Microbix Biosystems Inc.

With me, I have Cameron Groom, CEO, Ken Hughes, COO, and Jim Curry, CFO. Before we get started, the format will be a bit of an overview of the quarter from the management team, and then we'll jump right into Q&A. So if you have any questions, feel free to... submit them in the Q&A box at the bottom of the screen, or you can always email them to me at deborah.ca, although I'm sure most of you have my email address at this point. I don't believe that we're going to work off our presentation, but 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, which I will have updated later today. Unfortunately, I didn't quite get it done for this call, but it should be there this afternoon. With all of that out of the way, and I'm sure you're tired of hearing me talk, I'd like to introduce Cameron Broom, who's going to kick things off to talk about Q3 2020.

Great. Well, thank you very much, Debra. Thanks, Jim and Ken, and thank you, everybody, for taking a lovely August morning to join us for this Q3-related webinar. Apologies in advance. I picked up a bit of a chest bug following the ADLM conference in Chicago, so if I cough a little bit or if Jim and Ken need to take over momentarily, please bear with me. That's what happens when you hang out with 28,000 of your friends that work in clinical labs. You put yourself a little bit out there at risk when it's on demand. So thank you. For Q3, microbics, as you've seen this morning, reported revenues of $5.1 million Canadian. That's comprised of $3.3 million of sales of our antigenics, or test ingredient products a little bit ahead of where we were targeting, and $1.7 million of our test control caps products a little bit behind where we were targeting with a balance of $100,000 there, Ben, comprised of inbound royalties to us. And that compares to total revenues of $5.5 million the prior year. But it's important to note that in the prior year, 1.4 million of the quarter's revenues were comprised of a kinetic-related milestone that was a one-time occurrence. So when we're looking at recurring product sales year-over-year for Q3, they have increased by about 20% year-over-year, so very respectable growth for our industry. Similarly, for the nine months year-to-date, We've achieved revenues of $19.1 million, $4.1 million of which were catalytic-related milestones, and that was comprised of $9.3 million of antigens, $5.3 million of caps, and a balance of over $400,000 of royalties. So, comparatively, that compares to year-to-date revenues the prior year of 2012. was catalytic related. So when we look at our comparability of the year-to-date product sales for the nine months, we're at $15 million in recurring product sales this year versus $10.9 million the prior year. So for growth year-over-year sales growth, recurring sales growth of about 38%. So we consider this to be a very strong growth rate for our recurring product sales and are pleased with that performance. And frankly, we hope you are too. Industry growth in our industry is considerably lower than that rate. So we are strongly outperforming the overall growth of the diagnostic sector based on what we believe are doing the right things in terms of our customer servicing and product development efforts. In terms of margins, overall performance, The gross margin for Q3 was within a satisfactory range at 54%, and that compares to 42% gross margin the prior year. And in Q3 of fiscal 2024, our gross margin was positively influenced by ongoing work that we've undertaken to improve production efficiency, and it was negatively influenced by some write-downs that provisions we took related to sale-dated products CAPS products, which I best describe as BNNs that we could go into. By comparison, gross margins the prior year The growth margin the prior year was buoyed by a kinetic-related milestone that I mentioned earlier and also reduced by a write-down of expired viral transport medium inventory that was provided for in Q3 of fiscal 2023. So, and looking for the nine months, of course, gross margin for the nine months year to date was similarly in a satisfactory range at 63% gross margin for the nine months this year compared to 49% gross margin the prior year. So, again, we're pleased with this performance and certainly hope that you are too as shareholders. At this point, perhaps I can ask Jim Curry to speak a little bit about the balance in P&L, our balance sheet position coming out of the third quarter, and likewise review sources and uses of our cash for the nine-month period. Jim, please go ahead in your off-camera.

I think you may be having some technical difficulties.

Okay. Well, let me step in then. I will go through a few of my notes. Just in terms of our looking further, you know, our overall break-even point, of course, as we've disclosed, is around the $5 million revenues mark. And we came in with a satisfactory bottom line margin, net margin of 5% for Q3. This is largely in line with our expectations. And in terms of expenses, you can see SG&A expenses very much tightly controlled and not materially changed year over year. Our cash flow from operations generation was $1.4 million yesterday. And of that, this is for the period, and we've used about a million of that in CapEx and about half a million in debt repayment and use as a normal course issuer of it. Again, very satisfactory numbers, and our liquidity position and leverage remains quite strong as well. We have a current ratio of about 6.6, which is a very strong liquidity position, and we continue to delever our company. And it brought down the debt-to-equity ratio to 0.35, which, again, is pursuing a downward trajectory of improvement in terms of the equity that we have employing and paying down debt rather than running down. So... Strategically, I'll just roll through a little bit. We're now consistently posting sales over our $5.25 million break-even point without any reliance on government-related procurements, and this puts us in a very strong and sustainable position to continue growing our company and having, as I mentioned, come back from the largest U.S. industry trade show. I can very much confirm that we continue to add new business. with our existing customers, and we continue to target and add new customers as well. And all this continues to be amongst the leaders in the proficiency testing and external quality assessment customers. Those are the agencies that do the proficiency testing and accreditation of the clinical labs that are major customers for our CAPS products. We continue to grow our business with test makers. This is for both our antigen test ingredients products as well as our CAPS products for inclusion in the kits of test cartridges, often in the point of care but not always. and also direct sales to clinic major clinical labs is continuing to grow as well so the outlook is very positive overall and the only questions that we continue to ask and answer relate to the timing of our clients projects but before we get too granular in terms of outlook I'll now ask if Ken can provide us an update both on operations in terms of some of the progress we're making there, as well as on our therapeutics project, which promises to be very important for the company and is also progressing, I would say, very well. Ken, please go ahead.

Thanks. From an operational perspective, basically we just continue to execute operations In the last few months, we've announced the commissioning of a new R&D and QC space in our third building, a 275 watt line, which was a subject of an announcement with Minister Tangri, Provincial Minister. And we've also got the full automation unit in another lab in that same building, fully operational now as well. So basically, we've executed all of that, and we're in the process of actually building additional capacity To do that, we've been deploying grants from the Ontario Together Fund, as well as interest-free loans from FedDev Ontario, inexpensive capital to drive this. And we've basically been delivering as we said we would. In terms of the core business itself, the development and manufacturing and QC teams have done great work in improving manufacturing and throughput efficiency, which is driving margins. We've seen that on multiple products, and that will continue to be the case. We really do have an excellent scientific and technical team at Microbics, and that's going to continue to be the case. and that's going to drive margins going forward so from a general operational perspective from our business in qa2 we've also successfully um re-upped our order by audit our iso 13485 status and also um successfully um adapted our european filings to the invito diagnostic regulations the new regulations rather than directives which is a much higher standard and we passed those audits with flying colours to maintain our ceiling marks in Europe and our ability to sell around the world. So we are excellent in manufacturing, in development, in testing and in the quality systems. In terms of the digital implementation of quality management system in the ERP, both of those are successfully implemented and are just being built upon to make us more efficient and have the additional capacity to build forward as we need and have the capacity to sustain our growth over the coming years. So operationally, everything's going extremely well. Now on Kinlytic, I have to say everything is going extremely well there as well. We have an excellent relationship with SQL. We have a CDMO now working on upgrading the drug substance, the purified urokinase protein for regulatory filings. And those studies are going exceptionally well. I mean, this is a low, A low risk process in the sense that this product was the standard of care in catheter management and other thrombolytic indications for decades. So it's not going to fail clinics. This is about implementation of a process, an updated process. And that's going extremely well and the analytics to go with that. We're now in the process of engaging with a clinical research organization or development manufacturing organization for the drug product, which is the finished form, which will be in the vial, which will be used on patients. And that also, those negotiations are going very well as well. So we really have, we're moving forward at a pace in all aspects of the clinical project. And the timelines are unchanged from the last time we spoke. So bottom line is operations for the general business are going very well. The kinetic project is going very well. And as usual, we're executing exactly as we said we would.

You're on mute, Cam. Thank you. Thank you, Ken. That's a great point at which to leave it off. I think that we continue to do what we say we're going to do and have set out to do is very important, and the strength of the operations continuing to improve is really reflective of that. Certainly, we're gaining, I would say, greater visibility within our industry as go-to providers for not just test ingredients, but also for our test controls, which are so essential for our clients. I'm very pleased with the progress of Kinelig Urokinase. Of course, you know, we are selling products a unit at a time for our diagnostics business and growing that quite substantially. The torque additional leverage provided from Kinlytic, when that hits in several years' time, that will certainly probably provide as much profit again as our entire diagnostics business by that point, so remains extremely relevant to all of us as shareholders in microbex and delighted to see that progress. Now, we lost Jim for a couple of minutes there, Jim. I'm sorry about that.

Can you hear me?

We can, and I valiantly filled in for you. But maybe if you want to offer any supplemental comments about the financials for the quarter.

Yeah, I'm not sure what you told them yet, but I'll add some supplemental. Sorry about that. Don't ever switch laptops a day before you go on these calls. That's the moral of the story here. So I apologize. Yeah, no, a really strong quarter that we had, both from a top line and a bottom line perspective. I think Cameron will have identified that we had some favorable items coming from the funding side in terms of our FedDev grant providing us with some more beneficial terms and a delay in when we have to start our repayment out until I guess now January 2026, as opposed to originally starting in December of this year.

A FedDev loan, I think you meant.

A FedDev loan, sorry, yes.

To avoid confusion.

Yeah, I apologize. That's the repayment. And OTF, we also saw some favorable grant income recognized in the quarter, so that was excellent. We've Revenue growth, fantastic. For our caps and antigen businesses both, we're seeing some really strong bounce back. We're now well past COVID, but we certainly saw a downturn on the antigens business during COVID, but we are starting to see the results of the bounce back in COVID, and especially through our distribution partner in Asia. capital contributions. Uh, we've taken, uh, we're continuing to invest in the business. We're investing in all areas. Uh, I don't know whether you mentioned, uh, the acquisition of some technology that we were previously playing royalties on. Um, we took the opportunity to acquire the materials and some rights and know-how from, uh, from a, a key supplier of ours. And, uh, It was $270,000 that was capitalized during the quarter, and that should benefit us as we move forward. Cash flow is great. We're sitting with about the better part of $13 million in cash, and we've got our $2 million of credit available to us from TD as well. So we're well-funded at this point in time.

Thank you. Jim, did you want to mention anything about the normal course issue a bit and the pace of share buybacks?

Yeah. Yes. Through the third quarter, we had $1.6 million acquired in the form of buyback. We're continuing to look at – and we saw – I think it was in July that we've seen the block transactions as well as the regular daily transactions. So we're continuing to believe that we've got an undervalued stock and we think that we should continue the buyback process and we will continue that as we move forward.

Yeah, very much. Thank you, Jim. No, I think that emphasizes the cash balance continued to be very strong and net positive even as we are reinvesting strongly into our business to further improve efficiencies as well as buying back stock. Those actions still are not meaningfully eroding our cash balances, which is, again, very helpful as prospective customers evaluate making us a critical sole source supply chain partner that they know we have the strength and staying power to be there for them as needed.

That's a good point, Cameron.

Yeah, again, very strong, and at a minimum, our normal course issuer bid activities are enough to offset, fully offset the prospectively dilutive impact of our rolling stock option plan, but certainly we will go well above the 2% buyback level. and would happily buy back the allowed maximum of 5% if we can get the blocks to affect that. In the meantime, we buy back as much as we can every day under the prescribed rules of the stock exchange. Thanks, Jim. Thanks, Ken. In terms of, you know, a little bit of strategic discussion, certainly the outlook for the balance of 2024 into 2025 is strong. We don't give specific orderly guidance, as everyone knows, but certainly we expect Q4 this September 30 fiscal Q4 closeout to be very strong and certainly will be north of 20% year-over-year sales growth for Q4, as we have seen in Q3 and the prior quarters. In terms of the 2025 outlook, our budgeting process is conducted through the August through to a budget approval in November timeframe. And we'll be looking at sales growth certainly in the 20% to 40% range, but where we land precisely there very much depends on a detailed bottom-up forecasting exercise that we do that's a result of analysis customer by customer and SKU by SKU. So we're not just – blindly ballparking but really specifically identifying where revenues will be derived. But we certainly see the very strong growth trajectory that we've seen in 2024 to continue into and through 2025. And in so doing, we will very much be holding to our model of profitable growth and we'll be continuing to manage our liquidity to remain in a position of strength from a balance sheet point of view while continuing to use the NCIB, the share repurchase plan, aggressively to reduce our net number of shares outstanding. So that's, I think, where I would land as a summary of the quarter. And I know we have a good number of attendees on the call, and perhaps it would be at this point, Debra, if there are any questions that you have or any questions that we have from our listeners, participants in the webinar, we'd be delighted to address them.

Actually, I have a question. It's probably not all that relevant, but I was thinking about it this morning when I was reading the news. I believe a number of years ago when monkeypox first came out, you did develop some test controls for that. Do you think there's a business opportunity with the resurgence of the new strain in Africa?

I would say yes. We certainly acted to develop a product on request of our efficiency testing and lab accreditation partners, and we have generated some revenues from that project. We'll be evaluating whether the previously developed monkeypox controls remain fully relevant for the emerging clades and variants of monkeypox. But our capabilities are undiminished, and to the extent that that or H5N1 or any other emerging pathogen surface, those will be right there to help the industry and make sure that testing is as accurate and well-controlled as possible. So, yes, all of those opportunities serve as potential sales opportunities for microbots.

And then I had an audience question that came in earlier. Previously, the company announced on VTM that Microbix sees material and emerging interest from private customers and will be building that business line going forward. Those are direct quotes, Cameron. Can you please provide an update on progress with VTM?

Yes, we've been – been looking at other opportunities, non-governmental opportunities for VTM and VTM-like products. And some of the areas that we've seen our strong interest in are for being able to properly elute control samples for use, so effectively combining our CAPs and our VTM to offer a sort of full process solutions for our customers. And these can be within the context of our onboarding kits, as well as in control materials with the customer to say, hey, you should be using a compatible buffer. This buffer is certainly compatible and please make sure you're validating your workflows properly. So there is a definite value in having VTM. and using it for support of our controls business directly with customers. We have seen sales of material fashion in that category, but we're not breaking it out as such as it's really tied to the caps business at this point.

How much of VTM production capacity has been reallocated at this point?

A small proportion. It wouldn't be the full capability of the line. You know, the line is made to manufacture millions of vials of product, and we're looking at a much smaller scale at this point, edging back into that market, and it takes time.

A couple of other audience questions here. Estrogen and cap sales have been lumpy over the past few quarters. What are some causes of the fluctuations, and do you expect this to stabilize in the future?

I'm not sure I would call them lumpy, but let's assume that that's the case for the interest of this exercise. You know, it's always a question of when a customer is seeking to take delivery of product. So we are always looking to delight our customers with delivery schedules. But if a customer says, I want to take product on delivery, July 1st, not June 30th, that's when it's going to happen. So we don't game our quarters in terms of jamming revenues in and out of them. It's really a collaborative relationship with the customer. When can we have made the product and when do they want to take delivery? So we see that. Now, oftentimes we've seen, you know, sometimes customers can wait until the last minute and create a bit of a fire drill for us to make a product, but we try to work to schedule workflow so that it's – maximizes our capacity and doesn't overtax our staff unnecessarily. So, you know, if we look at our quarters, I think we've been up in the 20% to 40% range each quarter of this year, and certainly we'd like to see that continuing.

Cameron, we do have events sometimes within the PT business that could provide some lumpiness in in our sort of caps business on a time-to-time basis.

Great point, Jim. Maybe you want to expand on that a little bit.

Yeah, well, I provisionally testing customers that have events that take place throughout the fiscal year. However, in one particular customer case, we only have sales to them in three of the four quarters. So there is a quarter that ends up with, and they're fairly significant customers. So that will impact quarterly results. And I think as Cameron identified on the antigen business, it's really highly dependent upon, you know, four or five of our larger customers and the timing of their demands. So we can't have, as we've seen in the past, Q1 has typically seen a quieter border for us, and it's becoming less so than it was a number of years ago. But we're now starting to, so it is impacted by large antigen customer orders as well.

Yeah. And then, Pete, just to expand on Jim's comment about the proficiency testing and external quality assessment customers, Often the labs are tested of their competence three times a year. So for those customers, there are often three large shipments throughout the year to each one of those customers, creating some of that knowledge. quarter-to-quarter shifts and the antigen customers that they can take a, you know, half a million or a million-dollar delivery, and which side of the quarter end that falls upon is typically not in our control.

I mean, the processes by which antigens and caps are made can be quite long and the delivery can be quite large. And so that can generate a little bit of lumpiness as well. And as Cameron says, we don't gain the quarter. But as this business is growing and there are more events and more deliveries, there will be something of a smoothing associated with that. But, you know, if somebody orders $2 million worth of rubella virus, it's a single delivery, and that's going to, by definition, create a little bit of lumpiness, which would be diluted by the increased volume of what we're doing here. And I think we're seeing that. So it's not quite as lumpy as it once was, and it's going to continue to smooth.

Yeah, I would expect that smoothing process to continue over time. Certainly, we're also seeing a growing number of direct lab sales as well. And while that's still a smaller proportion of overall sales, those $500 or $1,000 invoices coming in on a more regular stream certainly served to offset some of the big industrial customer sales.

Questions here. There's been a strong resurgence in antigen demand this year. Can you share your expectations for antigens going into Q4 and next year based on current visibility that you have?

Certainly we have a very strong order book with antigens. There's no indication in my mind that that is in any way slowing down. So that continues to be the And, you know, in terms of we do have a visibility of orders for most customers out a few quarters. So that is strong. We don't publish sort of an order book number, but it is visible to us and certainly looks to be strong going into at least the first half of fiscal 2025. Jim, without providing express guidance, are there any qualitative comments you'd want to make about the antigen outlook? Oh, you're on mute, Jim.

Yeah, we certainly, in the antigen business especially, we do get a lot of visibility to future orders because we don't typically stock a lot of inventory in

Been trying to, but it keeps selling.

We're trying to catch up. Quite frankly, that's where we are is manufacturing is going full out to meet the demands of our antigen business, and the outlook into the first half of next year continues to be very strong.

And we continue, and I didn't mention that in the operational updates, deploy state-of-the-art technologies. We announced our second antigen product going into bioreactor recently, and we're continuing to develop that. And Jim mentioned earlier about importing new technologies that are state-of-the-art and deploying them both in terms of manufacturing and testing. We're going to continue to do that. It's very important to understand that we really are world leaders in this particular area in antigens and quality assessment products and related controls. And so the market is going to be growing with us in it, and we're going to continue to maintain our leadership by deploying state-of-the-art technologies.

So part of my question, Ken, but I'll give you the second part. And I don't know if Cameron's going to allow you to answer it. So with the addition of a second bioreactor line, can we assume that there's another type of antigen that is selling quite well, like rubella?

Yes.

Are you able to talk a little bit about that?

Yeah, we're not going into detail about precisely what we're making, you know, where and how. You know, as some people say, I don't know, Don't tell me how the watch is made. Tell me what time it is. But this is about being able to scale as efficiently as possible in terms of our production. We don't want to scale in such a way that we have to arithmetically increase our footprint as we grow revenues. We want to do more and do that more efficiently, such that we can grow margins at the same time as we're growing revenues. And that's the kind of work we're doing very much, and we have a very strong group technically within R&D and product engineering groups that are making some real progress in that regard as well. And we see that in the gross margin numbers. And you're chomping at the bit too.

We're deploying multiple technologies. We announced the bioreactor, but it's not just the bioreactor. We're still in many areas, and we've got a great team that are making sure that we have the necessary capacity for throughput, but also that we maximize margins going forward. And on both sides of that equation, the work is going very well, and we do have an excellent team to do that. So we anticipate... Easily, not easily, nothing's easy. We anticipate being able to support the growth necessary and growth beyond where we ought to be based on the technologies that are being implemented as we speak, and we will continue to grow from there.

Yeah, and this really speaks to work in R&D, work in engineering, work in manufacturing. way, looking at efficiencies up and down the line. And by efficiencies, we're not talking about some Dickensian work harder philosophy. We're trying to empower our staff, give them the tools to do their best possible work, remove the drudgery, improve accuracy, and we see that benefit in margins and capacity.

It's all about capacity building and the quality of that capacity, and it goes right through the IT and the electronic quality management system we're bringing into play, and the fact that the ARP, the Enterprise Resource Planning System, is being updated. So it just serves all that capacity and that capacity growth as we move forward.

I think that's a nice tie-in to a question that's been sitting here for a little bit. With automation now completed, are operating expenses expected to change going forward? I guess that one's for you, Jim.

I think what we've seen more recently and most recent quarter versus last year is we've actually seen a bit of a reduction in our operating expenses because we went through a period of implementation of the ERP solution as well as our master control on the EQMS side that we're not incurring those consulting fees this year. So we are being more efficient with our operating expenses. And I think in general, I wouldn't expect the level of operating expenses to grow, hopefully not at the same pace that our top lines are going, and it hasn't been. And I wouldn't expect to see that as we go forward either.

Yeah, and I would comment about this, you know, when we look at just in the summary slides, financials for the quarter ended, you can see that there's really been no material change in SG&A for the business year over year for Q3, even though we have dramatically increased revenues. So it is a disciplined execution that we're undertaking.

We are, however, starting to get back into trade shows and post-COVID into the trade shows. And so there will be some investment in continued investment in sales and marketing, as well as research and development. We're certainly not holding back on our research and development spend. And we're investing in adding new staff in the research and development area. So that is an area where we are investing.

Yeah, and this is very much about product development that is specifically being requested by our customers. So it's not speculation, speculative development that we're undertaking, but rather very sales-focused product development. You know, one of the areas that we are stretched on is, frankly, desk space and workstations within our operations. So, you know, I wouldn't be at all shocked if towards the end of this year, early next year, we're actually talking about putting a fourth site into place to further support the growth. And, you know, that's a small cost in the big scheme of things, but it is reflective, again, of the trajectory that we're on.

I've got two other questions here. Have there been any major advancements of other CAPS client programs?

Yes, there have. I think it's fair to say we count, I would say, four of the top five largest diagnostics companies in the world as direct customers. we now are counting the majority of the largest proficiency testing and accreditation organizations as clients, direct clients, and the majority of the world's largest clinical laboratories have become direct clients. So as you qualify yourself as a direct vendor to these different companies, That starts with a few SKUs, and then it becomes easier to ask the question, hey, what other problems can we solve for you? What other products can we be providing? And as we open these accounts, building the business with each of them is a very clear objective of our company, and we're doing it, I think, well.

And one final question here, probably depends partially on mix, but what's your target for margins over the next few years? I know you don't give guidance, but I'll let you take that however you want.

I mean, we had certainly quite a bit of variability historically within the antigen portfolio, product by product, and even lot by lot. We've been dialing to reduce that variability and improve margins, both with efficiencies and more intelligent pricing structures as well. I think we have improved things. We've talked about, you know, when we began focusing on this exercise, I think margins were in the high 30s. We've moved them up through the 40s now into the 50s. It probably would be a challenge to get sustained margins, you know, across the portfolio far over the 60% mark. But I think that continues to be a reasonable target for us, and we'll continue working in that direction. Jim, what would you want to comment there?

Yeah, I think you covered that well. I think that certainly we've historically set a strategic target of being on the plus side of 60%. And, again, it depends on product mix as well. But certainly in the caps business, that certainly would be the expectation.

Yeah, and for, of course, newer products, the greater the extent of innovation and proprietary nature of the product, the more a higher margin is justifiable. For some other products that might be less unique, there's more competitiveness in terms of pricing.

One last question. I thought we were going to get away without somebody asking, Cameron, but do you have an update on Quidel Ortho's respiratory panel progress?

Certainly they're moving forward with that, and the commitment is undiminished. Quite a bit of presence of the Savannah instrument in Wydell's trade show booth at the American Diagnostic and Laboratory Medicine Show in Chicago, and speaking with them, they certainly have very solid ambitions with that. As an insider on that, I really can't. directly comment on their targets and timing, you know, that would be speaking out of school, so to speak. But, you know, this is a very, very high priority for that NASDAQ listed company and remains so.

All right. That's all I see for questions. I see one comment, which was congrats on another great quarter. Keep up the good work, which I agree. It was a really good quarter. You're starting to show real progress in terms of growth on the caps and antigen side. Stock's still cheap. You're showing profitable growth and buying back shares. As a former analyst and banker, Cameron, what's it going to take for the market to start to recognize the work that you've been doing?

Well, you know, one of – There's been some great commentary, I think, on these matters in the small cap space by Matthew Mepthane, who I'll call out on this. You know, the question is, do capital markets in Canada recognize the value of publicly listed companies in a timely manner? And, you know, if they do, we'll see our stock move up. If they don't, I think at some point, this is stupid and will be bought out and there will be another company that exits the public Canadian market. Certainly, you know, we want to keep growing the business and boasting these kind of numbers and returns for our investors. And, you know, hopefully, if not now, not before too long, that gets more fully recognized. Because I would agree with you, you know, we're trading somewhere, you know, one-and-a-half times sales, one-and-a-half times book, maybe seven times EBITDA. This does not seem to me to be the appropriate price for a company that is posting the kind of year-over-year sales growth trajectory that we're very firmly on. But, hey, that's my opinion, and I'm not a licensed investment advisor, so I can't offer anyone advice, but I do own a few shares of Microbix.

At least you didn't blame your IR. I appreciate that.

We'll get to that. We'll get to that.

So one last question came in, Cameron. Prior guidance has been tough to hit in some years. What gives you confidence in hitting 20% to 40% growth next year?

Well, you know, we're looking at the trajectory we're on now. I'm talking about, to be clear, I'm talking about the growth in recurrent product sales. So there will be the kinetic milestones will not occur in 2025, but I'm talking about the comparability of year-over-year sales growth. We just frankly see – most if not all of our customers, on top of which we're adding new customers and we're adding new products. So, you know, that drives the basis of my optimism. And certainly we'll be running more precise numbers as we go through our own budgeting exercise. You know, we manage our cash and our spend in relation to, you know, very carefully projected numbers that I mentioned are customer by customer. What do we expect to be realized within each of the four quarters of the upcoming fiscal year? And SKU by SKU, what do we expect to sell for those products? And that's a cross-checking exercise is what we do. And then we manage cash to a lower percentage number so that we are not at all vulnerable if we don't hit our budget revenue numbers.

Sounds to me. I don't see any other questions. Was there anything else you wanted to touch on today that we didn't get to?

You know, I might leave off with, and I'll ask Ken and Jim to leave off with a key point and give them a 60 seconds to think about it, too. In terms of the points I'd make, you know, there is continued intense pace of innovation in the diagnostic space. You know, we're seeing better and better point-of-care instruments emerging as well as better and better clinical laboratory-based assays emerging. All of these need the kind of support that we're providing on the test control side. And, you know, some of the meetings I had, even with competitors that are acknowledging we are way out front in terms of the innovations that we're making in terms of specific CAPs, in terms of CAPs formats, in terms of capabilities. And that leads me to some very good optimism that we'll benefit alongside this innovation. And more and more as we acquire new customers, we're less and less dependent on the timing of success of any one customer. optimistically, justifiably optimistic on a broad basis. So, you know, always tough to hit specific numbers, but I don't feel we have anything to apologize for when we're growing, you know, in the 20% to 40% annual growth range.

All right. I think, actually, there was one other thing, Cameron, but I forgot to ask you if I could mention it, so I'm just going to get myself in trouble, which is anyone that's in the Toronto area or would travel to the Toronto area, we are looking at potentially doing a site visit in September. So tentatively looking at the 26th. Feel free to reach out, but I will be sending around a save the date the next little while. Hope that's not too offside, Cameron.

No, no, no.

I'm just putting the message out there.

Thank you. And, you know, that's a soft date. If that doesn't seem to work for folks, we can move that around. But Debra and I discussed that the other day, and that might be fun to show specifically what we're doing within our three current operating sites and operations. offer shareholders the opportunity to meet the broader team as well so it's not just me, Jim, and Ken talking. But I did promise the last word and thoughts to Jim and Ken, so I don't want to forget that. Jim, why don't you go first, and, Ken, you can go next. Can we just finish this off?

Yeah, I think if there's a point that I'd like to continue to make, and that is our continued investment in the business. We've invested in our systems. We've invested in our equipment. We've invested in our people and our product development, all this towards our strategic sales role. So we're well positioned today to, you know, probably double our revenues. And I think that's important to understand and to know. We're not going to be scratching our way to get to that level. We've got things in place that will allow us to achieve those levels.

Oh, great point, Jim, and this profitability doesn't come at the expense of starving the organization for resources. It's very much properly resourcing the teams. Thank you. Ken, what would you want to leave us off with?

My comments are not dissimilar to James's, as I'm sure he anticipated, but we continue to deliver on our operational goals. We reacted to the pandemic positively and we reacted to coming out of the pandemic positively. And now you see that growth, which has been realised. by the fact that we have the capacity and the capabilities in the state that we ought to move forward from there. So I expect us to now, to Jim's point, to be able to support great growth as it comes along and rebuild this business, because we have got that capacity and we've had inexpensive capital to do that. The other thing, of course, is Kindred is moving forward at a pace and moving forward well. So we expect to realize positivity in all these aspects. And it really comes down to the basics of science and manufacturing in a regulated environment. And MicroVix is excellent at all of those. And we're a global leader in the areas of antigens and quality assessment products. And that's going to continue to be the case as we're ahead of the competition. And we're continuing to build up expertise and that capacity.

Great. Deb, I'm going to have a – thank you, Ken. I'm going to have a last word, and I just want to – I want to first off, I want to very much thank our customers for the trust that they place in us for these critical products. I want to very much thank our staff in every department who are just doing brilliant work. And, you know, we're so blessed to have such great people within our organization. It really is a privilege to work with everybody. And lastly, I just want to also thank our shareholders. You know, capital is a very hard one for everybody, and thank you all for entrusting us with a portion of your capital. It's a privilege, and we take that very seriously, as I hope you can tell from what we do and what we said today. So thank you, everybody, and thank you, Deborah.

Thanks, everyone. Thanks for your time, Ken, Jim, and Cameron. And to the audience members, thanks for participating. It's under an hour, so you're welcome. If you have any questions or would like a one-on-one, please feel free to reach out. And, yeah, I hope everyone continues to have a good summer. Bye now.

Thank you so much. Thank you, everybody. Take care.

Thanks, Deborah.

Bye. Bye.