Q1 2027 MindWalk Holdings Corp Earnings Call

September 14, 2026

Operator 2: Hello, everyone. Thank you for joining us, and welcome to MindWalk Reports Financial Results and Recent Business Highlights for Q1 Fiscal Year 2027. After today's prepared remarks, we will host a question and answer session. I will now hand the conference over to Dr. Jennifer Bath, President and Chief Executive Officer of MindWalk Holdings. Dr. Bath, please go ahead. Before we begin, I would like to remind listeners that today's discussion contains forward-looking statements. These statements reflect management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated, including the company's history of net losses and the ability to convert platform adoptions into contracted recurring arrangements, market acceptance of RefIQ and Lens AI, intellectual property risks, competition, and capital market conditions.

Operator: Hello, everyone. Thank you for joining us, and welcome to MindWalk Reports Financial Results and Recent Business Highlights for Q1 Fiscal Year 2027. After today's prepared remarks, we will host a question and answer session. I will now hand the conference over to Dr. Jennifer Bath, President and Chief Executive Officer of MindWalk Holdings. Dr. Bath, please go ahead. Before we begin, I would like to remind listeners that today's discussion contains forward-looking statements. These statements reflect management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated, including the company's history of net losses and the ability to convert platform adoptions into contracted recurring arrangements, market acceptance of RefIQ and Lens AI, intellectual property risks, competition, and capital market conditions.

Speaker #1: I will now hand the call and the conference over to Dr. Jennifer Bath, President and Chief Executive Officer of MindWalk Holdings. Dr. Bath, please go ahead.

Speaker #1: Before we begin, I would like to remind listeners that today's discussion contains forward-looking statements. These statements reflect management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated, including the company's history of net losses and the ability to convert platform adoptions into contracted recurring arrangements, market acceptance of REFIQ and Lens AI, intellectual property risks, competition, and capital market conditions. A fuller description of these risks appears in the company's annual report on Form 20-F, and other filings are available on SEDAR+ and EDGAR. All financial figures discussed during this call are in Canadian dollars. Financial statements and MD&A are available on the company's website at mindwalkai.com, as well as sec.gov and SEDAR+.

Operator 2: A fuller description of these risks appears in the company's annual report on Form 20-F, and other filings are available on SEDAR+ and EDGAR. All financial figures discussed during this call are Canadian dollars. Financial statements and MD&A are available on the company's website at mindwalkai.com, as well as sec.gov and SEDAR+. A replay of this call will be available following its conclusion today. I will now turn the call over to Dr. Jennifer Bath, President and Chief Executive Officer of MindWalk Holdings. Please go ahead, Dr. Bath.

Operator: A fuller description of these risks appears in the company's annual report on Form 20-F, and other filings are available on SEDAR+ and EDGAR. All financial figures discussed during this call are Canadian dollars. Financial statements and MD&A are available on the company's website at mindwalkai.com, as well as sec.gov and SEDAR+. A replay of this call will be available following its conclusion today. I will now turn the call over to Dr. Jennifer Bath, President and Chief Executive Officer of MindWalk Holdings. Please go ahead, Dr. Bath.

Speaker #1: A replay of this call will be available following its conclusion today. I will now turn the call over to Dr. Jennifer Bath, President and Chief Executive Officer of MindWalk Holdings.

Speaker #1: Please go ahead, Dr. Bath.

Speaker #2: Thank you very much. Good afternoon. In this first quarter of fiscal year 2027, MindWalk advanced toward our goal of becoming the leading bio-native AI drug discovery and development company.

Jennifer Bath: Thank you very much. Good afternoon. In this Q1 of fiscal year 2027, MindWalk advanced toward our goal of becoming the leading bio-native AI drug discovery and development company. In June, we launched RefIQ, our proprietary data platform, and our focus is now on enterprise adoption. For those newer to the MindWalk story, RefIQ is the substrate layer between complex, unstructured biological data and AI models. It turns that data into structured, biologically meaningful representations, so AI models deliver deeper, more actionable insights for our pharmaceutical partners. RefIQ's commercial model is built around multi-year recurring revenue relationships that can scale as clients expand their use of the platform. Because RefIQ is integrated directly into a client's biological data and the discovery workflows, these relationships are designed to deepen over time.

Speaker #2: In June, we launched REFIQ, our proprietary data platform, and our focus is now on enterprise adoption. For those newer to the MindWalk story, REFIQ is the substrate layer between complex, unstructured biological data and AI models.

Speaker #2: It turns that data into structured, biologically meaningful representations. Through AI models, we deliver deeper, more actionable insights for our pharmaceutical partners. REFIQ's commercial model is built around multi-year, recurring revenue relationships that can scale as clients expand their use of the platform.

Speaker #2: Because REFIQ is integrated directly into a client's biological data and discovery workflows, these relationships are designed to deepen over time. As a trusted partner to many of the world's largest pharmaceutical companies, we know how drug discovery works inside these organizations.

Jennifer Bath: As a trusted partner to many of the world's largest pharmaceutical companies, we know how drug discovery works inside these organizations and what they need from a platform like RefIQ. Those relationships give us a real advantage as we drive adoption. We have made good progress. We are engaged with multiple large pharmaceutical companies around potential enterprise deployments of RefIQ. These discussions vary in maturity, and we are encouraged by how the platform is resonating with our clients. We are not yet in a position to announce specific partners or discuss contract values, but the level of engagement reinforces our conviction of the commercial opportunity. We look forward to providing additional updates as these discussions progress. These opportunities are substantially larger than our historical Lens AI recurring revenue agreements. Investors should not use prior Lens AI contracts as a benchmark for the size or the scope of RefIQ enterprise relationships.

Speaker #2: And what they need from a platform like REFIQ. Those relationships give us a real advantage as we drive adoption. We have made good progress.

Speaker #2: We are engaged with multiple large pharmaceutical companies regarding potential enterprise deployments of REFIQ. These discussions vary in maturity, and we are encouraged by how the platform is resonating with our clients.

Speaker #2: We are not yet in a position to announce specific partners or discuss contract values. But the level of engagement reinforces our conviction in the commercial opportunity. We look forward to providing additional updates as these discussions progress.

Speaker #2: These opportunities are substantially larger than our historical Lens AI recurring revenue agreements. Investors should not use prior Lens AI contracts as a benchmark for the size or the scope of REFIQ enterprise relationships.

Speaker #2: We have built a leading wet lab discovery franchise. Our clients include 19 of the top 20 global pharmaceutical companies, and every one of those relationships is a potential opening for REFIQ.

Jennifer Bath: We have built a leading wet lab discovery franchise. Our clients include 19 of the top 20 global pharmaceutical companies, and every one of those relationships is a potential opening for RefIQ. Two decades of biologics discovery work for our clients across multiple platforms and capabilities has already contributed to several dozen molecules reaching the clinic. Ten are in active phase I through phase III trials today, and four of those are first-in-class molecules. We are also reshaping how we structure our commercial relationships with our pharmaceutical partners. Increasingly, new engagements are being structured as broader platform partnerships where MindWalk participates in the economics of the assets we help create, rather than simply being paid for discrete projects. This structure aligns our incentives with our partners, has been well-received by our clients, and is contributing to increased activity across our commercial funnel.

Speaker #2: Two decades of biologics discovery work for our clients across multiple platforms and capabilities has already contributed to several dozen molecules reaching the clinic. Ten are in active Phase 1 through Phase 3 trials today, and four of those are first-in-class molecules.

Speaker #2: We are also reshaping how we structure our commercial relationships with our pharmaceutical partners. Increasingly, new engagements are being structured as broader platform partnerships, where MindWalk participates in the economics of the assets we help create.

Speaker #2: Rather than simply being paid for discrete projects, this structure aligns our incentives with our partners, has been well received by our clients, and is contributing to increased activity across our commercial funnel.

Speaker #2: Today, roughly 80% of our current funnel by value is now structured this way: banning data management, REFIQ, and multi-target discovery. We also reached a clear infrastructure milestone.

Jennifer Bath: Today, roughly 80% of our current funnel by value is now structured this way, spanning data management, RefIQ, and multi-target discovery. We also reached a clear infrastructure milestone. With our engineering partner, AMD and Vultr, we validated a production deployment of OpenFold3 on AMD Instinct MI325X GPUs, and the first of those results are being published this week. OpenFold3 is open source, and any drug discovery team can use it, which is exactly the point. Models commoditize the layer they run on compounds. Every model run on RefIQ enriches the biological context for every other program and Lens AI, our reasoning layer, is deliberately model neutral, so a client can bring their own model, any open source one, or any third party, and still reason over that same context layer. The compute win simply gives us more room to run discovery and scale RefIQ.

Speaker #2: With our engineering partner AMD and Vultr, we validated a production deployment of OpenFold 3 on AMD Instinct MI325X GPUs. The first of those results are being published this week.

Speaker #2: OpenFold3 is open source, and any drug discovery team can use it—which is exactly the point. Models commoditize; the layer they run on compounds.

Speaker #2: Every model run on REFIQ enriches the biological context for every other program. And Lens AI, our reasoning layer, is deliberately model-neutral. So, a client can bring their own model, any open-source one, or any third party, and still reason over that same context layer.

Speaker #2: The compute wins simply give us more room to run discovery and scale REFIQ. This is a marquee week for that partnership, with much more to come.

Jennifer Bath: This is a marquee week for that partnership, with much more to come. Our internal pipeline continues to advance through pre-clinical development, and we remain excited about the opportunity to drive value in this part of our business. Timelines there are hard to forecast, so we advance multiple programs in parallel and prioritize resources based on the strength of the data. This quarter, we added experienced leaders to accelerate our IND-enabling work and move our best programs toward IND filings in the clinic. We will update the market as they hit scientific, regulatory, and development milestones. Finally, our capital position. This morning, we announced a binding commitment for a $30 million US in unsecured revolving credit facility at a fixed 7% rate drawn as needed. It gives us financial flexibility without issuing equity, which matters given where our stock trades.

Speaker #2: Our internal pipeline continues to advance through preclinical development, and we remain excited about the opportunity to drive value in this part of our business.

Speaker #2: Timelines there are hard to forecast, so we advance multiple programs in parallel and prioritize resources based on the strength of the data. This quarter, we added experienced leaders to accelerate our IND-enabling work and move our best programs toward IND filings and the clinic.

Speaker #2: We will update the market as they hit scientific, regulatory, and development milestones. Finally, our capital position. This morning, we announced a binding commitment for a $30 million unsecured revolving credit facility.

Speaker #2: At a fixed 7% rate, drawn as needed. It gives us financial flexibility without issuing equity, which matters given where our stock trades, set against how AI-enabled discovery platforms are valued in public and private markets.

Jennifer Bath: Set against how AI-enabled discovery platforms are valued in public and private markets, we do not believe our market capitalization reflects what we have built or the scale of what we are pursuing. That informs how we think about financing the business and makes this facility particularly attractive to us. This is not a response to a step change in our cash needs. Our model is not capital intensive. The facility gives us the flexibility to invest behind RefIQ, advance our internal pipeline, and pursue opportunities as they develop on terms that we believe are very favorable to MindWalk and its shareholders. Our focus is on execution, and we believe sustained delivery will be reflected in the stock over time. Turning to the quarter, revenue grew 21% year over year, and gross margin expanded to 59% from 48%.

Speaker #2: We do not believe our market capitalization reflects what we have built or the scale of what we are pursuing. That informs how we think about financing and the business, and makes this facility particularly attractive to us.

Speaker #2: This is not a response to a step change in our cash needs. Our model is not capital intensive. The facility gives us the flexibility to invest behind REFIQ, advance our internal pipeline, and pursue opportunities as they develop, on terms that we believe are very favorable to MindWalk and its shareholders.

Speaker #2: Our focus is on execution, and we believe sustained delivery will be reflected in the stock over time. Turning to the quarter, revenue grew 21% year over year.

Speaker #2: And gross margin expanded to 59% from 48%. The larger loss this quarter reflects deliberate investment behind the commercial opportunity we see ahead of us.

Jennifer Bath: The larger loss this quarter reflects deliberate investment behind the commercial opportunity we see ahead of us. Sales and marketing expense increased by $1.9 million. We are investing to build a larger and more durable revenue base, not simply support the business we have today. On the bottom line, this quarter is not directly comparable to the same quarter last year, which included income from discontinued operations. With that, I will turn it over to Scott to take you through the numbers.

Speaker #2: Sales and marketing expense increased by $1.9 million. We are investing to build a larger and more durable revenue base, not simply to support the business we have today.

Speaker #2: On the bottom line, this quarter is not directly comparable to the same quarter last year, which included income from discontinued operations. With that, I will turn it over to Scott to take you through the numbers.

Speaker #3: Thank you, Jennifer, and good afternoon, everyone. I will take you through our first quarter fiscal year 2027 financial results. As a reminder, all figures are in Canadian dollars.

[Company Representative] (MindWalk Holdings): Thank you, Jennifer, and good afternoon, everyone. I will take you through our Q1 fiscal year 2027 financial results. As a reminder, all figures are in Canadian dollars. Revenue for the Q1 of fiscal year 2027 was CAD 3.8 million, versus CAD 3.2 million in the Q1 of fiscal year 2026. This is an improvement of approximately CAD 673,000 or 21%. That represents five quarters of consecutive year-over-year revenue growth. Gross margin was CAD 2.2 million or 59% for the Q1 of fiscal year 2027, as compared to CAD 1.5 million or 48% for the same quarter last year. Looking at operating expenses. For the quarter ended 31 July 2026, R&D was CAD 1.3 million compared to CAD 1 million in the same period last year.

Scott Areglado: Thank you, Jennifer, and good afternoon, everyone. I will take you through our Q1 fiscal year 2027 financial results. As a reminder, all figures are in Canadian dollars. Revenue for the Q1 of fiscal year 2027 was CAD 3.8 million, versus CAD 3.2 million in the Q1 of fiscal year 2026. This is an improvement of approximately CAD 673,000 or 21%. That represents five quarters of consecutive year-over-year revenue growth. Gross margin was CAD 2.2 million or 59% for the Q1 of fiscal year 2027, as compared to CAD 1.5 million or 48% for the same quarter last year. Looking at operating expenses. For the quarter ended 31 July 2026, R&D was CAD 1.3 million compared to CAD 1 million in the same period last year.

Speaker #3: Revenue for the first quarter of fiscal year 2027 was $3.8 million, versus $3.2 million in the first quarter of fiscal year 2026. This is an improvement of approximately $673,000, or 21%.

Speaker #3: That represents five quarters of consecutive year-over-year revenue growth. Gross margin was $2.2 million, or 59%, for the first quarter of fiscal year 2027, as compared to $1.5 million, or 48%, for the same quarter last year.

Speaker #3: Looking at operating expenses, for the quarter ended July 31, 2026, R&D was $1.3 million, compared to $1.0 million in the same period last year.

Speaker #3: This increase is due primarily to increased salary costs to support the commercial development of our platform. Sales and marketing expenses were $3.2 million for the first quarter of 2027, as compared to $1.3 million in the first quarter of 2026, which included non-recurring costs incurred in the quarter.

[Company Representative] (MindWalk Holdings): This increase is due primarily to increased salary costs to support the commercial development of our platform. Sales and marketing expenses were CAD 3.2 million for the Q1 of 2027 as compared to CAD 1.3 million in the Q1 of 2026, which included non-recurring costs incurred in the quarter. As I mentioned in our prior call, these are planned investments in our commercial infrastructure and represent increased headcount to support our commercial initiatives as well as investments in advertising and promotion. G&A increased to CAD 3.9 million for the quarter ended 31 July 2026, as compared to CAD 3.3 million for the same quarter last year. The increase is due primarily to non-cash stock-based compensation. Net loss and loss from continuing operations was CAD 6.1 million for the Q1 of fiscal year 2027 as compared to net loss from continuing operations of CAD 4.1 million in the Q1 of 2026.

Scott Areglado: This increase is due primarily to increased salary costs to support the commercial development of our platform. Sales and marketing expenses were CAD 3.2 million for the Q1 of 2027 as compared to CAD 1.3 million in the Q1 of 2026, which included non-recurring costs incurred in the quarter. As I mentioned in our prior call, these are planned investments in our commercial infrastructure and represent increased headcount to support our commercial initiatives as well as investments in advertising and promotion. G&A increased to CAD 3.9 million for the quarter ended 31 July 2026, as compared to CAD 3.3 million for the same quarter last year. The increase is due primarily to non-cash stock-based compensation. Net loss and loss from continuing operations was CAD 6.1 million for the Q1 of fiscal year 2027 as compared to net loss from continuing operations of CAD 4.1 million in the Q1 of 2026.

Speaker #3: As I mentioned in our prior call, these are plain investments in our commercial infrastructure and represent increased headcount to support our commercial initiatives, as well as investments in advertising and promotion.

Speaker #3: G&A increased to $3.9 million for the quarter ended July 31, 2026, as compared to $3.3 million for the same quarter last year. The increase is due primarily to non-cash stock-based compensation.

Speaker #3: Net loss and loss from continuing operations was $6.1 million for the first quarter of fiscal year 2027, as compared to net loss from continuing operations of $4.1 million in the first quarter of 2026.

Speaker #3: Overall net loss in the prior year was $3 million, which included $1.1 million of income from discontinued operations. Turning to the balance sheet, the company ended the quarter with a cash balance of $7.6 million as of July 31, 2026.

[Company Representative] (MindWalk Holdings): Overall net loss in the prior year was CAD 3 million, which included CAD 1.1 million of income from discontinued operations. Turning to the balance sheet. The company ended the quarter with cash balance of CAD 7.6 million as of 31 July 2026. Net cash used in operating activities was CAD 4 million compared to CAD 4.2 million in the prior year quarter, due in part to non-cash expenses related to share-based payments. Cash was CAD 11.3 million as of 30 April. I am also pleased with our announcement earlier today of a binding commitment for a $30 million US seniors unsecured revolving credit facility. This facility demonstrates confidence in our long-term strategy around our emerging pipeline and anticipated adoption of RefIQ and provides the capital necessary to execute on that strategy. With that, I will turn the call back to Jennifer. Jennifer?

Scott Areglado: Overall net loss in the prior year was CAD 3 million, which included CAD 1.1 million of income from discontinued operations. Turning to the balance sheet. The company ended the quarter with cash balance of CAD 7.6 million as of 31 July 2026. Net cash used in operating activities was CAD 4 million compared to CAD 4.2 million in the prior year quarter, due in part to non-cash expenses related to share-based payments. Cash was CAD 11.3 million as of 30 April. I am also pleased with our announcement earlier today of a binding commitment for a $30 million US seniors unsecured revolving credit facility. This facility demonstrates confidence in our long-term strategy around our emerging pipeline and anticipated adoption of RefIQ and provides the capital necessary to execute on that strategy. With that, I will turn the call back to Jennifer. Jennifer?

Speaker #3: Net cash used in operating activities was $4.0 million, compared to $4.2 million in the prior year quarter, due in part to non-cash expenses related to share-based payments.

Speaker #3: Cash was $11.3 million at April 30th. I am also pleased with our announcement earlier today of a binding commitment for a $30 million U.S. senior unsecured revolving credit facility.

Speaker #3: This facility demonstrates confidence in our long-term strategy around our emerging pipeline and anticipated adoption of REFIQ, and provides the capital necessary to execute on that strategy.

Speaker #3: With that, I will turn the call back to Jennifer. Jennifer?

Speaker #2: Thank you, Scott. As we've mentioned, this morning we announced a binding commitment for $30 million U.S. of unsecured capital, without issuing a single share.

Jennifer Bath: Thank you, Scott. As we have mentioned, this morning we announced the binding commitment for $30 million US of unsecured capital without issuing a single share, and this gives us the runway to execute. The strategy is showing up in the business with revenue up 21% and growth margin at 59%. RefIQ is a recurring revenue business and it compounds as clients adopt and expand. We are in active negotiations with multiple large pharma companies on RefIQ enterprise deployments, and you will hear from us as those conclude. As mentioned, do not measure them against our historical Lens AI agreements. These are a different scale. On the discovery side, we are moving from discrete projects to platform partnerships where we share in the economics of the assets we help create.

Speaker #2: And this gives us the runway to execute. The strategy is showing up in the business, with revenue up 21% and gross margin at 59%.

Speaker #2: REFIQ is a recurring revenue business, and it compounds as clients adopt and expand. We are in active negotiations with multiple large pharma companies on REFIQ enterprise deployments, and you will hear from us as those conclude.

Speaker #2: As mentioned, do not measure them against our historical lens. AI agreements are a different scale. On the discovery side, we are moving from discrete projects to platform partnerships, where we share in the economics of the assets we help create.

Speaker #2: Both of these are happening with clients we already have—a distribution advantage that no new entrants can buy. On top of that, our internal pipeline adds upside, with catalysts ahead.

Jennifer Bath: Both of these are happening with clients we already have, a distribution advantage that no new entrant can buy. On top of that, our internal pipeline adds upside with catalysts ahead. The higher loss this quarter is an investment behind a larger opportunity. The market is moving toward exactly what we built, and our job now is to lead it. Operator, we are ready for questions.

Speaker #2: The higher loss this quarter is an investment behind a larger opportunity. The market is moving toward exactly what we built, and our job now is to lead it.

Speaker #2: Operator, we are ready for questions.

Speaker #1: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad now to raise your hand.

Operator 2: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad now to raise your hand. To withdraw your question at any time, press star one again. Please pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Now please stand by while we compile the Q&A roster. Our first question comes from the line of Charles Wallace with H.C. Wainwright. Your line is open. Please go ahead.

Operator: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad now to raise your hand. To withdraw your question at any time, press star one again. Please pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Now please stand by while we compile the Q&A roster. Our first question comes from the line of Charles Wallace with H.C. Wainwright. Your line is open. Please go ahead.

Speaker #1: To withdraw your question at any time, press star one again. Please pick up your handset when asking a question to allow for optimum sound quality.

Speaker #1: If you are muted locally, please remember to unmute your device. Now, please stand by while we compile the Q&A roster. Our first question comes from the line of Charles Wallace.

Speaker #1: With HC Wainwright, your line is open. Please go ahead.

Speaker #4: Hi, thanks for taking my question. This is Charles. I'm from RK. So, I guess for my first question, could you maybe help us understand what portion of the $3.8 million in first quarter revenue was contracted recurring platform revenue?

Charles Wallace: Hi. Thanks for taking my question. This is Charles Wallace. I am for RK. For my first question, could you maybe help us understand what portion of the CAD 3.8 million in the first quarter revenue was contracted reoccurring platform revenue? Let us start there. Thank you.

Speaker #4: And I guess, yeah, let's start there. Thank you.

Speaker #2: Scott, if you have those numbers before you—I don't know if we do have those broken out. I can say that if, by platform recurring revenue, we're referring to REFIQ, REFIQ is not a data management program or platform that is currently in place.

Jennifer Bath: Scott, if you have those numbers before you, I do not know if we do have those broken out. I can say that if by platform recurring revenue, we are referring to RefIQ is not a data management program or platform that is currently in place. These are the ones that we have just discussed negotiating. That is like a whole new level of engagement from clients that you will definitely hear about as we proceed through that. This was the platform that we just released in June, quite recently. If it is recurring revenue or annual recurring revenue off of the SaaS model subscriptions, we do have that, and we have announced that historically. I am not sure that we have that broken out since we do not break these out by cost centers. But I can have Scott confirm.

Speaker #2: These are the ones that we've just discussed negotiating. That is a whole new level of engagement from clients that you'll definitely hear more about as we proceed through that.

Speaker #2: And this was the platform that we just released in June, quite recently. Now, if it's recurring revenue or annual recurring revenue off of the SaaS model subscriptions, we do have that.

Speaker #2: We have announced that historically, and I'm not sure that we have that broken out since we don't break these out by cost centers, but I can have Scott confirm.

Speaker #4: Oh, okay. So I guess for my next question—for the active negotiations that you mentioned with the multiple large pharma partners for the REFIQ, which as you mentioned just launched in June—what are the current gating factors in these negotiations?

Charles Wallace: Okay. For my next question, for the active negotiations that you mentioned with the multiple large pharma partners for the RefIQ, which as you mentioned, just launched in June, what are the current gating factors in these negotiations, and when do you expect to see these convert in fiscal year 2027?

Speaker #4: And when do you expect to see these convert in fiscal year '27?

Speaker #2: Fair question. So, the gating factors between each group actually differ significantly. Sorry, we're getting a lot of feedback on our side.

Jennifer Bath: Fair question. The gating factors between each group actually differ significantly. I am sorry, we are getting a lot of feedback on our side. In terms of negotiations with clients on our side for gating factors, what we are seeking are primarily people who are already engaged with MindWalk, who are running different programs already with MindWalk, and primarily starting off with people who are also engaged through the SaaS model subscription. We do look at, for large pharmaceutical companies when they are bringing a vendor into their core infrastructure, none of them are really about whether or not the platform works. They fall in three buckets for us. The first big one is really about IT security and data governance review, which is something you probably heard us talk a lot about over the last six months.

Speaker #2: In terms of negotiations with clients, on our side, for gating factors, what we are seeking are primarily people who are already engaged with MindWalk.

Speaker #2: Who are running different programs already with MindWalk and are primarily starting off with people who are also engaged through the SaaS model subscription. We do look at, for large pharmaceutical companies, when they're moving into a vendor—bringing a vendor into their core infrastructure—none of them are really about whether or not the platform works.

Speaker #2: They kind of fall into three buckets for us. The first big one is really about IT security and data governance review, which is something you've probably heard us talk about a lot over the last six months.

Speaker #2: REFIQ is different in the sense that it sits inside of a client's biological data and its discovery workflows. And so it goes through the same enterprise security, data residency, and governance processes as really any system of record.

Jennifer Bath: RefIQ is different in the sense that it sits inside of a client's biological data and its discovery workflows. It goes through the same enterprise security, data residency, and governance processes as really any system of record. The second one is legal and procurement. These are multiyear platform relationships. Instead of project statements of work that was done historically with our large pharmaceutical clients, also when we are sharing in the economics of different assets during co-development and partnership relationships. The contract itself is a very new shape. It is very different than the historical contracts we have had, so it is different for their procurement terms as well.

Speaker #2: The second one is legal and procurement. And these are multi-year platform relationships. So, instead of project statements of work that we've done historically with our large pharmaceutical clients, and then also when we're sharing in the economics of different assets during co-development and partnership relationships.

Speaker #2: So the contract itself is a very new shape. It's very different from the historical contracts we've had, and so it's different for their procurement terms as well.

Speaker #2: And then I would say, Charles, probably the third component of that is the scoping, and just agreeing on which programs and which data domains the first deployment is going to cover.

Jennifer Bath: I would say, Charles, probably the third component of that is the scoping and just agreeing which programs and which data domains that the first deployment are going to cover, so that it lands cleanly and then it is expanding from there. I would say those are the three core areas as companies are by and large taking a relatively new and fairly big step in bringing us fully into the data landscape of what exists throughout their company, oftentimes in a multinational setting. As far as when we plan to close our first agreement or when we plan to see these start closing, I am going to leave that question alone for now. I do not want to create that specific of an expectation.

Speaker #2: So that it lands cleanly, and then it's expanding from there. And so I would say those are kind of the three core areas, as companies are, by and large, taking a relatively new and fairly big step and bringing us fully into the data landscape of what exists throughout their company.

Speaker #2: Oftentimes, in a multinational setting. As far as when we plan to close our first agreement, or when we plan to see these start closing, I'm going to leave that question alone for now.

Speaker #2: I don't want to create that specific of an expectation. But what I am comfortable saying at this point on the call is that we have these negotiations occurring at various different stages.

Jennifer Bath: What I am comfortable saying at this point on the call is that we have these negotiations occurring at various different stages, and that includes groups that have worked with us for many years. That also includes one group that has been with us as many years and also has a SaaS model subscription and has been in negotiations in this particular component across multinational jurisdictions for their company for quite some time. So we have a very good line of sight on where and how this is going and when we anticipate it closing. Of course, not everything is under our control, so I will hold off on giving an exact, more specific timeline.

Speaker #2: And that includes groups that have worked with us for many years. That also includes one group that's been with us as many years and also has a SaaS model subscription and has been in negotiations on this particular component across multinational jurisdictions for their company for quite some time.

Speaker #2: So, we have a very good line of sight on where and how this is going, and when we anticipate it closing. But of course, not everything is under our control.

Speaker #2: So, I'll hold off on giving a more specific timeline.

Speaker #4: No, yeah, that's very helpful. And then maybe one final question, maybe on the $30 million revolving credit facility. So, when do you expect the initial draw from this facility, and over what time frame?

Charles Wallace: No, yeah. That is very helpful. Maybe one final question, maybe on the $30 million revolving credit facility. When do you expect the initial draw from this facility, and over what timeframe? How will it be allocated between the RefIQ commercial rollout and the biologics programs? Thank you.

Speaker #4: And how will it be allocated between the REFIQ commercial rollout and the biologics programs? Thank you.

Speaker #3: Yeah. So we have 60 days to get the credit agreement drawn up, so we won't be able to do anything until the credit agreement is complete.

[Company Representative] (MindWalk Holdings): Yeah. We have 60 days to get the credit agreement drawn up, so we won't be able to do anything until the credit agreement is complete. As far as the investments, we'll draw capital as we need it and as we need liquidity, but we still have cash runway in our bank account as well.

Scott Areglado: Yeah. We have 60 days to get the credit agreement drawn up, so we won't be able to do anything until the credit agreement is complete. As far as the investments, we'll draw capital as we need it and as we need liquidity, but we still have cash runway in our bank account as well.

Speaker #3: As far as the investments, we'll draw capital as we need it and as we need liquidity. But we still have cash runway in our bank account as well.

Speaker #4: Great. And maybe one final thought one follow-up to that question. Does that does this credit facility replace kind of the ring-fenced program level financing structure that you have in the asset style financing?

Charles Wallace: Great. And maybe one follow-up from that question. Does this credit facility replace the ring-fenced program-level financing structure that you have in the Cayman assets, Cayman-style financing?

Speaker #2: Sure, sure, we hear you. Correct. Exactly. It absolutely does not replace that. So, we still have interested parties in investing in ring-fenced assets within the Cayman structure.

[Company Representative] (MindWalk Holdings): It does not.

Scott Areglado: It does not.

Jennifer Bath: Sure, we hear you. Correct. Exactly. It absolutely does not replace that. So we still have interested parties in investing in ring-fenced assets within the Cayman structure and are probably 90% to 95% of the way in terms of completing the legal and tax planning efforts that go around setting up those structures.

Speaker #2: And we're probably 90 to 95 percent of the way in terms of completing the legal and tax planning efforts that go around setting up those structures.

Speaker #4: Thank you for taking all my questions.

Charles Wallace: Thank you for taking all my questions.

Speaker #2: Thank you, Charles.

Jennifer Bath: Thank you, Charles.

Speaker #1: Your next question comes from the line of Danya Ben-Hael with Jones. Your line is unmuting, and you are unmuted. Please go ahead.

Operator 2: Your next question comes from the line of Danya Benhail with Jones. Your line is unmuting. You are unmuted. Please go ahead.

Operator: Your next question comes from the line of Danya Benhail with Jones. Your line is unmuting. You are unmuted. Please go ahead.

Speaker #5: Hi, thank you for taking my question. How should investors think about your revenue growth over the next 12 months and the next two years?

Danya Benhail: Hi. Thank you for taking my question. How should investors think about their revenue growth over the next 12 months and next two years?

Danya Ben-Hail: Hi. Thank you for taking my question. How should investors think about their revenue growth over the next 12 months and next two years?

Speaker #3: Yeah. I mean, these initial REFIQ agreements are probably going to be relatively lumpy—it's just the nature of the structure. They're going to be milestone-based.

[Company Representative] (MindWalk Holdings): Yeah. These initial RefIQ agreements are probably going to be relatively lumpy. It is just the nature of the structure. They are going to be milestone-based. There are engineering efforts at the outset, and then they become annual recurring revenue. I do think revenue is going to be a little lumpy. It is hard to forecast. It really just depends on how quickly we get adoption of RefIQ.

Scott Areglado: Yeah. These initial RefIQ agreements are probably going to be relatively lumpy. It is just the nature of the structure. They are going to be milestone-based. There are engineering efforts at the outset, and then they become annual recurring revenue. I do think revenue is going to be a little lumpy. It is hard to forecast. It really just depends on how quickly we get adoption of RefIQ.

Speaker #3: They're engineering efforts at the outset, and then they become annual recurring revenue. So, I do think revenue is going to be a little lumpy.

Speaker #3: It's hard to forecast; it really just depends on how quickly we get adoption of REFIQ.

Speaker #5: Okay. And so we expect it to be around these numbers in the next few quarters, until things settle down and you get more subscriptions and annuals.

Danya Benhail: Okay. We expect it to be around these numbers over the next few quarters until things settle down and you get more subscriptions annually and things like that.

Danya Ben-Hail: Okay. We expect it to be around these numbers over the next few quarters until things settle down and you get more subscriptions annually and things like that.

Speaker #5: Things like that.

Speaker #3: Yeah, I think once we're in a position to announce an agreement, we'll take a deeper dive into what the revenue model looks like and what we expect recurring revenue to be, based on the timing of the contract.

[Company Representative] (MindWalk Holdings): Yeah, I think once we are in a position to announce an agreement, I think we will take a deeper dive into what the revenue model looks like and when we expect recurring revenue to occur based on the timing of the contract.

Scott Areglado: Yeah, I think once we are in a position to announce an agreement, I think we will take a deeper dive into what the revenue model looks like and when we expect recurring revenue to occur based on the timing of the contract.

Speaker #5: Yeah. Okay, thank you. And just another question about the discussions with the pharmaceutical and biotech companies. What are they focused on? Are they getting more engaged with the REFIQ?

Danya Benhail: Yeah. Okay. Thank you. Just another question about the discussions with the pharmaceutical and biotech companies. What are they focused on? Are they getting more engaged with RefIQ? Is it more the subscriptions right now for the Deep AI? What parts of it are more-

Danya Ben-Hail: Yeah. Okay. Thank you. Just another question about the discussions with the pharmaceutical and biotech companies. What are they focused on? Are they getting more engaged with RefIQ? Is it more the subscriptions right now for the Deep AI? What parts of it are more-

Speaker #5: Is it more the subscriptions right now for the DPI? Yeah, what parts of it are more?

Speaker #2: Yeah, that's actually a great question, Danya. No, I really appreciate that. So, one of the things we've talked about in the past is we definitely went about this from a different direction than others.

Jennifer Bath: Yeah, that is actually a great question, Dania. No, I really appreciate that. One of the things we have talked about in the past is we definitely went about this from a different direction from others. You will see that there are companies that have a technology and some discovery capabilities that prepare those offerings for others as a partnership model. And really a little bit more on the premise of it is extremely low risk, so we will backload it, but without really having the proof point or the evidence to support the quality of the work. And that low risk was given in exchange for not having that type of a relationship with those clients. We have really done the exact opposite.

Speaker #2: You will see that there are companies that have a technology and some discovery capabilities that prepare those offerings for others as a partnership model.

Speaker #2: And really, a little bit more on the premise of it's extremely low risk. So we'll backload it, but without really having the proof point or the evidence to support the quality of the work.

Speaker #2: And that low risk was given in exchange for not having that type of relationship with those clients. We've really done the exact opposite.

Speaker #2: We've spent the last five years demonstrating our ability to send really good molecules to the clinic that are quite successful in the clinic. And then also demonstrated our ability to do that with an understanding of the function of a molecule and its mechanism of action.

Jennifer Bath: We have spent the last 5 years demonstrating our ability to send really good molecules to the clinic that are quite successful in the clinic, and then also demonstrated our ability to do that with an understanding of the function of a molecule and its mechanism of action, providing a greater probability of success in later stages of a clinic. And that has been a really different approach that we have made. As we enter into these conversations, we have mentioned before, we are working with hundreds of different clients in building these therapeutic drugs. And one of the biggest changes we have had in the last two quarters is that every one of those programs coming in is an integrated lab in the loop with our in silico work intertwined very directly with our wet lab work, providing clients with data sooner, larger amounts of data for more data-driven decision making.

Speaker #2: Providing a greater probability of success in later stages of a clinic, and that's been a really different approach that we've made. So, as we enter into these conversations—as we've mentioned before—we're working with hundreds of different clients.

Speaker #2: In building these therapeutic drugs, one of the biggest changes we've had in the last two quarters is that every one of those programs coming in is an integrated lab in the loop, with our in silico work intertwined very directly with our wet lab work.

Speaker #2: Providing clients with data sooner, larger amounts of data, for more data-driven decision-making. But there are two components of that that really tie in—actually, technically three, Danya—that I think specifically address your question.

Jennifer Bath: But there are two components of that that really tie in, actually, technically three, Dania, that I think specifically address your question. One of them is that all of that data is turned back within Lens AI, so clients are directly exposed to the SaaS model subscription. They have the opportunity to use base layer applications within our Lens AI, and that has brought more clients to the table with those inquiries around SaaS model subscriptions. So it expands their ability to work with the data within the platform in which it is being received. The conversations around the partnerships, which are backloaded but always include some sort of upfront payment, the structure of those being ones that are milestone and royalty-based, that is now a conversation happening with every single client.

Speaker #2: One of them is that all of that data is turned back within Lens AI, so clients are directly exposed to the SaaS model subscription.

Speaker #2: They have the opportunity to use base layer applications within our Lens AI, and that has brought more clients to the table with those inquiries around SaaS model subscriptions.

Speaker #2: So it expands their ability to work with the data within the platform in which it's being received. The conversations around the partnerships, which are backloaded, but always include some sort of upfront payment.

Speaker #2: The structure of those being ones that are milestone- and royalty-based. That is now a conversation happening with every single client. So that fee-for-service option that we have provided in the past, where we use that opportunity to build a relationship with these clients to be one of their preferred vendors—which is no easy task—and to demonstrate the competencies that we have.

Jennifer Bath: So that fee-for-service option that we have provided in the past where we use that opportunity to build a relationship with these clients to be one of their preferred vendors, which is no easy task, and to demonstrate the competencies that we have, I would say superiority that we have in our AI and wet lab drug discovery, is what we are building on in those discussions. So every single one of those discussions is now a partnership discussion. There is no longer the opportunity to just walk in the door and put down money for fee for service. So it is a longer negotiation period for us.

Speaker #2: I would say the superiority that we have in our AI and wet lab germ discovery is what we're building on in those discussions. So every single one of those discussions is now a partnership discussion.

Speaker #2: There's no longer the opportunity to just walk in the door and put down money for fee-for-service, so it is a longer negotiation period for us.

Speaker #2: So even given the fact that we're still up in revenue with these double digits over last year, where we were up significantly in revenue as well, we're backloading approximately 80% of the discussions now in the pipeline as partnership discussions.

Jennifer Bath: Even given the fact that we are still up in revenue with these double digits over last year, where we were up significantly in revenue as well, while backloading approximately 80% of the discussions now in the pipeline as partnership discussions to us is bringing us additional confidence. These clients are not walking away from that discussion. They are not turning away from it because we have become the trusted provider that we have shown we can execute. That has enabled this discussion with, going back to your question, actually every single one of our clients. The third component of that is RefIQ, and I would say the majority of the earlier adoption interest and communications we are having from that is from the larger pharmaceutical companies, which I guess makes sense.

Speaker #2: To us, it is bringing additional confidence. These clients are not walking away from that discussion. They're not turning away from it because we've become the trusted provider, and we've shown we can execute.

Speaker #2: And so that's enabled this discussion with, going back to your question, actually every single one of our clients. And then the third component of that is REFIQ.

Speaker #2: And I would say the majority of the earlier adoption interest and communications we're having from that is from the larger pharmaceutical companies. Which I guess makes sense; these are companies that are oftentimes juggling multiple jurisdictions and have a lot more siloed data.

Jennifer Bath: These are companies that are oftentimes juggling multiple jurisdictions, a lot more siloed data, and are also oftentimes being asked from the top down to find a solution to help their data make sense and to connect their data. We are really seeing it across the board in all three areas. I would say the majority of those conversations, if we had to pick the one that was leading the way, would be partnership discussions, because again, that is not an option to not have that discussion with us any longer. The second most would be RefIQ, where people are looking for an advantage to find meaning in their data, an advantage to get away from hallucination, and make their AI models better than their competition.

Speaker #2: And are also oftentimes being asked from the top down to find a solution to help their data make sense and to connect their data. So we're really seeing it across the board in all three areas.

Speaker #2: And I would say the majority of those conversations, if we had to pick the one that was leading the way, would be partnership discussions because, again, that's not an option.

Speaker #2: And not have that discussion with us any longer. And then the second most would be REFIQ, where people are looking for an advantage—to find meaning in their data, an advantage to get away from hallucination, and make their AI models better than their competition.

Speaker #2: And we're able to bring that to the table with something we've been building for 20 years, and something that no one else is able to offer.

Jennifer Bath: We are able to bring that to the table with something we have been building for 20 years and something that no one else is able to offer.

Speaker #1: Perfect. Thank you very much.

Danya Benhail: Perfect. Thank you very much.

Danya Ben-Hail: Perfect. Thank you very much.

Speaker #2: Thank you.

Jennifer Bath: Thank you.

Operator 2: There are no further questions at this time, and this will conclude today's call. Thank you for attending. You may now disconnect.

Operator: There are no further questions at this time, and this will conclude today's call. Thank you for attending. You may now disconnect.