Good afternoon, and welcome to Numinus Wellness Incorporated third quarter fiscal 2024 results conference call. A question and answer session for analysts and institutional investors will follow the formal remarks. As a reminder, this call is being recorded. I would now like to turn the conference call over to your host, Craig MacPhail. Please go ahead.
Thank you, Krista. Good afternoon, everyone, and thank you for joining us for our conference call today. Discussing Numinus's performance are Peyton Nyquist, founder and CEO, and Melanie Beaulieu, interim chief financial officer. The following discussion may include forward-looking statements that are based on current expectations and are subject to a number of risks and uncertainties. The risks and uncertainties that could cause our actual financial operating results to differ significantly from our forward-looking statements are detailed in our MD&A for the quarter ended May 31, 2024, and in our other Canadian securities filings available on SEDAR. Numinus does not undertake to update or revise any forward-looking statements to reflect new events or circumstances, except as required by law. Our third quarter results were released earlier this afternoon. We encourage you to review our earnings release, MD&A, and financial statements available on our website and SEDAR.
As a reminder, all figures discussed today are in Canadian dollars. I'll now turn the call over to Peyton Nyquist, Chief Executive Officer.
Thanks, Craig, and good afternoon, everybody. I'd like to start by extending our utmost gratitude that the work that we do is conducted on the unceded homelands of the Musqueam, Squamish, and Tsleil-Waututh people, and on other sovereign indigenous lands and territories across Turtle Island. At Numinus, we are committed to a path towards reconciliation through continuous learning, reciprocity, and humility. In Q3 fiscal 2023, we embarked on a transformative initiative aimed at building on our position as a difference maker in the field of psychedelic therapy to also achieve profitability from our existing operations. This journey began with some difficult but necessary decisions to right-size the company. We eliminated non-revenue generating business lines and roles, including the closure of our Numinus Bioscience business and our unprofitable clinic in Phoenix, Arizona.
Additionally, we reduced our headcount by 60%, focusing our remaining team on growth-oriented initiatives and activities. Our goal was to reduce our burn rate to under CAD 1 ,000,000 per month. We reached that milestone this past October, and after accounting for one-time costs in our second quarter, we've successfully maintained that target into the third. In the past quarter, we further optimized our operations by transitioning out of our Canadian clinic operations. Through our agreement with Field Trip Health, our Canadian therapists were allowed to transfer their contracts to Field Trip, leading to the closures of our clinics in Montreal, Toronto and Vancouver. This transition represents a significant asset light opportunity for us and could serve as a model for future development. We will endorse Field Trip Health's clinics and receive a referral fee for therapists who join their team.
We will also collaborate on marketing campaigns for training, therapists, and patient recruitment. As a part of our recently launched Numinus Network, our former Canadian therapists have access to the latest therapeutic protocols, including ketamine and psychedelic-assisted therapies, along with ongoing support and continuous learning opportunities. Today, our operations are focused on our U.S.-based clinics. Our therapists are full-time Numinus employees, optimized to provide efficient, high-quality care, focusing on ketamine and alternate therapies. In Q3, appointments in our U.S. clinics decreased by 6% over Q2, with new client appointments rising by 24% and ketamine and Spravato appointments increasing by 15%. Since inception, our clinics have treated over 23,000 patients, and over that time, we have developed unique expertise in psychiatric services, medicine management, psychotherapy, and advanced therapies.
A vital part of that expertise is successfully navigating the complex US insurance system to achieve reimbursement for treatments. As well, we have built strategic relationships with leading psychedelic drug developers such as Lykos, Compass Pathways, Cybin, Usona, MindMed, and Beckley, and have been at the forefront of important clinical trials for MDMA, psilocybin, LSD, and 5-MeO-DMT. After the end of the past quarter, we decided to further leverage this significant experience in clinical care and research with the proposed acquisition of MedBright AI. MedBright is a Canadian company that has developed a medical-focused artificial intelligence and machine learning platform to drive clinic efficiency. MedBright's technology can transform the expertise that we have honed in patient care into an AI solution that will allow a therapist to be able to provide psychedelic-assisted therapy care without the investing in the significant infrastructure required.
We see this as a significant opportunity. Ketamine is growing as an accepted treatment for depression, PTSD, and anxiety. Spravato, Janssen Pharmaceuticals' version of ketamine, doubled in sales over the past year, indicating an increase in demand. Therapists, however, are challenged to put in place the significant infrastructure and expertise to meet patient demand. The Numinus and MedBright AI solution can provide the infrastructure in a SaaS model. This includes a call center to convert patients to new appointments, pre-authorization systems to ensure insurance coverage, drug protocols, clinical notes to bill, billing processes for relevant reimbursement codes, and aftercare process and recurring therapy protocols and reimbursement. We believe this solution will be invaluable to therapists looking to provide ketamine therapy to their patients. As other psychedelic compounds are approved for treatment, the platform can be adapted to encompass new protocols.
This acquisition is an important milestone and is a culmination of our efforts over the past year to align Numinus with revenue growth opportunities we see in the US mental health care sector, with the delivery of high quality care to a large population of patients in need of drug-assisted therapy and mental health services. We will rebrand to Numinus Intelligence once the acquisition closes, to mark this new strategic direction and focus. Our new name reflects our commitment to leveraging AI and data science to expand mental health services and solutions across the US. The acquisition is expected to close this August after completing a definitive agreement, the usual regulatory approvals, and shareholder approval. Melanie will now provide a financial overview of the quarter.
Thanks, Peyton, and good evening, everyone. This quarter's revenue was CAD 4,300,000 , compared to CAD 4,400,000 in Q2 2024, and CAD 5,200,000 in the same quarter last year. The 1.9% quarter-over-quarter decline is a result of a decrease in outpatient services, services revenue due to the wind down of the Arizona clinics. Revenue from our U.S. wellness clinics network was CAD 3,400,000 , compared to CAD 3,600,000 in Q2 2024, and CAD 4,100,000 in Q3 2023. The year-over-year decline reflects our focus on optimizing our operations and the closure of the clinic in Phoenix, Arizona. Revenue from Cedar Clinical Research increased 10.7% to CAD 800,000 from CAD 700,000 in Q2 2024, due to the launch of a clinical trial with additional patient appointments.
As the timing of clinical trials creates variability in CCR's quarterly revenue, a more illustrative way to look at CCR revenue is on a trailing twelve-month basis. CCR generated CAD 3,800,000 for the twelve months ending May 31, 2024, compared to CAD 3,100,000 for the twelve months ended May 31, 2023. Our practitioner training program has experienced solid growth since its launch, with over 1,650 learners on May 31, compared to 1,400 at the end of Q2 2024, and just 400 in Q4 of fiscal 2023. In Q3, Numinus Digital's revenue was CAD 168,830, a 114% increase over CAD 78,837 in Q2 2024.
Gross margins in Q3 were 22%, down from 24% in Q2, and 34.5% in Q3 2023. The decline in revenue is due to the company's focus on profitable operations. Operating expenditures in Q3, excluding other items, were CAD 4,900,000 , compared to CAD 6,300,000 in Q2, a 22% decrease. The decrease reflects the success of our cost-cutting initiatives. In the quarter, in the quarter, cash burn was less than CAD 1 ,000,000 per month. Also reflective of our cost containment, our net loss from continuing operations this quarter was CAD 5,100,000 , or CAD 0.02 per share, compared to CAD 5,700,000 and CAD 0.02 per share in the prior quarter. We ended the quarter with CAD 3,700,000 of cash on hand and CAD 2 ,000,000 of working capital.
Going forward, our focus will continue to drive high margin revenue and optimize our operating expenses. In preparation for the proposed acquisition of MedBright, we have put in place a transition team to reduce costs, preserve cash, and work to increase revenue through the period before the transition is completed. With that overview of our financial results, I'll turn the call back to Peyton for some closing remarks.
Thanks, Melanie.
Peyton.
As you heard today, Numinus continues to have success transitioning to a leaner and more efficient organization. The proposed MedBright transaction will amplify the opportunities available by leveraging our unique expertise to create an AI-enabled solution available to over 200,000 mental health providers in the United States. Closing the transaction opens up a growing high margin revenue opportunity for Numinus and furthers our mission to provide transformative care to thousands of patients. Before we open up the call to live questions, we'll take some questions sent in to us by investors.
Hi, Peyton. I have two questions sent to us from investors via email. Here's the first one: With the FDA advisory committee voting against MDMA-assisted therapy, what is your outlook for it being approved this August by the FDA?
Thanks, Craig. Given the strong clinical results for MDMA-assisted therapy and the significant need for care, while we were disappointed by the decision by the advisory committee. However, we note that the FDA is not bound by the committee's recommendation, and in about one-third of the cases, has approved treatments that the committee has recommended against. If the FDA does not approve it in August, I'm confident that the committee's specific concerns can be addressed and the treatment can be approved.
Thanks. Now, the second one: what is the actual size of the opportunity with Numinus Intelligence?
We consider the addressable market for AI-enhanced psychedelic therapy clinic management to be significant. Regarding the patient population, an estimated 14 ,000,000 people have conditions appropriate for psychedelic-assisted therapy, and about 200,000 mental health providers, including psychiatrists, psychologists, and clinical therapists, can provide care. We see the offering of a solution enabling providers to serve this population with reimbursed care without the investment in infrastructure or time to gain expertise will be very attractive. This also creates opportunities for us to introduce Numinus training and support through the Numinus Network. I believe with that, we'll open up the call from analysts and institutional investors. Operator?
Thank you. We will now begin the question and answer session. If you'd like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. Your first question comes from Michael Okunewitch with Maxim Group. Please go ahead.
Hi, Peyton. Thank you for taking my questions today.
Thanks, Michael.
So I guess the first question I have is just with regards to the MedBright acquisition, the proposed platform that you would be offering, is this completely new, and would it need to be developed, or is this something that would be plug and play? And then what about their existing AI offering?
Yeah. So, you know, a lot of, a lot of what they've built is very complementary to what we've been also creating on the Numinus Network side. And they've, they've done a significant amount of work building out that platform with a couple of their products, particularly, their, their main product, which they've also been able to launch into a number of clinics already. So there's a platform there that, we, we can start to utilize immediately, that, that we can incorporate into the Numinus clinics. Certainly, as, as we grow and expand, there's, there's opportunities to continue to grow and expand that platform as well. But something that we don't, we don't believe requires a lot of resources, and frankly, the, the data that, that we've been able to aggregate out of the Numinus own clinics, greatly enhances that model as well.
All right. Thank you. And then, do you have any additional color on your expectations on timing for that to close?
Yeah. So we're just working through the process right now, needing to complete definitive agreement. And then there's typically about a 60-day period after signing of the definitive agreement to do the shareholder vote on Numinus' side. But we should be able to see that happen fairly quickly with, as I mentioned, a proposed timeline of end of August or early September.
All right. Thank you. And then just one last one for me that's more of a financial housekeeping question. I noticed that, in terms of clinic revenues, you're down by about 18%, but you did have 6% growth sequentially on the clinic appointments. Could you kind of help quantify what drove that, I guess, disconnect?
Yeah. So as I mentioned, the closure of the Arizona clinic, and just transitioning some of the services to some of the higher margin services that we've got. But Melanie might be able to provide some color there, too.
That was actually it. The appointments went up, and the revenue was because of the closure of the Arizona clinic and some differences in some of the services that we provided.
All right. Thank you very much for taking my questions.
Thanks, Michael.
We have no further questions at this time. I will now turn the call back over to Peyton for closing remarks.