Kane Biotech Inc. (KNE.V) is a biotechnology company engaged in the research, development and commercialization of technologies and products that prevent and remove microbial biofilms. KNE.V has a portfolio of biotechnologies, intellectual property (80 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™ and DermaKB Biofilm™ are trademarks of Kane Biotech Inc.
Coverage was initiated March 2021. with additional notes on November 2021. and August 2022.
New Releases
Aug. 25 - Announces Second Quarter 2022 Financial Results
Oct. 4 - Receives an Additional $425K USD of Funding for its DispersinB® Hydrogel: related to its Medical Technology Enterprise Consortium Research Project Award granted in 2020 and funded by the U.S. Department of Defense.
This additional funding supplements the approximately $2.7 million USD in non-dilutive funding previously awarded for the continued clinical development of Kane’s DispersinB® Hydrogel to treat biofilm-mediated antimicrobial resistance in non-healing chronic wounds.
MTEC’s mission is to assist the U.S. Army Medical Research and Development Command (USAMRDC) by providing cutting-edge technologies and supporting effective life cycle management to transition medical solutions to industry that protect, treat, and optimize Warfighters’ health and performance across the full spectrum of military operations.
Nov. 3 - Announces 510(k) Submission for its coactiv+™ Antimicrobial Hydrogel: The device which uses the patented coactiv+™ technology in a thermo-reversible gelling system is easy to use and optimized for sensitive wounds.
Nov. 24 - Announces Third Quarter 2022 Financial Results:
Dec. 28 - Announces Loan Transaction: Reached an agreement to obtain loans in the aggregate amount of $2,000,000 from two lenders. The Loans will bear interest at 12% per annum and mature on March 31, 2024. As partial consideration for providing the Loans, the Lenders will be issued an aggregate of 4,705,882 common shares of the Company when the Loans are advanced. The Bonus Shares will be restricted from transfer for a period of four months and a day from the date of issuance in accordance with applicable securities laws.
Jan 4 - Announces First Distribution Agreement for its coactiv+™ Antimicrobial Hydrogel: with Salud Pharma S.A. (“Salud Pharma”) for its coactiv+™ Antimicrobial Hydrogel wound care and DermaKB™ scalp care products. Once Kane obtains 510(k) approval from the FDA, Salud Pharma through its distribution partners will register and commercialize Kane’s coactiv+™ Antimicrobial wound gel throughout Colombia, Panama, and Costa Rica via wound care centers and pharmacies and will also import and distribute Kane’s DermaKB™ line of scalp detoxifier and shampoos.
Salud Pharma S.A. is a pharmaceutical company that offers its customers high quality standards products through solid strategic partnerships in North and Latin America, where it has specialized and reliable distributors.
Feb. 6 - Announces Extension of Term of Credit Facility: Entered into an amending agreement with Pivot Financial I Limited Partnership to the amended and restated credit agreement between the Company and Pivot dated August 31, 2021, extending the maturity date of its credit facility from January 31, 2023 to February 28, 2023.
Mar. 1 - Announces Proposed Amendments to its Credit Facility and Changes to its Board of Directors: Amend the terms of the Company’s amended and restated credit agreement between Pivot and the Company dated August 31, 2021, as amended by, among other things, increasing the size of the Credit Facility from $4 million to $5 million and extending the maturity date of the Credit Facility from February 28, 2023 to August 31, 2023. The Proposed Amended Credit Facility shall have an interest rate of 15% per annum. The proposed $2 million loan transaction with two lenders previously announced on December 29, 2022 will not proceed.
The Company also announces that it has accepted the resignations of Mark Nawacki, Sarah Prichard and Allan Mandelzys as members of the board of directors of the Company effective immediately.
Mar. 2 - Announces Amendment to its Credit Facility: The Amending Agreement amends the Credit Facility by: i) increasing the size of the non-revolving term loan under the Credit Facility by $1 million from $4 million to $5 million; ii) extending the maturity date of the Credit Facility from February 28, 2023 to August 31, 2023; iii) providing for a guarantee of $1 million of the Company’s obligations under the Credit Facility by a third party guarantor; iv) requiring that $1 million advanced under the Credit Facility be promptly repaid by the Company upon the closing of either an equity investment in the Company of $1,000,000 or greater or an unsecured subordinated loan of $1,000,000 or greater by a company controlled by the Guarantor. As consideration for providing the Guarantee, the Guarantor will be issued 2,500,000 warrants to purchase common shares at $0.10 per Share for a period of one year.
Apr. 18 - Announces Additional coactiv+™ Animal Health Licensing Agreement: Signed a licensing agreement with Skout’s Honor Pet Supply Company for its patented coactiv+™ technology in pet oral care applications.
Skout’s Honor has been granted a ten-year license for the non-exclusive use of Kane’s coactiv+™ technology under their own brand in North America while STEM Animal Health (“STEM”), a subsidiary of Kane and joint venture formed with Animalcare Group PLC, will continue to commercialize its bluestem™ line of pet oral care products.
STEM will receive a $500,000 USD licensing fee from Skout’s Honor to be paid over the course of the agreement as well as an ongoing royalty on all Skout’s Honor’s sales of products that use the coactiv+™ technology.
Although STEM will continue to commercialize the bluestem line of products across North America, Kevin Cole, STEM’s President and CEO will be departing the company.
In September 2020, Kane formed STEM as a joint venture with Animalcare Group plc. STEM is dedicated to treating biofilm-related ailments in animals. STEM has a global license over Kane’s existing range of animal health oral care products and in collaboration with Animalcare focuses on the research and development of novel animal treatments. Animalcare has a one-third plus one share equity interest in STEM with the balance owned by Kane.
Apr. 20 -Announces Distribution Agreement with ProgenaCare Global for its coactiv+™ Antimicrobial Wound Gel: ProgenaCare will have exclusive distribution rights in the United States wound care market for Kane’s coactiv+™ Antimicrobial Wound Gel. Kane will receive a $500,000 USD upfront payment from ProgenaCare once it obtains 510(k) clearance from the U.S. Food and Drug Administration (FDA).
Apr. 20 - Announces Fourth Quarter and Full Year 2022 Financial Results
May 25 - Announces FDA 510(k) Clearance for its coactiv+™ Antimicrobial Wound Gel:
“FDA clearance of our coactiv+ Antimicrobial Wound Gel, is a major milestone for Kane,” said Marc Edwards, President and Chief Executive Officer. “We’re bringing an effective, differentiated, and accessible product to the annual USD $200 million1 U.S. antimicrobial wound hydrogel market. This clearance also opens the door for a large number of global markets. Building on our previously announced agreements with ProgenaCare Global LLP (“ProgenaCare”) (United States) and Salud Pharma S.A. (Panama, Columbia and Costa Rica), we anticipate future global distribution agreements. This clearance triggers a USD $500,000 initial payment from ProgenaCare."
May 25 - Announces First Quarter 2023 Financial Results.
Summary
510(K)
November 2022, Kane made a 510(k) submitted its coactiv+™ Antimicrobial Hydrogel for FDA approval. Last week, Kane finally received the FDA Clearance. Coactiv+ is intended to be used for the management of ulcers (including diabetic foot and leg ulcers and pressure ulcers), 1st and 2nd degree burns, partial & full thickness wounds, large surface area wounds and surgical incisions for adult populations.
Distribution
Kane signed two distribution partnerships. The first with Salud Pharma (Costa Rica, Columbia and Panama) for both Antimicrobial Hydrogel wound care and DermaKB™ scalp care products (January 2023). The other with Progenacare Global, an exclusive deal for $0.5M USD (USA) in April 2023.
Licensing
An agreement with Skout’s Honor Pet Supply Company for its patented coactiv+™ technology in pet oral care applications was reached in April. STEM will be issue a $0.5M USD to Kane in addition to royalties (April 2022).
Appointments
The departure from three board members and the head of STEM were noted in the last period. The board member departure also coincided with the cancelation of a loan agreement for $2M.
Earnings
Overall, revenues for FY 2022 and Q1 2023 are up from the respective previous period. FY2022 shows an improvement on the last few years. Otherwise net losses are contained but still exceed revenues significantly.
Financing
Initially in December 2022 Kane announced a $2M loans for 4.7M shares from two lenders. March 2022, the extension of the term facility with Pivot financial was reached increasing the amount from $4M to $5M and extending the maturity date to August 2023 at 15% per annum and canceled the previous $2M loan arrangement.
However, part of the deal included 2.5M warrants at $0.10 cents to the guarantor for a year.
Awards
A disbursement of $0.4M USD were received in October 2022 for the continued clinical development of Kane’s DispersinB® Hydrogel to treat biofilm-mediated antimicrobial resistance in non-healing chronic wounds from the Medical Technology Enterprise Consortium Research Project funded from the US Department of Defense.
This additional funding supplements the approximately $2.7 million USD in non-dilutive funding previously awarded
In short
In FY2022, Kane set three goals for itself and was able to complete two. i) Submission of 501(k) and FDA approval of its coactiv+™ Antimicrobial Hydrogel; ii) Signing a of commercial partnership. for coactiv+ and DermaKB (i.e. Salud Pharma and Progenacare Global). However, the company was unable to achieve its third objective: iii) "Initiate human clinical trials for Dispersin B wound gel in Q2 2022". These are set to begin in Q3 2023 (see Investor Presentation).
The reception of the 501(k) FDA approval was short lived especially given the warrant profile for the company.
Although, the subsequent events detailed in the Q1 2023 filings can be a factor: On April 20, 2023, the Company issued 2,500,000 warrants to acquire common shares of the Company at a price of $0.10 per share for a period of one year from the date of issuance. The warrants are consideration provided to a third-party for their guaranty of the $1,000,000 increase in the credit facility related to an amending agreement signed with Pivot on March 1, 2023.
In addition to the state of the company's balance sheet, the need for manufacturing (coactiv+) and clinical trials (Dispersin B) suggests that more funds will likely be needed for commercialization which could explain the lack of sustained appreciation after the announcement of the FDA 501(k) Clearance.
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