Q1 2021 Co-Diagnostics Inc Earnings Call

[music].

Good day and welcome to the current diagnostics first quarter 2021 earnings call. All participants will be in listen only mode should you need assistance. Please signal conference specialist by pressing the star key followed by zero.

After todays presentation, there will be and opportunity to ask questions.

I ask a question you May press Star then one on your phone to withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Andrew Benson head of Investor Relations. Please go ahead.

Thank you I'm, Andrew Benson and joining me. This afternoon are members of the Kodak Gnostics management team, including Dwight Egan, Chief Executive Chief Executive Officer, and Brian Brown, Chief Financial Officer.

We will begin the call with management's prepared remarks, and then open up the call for questions from our analysts before we begin we would like to inform our listeners that certain statements made by co diagnostics. During the course of this call may constitute forward looking statements any statement about company expectations beliefs plans objectives assumptions of future events or performance are forward looking statements.

For example statements concerning 2021 financial and operational guidance, the development regulatory clearance and commercialization and features and new products plans and objectives of management and market trends are all forward looking statements.

The company believes these state believes these statements are based on reasonable assumptions. However, these statements are not guarantees of performance and involve known and unknown risks and uncertainties that may cause the actual results to be materially different from any future results expressed or implied by such statements.

Important factors, which could cause actual results to differ materially from those in these forward looking statements are detailed and code agnostics filings with the S. E C.

Co diagnostics assumes no obligation and expressly disclaims any duty to update any forward looking statements to reflect events or circumstances occurring after this call or to reflect the occurrence of unanticipated events. In addition, the company will discuss certain non-GAAP financial measures during today's call.

These non-GAAP financial measures should not be considered a replacement for and should be read together with GAAP results.

We refer you to the company's earnings release out shortly before this call which contains reconciliations for the non-GAAP financial measures presented to their most comparable GAAP results at.

At this time I would like to turn the call over to co diagnostics, Chief Executive Officer, Dwight Egan blight.

Thank you Andrew and thank you all for joining us on this call. We will provide an overview of our results for the quarter updates on key financial performance metrics and a discussion of progress and future strategy. Then we will take questions from our analysts.

We are very enthused about the performance of <unk> diagnostics during the first quarter. The positive impact we have been able to have and various regions and the value we've been able to provide to our shareholders. We would like to thank our employees for their dedication and actions that delivered outstanding results for the quarter. We are also excited about the continued progress the company.

And has made so far and Q2.

Sales of our test continued to be strong and both domestic and international markets and overall sales momentum momentum is continuing to be consistent with prior quarters since the pandemic began.

As expected demand for our logic Smart COVID-19 test continued to drive sales and we anticipate demand for our portfolio of products to continue as we remain well positioned positioned to be a leading global molecular diagnostic company.

As we forecast during our first quarter call, we expected the revenue mix to trend more towards the international markets as 2021 progressed.

The Q1 domestic and international revenue mix was essentially equivalent to prior quarters and as we predicted in our last call. We are seeing some trending towards international sales in Q2, but as stated earlier overall sales and that momentum has remained stable.

Companys ability to maintain consistent sales, even as vaccination and the U S moves along is the result of several factors, including our more durable business model, comprising a large number of distributors and customers and over 50 foreign markets and our broad based network, a CLIA lab customers and the U S.

The general sentiment in the U S is relief as vaccination rates rise, but Meanwhile, the world as a whole is experiencing its highest level of infections. Since the pandemic began seeing surges and cases and deaths and some countries. This means that new mutations variants and strains are evolving that may compromise the worldwide sits.

Tuition keep in mind that vaccination in the United States has just crossed through the one third of the country being fully vaccinated, but on a worldwide basis that equals less and one 5% of the Earth's population worldwide only about 4% of the population is vaccinated, India is at 2% to 3% and.

And many countries have no material access to vaccines.

That is why we have always agreed with Dr. Michael Oster home a member of the President's COVID-19 Task Force, who said, we're not going to be Vaccinating, our way out of this to eight plus billion people and the world right now According to the New York Times yesterday, and the U S more than 600 people die from COVID-19 each day on average and.

He is desktop has been horrific cases had been rising and Cambodia, Malaysia, Thailand, and Brazil, and much of South Africa, South America are struggling too.

All of these serve as reminders that the world remains vulnerable to new waves so for.

Feis it to say that the worldwide incidence of COVID-19 infection is currently more prevalent than at any other time during the pandemic.

And the United States, a great deal of political and media attention has been directed to the status of vaccinations and the country, but notwithstanding the great efforts to curtail COVID-19 through mass vaccination the level of infection and the U S is still on par with what we were experiencing at the beginning of last summer, which as listeners may recall was.

Deem to be a very serious situation and every region of the country.

Moreover, as previously mentioned worldwide, we are experiencing more covenant infections, and we have ever had before in other words, the political and media focus on vaccination progress and the United States is masking the true prevalence of COVID-19 cases around the world and to some extent and the United States as well.

So to be clear, let me reiterate sales remained strong and our domestic and international distribution model is proving to be a durable and diverse business model. These conditions are providing the cash flow for co diagnostics to increase the number of markets, we serve and to more fully develop the capabilities of our powerful and unique intellectual.

<unk>, which we are about to leverage and significant and far reaching ways over the next several quarters and in the years to come.

Turning to normalization of society, we believe that many organizations will develop testing protocols to promote the safety of their employees and customers as normalization has attempted and countries where vaccination is more prevalent.

Restaurants for example will want to inform patrons that the staff is tested on a regular basis. So the transmission, resulting from close contact with the server and diner is minimized and.

And a recent survey two thirds of participants said they would rather quick and return to the workplace with more than half side and COVID-19 is the primary reason biz.

Businesses want to provide a COVID-19 safe work environment for employees and also desire to avoid potential legal liability for negligence claims that may obtain if prudent regular testing protocols are ignored and employees customers or their families get sick and possibly dive from COVID-19 exposure while at work.

Obviously airlines cruise ships theme parks and entertainment venues are also concerned about ensuring COVID-19 and say if conditions for their employees and customers.

Over the last 16 months since we first engineered a COVID-19 test doing our part to supply test kits around the world has been our primary concern we have contributed in important ways to the ongoing development of several new innovations for mass scale testing as well as point of care and at home applications that are and wide used around the world.

For example in conjunction with some of our capable partners such as clinical reference laboratory one of the largest privately held clinical testing laboratories, and the U S. New PCR science and technology pioneered by the company and <unk> is enabling and expanding the applications and accessibility of PCR tests, including.

<unk> noninvasive and highly accurate saliva PCR test for at home collection and November <unk> announced that it is selling its CRM and rapid response saliva based COVID-19, RT PCR test directly to consumers and in February of this year, CRM and Walgreens announced that the FDA authorized CRA all rapid.

And once COVID-19, saliva test based on co diagnostics co primary technology is now available through Walgreens find care, a digital health platform available on the Walgreens, App and Walgreens Dot com offering consumers the convenience of self collecting the test right in their own homes without supervision and <unk>.

Carl announcements states that the test uses co primer probes and primers developed by co diagnostics with high degrees of sensitivity and specificity and a simple saliva collection device that can be administered and virtually any setting with results and typically 24 hours that are delivered via a secure online computer or mobile device platform.

While we observed the daily infection and death counts around the World. We are also of course able to monitor that daily influx of demand for our tests, which now includes several different variations of our COVID-19 assays and several different modes of sample collection and instrumentation and <unk>.

Strong level of orders has not abated and we believe the expected shift of geographic emphasis trending towards our international clients.

Flex the lack of vaccination combined with mutations and more pernicious variants or other causes which has resulted in infection and death that is off the rails and some countries such as India and Brazil.

Just how long the virus continues to run somewhat unchecked and certain areas of the globe, we cannot say, but if our order flow for tests is any indication of the world's predicament, we potentially have a long way to go before the world as COVID-19 Safe. In addition, much attention is being placed on normalization and the developed world, including the United States to be.

Sure. This is still in its infancy, and a significant amount of ongoing and regular testing is likely to be needed in order to create COVID-19 safe work environment safe schools, safe restaurants, and safe travel and sports venues since.

Since cold and flu symptoms mirror, COVID-19, and the beginning stages people potentially infected with COVID-19 will need differentiation tests. Our ABC test for example has traversed from comprising 1% of fourth quarter testing orders to 5% and Q1 and 14% so far and Q2.

We will continue to supply and the United States with critical PCR tests as normalization has attempted and we will also continue to supply a significant number of tests to international customers for our comparatively a long way from COVID-19 safety and far behind the U S with respect to vaccinations and data is only at 2% to 3% vaccination.

Levels and Africa is only at approximately 1%.

That's how we see the current environment.

I will now turn to a discussion of the icon testing platform, which we regard as the most important and all our inventions and technologies and represents the culmination of a herculean effort on the part of the company as well as other world renowned experts who are involved and its development.

The icon platform includes several breakthrough technological advancements the unique chemistry includes co diagnostics flagship patented co primary molecules in our lifeline or freeze dried reagent that is activated with the company's direct saliva extraction free protocol co primary virtually eliminate cross reactivity.

Which enables multiplexed assays with a high level of accuracy. The device is being developed by Trailblazing real time, PCR scientists, who are renowned for previous PCR based inventions currently and widespread use around the world by prominent entities, including Roche via Mary you and the U S government.

The icon devices designed to deliver accurate COVID-19, PCR results and less than 30 minutes from patient direct saliva samples, which do not require extraction.

A simple saliva sample is placed into a disposable receptacle, which has been inserted into the compact platform and a command and from a smartphone app starts to test the smartphone app displays the progress of the tests, concluding with the result, and about 30 minutes.

Additional cloud based data applications facilitate multiple paths for data distribution to appropriate parties.

There are several global trends that motivated co diagnostics to create the new platform first and foremost as a long term need for molecular testing that is inexpensive providing fast results and at home point of care and remote locations and just as important providing results that are accurate, we believe co diagnostics icon platform will.

Meet the critical imperative for at home and point of care locations that need to be addressed during the pandemic.

But the icon aspirations go far beyond COVID-19. Indeed, it is designed to cover any RNA or DNA pathogen for which the company develops and extraction free test.

As the unstoppable trend and health care moves rapidly towards decentralized healthcare locations, including telemedicine and patients will want faster diagnosis than ever before but the results have to be reliable and test cost need to be cheap among other considerations take.

Taking all of this into account, including the evaluation of early entries, hoping to fill this need co diagnostics embarked on the most significant development project and its history to create what we believe will be one of the most significant diagnostic conventions ever engineered for worldwide health care, we believe the ramifications of this develop.

<unk> will be widespread and pervasive.

The company has been vigorously pursuing the icon development and we are very aware of competitive offerings seeking to attract the same vast market that we envisioned.

But it is one thing to be first and another thing to be right.

Diagnostics believes it will be the first company to get it right as we move forward and introducing this brilliant new diagnostic platform by.

By getting it right, we mean that the eikon platform will be a very low cost fully integrated sample to result, molecular diagnostic platform designed to meet all three criteria of cheap fast and accurate testing positioning the company to revolutionize molecular testing and a way that could drive co diagnostic results for many years.

For us to come.

Traditionally molecular testing has been a complicated process that involves numerous steps. These steps include extraction and amplification detection interpretation and reporting results because of the complexity of the process sophisticated off and centralized labs with trained personnel using expensive equipment, we're required to process the test.

In contrast, the icon platform through a combination of unique and powerful technologies and innovations will be able to complete all necessary steps and a sample to result mode with almost no human interaction besides spitting into a small container, placing the container into the compact device and activating the test or a smart.

Phone App the user can then walk away while the system provides rapid results through the smartphone app the.

And the progress that has been made on the device and a relatively short amount of time is truly staggering and we anticipate being able to provide updates on the validation and timeline for an application with the FDA for emergency use for the device and the initial test by the next earnings call as well as our more long term expectations for additional regulatory clearance and.

And updates on the planned menu for the platform.

The key to getting it right is not just for the short term. It is rather a long term strategy that can replace antigen testing because it has all of the primary benefits of an antigen test low cost rapid testing at home and point of care locations. While also delivering gold standard PCR accuracy as opposed to less accurate.

<unk> and testing over.

Over the next several years the company expects to conduct sales campaigns to a vast number of potential clients, which include doctors and dentists offices schools and college campuses theme parks Airlines cruise ships sports venues restaurants, and others. We believe the overall value proposition of this product has the potential to leapfrog over.

<unk> systems currently in place as well as open up the at home and point of care markets and ways not previously addressed by other less nimble technologies for.

From the creation of the co primary technology to the engineering of this device to the human factor studies and focus groups to the regulatory team. This product development represents a high level of innovation expertise and skill sets, which together for 10 to successful future for the product and the company as a whole.

Let me now turn things over to Brian Brown, our CFO for a review of the key financial metrics and numbers after which I will conclude with the discussion and future plans outside of what has already been discussed here Brian.

Thanks Dwayne.

For the quarter revenue increased to 20 point and zero million from $1 5 million for.

The prior year first quarter.

Merrily due to continued sales of the largest smart COVID-19 test.

Gross profit increased from $1 1 million and the first quarter of 2020 to $16 8 million in the first quarter of 2021.

Representing 83, 7% of consolidated revenue due to improved product mix as compared to the prior year period.

Total operating expenses for the quarter inclusive of corporate general and administrative and sales.

Sales and marketing research and development and depreciation and amortization increased $4 3 million from $2 $1 million and the first quarter of 2020 to $6 4 million and the first quarter of 2021, primarily driven by overall business activities, resulting from our <unk>.

Kris and revenue and investments in people processes and research and development.

Income from operations for the first quarter improved to $10 3 million versus an operating loss in the prior year quarter due to continued strong revenue and gross profit.

We achieved income before taxes of $9 9 million.

Compared to a loss of $1 1 million in the prior year comparative quarter.

As it relates to income taxes.

For the three months ended March 31, 2021, we recorded income tax expense of 2.0 million representing.

Representing a corporate effective tax rate of 21%.

We achieved net income for the first quarter of $7 9 million.

Or 2006.

Per fully diluted share compared to a net loss of $1 1 million and the prior year first quarter.

Which was primarily the result of sales of our largest smart COVID-19 test and resulting margins from those sales offset by increased operating expenses and corporate income taxes.

Turning now to our balance sheet and liquidity.

Our balance sheet remains strong, allowing us to invest and additional growth opportunities.

As of March 31, 2021 cash.

Cash cash equivalents and marketable securities totaled $60 1 million and increase of $12 8 million from December 31 2020.

We continue to remain well capitalized with no debt and a strong cash position that is afforded us financial flexibility as we execute our strategic growth plan, which includes investment in our people processes and research and development.

While we anticipate increased expenses in the second quarter of 2021, we expect our cash balance to continue to grow with no debt.

We ended the quarter generating $12 3 million and cash from operations, which represents an improvement of $13 $6 million over the prior year quarters use of operating cash of $1 3 million.

This significant increase in cash flow from operations is a testament to the hard work of our people and continued improvement of our processes.

Now turning to our guidance for the second quarter of 2021.

We anticipate revenue for the quarter totaling between $20 zero million.

And 22.0 million.

Due to continued strong demand for our products.

Including expected R&D spending on our new diagnostics platform, we anticipate diluted earnings per share between 19% and 23.

Based on 30 million shares outstanding and and corporate effective income tax rate of approximately 21.0%.

As noted previously we remain confident and our ongoing profitability and we will continue to invest in our growth.

We are expanding our international footprint and <unk>.

Sales continued to increase abroad, we are building upon our solid business Foundation, and our and a strong position to continue progress and the company forward.

We continue to innovate and leverage our technologies and order to scale and develop other necessary testing, which will allow us to more quickly enter markets, while staying focused on our long term growth strategy.

Let me now turn things back over to Dwayne.

Thank you Brian.

Our international footprint continues to grow as sales increase and we believe that this fact sets co diagnostics apart for many other participants and the COVID-19 testing space are.

Our distribution model is diverse with multiple distributors and covering over 50 countries.

This means we are not limited to the traffic generated through a few CLIA labs by limited numbers of mass testing sites our.

Our customer bases worldwide, which has mentioned is currently experiencing high levels of infection, along with low levels of vaccination.

Also our PCR test and contrast antigen test is even more important as the overall value proposition of less sensitive technologies diminishes.

We are confident and co diagnostic growing portfolio of molecular diagnostics products and we will continue to leverage our co primary technology platform as we scale up that menu, allowing us to provide more products to more markets even faster.

Key among these anticipated products are those within our liquid biopsy vertical, which we anticipate playing a significant role and as part of our growth strategy. We believe that liquid biopsy testing for cancer and cancer treatment monitoring is the future of cancer detection and the global market as a whole is expected to grow from a little over one.

1 billion and 2019 to over $5 billion and 2027 as more hospitals labs and physicians adopt liquid biopsy as the standard for cancer detection and monitoring that.

The company is pleased with the results that we have been seeing during the development process for liquid biopsy products built on the co primary platform and we anticipate being able to provide technology and development updates for this vertical soon the.

And the company's regardless expanded international presence to also be a considerable assets not only for our existing COVID-19 suite of diagnostics, including our ABC and direct saliva tests, which continued to see increasing sales, but for the other products planned and in development. Among these products include diagnostics for hepatitis B and hepatitis.

To see the combined global market size for which is estimated to grow to nearly $7 billion by 2025, nearly every single international customer or distributor along with several domestic customers have expressed interest and these tests once developed and brought to market. This is similarly true for human papilloma virus and HIV.

<unk> with respect respected global market sizes of over 1 billion expected in 2025, and $4 9 billion expected in 2023.

With growing global markets and ready made customers for these diagnostics the value of our growing network of distributors and customers becomes apparent.

Other tests currently in development include those for RSV and malaria test that uses our novel co primary technology to differentiate between species of the parasite that might be resistant to certain treatments and STI panel for gonorrhea and chlamydia and more.

Aside from these products are vector control vertical is also showing growth this year with some of our largest orders of tests received to date.

There are relatively few diagnostics companies developing and marketing tests for this largely unaddressed customer base. Our revenue from the segment is entirely domestic and since our vector smart products are not used for human diagnosis. We are able to offer these tests throughout the country without an EUA five 10-K clearance or other premarket authorization.

<unk> from the FDA.

Additionally, we continue to develop our agricultural vertical which is supported by strong partnerships and customer relationships with companies like LG <unk> Biosurgery and Bayer.

With regards to India, we believe that the countries approach to testing and the latter part of 2020 and the first quarter of 2021 failed to reflect the seriousness and danger of COVID-19, as a result, <unk> experienced a monetary loss and both of the last two quarters. The current surge of cases and death that is plaguing the country.

He has brought with it a renewed focus on the importance of accurate reliable affordable high throughput PCR testing exactly the kind of support that <unk> has been well positioned to provide as a result, so far this quarter. The joint venture is experiencing a dramatic uptick and a number of tests sold.

And even before the pandemic began India has been poised to become the largest healthcare market on the planet and its high infectious disease burden has made the country and area of focus for co diagnostic since even before we established the coast Sarah Diagnostics joint venture. These factors along with the quality of our joint venture partners and stay.

The art manufacturing facility have contributed to making India, a critical component of the company's long term strategy, especially in that region of the world.

Keep in mind that it has never been more important to ensure that we are having maximum positive impact in a region, where we are able to help as many people as possible, which includes pricing our products at prices that can be supported by the market.

However, each new customer and distributor with whom we forged a solid relationship during the pandemic and largest our footprint and will afford even more future opportunities related to the health care market for other eventual products the joint venture's dedication to the Indian people and providing quality real time PCR tests has expand.

Territory to about 160 current customers, which includes equipment installation and 73 laboratories over 40 of which did not have access to PCR technology prior to become <unk> customers. The joint venture is already awaiting the export quota to be assigned for additional test for the surrounding Asia Pacific.

African and middle East territories, and as and the process of applying for CE IBD clearance for several of its products.

2020 was truly an inflection point for <unk> diagnostics, illustrating our ability to successfully and profitably develop and bring high quality diagnostic products to the market and our upcoming menu that I described previously illustrates that our near and long term growth plans will allow us to continue to operate profitably and the future.

<unk> independent of revenue derived from our primary COVID-19 test.

We're already seeing our CE marked ABC test for influenza and COVID-19, and begin to replace orders for the Standalone and COVID-19 test a fact, which we believe is indicative of the direction COVID-19 testing is going as the disease becomes endemic and many parts of the world and bodes well for our continued foothold in the respiratory.

Tori diagnostics space.

But it is important not to lose side of the fact that the need for COVID-19 diagnostics remains strong at the present time and demand for our menu of COVID-19 tests seems to indicate the need for continued testing domestically and especially internationally. Despite widespread vaccination and the U S and certain other more developed countries.

That concludes our prepared remarks, operator, we are ready to begin the question and answer portion of the call.

We will now begin the question and answer session to ask a question you May Press Star then one and you touched telecom if youre using a speakerphone. Please pick up your handset.

Sure.

Yes.

Okay and part of your question is bad debts, and we would like to withdraw your question. Please press Star then two.

And profile, we will pause momentarily to assemble our roster.

Our first question comes from Chen with H C. Wainwright. Please go ahead.

Thank you for taking my questions and congratulations for a solid quarter. My first question is is kosta arrow's operations and getting negatively.

Impacted by the pandemic.

Yeah.

Thank you for that question with respect to co Sarah <unk>.

And so Sarah is our laboratory and Corsair and Indian Minoli, India was the very first.

<unk> in the country that received permission to make a COVID-19 test and as you know during 2020, we experienced.

A robust testing sales environment throughout India, and as I mentioned in my prepared remarks during.

During the last couple of quarters, when India basically dropped the ball on testing now which has resulted in a just devastating environment and that country.

Yes and actually.

And I was thinking what I'm and.

I'm not actually asking for the output I'm asking for whether the operation itself and whether the personnel are affected by an equivalent and team.

Okay. Good question.

The operation is operating just fine.

There were periods of time, when they had lockdowns that it affected people's ability to come into the lab, but.

I'd say that that those types of things have hampered the ability of the company or a joint venture to to meet its demand for tests.

Got it got it.

And the second question is do you expect to maintain the gross margin demonstrated in the first quarter going forward.

Yes, he does.

And this is Brian.

We are able to do that there will be we do expect some pricing pressures as we move forward a bit.

And in some countries, but we expect to be able to maintain a similar gross margin going forward.

Got it thank you.

Our next question comes from Jason Mccarthy with net.

Please go ahead.

Everyone. Thanks for taking my question.

A day on the line for Jason.

And as COVID-19 continues to be a problem and other parts of the world outside of the U S. Like you mentioned in your prepared remarks day.

For sea the export of COVID-19 test ex U S territories.

And we foresee that being a major revenue driver and.

And I want.

And.

And second question.

It's kind of and a similar vein are you considering any other potential partnership opportunities.

Side of the U S similar to the <unk> joint venture.

Uh huh.

Thank you for the question Jason.

Our international.

Businesses is very strong and we anticipate it to continue to grow.

As we mentioned on our call last quarter, where we had about a 60 40 U S International mix in and revenues, we expected that to kind of flip over during 2021, and two a 40% domestic 60% international and and I think it's safe to say we are seeing.

Gradually move in that direction first quarter didn't really show that it was pretty much as we had expected and experienced in the past, but as we are into the second quarter, we are seeing.

Heavy movement into the and to the international markets along along the way of I think that 40 60.

Move that we would be expecting and.

And and I'm very enthused about how we have established a presence in 50 countries with some terrific distributors and the need for our tests not just our rig and initial COVID-19 test, but our COVID-19 version two that has.

More than one target.

And the genome and also our ABC test and our saliva tests. These are all things that are helping to increase our market share overseas.

With respect to your second question as it relates to partnerships outside of the country. Currently we don't have any relationships outside of the country that we're exploring with respect to a joint venture of the nature that we have.

With <unk>.

And we did the Coursera joint venture several years ago, because we identified India as being.

And our minds and potentially the largest healthcare market and the world, which I think it will become and is becoming and so that was the reason we established the presence. There you know that a number of other companies large companies have also moved into India with manufacturing facilities for all types of pharmaceutical needs.

So we believe that.

And Theres, a very prudent and and good move that we made in India as I mentioned, we've got a pretty strong customer base there now.

And with about 160 customers and.

And about 73 different labs that are now using our products and now we're ready to give them a much broader menu and to continue to expand that I think you'll see and what we're looking forward to is more and more laboratories that are taking our tests as time goes for them and let me just touch on one other thing Jason.

We're talking about.

And what we are providing and things like COVID-19 testing and Hep, B and Hep C and such and within the regular complex laboratory setting and conducting PCR and.

Jason and I know, you're an expert in that field and you know how that testing is done and and you also know about our co primers and what is so unique about that technology, but it's important to realize that with our new forthcoming eikon platform.

Which is going to be a very low cost device with low cost test that do PCR real time, PCR and less than 30 minutes. It is a very unique product.

No nothing like it and the world today as far as we know and that is the product that will in our view explode from a market standpoint, and places like India, where you have as many as 100000 labs.

But many of them, we would not call labs from our perspective, but with the availability of something like the ikon product the amount of labs that can all of a sudden get into the molecular diagnostics business, making it so that somebody and a more rural area of India doesn't have to travel and new Delhi, or meta barter, Bangalore or someplace to get a test where they.

Don't have the ability to afford that.

And the travel or the cost of the test.

That's the kind of thing you have to look forward to in terms of how far reaching and revolutionary our new eikon platform is going to be.

Great. Thanks, Yeah, the additional color I appreciate it.

Our next question comes from.

For our Neal with Litchfield Hills Research. Please go ahead.

Thank you and and congratulations on the good quarter.

Wait I was wondering so this icon testing platform and this is basically a lab and a box that I'm going to you know.

At home.

Yeah.

I think that's not a bad way to characterize it.

And it's a.

It's a very small device you know think of it as being about.

For five five and a half inches square.

And this was featured not too long ago on net.

On NBC TV on the today show, where they were showing what kind of things are likely to happen as people go back to work and the United States and what workers could expect to see and they highlighted our icon device and shows a.

Quick demonstration of how it would be used and how simple it is to us. So I mean, the important thing about it is it is a direct saliva or.

Our nasal swab.

Sample from the patient which is self administered.

And it just goes right into the little box and close the box and then you use a cell phone app to activate the test and started you can then walk away and go back to work go back to your desk go back to whatever you were doing and your home and and.

And let the.

Results come to you and less than 30 minutes, and then of course because of the Bluetooth connectivity and connectivity into the cloud all the other day to distribution points into the cloud for public health and other reasons, we'll also be able to be accommodated.

And what what makes this device really unique are a few things, but one of them is the fact that it doesn't require extraction to.

To get to the pathogen and that's one of the main things that has made it. So this has not happened before and in our world of molecular diagnostics and why it has required very sophisticated labs to do the process. So when we talk about being able to take it out of that environment, because we've gotten rid of extraction, which is very unique.

Very important.

And along with lie authorizing our product and then along with developing a device with world renowned experts, who are really trailblazers and and known internationally for their ability to do rapid Pcr.

Which as I mentioned they've done for other companies that gives you an idea.

Hi. This is in fact as you characterized a lab and a box, but it's a very unique lab and a box I don't think it should be viewed as just another iteration of what's been coming down the pike.

And of course, the fact that it's PCR.

Gold standard diagnostics at the end of the day also sets us apart for many of the offerings that are currently out there and this box will last for many years in the hands of a school or a business or a home wherever its place. Its this is not a throwaway device. The very inexpensive consumable is used wants to put the slide into puts in.

The box and then you discard debt, but the box itself has a long term utility for the purchaser of it.

You've got a lot of cash on the other balance sheet now is there any thought about given where the stock is about buying shares back.

We don't have any thoughts about that right now.

We have.

A lot of cash we have been able to finance, our operation and our R&D, which is significant especially with respect to the ikon product.

You know, we're all about creating value for our shareholder base and you know anything that we think would enhance that.

Are things that we will consider and and take under advisement for for right now I think the best way for US to proceed is to keep our heads down and execute on the delivery of this icon product.

With associated test menu, and we think that's going to catapult us into and a very important place in the universal or international.

Molecular diagnostics territory. This is a in our minds truly a revolutionary product.

And we're very excited about taking it out we believe that we have to have cash reserves on hand, so that we have all the flexibility we need to launch this worldwide marketing we have a lot of good distributors and but it's going to be a big task to take it out to the world both domestically and and.

Internationally, so right now we're.

We're accumulating cash.

And on continuing to accumulate cash and get this product ready to go.

Thanks very much.

This concludes the question and answer session I would like to turn the conference back over to Ian for any closing remarks.

Thank you.

Since the beginning of the pandemic, it's been difficult to accurately predict exactly how much impact COVID-19 will have on core diagnostics and the long term for us the disease provided a gateway to introduce our co primary technology platform and suite of high quality PCR products to a far wider audience.

And to do so substantially faster than would've been imaginable before 2020.

And what I hope I've been able to do illustrate today is that while we do believe sales directly related to COVID-19 are expected to remain strong and the short and medium term or long term prospects are even more exciting than anything we have experienced to date.

This performance will be driven by a substantially increased suite of molecular diagnostics for established customers and distributors and growing domestic and international markets.

Becoming a key player and the cancer detection space and most importantly, our entrance into the molecular diagnostics device market market with the icon platform.

Thank thanks to all of you for your interest and our company our analysts and our shareholders. Thanks for joining us today on our first quarter call. We look forward to talking with you again after the second quarter.

Yeah.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.