Pressure BioSciences Inc. Q1 2023 Earnings Call
Please continue to hold ladies and gentlemen, your conference will begin momentarily. Please continue to hold your conference will begin in two minutes. Thank you.
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Greetings and welcome to the pressure Biosciences, Q4, and fiscal year 2022 financial results and business update call.
At this time all participants are in a listen only mode. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. Please note. This conference is being recorded I will now turn the conference over to your host Richard Schumacher, President and CEO you may begin.
Thank you John and welcome everybody to our fourth quarter and fiscal year 2022.
Review and business update.
Before I begin.
With the actual call I need to read a cautionary statement. The following remarks may constitute forward looking statements within the meaning of the privacy Securities Litigation Reform Act of 1995 forward looking statements involve known and unknown risks uncertainties and other factors, which may cause the actual results performance or achievements of the company to be materially different from any.
Future results performance or achievements expressed or implied by such forward looking statements.
Such factors include among others those detailed from time to time in the company's filings with the Securities and Exchange Commission, we expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward looking statements to reflect any change in our expectations or any change in events conditions or circumstances.
On which such statement are statements have been based.
So before we begin I am pleased once again to welcome back to the P. B, a financial review and business update two guys who are super important.
To the company and to the future success of P. B I, John Hollister, our director of marketing and sales and Jeff Peterson.
Our board Chairman welcome gentlemen.
Glad to be here.
So for today's meeting we're going to start with a brief discussion.
Of the 2022 fourth quarter and the fiscal year 2022.
The results and we're going to highlight some of the successes we achieved during the fourth quarter.
In the year to date in 2023 as well as some of the goals for the rest of 2023 is part of a general business update afterwards, we'll answer a handful of questions that have been sent to us.
Over the past pretty much two weeks or so where they request a that that they'd be asked and answered it on todays call.
And if there's time remaining we will be pleased to open up the phone lines as always to take a few extra questions that may not be among the ones that have been sent to us.
So let's start with the financial review.
Fiscal 'twenty two versus 21, well, we certainly know that 22 was not a good year for us I'm not going to go through all of the details everybody was sent that both in the K and in the press release, our revenue was down and many things were down.
In 2022 versus 2021 we made a bold move in may of 2022 and that was to pivot the company into put about 85% to 90% of our of our resources into ultra share technology, which is what we did when you do.
Something like that you fully expect that there may be a a an issue with what the results are they come back as you're preparing for something that's going to change this company going forward much for the better and and it certainly did but I am happy to say that in the fourth quarter we started.
To feel some of that efficiency and effectiveness again, and we had a very good one of our five or six best fourth quarters.
That we've had ever as a company are our our revenue in the fourth quarter was was up when we compare both to the previous quarter. The third quarter. When we compare it to the first three quarters of the year or are we compared to even the same quarter.
Previous year, we we we just did very well in the fourth quarter, we did well for the for our overall revenue in Q4.
We did well for our first sales of instruments consumables.
Agro Chems cell sales everything was was it was quite good in the fourth quarter as we started to work with this this new way of putting most of our efforts into into the ultra sheer technology are getting ready for ultra <unk>.
Year end and learning a lot as you go about to here and so.
The fourth quarter was was quite quite good and we've given guidance that the first quarter was even better we've given guidance that that you should expect to see obviously needs to be reviewed by by our auditors, but we feel like we've had a a a record.
Record for a first quarter. So we've not only had a good fourth quarter, but we beat it substantially with the first quarter and our goal and we believe that we have a very good chance to meeting our goal is to have every quarter in 2023 beat the previous quarter not not the quarter from the previous year, but the previous quarter of that year.
And so we started that off by having Q1 be substantially better and and and and and our guidance and our belief in Q4 of 2022 and we started second quarter off quite well.
And the the exciting fact is that we run into a lot of problems with just getting the operations going on ultra here and we think we're solving a solving all of these and we'll talk about that and so we're going to wait on top of having good core business what used to be our core business we expect.
To see a lot of ultra share in the fourth and the in the second third and fourth quarter of 2023. So we are very much excited about what's what what's coming ahead I know, it's hard to do but we're asking people don't look back because it's a different company. When you look back to 2022 and 2021 look ahead and and <unk>.
Just on what we do this this this year and we believe that we're going to do quite well this year, where we've been spending a lot of time getting ready for what we think is going to be very exciting 2023 so.
So.
In addition, what I wanted to talk about is we did have a and agro chems sale Oh, that's very important because all of that material has been paid for so we announced a $130000 agro can sale that the revenue from that is doing next week and that's a it's nice when you have revenue.
Coming in where it's not against any clustered skins costs that you've.
You've expense to the previous year. We also had a write down because the agro Cam sales had been very slow and based upon what the auditors and accountants have told US we needed to write down our our reserves. So there was a big big write down in the fourth and and and and.
And the.
Operating loss was was a bit high because of the write down in the fourth quarter of the inventory in agro Chems and what do you know what you know Oh, we can do after it was decided to write down we get a 130000 out of the order and we believe that we're gonna be getting other orders. We we we absolutely believe that this might be the.
Here, where we sell a lot of that inventory and that's all like frozen money to us. So it's gonna be great. When it comes in.
So we also had a very large sale in precious cycling technology P. C. T I needed to make sure that everybody understands that we did not have a.
Record first quarter of 2023 because we booked 16 instruments, we only booked four because the are the group that is a that gave us and paid in advance for the instruments.
Is wondering about for a quarter for the next for the first four quarters of it for all four quarters of this year and so it it wasn't a record quarter because of that sale. We had four which is the usual four of five is an unusual amount that we would sell in a quarter.
But we have a we have sales that will be booking for the rest of the year, probably about 100000 hundred hundreds of $150000 a quarter.
<unk> P. C D from instruments that are already sold and John who's going to be talking a little bit. After me. It would is going to tell you that that the sales in that area and our pressure systems are going up as they are anyway on top of the other P. C T.
But everything to us is really an ultra sheer going forward, we're not forgetting all the 400 or so customers that we still have a purchase the P. C. T instruments, we're still getting record numbers of orders or a P. C. G. So we'll continue in that area.
But we're putting 90% of our effort into ultra here on the operational and technical highlights I'll talk about a few and then and then we're going to get into the questions that people sent us in and then again afterwards, if there's time, we'll open up the phone lines I've put down about six or seven things that are very very important that have happened. So.
Far this year, we've made major progress in resolving a number of capacity limitations.
That we ran into and we'll talk about that but we've made major progress, culminating with today's press release, and we'll talk about that.
The early data that we released a which was extremely well received that early data on th C. A marketing study.
Showed that in an edible.
Usually the first effects of THC or felt some people say in 30 to 45, most people say 45 minutes to maybe an hour and 15 minutes. The first effects. We had 15 volunteers. They felt those first effects in the first three to five minutes on a tincture.
Tincture underneath the tongue.
And and the first effects were felt very very quickly so people, taking THC or any type of of cannabinoid cannabinoid.
Cannabinoid, maybe it's C, b D or or or or C. C D D or something or if they're taking another nutraceutical.
Our technology gets that material in the bloodstream very quickly. So we're very excited about the results and we're doing a follow on study, Jeff maybe talk about that briefly but we're doing a follow on study and we're trying to bring in more than the 15 that we had in the first study we hope to have that that study done in the next week.
Week, or two and I can say that so far.
So far everything is great. We have the data getting in generally or corroborating, what we already presented in our earlier marketing study. So the effects of of ultra share our profound in an edible and of course, we we can tell it and THC, but we can extend that out to.
And many many other active ingredients that are in the world that we nano emulsified that theyre going to get into the bloodstream very very quickly.
We have started to talk about a Oh C. B D study, we hired a terrific group and an academic instead of U S based academic institution to.
To do a study in animals in small animals and in rats.
And to see how well our Irish CBD holds up and compared to other and nano emotions that this group has worked with in the past and we started to talk about it. We we expect that the data we had hoped that the data would be presented and and and public publicized in.
And a published in the peer reviewed journal by the end of December that it's there's been delays but.
But we have reason to believe that the publication should be happening in the next we think two to four weeks.
We have reason to believe that the data are are gonna be outstanding as they relate to our in animals vacation process compared to to anything in the world. So we now start to tell people. We believe that we have the best in class process in the world and we have reason to believe that and we like you.
We can't wait for this study to be published and we're working on other studies are also and and we think that these all of these studies are going to profoundly show how how good are our process really is compared to anything on the market.
We are we have received several more orders, we actually did a processing run today.
And we hope to ship five years 600 vials are two a couple of companies one that we've already announced a million and a half we think its worth about a million and a half. This year still think it is and another one that has the potential to be worth a million dollars, but they wanted to start with a small pilot run or two or 300 vials and that's.
What we've done so we finished that run it went very well, but because of limitations in our current facility. It fits right in our being able to do a few hundred bottles, but our goal is to do thousands and tens of thousands and millions of bottles or vials, whatever you want to call them and we can't do that in the facility that we're in now.
But again, John and Jeff and I will talk about that in just a minute.
We think that the the opportunities are are quite big not outside of THC and CBD. We have we've been working with one group. That's a multibillion dollar multinational group in AR, and AR and AR and a nutraceutical that is we believe.
<unk> this year will come to fruition, where where we may be doing a strategic.
Our alliance with them in and shut in one or more areas and we've also talked about the fact of wanting to do some immune boosters, which are quite popular but it does it doesn't really work if you'd taken immune booster that might have curcumin in astra's zanten in vitamin D. Three and you don't get very much of it into your body, we believe with all.
Our with our process you will get the vast majority of into your body. So we're excited about we're talking to different groups about doing an immune booster Oh nano emulsion nutraceutical and and as I said Oh in in the press release, we we still expect we still plan. It is still our goal to look at a oh.
Uplift later this year and we can talk about that so at this point that's the background.
You know we had a bad year, we apologize to everybody for that but everybody I I believe will forgive us.
We execute as we're going to execute the rest of this year, because we made a very conscious decision that we need to put the vast majority 90% of our efforts into ultra here and that's what we're doing and we run into a little bit of a headwind we fought our way through the headwinds so let's talk about that.
So we have a handful of questions that we've been sent I'm going to read the first question and then Oh, Jeff or John when they're more appropriate to answer it you've heard enough from my voice I'm going to ask them to answer it. So I don't have I don't know who sent these N. I do know they were sent in and I'm going to read the question.
I think we're going to cover a lot of basis and then if there's time, we will open up the phone lines. So the first question is it was made clear during our R. P. B is 'twenty 'twenty to Q3 conference call, which is the last one we had last November that we had three separate CBD oil processing contracts, which we did.
Potentially worth about $1 million a four eight year initially.
Potentially worth about $1 million a four eight year initially.
And then we expected others too.
Or expect to be received for your deliveries. It was made explicitly clear by the P. B I team that your first contract with safer medical tier two run would be completed in January at the latest and the tier three and these are pilot runs as they test them out and do their test marketing would be done by the.
The first quarters and also please provide a summary of the developments with PD is cosmetic partnership as appropriate. So I think some of this Jeff you can take and then I think some of this when you're done speaking to it perhaps turn it over to John .
Sure.
So I think to begin with it's helpful to remember that last year, we announced that were working on meeting the demand for initial orders are ahead of our facility being prepared for full commercial launch.
And we announced some early access program that was targeted to satisfy demand for early demonstrations for product development.
The actions for test marketing.
The advantage of this step wise approach is that it also allows us to work out challenges encountered through the phases of product development and processing through with them some scale up as well as any equipment or facilities or issues.
These guys are challenges arranged the several areas southern materials. So for example.
The spray bottles that just works right.
Our preservative free product.
But it turned out to not be right for that.
A free product and and we were having some difficulty identifying bottlers that were willing to even acceptance service small and medium sized orders with supply chain issues going on and there's just been a lot of challenges and.
And some of these smaller test market size kind of requirements just weren't satisfactory.
Supplier side or they didn't have the capability to provide clean sterile manufacturing and packaging that we required.
So those are interesting initial challenges.
We also had challenges on the customer side or used to getting liquid product shipped to some historically cold locations of.
Which ones are interesting to work through.
In addition, we had the plan to convert part of our warehouse space at our headquarters into a ultra sugar production suite.
Done a lot of work in that direction and we learned during the first quarter.
This year that our local zoning.
It has significant limitations regarding the volume of process cooling water that we could return to the city.
So responding to these challenges we have a new innovative.
Spray bottle design alternatives to it and suppliers now.
That are adding further value to our already game changing nano emulsion solutions.
And we've already begun receiving supply of the initial production lots for these new spray bottle designs. So we're very excited about that.
And with the announcement, we put out today.
Hello, Good evening process engineering.
Corporate manufacturer artisan.
That has now begun working with us to provide appropriate and scalable facilities for our toll manufacturing capacity requirements to serve customers through their early requirements.
As commented in the.
Press release today.
I was fascinated about a personal connection in that straight out of my two decades ago.
One of my very first jobs.
I ended up working with some very innovative artisan equipment to solve some challenging vast material problems.
And and had a terrific experience and working with them. So.
I was just delighted to see this come together and we now have both companies very excited to be working with each other and we're already discussing our plans to meet our long term needs for ultra share equivalent production that would serve our lease and license business model for customers that get.
Through appropriate scale and want to internalize, our ultra sheer enter their in house manufacturing.
So a lot of challenges that some great and exciting progress in how we use.
Learned adopted to address them.
But maybe I'll turn it over to Jon and ask him to give some further color on.
How we're serving the contracts we've talked about it in all of the Kosmos circles partnership.
Thanks, Jeff I appreciate that and obviously the.
<unk>.
Yeah.
Commercialization of <unk>.
Early access program was a struggle we've learned an awful lot.
Having said that I'll issue isn't that we can't get customers.
Because.
People have been coming to us.
Wherever we are when we go to meetings like.
M J based conference a huge conference here in Las Vegas, we were just inundated by people who are coming up on complaining that their quote unquote nano emulsion processes they've been trying to do are just not working.
Sonication just has not been affected the devices from other companies in the market get clogged up and don't produce stable then all motions like ours. Our issue has been we haven't had a proper facility to produce the materials and that's why the news of today is a really exciting so that we can get back to.
To fulfilling the contracts that we already have in place and the additional ones that we've been gathering since then so.
It's not a matter of not having the business. It's now we need to execute against the business. So over the next 30 to 45 days, we'll be in a position to one satisfy the firstly customers that we're talking about it.
At the end of last year, but actually when you start.
Offering and announcing orders that were working on right now and which will add to a considerable uptick in volume for the balance of.
Not only this quarter, but for the year was also a question about Dr. Dennis.
Yeah, you know it's been.
Great working with her she was literally.
A phenomenon in the industry.
Both of our knowledge, but also her professional presence in the marketplace.
No surprise that has been successful, but we've been making progress the last couple of months on her next generation anti aging skin serum.
Which really hasn't changed in the market and in a couple of months.
We will be on goal too.
I'll talk to them and ask them to a very formal process of testing we've always testing all of these products before they get released but we still believe that this product will be on can be seen by the end of 2023 and that all opened our doors for a whole market segment of.
Regenerative skin and in all sorts of Kosmos medical business that we believe will be pounding at our doors I thought it goes out.
So at this point I'd like to turn it back over to Rick.
So thanks, guys and I will add one thing to it one of those contracts was with John Westlake Who's a really a guru in the in the cannabis area.
He knows so many people I know so much about the area. So one of the contracts was with John and John thought that he could do.
The two or $3 million himself, but once we got to know John better we realize that John could probably do much more than that if he were working with us and not just a customer and so we talk to John and we talked a little bit about this in previous conference calls when we talk to John about maybe.
Coming on board as a and independent but coming on board as it is as a as a key a master distributor somebody that would not only be able to satisfy local but nationwide and even even north America and.
And set up sub distributors and because it's a it's a huge market out there for a huge market.
And.
So it it would enable us to John Who's on the phone in and in particular I'd be able to set up as he builds his sales team to to look towards things like Kosmos Sutter, Kohl's, and and Nutraceuticals and and let someone who's adept in the area of someone who knows the area inside out John Westlake.
Handle the all of the hemp derived products that we're gonna be developing and John said I'd like to do it I'd very much like to do it. So we're working on a on a contract where we have agreed in principle I believe we will get that contract signed this are in the next week and then John will be.
On his own and you'll be out there and I I believe he'll be closing a lot of contracts were so well, we're moving into the space that's been been offered to us.
From artisan, which.
There's only going to take about 30 days, maybe 45 days.
Then john's going to be out there getting contracts and we've told them don't hesitate because the the facilities that we're moving into will allow us to do you.
You know multiples more of what we we can do here, we thought we could do it here, but as you. That's why you do your pilot runs you learn and we learned to everything from the town coming in and saying you can't put that much affluent out the water out that schooling your system out into the septic system and to many other things.
So we've learned and we act we reacted very quickly with the first looked at trying to find other space and we found other space, but we said this is going to take three to five months to renovate and then we talk to our friends, which John Westlake introduced us to and artisan.
Industries are 80 590 year old company that's.
You Universal reputation terrific around the world and they stay welcoming us with open arms, we had that press release today, so the impact of of of <unk>.
Changing from working here to working six miles away is gonna be very short and during that time, John Westlake is gonna get us I believe a lot of contracts and we've talked to all of the people that we have contracts with now everybody is understanding we are still doing a small pilot runs here, but 45 days.
Maybe maybe even sooner than that we're going to be doing.
Lot more business in our new facilities that have so much more than what we have here.
To be able to do that and and and and and a 30 minute in in 30 days or less is terrific. So kudos to my staff, who who really were able to take what could be really a bad downtime for four or five months to where it's not gonna be downtime at all because we're gonna be there in 30 days processing.
Second question is with respect to publishing the CBD oil bioavailability study and I'll mention just what that is for those who haven't heard about it the P. B I G. M is hopefully it would be released any week when our when we discussed it in November but it was rather certain that it would be out by the first quarter, which we were.
Any information as to why they don't like we're not going to get into specifics other than to say that that the oh, the principal investigator a world renowned scientists in the area of <unk>.
Cannabis in cannabinoids.
Got to Covid and was in the hospital for over four weeks most of the time on oxygen and it it it causes of course, a major delay he's out he's well thank goodness.
And we received word today that that is starting to move along quite well, which is why we feel that we can say within two to four weeks. We think this study will be out. We think this study is going to really shock a lot of people. We we think it'll prove that.
Point that we actually have.
Best in class method of making a nano emotions are in the world. We really believe that so we're as frustrated as everybody else because we know the impact that this study should have a once it gets out and and we're going to follow with other studies, but just to remind you.
We did a small THC marketing study that Jeff actually ran out in the San Francisco area and it proved our point you know three to five minutes on a on a on an edible feeling the effects of THC when normally you'd be waiting 30 to 60 to 75 minutes. So and that is is the Holy Grail.
I was told early on Rick if you can reduce the window and T. A C. On an edible you have all these people that don't want to smoke they don't Wanna vape, but they want it take some because it helps them sleep. It it helps them with their appetite it certainly helps them with their anxiety whatever it is and it helps them with they don't want a smoker vape it and they don't want it takes.
Something in and wait 30, 60 90 minutes to have an effect. So they said the Holy Grail here Ricky is try to get try to reduce that window and honestly, we've reduced the window or our processing ultra shear reduces the window I feel very confident in saying that we've reduced the window on edibles to wear.
It's just a matter of minutes to start feeling the effects.
So we're we're excited in and hoping that in the second quarter, maybe even before the end of may be in before Memorial day, we'll have those data and there'll be published the investigator has said he he plans to publish them in a peer reviewed journal.
To give them the authenticity they need.
So the third question talks about I guess, we've been using the word bottle we've been using the word spray bottle, we've been using the word vial.
You know exactly what are these things and John This is best for you.
That's correct.
Yeah, I was just listening to our presentation from the city of Boston.
These terms interchangeably.
So we apologize for that but understand that when you hear the term vial and bottle. They typically are referring to the small one ounce or two ounce bottles with the calpers spray on it.
Some people.
Direct you know he came out of the labs at Harvard.
So he has his terminology, Florida is a while it didn't.
In the industry, we hear lots of different terms I should also point out that while we are talking often about in little what are called final forms kind of presentation that youll see that the consumer purchases that has a label on it and comes often in a box or are you by the store.
Well over the Internet.
That is one for them and we will certainly be in that business and that's where we started because we were selling.
First customers are requesting and sample bottles.
Small spray bottles.
Ultimately our business is going to be in processing larger volumes of product and shipping them in larger volume containers, which we will likely be referring to as toads, whether they are a leader bottle or towed or thousand meter.
<unk>.
Which is roughly 264 gallons.
Isn't it weighs a ton.
So, they're large and get moved around with a pallet jacks and that material.
We'll either be put into.
As a final form into a little odd.
While or bottle or whatever you want to call it.
Or it will actually be infused into our sport drink or into a gummy bear oriented.
Our or into other combinations of products like Nutraceuticals may be a combination of two or three different noodle Nutraceuticals Orion one.
One caplet it could be in a lot of different forms ultimately.
Because it's highly concentrated product that's more readily available for humans.
Which is again the upside to this material it will take.
In terms of many of these products are only a fraction of a milliliter will be the dose if you will and then sports drink.
Literally 112 ounce bottle or eight ounce bottle or.
A coffee drink would have literally a quarter of a milliliter or half a millimeter.
CBD, a nano emulsion like all product that's that's the.
One has to kind of wrap themselves around leader of material could be 4000, or 5000 or even more doses.
For.
The final form so customers.
So I think hopefully that helps a little understanding of our mixed use of or different terms.
You know I might hop in here.
Just to add a little more color to that.
The Covid area.
Hum.
Cannabinoid containing beverages.
While still.
Small within the entire cannabis market.
Is far and away the fastest growing segment and is viewed as something that will become extremely.
Extremely important.
The product mix and that ranges from products that are intended to be fairly concentrated down to what is probably the biggest growth end of it.
Which kind of mimics the way the.
Market for alcoholic beverages has developed.
Where theres a lot of interest and things that can be consumed at relatively low doses, let's think of so called session beer.
And the cannabis products will likely many different configurations that mimic that where there's literally maybe two three.
Milligrams.
T H C.
Or small doses of CBD got better in the product. So that's quite a few couple of very important part of the mix in the industry is very focused on it.
The other commentary I'll provide on some of the cannabis studies of bioavailability and so on.
Rick was talking about the comparison to edibles and I.
Emphasize that the work we've been doing here with <unk>.
THC and CBD.
Phrase whether there are either oral or topical these are basically trends dermal delivery routes. So when we talk about an oral spray.
The intention here is not so much an edible but the ability to spray into the cheek or under the tongue and use the faster transdermal absorption route that you get there.
In order to beat the slower metabolic.
Consumption pathways that you got in the gastrointestinal track from here.
So I'll just make that point of clarification that are less.
What's so exciting areas it was capturing the transdermal capability.
So and I'll add one more thing to that and then we'll go on to the next question and what I'm, adding as I realize that we have are looking at a list that we have some new investors and stockholders on the call and so I think I'm just going to take 30 seconds and just define what why.
We're so excited about nano emotions.
Not all nano emotions are the same the reason people like nano emulsions, which is basically just think about mixing oil with water and the oil contains an active ingredient.
So you want to you your body wants to absorb the active ingredient out before the body excretes the oil because we don't we don't store oil, we get rid of oil and it's a fight between the body pulling out the active ingredient maybe that active ingredient is a supplement and anti oxidant like vitamin D three or.
Kirkey them in maybe it's a pharmaceutical like prednisone, a maybe it's a cosmetic going through the skin like retinol or at 10 O eight maybe it's CBD or THC. So it could be maybe it's an agro chemical on a lease so there's that that the reason we think so highly of nano emulsion.
Is that if you break the oil we're not touching the active ingredient if you break the oil down to a nano size just call. It a nano size of true nano size.
It has the ability to do basically looked like it dissolves in water. So it goes into the water. It gets transported through the body and and it gets absorbed out very well and so and it also becomes clear. So you know if you've got a really true nano emulsion by spraying into water whatever you use.
Goodbye and if it just turns oily you don't have a nano emulsion, which means it's not going to be absorbed as well. It will not have the same long stability. It will not have the same bio availability. So that's why because it's a true nano emulsion gives you very long stability. It gives you great.
<unk> ability to absorb it out of the oil and make it available for the biology of your body. The bioavailability. So if you can prove as we are improving in our studies marketing studies and in the animal studies that the CBD or THC or other active ingredient actually gets out it to a high level of bioavailability.
Billy you're onto something big and guys were onto something big here because we've we've looked at the data and we're very excited about the data and can't wait to see more and more data published and we're going to continue to do studies. So I wanted to just explain why we're so excited about nano emotions. So the the next question is.
It's really talking about how we're gonna manufacturer. It's one thing to manufacturers 600 vials, but it says you know anyhow long any idea how long it's going to take to to manufacturer like the CBD supply M. D announcement, we made where we think that contract and they think contract could be worth millions of millions of half Dod.
Or more to us in the course of the year. They are an active companies selling a lot of C. B D. They they have a website they sell all over the U S and when the this first pilot run gets done which it's it's being run today and when it's done and shipped and we send it to them, we're going to put on an hour.
Our website their website because if there's one thing I guess I probably have 25 investors who've said, that's really works, how do I get more and they're gonna be able to get more to buy it through a through C. B D supply M D or maybe Andrew Kim K band, we haven't talked about keep in a cave and it is a small one.
Wonderful group here in Massachusetts that were going to make a couple of hundred bottles for it at the same time, we're making the bottles for CBD supply and they all are both of these companies will put their label on it it's not our product. It's their label they will label it and they'll put it for sale on their website and we're going to let everybody know where they're going to be able to get it so that the.
Basic question was how are we going to handle all of this and I'll I'll just take a stab at that I came from a company that I founded many years ago called Boston Biomedical, we became the largest supplier of of controls and calibrated for infectious disease in the world. We were supplying 36 countries about 3500.
Different customers in 36 countries for all kinds of things and what I call vials are calibrated and controls for infectious disease testing and are we set up we started out just like we're doing here doing these by hand, and we ended up having machines that did all of the violin all of the capping all of this.
Sealing of the vials and bottles, a very sleek operation over the course of two or three years, because we went from doing a few hundred as we're doing now doing tens and hundreds of thousands and we became the largest supplier in the world. That's exactly what we intend to do here. So this company will grow and as we grow we'll bring in the machinery.
That will help us do not 10th that not not 600, not 6000, but 60000 and 600000 and $6 million, we were thinking big because we know the market is that big.
So the next question is if P V I were to have multiple contracts, which we do have and we think in the next 45 days, we will have multiple contracts.
With many clients as production throughput capable of handling multiple customers at the same time, John do you want to take that yeah.
Yeah sure.
Production of different products.
Definitely be done sequentially I mean, initially we're going to have.
Uh huh.
Couple of different systems with a major one will be the first set up to produce three or four liters per minute and that's the processing.
Yeah, but for each product you're running you will actually do the production run we will shut the production run down and you'll do a cleaning or we'll do a cleaning and sterilization process for that before you enter into a new next product obviously, our intent will be to have over the course of the year or not.
One system doing that multiple systems doing that so that you all that we will ultimately have in.
In parallel system running.
Different products or maybe the need is to do a product very quickly on multiple systems simultaneously.
Two to manage the needs and this is just going to be done in a stepwise fashion that you know to do it all at once.
B.
Overwhelming we just couldn't do it.
But we will build into that and we definitely will have the demand to keep these machines operating I'm convinced if I've just had too many customers from Tudor.
Too many different markets, who have expressed.
Their intent to have product done quickly.
And that doesn't include a really longer term products like the pharmaceutical area, where we already are getting inquiries.
It always takes a little bit longer.
And then ultimately we're going to have to and we've been talking about right.
Demand for small units that people want for formulations for the devices themselves.
That presents a whole another.
The opportunity for us as a company so.
In answer to the question about multiple contracts with multiple clients.
We're gonna have those beyond the process for production will be on each machine will run a product line that will be cleaned.
Probably at the end of one day, but theoretically you could do to ones in a day it takes about an hour or so.
You shut down the system clean it makes certain its operating sterilize. It and then go again and so if youre doing small runs.
Could see vertical during two runs on the system in one day, but generally speaking it's going to be.
One four days one for about seven hours.
Then clean and then that actually people will come in and use that machine for something else. Obviously, we do have the opportunity for considering multiple shifts so the capacity could be as much as three full shifts 24 hours.
I think that probably answers that.
Yes.
Yeah. Thanks, Thanks, John .
Let's say the time is as it always does is clicking by our the next question, which is a very important one.
It to me because I know the value of being on on a national exchange was you know how how are we going to get listen what are their requirements and do we qualify at this point no. We don't quantify at this point most companies that they try to go on NASDAQ or New York stock exchange many of them have to.
Do certain things to to qualify them, we have a lot of that we have too much debt to qualify we don't have enough cash on our on our balance sheet to qualify we do qualify and many of the other areas. So I can assure you that of the multiple areas that you need to qualify which I'm I'm intimately aware of.
We we qualify in many many areas. We certainly have the the number of stockholders and many we have audits every year going back not just two or three years, but going back 20 years. We we hold conference calls like this after we do things under under full disclosure. It we we qualify many way.
It is an absolute goal of ours to get on the NASDAQ I've, either founded or Cofounded for companies. They all went onto NASDAQ. So I'm intimately involved with with how that works and how to run a NASDAQ or New York Stock Exchange company and I and we all know what we're gonna have to do to get there and.
Some of it will be a little painful and some of it but you know one thing is for sure it's going to come what's going to help is what we're doing now which is getting ready for multiple contracts for four for for ramping revenue.
Because we have we believe we have the technology that that in an older share that will will get us there.
What I will say, though is that.
I've talked to you investors for 30 years running companies and I can I can tell you that a lot of investors want you to have the money to succeed but they don't want you to raise the money and dilute the company. So there are other things that can be done and I am a member of the board, Jeff as chairman of the board So Jeff.
If we're running out of time, but can you just spend a minute or two about some interesting topics of discussions we've had at the board level in the last few months.
Sure.
So.
Relative to the.
Pathway.
Preparation.
List.
Obviously challenges and improving the balance sheet and how we capitalize the company to finance growth.
And get to our stockholders equity targets and so on.
We have.
A great deal of focus on the role of strategic partnerships them back in service those objectives.
Obviously strategic partnerships can bring classical equity financing components, but we also have multiple opportunities that are in advanced discussions.
On non product revenues.
Through these partnerships and licensing and some other structure. So I would I would just emphasize that.
We're working on multiple fronts. Some nice progress that's already been reported on converting that into equity.
But we have a lot of focus on the strategic partnership.
Component in our strategy.
For either equity financing more non product revenues.
So Jeff you mentioned a debt to equity we did have a major announcement a month ago, where our largest investor who has been very very supportive of us over the years.
<unk> be support and we thank him greatly to.
To us by converting $10 million of debt some of which were promissory notes are.
And the equity and we believe that that is going to be followed by others that will be converting that into equity. So we have a lot of debt on the books, because we haven't had the cash to do things. So we've used we've used the.
The cash through debt to get to where we are today, which is which is ready to pounce.
And but there's a lot of debt on the books when I look at the debt I I and I know pretty much every single person, we owe money too and I'd say, there's maybe 35 or 40 total of which may be 10 are large and the other 30 are small we take as you can see in the case, we take investments.
From people 25, 50, $100000 at a time and give them an opportunity to invest in the company privately which is some people believe is a better deal than in the market. So we have maybe 25 of those types of deals that we've done in the last two years and almost everyone. When the year's upfront there that they they were.
Hold it over again, because they can get some more equity in the company. So what I'm, saying is because we know these guys. If if we execute and we're going to if we execute as a company and we do what we believe we can do over the next three quarters counting the second quarter.
Our goal is to is to is to uplifts before the end of the year and to do that we need to get a lot of this debt off the books one way to.
To do it is to bring money in either through the sale of equity or through as Jeff mentioned strategic partnerships and deals that we're talking to people about very exciting and that way there isn't any dilution and have the cash to buy out the debt. The other way is to execute and have the investors who are holding the notes.
Say the last thing in the World I want to do is have you buy me out no no I want to I wont be able to convert this into equity and and right in on the equity in so if we execute that's what we hope is going to happen is that the people holding these notes will will say don't don't buy me out let me let me.
Let me converted into stock and you keep your money I'll cover it in stock and I'll be happy to be even a bigger shareholder and so all of this requires on us executing and and believe me we understand it and it is high in our list, we're going to execute we had some problems in the first and the last three.
Three months or so we think we've solved pretty much all of these problems, we're ready to start to show everybody. What we can do with thank you for your patience. It. It's awesome that many of you have stuck around and we really appreciate it we owe you big time for all of the investors on the call who have.
Not sold out on us, but have kept your faith in us and we need to prove to you that you did the right thing and that's what our goal is over the next over the rest of this year for sure. We've just hit the one minute one hour one minute mark So we're not gonna be able to take any questions. Unfortunately, we will be back together.
In about a month.
When we talk about what we believe will be a record first quarter results and by that time I think we're gonna have a few news events happening too to help support what Jeff and John and I have been saying for the last hour. So thank you for joining us we really appreciate it thanks for keeping the faith and we ask you to keep the face a little bit.
Longer because now it's going to for us, it's going to get to be an exciting time, we work through some issues now it's time to execute and to prove to everybody you've done the right thing by sticking with us.
Thanks, everybody.
This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.
Jeff John let's get on a call.
Okay.