Kane Biotech Inc.

Good day and thank you for standing by. Welcome to the Kean Biotech Q3 2022 Financial Results Conference Call. At this time, all participants are on a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your first speaker today, to Nicole Sendi, Investor Relations. Please go ahead.

Thank you, operator. Good afternoon and welcome everyone to Kean Biotech's quarterly earnings conference call. We are delighted to have you join us today. This call will cover Kean's financial and operating results for the third quarter of 2022, along with a discussion of some of our recent highlights and goals for 2022 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 Kane'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 do 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 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 of Kane, Ray Dupuis. 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 third 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 September 30th, 2022, the company recorded total revenues of just under $572,000, an increase of 6% compared to just over $541,000 for the same period in 2021. In the nine months ended September 30th, 2022, total revenue increased by 65% to just under $2 million compared to just under $1.2 million in the nine months ended September 30th, 2021. License revenue in the three months ended September 30th, 2022 was just over $69,000, an increase of 93% compared to just under $36,000 in the three months ended September 30th, 2021. This increase is due mainly to revenue recognition in the current quarter associated with VOHC milestone payments. And in the nine months ended September 30th, 2022, license revenue increased by 499% to just under $606,000 compared to just over $101,000 in the nine months ended September 30th, 2021. This is due mainly to revenue recognition associated with the VOC milestone having been achieved in the second quarter of the current period. In the three months ended September 30th, 2022, Royalty revenue increased by 118% to just under $77,000 compared to just over $35,000 in the three months ended September 30th, 2021. This increase is due primarily to VRC certification achieved in Q2 2022, immediately triggering minimum royalties as per the company's license agreements, which has resulted in an increase in related sales in the veterinary channel. In the nine months ended September 30, 2022, royalty revenue increased by 73% to just under $176,000, compared to just under $102,000 in the nine months ended September 30, 2021. Revenue from product and services sales for the three months ended September 30, 2022, was just under $426,000, a decrease of 9%. from just over $470,000 in the three months ended September 30th, 2021. The decrease is due mainly to the reclassification of certain sales discounts to cost of sales and sales expenses in the prior period. Revenue from product and service of sales in the nine months ended September 30th, 2022 was just under $1.2 million, an increase of 20% compared to just over $993,000 in the nine months ended September 30th, 2021. Gross profit for the third quarter, 2022, was just under $270,000, an increase of 105% compared to just over $132,000 for the three months ended September 30th, 2021. Gross profit for the nine months ended September 30th, 2022 was just under $1.1 million, an increase of 187% compared to just over $381,000 in nine months ended September 30th, 2021. Third quarter 2022 operating expenses were just over $1.1 million, a decrease of 35% compared to just over $1.7 million for the same quarter in 2021. This decrease is due mainly to lower long-term incentive expense, as well as lower expenditures related to the company's dispersant B hydrogel program, partially offset by higher research expenditures related to the company's proactive plus antimicrobial hydrogel program in the current period than the comparative period. Total operating expenses for the nine months ended September 30, 2022, were just over $3.9 million, a decrease of 1%, compared to just under 4 million in the nine months ended September 30th, 2021. Loss for the third quarter of 2021 was just over 1 million, a decrease of 34% compared to just under 1.6 million for the quarter ended September 30th, 2021. Loss for the nine months ended September 30th, 2022 was just under 3 million, a decrease of 17% compared to just under 3.6 million in the nine months ended September 30th, 2021. Cash at September 30th, 2022 was just under 1.3 million. With that, I will now turn the call over to Mark.