MindWalk Holdings Corp. Common Stock 2027 Q1 Earnings Call

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. In June, we launched ReefIQ, our proprietary data platform, and our focus is now on enterprise adoption. For those newer to the MindWalk story, ReefIQ 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. ReefIQ's commercial model is built around multi-year recurring revenue relationships that can scale as clients expand their use of the platform. Because ReefIQ is integrated directly into a client's biological data and the 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 and what they need from a platform like ReefIQ. 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 ReefIQ. 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 LensAI recurring revenue agreements.

Investors should not use prior LensAI contracts as a benchmark for the size or the scope of ReefIQ enterprise relationships. 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 ReefIQ. Two decades of biologics discovery work for our clients across multiple platforms and capabilities has already contributed to several dozen molecules reaching the clinic. 10 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. Today, roughly 80% of our current funnel by value is now structured this way, spanning data management, ReefIQ, 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 ReefIQ enriches the biological context for every other program. LensAI, 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 ReefIQ. This is a marquee week for that partnership, with much more to come. 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. 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. 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 ReefIQ, 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%. The larger loss this quarter reflects deliberate investment behind the commercial opportunity we see ahead of us. Sales and marketing expense increased by CAD 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.

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. Revenue for the first quarter of fiscal year 2027 was CAD 3.8 million, versus CAD 3.2 million in the first quarter 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 first quarter 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 July 31st, 2026, R&D was CAD 1.3 million, compared to CAD 1 million in the same period last year. 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 first quarter of 2027, as compared to CAD 1.3 million in the first quarter 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 July 31st, 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 first quarter of fiscal year 2027, as compared to net loss from continuing operations of CAD 4.1 million in the first quarter of 2026. 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 July 31st, 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 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. This facility demonstrates confidence in our long-term strategy around our emerging pipeline and anticipated adoption of ReefIQ and provides the capital necessary to execute on that strategy. With that, I will turn the call back to Jennifer.

Jennifer? Thank you, Scott. As we've mentioned, this morning we announced the binding commitment for $30 million U.S. of unsecured capital without issuing a single share, and this gives us the runway to execute.