I'm Robert Water Tower Research. It's great to be joined again by Payton Nyquvest, founder and CEO of Numinus, an end-to-end mental health company. Well, without further ado, I'd like to welcome you, Payton. Thanks for joining me again. Let's start with your second 1/4 fiscal 2023 earnings. Results really highlighted a steady progress for Numinus in what is typically a quiet 1/4 as it contains the holiday season. Mm-hmm. Can you summarize for us the key takes from last 1/4's performance and highlight to us what pleased you most about the results? Yeah. I, you know, to your point, a couple of things. You know, I, a very small kinda drop from the previous 1/4 in regards to revenue, very much associated with just seasonality. Frankly, the fact that the kinda drop was as small as it was, is really, really encouraging to us in regards to not only the sustainability of the business, but the growth of the business going forward as well. To give people a sense, you know, seasonality in regards to the mental health space is really associated with a, with a couple of things, in particular in our business, where, you know, not only do we offer just traditional mental health support, but in regards to ketamine services in particular, where, you know, it's a, it's quite a larger time commitment. When people think about that, you know, they're not typically trying to sort of squeeze that in through the holidays, and so usually they'll wait until after the holidays to do that. That's, you know, why we see that kinda seasonality low at times. You know, really strong growth year-over-year and, you know, just continues to demonstrate what really sets us apart from the other mental health service providers in the psychedelic space is, you know, strong track towards continued growth and sustainability is really exciting to us, and then obviously the launching of our licensing platform as well. Great. Now, the past several weeks have missed the, like major competitors, I would say. You know, a couple of large clinics and networks announcing that they are shuttering all or most of their clinics. Mm-hmm. Last week, you in your results announced a network expansion strategy through a licensing program. Before we actually get a little deeper into that strategy, can you explain the stark difference. In other words, why are you able to expand while others are in retrenchment mode? Yeah. I think a couple of things. You know, the main 1 is the service platform that we put together and the diversity of services. You know, while we offer ketamine-assisted therapy, the diversity of just mental health services, keeps us, you know, very sustained and continued to grow. That's, I think, been the biggest differentiator for us. Insurance reimbursement. You know, over 90% of all of our services are covered under insurance, including 80% of our ketamine services covered under insurance. You know, we have a huge amount of financial support for the services that we offer. I would say also just a very methodical approach when we think about growth and expansion that's really centered around, you know, what is the client looking for today. You know, there's a lot of excitement about psychedelic therapy and the push towards that, but we've taken a, I would say, a very measured approach to how we, you know, move more into that market as approval starts to open up, knowing that, you know, we're not quite there yet today. You know, ketamine is very exciting. You know, fortunately, we've been able to rely on the experience of the Novamind acquisition, where, you know, they've been out of Cedar Psychiatry working with ketamine for over 13 years. You know, while a lot of other organizations over the last couple of years have been kind of working to try and figure it out, they've really done, you know, done the legwork and now have something that they know works that is sustainable and that is also, you know, scalable as well. Yeah. Okay. Now on the licensing program itself, can you tell us, you know, what the thinking was behind pursuing that strategy, and whether this is now the preferred approach over the we say a previous approach where you were looking to expand your corporately owned clinic network? Yeah. Maybe in, like, in the properly perhaps in the context of the recent upheaval we've seen in the sector. Yeah. To, you know, to the point of what we've just been discussing, that I think Numinus has really demonstrated that it very much understands, the clinic space and the services space currently. We've looked at, you know, how do we, how do we expand that platform as efficiently and cost effectively as possible, you know, knowing that as an example, MDMA is, you know, probably somewhere in the neighborhood of 12 months out from approval. Knowing that MAPS is gonna need, based off of, the feasibility study that they did, they're gonna need, you know, minimum, I would say somewhere in the neighborhood of 40,000-50,000 trained therapists, and that's a, you know, it's a very short period of time to grow that kind of infrastructure. When we looked at that, we really wanted to try and figure out how we could empower people to open up clinics that frankly didn't take the time or resources for us of building Brick-and-Mortar infrastructure. There's a lot of clinics out there at the moment that are already built, that are operating, albeit struggling to sustain themselves, just because, you know, the infrastructure that's required to be able to offer ketamine or other psychedelic therapy is very vast. It's frankly too much for, you know, an independent owner-operated clinic to try and gather the resources to build that infrastructure. This gives people a turnkey solution for something that is proven that works, that takes a lot of the heavy, the kind of financial and resource heavy lifting off of the clinic operator so that they can focus on doing the therapy. With that, also being able to integrate, you know, our insurance partners and things like that have, you know, made us be very successful while be it, you know, a challenging market still, and wanting to be able to continue to grow, scale, and improve margins while, you know, not having to draw off of the balance sheet, which has continued to be very healthy and strong for us. Those are the kind of the big reasons. I'm sorry. Carry on. Sorry. No, no, go ahead. Go ahead. A lot of interference here in the. Carry on finishing what you were about to say. Yeah. Just to wrap that up, you know, gives us an opportunity to continue to improve the margins. I think for people to take away this expansion strategy for us, you know, the overhead is greatly reduced for us. Really, you know, the resources that it requires on our end are marketing and financial management costs, which we've already built that infrastructure. You know, as we add on more of the clinics through this licensing program, the margins just continue to improve as this is all net positive for us. Maybe on the licensing, program itself, what can you maybe explain to us what the revenue model of this program looks like for Numinus, how you're going about implementing the actual strategy, and where you are targeting the rollout of the program regionally, and how many licensees you expect fiscal year and the next fiscal year? We're a little bit hesitant just to put a number on that at the moment, only because there's a couple of different pathways when we think about licensing that are available. Really and we'll start to communicate more of this in the, in the upcoming couple of months, but we see, you know, everything from a full licensing of all of the Numinus platform and kind of a complete new operation using the Numinus platform. To be able to set up in larger service providers who wanna be able to offer psychedelic therapy but just don't have the time or focus to really integrate that into a larger care model. If you think about, you know, some of the larger organizations like a Cleveland Clinic or the bigger service providers, they're very, very busy. They don't have the focus to really go in and build this in their own system. For us to be able to give them a turnkey solution to doing that is how we see that as well. Really for Numinus, there's a fee associated with the setup and then an ongoing licensing reoccurring fee as well. Okay, great. In conjunction with this program, you also established a partnership with healthcare-focused REIT, Healing Commercial Real Estate. That's an interesting concept. Can you add a bit how it benefits Numinus and how it dovetails with this licensing program? Really it gives practitioners essentially a complete full turnkey solution to opening a clinic. You know, the other challenge for practitioners is, you know, they might not necessarily have the resources to go and open a physical infrastructure, do the leasehold improvements to actually get that clinic launched if they're looking to use our licensing platform. This gives anybody who's looking to do that, it gives them the resources to be able to get up and going. Essentially a full turnkey, not only here's all of the operational infrastructure, including training, clinic protocols, insurance, relationships, but also here's the building and here's the leasehold improvements to get you up and running. from a practitioner standpoint, it just fully empowers them to get up and off of the ground without, you know, the need for resources from them. Oh, okay. Sounds interesting. You'll presumably update us as the- Absolutely. Let's now talk about some of the upcoming catalysts for Numinus. Last time we spoke, you talked about the regulatory reform as probably the major catalyst. We've seen Colorado voting in favor of Proposition 122. There's been a positive de-development in the province of Alberta, which has surprised many back to those developments. I would say as we continue to see, you know, different states as well as Canada, Australia, you know, showing continued not only support but really impactful changes around accessibility for psychedelic therapy. I think this is all coming kind of around a time where we're also anticipating the MAPS phase 3b trial results, which I think are going to be a bellwether moment for the space. MAPS has already indicated. Not only are they in line, but they reaffirm the phase 3a clinical trial results, which were spectacular. This is really for MAPS, the last big hurdle research-wise, to get MDMA approved and launched as therapy. You know, the FDA requires 2 completed, phase 3 clinical trial clinical trials, with this 1 complete and extremely positive, it's kinda all systems go on MAPS side. I think that is going to be a huge catalyst for the space and obviously for how closely we've worked with MAPS over the last couple of years. We're very excited, to be able to continue to work with them now about how do we scale, integrate, and implement MDMA as a therapy, and reach, you know, the kind of numbers that they've shown in their feasibility study, which, you know, going back to this licensing program, is really the big reason for why we created it, not only to scale current services, but to be prepared for when MDMA is approved and available. Okay. The new initiatives you've been announcing in the last week or 2, will the rollout of these actually these new initiatives impact on your target of achieving operating profitability in the next 18 to 24 months? Really, you know, not only... now with this licensing program launched, you know, I've talked quite a bit about burn rate reduction, and that's been very much at the top of mind for the company. Also, not wanting to cut our nose off to spite our face in regards to burn rate reduction. Now with this licensing program that allows us to not only grow exponentially but greatly reduce or greatly improve the margins, we see the opportunity to really actually condense that timeline. In particular, once MDMA is approved, which is going to be, you know, a higher margin and very sought-after service, we see actually that timeline improving over the next 12 months. The, sort of clarify that. Are you saying that, we could actually see, operating profitability prior to the, let's say, the latest target of 24 months within that period? Yeah. We are pushing very, very hard, and we'd like to see profitability within 2024. Okay. Yeah. Finally, are there any more immediate upcoming catalysts investors should be aware of, as far as Numinus is concerned? I think over the next couple of months, obviously, you know, we're very excited about this licensing program, and so I think over the next couple of months, you're gonna see the growth of that program, which we're really excited to be able to share with people, and I think will really show the full strength of that licensing program and the financial opportunity associated with it as well. Great. Okay. Well, I think that wraps up this fireside chat. Thank you, Payton, for keeping us abreast of the latest developments and how Numinus is progressing, especially against the background that we're seeing. Additional questions for Payton, please pass them on to me, and I'll pass them on to him. I just want to bid everybody, thank you for joining us and thank you again, Payton, and have a great day. Thanks, Robert. Appreciate it. Take care.