Q1 2022 Prophase Labs Inc Earnings Call

Ladies and gentlemen, thank you for standing by the conference will begin shortly please continue to hold and thank you for your patience.

Ladies and gentlemen, thank you for standing by. The conference will begin shortly. Please continue to hold and thank you for your patience.

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Good day and welcome to the Prophase Labs first quarter 2022 financial results and corporate update conference call all participants will be in a listen only mode.

Good day and welcome to the ProSays Labs first quarter 2022 financial results in corporate update conference call. All participants will be in a listen only mode. Should you need assistance please signal a conference specialist by pressing star than zero. After today's presentation there will be an opportunity to ask questions.

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Please note this event is being recorded.

Please note this event is being recorded. I would now like to turn the conference over to Ted Carcass, Chairman and CEO of ProFace Labs. Please go ahead.

Now I'd like to turn the conference over to Ted Carcass, Chairman and CEO of Prophase Labs. Please go ahead Sir.

Thanks, so much Matt and.

Thanks so much, Matt. And thank you all for joining me this morning. Obviously, we had a great quarter, and I'll get into that in a moment. But of course, I have to do the standard forward looking statement, which is obviously is important. So here goes. Before we begin today's call, I want to advise everyone that today's conference call will contain forward looking statements, including statements relating to our plans, expectations, future performance, and future events, including statements regarding projected financial results.

Thank you all for joining me. This morning are obviously, we had a great quarter.

And I'll get into that in a moment, but of course I have to do the standard forward looking statement, which is obviously is important.

So here it goes before we begin today's call I want to advise everyone that today's conference call will contain forward looking statements, including statements relating to our plans expectations future performance and future events.

Any statements regarding projected financial result.

For the second quarter of 2022, our expectations regarding the COVID-19 pandemic future waves of the pandemic and continued demand for diagnostic testing.

With a second quarter of 2022, our expectations regarding the COVID-19 pandemic, future waves of the pandemic, the continued demand for diagnostic testing, cursa funding, our plans to grow our diagnostic business, and expand our lab services, our plan.

Our plans to grow our diagnostic business.

And our lab services, our plan plans to grow our genomics business is build the WGS library to attract academic institutions, our plans to develop a broad spectrum antiviral OTC dietary supplement and build a pharmaceutical division and our expectations regarding the sufficiency of our cash and working capital.

plans to grow our genomics businesses, build the WGS library and attract academic institutions, and our plans to develop a broad-spec romantic viral OOTC dietary supplement, and build a pharmaceutical division. And our expectations regarding the deficiency of our cash-a-working capital. These statements are subject to risks and uncertainties that could cause our actual results to differ materially from those suggested by the Ford-looking faith.

They 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 materially materially from these forward looking statements are contained in the earnings release issued earlier today as well as in our public filings with the SEC.

Additional information concerning factors that could cause our results to differ materially Materially from these for looking statements 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 forward looking statement, whether as a result of new information future events or otherwise except to the extent required by applicable law. Finally Congress cold is being webcast webcast link is available in the Investor Relations section.

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 accept to the extent required by applicable, finally, the conference called being webcast. Webcast Lake is available in the Investor Relations section of profacelabs.com.

Prophase labs Dot com alright, thank you for bearing with me, while I read all of that.

All right, thank you for bearing with me while I read all that. I take the forward looking statement actually quite seriously. I do like to talk a lot about our future plans and of course there are never guarantees, but I will tell you that everything I state today, I believe 100% as of today, no question in my mind, as the things that I talk about. And so look, let's get into it.

The forward looking statement actually quite seriously I do like to talk a lot about our future plans and of course, there are never guarantees, but I will tell you that everything I state today, I believe 100% as of today No question in my mind.

Things that I talked about and so look what let's get into it.

I have to start by saying we have built an amazing team when you're starting a new business. So we started in our.

I have to start by saying we have built an amazing team when you started a new business. So we started in the Cleo Lab business in late 2020. It was a new business for me. It was a new business for our company. We built out very, very quickly. You hire.

The CLIA lab business and law.

Late 'twenty 'twenty here was a new business for me it was new business for our company.

We built out very very quickly you hire people.

You develop.

The good management teams continue to evolve right. The people that I thought were strong understand I didn't know the business a year and a half ago I thought I was hiring fantastic people for the business. There were I I appreciate all they did in the beginning to get us off the ground, but as a company a ball we hired people.

The good management teams continue to evolve. All right, the people that I thought were strong, understand I didn't know the business a year and a half ago. I thought I was hiring fantastic people for the business. They were, I appreciate all they did in the beginning to get us off the ground, but as the company evolved.

I was able to learn the business and also understand exactly what we needed to develop the business and exactly the type of people, we need it and quite frankly, we substantially.

Upgraded our management team throughout 2021.

We have excuse me express and we have a kick <expletive> management team.

And I do these virtual non deal Roadshows I wanted to give a lot of things to run Mark financial who sets up the virtual non deal Roadshows I do one or two of these a month I start off every one of those calls.

And if you're going to invest in micro cap or start up for development stage companies is nothing more important than analyzing your management team.

I can tell you from 40 years of investing I always invest in companies, where I'm excited and excited about the product or the service.

Management team most of the time it doesn't execute and I've said this quarter after quarter you want to invest if you're investing in development stage companies you have to put a lot of faith in the management teams and the problem is 95% of the time the management teams don't execute and that's why you lose money and so when you look at this bear market that started and I've been telling everybody hope for a year that.

95% of the time the management teams don't execute and that's why you lose money.

We've been in a bear market now all of a sudden you know the media in the last few months is picking up on it because the you know the larger cap you know the DAU averaged at NASDAQ that indexes and these are all you know dropped dramatically over the last three to six months, but we've actually been in a bear market for micro cap stocks.

The larger cap, the Dow average, the Nasdaq indexes, these are all dropped dramatically over the last three to six months. But we've actually been in a bear market for microcaps stocks for almost a year and a half. Breakingly, reminds me.

For almost the almost a year and a half.

Breaking Lee reminds me of 1998.

And you know I'm I'm dating myself now, but that's a period of time you want to look at.

And you know, I'm, you know, dating myself now, but that's the period of time you want to look at. You know, we're talking 24 years ago. And what happened was the microcaps dropped and then the major average is followed and then we went into this boom.

We're talking 24 years ago, and what happened was the Microcap dropped and then the major averages followed and then we went into this boom.

For a while with the micro caps and with a high tech stocks into 2000, and it was a pretty crazy time.

for a while with the microcaps and with the high tech stocks into 2000 and it was a pretty crazy time. The reason I point that out to you is we're going through the exact same thing now, 24 years ago. The microcaps have already been in a bear market for almost a year and a half. This is the time to be looking at them. What you wanna be looking at are the microcaps that have a management team that is demonstrated to execute. So it's interesting, you go back over time and yes, we raised capital.

And I point that out to you is we're going through the exact same thing now 24 years ago. The micro caps have already been in a bear market for almost a year and a half. This is the time to be looking at that but what do you wanna be looking at or the micro caps that have a management team that has demonstrated to execute and so it's interesting you go back over time and yes, we raised capital.

In January of 2021 as did a ton of other companies, there's an enormous type forgotten bags.

In January of 2021, as did a ton of other companies, there's an enormous time for a bus and bank.

To be raising capital for companies look at most of those startup companies. They are burning through most of that cash they've lost most of that cash and they're gonna have to raise more and we're in a bear market. They cant raise more and that's why their stocks continue to plummet.

to be raising capital for companies. Look at most of those startup companies, they are burning through most of that cash, they've lost most of that cash.

and they're going to have to raise more and we're in a bear market they can't raise more and that's why their stocks continue to plummet uh... because you're going to have to do the loot of runs around the financing or go out of business

Because they're going to have to do dilutive Ryan rounds of financing or go out of business. Meanwhile, if you look at our capital. We've now paid we just announced today. Another 30 cent dividend. After we've just been out but a couple of months ago, That's 60 cents and dividends just in the last couple of months. We also paid 30 cent dividend.

Meanwhile, if you look at our capital, we've now paid. We just announced today another 30 cent dividend. After we just announced about a couple of months ago. So 60 cents and dividends just in the last couple of months, we also paid a 30 cent dividend last year in the middle of last year. So we've paid 90 cents and dividends and yet our working capital is up dramatically from the capital that we raised in January of 2021. That's a company and management team that executes.

Last.

Last year in the middle of last year. So we paid 90 cents in dividend and yet our working capital AR is up dramatically from the capital that we raised in January of 2021 that's a company and a management team that executes.

And again going back I went a little bit of attention I'm. So excited about the management team that we have in place now we have a teller team people that are incredibly loyal.

And again, going back on a little bit of attention, I'm so excited about the management team that we have in place now. We have a killer team, people that are incredibly loyal.

I don't want to go through their names I don't want to leave anybody out, but just suffice it to say and every department. We are incredibly strong and what we built out in the lab business. We very quickly became one of the strongest CLIA labs for Covid testing and the entire state of New York and in fact in the entire country. We are.

I don't want to go through their names. I don't want to leave anybody out. But just the fight is to say in every department.

We are incredibly strong and what we built out in the lab says is we very quickly became one of the strongest.

Cleo labs for COVID testing in the entire state of New York and in fact in the entire country.

We are the darlings of our customers. We knock on wood. I don't believe we've ever lost the customer. And it's because our turnaround times are better. Our IT is more efficient. Our customer service is fantastic.

Our the darlings of our customers when we knock on wood I don't believe we've ever lost a customer and that's because our turnaround times are better our I T is more efficient our customer service is fantastic.

And so now what we have done and the Covid testing business, we want to expand so I wanted to talk about the numbers a little bit, but I did want to just say an acknowledged how great. Our entire management team is.

And so now what we have done in the COVID testing business.

we want to expand. So I wanna talk about the numbers a little bit, but I did wanna just say and acknowledge how great our entire management team is.

And we literally had been building in every department and in that regard we came out with the press release, the other day, but we just hired bill white to be our new CFO I'm I want to thank Monica Brady for doing an absolute fantastic job, but our former CLO CFO .

And we literally have been building in every department and in that regard, we came up with a press release the other day.

So we just hired Bill White to be our new CFO . I want to thank Monica Brady for doing an absolute fantastic job when our former CFO , CFO , left the company. She took over the CFO and provided really a smooth transition as a fantastic job helping build our company.

Let the company she took over as the CFO and provided really a smooth transition has done a fantastic job, helping build our company from a $10 million to $100 million company now the goal is to build our company from 100 million dollar company to a billion dollar company and the thing that we're building at every other department.

from a $10 million to a $100 million company. Now, to go to build our company from a $100 million company to a $1 billion company, and the same that we're building in every other department, we're also building out our finance department so that we're prepared.

We're also building out our finance department, so that we're prepared.

As we grow and so that's why we hired Bill White Monica was extremely helpful.

as we grow and so that's why we hired the white. Monica was extremely helpful.

In helping me and our company and our board of directors and searching for a CFO that she will now work with she's an incredible team player incredibly loyal and I honestly nobody has worked hard of the matter because he worked 24 70 to get the job done.

in helping me and our company and our board directors in searching for a CFO that she will now work with. She's an incredible team player, incredibly loyal. And honestly, nobody has worked harder than Monica. She works 24-7 to get the job done. And now it's simply time to build the department further.

And now it's simply time to build the department's part of the same thing in all the other departments, we have such strong departments, our I T and you got to understand we built out this lab.

Same thing in all the other departments. We have such strong departments. Our IT and you got to understand we built out this lab.

And this past year, and we did it with state of the art equipment and the same thing with our I T. We built out a really sort of custom made high and I T platforms that are so easy to use for our customers. So we really are a state of the art lab, it's very difficult for other labs quite frankly to compete.

in this past year and we did it with state of the art equipment and the same thing with our IT, we built out really sort of custom made high-end IT platforms that are so easy to use for our customers. So we really are a state of the art lab. It's very difficult for other labs, quite frankly, to compete with.

With us.

And so even in this time, where COVID-19 may have.

And so even in this time where COVID may have slowed a little bit, our business as you can...

Slowed a little bit.

Our business is as you can see there's still booming and there's a reason for that because we're not losing customers we're more.

And there's a reason for that, because we're not losing customers. We're more diversified lab in terms of our customer base. I can get into this.

Diversified our labs in terms of our customer base I can get into this in the Q&A. There's so much to cover and I'm really going to leave it up to people to ask questions in terms of what direction, they're going well look the numbers speak for themselves I also want to give a quick shout out.

in the Q&A. There's so much to cover, and I'm really gonna leave it up to people to have questions in terms of what directions they're going. Look, the numbers speak to themselves. I also wanna give a quick shout out.

So a couple of our investment bankers of course, Nick equity has done a phenomenal job for us in the last year and a half H C. Wainwright picked up coverage and I'm working very closely with them as well the two fantastic investment banks are part of my job in order to do a good job and our management teams do a good job you have to have good relationships with investment bankers if you.

to a couple of our invests and bankers. Of course, thick equity is done. A phenomenal job person last year and half, H.E. Wayne Wright picked up coverage.

and working very closely with them as well. They're two fantastic investment banks. A part of my job in order to do a good job and our management team to do a good job, you have to have good relationships with investment banks.

Really want to build and we want to build to be a billion or multibillion dollar company and you need fantastic relationships I have 40 years of experience on Wall Street, and we have those relationships with these firms.

If you really want to build, and we want to build to be a billion or multi-billion dollar company, and you need fantastic relationships by 40 years of experience on Wall Street, and we have those relationships with these firms. And of course, I already gave a shout out to Renmark, who works with us with the retail industries. All right.

And of course, I already gave a shout out to run more who works with us on a with a retail investors alright.

The numbers I don't really want to talk a lot about the numbers they really speak for themselves, obviously Q1 revenues 47, and a half million dollars.

The numbers. I don't really want to talk a lot about the numbers. They really speak for themselves. Obviously Q1 revenues 47 and a half million dollars.

Up to 211% from a year ago. The only reason I point that out, but oh, 211% from a year ago, a year ago, we were heavy into Covid. There was a huge spike in COVID-19 in the first quarter of 2021 huge huge testing huge spike and yet our revenues are up 211% our earnings are up.

up to one hundred two hundred eleven percent from a year ago the other is going to point that out for up to one hundred eleven percent from a year ago the year ago we were heavy into COVID-19 there was a huge spike in COVID-19 uh... in the first quarter of 2021 huge huge testing huge spike and yet our revenues are up to one hundred eleven percent our earnings are up a ridiculous amount my my point being

Ridiculous amount my my point being.

Why are our numbers up so much this year versus last year. When there was a huge spike both times. The difference is we're a much more efficient lab and we have a much more significant customer base.

Why are our numbers up so much this year versus last year when there was a huge spike both times? The difference is we're a much more efficient lab and we have a much more significant customer base, which that's the first five that we expanded. And so sort of an apple-sapples basis, we had a COVID spike both year and yet our numbers are up.

That's diversified that we expanded and so that's sort of an apples to apples basis, we had a COVID-19 spike both year and yet our numbers are up a huge year over year I have to mention Horsa Theres, a big question Mark around herself.

huge URL. I have to mention HRSA. There's a big question mark around HRSA. HRSA is government funded, and quite frankly, a significant percentage of our testing is from gets reimbursed by HRSA.

Her son is government funded and quite frankly, a significant percentage of our testing is from gets reimbursed by herself and so without her shop, you know our numbers are going to drop so and I have no way of knowing.

And so without HRSA, our numbers are going to drop. And I have no way of knowing.

I'm, hoping that Congress gets their act together and actually pass the belt I just literally heard the other day that the administration is requesting yet again in these requests have been going on for about eight weeks now so I believe or I hope.

I'm hoping that Congress gets their act together and actually pass the bill. I just literally heard the other day that the administration is requesting yet again. And these requests have been going on for about eight weeks now. So I believe or I hope.

That sometime in the near future Horsa will be funded if it is we're going to make an enormous amount of money.

that sometime in near future, a HRSA will be funded if it is. We're gonna make an enormous amount of money.

Person is not funded we're still going to make an enormous amount of money just not as ridiculous. Okay. So you can expect Covid does go in wage you can't expect that typically the fourth quarter and first quarters are going to be our strongest quarters. When it comes to Covid testing. So it does it does go in waves people.

If HRSA is not funded, we're still going to make an enormous amount of money, just not as ridiculous.

Okay, so you can expect COVID does go in ways.

Um, you can expect that typically the fourth quarter and first quarters are going to be our strongest quarters when it comes to COVID-19 testing. So it does it does go in waves. People, you know, typically don't test as much in the summer months. The schools are closed and so on and so forth. Uh, people aren't as

You know typically don't test as much in the summer months. The schools are closed and so on and so forth people aren't as nervous whatever the reasons. So you can expect sequentially. Your numbers are not necessarily going to be a strong I don't expect these types of numbers from the fourth and first quarters I don't expect them in the in the second or third quarters, but.

whatever the reasons so you can expect sequentially a number is not necessarily going to be a strong i don't expect these types of numbers from the fourth first quarter that don't expect them in the in the second and third quarter but

Our numbers I do expect them to be up substantially year over year, we are a growing company and honestly, we're killing it and we're making a ton of money and it's a great great place to be.

Our numbers, I do expect them to be up substantially year over year. We are a growing company and honestly we're killing it and we're making a ton of money and it's a great place to be. I don't want to get ahead of myself. I don't ever want to get a carried away. I don't know this will last forever, but it doesn't matter because you're investing in our company. You're investing in a management team that executes and we're going to diversify our company. The same way we diversified.

I don't want to get ahead of myself I don't ever want to get carried away I don't know if that's going to last forever, but it doesn't matter because you're investing in our company you were investing in a management team that executes them, we're going to diversify our company the same way we diversified.

Into the CLIA lab Covid testing business, we're now going to diversify our lap.

into the CLIA Lab COVID testing business. We're now going to diversify our lab.

I'm highly confident that we're going to do that and in short order, we are going to build out a fully diversified clinical lab. So for those of you that are nervous that we're a quote one trick pony, we're not any thing close to one trick pony.

I'm highly confident that we are going to do that. And in short order, we are going to build out a fully diversified clinical lab. So for those of you that are nervous, that we're a quote, one trick pony, we are not anything close to one trick pony. And of course, we have our manufacturing, which is growing this year. We have a dietary supplement business, which is growing this year.

And of course, you know we have our our manufacturing which is growing this year, we have a dietary supplement business, which is growing this year.

Our COVID-19 testing business is growing this year, obviously and now we're going to expand into your traditional clinical testing and then alongside that expansion not only are we going to expand into clinical testing at the same time in parallel we plan to build a genetics laboratories.

Our COVID testing business is growing this year, obviously, and now we're going to expand into your traditional clinical testing.

and then alongside that expansion, not only are we going to expand into clinical testing at the same time in parallel, we plan to build a genetics laboratory.

This is going to provide holds and in addition to and as you know I'm assuming most of you know our company I'm not going through all the basics, but would that be like genomics and I'm not going to exploit that and let you ask it into Q&A.

This is going to provide hold in addition to, and as you know, I'm assuming most of you know our company, I'm not going through all the basics, but with Nebula Genomics, and I'm not going to explain that unless you ask it in the Q&A, but Nebula provides hold genome sequence in direct to consumers.

But that would be a little provides whole genome sequencing direct to consumers.

In line, we're going to expand and leverage our food drug and mass retail distribution to also sell to consumers and retail stores. We're working on that as we speak I have this phenomenal head of sales that that's been with the company longer than I have and I've worked very closely within the last 12 years, Joe Brian He does a fantastic job he knows the business inside.

online, we're going to expand and leverage our food drug and mass retail distribution to also sell to consumers in retail stores. We're working on that as we speak. I have this phenomenal head of sales that's been with the company longer than I have and I've worked very closely with them last 12 years. Joe Brennan, he does a fantastic job. He knows the business inside and out and I'm highly confident that we're going to be successful in rolling out our whole genome sequencing product and retail stores.

And I'm highly confident we're going to be successful in rolling out our whole genome sequencing product in retail stores.

And when we do I believe that that will be a monster visit alright.

If and when we do, I believe that that will be a monster business.

Alright. So in addition to that both selling whole genome sequencing online in the stores, we're going to have a subscription model connected with that we have a library that is proprietary we don't believe there's another library in the world like our library, where you can go for information when you learn about diseases that you're predisposed to genetics.

All right, so in addition to that, both selling whole genome sequencing online and in the stores, we're gonna have a subscription model connected with that. We have a library.

That is proprietary. We don't believe there's another library in the world like our library where you can go for information. When you learn about diseases that you're predisposed to.

Patients and so forth you get to go to a library and learn all about yourself your personal genetic mutations potential diseases et cetera et cetera. It. It gets updated with all the latest clinical research from around the world. It gets updated weekly if not daily.

genetic mutations and so forth. You get to go to our library and learn all about yourself, your personal genetic mutations, potential diseases, et cetera, et cetera. It gets updated with all the latest clinical research from around the world, it gets updated weekly, if not daily.

And that subscription model is fantastic for us huge profit margins, we have a couple of scientists updating that regularly but so understand the more consumers to sign up for it. So all electronic there's very little cost to us to have more people sign up so it's phenomenal subscription.

And that subscription model is fantastic for us huge profit margins. We have a couple of scientists updating it regularly, but so understand the more consumers that sign up for it's all electronic, there's very little cost to us, have more people sign up. So it's phenomenal subscription.

Subscription.

subscription, you know, game plan for us to grow revenues and earnings highly profitable. And then finally, in building out, we want to build, the same way we built out a state-of-the-art COVID testing lab, we want to build out a state-of-the-art traditional clinical testing lab, and then we want to build out a state-of-the-art genetics lab.

<unk> plan for us to grow revenues and earnings highly profitable and then finally in building out we want to build the same way we built out a state of the art Covid testing lab, we want to build out a a state of the art a traditional clinical testing lab and then we want to build out a state of the art Jeanette.

Next slide.

Genetics is huge it is the future of precision medicine. It is the future of health care at the heart of it is a genetic test we want to be the leader in this country and providing genetic testing both whole genome sequencing and a whole range of genetic tests not only direct to consumer, but then ultimately to physicians.

Genetics is huge. It is the future of precision medicine. It is a future of healthcare. At the heart of it is a genetics test.

We want to be the leader in this country in providing genetic testing, both whole genome sequencing and a whole range of genetic tests, not only direct to consumer, but then ultimately to physicians.

And we're already talking to universities.

And we're already talking to universities. I literally two days ago, I was speaking to a university who does major genetic research.

Literally two days ago I was I was speaking to a university, who does major genetic research and they said this is so exciting that theres going to be a lab bright and New York. They don't want to send their specimens outside this country and he said he has lots of colleagues that are going to be excited about our lab. So theres tremendous.

and they said this is so exciting that there's going to be a lab right in the york they don't want to send their specimen outside this country uh... and he said he has lots of colleagues that are going to be excited about our lab so there's tremendous potential for all the different things that we're doing in the lab business now we are not going to be a one-foot pony and in the meantime

So for all the different things that we're doing in the lab business no. We are not going to be a one trick pony and in the meantime.

And I'm, sorry, if I'm rested a little bit, but as you can tell I'm very excited about our company, we're going into a lot of directions. We're executing we're making a lot of money and there's so much to be excited about just this morning in my driveway pure coincidence.

And I'm sorry if I'm ranting a little bit, but as you can tell, I'm very excited about our company. We're going in a lot of directions. We're executing. We're making a lot of money. And there's so much to be excited about. Just this morning in my driveway, pure coincidence.

Long Island Newsday, that's the major newspaper on long Island, where our company is located.

Long Island, Newstay, that's the major newspaper on Long Island where our company is located. Big.

Big Big headlight.

Front page headline Covid alert on long Island C. D. C says community level risk elevated too hot whereabouts.

Front page headline, COVID alert on Long Island. CDC says community level risk elevated to high. Where am I?

So first of all Covid is not dead secondly, even if it's less deadly.

So first of all, COVID is not dead. Secondly, even if it's blev deadly.

It's still spreading as fast as ever after a year of vaccinations at spread more this winter than it did a year ago. There was more of a spread it might've been a little less deadly, but the hospitals were still filled up with patients.

it's still spreading as fast as ever. After a year of vaccinations, it spread more this winter than it did a year ago. There was more of a spread. It might have been a little less deadly, but the hospitals were still filled up with patients and everybody needs to be tested. And so what's interesting is even if it's a little less deadly, it's still 10 times more deadly than flu and you still got to get tested. So testing isn't going anywhere. That's what people don't understand. COVID testing is not going anywhere and our COVID testing business is booming.

And everybody needs to be tested and so what's interesting is even.

Even if it's a little less deadly it's still 10 times more deadly with flow and you still gotta get tested so testing isn't going anywhere that's what people don't understand COVID-19 testing is not going anywhere and our COVID-19 testing business is booming.

Okay. So that's it on Covid, that's an expansion I left a little tweak.

Okay, so that's it on COVID, that's on expansion. I left a little

Tweak for all of you in the press release, a few if you want to talk about it. We are also planning on building a pharmaceutical division. There's two aspects to this one is a we are in plans to develop a broad based anti viral.

We've tweaked it for all of you in the press release. It's up to you if you want to talk about it. We are also planning on building a pharmaceutical division. There's two aspects to this. One is we are in plans to develop a broad-based antiviral that would be sold in all the same food drug and mass stores. It was selling our other dietary supplements and we think this product could be big. And at the same time,

That would be sold and all the same food drug and mass stores. So we're selling to other dietary supplements and we think this product could be big and at the same time.

We are we have plans to develop a pharmaceutical division to develop F. D. A approved drugs.

We have plans to develop a pharmaceutical division to develop FDA approved drugs.

We believe that we are well I don't know that I want to get too went to this right now, but I expect to be licensing.

We believe that we are...

Well, I don't know that I want to get too into this right now, but I expect to be licensing from very exciting early stage compounds that we could develop, that we can easily afford to develop the first round.

<unk>, a very exciting early stage compounds that we could develop that we can easily afford to develop the first rounds of testing with the working capital that we have so it's not anything we're all so we're running that in a bear market to raise capital that's not how I operate I do the opposite I like to pay dividend.

of testing with the working capital that we have. So it's not anything we're all so we're running out in a bear market to raise capital. That's not how I operate. I do the opposite. I like to pay dividends. I don't like to do diluted runs.

To do dilutive runs a big difference.

It depends on what's kind of management you want to invest in me personally I would rather invest in a management team that generates cash and cash flow and pays dividends and a management team that burned through your your capital and then ask one more okay.

Big difference, depends on what kind of management you want to invest in. Me personally, I'd rather invest in a management team that generates cash and cash flow and pays dividends in a management team that burns through your capital and then asks for more. Okay.

I said, a mouthful in 'twenty, a little more than.

I set a mouthful in 20, a little more than 20 minutes. I'm hoping that people are going to sign up for the Q&A if they don't, I'll go into some more details.

20 minutes I'm, hoping that people are going to sign up for the for the Q&A. If they don't I'll go into some more details.

On the call and with that Matt why don't I hand, it over to you I'll get I'll get more into the barriers.

on the calls. And with that, Matt, why don't I hand it over to you? I'll get more into the various divisions, our subsidiaries after the Q&A or during the Q&A. And depending on how long the Q&A is, I'm happy to spend a little bit more time talking about the various subsidiaries. But I do like the idea of getting into the Q&A. I don't like to be too repetitious. And with that, Matt, why don't I hand it over to you to start the question.

Visions our subsidiaries.

The Q&A or during the Q&A and depending on how long the Q&A as I'm happy to spend a little bit more time talking about the various subsidiaries, but I do like the idea of getting into the Q&A I don't like to be too repetitious and without Matt why don't I hand, it over to you to start the questions.

Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone. If you are using a speakerphone. Please pick up your handset before pressing the keys if at any time. Your question that's been addressed and he would like to withdraw. Your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.

Thank you. We will now begin the question and answer session. To ask a question, you may press star than one on your touchtone phone. If you are using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star than two. At this time, we will pause momentarily to assemble our roster.

Okay.

Matt we can get started with questions I see a number of people already in the queue.

Thank you. Our first question will come from <unk> Chen with H C. Wainwright. Please go ahead.

Thank you. Our first question will come from E10 with HVWaneRate. Please go ahead.

Thank you for taking my questions. My first question is could you. Please clarify that in the first quarter what percentage of your testing volume was.

Thank you for taking my questions. My first question is, could you please clarify that in the first quarter, what percentage of your testing volume was reimbursed by HRSA? And if HRSA is...

Reimburse pinehurst.

And if a person is no longer.

What would be our tried and true.

Test.

Sure.

Sure. So, this is, honestly, it's a complicated question I've never broken it out. The HRSA funding was probably was north of 50%. But we are at the same time, instituting ways to adjust for that so that

So yeah. This is honestly, it's a complicated question I've never broken at broken it out at the Hearst of funding was probably was north of 50%.

But we are at the same time instituting ways to adjust for that so that.

So that for instance, we have any customer or customers, rather our collection partners at our collection partners.

So that for instance, we have any customer, our customers are our collection partners and our collection partners.

What a couple of our sets of collective partners are actually on the street of New York City where they have pens and Because of HRSA if we don't get Reimversed by HRSA they don't get reimbursed either so it hurts them as much as it hurts us

A couple of our sets of collective partners, who are actually on the streets of New York City, where they have pets and because of her shop, if we don't get reimbursed by her so they don't get reimbursed either so it hurts them as much as it hurts us.

So they are doing an incredibly diligent job and we are adjusting so that they only accept.

And so they are doing an incredibly diligent job, and we are adjusting so that they only accept.

Katz from patients that have insurance or for which we have such good information on the patients that it is likely that we're going to get insurance.

tests from patients that have insurance or for which we have such good information on the patients that it is likely that we are going to get insurance. So while our numbers...

So while our numbers are.

Our high level numbers may drop off a little bit we're going to adjust by increasing our percentage of specimen that our company by insurance at the outset.

Our high-level numbers may drop off a little bit. We're going to adjust by increasing our percentage of specimens that are accompanied by insurance at the out.

So this really is a dynamic situation but.

So this really is a dynamic situation, but I can tell you our numbers are running up so substantially year over year that even without HRSA, our numbers will still be up substantially year over year in the second quarter and for the foreseeable future. I wish I could give you more specific answer than that right now. I apologize that I can't, but I hope that someone answers your question.

But I can tell you our numbers are running up so substantially year over year that even without hurting our numbers will still be up substantially year over year in the second quarter.

And for the foreseeable future I wish I could give you a more specific answer than that right now I apologize that I.

But I hope that somebody answers your question.

Oh and the last part of this I just heard the Biden administration. They are still fighting to get that funding and there's a good probability that the Hearst. The funding is going to come back if that happens our numbers will be extraordinary this year.

And oh, in the last part of this, I just heard the Biden administration they are still fighting to get that funding. And there's a good probability that the HRSA funding is going to come back. If that happens, our numbers will be extraordinary this year. But the rest of the year, otherwise, there's still going to be a substantial year over year. As I sit here today.

So you are otherwise, they're still going to be up substantially year over year as I as I sit here today.

Thank you.

Thank you. And my second question is, is the personal genomics testing service already available?

Second question is if the personal genomics testing service already.

Retail stores.

in cho depos

Understood.

No.

Our current sales looking recently.

Got it so no we're not in the big box stores, yet we are a big box stores I don't Wanna mention any names, but we have major retailers that are very interested and we're actually very far along in the process, but you've got to understand to go into retail stores. It sounds simple, but we had to completely change your package.

Got it. So, no, we're not in the big box stores yet. We have big box stores, I don't want to mention any names, but we have major retailers that are very interested and we're actually very far along in the process. But you've got to understand, to go into retail stores, it sounds simple, but we had to completely change the package. The Nebula package that's sold online, that's shipped direct to the consumer. That's not a package that's very friendly.

That'd be the package that sold online that's shipped direct to the consumer that's not a package that's very friendly.

Sitting on the shelf and retail stores also loved the job that the founders of that'd be all it did come I'll have Dennis.

sitting under shelf and retail stores. Also, love the job that the founders of Nebula did, Kamala and Dennis, and backed by George Church and started in the company, building over the last couple of years. But we have 25 years of experience.

And backed by George Church, and starting the company in building over the last couple of years, but we have 25 years of experience.

And retail sales and so we want to optimize the package so that it attracts consumers when they're walking down the aisle we wanted to.

in retail sales, and so we want to optimize the package so that it attracts consumers when they're walking down the aisle. We want to optimize the package, not only the shape of the package so that the retailer is accepted on the shelves, but we want to optimize the claims on the package.

Optimize the package not only the shape of the packaged shows the retailers accepted on the shelf, but we want to optimize the claims on the package.

So theres a number of variables that we're working very very quickly and we're in late stages of finalizing the package, making final presentations to retailers.

So there's a number of variables that we're working very, very quickly on. We're in late stages of finalizing the package, making final presentations to retailers. But unfortunately, I wish this was a fast process. It just isn't. We've been through it a number of times. And I don't want to give exact timing, but we're in late stages of finalizing the package and getting on the shelves. You know, but we're talking, you know, months, you know, late this year. We're not talking about it in the next few weeks. But we expect.

But unfortunately I wish it was a fast process. It just isn't we've been through it a number of times and I don't want I don't want to give exact timing, but we're in late stages of finalizing the packers doing getting on the shelf, but were talking you know most of you know.

This year, we're not talking about in the next few weeks, but we expect.

And and our goal and understand the goal and putting the package on the shelf.

And our goal and understand the goal and putting the package on the shelf.

You have your 5%, 2%, 5% or know exactly what the numbers are percentage of the public that knows about whole genome sequencing, 95% of cockpit doesn't even know what whole genome sequencing and our goal is to get this out to the masses and educate them on how interesting it is.

you have your five percent two percent five percent i don't know what exactly what the numbers uh... percentage of the public that knows about all genome sequins in ninety five percent of country doesn't even know what all genome sequins in our goal is to get this out to the masses and educate them on how it was being it is

Not just to get information about Grand South Korea, but to get information about your health about diseases eat your potentially are predisposed to I mean, that's such critically important personal information if we educate consumers we think that there's a monster market that is untapped.

not just to get information about your ancestry, but to get information about your health, about diseases that you're potentially predisposed to. I mean, that's such.

critically important personal information if we educate consumers we think that there's a monster market that is unpass and that's that's the goal. So we have not rolled out in storage yet but we are highly optimistic that we're going to be successful. We have 25 years of expertise doing this and I You know you bet you bought a dollar. We're gonna do this the right way and I'm very confident what we're and the packaging that we're developing and The response is so far from the retailers. There's been excellent

And that's that's the Gulf. So we have not rolled out in stores, yet, but we are highly optimistic that we're going to be successful. We have 25 years of expertise doing this and I know you can bet your bottom dollar where we're going to do this the right way.

And I'm very confident in what we're and the packaging that we're developing and the responses. So far from the retailers has been excellent.

Thank you.

Yeah. Thanks, so much for your support and I appreciate the questions. Matt We can go onto the next question. Please.

Thanks so much for your support and I appreciate the questions. Matt, we can go into the next question.

Thank you. Our next question will come from Patrick E. Patterson with home. Please go ahead.

Thank you. Our next question will come from Patrick E. Patterson with Home. Please go ahead. Good morning, Ken.

Good morning, Ken phenomenon, where you Patrick.

I'm trying to make numbers.

I'm, just really shocked you're great.

I'm just really shocked, you're great. Ted, I really have two questions and the first one is about the whole genome sequencing and it's, I'm watching a couple ads from ancestry.com and 23andMe and they're advertising that they can do health things also with their product. Can you just go in a little bit and explain the differences and what the advantages are that Medgill has?

I really have two questions. The first one is about.

The whole genome sequencing and it's I'm watching a couple of ads from ancestry dot com in 'twenty, three and they and their advertising, but they can do helps things also.

Their product.

Can you just go in a little bit and explain the differences in what the advantages are that natural house.

It's it's night and day not it's not in the same ballpark.

Sure, it's night and day. It's not in the same ballpark. If you want to learn about your...

If you want to learn about your health.

You want to know.

Details you don't want some just overall picture you want details you cannot get.

Details you don't want some just overall picture you want details you cannot get

The intricate details from the way they do sequencing compared to whole genome sequencing, what they do is very inexpensive.

the intricate details from the way they do sequencing compared to whole genome sequencing. What they do is very inexpensive.

Way that they study a very small percentage of your genome. It's great. It's all they need in order to provide you with detailed ancestry information, especially after they've tested so many people around the world. It's easy for them to go with a low cost.

way that they study a very small percentage of your genome. It's great. It's all they need in order to provide you with detailed ancestry information, especially after they've tested so many people around the world. It's easy for them to go with a low cost.

Genomic test to study is very small percentage of your genome to tie you win two other people around the world that have that same genetic makeup. So therefore, they can give you.

Genomic test to study a very small percentage of your genome to tie you in to other people around the world that have you know that same genetic makeup. So therefore they can give you You know high-level ancestry information the way they do their testing. However

You know high level ancestry information the way they do their testing however.

I don't see why anyone once you learn about whole genome sequencing and whatever.

I don't see why anyone, once you learn about whole genome sequencing, would ever pay...

Hey.

For their testing if you want to learn about health information so to put in perspective, you can get high level, you know granular ancestry information and minimal health information from their test or without test you can get a you know basic ancestry information, but very high level.

for their testing if you want to learn about health information. So to put it in perspective, you can get high level, you know, granular ancestry information and minimal health information.

from their test, or without a test, you can get, you know, basic ancestry information, but very high-level health-related information. So, if you, if the reason you're ordering the test is for ancestry information, yeah, go to one of those companies. You know, most people that want ancestry information has already done that test, okay? So, they actually have difficult business models. We, on the other hand.

Health related information. So if you if the reason you're ordering the test is for ancestry information you Gotta go to one of those companies.

Most people that want ancestry information has already done that okay. So they actually have difficult business models, we on the other hand.

We're at the forefront.

we're at the forefront, you know, we're at the beginning, we're, you know, it's first inning, I don't even know, we're warming up, it's not even the first inning yet, to reach out to the masses to educate them about health related information, if you want high level,

At the beginning where you know its first inning I don't even know where warm it up it's not even the first thing yet to reach out to the masses to educate them about health related information if you want high level.

Related information about your genetic makeup in diseases that you're predisposed to them and so on and so forth.

health-related information about your genetic makeup and diseases that you're predisposed to.

and so on and so forth. Then you're gonna want to hold genome sequencing. The reason why those companies that you mentioned don't do a hold genome sequencing is because historically it was so expensive. It was out of the reach of the average person. The average person who wants the answer for the information doesn't want to spend $600.

Then you're going to want a whole genome sequencing. The reason why those companies that you mentioned don't do a whole genome sequencing is because historically it was so expensive. It was out of the reach of the average person. The average person wants ancestry information doesn't want to spend $600, alright, and you know even up to like a year ago, you know $600 is the law.

right? And you know, even up to like a year ago, you know, $600 is the lowest and that was the base price of the whole genome sequencing. That's the cost of the lab. So then to the consumer would be like over $1,000. Nobody's paying that to learn about your ancestry information. So it was a model where they could not.

And that was the base price of the whole genome sequencing. That's the cost of the lap. So then to the consumer it would be like over $1000 nobody's paying that to learn about your accessory information. So it was a model where they could not.

I'll provide whole genome sequencing and so it's not the way they do business. They are in a completely different business, but to be honest, we shouldn't even be comparing to that the only reason we ever even make comparisons to them is because those are the names that everybody hears about and everybody knows about they're not [laughter] excuse me.

provide whole genome sequencing and so it's not the way they do business. They are in a completely different business but to be honest we shouldn't even be comparing to them. The only reason we ever even make comparisons to them is because those are the names that everybody here is about and everybody knows about. They're not. Excuse me.

They're not in the business that we are in a I I hope that answers your question Pat and I appreciate it's a great question.

They're not in the business that we are in. I hope that answers your question, Pat. And I appreciate it. It's great.

Oh yeah.

No, yeah, that is an answer, kid. My other question is about this potential new product, this over-the-counter anti-viral diatere supplement. You mentioned, are we talking a supplement that's preventive or one that's for treatment after you get it?

My other question is about this potential new products over the counter anti viral dietary supplement you.

You mentioned are we talking a supplement that's preventing or one that's for treatment. After you get it.

That's a that is a great question and I'm jumping ahead.

That's a, that is a great question and I'm jumping ahead. Um, and I don't know, maybe I shouldn't even put it in the press release, but I want shareholders to understand.

And I don't know, maybe I shouldn't even put it in the press release, but I want shareholders to understand that.

We are continuing to diversify and grow we have an incredible platform I mean I had this platform two years ago. When we had a dollar and a half stock you know, we're doing $10 million in revenues and breakeven. Okay. So we had a platform where the NASDAQ platform, you know with our history and people and infrastructure.

that we are continuing to diversify and grow. We have an incredible platform. I mean, I had this platform.

two years ago when we had a dollar and a half stock, you know, we're doing $10 million in revenues and breaking even, okay? So we had a platform. We had a NASDAQ platform, you know, with a history and people and infrastructure and all that stuff. I and our management team took that to the next level, you know, to be this 100 million market cap company with over 50 million in net working capital. We're a different company. It's a different platform now than what we were.

All that stuff.

I and our management team took that to the next level you know to be this 100 million market a market cap company with over 50 million in networking Castle, we're a different company. It's a different platform now than what we were.

Just a year and a half ago were completely different countries completely different ballpark. Our platform has five levels above what we were a year and a half ago. So now with the platform. We have now now with this platform I can build the company and our management team can build the company. The next day. So one of those things that we're doing we're looking at opportunities all the time.

just a year and a half ago we're completely different companies completely different bullpark our platform is five levels what we were a year and a half ago but now with the platform we have now now with this

I can build the company and our management team can build the company the next day. So one of those things that we're doing, we're looking at opportunities all the time. And I just wanted everyone to know we're in late.

And I just wanted everyone to know we're in a late stage discussions on a you know I'm not sitting here sleeping at the switch and I'm not rested on my laurels and yeah to be honest with you Pat I really appreciate.

discussions on, you know, I'm not sitting here sleeping at the switch and I'm not resting on my laurels. And yeah, to be honest with you, Pat, I really appreciate, you know, you saying great quarter and all that, but I don't want people to get spoiled by the quarter sequentially. We're probably not going to have numbers like this in the second and third quarters. We might in the fourth quarter, but we're not, we're not likely to in the second or third quarters.

You know, you're saying great quarter, and all that but I don't want people to get spoiled by the quarter sequentially, we're probably not gonna have numbers like this in the second and third quarters, we might in the fourth quarter, but we're not we're not likely to in the second and third quarters.

The demand just isn't there even though we do have this new spiked to COVID-19 coming. So you know there are a lot of variable, but the point is that just one business I'm I'm on to building. The next business already in the next two businesses, we're getting at the genomics and I want to build a pharma company.

uh... the demand just isn't there even though we do have this new spike the COVID-19 coming so you know there are a lot of variables but the point is that just one business uh... i'm on the building the next business already in the next two businesses on we're getting into genomics and i want to build a farm

Company when I watched the proxy contest when control of the company.

when I launched a proxy contest to win control of the company We had a form of division and I thought that was gonna be worth a lot of money And that's why me and a lot of other investors were actually invested in the company after I won control the company found out it was worthless

We had a pharma division and I just thought that that was gonna be worth a lot of money and that's why me and a lot of other investors rightfully invest within the company. After I won control of the company found out it was worthless what I can tell you is the pharma division that we're gonna build now we're going to execute on the same way we executed on the CLIA lab. So if I tell you we're going to build a pharmaceutical division that has big potential.

What I can tell you is the pharma division that we're going to build now, we're going to execute on the same way we executed on the clear lab. So if I tell you, we're going to build a pharmaceutical division that has big potential, you can bet on it. And I'm simply telling you, I'm in the late stages.

You can bet on it and I'm simply telling you I'm in the late stages.

Of developing that I'm really excited about it and I will be updating shareholders in the coming months, but I'd, rather not get into any more you know many more details on it Tonight.

of developing that. I'm really excited about it. And I will be updating shareholders in the coming months, but I'd rather not get into any more, many more details on it tonight.

Okay. Thank you Chad.

Thank you Pat really appreciate your support Matt next question. Please.

Thank you Pat, really appreciate your support. Matt, next question please.

Our next.

Our next question will come from Robert Pytis with MRT-End. Please go ahead.

Question will come from Robert Tightest with M. A R T and please go ahead.

Yeah.

Hey, Ted a stellar quarter, yeah, it's really nice to see so much free cash flow generated again.

Hey Cadd, Stellar Quarter. It's really nice to see some of the free cash loads generated again.

My question.

My question is with the ramp up and hiring, and especially particularly Bill Leight, I noticed that he had some international experience. And I was just wondering, does Popeyes have, can you speak to any plans to expand international?

With the ramp up in hiring.

Particularly bill White.

I know that he had some international experience and I was just wondering does Pope age have a can you speak to any plans to expand internationally.

Wow, that's great question isn't that interesting so actually.

Wow, that's a great question. Isn't that interesting? So actually, I mentioned the founders of Nebula genomics, Kamala Bod and Dennis Grishan, who really, really bright people in founding Nebula, and of course, backed by world renowned George Church. But then we hired Pam Bealer to be our Chief Strategy Officer for that business for the Prophase Precision Medicine subsidiary, and he has tremendous

I mentioned the founders of Nebula genomics, Kumalo bought and Dennis question, Oh, who really really bright people in founding nebula and of course backed by World renowned Georgia Sharp, but then we hired Sam Beeler.

B, our chief strategy officer for that business for the Prophage precision medicine subsidiary and he has tremendous.

Relationships abroad.

relationships abroad. And, you know, I think I've mentioned, I don't know, I think I mentioned one of the companies, actually, I think I mentioned before, so I can mention G42. It's a $10 billion company that has, it probably has the greatest initiative of anyone in the world for doing whole genome sequencing.

And you know I think I've mentioned.

I I think I mentioned, one of the companies actually I think I mentioned before so I can mention a G 42 is it it's a $10 billion company.

That has it has probably has the greatest initiative of anyone in the world for doing whole whole genome sequencing.

Through the MRI D genome product E G P and their test with conducting and whole genome sequencing on like everybody in the UAE I mean, what they're doing is vast and they wanted to do something worldwide and they want to develop a relationship a partnership with us because they don't have a presence in the United States in the United States of course.

through the MRID genome product, EGP, and their tasks with conducting whole genome sequencing on everybody in the UAE. I mean, what they're doing is vast, and they wanna do something worldwide, and they wanna develop a relationship, a partnership with us, because they don't have a presence in the United States, and the United States, of course, is one of the biggest, if not the biggest markets to go after. So they're actually excited to work with us. So Bill is going to compliment.

This is one of the biggest if not the biggest markets to go after so they're actually excited to work with us So bill is going to complement.

Initiatives that were already working on and.

initiatives that we're already working on. And the reason why we hired Bill, if we were just going to remain a $100 million company, our current CFO , Monica Brady, is fantastic. She's so loyal, works 24-7 and gets the job done. We switched auditors, built a whole new business. She oversaw all of it from the finance perspective. She did a fantastic job. I want to build.

The reason why we hired bill if if we were just going to me you know remain a $100 million company. Our current CFO Monica Brady it's fantastic she is.

Our loyal works 24, seven and gets the job we switched the auditors built a whole new business. She oversaw all of it from the finance perspective, she did a fantastic job I want to build to.

Two 1 billion a multibillion dollar company to do that you have to continue to build a bill brings some tremendous experience and perspective and skill sets that.

So a billion and multi-billion dollar company to do that, you have to continue to build, build brings some tremendous experience and perspective and...

That are complementary to Monica. So I think we're going to have the dream team on the finance side, and yes, absolutely and to be honest I've been working with all the investment bank myself all these years.

that are complimentary to Monaco's. So I think we're gonna have the dream team on the finance side. And yes, absolutely. And to be honest, I've been working with all the investment banks myself all these years. I, you know, I have a...

I have a 40 year history with Wall Street are worked on wall Street for decades.

40 year history with Wall Street, I worked on Wall Street for decades. So I've been doing all that my-

So I've been doing all that myself bill.

Bill has a lot of expertise it turns out he has a lot of the same relationships I do in fact I was introduced the bill through our through think equity our investment bank and so you know it's a match made in heaven, He's just going to significantly add.

Bill has a lot of expertise, it turns out he has a lot of the same relationships I do. In fact, I was introduced to Bill through our, through Think Equity, our investment

And so, you know, it's a match made in heaven. He's just going to significantly add...

To our overall team and absolutely on the global front, he's going to be very helpful. In working with Sam Nebulous side.

to our overall team, and absolutely on the global front, he's going to be very helpful in working with Sam on the Nebula side, but also in every subsidiary of our company.

But also in every subsidiary of our company.

And that really helps I was kind of reading the tea leaves there I appreciate it.

Yeah, that really helps. I was kind of reading the tealies there, so I appreciate you. You said some light on that.

Thank you.

Oh, you're quite welcome thanks for the question.

Next question please.

Again, if you have a question. Please press Star then one our next question will come from Dennis Waldman, but Barrett productions LLC. Please go ahead.

Again, if you have a question, please press star then one. Our next question will come from Dennis Waldman, but Barrett Productions, LLC. Please go ahead.

Hi, Ted congratulations on an awesome first quarter.

Hi Ted, congratulations on an awesome first quarter. Pat actually asked my initial question, but I'll ask a question about the diagnostic test.

Pat actually asked my initial question, but I'll ask a question about the diagnostic testing.

You're saying that you don't see second and third quarter are having the same sort of rates yet I live in new England I watched the New York rates are quite a bit positivity has gone in the last month from 3% to certain areas that are over 20%.

uh... you're saying that you don't see second and third quarter uh... having the same sort of rates yet i live in new england i watch the new york rates uh... quite a bit positivity has gone in the last month from three percent to certain area that are over twenty percent at the the cdc's are saying that we're expecting another surge in the new england area and the northeath area how could you be so sure that we're not going to see the same numbers that we saw in the first quarter

The C D. CS are saying that we're expecting another surge in the new England area and the northeast area.

How could you be so sure that we're not going to see the same sort of numbers that we saw in the fluff wasn't the first quarter.

Alright, so that if you are what an amazing question first of all I really appreciate your support and actually it's a fantastic question. So here goes.

All right, so Dennis, you went into amazing questions. First of all, I really appreciate your support. And actually it's a fantastic question. So here goes.

I don't want to get too caught up in myself, and I don't want shareholders to think that every quarter we're just going to keep announcing, you know, revenues up a bazillion percent and earnings up a bazillion percent. All right. It's just it's just not fair to put that, you know, I don't want to put that pressure on myself. And I like to.

I don't want to get too caught up in myself and I don't want shareholders to think that every quarter. We're just gonna keep announcing you know revenues up a bazillion percent in earnings up a Brazilian percent alright. It just it's just not fair to put that I don't want to put that pressure on myself and I like to.

Under promise and over deliver and I think that I have done that for.

under promise and over deliver and i think that i have done that at for twelve years of cio of a company right and the reason why we've paid out two dollars and ten cents special dividend we had a stock about sixty five cents paid out two dollars and ten cents and special dividend and we now have over fifty million network capital right now happen by accident but

For 12 years as CEO of our company Alright, that's the reason why we've paid out $2.10 and special dividends, we have talked about them 65 paid out $2.10 and special dividend and we now have over 50 million of net working capital right now it happened by accident, but.

I'm really interested and continuing to collaborate and partner with long term investors and I, just can't and won't be changed to short term traders and I want our shareholders to keep that perspective that if you're a long term shareholder on the largest.

I'm really interested in continuing to collaborate and partner.

with long-term investors. And I just can't and won't be chained to short-term traders. And I want our shareholders to keep that perspective that if you're a long-term shareholder, I'm the largest shareholder in the company.

Shareholder in the company.

and and you know i'm gonna build the value of the company to protect my

And and you know I'm going to build the value of the company to protect my interest and I say that just to make all of you feel better the truth of the matter is I care more about your investments in I do Mike. It's just the way I was born and that's the way I'm Wired and I want everybody, who has a long term shareholder to do really really well, but I don't want them to get.

and i say that just to make all of you feel better the truth of my words i care more about your investments and i do my it's just the way i was born in this way i'm wired and i want everybody who's a long term

to do really really well, but I don't want them to get wrapped up.

Wrapped up in short term psychological swings I've invested in hundreds if not thousands of companies over 40 years the only.

in short term psychological swings. I've invested in hundreds, if not thousands, of companies over 40 years. The only...

I ever really made substantial money, where in the smart long term investments I never made it on the deals where I thought I don't something for two or three months or five months never ever worked out you add up all those investments I watched a ton of money and all of them. The only ones that I made money where are the ones, where I invested in something long term and the management team executed and that's why I.

time I ever really made substantial money were in the smart long-term investments. I never made it on the deals where I thought I'd own something for two or three months or five months. Never ever worked out. Yeah, at all those investments, I lost a ton of money in it, all of them. The only ones that I made money were in the ones where I invested in something long-term and the management team executed. And that's why out of a thousand investments, maybe five worked out, but the five worked out, big enough to put me in the position where I'm in.

1000 investments, maybe five worked out but the five worked out big enough to put me in a position where I'm at now so I just want people to have that perspective, I don't know.

So I just want people to have that perspective. I don't know.

What our next couple of quarters are going to be and yes that longhorn Newsday newspaper that literally just came out. This morning was that my driveway picked it up communist work, which is why I mentioned, it yes, and I've been telling everybody they're more waves of Covid coming you know, but I can say that you know.

what our next couple of quarters are going to be. And yes, that long on the news day, news paper, that literally just came out this morning, it was on my driveway, picked it up, come in and did work, which is why I mentioned it. Yes, and I've been telling everybody, there are more waves of COVID coming, but I can say that, you know, it's still unblue, but you know, whether people want to listen or not. And so, yes, our testing is continuing, our testing is significant. We have a wrench in the works, and that herf is and funded.

Until I'm blue, but you know whether people want to listen or not and so yes. Our testing is continuing our testing is significant we have a.

A wrench in the works and that hurts isn't funded.

And a decent percentage of our business I E.

And a decent percentage of our business I

Each head is nice enough at ATWainwrights to follow our company and do updates. He really does a fantastic job. And he asked the question about the percentage person and I admitted it's over 50%. So I mean, that's a dramatic difference. If you cut out half of our revenues, you're going to cut out more than half of our earnings, of course, because you still have the overhead. So I don't know what's going on with HERSDA. It's a real wild card without HERSDA. It means that we're only going to get reimbursed.

Chat is nice enough Ah at H C. Wainwright to follow our company and do update do you really just fantastic job.

And you know when he asked the question about the percentage person and I admit it. It's all of it is over 50%. So I mean, that's a dramatic difference if you cut out half of our revenues you're going to cut out more than half of our earnings of course, because you still have the overhead. So I don't know what's going on with her so it's it's a real wildcard without versa. It means that we were only going to get reimbursed.

From people that have insurance and a lot of times people, but the issue was a lot of times people don't have the insurance with them.

from people who have insurance and a lot of times people, but the issue is a lot of times people don't have the insurance with them.

When they're walking down the streets, but they have it at home, but what we're doing is where we're continually we have such a sophisticated IC system, we're continually upgrading but if they don't have their insurance with them, but they have it we're instituting policies for collecting assessments only if you provide your legal idea like.

when they're walking down the streets but they have it at home. But what we're doing is we're continually, we have such a sophisticated IT system, we're continually upgrading so that if they don't have their insurance with them, but they have it, we're instituting policies.

for collecting assessments only if you provide your legal ID like a driver's license and we have IT and place back to the scan your driver's license.

The driver's license and we have IP in place to actually scan your driver's license. So the odds of us getting insurance goes way up so we've got two variables we have heard that.

They knock out and I understand the numbers, but the numbers are high and it depends on the customer so Barry I don't want it but it is more than 50%, but on the other hand, I think that we're going to start getting a higher percentage of.

People that have insurance, so I don't know where the numbers play out and that's why I know that year over year. The people that we're testing now that have insurance is significantly greater than the total number of tests, we were doing a year ago at this time significantly greater so without her so I know the numbers Rob I, just don't know how much they're going to be are going to be up without her shop, because we were making so much money.

Perfect.

They were making money, it's not a bad thing. It's a good thing it's testing people that don't have a chart with the amazing thing about all of this is that horse funds people who are in poverty people that don't have insurance people, who are a minority of people who are struggling.

and what i think we're making money that's not about the good thing is testing people that don't have a chart we did the amazing thing about all this is that her set fun

people who are in poverty, people that don't have insurance, people who are minorities, people who are struggling. You know, those are the people that need a good health care. So how do you not fund HRSA to take care of these people? So I think it's inevitable and logical that HRSA will be funded if it is, you know.

Those are the people that need a good health care. So how do you not find her her so to take care of these people. So I think it's inevitable logical that hurdle will be funded if it is are you now.

I'll be very excited but long term my game plan is a lot bigger than COVID-19 testing, alright, and I hope that I'm sure that came across on this call with the other things that we're working on.

I'll be very excited, but long term, my game plan is a lot bigger than COVID.

All right, and I hope that I'm sure that came across on this call with the other things that we're working on. The nebula genomics, I'm telling you, genomic testing right now.

The nebula genomics I'm I'm, telling you.

Genomic testing right now.

Is where the Internet and I've said this before it's where the Internet was 20 years ago why wouldn't you want to invest in a company. That's just the beginning of an exploding industry.

is where the internet and I've said this before, it's where the internet was 20 years ago. Why wouldn't you want to invest in a company that's at the beginning of an exploding industry?

And we have of them as we've demonstrated that we execute and we have great people who've got George Church World renowned leader in genomics working in partnership with US I mean, what more could you ask for we have a couple of brilliance.

and we have a demo we've demonstrated that we execute and we have great people got your church world renowned leader genomics working in partnership with us i mean what more could you ask for we have a couple of brilliant

From Harvard, who founded Nabila and and then our whole management team I think we're gonna blow this a big but this is something over the next few years did you earn in 1998 or 1999 or 2000. You know you did you look at you know Amazon and.

people from Harvard who who founded Nebula and and then our whole management team. I think we're going to blow this up big But this is something over the next few years did you in in 1998 or 1999 or 2000? You know you did you look at you know Amazon and and and Google and did you look at these companies and say oh wait This took three months longer than I expected it to allow the investment now there's something you buy you put it away And you want to blossom that's what I'm doing in genomics

And Google and did you look at these companies and say Oh wait this took three months longer than I expected. It allows the investment now there's something you buy it put it away and you watch it blossom, that's what I'm doing a genomics and I'm not.

Even rusting on that I'm going to continue to build the COVID-19 business, but we're going to continue to build our entire clinical lab business, that's going to take time, but we're doing that this year. So we're gonna have a fully diversified clinical lab. We're gonna have the genomics and then in addition to that what I discussed about the pharma business is the first time I've mentioned this.

even resting on that. I'm going to continue to build the COVID business, but we're going to continue to build our entire clinical lab business. That's going to take time, but we're doing that this year. So we're going to have a fully diversified clinical lab. We're going to have the genomics. And then in addition to that, what I discussed about the pharma business the first time I mentioned this.

And it's the first time I put it in the press release, but we're in late stages on what we're working on their number are really excited about it and that's something I've been working on for many many many months, but I'm the opposite of both management.

And it's the first time I've put it in a press release, but we're in late stages on what we're working on there. And I'm really excited about it. That's something I've been working on for many, many, many months, but I'm the opposite of most management.

I'm not going to hide something that's not real and I don't talk about something until it Israel.

You know, I'm not going to hide something that's not real and I don't talk about something until it is real.

And so that's something I've been I've been working on literally you know six months or nine months that I haven't talked about before and if I'm talking about it now in the late stages that are not in the early stages. So I have some.

And so this is something I've been talking, I've been working on for literally, you know, six months or nine months that I haven't talked about before. And if I'm talking about it now in the late stages, not in the early stages. So I have, you know, some exciting things.

Some exciting things.

Up my sleeve hopefully for our shareholders, but it for long term shareholders and I hope that answered. Your question. So look the short answer is that I went on because I don't see a lot more questions. The short answer is I don't know what our numbers are going to be for Covid, and frankly, I don't care, what I like to earn more money.

Up might sleeve hopefully for our shareholders, but it's a long-term shareholder.

And I hope that answers your question. So look, the short answer is, and I went on because I don't see a lot more questions. The short answer is, I don't know what our numbers are going to be for COVID. And frankly, I don't care. Would I like to earn more money?

Over the next couple of quarters sure of course, why wouldn't I and I hope to and I expect that our company is going to be very profitable over the next you know over the foreseeable future every quarter.

over the next couple of quarters? Sure, of course. Why wouldn't I? And I hope to, and I expect that our company is going to be very profitable over the next, you know, over the foreseeable future every quarter. But we're, I want to build a multi-billion dollar company. I'm not doing that with COVID.

But where I want to build a multibillion dollar company I'm not doing that with Covid testing COVID-19 is generating it generate enormous amount of cash it puts us in the enviable position. Unlike the 98% of other microcap could are all trying to raise money and a burnt through all their capital and that's why their stocks have gone down 90% Theres a reason why the stock market just crashed over the last two.

COVID is generating a generous amount of cash. It puts us in the enviable position unlike the 98% of other microcaps that are all trying to raise money and a birth world or capital. And that's why they're stocks. I've gone down 90%. There's a reason why the stock market just crashed over the last six months and our stocks up over the last six months.

Six months into our stock's up over the last six months, it's not an accident because we're executing we're generating cash flow, we're generating earnings and we don't have to raise capital we don't need investment banks to raise capital right now, but the investment banks are working with us as we build a multibillion dollar company and they see the potential the reason, they're following us in working with us so closely.

It's not an accident because we're executing, we're generating cash flow, we're generating earnings, and we don't have to raise capital, we don't need investment banks to raise capital right now, but the investment banks are working with us as we build the multi-billion dollar company, and they see the potential, the reason they're following us and working with us so closely, is because they know that the potential is there for us to grow big, and so there'll be a lot of capital activity in the coming years, and they're a long term, and that's specifically why I like think equity in AP way and write so much.

They know that the potential is there are forced to grow big and so there'll be a lot of capital activity in the coming years and there are there long term and that's the typically why I like to think equity an H C. Wainwright so much.

Because they are thinking long term with me and they are truly partners are in on a call.

because they are thinking long-term with me and they're truly partners in, of course, think equity.

I think equity.

You know raise all that capital first a year ago. They just did a phenomenal job I mean like surprisingly phenomenal job. So we have all of that to build a company longer term I'm, sorry rental ran on a little bit I'm, obviously excited about the future of our company I just don't want people buying the stock.

you know, raised all that capital for us a year ago. They just did a phenomenal job. I mean, like, surprisingly phenomenal job. So we have all that to build a company longer term. I'm sorry I ran on a little bit. I'm obviously excited about the future of our company. I just don't want people buying the stock because they're trying to figure out, are we gonna earn 10 cents or are we gonna earn a dollar, you know, in the third quarter? It's just not relevant to why you wanna be invested.

Because they're trying to figure out are we going to earn 10 sense, where we can earn a dollar in the third quarter. It just it's just not relevant to why do you want to be invested in our company.

Wow that was a long answer, but if I got it.

Wow, that was a long answer. What is that? You know it was. It was not on me.

No it wasn't.

Yeah.

But what I am long term and I do wonder about how how prophase gets affected by what's happening in the current world of course like everybody else how are how our uninsured people getting tested now.

but i have long term and i and i do wonder about how you know how uh... profite gets affected by what's happening in the current world of course like everybody else how are how are uninsured people getting tested now

They can't.

Well, but they have to pay they have to pay cash.

If they have the cash but now if you're talking about people who are uninsured. There are also poor then guess what they're not going to want to get tested.

you know if they have a cash but now if you're talking about people who are unsure the rights also poor then guess what they're not going to want to get tested

Which is a shame because at the end of the day the best way to handle this COVID-19 problem is to get tested and find out as quickly as possible. If you have COVID-19 and if you do have COVID-19 quarantine immediately before you spread it I mean, it's the most logical thing in the world to get tested find out if you have covered if you have symptoms you.

which is a shame because at the end of the day, the best way

to handle this COVID problem is to get tested and find out as quickly as possible if you have COVID, and if you do have COVID, quarantine immediately before you spread it. I mean, it's the most logical thing in the world to get tested, find out if you have COVID, if you have symptoms, you feel sick. And so right now, what's also went, this whole notion, this whole idea with masks and no masks and do we, you know, people are worried now, there's so much government, politics, and psychology and media. I really appreciate

Feel sick and so right now what's also went through this whole notion this whole idea with masks and no masks and do we have.

People are worried that there's so much government politics, and psychology and media.

Yes.

Which has absolutely nothing to do with what's going on with Covid, we have a monster outbreak of Covid going on right now a year ago, everybody would have been in a panic right now nobody's paying attention. They just changed the rules you don't have to worry about I don't know if mask help with COVID-19 or not quarantining and staying away from people does so listen I don't know what the answer so I just know that the way the media coverage.

which has absolutely nothing to do with what's going on in coven we have a monster outbreak of coven going on right now year ago everybody would have been an panic right now nobody's paying attention they just change rules you don't have to wear math no i don't know if math

help with coven or not quarantine in state of ways people so i don't know the answer so i just know that the way the media covers the system to be accurate uh... and the way to handle politically is a lot of accurate but yeah for people without insurance

This isn't always accurate.

And the way it's handled politically isn't always accurate, but yeah for people without insurance, they've got a real problem right now and that's why I think I just heard that in the last two days. The Biden administration again is pushing hard on getting hurt the funded again.

they got a real problem right now that's why i think i i just heard that uh... in the last two days uh... the by the administration again is is pushing hard on getting her for fun to be

I'm, assuming that's inevitable, it's going to be it was coming through then where we're just going to have you know killer numbers I'm just being honest with you, but my other point is we don't need killer numbers to build our company. We have all the capital we have all the management we have all the initiatives in place that we're gonna I believe we're going to grow a very large company over the next couple of years with or without Covid.

So I'm assuming it's inevitable, it's going to then we're just going to have, you know, killer numbers. I'm just being honest with you. Um, but, but my other point is we don't need killer numbers to build our company. We have all the capital, we have all the management, we have all the initiatives in place that we're going to, I believe we're going to grow a very large company over the next couple of years with or without COVID. COVID to me is sort of icing on the cake, that it's just generating extra profits for us while we build these other businesses.

Covid to me, it's sort of icing on the cake that its just generating extra profits for us while we build these other business right.

And pay dividends that's something that's.

and pay dividends. That's such a bad thing. Generate capital. I mean, I hear we pay a 30 cent dividend and are working capital in the earnings that we generate dramatically more than the dividend we pay. So we can pay out a dividend and still be better off than before we pay the dividend. You know, two quarters of what we did is. And we did it last year. So it's not a bad place to pay.

It's a bad thing generate capital I mean here, we pay a 30 cent dividend.

Our working capital and the earnings that we generate dramatically more than the dividend. We paid so we can pay out a dividend and still be better off than before and pay the dividend.

No.

Two quarters of why we did it and we did it last year.

It's not a it's not a bad place to be.

Well, congratulations again and thank you for your answer.

Thank you so much that it's really appreciate it and it looks like Matt we have another question.

Our next question will come from Kyle Krueger with Apollo capital. Please go ahead.

Good morning, Ted how many.

Nebula genomics tests were sold.

During the quarter, what what's the run rate on that since it's your incipient business.

Yeah.

A great question and I Gotta be honestly I don't even know the answer to that question in my mind, we're still in the very early stages of building it.

You know if you if you wanted to just ball I really don't know what the numbers are in general you should assume that we're probably somewhere around.

I don't know if thousand tests a month.

And we're looking to grow that number and that's online, but again, we haven't formally dropped our prices permanently we're still working on longer term major deals for the sequencing and you know we haven't gotten into retail stores yet in retail stores you know those numbers could go up by multiples.

Very very quickly once we get into retail stores. So we're in the early stages I literally I don't know the numbers, it's almost sort of immaterial to me to be honest Eni and not to mention the fact, we haven't posted them publicly at a I don't want to state anything out of the truck.

Apologize for not giving you a definitive answer but I gave you a ballpark.

Our goal with us is to grow those numbers dramatically, but even having said that at a thousand whole genome sequencing tests per month.

Or in that ballpark.

We're a major player.

And that business direct to consumer major player Nobody even comes close everyone else tells them well all the other companies in the business want to partner with us.

[noise], who use our volume to try and leverage that and getting better pricing, but where we're the leader and we're just starting out and with our capital and our expertise our even our numbers I think we're gonna blow the matter of the water over the next year.

Yeah. Okay. My final question is on the reported revenues for the quarter.

Are all of those revenues associated with reimbursement certainty or are you, saying that half of the revenues.

Related to uncertainty.

Well that is a brilliant question.

Can I tell you that is an absolutely brilliant question.

Oh My God you have no idea, what we've had to work through between our finance team and our auditors.

The answer to your question is we have reserved.

For whatever revenues.

Our questionable.

That we're not going to earn so so what you what you see is what we expect to get.

Alright, and so our earnings are based.

And so basically our earnings are based on us not earning anything from her shop after March 22nd because harsha.

They're not accepting claims after March 22nd.

So any testing that we've done since that time on uninsured people is not in our is not in our numbers, although there's still a possibility that we could we can actually collect on those.

And then you know we have reserves, we have big reserve numbers I don't I don't want to Mark Who's going to kill me, if I say something that I'm not supposed to or that I say something incorrectly, but what I can tell you is our numbers are orders make sure. We make sure anyway to report the accurate numbers on what's real and not a what we hope so those are not insulated.

Numbers at all I think that's the best way to answer that question and I hope that answers. Your question, yes, absolutely our numbers.

Alright. Good good good really appreciate that was a great question. Thank you, Matt we have another question.

Thank you.

Our next question will come from Fred Mcdonald, a private investor. Please go ahead.

Hi, Chad Hey, Kid, how many currently do we have for a temporary employees and how long does it take to get them productive.

Oh good question so.

I've I've covered this before when things were crazy in December January .

You know and I've mentioned.

Don't love mentioning names per se.

Jason Clark has built a tremendous customer business that absolutely exploded, particularly in December January and Alice Li I completely restructured our lab and they worked together as the co Ceos and.

Alice develop.

Our strategy for hiring temps, so that as the business builds he adds more tempered as the business slows you'd like to Tesco. So that our overhead is more in line at our overhead is more valuable and it's not all fixed so that we can still be profitable at lower levels of testing. So I can't tell you what the exact numbers are right now but.

But we have a nice cushion.

So that if if the testing ramps up significantly.

Significantly again like it did a few months ago, we'll be prepared for it but at the same time, our overhead is very efficient at the moment. So we're all we're monitoring this on an almost daily basis in terms of the amount of testing we're doing the amount of testing, we expect to be doing and then Barry.

Our overhead and our employees accordingly.

But you got to understand after a year and a half to doing this now.

We have a really good team, we just had something called lab weak too.

Two weeks ago that everybody participated in and you know it was like a little special party each day with wearing different clothes and doing different things and there was so much camaraderie within our lab I was so proud of everybody.

Truly and so we have a great lab, we have a great team in terms of the overhead and the temps fit right in and the flexibility is fantastic. So we're in great shape, we have a we always keep a cushion relative to where we are now so we have a cushion if things grow.

And I got to be honest, we were we're doing I mean, we're doing more business now than we were a year ago. We finished with crazy first quarter 'twenty 'twenty. One things were Crazy you know if we did 2000 tests a day were like Oh My God. We used the enormous now you know we've had days, where we do three or 4000 tests and it's like the lab is quiet.

It just run so efficiently it's scary, how nice business and I also got to throw in surgery on Marias, who did such a great job at our I T, which is what also helps make it run so officially so this whole team. It just made things run so efficiently. So yeah. We have a nice cushion of people are the employee overhead which was such a big deal last year isn't that issue.

For us at all anymore, and so we're very well positioned if we ramp up again and if not.

We're hugely profitable with the amount of testing, we're doing at present and again, even without her so we're doing more testing now significantly more testing right now than we were a year ago at this time and that's without her first thing comes back yeah.

The numbers.

No overnight could double or more.

I hope that answers your question and I and we're out there talking to the hour or so.

Alright, you're you're quite welcome.

Matt if there are no more questions I believe we should probably on the call now.

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