Kane Biotech Inc.

Good day and thank you for standing by. Welcome to the Kean Biotech Q2 2023 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Nicole Sendi, Investor Relations.

Nicole will cover Cane's financial and operating results for the second quarter of 2023. along with a discussion of some of our recent highlights and goals for 2023 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 King'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 believe, 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 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 second quarter 2023 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. Revenue from product and services for the three months ended June 30th, 2023 was $484,000, an increase of 68% from $288,000 in the three months ended June 30th, 2022. This increase is due mainly to higher STEM animal health online and pet retail sales, as well as a higher demand for contract manufacturing services during the current period. Royalty revenue for the three months ended June 30th, 2023 was 90,000, an increase of 74% compared to 52,000 in the three months ended June 30th, 2022. The Veterinary Oral Health Care Council, or VOHC, certification that STEM received in April 2022 immediately triggered minimum royalties from STEM's licensing partners, which has contributed to the increase in royalty revenue recognized in the current period. Total revenue for the three months ended June 30th, 2023 was $657,000, a decrease of 22% compared to $840,000 in the three months ended June 30th, 2022. Total revenue in the comparative quarter includes license revenue of $431,000 recognized by STEM related to the VOHC certification that STEM received in April 2022. Excluding this revenue recognition, Total revenue for the three months ended June 30th, 2023 increased by $248,000 or 61% compared to the three months ended June 30th, 2022. Gross profit for the second quarter of 2023 was $331,000, a decrease of 48% compared to $639,000 for the quarter ended June 30th, 2022. Revenue recognized with VOHC in the comparative quarter significantly contributed to the gross profit recorded in that period. Total operating expenses for the three months ended June 30th, 2023 were $866,000, a decrease of 36% compared to $1,361,000 for the three months ended June 30th, 2022. The decrease is due mainly to an adjustment in the current period of accrued short-term incentive compensation expense recorded in prior periods, as well as lower contract research expenditures related to the company's CoActive Plus antimicrobial wound gel and dispersant B hydrogel product development programs incurred in the current period. Loss for the second quarter, 2023, was $968,000, an increase of 22% compared to $795,000 for the quarter ended June 30, 2022. cash at June 30th, 2023 was $1,146,000 compared to $1,105,000 at December 31st, 2022. With that, I will now turn the call over to Mark.