Mr. Marc Edwards reports

KANE BIOTECH ANNOUNCES FOURTH QUARTER AND FULL YEAR 2023 FINANCIAL RESULTS

Kane Biotech Inc. has released its fourth quarter and full-year 2023 financial results.

On Dec. 20, 2023, Kane Biotech announced that it received a non-binding offer for its interest in Stem Animal Health. The terms of the offer remain confidential but specify that Kane Biotech will sell its ownership of Stem. In addition, pursuant to the terms of the offer, Kane Biotech received a $625,000 (U.S.) deposit. The parties have agreed to collaborate using their best efforts to enter into a binding share purchase agreement with respect to the sale of Stem within 90 days.

On March 20, 2024, Kane Biotech announced that it has extended the exclusivity period from March 19, 2024, until March 31, 2024, and that it has received additional deposits totalling $900,000 (U.S.). All deposits will be applied toward the sale price of Kane Biotech's interest in Stem.

Fourth quarter financial highlights:

• Licence and royalty income for the three months ended Dec. 31, 2023, was $250,740, an increase of 66 per cent compared with $151,173 in the three months ended Dec. 31, 2022. The increase is due mainly to incremental licence and royalty income associated with Skout's Honor's launch of its oral care product line, as well as increased royalty revenue from Animalcare in the current period.
• Product revenue for the three months ended Dec. 31, 2023, was $490,829, an increase of 9 per cent compared with $450,313 in the three months ended Dec. 31, 2022. The increase is due mainly to higher on-line sales of bluestem products in the current period.
• Total revenue for the three months ended Dec. 31, 2023, was $764,997, an increase of 11 per cent compared with $691,655 in the three months ended Dec. 31, 2022.
• Gross profit for the fourth quarter of 2023 was $398,234, an increase of 24 per cent compared with $320,653 for the fourth quarter ended Dec. 31, 2022.
• Total operating expenses for the three months ended Dec. 31, 2023, were $1,734,547, an increase of 96 per cent compared with $884,298 for the three months ended Dec. 31, 2022. The increase is primarily due to short-term compensation expense adjustments in the comparative period, as well as higher non-cash long-term incentive expense and higher contract research expenditures related to the company's coactiv+ anti-microbial wound gel product development in the current period.
• Loss for the fourth quarter of 2023 was ($1,611,894), an increase of 92 per cent compared with ($838,150) for the quarter ended Dec. 31, 2022.

Full-year 2023 financial highlights:

• Licence and royalty income for the 12 months ended Dec. 31, 2023, was $730,864, a decrease of 22 per cent compared with $932,532 in the 12 months ended Dec. 31, 2022. Excluding the one-time revenue recognition in the prior period associated with contractual Veterinary Oral Health Council milestone payments received from licensing partners, licence and royalty income increased by 46 per cent in the current period over the comparative period. The increase is due mainly to incremental licence and royalty income associated with Skout's Honor's launch of its oral care product line, as well as increased royalty revenue from Dechra and Animalcare in the current period.
• Product revenue for the 12 months ended Dec. 31, 2023, was $1,872,418, an increase of 25 per cent compared with $1,496,548 in the 12 months ended Dec. 31, 2022. The increase is due mainly to higher on-line and pet retail sales of bluestem products in the current period.
• Total revenue for the 12 months ended Dec. 31, 2023, was $2,817,776, an increase of 6 per cent compared with $2,668,352 in the 12 months ended Dec. 31, 2022.
• Gross profit for the 12 months ended Dec. 31 2023, was $1,389,051, a decrease of 2 per cent compared with $1,413,229 for the 12 months ended Dec. 31, 2022.
• Total operating expenses for the 12 months ended Dec. 31, 2023, were $5,474,723, an increase of 15 per cent compared with $4,777,038 for the 12 months ended Dec. 31, 2022. The increase is primarily due to higher long-term compensation expense and employee separation costs incurred in the current period, as well as higher government assistance received in the comparative period partially offset by lower contract research expenditures incurred in the current period.
• Loss for the year ended Dec. 31, 2023, was ($5,270,053), an increase of 38 per cent compared with ($3,824,000) for the year ended Dec. 31, 2022. Contributing to the higher loss were higher finance expenses in the current period and higher non-cash fair value adjustments on government loan advances in the comparative period.

Detailed financial information about Kane Biotech can be found in its Dec. 31, 2023, financial statements and management's discussion and analysis on SEDAR+ and the company's website.

"In 2023 and early 2024, we signed multiple licensing and distribution agreements, received U.S. [Food and Drug Administration] clearance of our revyve anti-microbial wound gel, strengthened our board, and signed a non-binding offer for the sale of Kane's interest in Stem Animal Health," said Marc Edwards, president and chief executive officer. "I am extremely proud of everything we have accomplished and look forward to more exciting developments throughout the remainder of 2024."

2023 and year-to-date 2024 corporate highlights:

• On April 20, 2023, Kane Biotech announced that it had signed a distribution agreement with ProgenaCare 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 Biotech's coactiv+ anti-microbial wound gel, and Kane Biotech will receive a $500,000 (U.S.) upfront payment from ProgenaCare once it obtains 510(k) clearance from the FDA.
• On May 25, 2023, the company announced that on May 24, 2023, it received 510(k) clearance of its coactiv+ anti-microbial wound gel from the U.S. Food and Drug Administration 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 Dec. 20, 2023, the company announced that it received a non-binding offer for its interest in Stem Animal Health.
• On March 8, 2024, Kane Biotech announced that at the Bioscience Association of Manitoba annual awards dinner held on March 7, 2024, the company received the BAM company of the year award. The bioscience company of the year award acknowledges a private sector company based in Manitoba that has distinguished itself in the past year through demonstrated leadership, significant achievement, and paving the road toward future wealth and job creation in the region.
• On Feb. 22, 2024, Kane Biotech announced that at the special meeting of the shareholders of the company held on Feb. 20, 2024, Dr. Robert Huizinga was elected as a director of the company. The company also announced that Dr. Huizinga had been appointed by the directors of the company as executive chair of the company.
• On Jan. 31, 2024, the company announced that if it had filed a patent on its revyve anti-microbial would gel spray, a follow-on product to its FDA 510(k) cleared revyve anti-microbial would gel and would be introducing it at the Boswick Burn and Wound Care Symposium on the same date.
• On Nov. 16, 2023, Kane Biotech announced that Dr. John Coleman had been appointed to the board of directors of Kane Biotech.
• On Nov. 2, 2023, the company announced the launch of the newly rebranded revyve anti-microbial wound gel (formerly coactiv+ anti-microbial wound gel). The product rebranding was being unveiled as part of Kane Biotech's participation in the Symposium on Advanced Wound Care fall forum.
• On Sept. 12, 2023, the company announced that it had fully subscribed and closed its previously announced non-brokered private placement offering of $500,000 and that it had entered into a further amending agreement to its credit facility with Pivot Financial I Limited Partnership, increasing the size of the credit facility from $5-million to $6-million.
• On April 18, 2023, the company announced that it had signed a licensing agreement with Skout's Honor for its patented coactiv+ technology in pet oral care applications. Skout's Honor has been granted a 10-year licence for the non-exclusive use of Kane Biotech's coactiv+ technology under its own brand in North America while Stem will continue to commercialize its bluestem line of pet oral care products.
• On March 2, 2023, Kane Biotech announced that it had entered into a formal amending agreement with Pivot, increasing the size of the non-revolving term loan under the credit facility from $4-million to $5-million.
• On Jan. 4, 2023, Kane Biotech announced that it had signed a distribution agreement with Salud Pharma SA for its coactiv+ anti-microbial wound gel wound care and DermaKB scalp care products.

Detailed financial information about Kane Biotech can be found in its Dec. 31, 2023, financial statements and management's discussion and analysis on SEDAR+ and the company's website.

Conference call

Kane Biotech management will host a conference call on Tuesday, March 26, 2024, at 4:30 p.m. ET, to review the financial results and discuss business developments in the period.

Participants must register for the call to receive the dial-in numbers and unique PIN to listen to the call seamlessly. It is recommended that you join 10 minutes before the event though you may preregister at any time. A webcast of the call will be available on the company's website in the investor section of the Kane Biotech website.

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 (67 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, bluestem, silkstem, goldstem, coactiv+, coactiv+, DermaKB, DermaKB Biofilm and revyve 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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