Microbix Biosystems Inc. ($MBX)

[Audio Gap] Corporate Secretary to the company, I'll act as Chairman of the meeting. With the consent of the meeting, I'll appoint Enrico Moretti to act as Secretary of the meeting. We'll start the meeting by addressing the formal matters. Once these matters have been addressed, Cameron Groome, the President and Chief Executive Officer of the company, will provide a short summary of recent activities and events. Questions can be asked and Cameron will answer them at the end of his presentation. I hereby appoint Matthew Burt and Megan Rocha of TSX Trust Company, the company's transfer agent and registrar, to report on the shareholders present in person and the number of shares represented in person and by proxy and to compute the votes on any poll taken. Notice calling this meeting and the accompanying management information circular have been distributed using the notice and access provisions under applicable securities regulations to all registered and nonregistered shareholders. These provisions allow us to post electronic versions of the proxy-related materials online rather than mailing paper copies to shareholders. This allows us to reduce our postage and material costs and also has environmental benefits, reducing the volume of paper documents generated. Physical copies of the form of proxy, the supplemental mailing card and notice and access letter have been mailed to all shareholders of record, to the directors and to the auditors of the company, and the registrar and transfer agent has filed with me proof of service. I direct that a copy of such materials with proof of service be annexed to the minutes of the meeting as a schedule. I'll now ask someone to move and second a resolution dispensing with the reading of the notice.

I'm Ken Hughes, and I'm a shareholder. I move a resolution as follows: be it resolved that the reading of the notice of this meeting be dispensed with.

I'm Jim Currie. I'm a shareholder, and I second the resolution.

I declare the resolution carried. The scrutineers' report shows a quorum to be present. I therefore declare the requisite quorum of shareholders is present and that the meeting is regularly constituted. I direct that the scrutineers' report be annexed to the minutes of the meeting. Before commencing the business of the meeting, I'd like to comment on voting procedure. Each holder of a common share is entitled to 1 vote for each share held by such shareholder in respect of each matter to be dealt with at the meeting. Based upon the information received from the scrutineer, I declare that to the best of my belief, if a ballot was conducted in respect of each matter to be voted upon at the meeting, the total number of votes attached to the shares represented at this meeting by proxy required to be voted against what would be the decision of the meeting in respect of each such matter is less than 5% of all the votes that might be cast at this meeting on each such ballot. Accordingly, in order to expedite the voting on such matters, I propose that unless a ballot is demanded in respect of a particular matter, each matter will be voted on by a show of hands. I shall now call upon the Secretary to file with the company records a list of shareholders of the company and the original proxies deposited at this meeting. I'll now ask someone to move and second a resolution respecting the destruction of proxies.

I move a resolution as follows: be it resolved that the proxies forwarded by shareholders for use at this annual general -- Annual Meeting of Shareholders of the company be retained with the records of the company for a period of 6 months from the date hereof and then that same be destroyed.

I second the resolution.

All those in favor of the resolution, please so signify by raising your hands. [Voting]

Contrary, if any? [Voting]

I declare the resolution carried. I now present to the meeting the financial statements of the company for the fiscal year ended September 30, 2025, and the auditor's report thereon. It's not proposed to ask shareholders to approve the financial statements. However, Jim Currie, the Chief Financial Officer of the company, would be pleased to deal with any relevant questions that are asked concerning the financial statements during the question-and-answer period at the end of the meeting. If the shareholders have questions of a general nature, they can be asked and answered after the formal part of the meeting is completed. It's now in order to proceed with the election of directors. The Board of Directors consists of seven directors. I now declare the meeting open for nominations.

I nominate Peter Blecher, Mark Cochran, Vaughn Embro-Pantalony, Joseph Renner, Martin Marino, Cameron Groome and Jennifer Stewart as Directors of the company to hold office until the next Annual Meeting of Shareholders or until their successors are elected or appointed.

Are there any further nominations? If there are no further nominations, I'll entertain a motion that nominations be closed.

I move that nominations be closed.

I second the motion.

All those in favor of the motion, please so signify by raising your hands. [Voting]

Contrary, if any? [Voting]

I declare the resolution carried and declare the nominations closed. We will conduct successive votes for the election of the seven nominees. For Peter M. Blecher, all in favor, please raise your hand. [Voting]

Withheld, if any? [Voting]

Elected. For Mark A. Cochran, all in favor, please raise your hand. [Voting]

Does anybody wish to withhold their votes? [Voting]

Elected. For Vaughn C. Embro-Pantalony, all in favor, please raise your hand. [Voting]

Withheld, if any? [Voting]

Elected. For Joseph D. Renner, all in favor? All in favor? [Voting]

Withheld, if any? [Voting]

Elected. For Cameron Groome, all in favor? [Voting]

Withheld, if any? [Voting]

Elected. And for Jennifer Stewart, all in favor? [Voting]

Withheld, if any? [Voting]

Elected. I declare the resolution carried and those nominated to have been duly elected as directors of the company to hold office until the next Annual Meeting of Shareholders or until their successors are elected or appointed. The next item of business is the reappointment of Ernst & Young LLP as auditors of the company and the authorization of the directors to fix their remuneration. I'll now ask someone to move and second a resolution appointing auditors and directing the directors to fix their remuneration and directing me to cast a single ballot for such appointment.

I move a resolution as follows: be it resolved that Ernst & Young LLP be and they are hereby reappointed auditors of the company to hold office until the next Annual Meeting of Shareholders or until their successor is appointed at such remuneration as may be fixed by the directors and the directors be and are hereby authorized to fix such remuneration, and the Chairman of the meeting be and is hereby authorized to cast a single ballot in favor of the resolution.

I second the resolution.

All those in favor, please so signify by raising your hand. [Voting]

Contrary, if any? [Voting]

I declare the resolution carried. Is there any further business?

Mr. Chairman, I move that the meeting be terminated.

I second the resolution.

All those in favor of the motion, please so signify by raising your hand. [Voting]

Contrary, if any? [Voting]

I declare that this meeting is now terminated. This concludes the formal part of the meeting, and I propose that we terminate the formal portion of the meeting and Cameron Groome, the President and Chief Executive Officer of the company, will make a presentation to shareholders and thereafter respond to questions from shareholders that have been asked. Cameron?

Great. Thank you very much, Chris. I'll just move into frame here. First off, I just want to thank everybody very much for taking the time to attend today. Our management staff very much appreciate your trust and support. The past 12 months, as many of you know, have been a challenging time for Microbix during which we faced setbacks with two major clients, and that has resulted in some near-term revenue declines and some controlled net losses. And we're very much hard at work at resolving those issues through the addition of further client projects, by adding new clients and by adding new products and in fact, product lines. Over the past year, I'll note that we have progressed on many initiatives to the point of those needing to have public disclosures and some of those have been our engagement with policymakers and key opinion leaders in Ontario and around the world, securing the access to an extensive library of organisms to broaden out our quality assessment products through a collaboration with the National Center for Infectious and Parasitic Diseases of Bulgaria, launching our new QUANTDx line of reference materials to complement our quality assessment product lines, entering into collaborations for quality management support of genetics testing through our QAPs and work with EMQN out of the U.K., welcoming multiple new test maker clients such as Seegene and SEKISUI that were announced in the fall of 2025, commercializing our first recombinant quality assessment antigen products initially for our own use and then for addition to our catalog and adding more of those, adding that very important new capability for our company, developing multiple products to support the emerging field of molecular pathology, the combination of conventional pathology with modern molecular diagnostic techniques such as PCR. Also, we're very pleased this -- in 2026 to welcome the College of American Pathologists as an important new Microbix client, when -- we look forward to working with them on multiple programs and over many years. We also have recently announced at the EUROGIN conference, the development of next-generation human papillomavirus test controls that will help enable the move to self-sampling for global cervical cancer screening programs. And we've also made multiple announcements over the past year with regards to advancing Kinlytic towards FDA reapproval with progress both on the drug substance manufacturing as well as the drug product reformulation and revalidations. So such progress broadly is very reflective of a bright future for Microbix and where we're being increasingly recognized as a go-to partner in the global diagnostics industry. And while our policy remains and is only to announce relationships when they are either signed agreements or are resulting in material sales, we're dealing with most, if not all, of the leading firms in our sector now, and we're optimistic that those budding relationships will bear fruit for our company and its shareholders. So with that, let me conclude by discussing briefly that we'd like to thank you, our loyal shareholders, for your ongoing support. We'd like to thank our many valued customers for their support and our talented and dedicated Microbix team for the work that they're -- important work they're doing every day. So very much our company remains and is placing itself at the center of many important intersections between our clients and their needs. And we're really doing, I think, some important work in advancing testing and really achieving material markers of progress that we can demonstrate that you see in this presentation and our continuous disclosure filings that we make through the year and the periodic news releases that we continue to disclose. So just conclude with that by thanking everyone. And I'm pleased to open this to questions from shareholders and address those to the best of our ability. So thank you very much. Deborah, if you have some customers that are attendees of our meeting that would like to pose questions, we're happy to address them.

So far, I don't have any questions. [Operator Instructions] And while we're waiting for that, maybe there's people in the audience that have questions, Cameron?

Well, this is an interesting exercise because it's our first return to an in-person AGM since that was disrupted for COVID. And we have some great attendance by management, by our counsel, our scrutineers, but we don't have much in the way of shareholders here. So I think it will be a short Q&A. Does anyone in the audience here have any questions? Okay. No.

I'm not seeing any questions either, Cameron. Do you have any questions?

I have many questions. Yes, questions, and Jim says a few answers. The mic didn't pick that up.

Well, I can...

Deborah, are there any questions you've had from shareholders that you feel we should touch upon while we're all here?

I guess the main questions people have are updates on Kinlytic timing and how that's progressing and yes, just the return to profitability story. I think those are the two things that investors are the most focused on. So maybe if you want to address those?

Well, we made our latest update on Kinlytic on March 10, which is really describing the progress that's being made on the two major components of that project. The first is modernizing and revalidating the drug substance or active ingredient manufacturing, and that's ongoing with contractors engaged by our development partner, Sequel Pharma, with contributions from -- technical contributions from Microbix with that relationship being led by Ken Hughes, our Chief Operating Officer. So that's progressing. And there are -- there is work being done on pre-lockdown and pending lockdown manufacturing runs. And when those are completed to our satisfaction and our partner's satisfaction, then there will be work advanced accelerating by the drug product contractor, and that's the organization that will take the active ingredient, mix it with the excipients, put it in a vial, freeze dry, cap and label it. So the work now is really moving to reconfirm the purity of the product from a drug substance point of view and then revalidate the assays of potency from a drug product point of view. And as those files get wrapped up, then there'll be the preparations for the supplemental b -- or supplement to the biologics licensing application, the pre-existing FDA approval. And it's certainly the party's objective that such a filing will be made sometime in the second half of calendar 2027 and that the drug will return to market in 2028, hopefully, in the first half. Now there are always risks within our control and outside of our control that could change those time lines, but those are the time lines that are being targeted at present. So very, very optimistic about that. And I'll just remind everybody that the initial markets for Kinlytic that we're looking to return the drug for are for the catheter clearance indication. So this is for dissolving blood clots in venous catheters, and those can be central venous catheters for chemotherapy and nutrition or they can be for catheters most often in the arm, long-term indwelling catheters for venous dialysis. And there are many millions of those catheters implanted for months at a time for those different forms of therapy. And about 25% of those catheters are -- have blood clots from blood that's washed back up into the catheter and formed a clot, preventing the continuation of therapy. And unless those clots can be mechanically removed or dissolved with a thrombolytic, then it's a question of a vascular surgeon and thousands of dollars of procedure with potential morbidity or mortality associated with that to replace those catheters. So that's the market we're going after initially, which is $400 million to $500 million just in the U.S. And then that broadens out both in geographic terms beyond the United States, and it broadens out in clinical terms and that can move to prevention of blood clots in the catheters, and it will ultimately, we hope, move back to the treatment of clots systemically for conditions such as pulmonary embolism for which the drug was already approved in the United States and Canada and for conditions that the drug was widely used in off-label such as heart attacks, stroke, deep vein thrombosis, peripheral arterial occlusions. Those indications, however, require a lot more drug active -- on the order of 100x as much drug active ingredient to treat those conditions and will require a longer cycle for reapprovals likely involving modernization of the upstream drug substance manufacturing, and we certainly want to see Microbix play a key role in that work as well. So very optimistic about Kinlytic and Microbix. Just to remind everybody, we have received USD 4 million in licensing fees from our partners as goodwill and proof of their [ bona fides. ] And we are eligible to receive up to USD 31 million in onetime milestones driven by approval and sales thresholds in addition to which we will receive a royalty on ongoing sales of the product actually on all revenues realized by our partner in relation to the product, and that is targeted to be a double-digit recurring royalty. So again, that can be very impactful to Microbix as those revenues drop straight to the pretax line of the company. With regards to our diagnostics business, we had grown the overall revenues of Microbix at quite a good clip for the 5 years through fiscal 2024. And in fact, the growth rate of our QAPs business through year-end 2024 had been close to 50% compound annual growth rate, going from about $1 million in 2019 to $7 million in 2024 before slipping back somewhat to about $5.5 million in 2025 due to client setback, a major cancellation of a program that we were supporting where our customer, in fact, took about $850 million in write-downs in relation to that program cancellation. So while we got nipped, they were certainly [ bitten. ] And we're looking and engaging with many customers, some of which are tenfold more the size of that customer with whom we are now having detailed project discussions and engagement. And per our policy, as those relationships progress into formal contracts and/or generate material revenues, we'll make disclosures associated with those relationships. But the engagement is intense. It is with multiple prospective new customers. And some of those we've been able to announce relationships such as with SEKISUI and Seegene in late 2025 and with College of American Pathologists in early 2026. All of those are potentially material accounts and generating revenues, but there is always a cycle. The relationship may start with hundreds of thousands of dollars in revenues in the first year of relationship before it progresses to potentially much more in future years. But again, we're in a regulated industry, and it takes time for these seeds that we sow to germinate and grow. And that's where we're focusing on building our capabilities and the sustained revenues of our company. And we're working as quickly as we can to bring those revenues back up through the -- our engineered breakeven point. And until then, we'll be engaging in some sustained losses, but we continue to hope to and target to be back towards breakeven towards the end of the current fiscal 2026 period. So thank you. Deborah, did I see a question pop into the feed there? Or was that...

I don't see anything.

Okay. Well, then with that, I will just reiterate that management team is hard at work. We have an engaged and supportive Board, and we are very thankful for, again, to our shareholders, to our clients and to our staff for the support, trust and engagement that all of those stakeholder groups are providing. So thank you to everyone, and I'll suggest we sign off. We do have a, I think, a few canapes or some such here that we'll have to try and do service to. But thankfully, we didn't over-order at the venue here. So I think we're in good shape there. So with that, I'll just thank everybody for the -- and call for the conclusion of the informal portion of our 2025 Annual Meeting of Shareholders, and we'll be hard back at work within a few minutes.

All right. Thank you, Deborah. Thank you, everybody.

Thank you, gentlemen.