Numinus Wellness Inc.

Good afternoon and welcome to the Numinous Wellness Inc's fiscal second quarter 2022 results conference call. A question and answer session for analysts and institutional investors will follow the formal remarks. As a reminder, this call is being recorded. I would now like to turn the conference call over to your host, Jamie Kokoska, Vice President, Investor Relations. Please proceed.

Thank you, Emma. Good afternoon, everyone, and thank you for joining us for our fiscal second quarter 2022 results conference call. Discussing Numinous' performance today are Peyton Nyquist, founder and CEO, and John Fong, chief financial officer. Joining them for analyst questions at the end of our formal remarks will be Evan Wood, chief medical officer. The following discussion may include forward-looking statements that are based on current expectations and are subject to a number of risks and uncertainties. The recent uncertainties that could cause our actual financial and operating results to differ significantly from our forward-looking statements are detailed in our MD&A for the quarter ended February 28, 2022, and in our other Canadian securities filings available on CDAR. NUMIDIS does not undertake to update or revise any forward-looking statements to reflect new events or circumstances except as required by law. Our second quarter results were made available earlier this afternoon. We encourage you to review our earnings release, MD&A, and financial statements, which are available on our website as well as on CDAR. As a reminder, all figures discussed on today's call are in Canadian dollars. I'll now turn the call over to Peyton Nyquist, Chief Executive Officer.

Thanks, Jamie, and good afternoon, everybody. Before I provide my comments, As I acknowledged on the last earnings call, I'd like to extend the utmost gratitude that our work is conducted on the unceded homelands of the Musqueam, Squamish, and Tsleil-Waututh peoples and on other sovereign Indigenous lands and territories across Turtle Island. We are committed to a path towards reconciliation through continuous learning, reciprocity, and humility. Our fiscal second quarter demonstrated the positive impact of our growing service offering and the efficiency of our operating platform, with gross margin for the first quarter reaching 29.1%, which is significant improvement from the 6.5% gross margin achieved just last quarter. Most of this improvement was due to a greater number of client appointments being for ketamine-assisted therapy, as well as the successful integration of the Neurology Center of Toronto, which continues to be fully booked, often for high-margin neurology-focused services. Overall, we were pleased with the quarter's performance, with revenue in line with our previous quarter, despite the anticipated slower period over the December holidays and having fewer days in the quarter compared to Q1. But probably most importantly and impactful for our shareholders, subsequent to the second quarter and just earlier this week, we announced a transformational acquisition that will significantly enhance the growth trajectory of Numinus. With our proposed acquisition of Novamind, a well-respected integrative mental health company, operating eight wellness clinics across Utah and Arizona, and a highly regarded clinical research management division. This acquisition marks our largest acquisition to date and our first expansion into the United States. Following completion of the acquisition, our combined business will have 13 wellness clinics across North America, four clinical research sites, and our bioanalytical lab. We have never been more excited about the future of Numinous. Before I provide more details about this announced acquisition, let me first review some of the highlights that occurred during our second quarter. At Numinous Health, our client-facing wellness clinic division, we were pleased with the 5% revenue growth achieved compared to the first quarter, given the second quarter is seasonally impacted by slower clinic activity over the December holidays. Even with the two-week of expected slower therapy activity and fewer days in the quarter, our clinics saw client appointments declined only by 14% with the previous quarter. More importantly, the mix of services booked by clients shifted more towards higher margin offering, such as ketamine-assisted therapies and neurology services, which significantly improved our gross margin, or gross profit, sorry. Overall, Numinous Health achieved a 29.8% gross margin during the quarter and $203,000 in gross profit. I'll also add that the increase in ketamine-assisted therapies was due both to the increased client demand and also a greater availability of appointments as we continue to train more therapists on this specialized treatment through our proprietary CAP therapist training program. This training has been proven to be extremely well received by those who have participated and we believe it will be a key differentiator for our business as we have the ability to train additional therapists as our business continues to grow. We believe the future training programs for other psychedelic therapies could be modeled off this training program and will help to ensure consistent quality care will be available to clients with their chosen therapist at any of our wellness clinics. As a reminder, all of our wellness clinics provide a wide range of mental health care services alongside psychedelic-assisted treatments, and these include traditional therapies, group therapies, couples therapy, and now neurological care. Collectively, these services will continue to drive reliable revenue streams and cash flows across our clinic network as we grow our psychedelic therapy offering in line with regulatory reform. At Numinous Bioscience, many key developments occurred during the second quarter that will provide long-lasting benefits to the breadth of research and expertise we can draw on. First, we received approval from Health Canada to add ayahuasca and San Pedro to our Health Canada controlled drugs and substances license, allowing our lab to now possess, produce, assemble, sell, export, deliver, test, and research these unique psychedelic compounds alongside DMT, ketamine, LSD, mescaline, MDMA, psilocin, psilocybin, and other psilocybe-fruiting bodies. It is one of the most, if not the most, extensive license to work with in psychedelics. We're proud that our compliance processes have been recognized by Health Canada to allow the breadth of this important research. Second, recent upgrades to our lab allowed us to be granted a containment level 2 license by the Public Health Agency of Canada which will allow us to deeply understand not only the mechanisms behind psilocybe mushrooms and other naturally occurring psychedelic materials, but also their interaction with the human body. More specifically, this biosecurity expansion allows us to study pathogens and bacterial fungal and microbial contaminants to identify baseline markers and optimal growth environments for psilocybe mushrooms, performed bioassay studies using mammalian cell lines to analyze the bioactivity of different whole mushroom formulations that contain both psilocybin and other psychedelic compounds, and performed pharmacokinetic and preclinical studies using analysts of blood and other fluids to investigate reactions in the human body to whole mushrooms and other natural formulations. Obviously, this expanded research allows us to investigate many new theories and discoveries, and we're excited to see what we can find. During the second quarter, we also appointed three highly respected industry leaders to the Bioscience Advisory Board. including two associate professors specializing in research areas of interest to us, and a patent attorney who is extremely well versed in our space. We couldn't be more pleased to have access to the immense expertise all three of these individuals bring to our research and commercialization strategy. Operationally, shipping challenges impacted the timing of analytical testing services we were contracted to perform for third-party research clients, which pushed certain services from the second quarter into the third. As a result, revenue generated by numinous bioscience declined 26% from the prior quarter. But importantly, an ongoing focus on operating efficiencies allowed the gross margins of the division to improve significantly during the quarter. Overall, Luminous Bioscience achieved a 24.5% gross margin in the second quarter. Turning to the two clinical trials we've previously announced, the MAPS-USX Phase III study with MDMA for post-traumatic stress disorder is underway. As a reminder, we are hosting and managing the Canadian clinical research sites for MAPS during this important study. We were pleased to have those our very first clinical trial volunteer at our Montreal based research clinic just a few weeks ago. The treatment offered through the study follows MAPS protocols of three sessions of MDMA administration and therapy, each to be followed with three integration sessions. This study is expected to be complete during the summer, and we look forward to updating you and seeing the final results MAPS will ultimately publish. And as you may have read in our earnings release earlier today, we are pleased to provide a new development for our phase one proprietary psilocybe extract. In recent weeks, our research lab has discovered an additional drug candidate currently being referred to as NBIO3 that is nearing the final stages of development. Given this new discovery, we believe the most efficient way to review clinical trial results for NB-IO-03 is to do so alongside the clinical trial program for NB-IO-01. We believe this is the most fiscally responsible strategy to review both drug candidates, though we will need to resubmit our application to Health Canada in the next several months to reflect the redefined scope of this study. Assuming positive results from phase one, we anticipate this study will lead directly to a phase two clinical study for both simulations to evaluate the efficacy of these products. We're very excited to have two promising proprietary drug candidates in our development pipeline now. And we'll update you as the study progresses. And with that overview of our second quarter highlights, I'll turn the call over to John to discuss our second quarter financials in more detail, after which I'll return to discuss the details and many benefits of our announced acquisition of Novavax. John?