Kane Biotech Inc.

Good day, and thank you for standing by. Welcome to Kean Biotech Q2 2022 Financial Results Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Nicole Sende, Investor Relations and Public Relations for Kean Biotech.

Thank you, Operator. Good afternoon and welcome everyone to Kean Biotech's quarterly earnings conference call. We are grateful to have you join us today. This call will cover Kean's financial and operating results for the second quarter of 2022, along with a discussion of some of our recent highlights and goals for 2022 and beyond. Following our prepared remarks, Our call today will be led by Cane'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, anticipate, potential, intends, expects, or other similar expressions. Such forward looking statements involve known and unknown risks, uncertainties, and other factors 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 result of any revisions to any of the forward-looking statements contained herein to reflect future results, events, or developments. I will now hand over the call to Chief Financial Officer Ray DuFour. Please go ahead, Ray.

Thank you, Nicole. 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 second quarter 2022 financial results. To streamline things, all the numbers that I will mention have been rounded and are therefore approximate. The following figures are all in Canadian dollars. For the three months ended June 30th, 2022, the company recorded total revenues of $840,000, an increase of 201% compared to $279,000 for the same period in 2021. License revenue in the three months ended June 30th, 2022 was $500,000, an increase of 1295% compared to $36,000 in the three months ended June 30th, 2021. This substantial increase is due to the company's subsidiary, STEM Animal Health, achieving a key milestone in April 2022, namely the Veterinary Oral Health Council VOHC seal of acceptance, which triggered approximately $1.3 million in milestone payments from STEM's licensing partners pursuant to its license and distribution agreements. In the three months into June 30th, 2022, royalty revenue increased by 77% to $52,000 compared to $29,000 in the three months ended June 30th, 2021. This increase is due primarily to VOHC certification achieved in the current period, immediately triggering minimum royalties as per the company's license agreements, as well as the underlying product sales in the veterinary channel being less impacted by the COVID-19 pandemic in the current period than the comparative period. Revenue from product and services for the three months ended June 30th, 2022 was $288,000, an increase of 35% from $214,000 in the three months ended June 30th, 2021. The increase is due mainly to the reclassification of certain sales discounts to cost of sales and sales expenses and higher DERMA KB sales in the current period. Gross profit for the second quarter 2022 was $639,000, an increase of 665% compared to $84,000 for the three months ended June 30th, 2021. Second quarter 2022 operating expenses were just under $1.4 million, an increase of 25% compared to just under $1.1 million for the same quarter in 2021. This increase is due mainly to lower government assistance and higher non-funded research expenditures related to the company's Core Active Plus antimicrobial hydrogel and dispersant B hydrogel programs in the current period. The company recorded a second quarter 2022 loss of $795,000, a decrease of 26% compared to $989,000 for the same quarter and at June 30, 2021. Cash at June 30, 2022 was $2.5 million. During the quarter, the company received $500,000 U.S. from one of its licensing partners related to the achievement of the VOHC milestone, closed its non-brokered private placement offering, raising gross proceeds of $1 million, and further amended its credit agreement with its lender, resulting in approximately $1.8 million in new capital being provided. With that, I will now turn the call over to Mark.