MBX Biosciences, Inc.

Good morning, everyone. Thanks for joining us. We have an update with Microbics focused on their Q3 fiscal financials that they reported this morning. For those of you who have not seen them, you can find them on CEEDAR and I believe the website. As always, I don't believe we're going to work off a presentation today, but I promise to get an updated one on the website later today. But as always, this presentation will contain forward-looking statements. If you'd like to know more about those, you can find them on the presentation on the company's website. And with me today, I have Cameron Groom, CEO, Ken Hughes, COO, and Jim Curry, CFO. I think the format will be Cameron's going to do a bit of an overview on the quarter, and then we'll jump into Q&A and then have closing remarks. With all of that out of the way, Cameron, nice to see you.

Thank you, Debra. Great to see you as well. And thank you, Ken and Jim also. This morning, we reported the results for our third quarter of fiscal 2025. That's the quarter ended June 30, 2025, and it was a weak quarter, our weakest in about three years due to lower sales to two clients, one to our distributor into China, and second, a customer that we were supporting. So those were very material impacts on us, slowdowns with two large clients. And, you know, as with any smaller businesses, you're building it, you inevitably end up with some customer concentration. And I think we could have readily withstood a slowdown from one customer, but a slowdown from two creates a situation to use quickly enough. So then there's some downstream impacts in relation to that on margins as the fixed portion of manufacturing costs has to be covered across a fewer number of units produced, which pulls down margin and, of course, leads to negative figures on the net earnings perspective. that there weren't enough sales to cover the five to five and a half million break even point for which we've engineered the business. So, admittedly, a tough quarter. Our viewpoint is that we'll continue to move past this and resume our growth, although it will take some quarters to move us back through that. We did continue to see double-digit year-over-year growth in our CAPS business if we remove the one customer that cancelled that program. And we find certainly that quite encouraging. And the year-over-year sales are not particularly different for the recurring sales over the period. 14.8 versus 14.6, but obviously the customer setbacks clipped the growth we were expecting and resulted in that loss that we were not targeting. Jim, did you want to comment any further about the specifics of the quarter?

Sure, I'll give a couple of updates, I guess. It was a disappointing quarter, no question. On the revenue side, as Cameron indicated, there was a couple of Clients that fell short of expectation due to cancellation and some issues with China. I think there was a little bit of silver lining in that. On a year-to-date basis, excluding those two clients, we did see growth of 13% in our caps business and actually 34% in our antigen business. So in our other clients, we are seeing growth, which is good news, and we expect that to continue. Margins, again, not where we had wanted them to be. We do have fixed manufacturing costs, which obviously with the sales levels down, the amount it was impacted our margins. The product mix always also was unfavorable in that there was a couple of products that we typically have, and their sales levels were lower during the quarter, so. There's a few factors that impacted our margin. On the OpEx side, we are continuing to invest in our sales and marketing. We did attend additional trade shows, again, trying to promote both of our businesses. R&D spending is up. Again, we want to make sure that we are investing in new products and launching new products on an ongoing basis. We did have a couple of things that impacted We had OTF funding last year that we didn't have this year. It was about $150,000. Our financial expenses were impacted. Again, there was an amendment to our agreement with FedDef last year that gave us a favorable $166,000 that obviously isn't there this year either. And we had some unfavorable FX losses during the quarters that affected our operating expenses. From a financial perspective, from a balance sheet perspective, we still continue to be in good shape. Current ratio, 9.73. Our debt-to-equity ratio is in a good position at .3. We've got cash of $12 million, cash and cash equivalents of $12 million. So, we are still a very financially viable organization, and we're looking forward to growth as we move forward.