Q2 2024 Numinus Wellness Inc Earnings Call

Okay.

Speaker Change: Good afternoon, and welcome to newness Wellness Inc's Second Corp, second quarter fiscal 2024 resorts results conference call.

Operator: Good afternoon, and welcome to Numinus Wellness Inc.'s second quarter fiscal 2024 results conference call. A question and answer session for analysts and institutional investors will follow the formal remarks. As a reminder, this call is being recorded. I would now like to turn the conference call over to your host, Craig MacPhail. Please proceed. Thank you, Jael.

Speaker Change: Question and answer session for analysts and institutional investors will follow the formal remarks as a reminder, this call is being recorded.

Speaker Change: I would now like to turn the conference call over to your host Craig Mcphail. Please proceed.

Craig MacPhail: Thank you Jill and good afternoon, everyone and thank you for joining us for our fiscal second quarter 2024 results conference call.

Craig MacPhail: Good afternoon, everyone, and thank you for joining us for our fiscal second quarter 2024 results conference call. Discussing Numinus' performance today are Payton Nyquvest, founder and CEO, and Melanie Valut, Interim Chief Financial Officer. The following discussion may include forward-looking statements that are based on certain expectations and are subject to a number of risks and uncertainties. The risks and uncertainties that could cause our actual financial and operating results to differ significantly from our forward-looking statements are detailed in our MD&A for the quarter ended February 29, 2024, and in our other security filings available on CDAR. Numinus does not undertake to update or revise any forward-looking statement.

Craig MacPhail: Discussing pneumonyssus performance today, our patent like best founder and CEO MLR, you've got the ability for Lou interim Chief Financial Officer.

Craig MacPhail: The following discussion May include forward looking statements that are based on certain expectations and our <unk>.

Craig MacPhail: Second to a number of risks and uncertainties.

Craig MacPhail: The risks and uncertainties that could cause our actual financial and operating results to differ significantly from our forward looking statements are detailed in our MD&A for the quarter ended February 29th 'twenty 'twenty four and in our other security filings available on SEDAR.

Craig MacPhail: Numerous does not undertake to update or revise any forward looking statements to reflect new events or circumstances, except as required by law are.

Craig MacPhail: Our second quarter results were released earlier this afternoon. We encourage you to review our earnings release, MD&A, and financial statements, which are available on our website and CDAR. As a reminder, all figures discussed today are in Canadian dollars. I'll now turn the call over to Payton Nyquest, Chief Executive Officer.

Craig MacPhail: Our second quarter results were released earlier. This afternoon. We encourage you to review our earnings release, MD&A and financial statements available on our website and SEDAR.

As a reminder, all figures discussed today are in Canadian dollars.

Craig MacPhail: I'll now turn the call over to Pete Nyquist, Chief Executive Officer.

Craig MacPhail: Yeah.

Payton Nyquvest: Thanks, Craig and good afternoon, everyone I'd like to start by extending our utmost gratitude that the work that our work is conducted on the unseeded homelands of domestically in Squamish and so they went to people and other sovereign indigenous lands cross and territory territories across Turtle Island.

Payton Nyquvest: Thanks, Craig. And good afternoon, everyone. I'd like to start by extending our utmost gratitude that our work is conducted on the unceded homelands of the Musqueam, Squamish, and Tsleil-Waututh peoples, and on other sovereign Indigenous lands across and territories across Turtle Island. We are committed to a path toward reconciliation through continuous learning, reciprocity, and humility. In the second quarter of fiscal 2024, we continue to focus on preparing Numinus to capture growth opportunities across the spectrum of psychedelic assisted therapy.

Payton Nyquvest: We're committed to the path towards reconciliation through continuous learning reciprocity and humility.

Payton Nyquvest: In the second quarter of fiscal 2024, we continue to focus on preparing newness to capture the growth opportunities across the spectrum of psychedelic assisted therapy.

Payton Nyquvest: As the sector's only fully integrated behavioral health care provider, we are well positioned to benefit. The strategy is bolstered by the continued advancement of drug candidates towards FDA approval. As mentioned last quarter, Lycos Therapeutics' MDMA treatment is now with the FDA as a new drug application. With MDMA designated as a breakthrough therapy, the FDA has 60 days to accept the application for review and decide whether MDMA will receive priority review in the next six months.

Payton Nyquvest: Sector as the only fully integrated behavioral health care provider, we are well positioned to benefit.

Payton Nyquvest: This strategy is bolstered by the continued advancement of drug candidates towards the FDA approval.

Payton Nyquvest: As mentioned last quarter, <unk> therapeutics and DMA treatment is now with the FDA as a new drug application.

Payton Nyquvest: M D M. A designated as a breakthrough therapy. The FDA has 60 days to accept the application for review and decide whether M. DMA well received priority review in this and that.

Payton Nyquvest: Review of six months.

Payton Nyquvest: This March mine Med L. S D based.

Payton Nyquvest: This March, MindMeds' LSD-based MM 120 program for the treatment of generalized anxiety disorder also received breakthrough status after the results of its phase 2b clinical trials were released. The study showed that four weeks after a single 100-microgram dose of M120, 48% of participants achieved remission, no longer showed clinically significant anxiety, and 65% showed clinically meaningful improvement. This joins the breakthrough therapy designation granted earlier to USONA Institute Psilocybin Treatment for Major Depressive Disorders. A Phase II study of psilocybin showed in a six-week trial that a 25 milligram dose of psilocybin administered with psychological support was associated with a rapid and sustained antidepressant effect.

Payton Nyquvest: And 120.

Payton Nyquvest: Program for the treatment of generalized anxiety disorder also received breakthrough status. After the results of its phase two b clinical trials were released.

This study showed that four weeks after a single 100 microgram dose of <unk> 120.

Payton Nyquvest: 48% of participants achieved remission no longer showed clinically significant anxiety and 65% showed clinically meaningful improvement.

Payton Nyquvest: This joins the breakthrough therapy designation granted earlier to Usona Institute suicide in treatment for major depressive disorder.

Payton Nyquvest: The phase two study of psilocybin showed in a six week trial that is 25 milligram dose of psilocybin administered with psychological support.

Payton Nyquvest: Stated with a rapid and sustained antidepressant effect.

Payton Nyquvest: In addition to providing the highest enrolling sites for the am 120 clinical trial.

Payton Nyquvest: In addition to providing the highest enrolling sites for the MM120 clinical trial, Numinus and Cedar Clinical Research provided sites for USONA's Phase 2 trial and will again be a research partner for the Phase 3 trial. According to the news, the New Service Psychedelic Alpha, there are over 35 psychedelic compounds in the phase two or phase three trial stage, with most addressing conditions for which there's no effective treatment.

Payton Nyquvest: Cedar Sinai Cedar clinical research provided sites for your son is phase two trial and will again be a research partner for the phase III trial.

Payton Nyquvest: According to the news or the new service.

Payton Nyquvest: If I could Alec alcohol, Virginia, there are over 35 psychedelic compounds in the phase II or phase III trial stage with most addressing conditions for which there is no effective treatment.

Payton Nyquvest: This momentum indicates the progress that psychedelic treatments are making to become accepted as treatments for serious mental health conditions and available to the general public.

Payton Nyquvest: This momentum indicates the progress that psychedelic treatments are making to become accepted as treatments for serious mental health conditions and available to the general public. This provides opportunities for continued growth across the three areas of our business. The advanced stages of drug development drive the demand for efficient and clarifying clinical research.

Payton Nyquvest: This provides opportunities for continued growth across the three areas of our business.

Payton Nyquvest: The advanced stages of drug development drive the demand for efficient and clarify clarifying political research.

Payton Nyquvest: Once approved, these drugs will be required to be administered and monitored in treatment clinics using FDA-approved methodology. Considering the expected strong patient demand once these drugs are approved, there will be a high demand for trained psychedelic therapy practitioners. Since the third quarter of fiscal 2023, we have focused the company on taking advantage of these opportunities. This includes optimizing our operations and implementing cost-containing measures. As part of these initiatives, we announced this morning that we will focus on growth opportunities in the United States while shifting to a resource-efficient capital light model to continue to support Canadian organizations and the therapists, and healthcare professionals practicing in this mental health treatment sphere. This decision was made with careful consideration and foresight and resulted from our previously announced strategic review.

Payton Nyquvest: Once approved these drugs will be required.

Payton Nyquvest: We'll be required to be administered and monitored in treatment clinics using FDA approved methodologies.

Payton Nyquvest: During the expected strong patient demand once drugs are approved there will be a high demand for trained psychedelic therapy practitioners.

Payton Nyquvest: Since the third quarter of fiscal 2023, we have focused the company on taking advantage of these opportunities.

Payton Nyquvest: Includes optimizing our operations and implementing cost containment measures.

Payton Nyquvest: As part of these initiatives, we announced this morning that we will focus on growth opportunities in the United States, while shifting to a resource sufficient capital light model to continue to support Canadian organizations and the therapist.

Payton Nyquvest: And health care professionals practicing in the mental health treatment sooner.

Payton Nyquvest: This decision was made with careful consideration and foresight and resulted from our previously announced strategic review.

Payton Nyquvest: This reorganization is a strategic shift for numerous and will allow it to focus on its clinical operations in the United States.

Payton Nyquvest: This reorganization is a strategic shift for Numinus and will allow it to focus on its clinical operations in the United States. Numinus has entered into a non-binding letter of intent with the Canadian Centre for Psychedelic Healing with respect to a component of the Canadian Reorganization and is actively working to settle definitive terms. Going forward, our focus will be on the significant opportunities available in the United States with MDMA at the new drug application stage with the FDA and several novel drug therapies at late stage clinical trial stages; we expect the U.S. to be the first to introduce breakthrough therapies in patient care. We believe this decision also aligns strongly with our goal of profitability from our existing operation.

Payton Nyquvest: The minutes has entered into a nonbinding letter of intent with a Canadian with Canadian site center for psychedelic healing with respect to a component of <unk>.

Payton Nyquvest: <unk> of the Canadian reorganization and is actively working to settle a definitive terms.

Payton Nyquvest: Going forward, our focus will be on the significant opportunities available in the United States with empty in may at the new drug application stage with the FDA and several novel drug therapies at Lake.

Payton Nyquvest: Clinical trial stages, we expect the U S to be the first to introduce breakthrough therapies in patient care.

Payton Nyquvest: We believe this decision also align strongly with our goal of profitability from our existing operations.

Payton Nyquvest: It's important to note that our US operations generated 88% of our revenue in fiscal 2023, with our US wellness clinics having an optimized business model with full-time practitioners and near-term profitable evidence. To continue to support healthcare professionals and reinforce its commitment to advancing novel psychedelic-assisted therapies in Canada, Numinus is introducing a pilot membership program under its Numinus Network initiative. Through the program, Canadian therapists and healthcare professionals will retain access to the latest therapeutic protocols, including ketamine and psychedelic assistance therapy.

Payton Nyquvest: It's important to note that our U S operations generated 88% of our revenue in fiscal 2023.

Payton Nyquvest: S wellness clinics, having an optimized business model with fulltime practitioners and near term profitable EBITDA.

Payton Nyquvest: To continue to support health care professionals and reinforce our commitment to advancing novel psychedelic assisted therapy than Canada.

Payton Nyquvest: This is introducing a pilot membership program under its numinous network initiative.

Payton Nyquvest: Through the program Canadian therapists, and health care professionals will retain access to the latest therapeutic protocols, including ketamine and psychedelic businesses therapies.

Payton Nyquvest: Participants will benefit from ongoing support, including supervisory and mentorship engagements with Numinus medical and clinical leaders and certified training programs. This pilot will lay the foundation for a future subscription-based model. Looking at the details of the quarter, we'll begin with our wellness clinic. We conducted almost 18,000 clinical appointments in the second quarter, compared to about 20,000 in the first quarter of 24. The decline in appointment count is due to seasonality, the continued focus in Canada on higher-margin service lines, and the closing of our Phoenix clinic.

Payton Nyquvest: Disappoints will benefit from ongoing support, including supervisory and Mentorship engagements with numerous medical and clinical leaders and certified training programs.

Payton Nyquvest: This pilot will lay the foundation for future subscription based model.

Payton Nyquvest: Looking at the details of the quarter, we'll begin with our wellness clinics.

Payton Nyquvest: We conducted almost 18000 clinical appointments of them in the second quarter compared to about 20000 in the first quarter of 'twenty for the decline in appointment count is due to seasonality.

Payton Nyquvest: The continued focus in Canada on higher margin service lines on the closing of our Phoenix clinic.

Payton Nyquvest: Year over year appointments at our Utah clinics grew by over 3%. This growth. Despite a more extended wellness break in December for our therapists demonstrates you utah's growth potential.

Payton Nyquvest: Year over year, appointments at our Utah clinics grew by over 3%. This growth, despite a more extended wellness break in December for our therapists, demonstrates Utah's growth potential. New clients made up about 6% of appointments in Q2, and about 18% were ketamine and spervato related. We have focused on visibility and excellent patient care to drive continued clinic growth. Our transformative care center has been operating seven days a week for the past two quarters to increase client accessibility.

Payton Nyquvest: New clients made up.

Payton Nyquvest: 6% of appointments in Q2, and about 18% or ketamine its provider related.

Payton Nyquvest: We are focused on visibility I think excellent patient care to continue to drive continued growth.

Payton Nyquvest: Our transformative care center has been operating seven days a week for the past two quarters to increase client accessibility.

Payton Nyquvest: We have also introduced complementary information calls.

Payton Nyquvest: We have also introduced complimentary information calls. We have completed a comprehensive revamp of our digital infrastructure, including optimized online listings and website, enhancing accessibility and user experience for existing and prospective clients. Bookings are now integrated into our Google listings along with chat functionality.

Payton Nyquvest: We have completed a comprehensive revamp of our digital infrastructure, including optimized online listings and website enhancing accessibility and user experience for existing and prospective clients.

Payton Nyquvest: Bookings are now integrated into our Google listings, along with chat functionality.

Payton Nyquvest: Smart Reminder Systems and Enhanced Scheduling Capabilities. This has streamlined the client acquisition processes and helped existing clients easily navigate their care. As a result of our efforts to focus on accessibility and excellent care, we have received over 400 five-star Google reviews and consistently receive high ratings across all clinics. Together with Expert Care, these initiatives will drive appointment growth, clinic utilization, and ultimately strong financial performance. Next, I'll talk about our Practitioner Certification Training Program, which we see as a strategic growth channel and an important source of high-margin revenue.

Payton Nyquvest: Reminder, systems and enhanced scheduling capabilities.

Payton Nyquvest: This has streamlined the client acquisition processes and help existing clients easily navigate their care.

Payton Nyquvest: As a result of our efforts to focus on accessibility and excellent care. We have received over 405 star Google reviews and are constantly.

Payton Nyquvest: Additionally, high ratings across all fronts.

Payton Nyquvest: Together with expert care. These initiatives will drive appointment growth like utilization and ultimately strong financial performance.

Payton Nyquvest: Yes.

Payton Nyquvest: I will talk about our practitioner certification training for one.

Payton Nyquvest: We see as our strategic growth channel and an important source of high margin revenue.

Payton Nyquvest: Numerous training has made significant strides in the past forward towards its mission of providing comprehensive training programs and if I could.

Payton Nyquvest: Numinus Training has made significant strides in the past four months towards its mission of providing comprehensive training programs in psychedelic-assisted therapy and building a system of care for clients accessing these services. Since its inception, nearly 1,500 learners have enrolled in Numinus Training programs. Joining from over 15 countries, this compares to 700 learners reported last quarter. Cohorts have increased at all program levels, including our higher-level molecular foundations courses.

Payton Nyquvest: Consistent therapy and building a system of care for clients accessing new services.

Payton Nyquvest: Since its inception, nearly 1500 learners have enrolled in human this is training programs.

Payton Nyquvest: Joining from over 15 countries. This compares to 700 Lauder learners reported last quarter.

Payton Nyquvest: Cohorts have increased at all program levels, including our higher level molecular foundations courses.

Payton Nyquvest: Last quarter, we launched our introduction to psychedelics program.

Payton Nyquvest: Last quarter, we launched our Introduction to Psychedelics program. This free course has proven to be an effective way to introduce the entire training program, and 30 learners from the introduction course have already signed up for the paid Numinus program. Next quarter, we will launch a community platform allowing practitioners to access ongoing mentorship support and networking opportunities with other psychedelic providers worldwide. The platform will also provide exclusive continuing education opportunities, webinars, and operational advice for establishing and growing their practice.

Payton Nyquvest: This free course has proven to be an effective way to introduce the entire training program and 30 learners from the introduction of course have already signed up for our paid pneumonyssus programs.

Payton Nyquvest: Next quarter, we will launch a community platform, allowing practitioners to access ongoing mentorship support and networking opportunities with other psychedelic to providers worldwide.

Payton Nyquvest: The platform will also provide exclusive continuing education opportunities webinars and operational advice for establishing and growing their practice.

Payton Nyquvest: We are also in the early stages of an initiative to provide training directly to psychedelic drug development companies for practitioners working with participants in clinical trials.

Payton Nyquvest: We are also in the early stages of an initiative to provide training directly to psychedelic drug development companies for practitioners working with participants in clinical trials. This would leverage our clinical research experience and expertise among our trainers. Considering the growth in clinical trials globally, we see this as an attractive growth opportunity. We are pleased with the momentum we are seeing with our training program. We are establishing the gold standard for psychedelic therapy practitioner training, which will attract even more learners as treatments advance through FDA approval.

Payton Nyquvest: This would leverage our clinical research experience and expertise for our trainers.

Payton Nyquvest: Considering the growth in clinical trials globally, we see this as an attractive growth opportunity.

We are pleased with the momentum we are seeing with our training program.

Payton Nyquvest: We are establishing the gold standard of psychedelic therapy practitioner training, which will attract even more learners as treatments advance through FDA approvals.

Payton Nyquvest: Looking at Cedar clinical research in Q2, we manage 15 clinical trial sites.

Payton Nyquvest: Looking at CDER clinical research, in Q2, we managed 15 clinical trial sites, including 260 patient appointments compared to 22 trials and 325 appointments in Q1, just a decline from the previous quarter, as we completed several high-value clinical trials in the past quarter and wound down the Phoenix Research Center. Currently, CCR is working on two clinical trials, including a phase three of psilocybin to treat major depressive disorder at our Murray and Draper, Utah locations. Four further trials are on deck to commence in Q3.

Payton Nyquvest: <unk> 260 patient appointments compared to 22 trials and 325 apartments in Q1.

Payton Nyquvest: This decline from the previous quarter.

Payton Nyquvest: One was as we completed several high value clinical trials in the past quarter and wound down to fit the Phoenix Mr Center.

Payton Nyquvest: Apparently CCR is working on two clinical trials, including our phase III of psilocybin to treat major depressive water at our brewery in Draper, Utah locations.

Payton Nyquvest: For further trials are on deck to commence in Q3.

Payton Nyquvest: With a continued increase of psychedelic drugs moving through into phase II and phase III trials, along with CCI to expanding expertise and extensive relationships with drug developers, we expect steady growth in our clinical research division.

Payton Nyquvest: With the continued increase in psychedelic drugs moving through phase two and phase three trials, along with CCR's expanding expertise and extensive relationship with drug developers, we expect steady growth in our clinical research division. However, faced with significant opportunities in our business segments, our focus remains on financial discipline. P & P initiatives is cost containment. Since Q2 2023, we have reduced our headcount by 60%. This has meant eliminating non-revenue-generating roles and aligning all remaining employees on growth-oriented initiatives and activities. We have also trimmed through the organization, including renegotiating or terminating vendor and agency agreements.

Payton Nyquvest: Faced with significant opportunities in our business segments, our focus remains on financial discipline.

Payton Nyquvest: The initiative is cost containment since Q2 2023, we have reduced our head count by 60%.

Payton Nyquvest: This is matt eliminating non revenue generating roles.

Payton Nyquvest: Aligning all remaining employees on growth oriented initiatives and activities.

We've also trimmed through the organization, including renegotiating or terminating vendor and agency agreements.

Payton Nyquvest: The psychedelic therapy treatments expected to be approved in the U.S. before other jurisdictions will focus our resources on building profitable U.S. operations to capture this attractive opportunity. Today, we have closed our Numinus Bioscience Business and our unprofitable clinic in Phoenix, Arizona. With the consolidation of operations, Numinus is optimizing its patient experience and care model, improving efficiencies, and establishing best practices for future expansion. At this point, I'd like to welcome Melanie Valoo, who joined us last month as interim CFO.

Payton Nyquvest: Psychedelic therapy treatment is expected to be approved in the U S. Before other jurisdictions, we will focus our resources on building profitable U S operations to capture this attractive opportunity.

Payton Nyquvest: To date, we have closed our numerous bioscience business and our unprofitable clinic in Phoenix, Arizona.

Payton Nyquvest: With the consolidation of operations, new Mrs optimizing its patient experience and care model, improving efficiencies and establishing best practices for future expansion.

Payton Nyquvest: At this point I'd like to welcome Melanie for Lou <unk>.

Melanie: He joined US last month as interim CFO.

Payton Nyquvest: Melanie is a seasoned financial professional who brings U.S. corporate finance and capital markets experience to Numinus, which aligns with our plans to increase our presence in the U.S. with U.S.-based patients and investors. She will now provide a financial overview for the quarter.

Melanie: He is a seasoned financial professional who brings the U S corporate finance and capital markets experience voluminous, which aligns with our plans to increase our presence in with U S based patients and investors.

Melanie: Melanie will now provide a financial overview for the quarter.

Melanie: Okay.

Melanie: Okay.

Melanie Valoo: Thanks, Payton, and good afternoon, everyone. This quarter's revenue was $5 million compared to $5.9 million in Q1 2024 and $5.4 million in the same quarter last year. The decline reflects the changes Payton mentioned that were made in the past three quarters to optimize operations and the seasonal impact of fewer clinic appointments in December and January. Revenue from our Wellness Clinic Network was $4.3 million, declining 9.5% compared to the same period last year and decreasing by 13% compared to Q1 2024.

Melanie: Peyton and good afternoon, everyone.

Melanie: This quarter's revenue was 5 million compared to $5 9 million in Q1, 2024, and $5 4 million in the same quarter last year.

Melanie: The decline reflects the changes paint and mentioned that were made in the past three quarters to optimize operation and the seasonal impact of fewer clinic appointments in December and January.

Melanie: Revenue from our wellness clinic network with $4 3 million declining nine 5% compared to the same period last year and decreasing by 13% compared to Q1 2024.

Melanie: Revenue from CCR Rose, 21% 2.7 million from <unk> 6 million in the same period last year and fell 27, 1% from 1 million in Q1 2024.

Melanie Valoo: Revenue from CCR rose 21% to $0.7 million from $0.6 million in the same period last year and fell 27.1% from $1 million in Q1 2024. As the timing of the clinical trials creates variability in CCR's quarterly revenue, a more illustrative way to look at CCR's revenue is on a trailing 12-month basis.

Melanie: At the timing of the clinic clinical trials creates variability and CCR its quarterly revenue a more illustrative way to look at CCI Ccr's revenue is on a trailing 12 month basis.

Melanie Valoo: CCR generated $4,000,000 for the 12 months ended February 29, 2024 compared to $2,000,000 for the 12 months ended February 28, 2023. Looking at the revenue mix, wellness clinics comprised 85% of total revenue during the second quarter, up from 83% in the prior quarter but down from 88% in Q2 2023. This highlights a more diversified revenue mix year over year. U.S. operations comprised 87% of total revenue this quarter compared to 84% last quarter. Growth margins in the second quarter were 33%, down from 36.1% in the previous quarter and 39.3% in the same quarter last year.

Great CCR generated.

Melanie: $4 million for the 12 months ended February 29, 2024, compared to 2 million for the 12 months ended February 28 2023.

Melanie: Looking at the revenue mix wellness clinics comprised 85% of total revenue during the second quarter up from 83% in the prior quarter, but down from 88% in quarter two 2023.

Melanie: This highlights a more diversified revenue mix year over year.

Melanie: Okay.

Melanie: U S operations comprised 87% of total revenue this quarter compared to 84% last quarter.

Melanie: Gross margins in the second quarter were 33% down from 36, 1% the previous quarter and 39, 3% in the same quarter last year.

Melanie: Operating expenditures in Q2 were $6 4 million compared to $6 3 million in Q1, a 1.5% increase after excluding a one time noncash charge of point 3 million to recognize deferred financing costs from the ATM program.

Melanie Valoo: Operating expenditures in Q2 were $6.4 million compared to $6.3 million in Q1, a 1.5% increase after excluding a one-time non-cash charge of $0.3 million to recognize deferred financing costs from the ATM program. Also included in Q2 were operating expenditures of $0.5 million in non-recurring consultant fees related to our cost containment measure. Reflecting the success of our cost containment measures, operating expenses decreased 27% compared to Q2 2020. Our net loss this quarter was $6 million, or $0.02 per share, compared to $4.4 million in the prior quarter.

Melanie: Also included in Q2, where operating expenses of 4.5 million and nonrecurring consulting fees related to our cost containment measures.

Melanie: Reflecting the success of our cost containment measures operating expenses decreased 27% compared to Q2 2023.

Melanie: Our net loss this quarter was $6 million or two cents per share compared to $4 4 million in the prior quarter.

Melanie Valoo: The increase in net loss for the quarter is due to increases in legal, consulting, and marketing expenditures, $0.5 million of which are non-recurring cost-cutting initiatives, and $0.7 million loss on the sale of the company's investment in Alto Neuroscience. Total net cash inflow during the quarter was $1.9 million, an increase of $5.8 million compared to a cash outflow of $3.9 million in the previous quarter. We ended the quarter with $6.6 million of cash on hand and $6.4 million of working capital.

Melanie: The increase in net loss for the quarter is due to increases in legal consulting and marketing expenditures point 5 million of which are nonrecurring cost cutting initiatives and <unk> 7 million loss on the sale of the Companys investment in auto neuroscience.

Melanie: Total net cash inflow during the quarter was $1 9 million, an increase of $5 8 million compared to a cash outflow of $3 9 million in the previous quarter.

Melanie: We ended the quarter with $6 6 million of cash on hand, and 644 million of working capital.

Melanie: In Q2, 'twenty 'twenty, four we announced the closing of our prospectus offering for net proceeds of $5 5 million. This quarter. We raised an additional point 3 million through our previously announced at the market equity offering program.

Melanie Valoo: In Q2 2024, we announced the closing of our prospectus offering for net proceeds of $5.5 million. This quarter, we raised an additional $0.3 million through our previously announced At-The-Market Equity Offering Program. Our focus on driving high-margin revenue, optimizing our operating expenses, and further industry catalysts such as the expected MDMA-assisted therapy approval in the U.S. put us on a solid roadmap to achieving strong revenue growth and positive EBITDA on a consolidated basis. And with that overview of our financial results, I'll turn the call back to Payton for some closing remarks.

Melanie: Our focus on driving high margin revenue optimizing our operating expenses and further industry catalysts, such as the expected M. D. N. A assisted therapy approval in the U S put us on a solid roadmap to achieving strong revenue growth and positive EBITDA on a consolidated basis.

And with that every detail of our financial results I'll turn the call back to pain for some closing remarks.

Pain: Thanks Melanie.

Payton Nyquvest: Thanks, Melanie. Over the past several quarters, Numinus has taken important measures to capitalize on the growth potential of the psychedelic health sector. Going forward, Numinus will be a leaner and more efficient organization that will benefit from the advances in drug development, the mainstreaming of psychedelic-assisted therapy, and the demand for trained practitioners. A stronger team also supports us.

Pain: For the past several quarters numinous has taken important measures to capitalize on the growth potential of the psychedelic health sector.

Pain: Forward numerous will be a leaner and more efficient organization that will benefit from the advances in drug development. The mainstreaming of psychedelic assisted therapy and the demand for train practitioners.

A stronger team also supports US last month, Dana Wilson and Dawn of long were added to the board of directors. They bring important experience in strategy Corp, finance corporate governance and people manageable.

Payton Nyquvest: Last month, Donna Wilson and Donna Wong were added to the board of directors. They bring important experience in strategy, corporate finance, corporate governance, and people management. Also, in February, Rick Doblin, the founder and president of MAP, joined as an unpaid, non-exclusive strategic advisor. Before we open the call to live questions, we will take some questions sent to us by investors.

Pain: Also in February Rick Doblin, the founder and president of Mats.

Pain: And as an unpaid nonexclusive strategic adviser.

Pain: Before we open the call to live questions we.

Pain: We will take some questions sent to us by investors.

Craig MacPhail: Hi Payton, I have two questions sent to us from investors via email. Here's the first one.

Speaker Change: Hi, Peyton two questions sensuous when investors by email here.

Speaker Change: Here's the first one.

Craig MacPhail: Given the 26 to 38 week training period for MDMA-assisted therapy, what incentives exist for therapists to undertake this training before FDA approval?

Speaker Change: Given the 26% to 38 week training period for <unk> therapy.

Speaker Change: What incentives exist for therapist to undertake this trading before FDA approval.

Peyton: Thanks, Craig.

Payton Nyquvest: Thanks, Craig. We have seen a strong interest in the training program with learners enrolling from several countries and with diverse backgrounds. As we reported this quarter, enrollment has doubled to almost 1500 compared to Q1. I think what makes the course attractive is that it provides comprehensive training from the fundamentals of psychedelics to specific training on ketamine, psilocybin, and MDMA therapy. It also appeals to those who are considering entering the field of psychedelic-assisted therapy, as well as experienced traditional therapists to understand how it can help their patients or better work with patients' self-administration. Once MDMA is approved, we expect demand may increase, and our scalable offering will be able to meet it.

Peyton: We are seeing a strong interest in the training program with learners and rolling from several countries and diverse backgrounds. As we reported this quarter enrollment has doubled to almost 1500 compared to Q1.

Peyton: What makes the course attractive is that it provides comprehensive training from the fundamentals of psychedelics to specific training Academy psilocybin and MDMA therapy.

Peyton: It also appeals to those who are considering entering the field of psychedelic assisted therapy as well as experience traditional therapist to understand how it can help their patients or better work with patients self administered once <unk> is approved we expect demand may increase and our scalable offering will be met we will be able to meet it.

Peyton: Okay.

Payton Nyquvest: Thanks, Payton. Here's the second one. With your increasing focus on U.S. operations... When can we expect Numinus to be listed on a U.S. exchange?

Speaker Change: Thanks, Peyton Here's the second one with your increasing focus on U S operations. When can we expect new munis to be listed on a U S exchange.

Craig MacPhail: To increase our exposure to U.S. investors and capital markets, we're always considering the optimal way to achieve that. When the markets and the timing are right, we'll do what's best for Numinus and our shareholders. If those are the only questions, we'll open the call to questions from analysts and institutional investors.

Speaker Change: To increase our exposure to the U S investors in U S capital markets.

Speaker Change: We're always considering the optimal way to achieve that when the markets and the timing of right, we'll do what's best for new minutes and our shareholders.

Speaker Change: If those are the only questions, we'll open the call up to questions from analysts and institutional investors.

Speaker Change: Thank you. Your first question comes from the line of Michael <unk> of Maxim Your line is open.

Operator: Thank you. Your first question comes from the line of Michael Okunewitch from Maxim.

Michael Okunewitch: Your line is open. Great, Payton. Thank you so much for taking my questions today. [inaudible] I guess, first off, I'd just like to see if you could provide a little bit more granularity on how your decisions regarding the Canadian clinics could potentially impact your expense profile and your path to profitability.

Michael: Okay, great. Thank you so much for taking my questions today.

Well Michael.

Michael: I guess first off I just wanted to see if you could.

Michael: Had a little bit more granularity on how your decisions regarding the Canadian clinics could potentially impact your expense profile and your path to profitability.

Michael: Sure without getting into too much details, we're still waiting to define where to sign the definitive agreement.

Payton Nyquvest: Sure, without getting into too many details, we're still waiting to define or sign the definitive agreement. You know, Canadian businesses have been a challenge to get to profitability with overhead also being a consideration for that. And with the potential opportunity that we're seeing with the clinics in Canada, to be able to transition them to the Numinus network model provides us ongoing exposure to Canada with a much reduced overhead cost and continues to provide scale as well.

Michael: The Canadian businesses have been a challenge to get to profitability with overhead also being a consideration into that.

Michael: And with the potential opportunity that we're seeing with the clinics in Canada to be able to transition them to the numerous network model provides us ongoing exposure to Canada with a much reduced overhead.

Michael: The cost and and continued to provide scale as well.

Speaker Change: Alright, Thank you and then.

Payton Nyquvest: All right. Thank you. And then I'd like to see if you could provide just a bit more color on how your plans to focus on U.S. operations could manifest. Would you look towards bringing on board additional clinics directly, through the network, or organically, and is that something in the near-term focus, or is the near-term really just to prepare your existing clinics for MDMA-assisted therapy, and then down the road look towards more expansion in the

Just a bit more color on how your plans to focus on U S operations could manifest would you look towards bringing on board additional clinics directly through the network organic opening.

And.

Speaker Change: Is that something in the near term focus or is the near term really just to prepare your existing clinics.

Speaker Change: If this therapy and then down the road look towards more expansion in the U S.

Speaker Change: Yeah. Good question, we continue to see operation or opportunities to grow within our existing business and improve as we continue to make the path towards profitability.

Payton Nyquvest: Yeah, good question. We continue to see opportunities to grow within our existing business and improve as we continue to make the path towards profitability. And so I think there's lots of opportunity to expand within the own infrastructure that we've got, but we are continuing to evaluate opportunities out there in the marketplace and certainly continuing to develop the Numinus network, particularly as we look towards the approval or potential approval of MDMA in August and make sure that that product is ready to go on approval.

Speaker Change: And so I think there's lots of opportunity to expand within the the owned infrastructure that we've got.

Speaker Change: But are continuing to evaluate opportunities out there in the marketplace and certainly continuing to develop the new minutes network.

Speaker Change: Particularly as we look towards the approval or potential approval of of MDMA in August.

Speaker Change: And making sure that that product is ready to go.

Michael Okunewitch: All right, thank you. And then just one last one from me, and I'll hop back into the queue.

Speaker Change: Upon approval.

Speaker Change: Alright. Thank you and then just one last one from me and I'll hop back into the queue I would like to see if you could provide just a little bit of color on your <unk> and.

Michael Okunewitch: I'd like to see if you could provide just a little bit of color on your thoughts on the recent decision in Utah regarding, um, Opening Psychedelic Medicine. Sorry, I lost my train of thought. The recent legislative action supporting psychedelic medicine in Utah, and what that might mean for your clinic.

Speaker Change: Your thoughts on what the recent decision.

Utah regarding.

Speaker Change:

Speaker Change: Opening psychedelic medicine.

Speaker Change: I'm, sorry, I lost my train of thought.

Speaker Change: The recent legislative action supporting psychedelic medicine in Utah, what that might mean for your clinics.

Speaker Change: Yeah I think.

Payton Nyquvest: Yeah, I think... To me, the most exciting part of that is when we think about rescheduling these drugs once the FDA has approved them. More broadly, you know, I think what Utah has demonstrated is a willingness and keen interest in supporting these therapies. And I think, you know, also, if you think about insurance coverage, you know, to have that highlighted and already being considered within the healthcare system in Utah, I think presents lots of opportunities for Utah to be, you know, one of the states to be at the forefront of any regulatory changes in regards to different psychedelic therapies, but obviously, you know, most paying attention to MDMA-assisted therapy.

Speaker Change: To me the most sort of exciting part of that is when we think about reschedule a rescheduling. These drugs once the FDA has approved.

Speaker Change: Hum.

Speaker Change: More broadly I think what Utah has demonstrated is that there is a willingness and keen interest in supporting these therapies.

Speaker Change: And I think also if you think about insurance coverage.

Speaker Change:

Speaker Change: To have that be highlighted in an already being considered within the health care system in Utah, I think presents lots of opportunities for you to be one of the states to be at the forefront of of any regulation changes in regards to different psychedelic therapies, but but obviously.

Speaker Change: Most most paying attention to MDMA assisted therapy.

Speaker Change: Alright, Thank you very much for taking my questions today.

Michael Okunewitch: Alright, thank you very much for taking my questions today. Thanks, Michael. With no further questions, this concludes our Q&A session. I will now turn the conference back over to Payton Nyquvest for closing remarks.

Speaker Change: Thanks, Michael.

Speaker Change: With no further questions. This concludes our Q&A session.

Speaker Change: Turn the conference back over to Peyton like vest for closing remarks.

Peyton: Thanks, operator.

Payton Nyquvest: Thanks, operator, and thank you everyone for joining our conference call today. I look forward to speaking with you in July when we will report our fiscal third quarter 2024 results.

Peyton: Thank you everyone for joining our conference call today I look forward to speaking with you in July when we will report our fiscal third quarter 2024 results.

Speaker Change: This concludes today's conference call you may now disconnect.

Operator: This concludes today's conference call. You may now disconnect.

Speaker Change: [music].

Speaker Change: Yeah.

[music].

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Yeah.