Q4 2021 Prophase Labs Inc Earnings Call

March 30, 2022

Good morning, everyone. Welcome to the ProPhase Labs conference call. The call will begin momentarily. We do thank you for joining today. If you do need assistance prior to the call start, you may do so by pressing star and zero. Once again, the call will begin momentarily. Thank you for holding.

Good morning, everyone welcome to the Prophase Labs conference call. The call will begin momentarily. We do thank you for joining today, if you do need assistance prior to the call start you may do so by pressing star zero. Once again the call will begin momentarily. Thank you for holding.

[music].

Good morning, everyone, and welcome to the Profase Labs Fourth Quarter 2021 Financial Results and Corporate Update Conference Call. All participants.

Good morning, everyone and welcome to the Prophase Labs fourth quarter 2021 financial results and corporate update conference call.

All participants are currently in a listen only mode.

Should you need assistance, please contact a conference specialist by pressing the star key followed by zero.

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After today's presentation, there will be an opportunity to ask questions.

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

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Please also note, today's event is being recorded. And at this time, I'd like to turn the conference call over to Mr. Ted Karkas, CEO and Chairman of Prophase Labs. Sir, please go ahead.

Please also note today's event is being recorded.

And at this time I'd like to turn the conference call over to Mr. Ted Carcass, CEO and chairman of Prophase Labs, Sir. Please go ahead.

Great. Thank you Jamie.

Ted Carcass: Great. Thank you, Jamie. And thank you all for joining me today. Before we get started, of course, I have to start with a forward-looking statement.

And thank you all for joining me today before we get started of course I have to start with the forward looking statement.

I wanted to advice.

Speaker Change: Everyone that today's conference call will contain forward-looking statements, including statements relating to our plans, expectations, future performance, and future events, including with respect to our expectations for Q1 2022 COVID-19 testing revenues.

Everyone that todays conference call will contain forward looking statements, including statements relating to our plans expectations future performance and future events, including with respect to our expectations for Q1, 2022, COVID-19 testing revenues.

Speaker Change: financial results, our ability to provide genomic testing with faster turnaround times and lower price points, our ability to expand direct-to-consumer and big-box retail distribution of Nebula's genomic sequencing products by leveraging our distribution network, our goals related to the development of partnerships and research collaborations, and our ongoing efforts to evaluate and pursue additional strategic and synergistic acquisitions to build our precision medicine and genomics research capabilities.

But as a result, our ability to provide genomic testing with faster turnaround times and lower price point, our ability to expand direct to consumer and big box retail distribution of Nebulize genomic sequencing products by leveraging our distribution network our goals related to the development of partnerships and research collaboration and our ongoing efforts to evaluate and pursue additional strategic.

It's synergistic acquisitions to build our precision medicine and genomics research capabilities. These statements are subject to risks and uncertainties that could cause our actual results to differ materially from those suggested by the forward looking statements additional information concerning factors that could cause our results to differ material from these forward looking statements are.

Speaker Change: These statements are subject to risks and uncertainties that could cause our actual results to differ materially from those suggested by the forward-looking statement.

Speaker Change: Additional information concerning factors that could cause our results to differ materially from these forward-looking payments are contained in the earnings release that we issued earlier today as well as in our public filings with the SEC. The company undertakes no obligation to publicly update or revise any

And in the earnings release that we issued earlier today as well as in our public filings with the SEC. The company undertakes no obligation to publicly update or revise any forward looking statement, whether as a result of new information future events or otherwise except to the extent required by applicable law. Finally, the conference call is being webcast.

Speaker Change: forward-looking statement, whether as a result of new information, future events, or otherwise, except

Speaker Change: to the extent required by applicable law. Finally, the conference call is being webcast. The webcast link is available in the investor relations section of profazelabs.com. That was a mouthful. I'm sorry.

The webcast link is available in the Investor Relations section of Prophase Labs dotcom.

That was a mouthful I'm sorry, but.

Speaker Change: It's just one of the things you have to go through before we get to the actual conference call. Look, I have a lot to cover and I wanna leave plenty of time for the Q&A. So I'm not going to read.

Just one of the things you have to go through before yet.

Get to the actual conference call.

Look I have a lot to cover and I want to leave plenty of time for the Q&A. So I'm not going to read the financial numbers, you're all capable of reading the press release and going through the financial numbers and of course I'm happy to answer your questions in the Q&A about the the numbers suffice it to say that the numbers were for our fourth quarter and therefore.

Speaker Change: The financial numbers, you're all capable of reading the press release and going through the financial numbers. Of course, I'm happy to answer questions in the Q&A.

Speaker Change: about the numbers, suffice it to say that the numbers were.

Speaker Change: for our fourth quarter, and therefore for the full year, we're awfully good. I want to start by

The full year were awfully good.

I want to start by thanking and acknowledging our entire management team.

Speaker Change: thanking and acknowledging our entire management team.

Honestly the achievements and the success we had this year. This past year were pretty remarkable I don't normally highlight.

Some of our executives and employees, but I think it's.

Important that I do so just because of the amount of success, we've had and what we've been through this past year.

I have to start with our CFO Monica Brady She literally works 24 seven.

She used to work and Doyle County, Pennsylvania and out of the Blue I, just decided to get into this crazy CLIA lab testing business and before you know it we blew up this enormous business in Garden City, New York blew up you know blow out this tremendous lab here in this enormous new business.

Monica had to move she had to literally worked 24 seven this past year, we have new auditors an entirely new business.

Speaker Change: uh you know entirely new subsidiaries acquisitions you name it um so really my hat's off to monica no nobody is more loyal and nobody has worked harder than she has and i just want to say how much i appreciate her um i also have to highlight three of our

You know entirely new subsidiaries acquisition you name it.

So really my hat's off to Monika not nobody is more loyal and nobody's worked harder than she has that I just wanted to say how much I. Appreciate her I also have to highlight three of our.

Senior members of our lab diagnostics business adjacent carcass, yes. He not only has the same last name as me. He is my sign his co C O O E R and that every bit of it.

Look at the end of the day without sales there would be no earnings there would be no business. So to speak he was personally responsible for the vast majority of the sales that were generated this past year as well as in the first quarter that we're in right now what he is.

Speaker Change: responsible for the vast majority of the sales that were generated this past year as well as in the first quarter that we're in right now. What he has accomplished is nothing short of remarkable. What he accomplished is the equivalent of what 20 senior salespeople would accomplish at another lab.

Accomplishes nothing short of remarkable what he accomplished as the equivalent of what 'twenty senior salespeople.

What accomplished had another lab.

Speaker Change: I also have to acknowledge Alice Leoy, she's, Jason is our co-COO, Alice is our other co-COO. She did a, took on a Herculean test.

I also have to acknowledge Alex Lee why she Jason is our co C. O L. Alex is our other co C. O L. She did a took out a herculean task.

Speaker Change: in organizing our lab. Understand it was the first year in the business. Throughout the year, we upgraded and improved our management team and the people that we hired and the people that we promoted. Alice was one of those key people who came in and completely reorganized our lab, made it significantly more efficient when.

And organizing our lab understand it was the first year in the business throughout the year, we upgraded and improved our management team and the people that we hired the people that we promoted Alex was one of those key people who came in and completely reorganized our lab made it significantly more efficient when.

Speaker Change: When Omicron spiked late in the fourth quarter, she ramped up the number of employees from 50 to over 250 employees in our lab, really did an incredible job. Since then, I'm gonna get more into this later. She's responsible for also significantly reducing the cost to process tests. I'll get into that when I talk more about the diagnostics business.

When Ami crime Spike late.

Late in the fourth quarter, she ramped up the number of employees from 50 to over 250 employees at our lab really did an incredible job. Since then I'm going to get more into this later she's responsible for also significantly reducing.

The cost of process casts I'll get into that when I when I talk more about the diagnostics business.

But.

Speaker Change: It was a godsend that Alice came to work for us this year. And finally, Sergio Moraes, our Chief Information Officer. Once the lab is operating properly, the most difficult component is actually IT. It's the collection of patient data and the reporting of results. I am proud to say that we have one of the best, most automated technology platforms and portals in the laboratory industry.

It was a godsend that at that Alex came to work for US this year and finally Sergio Marias.

Our Chief Information Officer once the lab is operating properly the most difficult component because actually I T. It's the collection of patient data and the reporting of results I'm proud to say that we have one of the best most automated technology platforms at portals in the laboratory industry and that includes all the big guys and a lot of these big labs.

Speaker Change: And that includes all the big guys. And a lot of these big labs, they're actually using old IT infrastructure. And I can tell you that we're just state-of-the-art in our equipment, in our IT infrastructure, in our security, et cetera. These people that I just mentioned, as well as their teams that are behind them,

There actually are using old I T infrastructure.

And I can tell you that where the state of the art.

Our equipment and our I N T. It infrastructure and our security et cetera.

These people that I, just mentioned as well as their teams and that are behind them.

Speaker Change: I can't thank them enough for what they've accomplished and their loyalty to the company.

I can't thank them enough for for what they've accomplished and their loyalty to the company.

Speaker Change: I typically state on these investor conference calls that my number one goal is to execute on behalf of shareholders. That has always been my goal for 40 years. I started off as an investor, as a trader on Wall Street, and then as an investor and then consulting to small cap companies. I've been doing this for 40 years, hundreds of companies.

I typically stayed on these investor conference calls.

My number one goal is to execute on behalf of shareholders that has always been my goal for 40 years I started off as an as an investor as a trader on Wall Street, and then as an investor and then consulting for small cap companies I've been doing this for 40 years hundreds of companies and.

Speaker Change: And the one thing I've learned that's most important is something called terminal value on a per share basis. Every decision I make is based on what's best for the shareholders in terms of the value of our company today, divided by the number of shares outstanding and what the value of our company could be in two, three, five years, divided by the number of shares outstanding then. So I pay attention to things like dilution. I pay attention to stock buybacks, to dividends, all of these types of decisions that I'm making.

And the one thing I've learned that's most important is is something called terminal value on a per share basis. Every decision I make is based on what's best for the shareholders in terms of the value of our company today divided by the number of shares outstanding and what the value of our company could be in 235 years divided by the number of shares outstanding men. So I paid.

Hence into things like dilution I pay attention to stock buybacks or dividends or all of these types of decisions that I'm, making and that our board of directors, making its all in terms of what's best for our shareholders. It's the reason why we went through this tremendous bear market for 14 months and other stocks in the life science industry like ours are.

Speaker Change: and that our board of directors is making. It's all in terms of what's best for our shareholders. It's the reason why we went through this tremendous bear market for 14 months and other stocks in the life science industry like ours are currently trading between 50 cents and $3.

Trade between $53.

Speaker Change: There's a reason why our stock is where it is. It's because I care deeply about the value of our company on a per share basis. I don't spend money frivolously. We have significantly more capital now than what we raised a year ago. And that's even after an acquisition of Nebula, which I'm gonna get into, and two dividends. And even with those tens of millions of dollars that we spent between stock buyback, dividends.

There is a reason why our stock is where it is is because I cared deeply about the value of our company on a per share basis I don't spend money prevalence Lee we have significantly more capital now than what we raised a year ago and that's even after an acquisition of nebula, which I'm going to get into and to <unk>.

Dividends and even with those tens of millions of dollars that we spent between stock buyback dividends.

Speaker Change: and the acquisition of Nebula. We have more work in capital now than we did a year ago after capital re-raise.

And the acquisition of Nabila, we have more working capital now than we did a year ago. After the capital we raised I would find I'd be hard pressed you'd be hard pressed to find another microcap company in the entire country.

Speaker Change: I would find, I'd be hard-pressed, you'd be hard-pressed to find another micro-cast company in the entire country.

Speaker Change: who raised a block of money back in January a year ago when things were crazy and we were in a crazy bull market, that have more capital now, made acquisitions, did the things that we accomplished, and have more capital now than they did a year ago. And I will continue in the future. You have my word that in the future I'm going to continue to operate the company the same way.

Who raise the block of money back in January a year ago, when things were crazy and we are in a crazy bull market that have more capital now made acquisitions did the things that we accomplish that have more capital now than they did a year ago.

And I will continue in the future you have my word that in the future I'm going to continue to operate probably the same way.

Alright.

Wow.

Speaker Change: Um, let's get into our company in a little bit more detail. Um.

But let's get into our company and the and a little bit more detail.

Speaker Change: I should point out, oh, by the way, I should also point out that we hired a company called Redmark. If you're new to ProPhase, I recommend getting in touch with Redmark to listen to presentations I do in the future. I do live presentations once or twice a month.

I should point out Oh by the way I should also point out that we hired a company called Red Mark if.

If you renew the prophase I recommend getting in touch with rent Mark.

To listen to presentation as I do in the future I do live presentations once or twice a month.

Speaker Change: And these are mostly for new retail investors, but if you call Redmark and they're actually there on the press release, you can certainly sign up for that. I more go through all the divisions of the company from beginning to end you as shareholders. If you're new to the company, I suggest that you sign up with Redmark.

And these are mostly for new retail investors, but if you call Red Mark.

And there are actually there on the press release, you can certainly sign up for that I I more go through all the divisions of the company from beginning to end.

You as shareholders, if you're new to the company I suggest that you sign up with Red Mark.

Speaker Change: In terms of getting into our particular divisions, let's talk about our lab business a little bit.

In terms of getting into our particular divisions, let's let's talk about our lab business a little bit.

Speaker Change: As you all know, we acquired a small lab in October of 2020 with no customers.

Yeah.

As you all know we acquired a small lab in October of 'twenty 'twenty.

With no customers.

Speaker Change: minimal operations, and we then built out the fabulous lab in Garden City, New York, 25,000 square feet, state of the art equipment.

Minimal operations.

We then built out this fabulous lab in Garden City, New York 25000 square feet state of the art equipment.

Speaker Change: And we obviously, we blew it up big with the COVID testing. We not only do PCR COVID testing, we do antigen and antibody testing as well. The next step in our business is to build out a fully functional and diversified clinical lab. We were able.

And we obviously, we blew it out big with the Covid testing, we not only do PCR Covid testing, we do anticipate an antibody.

Testing as well the next steps in our business is to.

Build out a fully functional and diversified clinical lab, we were able.

Okay.

Speaker Change: I'm sorry. You know, as I said, we started off with PCR testing with antigen and antibody testing. We're going to diversify. We have twenty five thousand square feet here in Garden City, New York. We are going to diversify by leveraging our customer base. We built out this incredible customer base. We went from approximately two or three major customers a year ago to, we probably have a dozen major customers. Now it's diverse.

I'm sorry.

You know as I said, we started off with PCR testing with antigen and antibody testing where are going to diversify we have 25000 square feet here in garden City in New York, we are going to diversify.

By leveraging our customer base, we built out this incredible.

<unk> customer base, we went from approximately two or three major customers a year ago to we'd probably have a dozen major customers now its diverse and growing our base of customers. So we've gone through these waves of COVID-19 , but.

Speaker Change: and growing our base of customers. So we've gone through these waves of COVID, but even as COVID drops now, we're still doing significant testing. And the reason which is why our testing year over year is so fantastic because we built up this tremendous customer base. So yes, of course, when the incidents of COVID

Even as Covid drops now we're still doing significant testing.

And the reason it which is why our testing year over year is so fantastic because we built out this tremendous customer base. So yes of course.

When the incidence of Covid goes up there is more demand for testing we are going to do more testing. However.

Speaker Change: there's more demands for testing. We are going to do more testing. However, you know, with the peaks of the valleys.

You know with the peaks and valleys. Unlike a year ago. When we only had a couple of customers. We have so many customers now we are.

Speaker Change: Unlike a year ago, when we only had a couple of customers, we have so many customers now, we have testing from so many different places, that even when the incidence of COVID is lower, we're still doing a significant amount of testing, which is why we had a fantastic, not only fourth quarter, but I already announced that we're going to have a fantastic first quarter. Because even though army crime has, the incidence of it has dropped dramatically, we're still doing a significant amount of testing.

Testing from so many different places that even when the incidence of Covid is lower we're still doing a significant amount of testing.

Which is why we had a fantastic not only fourth quarter, but I already announced that we're going to have a fantastic first quarter, because even though I Ami crime has as the incidence of it has dropped dramatically. We're still we're still doing a significant amount of testing.

Speaker Change: Testing is not going away. It's the number one way to cut the spread of COVID. At the end of the day, you can get vaccinated.

Testing is not going away, it's the number one way.

To put.

The spread of Covid at the end of the day you can get vaccinated.

Speaker Change: But even if you get vaccinated, it doesn't stop you from getting cobit. Certainly that's now been proven. No, 1 was vaccinated a year ago when when cobit. In approximately January of 2021. Now, a year later, 70% of the population.

But even if you get vaccinated it doesn't stop you from getting Covid certainly that's now been proven no one was vaccinated a year ago when when Covid peak.

Peak in approximately January of 2021 now a year later, you know 70% of the population has been vaccinated and yet we had this awful ami crowd.

Speaker Change: has been vaccinated, and yet we had this awful Omicron in December and January . Now, as we speak, there's a new sub-variant, BA2. Nobody's been paying attention to it in this country because Omicron has been dropping, the incidence of Omicron has been dropping so quickly.

In December and January now as we speak a new sub variant B, a two nobody's been paying attention to it in this country because army quad has been dropping so the incidents of Ami quite has been dropping so quickly.

Speaker Change: But we're getting into a situation now in the coming weeks, where the incidence of BA2 is starting to increase more rapidly than Omicron is dropping. So, at some point, you're going to start to see the media turn.

But we're getting into a situation now in the coming weeks, where the incidence of B. A two is starting to increase more rapidly than army crime is dropping so at some point youre going to start to see the immediate term.

Speaker Change: And they're going to start paying attention. And all of a sudden, you're going to see and I can't tell you this can be in two weeks, four weeks, six weeks, you're going to see the incidence of BA to likely increasing significantly. And you're going to see a lot of talk about covert is back again. I don't want to give you depressing news, but that's just the reality. And we are incredibly well positioned for that test.

And they're going to start paying attention and all of a sudden you're going to see and I can't tell you. If it's going be in two weeks four weeks six weeks, you're going to see the incidence of VA to likely increasing significantly and youre going to see a lot of talk about Covid is back again I don't want to give you a depressing knows but that's just the reality.

And we are incredibly well positioned for that testing so that that's our diagnostic testing business its doing awfully well.

Speaker Change: So that's that's our diagnostic testing business. It's doing awfully well. Um, we are very well positioned. We have, um.

We are very well positioned we have.

Speaker Change: gone from all full-time employees to

Gone from all full time employees to half of them are what we call temporary employees to come from temp agencies actually by two thirds of our employees from temp agencies. So we can fluctuate the number of employees, it's very easy to hire temps and let them go as our testing demand fluctuate.

Speaker Change: Half of them are what we call temporary employees that come from temp agencies, actually about two-thirds of our employees are from temp agencies, so we can fluctuate the number of employees. It's very easy to hire temps and let them go.

Speaker Change: As our testing demands fluctuate, which means that our lab is going to be significantly more efficient when testing demand and volumes are lower. We'll be able to decrease our overhead quickly. So we can still be profitable even at lower testing volumes. Unlike a year ago. So, I'm confident in our year over year numbers going forward throughout the year. The combination of our larger customer.

Which means that our lab is going to be significantly more efficient when testing demand and volumes are lower will be able to decrease our overhead quickly. So we can still be profitable even at lower testing volumes. Unlike a year ago. So I'm confident in our year over year numbers going forward throughout the year the combination of our.

A larger customer base.

Speaker Change: with the fact that we have the variability and the flexibility with our employees. And then in addition to that, Alice Leoy, our co-COO, was able to significantly reduce the cost to process the test. So our gross margins, whatever our gross margins were in the fourth quarter, you can expect them to increase further in the first quarter and into 2022.

With the fact that we have this variability and flexibility with our employees and then in addition to that.

Alice leeway or co C O L was able to significantly reduce the cost of processing tasks. So our gross margins whatever gross margins were in the fourth quarter. You can expect them to increase further in the first quarter and into 2022.

Speaker Change: So that's our diagnostics business. Happy to talk more about it in the Q and A.

So that's our diagnostics business happy to talk more about it in the Q&A.

It's got a great last year was a great year for Covid testing, we currently as far as I'm concerned this year.

Speaker Change: Um, it's been a great last year was a great year for COVID-19 testing. Uh, we currently, as far as I'm concerned this year, we've all but made our year already just with what we've accomplished in the first quarter. So I'm looking forward to our next earnings report in six weeks.

All but made our year already just with what we've accomplished in the first quarter. So I'm looking forward to our next earnings report in six weeks.

Speaker Change: The second half of this year and into next year, I expect Nebula to be huge and I expect our diversified clinical lab.

The second half of this year and into next year, I expect mobile to be huge and I expect our diversified clinical lab.

Speaker Change: that we're going to build out. I expect that to start to take off as well. So, we're not a one-trick pony. We are heavy in assets, heavy in cash, heavy in working capital. Again, going back to the idea of the terminal value on a per share basis, we have enormous...

We're going to build out I expect that to start to take off as well. So we're not a one trick pony, where heavy and asset heavy on cash heavy and working capital.

Again going back to the idea of the terminal value on a per share basis. We.

We have enormous working capital enormous cash minimal debt, earning a ton of money and.

Speaker Change: working capital, enormous cash, minimal debt, earning a ton of money. And I don't know if I'm allowed to say it's an inexpensive stock, but our stock price.

I don't know if I'm allowed to say, it's an inexpensive stock, but our stock price.

Speaker Change: Certainly, it's attractive relative to the amount of assets we have. And if we continue to earn, you know, earn money the way we have been, at a minimum of our stock stays where it is. There's no reason why we can't continue to either do stock buybacks or dividends. I am not stating today that we're going to do either one. Again, I'll refer back to the four lucky statements, but I have a history of taking.

Certainly is attractive relative to the amount of assets, we have and if we continue to earn a you know earn money the way we have been.

At a minimum of her stock stays where it is there's no reason why we can't continue to either do stock buybacks or dividends I'm not stating today that we're going to do either one again I'll refer back to the forward looking statements, but I have a history of taking taking such actions are put in a perspective relative to the amount of money that we.

Speaker Change: taking such actions, putting in perspective relative to the amount of money that we're earning.

Learning.

Speaker Change: All right, let's talk about Nebula. Nebula is, I think,

Alright, let's talk about Nabila nebula is.

I think of Nebula today.

Speaker Change: similar to where the internet was 20 years ago. Of course, I'm talking about ProPhase Precision Medicine. That's our wholly owned subsidiary. We acquired Nebula Genomics within that subsidiary. I assume most of you know about Nebula and whole genome sequencing. I'll touch on it. We can get more into it in the Q&A. If you're not familiar with it, anybody that's a long-term shareholder certainly knows what we're doing there.

Similar to where the.

The Internet was 20 years ago of course, I'm talking about Prophage precision medicine, that's a wholly owned subsidiary.

We acquired Nebula genomics within that subsidiary I assume most of you know about nabila.

And whole genome sequencing I'll touch on it we can get more into it in the Q&A, if you're not familiar with anybody that for long term shareholder.

Certainly knows what we're doing there at.

Speaker Change: At the end of the day, precision medicine is all about.

At the end of the day.

Precision medicine is all about.

Speaker Change: A couple of things, it's learning about your genetic makeup and then based on your genetic makeup.

A couple of things it's learning about your genetic makeup and then based on your genetic makeup.

Speaker Change: changing your lifestyle based on diseases that you might be predisposed to. For example, if after being whole genome sequenced through our company, it turns out you're predisposed to lung cancer, well, guess what? I think you're gonna think twice before picking up that first cigarette. That's a pretty easy example. Another example that I like to use, if you're predisposed to colon cancer.

Changing your lifestyle.

Based on diseases that you might be predisposed to for example, if after being whole genome sequenced through our company. It turns out you're predisposed for lung cancer, well guess, what I think youre going to think twice before picking up that first cigarette Ah.

That's a pretty easy example, another example that I like to use.

If you're predisposed to colon cancer.

Speaker Change: Well, then, instead of waiting until you're 50 years old, that's when the insurance companies say you should get a colonoscopy. Maybe you'll get one at 45 or 40 or 35 if you're predisposed to colon cancer.

Well, then instead of waiting until you're 50 years old that's when the insurance companies say you should get a colonoscopy, maybe you'll get one a 45 or 40 or 35, if you're predisposed to colon cancer I.

Speaker Change: Ideas like that, things like that, that's the future of medicine in terms of changing your lifestyle based on your genetic makeup and diseases that you're potentially predisposed to. Then taking it a step further, let's suppose you get a disease, you get a cancer and you want to know how to treat it.

Ideas like that things like that that's the future of medicine in terms of changing your lifestyle based on your genetic makeup and diseases that you're potentially predisposed to then taking it a step further let's suppose you you get a disease you get a cancer and you want to know how to treat it historically.

Speaker Change: Historically, you know, you'd rush, two women get breast cancer and they rush to get chemotherapy. What if for the cancer that you have, what if for the first person based on their genetic makeup and based on research ongoing and into the future suggests that chemotherapy isn't the way to go, that you're going to wait six months and there's an 80 or 90% probability it's not going to work for you. I would think you would want to know that. You would want to know what your genetic makeup is.

Historically, you know you'd rush to women get breast cancer in a rush to get chemotherapy, what if for the cancer you have whatever the first person based on.

Their genetic makeup and based on research ongoing in and into the future suggest that.

Chemotherapy isn't isn't the way to go that you're going to wait six months and there's an 80 or 90% probability is not going to work for you.

I don't think you would want to know that you'd want to know what your genetic makeup is before making such a decision.

Speaker Change: before making such a decision. And conversely, another woman could have breast cancer and it turns out there's 90% probability of success with chemotherapy. You'd wanna, you know.

And Conversely, another woman could have breast cancer and it turns out there's 90% probability of success with chemotherapy that you'd want to you know.

Speaker Change: you'd want to go into chemotherapy immediately. Decisions like this are what personalized precision medicine are all about at the heart of it. It all starts with whole genome sequencing, genetic testing, learning about your genetic makeup. Right now, Nebula sells whole genome sequencing direct to consumer online. The business is just starting out.

You'd want to go into chemotherapy immediately decisions like this are what personalized precision medicine are all about at the heart of it. It all starts with whole genome sequencing and genetic testing learning about your genetic makeup right now <unk>.

<unk> sells whole genome sequencing direct to consumer.

On line the business is just starting out.

Speaker Change: Our goal is to get the pricing down significantly. We found, we did a test.

Our goal is to get the pricing down significantly we found we did a test.

Speaker Change: over Thanksgiving on Black Friday, where we dropped the price arbitrarily from $300 to $200 and our sales went up 10 times. It was a fantastic test. It proved the point of the price elasticity of demand as it pertains to whole genome sequencing. We want to get this out to masses. There's only a very small percentage of the population that even knows what whole genome sequencing is. So this literally is in its infancy. So the first thing we want to do is educate consumers and get it out to the masses. How are we going to do that? We're going to drop the price significantly from $300.

Over Thanksgiving and Black Friday, where we dropped the price arbitrarily from $300 to $200 and our sales went up 10 times. It was a fantastic test proved the point that the price elasticity of demand as it pertains to whole genome sequencing, we want to get this out the masses, there's only a very small percentage of the population that even those would hold.

Sequence. He knows so there's literally is in its infancy. So the first thing we wanted to do is educate consumers and get it out to the masses. How are we going to do that we're going to drop the price significantly from $300.

Speaker Change: We're working with partners right now, strategic partners right now to drop the pricing. We sell whole genome sequencing at Quest.

We're working with partners right now strategic partners right now as it dropped the pricing we sell whole genome sequencing at quest.

Speaker Change: It has zero gross profit margins for us. I'll explain a little more when I get into the library where we sell a subscription. But just understand our growth model here. One is to get the price down. As I said, we're working with partnerships right now to get the price down significantly. We think that that's going to significantly drive demand for whole genome sequencing to our online consumers. That's direct to consumer.

It is zero gross profit margins for us I'll explain a little more when we get into the library, where we sell a subscription.

But the but just understand our growth model here one is to get the price down as I said, we're working with partnerships right now to get the price down significantly we think that that's going to significantly drive.

Demand for whole genome sequencing to our online consumers that's direct to consumer.

Speaker Change: We're also working on a lower price, what's called low-path whole genome sequencing, that we're going to sell and store.

We're also working on our lower price, what's called low pass whole genome sequencing that we're going to sell in store.

Speaker Change: Historically, our business has been selling coldies, cold remedy into all the 40,000 food, drug and mass retail stores, Walgreens, Walmart, CVS, and so forth. We sold the coldies grant, but we kept the manufacturing facility where we still sell lozenges and that business is doing very well. By the way, we developed another line of dietary supplements that we're selling into those stores. So we kept all that infrastructure in place. And now our goal is to sell a whole genome sequencing product.

Historically, our business has been selling cold these cold remedy into all the 40000 food drug and mass retail stores, Walgreens, Walmart Cvs and so forth.

We sold the cold these grant, but we kept the manufacturing facility, where we still sell licenses and that business is doing very well by the way we developed another line of dietary supplements. It we're selling into those stores. So we kept all of that infrastructure in place and now our goal is to sell a whole genome sequencing products.

Speaker Change: in the same food, drug, and mass retail stores where we have all this distribution. So we have access to distribution not only in 40,000 food, drug, and mass retail stores, but also potentially 110,000 convenience stores. So there's enormous.

In the same food drug and mass retail stores, where we have all this distribution. So we have access to distribution not only 40000 food drug and mass retail stores, but also potentially 110000 convenience stores. So there is enormous.

Speaker Change: possibilities for our ability to distribute whole-genome sequencing massively, and then

Possibilities for our ability to distribute whole genome sequence he massively and then <unk>.

Speaker Change: Educate the masses in the same way that we developed this fantastic and efficient marketing campaign for coldies and turned around the coldies brand. I want to do the same thing for whole genome sequencing for nebula. So grow sales online by dropping price, grow sales by distributing to retail stores. That's the direct to consumer.

Kate the masses in the same way that we develop this fantastic get efficient.

<unk> marketing campaign for Cold these and turned around the cold. These brand I wanted to do the same thing for whole genome sequencing for Nabila. So gross grow grow sales online by dropping price.

Gross sales by distributing to retail stores, that's the direct to consumer.

Speaker Change: And then the third part of this is Nebula has a proprietary library. I'm not aware of anyone in the world that has a library like ours. In fact, we have large companies and countries that are very interested in licensing that library and partnering with us.

And then the third part of this is nebula has a proprietary library I'm not aware of anyone in the world that has a library like ours. In fact, we have large companies and countries that are very interested in licensing that library and partnering with us.

Speaker Change: I'm not going to get more into that on this call, but our library.

I'm not going to get more into that on this call, but our library.

Speaker Change: Basically, when you get a whole genome sequence, you get what's called the polygenic risk score. It tells you about diseases.

Basically.

When you got whole genome sequence you get whats called the polygenic risk score. It tells you about diseases that youre potentially predisposed to based on your genetic makeup and then we have a library of all the clinical research from around the World. That's being conducted that has been conducted in the past and is being conducted currently.

Speaker Change: that you're potentially predisposed to based on your genetic makeup, and then we have a library of all.

Speaker Change: the clinical research from around the world that's being conducted that has been conducted in the past and is being conducted currently that relates

That relates to the diseases that you're predisposed to and it's really interesting that library gets updated regularly and you get if you sign up for a subscription.

Speaker Change: to the diseases that you're predisposed to. And it's really interesting that library gets updated regularly and you get, if you sign up for a subscription, you get regular updates on all the research out there and how it relates to the diseases that you're predisposed to.

You get regular updates.

And all the research out there and how it relates to the diseases that you're predisposed to.

Speaker Change: And that obviously is a hugely profitable business for us, you know, it's all on the issue.

And that obviously is a hugely profitable business for us.

It's all on the Internet.

Speaker Change: Uh, we have a handful of scientists who continue to build that library. Uh, so it has.

We have a handful of scientists who continue to build out library. So it has.

Speaker Change: You know, based on the size that we're doing, the gross margins, you know, are close to 100% on the library.

You know based on the size that we're doing the gross margins you know close to 100% on the library. So it's a subscription based model. So the idea is to sell as many whole genome sequencing tests as possible, which right now as far as I'm concerned it's in its infancy, the number of pets with selling compared to the potential and then the idea is to sell this.

Speaker Change: So it's a subscription-based model. So the idea is to sell it.

Speaker Change: Many whole genome sequencing tests as possible, which right now, as far as I'm concerned, it's in its infancy, the number of tests for selling compared to the potential. And then the idea is to sell the subscriptions. So, the next part of this is to.

Subscriptions then the next part of this is to partner.

Speaker Change: with other companies and countries with regards to our library. And then in addition to that...

With other companies and countries with regards to a library and then in addition to that.

Speaker Change: We're looking into doing other types of partnerships based on the other people that we hired. Again, George Church, who is world-renowned in whole genome sequencing, he's the founder of Nebula along with the two gentlemen that, you know, run the business when we acquired Nebula. George Church took stock instead of cash.

We're looking into doing other types of partnerships.

Partnerships are based on the other people that we hired.

Again, George Church, who is world renowned and whole genome sequencing he's the founder.

Nabila along with the two gentlemen.

That run the business when we acquired Nebula, George Church took stock instead of cash.

Speaker Change: and he agreed, which he really does, he agreed to be on our advisory board. And so George is.

And he agreed which he really does he agreed to be on our advisory board.

And so George is.

Speaker Change: very into what we're doing with Nebula, and he's excited to help us. We're having regular calls with him. He potentially is going to bring other companies within Precision Medicine that we can acquire. So, understand, we're just getting started. Yes, whole genome sequencing in and of itself.

Barry into what we're doing with nebula and he's excited to help us we're having regular calls with him he potentially is going to bring other companies within.

Precision medicine that we can acquire so understand where we're just getting started yes whole genome sequencing in and of itself.

Speaker Change: isn't saving the world. That's just a test. It's just the starting point. But we're building a foundation here. Give us a little time. The same way that it took us a year to build up the lab and make it one of the best labs in the country, we believe we're going to do the same thing with Nebula and with Precision Medicine. So when we call this Precision Medicine, of course, it's just a whole genome sequencing test now. But the goal is to turn our company into a Precision Medicine.

Isn't saving the world. That's just the test is just the starting point, but we're building a foundation here give us a little time.

The same way that it took us a year to build out the lab and make it one of the best labs in the country. We believe we're going to do the same thing with nebula.

And with precision medicine, so when we call those precision medicine of course, it's just a whole genome sequencing tests now, but the goal is to.

Turn our company into a precision medicine company overtime.

Speaker Change: All right and again in the Q&A we can talk more about Nebula. I would just add and I'm going to get to the Q&A very shortly, I would just like to add

Yeah.

Alright, and again in the Q&A, we can talk more about <unk>.

I would just add I'm going to get to the Q&A very shortly I would just like to add.

Speaker Change: So our lab diagnostics, obviously we had a fantastic year, a fantastic fourth quarter, our first quarter, we believe is going to grow even more than the fourth quarter. So we're looking at a fantastic year for our lab diagnostics business. We're looking to, in the second half of the year, we're going to be, our goal is to be building out into a more fully diversified clinical lab. Nebula is in its infancy. We have, we think that's going to grow from a very

So our lab diagnostics, obviously, we had a fantastic year of fantastic fourth quarter or first quarter. We believe is going to grow even more than the fourth quarter. So we're looking at a fantastic year for our lab diagnostics business, we're looking to.

In the second half of the year, we're going to be our goal is to be building out into a more fully diversified clinical lab.

Nebula is in its infancy.

We have.

We think that's going to grow from a very small base.

Speaker Change: of business into a very large base of business, how much of that is going to kick in when I don't know. It's no different than when we built out the lab business, you know, we started slow and then blew it up big. Well, I expected to do the same thing with Nebula. I think Nebula ultimately could, the value of Nebula alone, I believe could be worth multiples of the entire market cap of our company currently. That is what I believe in my heart.

Our business into a very large base of business how much of that is going to kick in when I I don't know, it's no different than we built out the lab business. We started slow and then blue Dot Berg will I expect to do the same thing with Nebula I think nebula ultimately could the value of nebula alone I believe could be worth multiples of the entire market cap of our COO.

Company currently that is what I believe in my heart.

Speaker Change: It's not a guarantee, but I truly believe Nebula is going to be more valuable than our entire company. Meanwhile, we have an asset-rich company right now and earning a lot of money, so what's the downside? TK Supplements.

Forward looking statement I can't it's not a guarantee but I truly believe nabeel is going to be more valuable than our entire company and Meanwhile, we have an asset rich company right. Now so you know and earning a lot of money so what's the downside.

TK supplements.

Speaker Change: That's our dietary supplement business, albeit from a small base, just by the mere fact that we are fully distributed now into all of these 40,000 food, drug, and mass retail stores just because we added on distribution of Walmart and CVS this past year.

Is growing.

That's a dietary supplement business, it's albeit from a small base just by the mere fact that.

We are fully distributed now into all all of these are you know 40000 food drug and mass retail stores, just because we added on distribution.

Or Walmart and Cvs this past year that business is going to grow going into 2022, and the same thing with our contract manufacturing business just very very briefly at the at the end of 2020, you know the first year of Covid in 'twenty 'twenty, everybody raced out to buy paper towels and toilet paper. They also raped up by logging tools.

Speaker Change: that business is going to grow going into 2022. And the same thing with our contract manufacturing business, just very, very briefly, at the end of 2020, the first year of COVID in 2020, everybody raced out to buy paper towels and toilet paper. They also raced out to buy lozenges. It was incredible.

It was incredible there's.

Speaker Change: every lozenge and every store shelf was sold out in the middle of 2020. So come late 2020, all of our contract manufacturers

Every license in every store shelf was sold out in the middle of 'twenty 'twenty. So come late 'twenty 'twenty all of our contract manufacturers all loaded up on inventory like an enormous amount of inventory and so on 2020 one they had to work through all that inventory that we built out for them in 2020.

Speaker Change: all loaded up on inventory like an enormous amount of inventory and so in 2021 they had to work through all that inventory that we built out for them in 2020.

Speaker Change: And so, 2021, we actually had a dip in sales and contract manufacturing. We're now back to normalized level. We burned through all that inventory. Plus, we're adding on new customers. So, we're going to have some nice growth in contract manufacturing. So, all four subsidiaries of our company, operating subsidiaries, all look like we're going to have a great year in 2022. And finally...

And so <unk> 2021 we actually had a dip in sales and contract manufacturing. We're now back to normalized levels, we burn through all that inventory plus we're adding on new customers. So we're going to have some nice growth in contract manufacturing. So all four subsidiaries of our company.

Operating subsidiaries all look.

We're going to have a great year in 2022.

And finally.

Just to summarize.

<unk>.

Speaker Change: history of executing on behalf of shareholders. Since the time that the stock bottom 10 years ago at 65 cents, our stock is up 10 times. And

History of executing on behalf of shareholders.

Since the time that the stock bottom 10 years ago at 65 sets our stock is up 10 times.

And I've paid out.

Speaker Change: And I want to say, I, obviously, the company, Profase has paid out $2.10 in special dividends. $0.60 of those dividends were between last June and the $0.30 dividend that we just paid out a couple of weeks ago.

And when I say I, obviously, the company prophase has paid out $2.10 and special dividends 60 cents of those dividends were between last June and the 30 cent dividend. We just paid out a couple of weeks ago and Theres. No reason why the success should not continue we turned around the cold These brand when it when it was in a downward spiral and sold it for 50.

Speaker Change: There's no reason why the success should not continue. We turned around the Coldies brand when it was in a downward spiral and sold it for $50 million. We pivoted into CLIA lab testing, became one of the top performing labs in the country in the first year of operation. Next up, we're going to diversify the CLIA lab for traditional testing.

We pivoted into CLIA lab testing became one of the top performing labs in the country in the first year of operation next up we're going to diversify the CLIA lab for traditional testing.

Speaker Change: So I still expect COVID testing to be around for the foreseeable future. And next up, nebula, where literally it's in the infancy of what we're going to do with nebula, we're in the first inning, it has enormous potential over the next several years.

So I still expect COVID-19 testing to be around for the foreseeable future.

And next up Nabila.

We're literally it's in the infancy of what we're going to do with Nebula, where in the first study.

It has enormous potential over the next several years.

Speaker Change: And with that, Jamie, I kept it to about 30 minutes, which was my goal. I'd like to open it up to Q&A. I'm very happy to answer all of your questions and get into whatever else anybody else would like to ask. Jamie, I'll hand it over to you to start the Q&A.

And with that Jamie I would like to I kept it to about 30 minutes, which was my goal I'd like to open up to Q&A I'm very happy to answer all your questions and get into whatever else.

I also would like to ask Jamie.

Jamie I'll hand, it over to you for to start the Q&A.

Jamie: Ladies and gentlemen, we will begin the question and answer session. To ask a question, you may press star and then one using a telephone keypad. If you are using a speakerphone, we do ask that you please pick up your handset prior to pressing the keys to ensure the best sound quality. To withdraw your questions, you may press star and two. Once again, to join the queue, that is star and

Ladies and gentlemen, we will begin the question and answer session to ask a question you May Press Star and then one using a telephone keypad if.

If you are using a speaker phone, we do ask that you. Please pickup your handset prior to pressing the keys to ensure the best sound quality.

So withdraw your question you May press Star two.

Once again to join the queue that is star and then one.

We will pause momentarily to assemble the roster.

Yeah.

Yes.

Ethan Cartwright: And our first question today comes from Yi Chen from HC Wainwright. Please go ahead with your question.

And our first question today comes from E. Chen from H C. Wainwright. Please go ahead with your question.

Ethan Cartwright: Thank you for taking my questions and congratulations on a very solid quarter. Could you comment on the current trend of COVID-19 testing volume and whether there is any potential for the current quarter to exceed the past?

Thank you for taking my questions and congratulations on a very solid quarter could.

Could you comment on the current trend of COVID-19 testing volume and whether there's.

Any potential for the current quarter to.

Exceed the past quarter.

Speaker Change: Yeah, sure. Thank you. Thanks for joining the call. And thank you for continuing to cover our company and write on our company.

Yeah sure. Thank you thanks for joining the call and thank you for continuing to cover our company is right on our company.

Speaker Change: Yeah, so as I briefly touched on before, no one's really paying attention to COVID right now because Omicron, there was such a tremendous incidence of Omicron back in December and the beginning of January , and that's been dropping like a rock.

Yeah, so as I briefly touched on before.

No one's really paying attention to COVID-19 right now because I'm a crime.

There was such a tremendous incidents of violent crime back in December at the beginning of January and that's been dropping like a rock.

Speaker Change: over the last couple of months, over the last two or three months, it just dropped dramatically. And what happened is, BA2, the sub-variant, is now just slowly starting to pick up steam, but Omicron was dropping faster than BA2 was rising. It's getting to a point now.

Over the last couple of months over the last two or three months. It just dropped dramatically and what happened to be a to the Sudbury is now just slowly starting to pick up steam but army crop was dropping faster that'd be a too was rising it's getting to a point now.

Speaker Change: where Omicron has basically dropped. All right, that's basically off the map. So our positivity rates for Omicron went from 20 or 30%, you know, down to like 1%, negligible. But BA2 is just starting to pick up. So I sincerely believe that in the.

Where I'm a crime has basically dropped alright, that's basically off the map our positivity rates for army client went from 20 or 30% down to like 2% net negligible, but be a too is just starting to pick up so I sincerely believe.

That in the coming weeks, we're going to hear a lot more about be a too and I think that you're going to hear a lot more about people getting cold, but again in a new spread of Covid everybody was thinking springtime is coming called the double worry about it next fall.

Speaker Change: we're going to hear a lot more about VA too. And I think that you're going to hear a lot more about people getting COVID again and a new spread of COVID. Everybody was thinking, you know, springtime is coming COVID's over, we'll worry about it next fall. Um, and people don't understand, you know, COVID occurs in the spring and summer as well. And so we're about to go through another wave of COVID, whether it's a big wave of COVID, a small wave of COVID, I have no idea.

And people don't understand Covid.

Coconut occurs in the spring and summer as well and so we're about to go through another wave of Covid, whether it's a big wave of Covid or small wave of Covid I have no idea.

Speaker Change: you know I can't worry about those things what I can tell you is we are such a well diversified

I can't worry about those things, but I can tell you is we are such a well diversified.

Speaker Change: lab in terms of our customers, our customer base, you know, it's diversified and large. And because of that, we still have a significant amount of testing going on even right now. So that it wasn't just in, you know, December , we had obviously an enormous December , which, you know, created an enormous fourth quarter, you know, although the other two months

Lab in terms of our customers.

Our customer base, Oh, it's diversified and large and because of that we still have a significant amount of testing going on even right now so that it wasn't just in December .

Remember, we had obviously an enormous December which you know.

Created enormous fourth quarter, although the other two months.

Speaker Change: October and November were strong, but December was, you know, off the charts. We also had January was off the charts. But what's interesting is February and March had been pretty stable.

Coburn known Brammer was strong but December was.

Whilst the chart. We also had January was off the charts, but what's interesting is February and March had been pretty stable.

Speaker Change: So, and that's with Omicron dropping as much as it drops. So the point is it's still, if you're, you know.

So and that's with army crime dropping as much as a drop so the point is its still if you're.

Speaker Change: Feeling like you're getting a cold or sniffle or whatever. It's easy. We have concierge services where you can literally walk out the door. We're heavily covered in New York City. And we're spreading to other states where you can literally just walk out the door and get a coven test. If you see those tents.

Feeling like you're getting a cold or sniff or whatever it's easy we have concierge services, where you can literally walk out the door were heavily covered in New York City and were spreading to other states, where you can literally just walk out the door and get a COVID-19 test.

If you see those tends to pop up.

Speaker Change: In New York City, as an example, a good percentage of those tents are actually sending their business to our lab, and they're spreading into other states.

In New York City as an example, a good percentage of those tests are actually sending their business to our lab and their spreading into other states and that business honestly is not going away. There is one rankle and that's regarding her side a percentage of our business.

Speaker Change: And that business, honestly, is not going away. There is one wrinkle, and that's regarding HRSA. A percentage of our business is reimbursed by HRSA, which for those of you who don't know, if you don't have insurance.

Is reimbursed by herself, which for those of you don't know if you don't have insurance than her so which is government funded.

Speaker Change: Then HRSA, which is government funded, reimburses our lab for the testing.

Reimburses, our lab for testing Hersheys ran out of funding as of March 22nd which means that our uninsured patients as of right now it's up in the air whether or not we will get reimbursed for them.

Speaker Change: HRSA ran out of funding as of March 22nd, which means that our uninsured patients, as of right now it's up in the air, whether or not we'll get reimbursed for them, that would,

That would.

Speaker Change: obviously take a hit to our revenues. However, first of all, our first quarter, we already had a phenomenal first quarter, even if we hadn't done testing in March, we had a phenomenal first quarter. In fact, I said that two weeks into January gave an update that basically we were going to have a phenomenal first quarter just on what we were doing in January . So HRSA is a question mark. I'm hoping fingers crossed that HRSA gets

Obviously take a hit to our revenues. However, first of all our first quarter, we already had a phenomenal first quarter, even if we hadn't done testing in March we had a we had a phenomenal.

First quarter in fact, I said that two weeks into January gave an update that basically we're going to have a phenomenal first quarter just what we're doing in January .

So first is a question Mark I'm, hoping fingers crossed that it hurts our guests.

Speaker Change: Um, refunded again, it should Congress originally guaranteed funding through 2025. So I think there's a political game going on at the moment. So we'll see what happens in the coming weeks. If we have HRSA, then it's game over. We're gonna, you know, we're gonna have an.

Refunded again, it should Congress originally guaranteed.

Funding through 2025, so I think there is a political game going on at the moment. So we'll see what happens in the coming weeks. If we have Hearst then it's game over we're gonna.

We're gonna happen.

Speaker Change: an extraordinarily strong year, the entire year. Without HRSA, I believe that we'll still have a very good year, and we'll just have to wait and see, fingers crossed that within a few weeks that that's going to clear itself up. I find it hard to believe that the government is going to turn their backs on the people who are uninsured that are mostly, you know, poor, minorities, and so forth, that they're going to say, oh, you can't get the same health care. So, we'll see what happens. I did want to mention that. That's sort of the only slide.

An extraordinarily strong year the entire year.

Without her shop I believe that we'll still have a very good year and we'll just have to wait and see fingers are crossed that within a few weeks that that's going to clear itself up I find it hard to believe.

The government is going to turn their backs on the people who are uninsured that are mostly.

Poor minorities, and so forth that theyre going to say Oh, you can't get the same health care. So we'll see what happens that I did want to mention that that's sort of the only fly a.

Speaker Change: or wrinkle in the ointment, but beyond that, our testing is at a robust level with Omicron at its low, which should suggest you testing isn't going anywhere. It's no different from if you have, you know, feel like you're getting flu symptoms and you go get a flu test. Well, well, it's the same thing with, you know, COVID, whether you go to the hospital or not, you're going to get tested. If you have COVID, you want to know it right away so that you can quarantine before you spread it to others.

A wrinkle in the ointment, but beyond that our testing is at a.

Is that a robust level with army crime and its low which should suggest you testing isn't going anywhere it's no different from if you have a feel.

If youre getting flu symptoms and you'll go get a flu test well well. It's the same thing was you know COVID-19 , whether you go to the hospital or not youre going to get tested and if you have COVID-19 do you want to know it right away. So that you can quarantine before your spread problems.

Yeah do you have another question.

Speaker Change: Yes, with respect to the mevalogenomics test, the price reduction, is it going to occur in the second quarter? And also, can you tell us when the test will be available in the big box retail distribution channels?

Yes with respect to them.

Nevertheless, genomics tests.

The price reduction is it going to occur in the second quarter and also can you tell us when the test will be available in the big box retail distribution channels.

Speaker Change: Yeah, this is I'd like to say this is all second half of the year event.

Yeah. This is I'd like to say this is all set.

Second half of the year events.

Speaker Change: I can't tell you the exact timing, the negotiations are ongoing, the strategic partnerships are ongoing, strategic partnerships take longer.

I can't tell you the exact timing.

The negotiations are ongoing the strategic partnerships are ongoing.

Strategic partnerships take longer than you think especially because we're working with new companies and countries.

Speaker Change: than you think, especially because we're working with new companies and countries, and these companies and countries need to get to know us, and we need to get to know each other, and that takes time, but everything is moving along.

Ms <unk>.

Companies and countries need to get to know us and we need to get to know each other and that takes time.

But everything is moving along.

Speaker Change: Uh, incredibly well. I am highly optimistic. We hired, um, a gentleman, Sam bealer to be our chief strategy officer. He has a wealth of experience, not only in, uh,

Incredibly well I am highly optimistic we hired.

A gentleman Sam dealer to be our Chief strategy officer. He has a wealth of experience not only in.

Speaker Change: helping human services, but also has tremendous ties to these companies and countries worldwide. So I was really excited to hire him, and he's spearheading and overseeing the development of these partnerships. But you can assume within the next few months, we will have new contracts.

Health and human services, but also has tremendous ties to these companies and countries worldwide.

So it was really excited to hire him in and he is spearheading over overseeing the development of these partnerships, but you can assume within the next few months, we will have new contracts in place and then we'll be able to drop the price for online sales so I.

Speaker Change: In place and then we'll be able to drop the price for online sales. So I can't tell you if that's going to happen in the second

I can't tell you if that's going to happen in the second quarter or in the third quarter, but somewhere between the second and third quarter, we should have.

Speaker Change: You know, in the 3rd quarter, but but somewhere between the 2nd and 3rd quarter, we should have.

New agreements in place that's for dropping the price online and then with retail stores that always takes longer.

Got an initial positive responses already from some of the largest retailers in the country.

Speaker Change: responses already from some of the largest retailers in the country. Right now, we're doing market research to optimize our packaging the same the same way we did for coldies. We're creating new packaging.

Right now we're doing market research to optimize our packaging the same the same way we did for colby's, we're creating new packaging.

For our package it would go on the store shelf, we're really excited about it we're doing marketing research to develop the best claims to put on the package as we speak I've done.

Speaker Change: to develop the best claims to put on the package as we speak. I've done.

Speaker Change: three market research studies in the last month and so we're close to optimizing the package then we have to create the package go back to the retailers they have to accept it once once the retailer agrees.

Three market research studies in the last month and so we're close to optimizing the package that we have great package go back to the retailers they have to accept it once once the retailer agrees to put it in what's called the plan of ground. It then it can take three to six months for them to actually put it on the store shelf. So this is a long process, but once.

Speaker Change: to put it in what's called a planogram, and then it can take three to six months for them to actually put it on the store shelf. So this is a long process, but once you're in, you're in. And so assume Nebula is really a second half of the year.

You're in you're in and so assume nebula is really a second half of the year story. So first half of the year for this year I still think we're going to do an incredible amount of testing revenues earnings.

Speaker Change: Um, story. So first half of the year, you know, for this year, I still think we're gonna do an incredible amount of testing revenues earning, uh, for the covert testing will then diversify with the clinical lab testing, and then nebula will start kicking in in a bigger way. Probably the second half of this year and certainly into 2023.

For the Covid testing will then diversify with the clinical lab testing and then nebula will start kicking in.

Bigger way, probably the second half of this year and certainly into 2023.

Speaker Change: Got it. Thank you. Oh, thanks for your questions. Thanks again. All right. Next question. Jamie. Next question. All right.

Got it thank you.

Oh, Thanks for your questions and thanks again.

Alright next question Jami next question or I should say.

Speaker Change: Our next questioner is Dennis Waldman from Barrett Productions. Please go ahead with your question.

Our next questioner is Dennis Waldman from Barrett Productions. Please go ahead with your question.

Dennis Walman: Hi Ted, I first want to say wow and congratulations.

Hi, Ted I first want to say Wow and congratulations.

Dennis Walman: I want to talk about the impairment charge of $3.75 million. If I'm seeing this correct, if you did not have that charge, you would have made close to $0.90 a share.

I wanted to talk about the impairment charge of $3 75 million if I'm seeing this correct. If you did not have that charge you would've made close to 90 cents a share.

Dennis Walman: I'm not going to, I'm not going to, you can do the math and I'm not going to give you hypothetical numbers because then the SEC gets in, again, trouble with the SEC. But the answer is yes, without that impairment charge of $3.7 million, our earnings would have been $3.7 million more than what we reported. Now having said that, that was a non-cash charge because we didn't loan the money in the fourth quarter. It's the fourth quarter in which we wrote it off. So it's a write-off. And we're still

Hum.

I'm not you can do the math and I'm not going to give.

I'll give you a hypothetical numbers because then the FCC gets them again call with the SEC, but the answer is yes without that impairment charge of $3 7 million.

Our earnings would have been $3 7 million more than what we reported now having said that that was the noncash charge because we didnt loan the money in the fourth quarter, it's the fourth quarter and which we wrote it off so it's a write off and we're still hopeful that we can collect that money it's not like.

Dennis Walman: that we can collect that money. It's not like, it's a fait accompli that we're not going to collect that money. But given the

It's a fair to complete that we're not going to collect that money.

But given the.

Dennis Walman: given the circumstances around the company that we are going to be collecting the money from, it's questionable whether we will be able to collect.

Given the circumstances around the company that we are going to be collecting the money from its questionable, whether we will be able to collect it or not.

Dennis Walman: So, we'll just have to see over time. If over time we collect that money back, that'll be added to future earnings. But the answer is yes. From an operating point of view, and that's why I made sure to, you know, highlight our EBITDA is because EBITDA, you know, corrects for non-cash issues like this which hit your earnings but don't hit the EBITDA.

We'll just we'll just have to see over time, if over time, we collect that money back so that'll be added the future earnings but the answer is yes from an operating point of view and that's why I made sure.

To highlight our our EBITDA is.

Because EBITDA correct for noncash issues like this which hit your earnings.

But don't hit to EBITDA.

Speaker Change: So I've been involved with ProPhase for quite a while and I'm assuming this charge has to do with the relationship with Predictive Technology Group. I've watched their technology for a while and they seem to have quite a few assets that are worthwhile to acquire. Has that been looked at?

Okay. So I've been involved with prophage for quite a while and I'm. Assuming this charge has to do with the relationship with predictive technology group I've watched their AR technology for a while and they seem to have quite a few assets that are worthwhile to acquire has that been looked at.

Speaker Change: Yeah, so we actually negotiated with them and listen, I don't want to speak for predictive, but we were very interested in some of their assets and at one point we were looking to take the money that they owe us and convert that into an acquisition of one of their assets. They decided, one of their core assets that I was actually very interested in, they decided to go in another direction in developing that asset or those

Yeah, So we actually negotiated with them.

And listen I don't I don't want to speak for.

Predictive.

But we were very interested in some of their assets and at one point we were looking.

To take the money that they owe us and convert that into.

An acquisition of one of their assets. They decided what are their core assets that I was actually very interested in they decided to go in another direction and developing that asset or those assets with other parties and.

Speaker Change: with other parties and so we're hopeful that they are successful in developing those assets and generating revenues and if they do you know we're then hopeful that we will get paid back at 3.79 so originally actually i was negotiating a

So we're hopeful that they are successful in developing those assets and generated revenue variance and if they do.

We're hopeful that we will get paid back that $3 7 million. So originally actually.

Always negotiating on some of those assets.

Speaker Change: And it's one of the reasons why we didn't write off the loan before now was because there was a very good probability that we were going to do a deal with them. We ended up not doing a deal with them, and that's when we decided, you know what, the prudent thing to do is to write off the debt.

And it's one of the reasons why we didnt write off alone before now.

It was because there was a very good probability that we're going to do a deal with them. We ended up not doing a deal with them and that's why we decided you know what are the prudent thing to do is the write off did that now.

Speaker Change: Okay. Last question. I see and you know that I'm very positive towards buybacks and I see that you've only bought a little less than a million of the six million that you committed. Are you going to become more aggressive in your buybacks?

Okay last question.

And you know that I'm very positive towards buybacks and I see that you've only bought a little less than a million of the 6 million that you committed are you going to become more aggressive in your buybacks.

Speaker Change: OK, so I'm not going to. Well, OK, so first of all, we separately retired some of the debt outstanding and some of that debt was convertible into stock. So one of the debt holders actually converted 200,000 shares, which we also bought in a private transaction of 575.

Okay, So I'm not gonna well, okay. So first of all we separately.

Retired some of the debt outstanding.

And some of that debt was convertible into stock. So one of the debt holders actually converted 200000 shares which we also bought in a private transaction of $5 75.

Speaker Change: For sure, although, you know, that happened in the first quarter, so we didn't put that into this report. So that also was a stock buyback. And then beyond that, I think, actually, our current stock buyback expire shortly. And then we'll have to revisit and say, that's certainly a possibility. Stock buybacks are always a possibility. Additional dividends are also a possibility. And we'll just have to say, that's not something I'm going to announce.

For sure. Although you know that happened in the first quarter. So we didn't put that into this report.

So that also was the stock buyback.

And then beyond that I think actually our current stock buyback I expire shortly and then we'll have to revisit and say that's certainly a possibility stock buybacks are always a possibility of additional dividends.

<unk> also a possibility and we'll just have to say, that's not something I'm going to announce.

Speaker Change: on this call today. That's not a decision that's been made. But clearly, I'm the largest shareholder in the company. And I don't just say this because I'm the largest shareholder of the company. I also say this for all the people that are long-term shareholders that have supported me and have supported the company. I do right by people, and I do right by our shareholders. So whatever decisions are made going into the future are going to be in the best interest of all the shareholders for long-term investors.

On this call today, that's not a decision that's been made.

But clearly you know I'm the largest shareholder in the company.

And I don't just say this because I'm the largest shareholder of the company I also say this for all the people that are long term shareholders that have supported me and have supported the company.

I do right by people and I do right by our shareholders. So whatever decisions are made going into the future are going to be in the best interest of all the shareholders for long term investors traders always say I wish you. The best luck, that's a tough business.

Speaker Change: Traders always say, I wish you the best of luck. That's a tough business. I don't make decisions on, you know, running the stock price up or down or, you know, playing games or any of that kind of stuff. I only care about building the value of the company long term. And if it's best for long term shareholders, if I think that the capital, we have excess capital that we don't need.

I don't make decisions on you know running.

Running the stock price up or down or playing games or any of that kind of stuff I only care about building the value of the company and long term and if it's best for long term shareholders of I think that the capital we have excess capital that we don't need.

Speaker Change: and that we don't have a current use for, then by all means, why wouldn't we either, you know, do additional stock buybacks and or dividends, but you know, we'll just have to see. We also have to see what the opportunities are with acquisition. Given that we just went through a 14 month bear market in life science companies, there are life science companies out there, you know, trading.

We don't have a current use for then by all means why wouldn't we either do additional stock buybacks <unk> dividends, but we'll just have to say we also have to see what the opportunities are with acquisition given that we just went through a 14 month bear market in life science companies.

Life Science companies out there trading.

Speaker Change: you know, at or below cash. And if we happen to find one, like I told our investment bankers to please, please, please look for companies that were going to IPO, the IPO market will all but shut down.

At or below cash and if we happen to find one fact I told her investment bankers to please. Please please look for companies that were going to I P O.

IPO market, all but shut down.

Speaker Change: uh, you know, in the recent past. And so there's, there may be some exciting companies out there, uh, to acquire similar to acquiring nebula. I would like to acquire other companies.

In the recent past and so there's there may be some exciting companies out there to acquire similar to acquire nebula I would like to acquire other companies.

Speaker Change: you know, if we could buy a company that I think is going to be worth, you know, 10 times more a year or two later, well, that would be great for the shareholders. And that's something I would want to do. So we're weighing all those options.

If we can buy a company that I think is gonna be worth 10 times more a year or two later well that would be great for the shareholders and that's something I would want to do so we're weighing all those options.

Speaker Change: on a daily basis. So it's a good question. I can't give you a better answer than what I just responded with. I hope that answers your question. That does, Ted. Thank you. Congratulations again. I look forward to hearing again in six weeks.

On a daily basis. So it's a good question I can't give you a better answer than what I just responded but I hope that answers. Your question that does Ted. Thank you congratulations again and I look forward to hearing again in six weeks.

You're quite welcome alright, Thank you Dennis.

Speaker Change: And, uh, Jamie next question. And by, by the way, before you go to the next question right now, there's only one more question in line. So if you have a question, please get in line. And if not, we have one more question or ready to go. Go ahead, Jamie.

And Jami next question and by the way before you go to the next question right now there's only one more question in line. So if you have a question please get in line.

And if not we have one more question or ready to go go ahead Jamie.

Yeah.

Speaker Change: And that is correct. If you would like to join the question queue, once again, you may press star and one. Our next question does come from Lee Hopper from Hammock. Please go ahead with your question.

And that is correct. If you would like to join the question queue. Once again, you May press star and one on.

Our next question does come from Lee <unk> from <unk>. Please go ahead with your question.

Hi, great quarter.

Lee Happer: Dad, can you give us a little more color on how many tests you did in the fourth quarter, how many tests you did in the first quarter, and how did the tests compare in the beginning of March to the last half of March?

Doug can you give us a little more color on.

How many tests you did in the fourth quarter, how many tests you did in <unk>.

First quarter.

How did the tests comparing the beginning of March through last half of March.

Speaker Change: Okay, so first of all, the fourth quarter, I'm pretty sure in the press release, we stated how many tests were performed for calendar. Actually, we put in the press release for calendar or fiscal year 2021, we did 580,000 tests. Of those 580,000,

Okay. So first of all the fourth quarter.

Pretty sure in the press release, we stated.

How many tests were performed.

For calendar actually we'd put it in the press release for calendar <unk>.

Our fiscal year 2021, we did 580000 of those 580003.

Speaker Change: 350,000 were performed in the fourth quarter ending December 31st. All right. So that's 350,000. All right. And to put that in perspective, I think in the first quarter, which was the biggest quarter in the history of the company, we did 110,000. All right. So that was the first quarter of last year. We did 110,000. The fourth quarter, we did 350,000.

350000 were performed in the fourth quarter ending December 31st Alright, So that's 350000, alright and to put that in perspective, I think in the first quarter, which was the biggest quarter in the history of the company. We did 110000, alright. So that was the first quarter of last year. We did 110000 in the fourth quarter, we did 350000 alright.

Speaker Change: It just gives you an idea of how much we've grown our business and how diversified our customer base is to do more than triple the number of tests, even though it was an extraordinary spike back in January of 2021, and now we had another extraordinary spike really in December of 2021, and yet we did more than triple the amount of tests in the fourth quarter versus the first quarter. Going into the first quarter, I'm not going to go into more detail than...

It just gives you an idea of how much we've grown our business and how diversified our customer bases to do more than triple the number of tests.

You know, even though it was an extraordinary spike back.

Back in January of 'twenty, 'twenty, one and now we had another extraordinary spike in you know really in December of 2021.

And yes, we did more than triple the amount of tests in the fourth quarter versus the first quarter going into the first quarter I'm not going to go into more detail than really what I've already said.

Speaker Change: Really, what I've already said, other than I made it very clear that, you know, our tight are in our headlines, records financial results also expected for Q1, 2022. All right. Now.

Other than I made it very clear that.

You know, our our our tight or at our headlines our record financial results also expected for Q1 2022, Alright now I'm.

Speaker Change: I'm not saying with Q1 that our record financial results are only compared to year over year of the first quarter of last year. I'm talking about record financial results even compared to the fourth quarter that we just reported.

I'm, not saying with Q1 that our record financial results are only compared to year over year. The first quarter of last year I'm talking about record financial results, even compared to the fourth quarter that we just reported.

Speaker Change: And that should really tell you all you need to know. We're going to have a very strong first one.

And that should really tell you all you need to know where we're going to have a very strong first quarter, alright, and when people say, they're looking forward to our first quarter results.

Speaker Change: All right. And when people say they're looking forward to our first quarter results, well, you know, we're going to be announcing them in six weeks. The bottom line is, I expect that we will be announcing that we did more tests in the first quarter of this year than we did in the fourth quarter.

Well, we're gonna be announcing them in six weeks.

Line is.

I expect that we will be announcing that we did more cash in the first quarter of this year than we did in the fourth quarter.

Speaker Change: that we just reported, and I also stated that our gross margins

We just reported and I also stated that our gross margins I believe will improve in the first quarter.

Speaker Change: I believe will improve in the first quarter, and we're not going to have another $3.7 million write-off like we had in the fourth quarter. So when you put all three of those things together, we should have a very strong first quarter. And again, that's going to grow our working capital, it's going to grow our cash levels.

And we're not going to have another $3 $7 million write off like we had in the fourth quarter. So when you put all three of those things together.

We should have a very strong.

First quarter and again, that's going to grow our working capital is going to grow our cash levels are at.

Speaker Change: It's going to increase our flexibility on what we do with the capital and how we build our company. We don't need capital. We don't have to go do a dilutive round of financing. We're going to be able to build out our clinical lab. We're going to be able to build out Nebula Genomics and our Precision Medicine business and so on and so forth.

To increase our flexibility on what we do with the capital and how we build our company. We don't need capital. We don't have to go do a dilutive round of financing, we're going to be able to build out our clinical lab, we're gonna be able to build out nebula genomics and our precession medicine business and so on and so forth.

That answered your question.

Speaker Change: Okay, but could you give us an idea of how the testing went the first half of March compared to the second half.

Okay, but could you give us an idea of how the testing one the first half of March compared to the second half of March.

Speaker Change: I'm not going to get into that. There's no reason to get into that level of detail. We're doing the month of the month of March. Looks similar to the month of February . Obviously, January was a big spike, December , January , big spike, but we did a very healthy amount of testing in February and a very healthy amount of testing in March. We're still doing a solid amount of testing in the month of March. Okay.

Yeah.

I'm I'm not going to get into that there's no reason to get into that level of detail, where we're doing.

The months of the.

The month of March.

Look similar to the month of February Obviously January was a big Spike December January Big Spike, but we did a very healthy amount of testing in February at a very healthy amount of testing in March we're still doing a solid amount of testing in the month of March.

Yeah.

Okay. Thank you.

You are quite welcome Jamie next question. Please.

Speaker Change: Our next question comes from Patrick Patterson, please go with your question.

Our next question comes from Patrick Patterson. Please go with your question.

Patrick Patterson: Okay. Congratulations, Ted. Wonderful, wonderful numbers. I love seeing it. Thank you, Patrick. I appreciate it.

Okay, Congratulations Jay a wonderful wonderful.

She loves.

Thank you Patrick I appreciate it.

Speaker Change: I know you're more than welcome, you deserve it. Ted, could you go over how you describe your customers? I remember in one of your presentations, you talked about having like 100 or 200 independent pharmacies, but

Now you're more than welcome to discern.

Could you go over how would you describe your customers' I remember on one of your presentation, you talked about having like 100 or 200 independent pharmacies.

Speaker Change: Today, you say you have like a dozen customers. Could you just explain what a customer must be? Yeah.

Today, you're saying you have like a dozen customers that could you just explain why.

Oh sure.

Yes, okay. So.

Speaker Change: When I say customer, I'm so glad you asked that question, really, that could be very misleading the way I presented that. That's excellent point. When I talk about customers, our customers.

When I say a customer.

So glad you asked that question.

Really a that could be very much leading the way you presented that excellent point when I talk about customers our customers.

Speaker Change: are our specimen collection partners. Our specimen collection partners are the ones that bring in the business.

Our our specimen collection partners our specimen collection partners are the ones that bring in the business.

So.

Speaker Change: You know, Jason, our co-COO who oversees sales, he developed relationships with these dozens, probably like two dozen companies, but one dozen are like super active. These companies all have different ways of bringing in business to us. These specimen collection companies.

You know, Jason our co CFO , who oversees sales he developed relationships with these dozen is probably like two dozen companies, but one does it are like Super active these companies all have different ways of bringing in business to us.

Specimen collection companies.

Speaker Change: one of the specimen collection companies is overseeing independent pharmacy.

One of the specimen collection companies is overseen independent pharmacies. So we have 100 or 200 independent pharmacies as one specimen collection company, that's overseeing those hundred or 200 independent pharmacies I'm not referring to those independent pharmacies as our customers I'm, referring to our specimen collection partners.

Speaker Change: So, we have 100 or 200 independent pharmacies. There's one specimen collection company that's overseeing those 100 or 200 independent pharmacies. I'm not referring to those independent pharmacies as our customers. I'm referring to our specimen collection partners as our customers. So, maybe instead of calling them customers, we should really just call them, you know, our specimen collection partners or our partners. So, our partners bring in the business. So, we have one or actually two.

As our customers, so maybe instead of calling them customers, who should really just call them.

Our specimen collection partners or our partners or partners, bringing the business. So we have won or are actually too.

Speaker Change: uh, different partners who bring in independent pharmacies and, you know, that's a fair amount of our business. Then we have several

Different partners, who bring an independent pharmacies.

That's a fair amount of our business then we have several.

Speaker Change: specimen collection partners, each one of which has set up concierge services in primarily New York City, but some of them are now spreading into other states. And so, you know, their customers are people who are walking down the street or they go visit their homes. Then we have another specimen collection partner.

Specimen collection partners, each one of which has setup concierge services and primarily in New York City, but some of them are now spreading into other states.

And so you know their customers or people are walking down the street or they go visit their homes. Then we have another assessment of collection partner.

Speaker Change: who is doing our municipal contracts. We won a couple of RFPs, as you know, in Dutchess County and in Township of Oyster Bay and so forth. These are townships and cities or towns where people can go to a central location in town to get tested, and we have a specimen collection partner who actually provides the service of collecting specimens here and then sending them to our lab.

Who's doing our.

Our municipal contract we won a couple of Rfps as you know in Dutchess County, and intensive of Oyster Bay and so forth. These are townships in cities or towns where people can go to a central location in town to get tested and we have a specimen collection partner, who actually provides the.

Service of collecting specimens here and then sending them to our labs.

Speaker Change: So, and then, you know, we have another specimen collection partner that focuses on schools that has, you know, that has probably 100 different schools that they test. So we have a pretty. So, unlike last year, where we probably had 2 major specimen,

And then we have another.

Specimen collection partner that focuses on schools that has you know that it was probably 100 different schools that they touch so we have a pretty so unlike last year, where we probably had two major specimen collection partners, who did various business are two main ones last year, one was doing the schools and one was doing the state attack.

Speaker Change: collection partners who did various business, our two main ones last year, one was doing the schools and one was doing the state of Texas, and then the state of Texas shut down after the bad weather in February , unlike a year ago.

And then the state of Texas shutdown after the bad weather in February .

A year ago.

Speaker Change: You know, we have a dozen like that in all sort of walks of life, testing people in different locations for different reasons. And so because we have the diversity, we have a large number of customers, and because of the diversity, it stabilizes our business somewhat. So even the previous caller that was asking...

We have a dozen like that in all sort of work walks of life.

Testing people in different locations.

For different reasons.

So because we have the diversity, we have a number a large number of customers and because of the diversity.

It stabilizes our business somewhat so even the previous caller was asking.

Speaker Change: about the last two weeks of February versus the first two weeks, I mean the last two weeks of March versus the first two weeks. The bottom line is we have a nice stable business.

About the last two weeks of February for the first two weeks I mean in the last two weeks of March 1st week, but bottom line is we have a nice stable business.

Speaker Change: Um, and we're gonna have fantastic first quarter and it didn't like, you know, unlike a year ago, it didn't drop off the cliff in late in February and March. Uh, last year we had a monster January , but testing dropped off cliff in February , March and March. It did not drop off this time the way it did a year ago.

And we're gonna have a fantastic first quarter and it didn't like unlike a year ago. It didn't drop off the cliff and late in February and March.

Last year, we had a monster January .

Testing dropped off a cliff in February market. It in March it did not drop off this time the way it did a year ago.

Speaker Change: Pat, does that answer your question? Oh, that was great. Thank you very much, Tim. Oh, you're quite welcome. Best of luck to you. Jamie, next question, please.

That's does that answer your question.

That was great. Thank you very much Dan.

Oh, you are quite welcome and best of luck to you.

Jamie next question please.

Jamie: Our next question comes from Robert Donaher, who is a private investor. Please go with your question.

Our next question comes from Robert Dan O'hare.

Who is a private investor. Please go ahead with your question.

Jamie: Hey, thanks for taking my question. I just wanted to touch on a possible opportunity for your business. And you know, you're in the manufacturing business, and China's washing our clock, you know, with generic drugs and the likes of that. And I was wondering if you ever considered getting into the generic drug business.

Hey.

Thanks for taking my question.

I just wanted to touch on a possible opportunity for your.

In your business and you know you're in the manufacturing business in the.

China's what portion of our clock.

Generic drugs and the likes of that and I was wondering I E.

<unk> considered.

Getting into the use of.

The drunk the generic drug business.

Speaker Change: manufacturing. So, yeah. Okay. So, first of all, I don't, um, manufacturing tends to

So yeah, Okay. So first of all I don't.

Manufacturing tends to be a low margin business.

Speaker Change: It turns out that you were doing a very good job with our manufacturing and that it's going to grow nicely this year It's going to contribute to profits, you know to earnings But it's it's not a focus what you're talking about With generic drug manufacturing. It's honestly it's a little far afield from anything. We're doing now. I had we had people that

It turns out that you were doing.

Very good job with our manufacturing and that is going to grow nicely. This year, it's going to contribute to profits to earnings.

But it's it's not a focus what you're talking about with generic drug manufacturing honestly, it's a little far afield from anything we're doing now I had we had people that.

Speaker Change: I had an analyst that actually knocked me because we acquired Nebula and I, you know, because it's, it's not.

I had an analysts that actually knocked me because we acquired nebula and.

Because it's not.

Speaker Change: You know, it doesn't fit in with a lab diagnostic business, even though actually it not only provided tremendous synergies, but as I said, I think, you know, Nebula could be worth multiples of our current market cap in the coming years. So that's a little far field.

It doesn't fit in with the lab diagnostic business, even though actually.

It not only provided tremendous synergies, but as I said I think <unk>.

It could be worth multiples of our current market cap in the coming years.

So that's a little far field.

Speaker Change: I don't know. I listen. I'm an entrepreneur. I'll consider almost anything, but I'm not sure that's a fit with what we're doing. And I'm not, I'm not particularly enamored with manufacturing.

I don't know I'm.

I'm, an entrepreneur all concern with anything but I'm not sure that's a fit with what we're doing and I'm not I'm not particularly enamored.

With manufacturing in general.

Speaker Change: I hope that answers your question. Do you have another one? No, that's it. One other thing. You considered doing testing overseas and I was just wondering if you followed up on that at all? Yeah, sure. So, first of all

I hope that answered your question do you have another one.

Yeah.

Uh huh.

Would.

You considered over.

Testing overseas and I am just wondering if you can follow up on that alone.

Yeah sure so first of all.

Speaker Change: Our COVID testing, you know, we're right now just in the United States. We have worked on initiatives in the past.

Our COVID-19 testing.

We're right now just in the United States, We have worked on an initiative in the past.

Speaker Change: in Central and South America to date, they have not come through. However, through Nebula.

In central.

Central and South America to date, they have not come through however.

Through Nebula, a first of all a nebula does do testing around the world.

Speaker Change: First of all, Nebula does do testing around the world. I think about two-thirds of our testing is the United States, but approximately one-third is actually in other countries around the world, and we are currently,

I think about two thirds of our testing in the United States, but approximately one third is actually in other countries around the world.

And we are currently.

Speaker Change: working on strategic partnerships with

Working on strategic partnerships with <unk>.

Speaker Change: you know, large companies, um, in other parts of the world. So, um, yes, I, I expect our testing, uh, to ultimately be global, but not necessarily our COVID.

Large companies and other parts of the world. So, yes, I expect our testing to.

Ultimately be global but not necessarily our COVID-19 testing.

Okay, great. Thanks, Thanks Ted.

Speaker Change: Okay, great. Thanks, Ted. I want to thank you again for your hard work. Appreciate it. Sure, of course. Thanks for the questions and thanks for following our company and being an investor. Next, and I believe last question as we're about to hit the hour. Jamie?

Thank you Bruce.

Appreciate it sure of course, thanks for the questions and thanks for following our company to be an investor.

Next and I believe last question as we're about to hit the hour Jamie.

Speaker Change: Our final question today comes from Fred McDonald. Please go ahead with your question.

Our final question today comes from Fred Mcdonald. Please go ahead with your question.

McDonald: Ted, great job. Hey Ted, the turnaround times on our test are still 24 hours.

Great job, Hey, Chad the turnaround time, so not 24 hours.

Yeah. So we had a period in December that was out of literally out of control we were inundated.

With Covid test coming into our lab, we built out our lap and at that time, we had the best turnaround time.

Consistently best turnaround times in the country and it's one of the reasons why we've never lost a customer or turnaround times in general, we're probably running 18 to 24 hours.

Sometimes even faster than that.

Of course, we had the sporadic 36 hours, but.

You know all of our contracts basically set our goal of 24 to 48 hours.

And again, that's just the Gulf.

McDonald: In December things were out of control. We built out quickly from about 50.

And December things were out of control.

We built out quickly from about 50.

McDonald: lab employees to 250. So our capacity went up by multiples. I give Alice Leoy an enormous amount of credit for that. And then things stabilized after a few weeks and we went right back to the same great turnaround time. So ever since, I don't remember what the exact date was, but other than like a two or three week period at the end of December and early January , we got back to the roughly 24 hour turnaround time.

<unk> employees to 250.

So our capacity went up by multiples.

I give Alice Li.

Leroy an enormous amount of credit for that.

And then things stabilize after a few weeks and we went right back to the same great turnaround time, so ever ever since I don't remember what the exact date was but other than like two or three week period at the end of December and early January we got back to the you know the roughly 24 hour turnaround times soon thereafter, and we stayed there so.

McDonald: soon thereafter, and we stayed there. So our customers love us from the point of view of turnaround times. We also, as I mentioned, are head of IT.

Our customers Love Us from point of view turnaround times, we also.

As I mentioned, our head of IP, Sergio Marias built out a tremendous IP infrastructure, we have an automated platform.

McDonald: Sergio Marais built out a tremendous IT infrastructure. We have an automated platform and portal. It's really easy to use, and that's a big help as well. So we're an incredibly efficient lab for testing right now.

And portal, it's really easy to use.

And that's a big helped as well so we're we're an incredibly efficient lab for testing right now.

Thank you.

Speaker Change: If that's it, then thank you for the last question.

If that's it then thank you for the last.

<unk>.

Speaker Change: Jamie, I think that this wraps up the call today. I just want to thank.

Jamie.

I think that this wraps up the call today I just want to thank everybody for joining the call I hope it was informative.

Speaker Change: everybody for joining the call. I hope it was informative. Again, I do short presentations. There are video presentations. I do one or two per month through Renmark. Particularly, if you're a retail investor, feel free to reach out directly to Renmark if you want to be updated and you want a more detailed, particularly if you're a new investor, if you want a more detailed

Again, I do short presentations there are video presentations I do one or two per month through rent Mark, particularly if your retail investors feel free to reach out directly to read Marc.

If you want to be updated and you want a more detailed particularly if you're a new investor if you want a more detailed.

Speaker Change: uh... review of what we're doing with our company feel free to reach out to red mark uh... thank you all for being

A review of what we're doing with our company feel free to reach out to read Marc. Thank you all for being.

Speaker Change: For those that are long-term shareholders, thank you so much for your loyalty.

For those that are long term shareholders. Thank you so much for your loyalty.

Speaker Change: I am confident that I'm not going to let you down in the future. And with that, have a great day. Jamie, over to you.

I am confident that I'm not going to let you down in the future and with that have a great day, Jamie over to you.

Ladies and gentlemen, with that we will conclude today's conference call. We do thank you for joining today's presentation. You may now disconnect your lines.

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