Good morning thanks for joining us. We have an update with Microbix, who just recently put out their Q2 numbers which were excellent. With me I have CEO Cameron Groome, COO, Ken Hughes and CFO Jim Currie. We’re going to do a little bit of a run through the quarter, and then we'll do a Q&A afterwards. As always, this presentation will contain forward-looking statements. If you'd like to know more about those, you can find them on the company's disclosure on their website. And there will be a Q&A section, so feel free to input your questions at the bottom. With that out of the way, I'd like to introduce Cameron. Hi, Cameron.

Hello, Deborah. Good morning, everyone. Thank you, everyone for joining us today. It's a pleasure to chat will be in a in Denver to catch everyone up on goings on with Microbix and give a bit of a general outlook of where we see our business evolving. As you'd mentioned, Deborah, the principal objective this morning is to update about Q2 and give a bit of outlook. In terms of Q2, we had a record top-line for a second quarter for Microbix, which we're very pleased to generate, so CAD4.9 million sales for the quarter, which is up year-over-year for the quarter and of course, the first half as well. We also recorded a very favorable gross margin of over 60% on our sales. And of course, most importantly, net margin is well on the order of 15% for the quarter with strongly positive net earnings and free cash flow as well. So this is continues to be reflective of our successful transformation into a medical devices company with a business model based on profit growth. So I would represent this is not by accident, but by intent. And it's by a lot of dedicated work from a very talented management team and right up and down the company at every level of staff. Our emphasis continues to be of course on creating, manufacturing and selling a variety of products that support the major players in the global diagnostics industry. We don't have the hubris to think we're going to go toe-to-toe with giants. So what we do is create products, whether that's our quality assessment products or test controls, whether that's our viral transport media, whether that's our antigens, we're actually making big players, our customers. And this means that we're identifying specific skill sets and areas of expertise where we can help our customers collaborate with them, and develop, continue to foster great relationships. And we've got now over 100 customers, so obviously you have an 80-20 rule in any business where, the top five customers represent a good proportion of our sales. But that continues to diversify and spread, which is very, very healthy for us and cost. And in so building and building those relationships really already have, I would represent the relationships with the customers certainly in the diagnostics industry. We're starting to build those more oratory industries as well, which were client base for us. And we've also got the products we need with the growing portfolio of apps such as reference behind me as well as our antigens, and our VTM schemes as well. And that gives us with the customers’ products, it's now becoming more and more about demonstrating that we can fulfill the kind of scale that these major customers need and want to be ordering from us. This is why we're investing more in our systems to enhance the robustness of them. And that involves our capacity for semi-automated and fully automated production that involves the support systems such as digitized massive ERP systems upgrades were now undertaking as well as personnel in terms of cross training and developing skills, and bringing on more and more talented people in the organization to keep growing. And this is targeted to get us from the current lab run-rate of approximately $20 million a year in sales up towards and then ultimately above the $100 million year sales mark, whereby our company is much more significant for investors, even for the global industry, and becomes ever more valuable as we become embedded in more and more customers key products and processes. It really gives us business with state power, and in real earnings torque, if I can use that term. So we've got the customer relationships, we’ve got the products. Now, it's about demonstrating the robustness of our systems and the level of our capacity. And the great news and we've all seen very tumultuous capital markets since the start of calendar 2022 and certainly healthcare and life sciences companies’ share prices have been generally indiscriminately saturated, we've been affected by that, like what so as frustrating as it may be, to see our record orders being clocked up. And this is in fact, our sixth consecutive profitable quarter that we've reported. It’s a gut punch to see the shares trading year 52-week low. But we're certainly not the only company affected by them. What is very, I think, good for Microbix is we're already fully capitalized to execute on our growth plans. We're not dependent on issuing shares in market to achieve the goals set out for Microbix for 2022-2023 and beyond, but rather an extremely strong capital position. And we can answer some questions about that as well. But you'll see that our current ratio, which is our current assets over current liabilities is at a record our debt-to-equity levels falling, our cash position is extremely strong. So not only will we come out of this debt market downturn doesn't affect our operations, but rather our share price, not only will we come out stronger on a relative basis will be stronger as well on an absolute basis. So, again, puts us in a very strong position to keep executing for shareholders. And we're just incredibly committed it was [indiscernible] by doing so. So that's overview comments. I think there's more people that know Microbix, slightly on this call. That don't -- so I'm not going to go in necessarily to use our time, so much on a corporate deck. And there's a very good Microbix beginner session archive on the Adelaide Capital website, as is our lead gen meeting presentation as well, which goes into more the origin story of the company and how we got from the beginnings of the company to today. But what will I think focus on the balance of this give everyone, an updating or research or on where we are where we're going. So with that maybe I can hand off to Jim to hit some highlights of Q2, and just give a bit of sense of our outlook, as well for the balance here. Jim?

Thanks, Cameron. Kevin's done a good job of providing an overview of where we finish off with the quarter. Very, very strong performance $4.9 million 12% growth on last year, through the first half of the year we're 30% above where we were last year on the top-line. Again, as Cameron indicated six straight quarters of profitable growth. I can tell you, I certainly like that after a number of previous quarters where that wasn't the case. And certainly what that's helped to do is leave us with a good strong cash balance to invest in the future. A year ago, we had a public offering where we raised in the neighborhood of $6 million. And we outlined what we were going to do from a strategic standpoint. And we've been doing that and that's led to some of the results that we've got today and the results that we're expecting as we go forward. Nothing's changed in that strategy. We are continuing to work on what we said we were going to work on a year ago. The yield have seen operating expenses climb. That's one area where we're again investing. It's primarily happening in sales and marketing, business development areas, research and development. Also, we had some funding last year to our OTF grant funding we received from the federal government to support the VTM business. We completed that program at the end of last year from a funding perspective. So we didn't have any funding in the first half of this year, and we did last year. So that had about a $0.5 million impact on our operating expenses. But this investment that we're making, as we identified was what we had planned to do. Some of its coming from depreciation on capital investments, and a variety of different areas in all of our business areas, we're making these investments and continue to make these investments. The cash position where we ended the quarter with $12.2 million in cash plus, we've got another couple of million in credit facility within our bank. And so we're well positioned to make the investments and continue with the growth that we've seen over the last 12 to 24 months. That's what I've got from an update on the quarter and a half. Ken, is there anything else you want to add at this point in time?

All right. Thanks, Jim. Thanks, Jim. Yeah, absolutely. And to Jim's point in the Cameron’s point, we are following the trajectory that we articulated in the past. In the last couple of years, we've moved from one facility our original antigen facility to a second one, which now has three operational labs, making our quality assessment products and additional capabilities are being put in there right now, to further build capacity. We also now have a third building, which is just being kitted out. And that ultimately will be our VTM building. And we're just installing processes there. On top of that, of course, we want to future proof ourselves for growth, that's a term I use a lot. We're a $20 million run-rate company. Now, to Kevin's point, again, we're targeting 100 and you need the capacity to do that. So we're upgrading our quality management system into state-of-the-art, eQMS, SaaS, solutions, Software-as-a-Service solutions and also our ERP and the product information management systems in the next little while. And the whole purpose of that is capacity building, anticipating the basically the deal flow that's going to come through. And we have to be able to satisfy that with our manufacturing, quality development, and QA teams. And so that's all what we're doing right now. It's going very well as planned, and we can sit there expect the trajectory to continue.

Well, thank you, Ken. And very much so this is entirely what we're seeing. These are not nipping out to the corner store for a quart of milk business development cycles that we deal with. We're actually working very much to embed Microbix products into the consumables of major multinational diagnostics companies. That is not a trivial exercise from integrating quality management agreements, purchase and sale agreements, delivery schedules, customizing product, and in setting release criteria. So there is a long industrial style of business cycle on this, but in turn, it's incredibly sticky business as secure and it sets at very acceptable margins as well. So this is what we're moving forward on. You've seen announcements from Microbix over the course of the spring it at attendance at different industry conferences as well. And that's only intensified the level of business development that we've been impacting. And that's really setting up a very strong pipeline, the caps side of our business, the quality assessment products or test controls would be another description notes, the positive or negative patient sample mimics that helped to ensure diagnostic tests are actually functioning properly. And we've seen some big drivers in that area, one of which being the greater availability and acceptance of the point of care testing solutions. And these are the sophisticated but perhaps toaster sized instruments that can run tests for multiple disease, disease conditions at the same time. And we're right in the position you need to be for that transition with our FLOQSwab-based controls from our alliance with Copan Italia is working out very well, something that was being established even before the pandemic broke. And we're right in the course of supporting the transition from single channel testing, your testing might have been from one organism of viral of bacterial into multiple organisms simultaneously from one sample. And that evolution we anticipated, we're now surfing that wave, as well as the availability of tests for anti-microbial resistance to not only type what bacteria is causing an infection, but then be able to determine what antibiotic resistance genes that bacteria is carrying, so that you can inform the judgment as to what drug antibiotic therapy to prescribe. So this just provides better healthcare for all of us healthcare that's available at the point of care, that has sophisticated capabilities, and most importantly, that it actually works. And it's that side of things that we're helping delivered. So this ties in beautifully with our relationships that long established on the antigen, so testing median side of our business, and now flows quite naturally into the provision of test control medical devices, and likewise into providing sample collection devices such as our viral transport media. So really, all elements of our business are moving along nicely, and we see each of them having very good prospects. But I think it's difficult to dispute that the biggest driver of sales growth for us will be in cap side test controls area A with very solid performance and growth from our VTM and antigen businesses well.

When you talk to officials from public health now about obviously, we don't have to advertise how good doing diagnostics right is now based on what we've just enjoyed over the last couple of years. When they're talking about what are we going to do next? What's next up? How are we going to continue to build on the new wave of diagnostic excellence? The things that come up or human papilloma virus for various cancers, and antimicrobial resistance as major focus is going forward. And other ones, but STIs is the gastrointestinal and other things as well. But the group should be aware that Microbix has been deeply involved in human papilloma virus, and antimicrobial resistance before the pandemic started. So we're really nicely positioned to support the Excellence in diagnostics, from our customers in public health and in industry as we go forward. And we're setting the table for that. So people foolishly at times think we might be a COVID play. Anybody that looks at us knows better than that, of course, but these new opportunities are right there. Just right at the end of the street here. And we're working in setting the capacity to be able to service that going forward and build this business way beyond COVID, then through respiratory into human papilloma virus and beyond. And that's really what Microbix is all about right now.

Very much so. And tremendous breadth to our portfolio of product areas that we're involved with. Certainly, respiratory viruses generally is a broad category, not just COVID for this thing from the truth. And then it was Ken's indicating things like human papilloma virus, childhood diseases, gastrointestinal, urinary tract, sexually transmitted disease, the list goes on and on. And we're really hitting some very large market opportunities with global leaders in those fields. So it's quite gratifying to have actual strategy be paying off in this manner force. Outlook, outlook for the balance of the year, I think we've been quite consistent in that regard. We've indicated that sales have been bouncing along the plus or minus $5 million a quarter range for several quarters now. And what we're really looking is now is some of these long business development cycle relationships to start to come to fruition, that we'll likely see Q3 not markedly dissimilar to our Q2 top-line numbers might start with a five might start with six. But we'll see how that final order book includes. And then looking more at Q4 as a prospective breakout quarter in terms of moving substantively above that level. And there's a lot of moving parts on this. I think we have some good visibility on our antigen order book for Q3 and Q4 at this stage, because that is a longer development cycle for manufacturing orders. So we are seeing the antigen side of the business come back. And it really comes down to when does the ticket go in for manufacturing, and when this product ship and on what side of the border and two different shipments fall as to whether -- what integer our Q4 sales number starts at. But I think we continue to look at that as being a convincing breakout order for Microbix. And really substantiating what we've been talking about in terms of the growth potential for the company and realizing growth potential. So, very positive with both things, in spite of as Jim was alluding, that we've done exactly what we said we were going to do with the capital that we raised in spring of 2021. The good news story is that we continue to accumulate capital and accumulate cash on a net basis in spite of a very aggressive CapEx program, as well as considerable repayment of debt that we've undertaken also. So it's a good position to be in. Absolutely. So before we break for some questions that I think they queue up, and certainly encourage those of you that have chosen to join us to anything on your mind that we can help address. Please don't be shy about it. But maybe I can start with asking Deborah, if she has any questions from her discussions with shareholders that have come up? A - Deborah Honig: Well, I see that we have a whole bunch in the chat already. So if it's okay with you, Cameron, maybe we can just address some of the audience questions.

Sure. Sure. Absolutely.

So the first -- I got some through email.

Okay.

As well. So yeah, the first question that came in --

Sales. I see. Yeah, Asia continues to be an interesting matter. I think the zero COVID policy in China continues to -- or at least notional zero COVID. I don't know the extent to which it's believable that there is zero COVID there. But anyway, there have been considerable lock downs, the city of Shanghai 25 million continues to be locked down, at least the last time I looked with ports closed. So tremendous amount of business disruption, so that has affected antigen sales into Asia. We're starting to see that move closer to normality with some beginnings of reorder flow into Asia. And the antigen business generally was affected by that just very breadth of our product offerings, they're impacted our sales. One of our key areas, of course the TORCH channel antigens for prenatal testing for exposure, maternal exposure and immunity to those diseases. And many appointments, medical appointments just were not being made or happening during COVID, and did affect our antigen business. So we were down. And I think you've seen this quarter likely is the low for that business, from $3 million a quarter pre-COVID on our antigen business to more in the order of $1.6 million this quarter. And our order book certainly supports something much closer to the prior levels for Q3 and Q4. We'll see what Q1 and Q2 of next year -- next fiscal year look like but we do have visibility usually a couple of quarters advance.

Jim, is that a good characterization on the antigen side?

On the androgen side? Yeah, but I think I mean, the question was more around Asia, which isn't all of the attitude as this right. So well, in fact, our sales were actually up to our Asian distributor in Q2 of this year, double what they were last year in the same quarter. And the sales in this past quarter were actually more than they were for the previous three quarters. So we are starting to see an uptick in orders coming from our Asian distributor. And also, as we go forward into Q3 and Q4, we're starting to see that uptick. A lot more activity coming from that Asian distributor in terms of the order book as well. So while the antigens, as Cameron said, we're down in the quarter, that wasn't a result of our Asian distributor. It's more in regards to timing. So we've got some large antigen customers, which just happened to be weaker in this past quarter. But we're going to see some significant uptick based upon the order book in the Q3-Q4, and into Q1 for that matter, because we've got an order book for some of these larger customers that go out to the first and second quarter of next year.

Very good. Thank you. Thank you for supplementing that, Jim. I think it does give us because of the long production cycles in the antigen business, the customers know they have to order, the large customers have to order many months in advance. So we are seeing that encouragement moving forward, I don't think the sales are necessarily flowing through into Asia. But Jim's quite right that our distributor is ordering now in anticipation of resumption banned from their end users. Another question we had were with regard to viral transport media mark DxTM, branded viral transport medium, and the question any sales beyond the Government of Ontario? And the answer to that is yes, we are making some private industry sales. They are still in the minority. We're still largely for better or worse, the government has been taking the absolute lion's share of our production. We are moving forward with the renovation build out of the rebuild, essentially, of site three, to support to have a dedicated site for our viral transport medium production. And that's really for two reasons. One is to have a properly configured site for the fully automated production of VTM. And the second reason is, we need to recapture the production spaces in our second site for a much larger scale of quality assessment, products of caps manufacturing, and that needs to be recaptured now. So we're just now working on final finishes for building three. The construction is lead, and we have to have the quality system sign offs to begin to use that facility. And that's not quite ready yet. And then we're pushing hard to get the automation equipment in. And that should be -- was to be completed much earlier. But due to the supply chain challenges and getting all sorts of components that is probably going to be commissioned closer to late summer for the fully automated blind, installed and operable. And is there anything you wanted to supplement on those companies?

Yeah, and that's, pretty much where we stand out. Obviously, we're implementing the semi-automated VTM process and building three ahead of the fully automated one. So the $100,000 a week capacity will be then transferred out of building one to give the capacity needed for the caps -- sorry, building to give the capacity, the caps -- capacity we required, we require for all these opportunities that are coming down the pipe. And I notice there was a question about a building four. And what I said in my last talk with Adelaide Capital. And of course, as we build our capacity, and it was successful in that regard, we understand that the caps component may become rather large, and we will be tapping out the capacity of building two very quickly and therefore we are indeed already kind of just having a little scout around to see about the business at building four is obviously we're trying to target the $100 million dollar mark. And capacity building is what we're about right now. The systems to support the capacity and the space and the excellent staff members to drive that capacity. So yes, we're looking pretty aggressively in that regard.

And clearly, we approached these issues with a very responsible demeanor. So it should guide you that we have some justifiable confidence about the prospective demand for our products before we even have that glimmer in our eye. The next question we have is regarding recruiting and obtaining personnel. And, we've all read sort of about the great resignation and you know, people rethinking work life balance coming out of, two years of lockdown. Certainly, personnel retention is something -- and recruitment, there are both things we take incredibly seriously. We've continued to upgrade, revisit our compensation grids to make sure they are staying competitive in a more inflationary environment, we're continuing to look to enhance staff benefits as well. So that compensation increases will be more on a variable basis, rather than a fixed basis. So bonuses, profit sharing are things that we're looking at. We have established some tiered seniority tiered group RSP benefits already. So we're really modernizing the compensation system of the company as much we can. I think the only issues with regards to recruitment and retention, we've seen are some of the more government funded organizations that don't seem to be anchored to any reality. So we have lost I think some staff that may be lured into a good time rather than a long time and joining organizations where it's going to be great party as long as the funding lasts, but they're not sustainable in our view over the longer term. But in spite of that, we want to make sure that we're not facing an untenable level of staff turnover. And thus far, we see a bit of it, we watch it, it goes up and down, but we're going to make damn sure, keep our good people.

There was a component of that question that talked about margins.

Sorry, it got deleted before I got to that.

Yeah, I think we've identified areas where -- there's pressure on compensation, inflationary, as well as competitive. However, we're putting in place automation that is expected to help us to maintain and improve margins in for those particular products. So that's the offset that we're going to see to some of the potential increases in compensation in the manufacturing environment.

Yeah. And to be clear, on Jim's comment automation is not to replace staff automation is to remove drudgery and enable us to move people as they gain experience into roles of greater responsibility and greater creativity for that matter, as well. Yeah. Someone has asked making a statement, I guess that cap sales will lead to increased significantly in Q3-Q4 to meet revenue targets. And what announcements or discussions are ongoing with regards to that. There's a ton of stuff ongoing. We are still a relatively small fish in a big pond. And we don't necessarily drive the agenda drive the timing of announcements or concluding agreements. But I can tell you that Microbix is working very closely with a growing number of global leaders in the field. And the best objective evidence I give with regards to that is to actually look at some of the collaborators on the posters of results that we have presented at different conferences. As you can see that the people collaborating with us that we are targeting most instances to become customers, our global leaders in that regard. And as we conclude the agreements with different companies, as they are material, we will make announcements but those announcements may be Microbix announcing an agreement with broad terms disclosed with an unnamed party. There may be announcements where we named the party or they could be announced joint announcements, depending on the preferences of the different partners. But we continue to work on those and I don't Like we're materially off our budgets thus far, we're within probably 5% of our top-line and bottom line budgets for the first half. So we're certainly optimistic that we'll keep on pace for the second half. And with regards to ship dates, it always comes down to which side of a quarter and is something ship. But certainly we're working furiously to make sure we're not just putting up good short term numbers, but we're also building the relationships and the trajectory for lasting success. Question why a cap sales have been roughly flat for the past while capsule sales have taken for the past while. Cap sales have taken bit to build, we’ve seen some good penetration. A lot of the tests that have been rolled out in the past while have been under emergency use authorizations where the requirements for compliant controls have been waived. And some of that is coming to an end that companies have to start to make choices as to whether they want to remove a product from the market, or whether they want to become fully flying controls. And that tip of the spear on some of that is on respiratory side but also more broadly. A lot of new point of care antigen test instruments and point of care PCR instruments have been rolled out. And if those instruments are going to stay successful, and last beyond COVID, that they have to have a broader portfolio broader menu of tests. And that broader menu has to be fully compliant with having controls, paired and partnered with those test cartridges. So we're seeing a big inrush of interest today. As actually, people can come off of full emergency mode with regards to the pandemic. So, paradoxically, I think some people have said, well, this is Microbix is somehow linked to the fortunes of COVID, perhaps, but not in the direction people were thinking. So we really have some very good opportunities coming in. The other thing we're doing and -- is perhaps a more granular explanation is good goodly number of our sales of past 12 months were the on board kit category. And this is for qualifying newly installed instruments for usage and training technicians on those instruments. So the rate of placement of new instruments has slowed a little bit. And we're now moving for a far stickier regular at larger business, where our caps are actually included. It's fixed ratios with the test cartridge, boxes and that could be one control per 25, one control 40-50 usually in the 25 to 40 range. And that gives a much more regular flow of business and a much more massive flow of business. So we're actually looking from selling, you know, hundreds of kits at a time, that might comprise anywhere 12 to 30 controls kit, and an onboard kit to actually selling tens and hundreds of 1000s of individual units for inclusion in boxes of replacement cartridges hits the test replacement cartridges. So that transition is now ongoing. That's one of the big things we see as being a driver for the kind of sales breakout we've been describing. I hope that gives you some color as to why, there has been a pause in the growth trajectory why we feel that pause will soon yet. Another question, pricing and volume trends in the antigen business is one question and you know how selling prices are developing. And then unit sales have caps and capacity utilization. With regards to antigen pricing, large customers have multiyear contracts with his half price adjustment clauses in those and those are usually linked to CPI and might multiples multiple CPI but linked to CPI. So we do have the ability to reprice and pass through cost increases, we have to be sensitive to our customers, as they in turn may have contracts. And there's some epic flow and discussion goes on there. But we do see our average selling price increasing, and we do believe we have pricing power in that side of the business. Jim, would you concur with that?

Yes, we're certainly like -- we pressure our suppliers, there's pressure from our customers to keep our prices as flat as possible. But I think everybody's recognizing that we're in a different environment right now in terms of costs that are leading to increases in prices. We continue to invest funds on in our manufacturing environment with research and development, we have on improving our costs, as well as improving the yields, especially on the antigen side of the business, which can have a large impact on our cost base. So we're working on both ends, we're working on raising prices, and obviously on the other end, trying to keep our costs down, or even lower.

Yeah. And we have to be sensitive our customers sometimes need time to adjust, in order that they can get better test reimbursement or pricing, don't want our customers to lose contracts, by being non-competitive, but typically, the antigen side of -- the antigen is a component is a relatively small portion of the overall test price. So, so this is this is not a showstopper for anyone if we need to, we genuinely need to raise prices to maintain our margins. And as well as to further optimize the technology.

And the product are very sticky by virtue of their specificity and the quality systems that drive them. There are very specific capabilities which are germane to the devices they support. And to Jim's point, as well, we spend a lot of time on operational excellence building yields and minimizing our costs. But at the end of the day, we're kind of the Intel inside of a lot of tests, and the customers are well aware of the excellence of the products we've provided, under the quality systems that we've run.

Very good. One of the -- next questions was with regards to caps sales. And you know how those have grown year-over-year. There are two formats of caps principally that we provide, there is the small vial, usually with 0.5 to 1 ml liquid within them. And then there is the FLOQSwab the swab-based controls that are room temperature stable and very suitable for use with different point of care tests. The biggest growth area in our cap sales has been on the swab format, much as we hoped and expected. We just began to offer that format late in fiscal 2020 with some initial sampling and stocking shipments in Q -- at the very end of Q3. So at the end of June 2020. And then we had a trickle of reorders in towards the end of September of 2020. So we perhaps sold 10,000 units of that format that you're just again the very beginnings that grew by well, well in excess of 10 fold in 2021. And will grow -- is growing in multiples of that level for 2022. And we see it growing another 5 to 10x in 2023. So this is some very explosive growth. And keep in mind, when we talk about these products, we're taking a FLOQSwab that costs $0.10 cents and turning it into a sophisticated molecular or antigen test control that sells for $10. So there's a real increase in the value associated with products with of course these being world leading sophisticated medical devices in their own right from our partner called MAV [ph]. So that's really moving forward. It's really about the capacity we taken. Same way, Microbix used to produce 100,000 vials of this format per year. And we're now move forward if we're producing 100,000 vials of viral transport medium, per week. So that's over 50 times scaling. So I think we've demonstrated our ability to scale. And for the cap side of things, we're moving from what had been almost an artisanal production, scaling to something that is much more industrial and, and will scale 10-20 fold from where we see it today. Ken, do you want to supplement any comments on that?

I think that the description of capacity is really good. I mean, as you said, with viral transport medium, even though we've scaled through ourselves, we're currently running at 100,000 a week. And with the caps, we can do see 100,000 in bonds, generally speaking, the intent is to go by another order of magnitude to service the businesses that are coming our way. And so that's the capacity building we're doing right now. Obviously, we're a manufacturing group, we have the necessary quality systems and the engineers in place to do that. So we're basically just implementing those processes right now.

Yeah, very, very much the case. And I stepped out of frame for a moment, because I wanted to get a proper sample of our DxTM viral transport medium. But, you know, making 100,000 units of this per week is not a trivial exercise. And that is before our full automation. So that's very, very good. And that's been substantively taken up, as referenced by procurement authorities in the province of Ontario who validated through public health Ontario, or VTM, that first class product with really unprecedented quality, in terms of the rate of contamination spoilage rate, we've got first class medium in first class vials and systems and filling and sterility, all of the above is very, very good. So, we're now as we come closer to bringing on additional capacity, we're now engaging more and more with other prospective buyers, that we can provide strategic levels of product to them and expect to be able to do so shortly. So that's moving forward very well.

You've heard from end users seeing just the excellence of this product, and how it works very well in various sundry labs. And to Cameron’s point, 100,000 a week is good right now. But as you move to 50,000 to 100,000 a day, that's going to allow us to satisfy ex-Ontario, and other major players instituting amounts going forward. And that's really the intent.

Yeah, very much. There's a next question is, is really about CapEx dollars invested from here to get to $100 million revenue level. We've been investing CapEx on things like the eQMS on the enterprise electronic quality management system documentation management for QC and QA, product release the criteria, the enterprise resource planning or ERP system software, just those is $600,000 spent in 2022 on those essential systems, we've also been spent on the build out of our third site in terms of creating the production laboratory spaces within that site, and then spending on the automation equipment for VTM, spending on semi automation equipment, this stage for caps production. But Jim seems to still be building up cash in spite of all that spent. Jim, what do you want to comment further on CapEx?

Yeah. We have been making the CapEx in a variety of areas. I mean, we were -- we’ve had a number of years where we didn't have the funds to make the capital investment even in our core antigen business. So I think we've been making it across the board in the antigen business and then all three facilities to expand and create the expansion capabilities for not just VTM, not just caps, but antigens as well. And yes, like I continue to accumulate cash despite you and Ken trying to spend it. I still make [indiscernible] for the investment.

We’re spending at the right places. And I think that is something we'll continue to do. We emphasized to everybody on the team, if you need something, a piece of equipment, you need additional trained staff to execute on what you've been tasked with. You need to ask it, it's our job as senior management to make sure the team has the resources to do their best work. And, and that's very much the approach we've taken and it's really bearing fruit.

The other thing that you had, I think I had mentioned earlier, Cameron was, we've also used the funds to pay down some debt. We've prepaid one of our larger debentures we've just recently -- as in our most recent quarterly results, identified the fact that we've also paid off one of our other debentures. We've paid off a BDC loan that we had previously as well, prepaid. And so we are trying to get rid of some of the more expensive debt that we've got on our books as well.

Yeah, absolutely. So Jim, thank you very much. And in for CapEx $2 million to $100 million. We have tremendous flexibility, not only do we have the capital in cash that Jim's indicated, but I think our legitimate ability, if we saw the need for additional bank debt, we would actually have recourse to that under terms of EBITDA basis, we could probably expand our current bank line from $2 million to $10 million if we needed to. So between cash on and legitimate debt capacity, on a prudent level, we could certainly find whatever CapEx we require to drive sales to that, including if we saw that need to be even to the extent of purchasing a fourth site if that were deemed more appropriate than if we see. And equipping -- the other thing is well, we'll continue to look with some of the public private partnerships and government leveraging capabilities for economic growth as we have with our very successful that Ontario loan program and our very successful Ontario Together Fund grant. And just as a point of mention, the Ontario Together Fund read by the Ministry of Economic Development, Job Creation and Trade material, deemed our program entirely successful with regards to moving to strategic supply of viral transport medium, signed off on the file, at least the hold back balance of that grant Microbix. So, again doing, saying what we're going to do, and then most importantly, going ahead, doing it and doing it on time and on budget. So that's the way we're looking to roll in and keep building value for everybody. So I think weighted average cost of capital is something we understand and we're managing that quite effectively, I would represent. Another compound. Sorry, I'm just looking at a compound question here. Approximate sales split for the three business lines. I think the biggest growth for us growth potential. Well, biggest growth potential is likely in the quality assessment products, just that that is potential expectation that will lead to tens of millions. I think we will see a -- from there, we may see a doubling tripling quadrupling of viral transport medium sales, if we achieve our objectives in selling more broadly, which certainly we're pushing our view. And we'll see a recovery in a resumption of growth in our antigen business. So today we're at call it 50% antigens, now 12 months trailing, we’re roughly 50% antigen sales 25% caps 25% VTM. I think you'll see those relative proportions changed to a greater proportion of caps, and probably 50% caps and 25% VTM and, and antigens in 2023. And beyond that, we'll see exactly what those splits start to look like. Update on what's currently happening with respect to our Kinlytic urokinase partnering asset? That can continues to be an active file. We're working now under Ken's leadership, to revalidate drug substance manufacturing agreements and reprice those in light of more inflationary times it just to keep those files and relationships refreshed. We do have multiple parties under confidentiality, expressing interest in the asset. And we'll continue to update shareholders in generalities as that moves forward, but we do hope to secure a definitive agreement. But the timing of pinning it down it's been very challenging in the face of COVID. Many of the companies who were the most logical partners, companies that focused on sales of hospital-based products, just saw their sales lead the claps, as procedures weren't taking place in the hospitals. The sales of the incumbent product, cash flow activators have held up beautifully throughout which is just incredible. That they were almost entirely unaffected by COVID, which really speaks to the robustness of this market. And it's appeal to potential partners. So we'll see if more players start coming back into the fold on this, but we have two very qualified potential partners currently that we're in dialogue. And order priority possible uses of cash balances and future earnings. Well, there's a saying an embarrassment of riches. I think, you know, hopefully we won't get excessively. Well, hopefully we will get excessively embarrassed. But some of the things we've been using cash for thus far are upgrading systems, increasing capacity paying down debt, those uses won’t change. Some of the other uses we are starting to look more favorably upon or even in the order of share buybacks. Our effective price of issuance in our last offering if once splits and the half warrant that was on our $0.60 unit offering was $0.51. We're trading around that level now. Even after tremendous advancements the fundamentals of our business so we're starting to look at possible share buybacks as a real effective use of capital. Not to deplete our war chest, but to a lot -- at least some level and make sure there is not an opportunity for a potential acquirer to lowball shareholders based on excessively low share price. So that's something we are seriously considering it will update as we go through the process of evaluation and regulatory confirmation. So that that is a fourth possible use of capital to add to the other three. Another one would be if we made the evaluation, that it made more sense to purchase a fourth site by at least one that would be another possible use of capital. But we'll see how that shakes out as well. I think that's covered CapEx budget for this year. And next well, we haven’t done our budget for next year yet. But I think, certainly a lot of our capital is spoken for capital budget is allocated already for building three and the automation VTM and the automation of caps and the upgrades to ERP and software. But collectively, the remaining spent on those wouldn't amount to a couple of million bucks. So we're in a very strong position for that. We do see continuing to distaff up as the pace of product development continues in the pace of manufacturing. And we're also doing a lot of cross training of employees between things like caps and VTM as well as antigens, as well so that we have a very flexible and well-trained workforce as well. So some very good things going on there.

As well as building the physical capacity. We're obviously hiring top talent right now and that's in support of what we're trying to achieve here. So we're getting some pretty good people in the door, quality specialists, engineers, scientists, IT specialists that type of thing to support the growth we're having. But to Cameron's point, and Jim's point, we're nicely cashed up to cover all of that. And it's not a problem to do so as we build future proof the company.

Yeah, very, very much the case. And this is all part of that path to get to $100 million in sales, making sure that we're identifying obstacles well in advance, and removing those or coming up with the solutions to work through those real world challenges. This is not a meme stock that we're the company that we're running, we make stuff and sell it fully regulated products to real customers did impact -- that directly impact your health. So these are non-trivial exercises, and it takes the setup takes a while. But the annuity potential for these is immense. And the margins aren't bad either. Another question --, sorry, R&D expenditures. Yes, they're going to go up continue to go up. We don't do our in the sense of discovery research. What we're doing is creation of new methods to create innovative value added products, and creating those products. And doing that alongside partner, so much more D than R. But we'll continue to see that escalate in an intelligent fashion.

There's a related question further down, which is R&D expenses have been rising. Can you provide any specific or general guidance as to the main areas where these funds are being invested?

Main area that funds are being invested is increasing the breadth and sophistication of our quality assessment products. And that set the direct urging of potential customers. So this isn't building on speculation, this is really building in full alignment with customers. So when you see us having confidence in the direction of revenues and revenue growth, when we're developing enabling products for major international companies, we have some pretty good confidence that they're going to buy them at the end of the day. Now, our risk is if somebody fails miserably in the market, but if they're going to be spending tens if not hundreds of millions on product launches, were integral to the success of that product. That's a very good, calculated business risk. Question about securing longer term VTM contract with Ontario. Yeah, we're still in discussions with that. Certainly, the current election going on, is a bit of a distraction. But we're emphasizing the need for us to be a supply chain partner with carrying that base level. And it's a bit annoying when we're -- we get this question again and again, and these relationships evolve. But we had the question before the first order, when's the first order and the first order wasn't nailed before people were asking, when we're going to get a second order. The second order landed bigger than the first and people are immediately shifted over to whether you're going to get a third order. So we see this as being a continuing progression. And, the more we will continue to push to move it towards greater clarity and visibility. But we certainly don't see any aspect of this business going away. Right now it's just lumpy in terms of the order flow disclosure. But the need remains, and some of -- I'm on board of another company that does a lot of importation from Asia. What I'm advised is there is at least 16 weeks to get a container reliably from a manufacturing hub in Asia to distribution hub in North America. That's completely untenable for critical medical products to be able to predict a six wave for example, and then say, well, it takes a month to make the product at least four months even if the port reopens to get product in North America, you've got to have domestic suppliers. The days of just in time global supply chains are not. So we're not expecting 100% of Ontario's demand or other provinces. But we certainly would like to take on the base load and be able to provide them as well some search capacity, that isn't going to take months to come online and realize product delivery. And that's a benefit as well, to our caps business, our antigen business just we're a secure and trusted supplier.

You’ve been talking about VTM. Can you comment on discussions with orders with other province provinces federally or other groups?

I prefer not to at this time, Deborah. Those discussions are beginning and moving ahead. But I would feel uncomfortable about getting granular about what dealings are going on with them.

Sure, that was just a question further down.

No, no, that's fair. Question about SQI Diagnostics. No, I'm like I'm own the stock. Good guys. And the question is, COVID antibody tests? Well, there's been potentially a good scientific rationale for using antibody tests, perhaps inform the intervals between vaccinations for example or to confirm prior exposures. But there has not been broad uptake of serology-based COVID testing for a variety of reasons. And I think that's an intersect of medicine and politics that would be a longer conversation. We have time for it here. But certainly, we already have the availability of controls for COVID Serology tests and the extent those start to move more into the main stream for whatever reason, we're already ready to go on. And we support SQI. And we could support other companies with such tests as well. Ken, do you want to briefly expand on anything there?

Just indeed how serology controls, and that we've had done a lot of clinical testing and we perform admirably, as we would expect them to. And so as if that market -- when that market takes off will be very difficult.

Perfect, thank you. Amazon, okay. Just looking at this question. The single use at home test has inherent limits to the sensitivity and specificity. So the ability to pick up true positives and the ability not to pick up true negatives. So you're not going to have controls so much in a single immuno-chromatography antigen strip test, that's not really a market that we would go after. Our markets could include self-collection, using our VTM or certain test types. And our markets could include -- do include the uses point of care tests in places like pharmacies or clinics or industrial settings where people actually doing enough test volume, frequency that controls to catch systemic errors make sense. But there isn't really a role for our controls, somebody isn't going to buy two strip tests from Amazon because they're visiting Grandma and using a control arm one of them. That isn't really our market. But our market is more the institutional settings where somebody wants to make sure that they're not developing any kind of persistent error that put people's health at risk. Ken, did you want to comment on that Amazon issue any further?

I think that's final. We need the volume where the control is relevant if it's just kind of then do what you want to do. But I think that's not really our marketspace.

Yeah, agreed. Okay. Caps expansion. When is that commissioned? Well, that's already commissioned. We already have two material production labs in our 235 Whiteline facility. They got grabbed to some extent to do DxTM production as well. Well, so what we're -- what we will be doing in the coming weeks, and this is weeks, not months. But we will be fully recapturing that space for dedicated caps production, and DxTM will move exclusively into building three. So then we have systems where we can produce quite a satisfactory number of caps liquid or, or swab-based controls in the near term. But frankly, just the magnitude, some of the customers we're speaking to, including arrangements with may consume that capacity sooner rather than later. And that's why we're sort of alluding to looking at additional sites. So at that at that point, our -- our key you will not be displeased with our numbers. Let's put it that way. I think that addresses that. There's a question of when does the relationship with Copan swabs expire? This is a contract or agreement that I think both parties are very pleased with. This is just tremendous, family-owned company. Wonderful folks can't say great things about their philosophical approach in business ethics. And it's been a long time thought of the company going back to its founder that FLOQSwab were the absolute best format for test controls. And we've been privileged to help make that vision a reality. So we don't see that agreement and being I'd like to think that this is a relationship that will span decades. And we're going to do our damnedest to, to earn that privilege. So there is no expiry or fuse on that. And we view this as a generational relationship. And I certainly hope Copan does as well. Do we need a fourth site paid $100 million in sales? Boy, that's an interesting one. We probably should. Do we absolutely need to, I think we could juggle space in the three sites, we have to hit that number. But I'd like to think we're going to keep an empty tile and stay a step or two ahead of the need and not be pinched. And, at some point it gets to, with the dollar numbers that we could realize it should realize the cost of leasing, and to a lesser extent, the cost purchasing and equipping, even starts become trivial. So we really will continue to monitor that. And, I wouldn't be shocked if we are looking at pulling the trigger on something like this here sometime next spring. But we're -- we've got a very, very sharp eye going on this right now.

There was a good question, which is would you break out in some detail to past $200 million in revenues in terms of business lines, margins, time to get there, et cetera?

That's the kind of thing I think any securities lawyer would tie me down to beat me senseless for doing. We’ll sketch the broad strokes, but I wouldn't want to -- I wouldn't want to telegraph that to competitors, for starters, and then -- but there are always surprises between how you get to the destination. And it's the ability to management to adapt and overcome that that defines a success. So I’d be too concerned about some plot twists, leading people to think we misguided. But, but I'm very confident.

I would comment that the trajectory to past $200 million depends on the product mix. And to the previous question about facilities, we can get a long way in the facility in the facilities we've got. And to Cameron’s point. By the time we get there, the fourth building would be really a no brainer. But we can build a web -- put it this way. We're not constrained at $20 million and the facilities we got not even close.

Yeah. I mean -- if I would see I would see absolutely zero issues getting $10 million a quarter in the facilities that we have. And then you can then look at double shifting. And that takes you to $80 million. So you're 80% of the way there with the sites we have. It's -- the growth, potentially outstripping that that then you say, well, gosh if we want to move to full automation on caps, for example, you're never going to be able to shut down your current production labs. So you actually need an empty tile to be able to do that, you might as well sketch out the workflow, from blank canvas, rather than trying to rip down walls and existing facility. It's just not efficient.

Yeah. And then you're building for what's next at the same time.

Makes sense? Well, that's it for questions. If anyone has any further questions, feel free to reach out and I can get those answered for you. Cameron, is there anything else you wanted to add into the session today?

I would just reiterate, Deborah, that we're growing sales, we've grown margins, we're profitable, we're throwing off cash, we have a clear direction and to achieve fivefold growth here, we've got customers, we've got products, the associated capabilities. And there are no obstacles that we've not identified already that, that we're not already in the course of addressing. So, we're just I think, in a very powerful position to drive value for shareholders. And we're all really committed to doing that. So I think I know we've got a number of our staff listening in as well. I just like to thank you guys for the work you're doing. And it's just superlative. And we couldn't be prouder to have such a great team. And know, we're going to keep doing our damnedest to make sure that Microbix is an exciting and rewarding place to continue building careers at.

Yeah, it's good to see some insider buying too recently.

Yeah.

Why not at that stock price? Come on.

All good. Absolutely. And I've been adding to my position, I had some options I negotiated when I came in, that are in the money, and I'm exercising and holding all of those. But they don't show up on the insider -- for some reason, they don't show up on the insider list. But I've increased my holdings by 750,000 shares since the start of the year. And we'll increase them by that much again before the end of the summer.

Great. Well, thank you all for your time. Thank you to the audience for your questions. And yeah, really enjoyed the presentation. Congrats on the quarter and looking forward to the second half of the year. Should be exciting times.

Well, thank you, Deborah. Thank you, Jim. Thank you, Ken. And thank everybody on the call for taking your valuable time to get updated and for interest in us with a portion of your capital. Couldn't be more thankful.

Thanks. Have a great afternoon, everyone.

Thank you. Take care. Bye.