MindWalk Holdings Corp. Q3 FY2025 earnings call

• Secured a strategic partnership valued at US$8 million to US$10 million with a leading biotech company leveraging proprietary B-cell select technology and AI-driven capabilities. - Successfully raised US$7 million through At-the-Market facility, completing a consolidated $8.8 million equity raise, and Yorkville debenture was fully converted, making IPA debt-free. - Relocated corporate headquarters to Austin, Texas. - Entered strategic partnership with RIBOPRO to integrate mRNA and LNP technologies and pioneered AI-designed GLP-1 therapeutics for diabetes. - Realigned pipeline strategy with new therapeutic development pipeline and revealed multiple ADC lead candidates. - Announced key leadership updates including Dr. Kamil Isaev joining the Board, Joseph Scheffler as Interim CFO, and Dr. Li Hui as Senior Director Client Relations. - Made progress on potential divestiture of EU lab, with 77 strategic and financial partners engaged. - Collaborations with Vultr, AMD, etc., enhancing lab-in-a-loop drug discovery capabilities. - Completed submission of technical review to AWS Marketplace for expanded market reach. - Rebranding to unify identity and reflect integrated capabilities across AI and biologics, with HIP technology at the center.

For the third quarter, IPA generated $6.2 million in revenue, same as the same quarter last year. On the AI side, BioStrand generated $0.6 million in Q3 revenue, with year-to-date revenue exceeding $1 million and a year-to-date gross profit margin of 97%. The main wet lab discovery site in Canada saw the percentage of antibody discovery projects aimed at therapeutic ends increase from 19% to 48% year-over-year, indicating high revenue potential for therapeutic services.

• The strategic partnership has an initial $8 million purchase order with potential for a second PO, with revenue drawn down weekly based on work completion, expected to impact current quarter. - Collaborations with Vultr and AMD are expected to improve margins, especially for AI programs requiring significant GPU usage, and also enable co-marketing to expand reach without increasing costs. - Anticipate continued growth from AI-driven platforms scaling, leading to enhanced profitability and competitive edge in the AI healthcare landscape.

• Global political and economic factors, changes in market conditions, regulatory changes, and other unforeseen business risks could cause actual results to differ materially from forward-looking statements. - Biotech industry has faced capital constraints, with many companies filing for bankruptcy, and larger organizations reporting declining revenues, which could impact IPA if not managed properly.

Q: Regarding the $8 million to $10 million deal, should we expect a second PO this year and how does the revenue drawdown work?

A: The first purchase order was $8 million with potential to expand to $10 million. Revenue is drawn down weekly based on percent of completion of work, with the first PO expected to be completed in an 18-month period and impacting the current quarter.

Q: How does the collaboration with Vultr improve margins, and is it company-wide or project-dependent?

A: The collaboration with Vultr is specific to AI programs requiring significant GPU usage, like those through BioStrand. It enables faster work, increased bandwidth, cost efficiencies, and co-marketing opportunities, primarily improving margins for AI projects but also impacting wet lab work.

Q: How will post-European divestiture affect costs?

A: Post-divestiture, operating costs will be significantly lower as European operations were more expensive and repetitive, with North American operations (like Austin and Boston) having lower costs and COGS.