Good morning, ladies and gentlemen. Thank you for joining us today for IPA’s Earnings Call covering the Second Quarter of Fiscal Year 2024. I am Sarah and I have the privilege of hosting this call. Before we commence, I would like to draw your attention to the fact that our discussion today may include forward-looking statements. These statements are subject to various risks and uncertainties that could cause actual results to differ materially from what we express or imply. We strongly encourage you to review our filings with the Securities and Exchange Commission for a comprehensive discussion of these risks and uncertainties. IPA remains committed to complying with legal requirements and will update forward-looking statements only as mandated by law. During today's conference call, as well as in the accompanying presentation slides, we will be employing non-GAAP financial measures to assist investors and analysts in comprehending IPA's business performance. Adjusted EBITDA in particular allows for meaningful comparisons and analysis of trends in our business over different periods. For a detailed explanation and reconciliation of these non-GAAP measures to GAAP measures, please refer to the Management Discussion and Analysis Section of our filing on EDGAR and SEDAR. Now without further ado, I would like to pass the floor to IPA’s CEO Dr. Jennifer Bath, who will provide an overview of our quarterly results.

Thank you, Sarah. Good morning, everyone, and thank you for joining us. IPA has consistently invested in its end-to-end antibody services, encompassing discovery through development, aimed at reducing the risk, cost, and time needed to bring novel therapies to the clinic. Reflecting on the effectiveness of this approach, the company's second quarter financial and operational results reveal a third consecutive record quarter with revenue of $6.2 million. This number represents an 18.6% increase above the same period last year. We continue to see strong growth across several areas of our service offerings, including our laboratory B-cell select platform and our manufacturing facility with its expanded capacity. Importantly, our strategic efforts have enabled us to be successful in growing revenue while also reducing our cash burn from $1.6 million in our first quarter of this fiscal year to $700,000 this quarter. Our subsidiary, BioStrand, recognized approximately $165,000 of early revenue this quarter, stemming from LENSai-driven client programs as they continue to progress toward the next phase of their launch of their LENSai portal and software as a service or SaaS platform. With our Talem assets, we remain committed to our strategy of driving revenue through out-licensing opportunities. I am excited to share with you today an update on one of our Talem assets that was highlighted in September's earnings call. We have recently received and executed a letter of intent to engage in a material transfer agreement for that asset. We also continue to leverage Talem’s other previously announced strategic partnerships, which are contributing to our contract research revenue and generating new client opportunities for BioStrand. The macro environment for the drug discovery industry continues to be challenging. Industry-wide biotech funding is down over 60% from its peak in 2021. It is against this backdrop that we are especially pleased with…

Thank you, Jennifer. I'll provide a brief overview of our financial results for the second quarter before touching on our financial position as of the end of the period. As a reminder, all numbers I reference are in Canadian dollars, unless otherwise noted. Starting with our revenue, for the three months ended October 31, 2023, we achieved revenues of $6.2 million, representing a 19% increase from our revenue of $5.2 million in Q2 of the previous year. Our year-to-date revenue for fiscal 2024 was $11.8 million, reflecting a 20% increase from fiscal 2023 year-to-date revenue of $9.9 million. Supporting this growth, our Utrecht, Netherlands site achieved year-to-date revenue growth of 43% year-over-year and is benefiting from expansion efforts in Q3 of last year. Our Victoria, BC site achieved year-to-date revenue growth of 17% year-over-year, and will be expanding in early calendar 2024. We're seeing the impact of these expansion costs on our gross margin, along with the new BioStrand revenue, which in its early stage of limited commercialization has lower margins than those targeted at full rollout. We're also seeing the impact of inflation and we are reviewing pricing changes for the start of the calendar year as part of our overall initiatives to bolster gross margin. Now on to our operating expenses. Our research and development expenses for the second quarter were approximately $1 million, representing a $4 million decrease over the same period of the previous year. This decrease reflects the completion of the investments required to build the Talem assets and now primarily represents our investment in supporting the phased rollout of our BioStrand offerings. Sales and marketing expenses for the quarter are up approximately $100,000, in line with our rising revenues. And general and administrative expenses for the quarter are $3.3 million compared to $3.8 million…

Thank you, Kristin. Before Jennifer adds any closing remarks, we would like to open the floor to any questions from analysts and investors. [Operator Instructions] Your First question comes from the line of Arthur He with H.C. Wainwright. Your line is open.

Hey, good morning, everyone. This is Arthur on for RK. Thanks for taking my question. So the first question is regarding the rollout of the LENSai portal. Before you taking that to all IPA clients right now, what additional steps or effort you need to complete before the rollout?

Thank you for your question. This is Jennifer. I'm happy to answer that question. So first of all, one of the things that is being done here is, we are still adding a couple of features to that portal for the client rollout, as it will have numerous features that the clients can use to analyze the actual data that they're getting from all of our different web lab sites globally. We're also testing that portal internally across multiple sites to make sure that we've basically removed any bugs or any challenges that could exist during the client rollout so that we know that it's entirely ready for that push out to our clients. Aside from that, we're actually getting fairly close to having the final portal available for the client. So it's part of the front end user capabilities and being ready to push that in a secure environment with the username and passwords for our clients to access it.

Got you. Thanks. So within that, in the background, how we should expect the public launch for the SaaS platform, is still within the estimate you guys provided for it, which probably is in the second half of next year?

Yes. So yes, we are still on track for the same dates that we previously provided. And how we envision that is, after the portal has been in use by our existing clients, we will continue to add additional features through that portal, as well as advertising the ability for those clients to come in directly for the fee-for-service capabilities for more complex programs. And then we will roll out that SaaS platform, which is essentially a much more sophisticated version of the portal, both to our clients and then to the public. And again, just to re-emphasize that the SaaS platform in and of itself is also managing our capability for data management and data organization, while also giving access to LENSai to our clients. And as just previously mentioned, yes, that continues to be on target for the previous time frame we have provided.

Awesome. Thanks for taking my question. Congrats on the rollout.

Of course. Thank you.

Your next question comes from the line of Will McHale with Ingalls & Snyder. Your line is open.

Good morning, Jennifer and Kristin, and congrats on the solid set of financial results.

Thank you.

To start, I guess just looking back at the performance of the company over the past 12 or 18 months, there have been a number of things that have been discussed on the conference call, things such as expectations around out-licensing deals and time to ramp revenue from BioStrand partnerships that haven't fully materialized as the company expected initially. If you were to kind of give a postmortem or look back on why things haven't exactly materialized as expected, what would be the explanation?

Thank you. Thanks for asking that question, Will, because I suspect that you're not alone in having that question with regard to BioStrand partnerships and out-licensing expectations for Talem. And so, while there's probably a couple of different factors, I think there's one key factor that we definitely can be confident has impacted those prospects and clients and partnerships. And a lot of that has to do with the undeniable post-COVID market slowdown. We know that it had a very tangible impact on our partners and our clients. We observed a notable shift in their operations. Oftentimes they shared that very directly with us. Many of them temporarily had to pause programs or pause partnerships. Many of those clients also saw consolidation in the industry and many of the pipeline companies either merged or ceased operations or even delayed further investments. And of course, those pipeline companies are our primary target for these types of opportunities. Additionally, the challenging financial landscapes also made it really difficult for these biotech firms to secure the necessary capital for in-licensing and continuing their research endeavor. So we really saw a significant slowdown in those efforts and a lot more conservative spending as a lot of those pipeline companies kind of halted those activities. However, I think it is important to note also that there are emerging signs of a shift in this trend. We're beginning to see a gradual resurgence in activities, in conversations and investments in the sector. As indicated, I think, really by the recent letter of intent received by Talem. And the change, even though it is gradual and will be gradual, I think it's a positive indication of recovery and a return to more robust operations for our partners and our clients.

Thanks, that makes sense. And I appreciate the color you gave in the script about the overall biotech funding environment. Hopefully it's a change in 2024 as we move forward. A quick question on capital allocation. The company has spent a lot of money on Talem assets and issued a bunch of shares to acquire BioStrand. Looking at those totals now are more than our current market cap, which is sort of depressing to see. But how are you guys thinking about just these investments creating shareholder value? And I guess you can also address the raise last week too. It was a pretty depressed valuation. What are sort of the thought process on ROI with these decisions?

Sure, Will. This is Jennifer again. I'll take that question for you. So, yes, so first of all, I think it's essential to acknowledge that these are substantial investments we've made in Talem and for the acquisition of BioStrand. And these investments, as well as the recent fundraising are at a valuation that we don't believe and may not currently reflect our intrinsic value. So first of all, I'd like to touch just a little bit then on the strategic rational behind these investments. Really both Talem and BioStrand bring unique and complementary capabilities to IPA. Talem has obviously been the subject of internal investments as we've invested in assets within TOLUM. And then BioStrand’s technologies are pivotal in enhancing our core competencies and diversifying our product offerings and expanding our market reach. So really going back to fundamentally the mission that we have continued to articulate in the end-to-end services in discovery and development for BioStrand. The BioStrand offerings are really an integral and important part of that aspect of what we are offering as we continue to listen to our client needs. And so the strategic integration of that, we really believe creates a more robust platform for potential significant synergies. We also believe this creates long-term value creation. While the current market cap and recent fundraising reflect a momentary evaluation in a volatile market, the investments in both Talem and BioStrand are projected to yield returns in the future. And that includes expanding into new markets, accelerating product development, and leveraging cross-selling opportunities across our end-to-end spectrum of services. And I think that's something that we really should not overlook as that ability for us to go ahead and tie really directly into the existing clients that IPA have which are extremely loyal and already utilizing our services at IPA which really make a great market entry for us. Then just lastly with the acquisition of BioStrand and then combining that with Talem's capabilities, we do think that there are numerous different market segments and customer segments that we are able to tap into. So it's not just about increasing revenue streams, but also building more resilient and also diversified business models for IPA.

Got it, thanks. So it sounds like you're saying the raise last week, while not at an ideal valuation was necessary because we have to make these investments now to meet the market opportunity. Is that the gist of it?

Yes, Specifically on the raise, that's exactly right. Well, there are several opportunities that we feel are really important to capitalize on here in the short term that we really do believe provide substantial revenue returns for IPA. And in particular, the two that we really highlighted with respect to this decision that wasn't taken lightly with regard to the issuance of the common shares is the expansion of our facilities, in particular in Victoria, where again, similar to what happened in Utrecht, we are at client capacity, and we have client demand for increased number of services, increased number of programs for our clients in both B-cell and also actually in protein production there in Victoria and then the other one was isn't with BioStrand. That market is moving really quickly, BioStrand is moving really quickly and we feel it's imperative to make an investment in BioStrand for this push for the LENSai portal and the SaaS model due to the high projected return in benefits to IPA.

Got it. Thanks. One more quick question. As you look at BioStrand and kind of the product roadmap there, how closely are you evaluating whether it's new features or functionalities in conjunction with existing CRO clients?

Can you repeat the question one more time, Will?

Sure. The question is, as you look at BioStrand's product roadmap and kind of the different features and modules you're building, are those a result of direct requests from clients? Or how do you determine exactly where the next feature or module is going to be built?

Yes, that's a fantastic question. So first of all, as I mentioned earlier in the script, we're always in very close communication with our clients, with the project leads at these industries. With many of them, we have several decades of relationships with them. And they're very open and clear about what their needs are, what their pain points are. I mean, going back to even the mission that we put forward with IPA with regard to the end-to-end discovery and development services, that's exactly why we did that, because we were answering to these pain points that our clients had, and that's exactly what we're doing with BioStrand. Before the acquisition of BioStrand, there were a number of areas where we were just absolutely certain that a really good AI platform could help us to address some of these needs that our clients had. And obviously after the acquisition, it really became clear as our clients continued to articulate this, that there were several things that they were seeking. Part of it is the speed with which we're able to do some of the work that's currently done in wet lab environments, and some of the work that we currently were not offering in the wet lab environment. With artificial intelligence, we're obviously able to tackle some of those requirements much more rapidly for our clients, which is one of their major pain points and one of their major demands. But in addition to that, we've seen this real shift in the industry too, where we've tackled a lot of the easier targets for many different diseases. And those diseases in our clients are coming with more complicated targets that oftentimes just don't lend themselves very well to wet labs or require a combination of a lot of in…

Got it. That's really helpful. It seems like for a lot of the startup SaaS world, the biggest sort of hurdle is finding product market fit. And the fact that we already have such a long relationship with these clients and the CRO, it seems like we kind of already have that. So that's super exciting to hear. I will drop and let whoever's next in the line ask questions. Thanks, Jennifer.

Thank you, Will.

[Operator Instructions] There are no further questions at this time. I will turn the call back to Jennifer for closing remarks.

Thank you, Sarah. So, as we conclude this earnings call, I would like to reiterate the key points that demonstrate our strategic progress and financial resilience. In the first quarter, I discussed our strategy and related initiatives aimed at driving growth and value creation. Now in the second quarter, we continue to deliver on these initiatives. Our focused efforts on laboratory expansion, the advancing commercialization of BioStrand, and monetizing Talem are yielding tangible results. This is evident in our financial performance marked by our revenue growth of 19%. This increase not only reflects our operational efficiency but also underscores the effectiveness of our strategic decisions in a challenging and dynamic market environment. Moreover, we've seen a noteworthy improvement in our net loss, which now stands at $0.10 per share. The investments we are making today in key value creation initiatives are laying the foundation for a strong and sustainable future. We are strategically deploying our resources to areas with the highest potential for growth and return, ensuring that we are well positioned to capitalize on emerging opportunities. As we move forward, our focus remains on executing our strategy with precision, maintaining financial discipline, and continuing to drive shareholder value. Thank you for joining us today and for your continued support.

This concludes today's conference call. We thank you for joining.