Kane Biotech Inc.

There will be a question and answer session. To ask a question during a session, you need to press star 1 on your telephone. Please be advised that today's conference is being recorded, and if you require any further assistance, please press star 0. I would now like to hand the conference to your speaker today, Graham Farrell. Please go ahead, sir.

Thank you, Operator. Good afternoon and welcome, everyone, to Cain Biotech's quarterly earnings conference call. We are delighted to have you join us today. This call will cover Cain's financial and operating results for the fourth quarter and year ended December 31st, 2020, along with the discussion of some of our recent highlights and goals for 2021 and beyond. Following our prepared remarks, we will open the conference call to a question and answer session. Our call today will be led by Cain's Chief Executive Officer, Mark Edwards. Before we begin our formal remarks, I would like to remind everyone that some of the statements on this conference call contain certain forward-looking information and statements within the meaning of securities law, which may not be based on historical fact, including, without limitation, statements containing the words believes, should, may, plan, will, estimate, predict, continue, anticipates, potential, intends, expects, or other similar expressions. Such forward-looking statements involve known and unknown risks uncertainties and other facts that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, among others, the company's stage of development, lack of product revenues, additional capital requirements, risks associated with the completion of clinical trials and obtaining regulatory approval to market the company's products, the ability to protect its intellectual property, and dependence upon collaborative partners. These factors should be considered carefully, and readers are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements are made as of the date hereof, and the company disclaims any obligation to update any such factors or to publicly announce the results of any revisions to any of the forward-looking statements contained herein to reflect future results, events, or developments. I will now hand the call over to Chief Financial Officer, Ray Dupuit. Please go ahead, Ray.

Thank you, Graham. Before I turn the call over to Mark for an update on our commercial activities, I would like to provide a brief update on our fourth quarter and year-end 2020 financial results. To streamline things, all the numbers I will mention have been rounded and are, therefore, approximate. The following figures are all in Canadian dollars. For the three-month period ended December 31st, 2020, the company recorded total revenues of $257,000, a 54% decrease compared with the same period in 2019. Total revenues include $61,000 from license and royalty and $196,000 from product and services revenues, which increased by 24% and decreased by 62%, respectively, compared with the same period in 2019. The increase in license and royalty revenues in the current quarter is due mainly to the initial licensing payment from animal care being recognized over 10 years. The decrease in product and services revenue in the current quarter is primarily due to supply chain disruptions brought about by the COVID-19 pandemic resulting in product shortages, a large order to an international customer in a comparative period that did not reoccur, and lower demand for contract services revenue in the current period. Gross profit for the fourth quarter of 2020 was $103,000 compared to $200,000 for the three months ended December 31, 2019, due mainly to lower project and services revenue in the current period. Fourth quarter 2020 operating expenses were $1.2 million, a decrease of 18% compared with $1.4 million for the three months ended December 31st, 2019. The decrease is largely attributable to higher government assistance received in the current period. The company recorded a fourth quarter 2020 loss of 816,000 or one cent per share, compared with a loss of 1.2 million or one cent per share for the same three month period in 2019. Moving to the results for the full year ended December 31st, 2020, The company recorded total revenues of $1.3 million, a 21% decrease compared with $1.7 million in 2019. Total 2020 revenues include $212,000 from license and royalty revenues and $1.1 million from product and services revenues, which increased 8% and decreased 25% respectively compared with 2019. The increase in license and royalty revenues in the current quarter is due mainly to the initial licensing payment from Animal Care being recognized over 10 years. The decrease in product and services revenue in the current year is primarily due to retail and supply chain disruptions brought about by the COVID-19 pandemic and lower demand for contract services revenue in the current period. Gross profit for the full year 2020 was $527,000, $83,000 lower compared with 2020 due mainly to lower product and services revenue in the current period. Full year 2020 operating expenses were $4.8 million, a 13% increase compared with $4.2 million in 2019. The increase is primarily attributable to higher compensation-related and consulting expenses, higher business development costs related to the launch of our new Dermix AV shampoo product lines, and higher contract research costs related to our Dispersing Bee Human Wound Care Program in the current period, partially offset by higher government assistance received in the current period. The company recorded a 2020 loss from operations of 3.7 million, or 3 cents per share, compared with a loss from operations of 3.6 million, or 4 cents per share, in 2019. At December 31st, 2020, the company had cash of $1 million, compared to 800,000 as of December 31, 2019. With that, I'll now turn the call over to Mark.