Mr. Marc Edwards reports

KANE BIOTECH ANNOUNCES SECOND QUARTER 2023 FINANCIAL RESULTS

Kane Biotech Inc. has released its second quarter 2023 financial results.

Second quarter financial highlights:

• Revenue from product and services for the three months ended June 30, 2023, was $484,433, an increase of 68 per cent from $287,584 in the three months ended June 30, 2022. This increase is due mainly to higher Stem Animal Health on-line and pet retail sales, as well as a higher demand for contract manufacturing services during the current period.
• Royalty revenue for the three months ended June 30, 2023, was $89,850, an increase of 74 per cent compared with $51,770 in the three months ended June 30, 2022. The Veterinary Oral Health Council (VOHC) certification that Stem received in April, 2022, immediately triggered minimum royalties from Stem's licensing partners, which has contributed to the increase in royalty revenue recognized in the current period.
• Total revenue for the three months ended June 30, 2023, was $657,310, a decrease of 22 per cent compared with $839,579 in the three months ended June 30, 2022. Total revenue in the comparative quarter includes licence revenue of $430,814 recognized by Stem related to the VOHC certification that Stem received in April, 2022. Excluding this revenue recognition, total revenue for the three months ended June 30, 2023, increased by $248,545 or 61 per cent compared with the three months ended June 30, 2022.
• Gross profit for the second quarter of 2023 was $330,505, a decrease of 48 per cent compared with $639,215 for the quarter ended June 30, 2022. Revenue recognized for VOHC in the comparative quarter significantly contributed to the gross profit recorded in that period.
• Total operating expenses for the three months ended June 30, 2023, were $866,229, a decrease of 36 per cent compared with $1,361,306 for the three months ended June 30, 2022. The decrease is due primarily to an adjustment in the current period of accrued short-term incentive compensation expense recorded in prior periods, as well as lower contract research expenditures related to the company's coactiv+ anti-microbial wound gel and DispersinB hydrogel product development programs incurred in the current period.

Loss for the second quarter of 2023 was $967,905, an increase of 22 per cent compared with a loss of $794,595 for the quarter ended June 30, 2022.

Detailed financial information about Kane Biotech can be found in its June 30, 2023, financial statements and management's discussion and analysis on SEDAR and the company's website.

"Once again, our second quarter saw us achieve significant milestones as we continue to deliver on our business plan. These include obtaining U.S. FDA 510(k) clearance and signing a distribution agreement with ProgenaCare Global, both related to our coactiv+ anti-microbial hydrogel as well as signing a licensing agreement with Skout's Honor for our pet oral care line. The significant period-over-period increases in animal health product and royalty revenues are also very encouraging," said Marc Edwards, president and chief executive officer.

Recent corporate developments:

• On April 18, 2023, the company announced that it had signed a licensing agreement with Skout's Honor Pet Supply Company for its coactiv+ technology in pet oral care applications. Skout's Honor has been granted a 10-year licence for the non-exclusive use of Kane's coactiv+ technology under its own brand in North America while Stem will continue to commercialize its bluestem line of pet oral care products. Stem will receive a $500,000 (U.S.) licensing fee from Skout's Honor to be paid over the course of the agreement as well as a continuing royalty on all Skout's Honor's sales of products that use the coactiv+ technology.
• On April 20, 2023, the company announced that it had signed a distribution agreement with ProgenaCare Global LLC for its coactiv+ anti-microbial wound gel in the United States wound care market. ProgenaCare will have exclusive distribution rights in the United States wound care market for Kane's coactiv+ anti-microbial wound gel. The agreement includes a $500,000 (U.S.) upfront payment from ProgenaCare that Kane received when it obtained 510(k) clearance from the U.S. Food and Drug administration (FDA).
• On May 25, 2023, the company announced that it had received 510(k) clearance of its coactiv+ anti-microbial wound gel from the FDA for the management of ulcers (including diabetic foot and leg ulcers and pressure ulcers), first- and second-degree burns, partial- and full-thickness wounds, large-surface-area wounds, and surgical incisions for adult populations.
• On Aug. 2, 2023, the company announced that it had engaged Research Capital Corp. as Kane's exclusive financial adviser to conduct a strategic review process for its Stem animal health business division. Kane is considering a variety of strategic alternatives to maximize shareholder value with regard to Stem. These alternatives could include, among other things, the sale of all or part of its assets in Stem, a merger or other business combinations with another party, or any other strategic transaction.
• On Aug. 3, 2023, the company announced its intention to undertake a non-brokered private placement offering of up to 6.25 million units of the company at a price of eight cents per unit for gross proceeds of up to $500,000. Each unit shall comprise one common share of the company and one-half of one share purchase warrant. Each full warrant shall entitle the holder thereof to purchase one additional share of the company for a period of 18 months at an exercise price of 10 cents per share.

Conference call

Kane Biotech is pleased to invite all interested parties to participate in a conference call on Tuesday, Aug. 29, 2023, at 4:30 p.m. ET, to review the financial results and discuss business developments in the period.

A webcast of the call will be available on the company's website under news/events in the investors section.

About Kane Biotech Inc.

Kane Biotech is a biotechnology company engaged in the research, development and commercialization of technologies and products that prevent and remove microbial biofilms. The company has a portfolio of biotechnologies, intellectual property (74 patents and patents pending, trade secrets, and trademarks) and products developed by the company's own biofilm research expertise and acquired from leading research institutions. StrixNB, DispersinB, Aledex, bluestem, silkstem, goldstem, coactiv+, DermaKB and DermaKB Biofilm are trademarks of Kane Biotech. The company is listed on the TSX Venture Exchange under the symbol KNE and on the OTCQB Venture Market under the symbol KNBIF.

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