Good morning, everyone. Thanks for joining us today. We have a webinar with Microbix who just reported their Q3 results this morning. Good results showing progress in the business. With me today, I have Cameron Groome, CEO, Jim Currie, CFO, and Ken Hughes, COO. I don't believe that we'll be working off a presentation, but this session will contain forward-looking statements. If you'd like to know more about those, you can find them on the company's presentation on their website. And the format today is going to be a quick overview of the quarter and some other key items. And then we're going to get into Q&A. So if anyone has a question, feel free to enter that in the Q&A box at the bottom of your screen. And with that all out of the way, congrats, gentlemen.

Well, thank you. Thank you very much, Deborah. Appreciate it.

And Cameron, I think I'll turn the mic over to you.

Sounds good. Thank you. Well, thanks to everyone for joining us this morning for the Call to Review. Our results for the third quarter of fiscal 26 in the nine months ended June 30, 2026. Recalling, of course, that Microbix has a September 30 fiscal year. In the Q3, we demonstrated a solid year-over-year growth of 17% for the quarter, close to our goal of at least 20% year-over-year sales growth and really putting us back on track following the two specific client setbacks in mid-year 2025. Antigen sales were up 20% year over year, and cap sales were up 13% year over year and a quarter, with the balance being inbound royalties. Gross margins also improved to 54% up from 41% in the prior year Q3, reflective of some good manufacturing mix and discipline. And we recorded a controlled net loss that is reflective of some fairly strict cost controls that we put in place as we build back up on revenues. Our outlook in Q4 is for continued year over year and quarter over quarter revenue improvements and continuing to move us closer to our engineered break-even point and reducing our net cash usage. as we continue to execute on our mission both with respect to growing our diagnostics-oriented business and advancing our therapeutic asset program back towards refiling and commercialization. I'll have some more comments about some strategic highlights in the quarter, but before we get to that, maybe I can ask Jim if he has any further information about the quarter or the outlook for the balance of the year that you'd like to share.

Great, thanks Cameron. As Cameron outlined, we saw some really good growth year over year, 17% in both businesses, business product lines, antigens and caps, we saw good growth. From gross margin standpoint, we also saw some improvement. A good chunk of that was product mix and the improved revenues and the absorption of the fixed manufacturing costs.

We continue to control operating expenses.

We're down from the prior year. We continue to be in a good, strong cash position with $7.2 million in cash. And we've been continuing to buy back our shares for NCIB for the quarter. We bought back just under 800,000 shares at a cost of $209,000. and for the year to date we've bought back 2.3 million shares at just about $571,000 for the year. We continue to be bullish. We have said that we're going to continue to try and grow on what was, I guess, our new base a year ago, Q3 last year. And as Cameron indicated, we're expected to see some growth in Q4 against last year's quarter, certainly, and even against the third quarter of this year. So a good end to fiscal 26 that we're looking at for this year. That's it then, Cameron. Okay, thank you very much, Jim.

Let me speak to a few strategic developments during Q3 and some matters we continue to work on. First off, I'll point to our host your presentation and attendance at the ESCMID Conference Europe. That's the European Society for Clinical and Infectious Diseases, a major scientific congress and trade show we attend each year. At ESCMID, we presented data wanted for controlling tests for RNA-based organisms, namely specifically RNA-based viruses, and this really expands the range of safe synthetic controls that we can provide, we can build and provide to different test makers and really gives us some Thank you very much. In association with such developments, we continue some very intense pace of work with multiple major international diagnostics companies on CAPS-related projects. and that's really to support the commercialization of new assays on existing or new instruments by those companies and several such discussions are quite material and they're late to be able to conclude some formal agreements and be in a position to discuss those over the balance of this year but of course as we're working with clients The timetable is very much theirs more than ours in terms of how that drives forward. So it can only be advanced in collaboration with them and is not entirely under our control from timing point view. Speaking of timing, we also see Ken Living, we'll battle this section with the drug substance and drug product work progressing. And we therefore believe Microbix and our licensee are very much on track for filing an SVLA and subsequently bringing that product back to market with the timing for such still being reflective of what is in our management discussion analysis for looking at probation. So the level of business activity has been very intense and it's that level of support for clients client visits, business and quality audit teams that have led us, in fact, to making fewer conference presentations and a little bit less announcements these past few months is not reflective. Thank you very much. Thank you very much.

From the operational side, everything is good at Microbix as it usually is. We're set up to satisfy all sales requirements and move forward. As usual, I will compliment the operational staff in all departments for manufacturing, R&D, QC, QA, IT, facilities and others, etc. The manifestation of the excellence of the operational team is described in how often we sail through regulatory and client audits, and we always do. We have an excellent team associated with that. As I say, we can satisfy the sales needs of microbics and more going forward. We've been focusing as well on increasing processing efficiencies, implementing automation, reducing burdensome testing, exploiting new capabilities within the framework of our QMS, which is allowing to streamline processes as well, implementing new technologies. We've talked a lot about the common technologies in synthetic biology. They are all ready to go, have been implemented, and will be servicing and supporting our sales efforts going forward. So from a general operational perspective, everything is great. I will lead then into Kinlytic, which is also going extremely well. The relationship with Sequel remains extremely strong and the drug substance, the active pharmaceutical ingredient work has really taken off and is going extremely well. There have been some major breakthroughs in process development which have increased yields and therefore will increase margins and we're moving forward with that. were moving forward with engineering batches leading into the GMP production batches of the drug substance and were in the process of developing the comparability protocols to compare the new product with the old product which will be presented to the FDA. There were a few little things associated with supply chain and getting reagents in place, but they're being resolved and we're moving forward at a pace. The drugs product work is also going extremely well. Sequel's contract manufacturing organization is doing that work. The analytics are in place. We're putting together the finished formulation and we'll be moving forward with that. I think to illustrate where Sequel's head's at, they're just in the process of hiring senior executives in the drug product space, they've already got them in the drug substance space, and in the regulatory and quality assurance space. So they're driving on very forcefully and vigorously, and we will be going back to the FDA likely before the end of this calendar year to discuss our comparability protocols and our comparability strategy to show that our new So in terms of Kinlytic, everything is moving forward as it should. In fact, the process is probably better than we could even have hoped for based on the excellent work that's been done at Sequel's hired drug-substanced CDMO. Thank you very much, Ken. Well, I think that's a pretty good summary of the order from our perspective. I can't think of too much more that I want to call out unless we start naming names and

and Violating CDAs, which we would never do, of course. So perhaps, Deborah, we can move over to the Q&A section of things. Very quiet, Debra, but I could ask that if anybody has any questions to put them in the chat or the Q&A section, and then we can start to answer.

Yes, sorry, Cameron. I'm in a hotel in Boston, and they have the worst Wi-Fi I've ever experienced. So if I cut it out, I apologize to you three gentlemen as well as the audience. We do have a question. So why have your gross margins improved relative to fiscal Q1 despite similar revenues? Do you expect similar margins going forward?

Jim, why don't you take that one on? Some of it can be a mix of the quarter, but it's an astute sales mix, but it's an astute question.

Yeah, that's a good question. I think it is... very much impacted by the product that is sold during the quarter. We do have all of our, for instance, antages don't have exactly the same margins. Some of them have much more significant margins than the others. So you will see quarters that benefit from it or and others. We've also got the absorption of manufacturing fixed costs. The costs are down a little bit more this year versus that timeframe. As Ken indicated, we've Looking at efficiencies and also we haven't been adding staff in the meantime. As we've indicated, I mean, this is a better quarter, but losing $800,000 in a quarter isn't What we're looking for is to get the top line up and get it back to where it was about a year ago. And that's what we're targeting as we end the year and enter into fiscal 27.

A lot of the manufacturing overheads, of course, are fixed, and those are allocated into the product based principally on the number of labor hours that are expended in manufacturing that product. So that's a bit of that fluctuation, Jim. can speak to or speak to depending on what efficiencies being realized in the manufacturing and as we get sales back up through our breaking level, we're going to see that those efficiencies reflected in better gross and net margins with similar revenues.

Thank you so much for having me.

and it's not the materials that are being used. I guess it's the process more so. I think we've seen some strength and growth and I can't talk about efficiencies. One of our key products, we've probably doubled our yield in the last two years. So that's also starting to come through and improve merchants as well and the entities.

Yeah, I think without getting too much into the weeds, it really depends on whether the product is large enough to justify investment in improving yields if there's going to be a meaningful return associated with that. All the methods that we look at, we develop, and we do have a philosophy, but you have to make the investment case for whether it's justified to make those agreements. So we see those realized and... We'd like to do that in areas where we see the potential for real product sales growth and that's where we'll make the investments.

Each individual organism we work on, each technology is idiosyncratic itself and so the processes are different and some are more expensive than others and some are more amenable to efficiencies going forward. Obviously we always want to make the maximum margin on each individual process but Thank you very much.

diverse set of raw materials that go into a multiplex caps product, but we're really looking to have a template-driven methods of assembling those products, conducting the QC and the QA very efficient and very reproducible and very scalable for that genre of product.

Have you reduced your break-even point from $5.5 million a quarter, or is that an initiative that you're working on?

We've allowed some attrition of staff without replacing people to, as we've realized, efficiencies. So our headcount has come down from the peak levels we've had. But we've done this without degrading our capabilities in any way. and there's really a minimum level of capability that's table stakes for being able to credibly want very much to demonstrate a strong and robust and resilient organization to our clients and prospective clients that they can rely on us for key deliverables. So that's where we've not, we've not tried to cut our way into prosperity. We're very much into growing our way into prosperity and the nature of business, you know, in our proficiency testing programs. These are often starting in 6-figure type new projects that can grow into 7-figure projects and in the diagnostics support of these go through a cycle where you're doing feasibility samples then validation lots and then going commercial so it takes 2-3 years to get full stride on some of these projects but those Thank you for joining us. But until we have formalized disclosure threshold, that's normal course of business and doesn't require nor would it be appropriate to make formal announcements of those kind of projects unless until they really are... are fully gestated and delivered.

You answered the other question. I don't know if you have any more that you want to add there. It was, is there a point in the development commercialization process at which you will be able to start disclosing large caps customers and the products you're working on? And is there an expected timeline for that?

Yes, I believe so. We should see the beginnings of such disclosures of the balance of this calendar year, calendar year 2026. Just how granular we'll be able to get or choose to get is going to be a bit of a negotiation. So it might, you know, customer may say, great, we're happy to have a say, listen, we We understand your disclosure obligation as a smaller and public entity, but we'd rather you not describe what client and perhaps what instrument platform or what asset you're working with. I think as we get a greater diversity of clients, that makes sense for us too. We don't necessarily want to be pointing our competitors in the directions of who exactly we're working with and on what projects either. So it makes sense for our shareholders as much as it does for our counterparties. So I think in large part, you'll see... Thank you for joining us.

line by line. Can you talk a little bit about who you view as competitors?

Yeah, there aren't that many in each of the categories. Our competitors are really the life sciences tools companies that would be described as with an orientation toward the diagnostic space. In the antigen business, if you want to buy a microgram or a milligram of an antigen, you'll call a scientific catalog company a gram of antigen, a thousand to a million times as much. The The number of companies you can call and where you can go narrows that funnel, narrows quite dramatically. And the main advantage in business, there might be three companies of any consequence globally that Thank you for having me. I think we're coming to be dominant in the infectious disease category and by all the abilities we have long-standing abilities in our antigens business that we're really driving that expertise and controls business. Thank you for watching. So that it's not a control designed against good work for any test. And that's incredibly important for our proficiency testing and EQA or external quality assessment clients that our controls really do represent a clinical sample and will work with anyone's assay. When we get into in-kit controls where our patient sample memetics are included in with a kit of test cartridges, then it may be more customized to channel OD of the test for each of the Thank you, that's helpful.

have a follow-up question going back two questions ago about when you make announcements about clients. Given the two- to three-year lead time on projects, where are you right now in the process with the largest clients?

Well, with our largest caps, our largest antigen clients, we are already embedded in their tests. And it's a... We can't be unembedded unless somebody goes back to the formula and completely is redoing a test from scratch. So that business is very much ongoing and stable. We see manufactured from the native antigen perspective and perhaps recombinant, newer recombinant category as well. With respect to CAPS, for the PTEQA clients, the agencies that do the quality checks on labs and accredit labs to do testing, We have ongoing sales and contacts with those companies and we continue to add new programs or schemes with those companies. And those are typically a two-year cycle. There's a smaller number of labs, usually in the order of 20 to 50 will be invited. to pilot a program, see if it performs as hoped, to work with all the different instruments in use, and then that can expand well into hundreds of labs, potentially thousands of labs in the second year or third year when that goes commercial, and third year when it continues to get more labs accepted. For the test makers, we have multiple large test makers for whom we're providing feasibility samples currently that they're testing. and then on the drives a formal contractual agreement and those are things we're working on now and then in the second year there can be validation lots or clinical lots if there's clinical work required on those in the third year. Those can really hit full stride on global commercialization of an assay. And some of those test makers have thousands of instruments already in the field, in some case tens of thousands of instruments already in the field. So if a new, you know, it's... It's an interesting comparison, Cameron.

When you say embedded, does that mean development is complete and the asset controls are now commercialized?

Well, when we said embedded, I was meaning more our test ingredients in the form of an amino acid, for example. But we can be equally embedded in different aspects of our CAPS business, where our reagents might be part of the internal controls of an assay, part of the chemistry. We might be in the regulatory file for a control in kit where our controls are independent of the assays, but they're literally in a box of test cartridges. And we're also seeing sales of our Quant VX product line. This is the newest product line we launched last summer. which are reference materials and those reference materials can actually be used for quality control release of tests and create an ongoing revenue stream on that basis and are doing so in fact still small, still in the six-figure range. The progress of that product line is really an earlier stage touch point for us with companies that are developing new assets. So the 1DX product line is proving as hoped and expected to be quite strategic for us.

Excellent. One last question here from the audience. Regarding the RNA virus control you mentioned, is that a naked RNA or in virus control? Ken, I think that one's for you.

Well, I could tackle it, but Ken, why don't you take that?

Well, sure. I'll start by saying that we don't need oligos for controls, whether it's an RNA oligo or a DNA oligo. So I won't give any particular technical details unless Cameron wants to, but suffice it to say that RNA is armored. So it's encapsulated, it looks like the product that you're supposed to be testing for.

One of the challenges for PCR-type assays, molecular diagnostics, is is actually cracking the shell of a virus or bacteria and getting to the nucleic acids. And it's very important to validate that step of an assay. So in the case of our RNA controls, we're encapsulating the shell of a type of virus called a phage. and then we put an RNA payload into that shell so that the extraction process, which is critical to the function we ask, is likewise controlled. So demonstrating that very sophisticated capability to take Thank you very much.

So we challenge the entirety of the test from extraction to fluidics and everything else, not just whether or not the RT or PCR, the PCR test reaction works, but everything that's supported, that reaction also works. So all our samples look like as best possible.

Some good questions.

Yeah, I know I'm going to age myself, but... Feels like I'm in OAC biology class sometimes when I'm doing webinars.

Yeah, hopefully you're not bringing back any childhood traumas during that. We won't ask you to do any square roots or anything like that.

I went to a French high school and I do not speak French, so. Yeah, yeah. Okay, another question. Are any of the CAPS products currently embedded in commercial stage assays?

Yes, some of them are.

and not yet, when do you expect to start to see the launches of assays with your caps? So, yes.

Some assays have already launched in association with their caps. What we've been working on and working with are some companies that have very large installed bases of instruments that, you know, if somebody is using a platform that has, again, thousands or tens of thousands of units in the field, those caps get ordered, you know, come out directly with the kits of test cartridges, and that's principally in that point-of-care field. and that's very exciting for us and that's something we achieved previously or were achieving prior to a major program cancellation and we're getting back into that now with a variety of companies to push through that and really remove our exposure to setbacks with any one particular client.

Is there any update on orders in China?

Yeah, there has been. I mean, China was running at a $2-3 million a year portion of our revenues. It shot up dramatically in 2024 and through mid-year 2025 before falling precipitate. China has moved up Thank you very much. And one of the things I'll mention that's nice, and maybe Jim can provide a little color on this too, is our sales historically have been almost entirely B2B, business agency testing and EQA agencies. But now we're seeing a growing proportion of B2C sales. These are sales to end-user clinical laboratories. and that is a more diverse client base and very much a recurring stream of sales that isn't dependent on any single client. Jim, did you want to talk about how the B2C side is growing in significance?

Yeah, it has been growing quite well in its significance. No, it's not on a smaller base, but it is growing very well. And in fact, during the quarter, quarter over quarter, we saw a 35% increase. And it's starting to become a more significant portion of the CAPS business. So, yes, it is doing very well right now.

Yeah, and that's all my ProBix branded products, which is important too. So these are either under the Proceed or Red label. And what's driving the rebound in China? Is it inventories drawn down?

Do you expect that biz to get back to the historic highest levels?

You know, barring another outbreak, I think it's difficult to see it jumping back to those elevated levels at this point. But I think we could see it return readily to a more normalized level in the 2 to 3 million per year range. It's not unrealistic gauging how much of that is inventory drawdown by end users and what a new normal looks like.

And what's the concentration of your caps revenue? Are you diversifying that revenue base and how long do you expect that to take?

Well, it's an interesting question, diversifying, because, you know, if you're adding a bunch of smaller clients to your diversifying, suddenly you land a huge client and You're less diversified again, but your revenues have shot up massively. So we're going to see some teeter-tottering between growth and diversification as that advances.

And one last, actually two more questions. Can you provide an update on the NCIP?

Absolutely. Jim, you've got the figures most at hand there. We continue to buy back about... 15,000 shares a day, which isn't quite the maximum, but we're really balancing a little bit between cash consumption as we're still a net user of cash at the present level of revenues and prudently buying back shares. So we have sources of solution, but we're not aggressively chasing blocks right now. Jim, what would be being reported year-to-date in terms of shares bought back?

Yeah, I think as I indicated earlier, Q3 we saw 796,000 shares bought back at a cost of $209,000. And year-to-date, 2.3 million shares have been repurchased at a cost of $571,000.

So as you track back towards profitability, will you ratchet that up back towards the max level?

Yeah, I think that's something we'll absolutely look at doing. And the question will be just how we balance that. One of the things we're looking at is just we have good capacity right now, but if some of the big chunks of business land and we don't want to be in a position even for the best of reasons we want if we're ever approaching the markets for equity we want to do it at a time of our choosing for expansion not otherwise. So the question for us is just how much of our cash we want to use on buying back shares versus how much we need to have available for further scaling production.

And then one last question, which I think is a really astute one. Obviously, someone's been watching us, Cameron. Do you expect conference attendance and presentation to be at a similar cadence of the first half of the year? I guess what this is getting at really is do you expect to increase your marketing and investor outreach efforts in the second half of the year?

There are two facets to that question. One is the scientific conferences and the presentations and those. I think that's slowed down a little bit just because we've been so busy working on and so forth. And that's kept us really hopping and not as able to present about scientific innovations, but rather to support clients directly and work on business projects. So that's something. From an investor point of view, we've been fairly quiet or a bit quieter. You know, I was unable to attend Bloomberg because it moved two weeks earlier and conflicted with the ESPN conference. So Ken and Jim were handling that investor side with you, Debra. Yeah. And we're going to do some more investor meetings this fall. I think we're attending the CEM in late September and through October. So we'll be doing some investor outreach activities there and with any luck maybe we have a few fresh business things to announce by then. If not, we'll certainly be talking about the nature of what we're working on rather than potentially some deep specifics.

No, I think it's a good time to be getting out and telling the story. You've made good progress with the underlying business starting to grow again. So yeah, I think it's a good time for investors to be looking at the story. One more question just came in. Are there any updates on VTM, DXTM product line? Given we currently have few confirmed orders in the pipeline, what's the plan for that assembly line? I think it's already been reached.

Well, it's being used principally for what we call control elution buffer. So this is where we're shipping a VTM, a similar reagent to VTM, out in parallel with the sample, just to say, here's your swab, for example, with control. Here's the right dilution buffer to use it, so you don't have to go chasing around and finding that to run the sample. but government procurement continues to be a real frustration and if anybody's interested, Ken and I recently co-authored an op-ed on the disconnect between the innovation support that governments give and the complete and utter lack of any procurement support that's provided and really highlighting that they're talking the talk but not walking the walk. if companies are really to be able to tap the domestic market. Some similar comments made at a recent presentation from the Canadian Council of Innovators highlighting the precise issue that Ken and I were identifying in our op-ed about the difficulties that domestic companies have in selling domestically. You know, Canadian companies, you know, we're a case of 0.9. So, you know, a lot of the output goes up. It's very performative right now rather than helpful. So I think hopefully we'll get a little bit more of that. But the quick answer is not a lot of the government, a whole lot of the private industry.

Okay, well, I don't see any other questions, and you've answered my questions. Any final thoughts, anything that you wanted to touch on that we didn't cover?

Just, you know, we're an open book. We're doing what we have said we would do. and that is recovering sales quickly towards our breaking point and then back through into substantial profitability. I think our Q4 will be still considerably stronger than our Q3 land and lock in some of these projects that we're working on whether it is material agreements with major international diagnostics companies that we're working on or the advancement of Kinlitic. All of those are things we're executing on and I think executing on well and I hope our shareholders participating today delve into our statements and our disclosures Those aren't already up on our website. They will be, and they're certainly on CDAR. And we thank everybody for their ongoing trust and support.

Well, thank you very much for your time. Thank you to the audience for the questions and their time. If anyone has any follow-up questions, feel free to reach out, or if you want a one-on-one meeting, I'd be happy to set that up. and congrats on the quarter and look forward to the conferences.

Thank you so much. Likewise, and anybody, please reach out to us directly or through Debra if you have any questions that occur to you later. Again, happy to answer them and delighted to have your attendance today and your support.

So thank you. Thanks, everyone. Thanks, Debra.

Okay.