metrics are healthy and strong with a diversified global cannabis business delivering dependable revenue and leading gross profit and supported by a well-controlled SG&A foundation.

As we outlined, management is working diligently to even further strengthen both the balance sheet and the company's free cash flow. Thanks for your interest. I'll now turn the call back to Miguel.

Miguel Martin: Thanks, Glen. Several years ago, we embarked on a journey to bring the company to sustainable positive adjusted EBITDA. This has since been accomplished through our focus on the highest margin opportunity within cannabis, global medical, as well as a substantial reduction in cost that have resulted in significant operating efficiencies. We have now set another ambitious target of removing a further $40 million of cost during this fiscal year to support our goal of being free cash flow positive by the end of calendar 2024. In the big picture, we believe our accomplishments to date coupled with our near term goals, becoming convertible debt free and cash flow positive truly sets us apart from our peers. And as industry rationalization takes hold, we think it is important for our investors to appreciate that we have the necessary capital, business plan and by extension the staying power to not only endure, but emerge stronger than these competitors as the global cannabis industry develops.

Our growth and profitability focus is on the high margin medical business that continues to expand globally, supported by innovation and development of quality products for a loyal patient base. We have and will continue to pull all levers at our disposal to create equity value for our shareholders. And that includes smartly allocating capital between organic growth, strategic M&A and continuing to focus on all the details that build a world class company. Thank you for your time and interest in Aurora. Operator, please open the lines for questions.

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