Pressure BioSciences Inc. Q1 2023 Earnings Call
[music].
Yeah.
Greetings and welcome to the pressure Biosciences, Q1, 2023, investor call and business update.
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I'll now turn the conference over to your host Richard Schumacher, President and CEO of pressure Biosciences, you may begin.
Thank you Paul and welcome everybody seems like we just did this.
Welcome to the <unk> first quarter financial or are you a business update before we begin as always I need to read a cautionary statement. The following remarks may constitute forward looking statements within the meaning of the private Securities Litigation Reform Act with 1995 forward looking statements involve known and unknown risks uncertainties and other factors which may.
Cause the actual results.
Formers or achievements of the company that you mentioned you'd be materially different from any future results performance or achievements expressed or implied by such forward looking statements.
These 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.
Any change in our expectations or any change in events conditions or circumstances on which any such statement where statements were based.
First I'm pleased to welcome back to.
The financial review and business update John Hollister.
One is the company's director of marketing and sales as many of you might remember.
John is himself an entrepreneur starting several companies and also including one can have as one of the first publicly traded cannabis companies you all.
Also it has worked in big Big pharma in the past with budgets I can only dream about some sometimes are welcome John .
Thanks, Greg I appreciate it and then I'm happy to be here today.
So for today's meeting we're going to start with a brief discussion of the 'twenty two 'twenty three first quarter results.
Then we're going to highlight some of the successes we achieved during the first quarter and the year to date in 2023 as well as some of our goals for the rest of fiscal year 2023 is part of a general business update afterwards, we'll answer a handful of questions that have been sent to us.
But we're also gonna find time to it takes some some calls from the open lines from everybody that's joined us today.
So I'm going to briefly go through the financial review of the first quarter compared to the first quarter of 2022.
We're very happy with the first quarter. There are a lot of good things. There are certainly some things you need to improve on but for the most part we're pleased with the first quarter, it was and and both financial and operational basis.
First quarter was the first quarter that we've ever had that's broken 700000, and we almost we we did 740000 in revenue.
This is going in the right direction, it's certainly not our goal to try to increase revenue by $200000 a quarter, we need to put some zeroes on that 200000, but it's certainly a step in the right direction for it it is a terrific quarter when you think about.
Sales across the board our goal is to have a.
One or more quarters with greater than $1 million in revenue.
This year that is our goal next year. Our goal is to have at least one quarter where for every month is a is a million dollars in revenue. So did you reach that we're gonna have to succeed in what we're doing and our expectation is we are going to succeed in what we're doing in primarily.
What that means is commercializing Ulster sheer I'm more stoked about Oh this year today than I was.
Even.
Even a week ago, and I'll talk about that a little bit, but hum and that's a that's an understatement because I'm pretty stoked about all share to begin with so for me to be more happy about what we're doing is saying something but I've had a number of interactions over the past week that that tell me.
We are absolutely positively going into right direction that we made the right decision a year and a half ago to to pivot the company into a majority vast majority supermajority working on ultra sure we haven't given up on the other two platforms, but older share is certainly the.
The platform, that's going to get us to where we want to go faster.
And and with more revenue than the other two and the other two will follow so we're going to talk about that in.
And a little bit, but right now what I'd like to talk about is just briefly everything was spelled out in the press release of course, it's in the Q, but it's it's loss in them and you know 50 pages of a lot of stuff.
So total revenue for the first quarter was 740000.
Which was an increase of 54% over 480000 for Q1 'twenty two instrument sales were up 74% from from 245000 up to 427 consumable sales were up.
About 66% from 40000 to 66000 agro Kevin sales, Thank goodness, where we're up from 83000 last year. The first quarters. It is a good quarter as is the second due to sell these these products up 57% from last year.
The operating loss as we put out there and we and we did some explanation and I'm sure. There may be some questions about that every loss was $3 6 million compared to 1 million for the same quarter last year. This operating loss increase was pretty much primarily due if not all due to two noncash.
Cash expense items, one was 1.48 million for stock and warrant issuances debt holders and professional service groups and the other was another one point for this at 1.43 million for equity based compensation Awards.
Stock options are given which we haven't done very much lately its been three and a half years.
We have to use black shoals to value the stock options, we have to take a hit. This again is noncash. So if you back out the $2 9 million in noncash items, we actually had a operating loss would be.
Decreased.
From the fourth quarter last year as it should with this significant increase in sales and also our cash that was used in operations in the first quarter was down substantially in the first quarter of 2020.
Two we use 756000 and in the first quarter of 'twenty three.
We used 422000, and so where we're heading in the right direction across the board with the exception of old to share and that is what we expect to be a leading the charge from the second quarter on.
Basic and diluted.
Loss per share was 46 cents.
So as we said in the in the press release today.
We reduced our burn by 44% to just 422000 in the first quarter of 'twenty. Three we believe this reflects the focus that we have on on cash management I'm very disciplined cash management.
During the first quarter of 'twenty three.
We issued these one time stock issuances.
There's certain debtholders and Investor relations firms.
To assist with what we called critical corporate financing and development initiatives, we needed to get the word out we need to let people know that we pivot if we need to let investors know that we believe that Oh. This year is is what we should be doing and putting the vast majority of our efforts into it.
And we believe we've done that.
And and we need to proceed through the commercialization of Oleds. This year and have had investors understand what we're doing and so we spent money mainly stock.
To bring in additional Investor relations.
And to and do bring in cash that we needed to do to try to expand the horizon of Volta here.
Cash is is often limited here. So we are we use stock in place of cash.
For for some of the things that we've needed to do also in the quarter, we gave stock options for the first time in.
I hate to say it in three and a half years, we recognize the importance of what incentive options are.
To everybody and because of that.
We are very aware of that.
We need to get options out to a number of people and keep them here, we have a very high retention rate. We have the vast majority of our staff and we have 16 members. The vast majority of our staff have been here for much of that 16 years, they're very dedicated to the company. They are very dedicated to the shareholders.
And they are extremely dedicated to the technology.
And because of that.
I'm happy to say that the retention rate is very high but we do have a lot of competition, where and the number one biotech area in the world.
And we have lost people in the past other other companies and they they do give options. So we need to follow suit and that that we've done and not enough and I should also mention that when we gave the options we gave them above market, so they're well above market now at $1 50, but.
<unk> was a it was in $1.35 40 range. When we gave the options and the board decided we were going to do them above market.
So John John is of all of the people are in and our sales do touch many of our personnel. We do a lot of things in house, because we can't afford to do them out of house.
And we we we make some of the instruments, we make some of the consumables ourselves.
The the cost to send them out would be prohibitive.
John is the frontline guy he's the guy that's following up on <unk>.
All of the leads he is also you know taking charge of a number of things that have to do with ultra share, but John is.
Deeply involved in pursuing.
The orders in pursuing the interests from out there and so you know I commend John for his hard work for forgetting the first quarter done in a record fashion.
And John if you'd like to you know talk a little bit about the about the current business and the current business that we do in and that that which you know added up to this remarkable 740000 that as I said, we wanted to turn that into a <unk>.
Seven figures before the year's out in a quarter.
Sure. Thank you Ed.
Definitely enjoying the opportunity to share a little bit more detail about what has been happening at least as we see it.
But what I've been seeing in the market places some encouraging signals from Grant's been authorized and finally funded and the University environment, which has been reflected in some uptick in purchases.
By the research community as.
As well as the corporate environment and while we have continued to enjoy a very significant uptick in service agreements that is commit.
Commitments by companies to keep their older units.
Units.
Working and operating.
It's typically a reflection that they're trying to get a little bit more mileage out of their older devices.
We're finally seeing people actually pulling the trigger on on buying our products across our platforms and that is oh, our own bear recycler and a hub instruments.
As well as the products that we distribute for constant systems, all of which saw very strong sales in the first quarter and.
Appear to be continuing and I continue to be pretty optimistic about this.
Change in trends.
But I also will say that we have.
Decided to get to a few of the trade meetings, obviously during the Covid time, we had to pull back from attending in person meetings, and so we weren't getting ourselves exposed to potential customers and then the last seven or eight months, we've started doing that and that's reflecting it.
And ourselves and this extends not only to our.
Personal cycling technologies, but it's also now extending to U S T and we're getting our name out with customers. The reception to ultra sugar has been absolutely fabulous, whether it's our and Nutraceuticals.
Nutraceuticals area of the Kosmos sudhakar areas or.
Cannabis and in fact.
Even the beginnings of interests in the pharmaceutical side, so really all of the sectors that we have.
Talked about our interest.
For the potential of ultra here, we're actually seeing it firsthand and people are coming and finding us at meetings and wanting to learn more about what makes us different.
To a person they are just.
Shocked by the improvement and stability the clarity.
The expectations for much better bioavailability.
With that I'll pass it back to Rick.
To extend this Peter.
Thanks, John .
So.
Wonderful wonderful news on the financial and it's.
It's going to it's got it's got to get better it's going to get better our goal is to get it better and again I will say it again.
740, it's great to be a couple hundred thousand more than what we were this time last year.
In that quarter was a pretty good quarter, when we broke a half a million dollars, but it's not good enough and so our goal is very clear that in the second half of this year. Our goal is to break a million dollars for a quarter at least and our goal next year.
At least one quarter, we want to have every month to be $1 million and I'm trying not to be that.
For that not to be the last quarter of the year I'd like it to be the first quarter of the year quite frankly start off with with gusto. So we have a lot of.
Our goals are.
We believe their realistic we believe we have the technology that can do it and we believe that the technology has been proven.
Over and over again.
And.
People are starting starting to do believe out there as John said, where we're finding great reception.
I'm going to talk a little bit about it coming.
Coming up and end and when I go over these highlights first.
First of all on a press release on May 9th.
A follow on press release, and the one January 17th where we announced that we are we had had a consumer focus group.
We had worked with a group in California on both of these and and this group was able to produce them THC using a small portable prototype instrument that we had and they brought in are about 15 or so.
Volunteers and this is for an edible because one of the biggest problems in T. H C.
Itself is that all you can smoke and vape it and you can get pretty immediate effect, but if you want to not.
Insults your lungs, and if you want to take it as an ingestible as an edible.
It's a generally accepted that youre going to have 30, 45, or even 60 minutes to wait some people get anxious and take a second or third dummy or another bidder, the tincture or whatever they're using or another bite of ravioli.
And and they ended up getting hit all at once later on and feeling sorry for that that's for sure. So it's a problem that if you're taking THC to help you sleep or curve your appetite or reduce your anxiety, which many people use it for them.
Besides just getting high that if you take it through an edible you're going to have to wait and so somebody told me you got to reduce the window. Rick if you can reduce the window, you've you're you've got a terrific.
Product and so we went out to reduce the window I was told take it from.
45 minutes to an hour down to 15 minutes and that would be remarkable well as you know from reading the two press releases.
We we nano emulsion side, THC or why we didnt, but our colleagues did.
And they were able a crimp dealer crim in California near Monterey, They were able to make a THC that actually worked in under 10 minutes and the general average was about three to five minutes, whereas where the users are starting to feel the effect.
And the high that they got was generally in about 15 minutes in and what we found the second time, which we put out on may 9th or is that a heavy users. We're able to you know again and only equals about six or eight here, but but heavy users we're able to use a much smaller percentage you can get the same reaction.
And that was that was very exciting, but what was probably most exciting is that is that.
Counting both of the study groups of which they were 30 35 or.
Or more people are there were there were a handful probably.
Up to 10 that tried it topically and and came back and said.
It's really worked I mean, I I had a backache inflammation in my knee I have arthritis in my in my joints in my fingers and Anna and it really worked.
And we've we've we've read about it we know theres receptors in the body, but it's great to hear it coming back and you don't always hear that I mean, theres a theres a lot of there's a lot of people that have tried it and failed.
That it doesn't work and I think the key here is that we make nano the right way. We are nano is truly nano theres a lot of pre tenders out there there's tremendous number of pretenders. So many of the people say don't even call. It nano because you'll think it's it's not now but.
But we we do it right we know it works and we've had feedback from a dozen people that have said Wow. This works topically. In addition, due to reducing the time on a on an edible. So that's very exciting I will say you know.
Here I was at a meeting last week Thursday, and Friday in Brooklyn, New York or family offices, and I met I met two people I met one in person in the met one on the phone and the one in person said I'm very interested if you can reduce the window.
And I showed him and filled in what we had and he said you know if you. If you can prove this you know we'd like you to work with our Massachusetts are firm and if that has a licensing can use your your prototype and because because we have friends in Massachusetts that we trust and we'd have.
Try it and he said.
That's the Holy Grail for me that that if you can reduce this to.
10 minutes or less you're on to something very big and this is this is somebody that I respect a lot for looking at what he has done in the cannabis field and then later that day I got on the phone with with a a fund and it was a cannabis fund and they they they said and I started talking about the reduction in the window. They said, we're really not interested in that.
I said well what about topical he said what do you mean I said what about you.
You know uses of it topically. It goes if he's got topical uses that are effective I'm all ears I'm I'm all in tell me about it so I told him about the the experiences of a dozen people and he was.
I'm going to say it was in all he basically said you're onto something very big So here I've got to cannabis gurus one of them.
Is really interested in law and reducing the window. The other one is interested in the topical use of it so exciting day for me last Friday when both of these things.
Moving on.
We've.
We've let the world know that because it's going to be several years before we're in the business of of making machines and leasing them and getting them out that we would make five licenses and we are clearly talking to.
Six to 10 different people and in six to 10 different states that they are interested where they could get an exclusive to our technology, our ultrashape technology, and we would build them custom build them, a a and instrument.
Sure instrument and they would have a leg up for three years and so we're very we're in.
Excellent discussions with with a handful of people about about this potential we've we've talked last time about the issues. We've had in our office park here and that we have a group that six miles away that were working with that we plan as I said before a plan to move in during the month.
In May and we still plan to move in.
In the month of may to be able to alleviate the problems. We have which are that we can only make so much C. C be deemed material here of course, we can't make any any THC material, but but CBD material under.
Under license that we have that we can make it but only a certain amount and we're really inhibited with that.
But that's going to and when we moved to this new facility and we've had fresh sales momentum in P. B I agro Cam, which is great over 100, and something thousand dollars, we received a $1 5 million contract.
That's a contract that we believe will be fulfilled.
The year is it everybody we've talked to and we're expecting new contracts to come in you know by the by the week by the month going forward.
But these contracts are from individuals to say I need a pilot run first I need I need hundreds of vials first in thousands of vials and tens of thousands of our vials. So I'm happy to say that we've made the first 600 vials, they're already made there done there they're being labeled.
And.
We have a a site in Maryland that is interested in putting this on their website, so keep eyes and ears open I'm expecting that by this time next week.
The first poster share.
<unk> nano CBD will be available we will we will certainly put the news out from the company. We will give the website I've had probably two dozen calls from people, saying that I've sent samples suite, how do I, how do I get this madeira, whereas it available.
Hasn't been available now, but I believe that by this time next week.
Tuesday, or Wednesday at the latest next week it'll be available from a site in in Maryland, and we will get the name and the phone number and the website in the links out to everybody.
Once this is set up and ready to go.
So very excited about that I'll remind everybody that our largest investor.
<unk> agreed to exchange over $10 million of debt into preferred stock and the equity he gave up his right and that he wanted to lead the way we're asking other investors to do the same to help clean up the balance sheet as we try to get ready and more ready for.
And up list this fall or later this fall.
We've we had that very large single order from China for 16 pressure cycling technology instruments, and and we've talked about a great company called one world products.
Which which is developing a sports performance and recovery drink and our discussions with with them and we'll have some some updates on that soon.
Just add a couple of things before we.
Turn it over I'll, let Jon see if he wants to add anything and then ill turn it over to questions, but what I'd like to add is that.
<unk>.
We are waiting I've mentioned, several where we have mentioned several times before that we had a leading academic researcher.
A full professor at a at a wonderful University do a buy availability study and we've said that we where we are.
A little upset.
Upset that it's taken this long to get it out because we want to get those data out we have reason to believe that the data are quite good and we're doing everything we can but it's very important to have the data published in a peer reviewed journal and we're hopeful at this point that it will be published in the coming weeks I've said that before.
Four but at this time I have more reason to believe that it will be.
Published in a peer reviewed journal and an online period journal in the coming weeks and we're still targeting.
An uplift to NASDAQ and New York Stock Exchange later this year I went to New York two weeks ago I met a couple of great bankers that are in our broker dealer that I liked a lot.
Call with them Tomorrow so.
Where we're still onboard with getting this company listed on a national exchange.
Before we turn it over to any questions anything you want to add you don't have to have you don't have but give you the mic.
I think I'm looking forward to hearing what questions for investors have for us.
Well I'm looking forward to hearing some of them, but maybe some of them or not but we'll take all questions.
So Paul if we could bring.
Bring you back on and and think about opening up the lines for some questions.
Saturday. Thank you at this time, we'll be conducting a question and answer session.
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Okay.
On the first question today is coming from Thomas Allison.
Thomas is a private investor Thomas Your line is live.
Yes.
Thomas Your line is live if you wish to ask your question.
I'm on your side.
I'm here.
I'm a big fan Okay, I have a tough question I'm a bit confused during our November conference call. You basically said you had three 1 million dollar plus contracts totaling contracts. You mentioned you could produce the large tier three batches than ours.
I'll round up to a week per batch.
That was 26 weeks ago, and you only show around 70, K dollars of tolling revenue.
Why can't you show 3 million in tolling revenue.
Soon since you are now added new facility or will soon be there in my eyes, you're local machine has basically been idle for six months.
Our local machine Yep.
Yep Yep tough question, but a good one and one that we need to be.
Willing to answer I did answer some of this before so I'm not sure. If you were on the call for the fiscal year I did I did but I'm, just saying that you're talking about 1 million a quarter.
You threw out $3 million and you said there would be follow ons.
And they were and there will be and there will be times when I made the $70000 is crazy crazy really small.
May I answer the question.
Yeah, I'm I'm quite.
Thank you so what I said before I'll say again.
We moved into an office park 10 years ago, we renovated.
The warehouse downstairs into a facility that could generate.
That has an older share machine.
We started we started working on this.
And in the renovations a.
A year ago.
And we were expecting to be able to do that downstairs, two things happen number one is.
There is now a state regulation that limits the amount of water that we can put into the septic system. So the most we can do is kind of what we did for the 600 vials that's done and that will be shipped by Friday and that will be available next week. So we're limited to about 600 vials.
The other week that's the most we can do here, that's not going to get us to the promised land. So we have negotiated a deal.
The deal is for us to we have to finish one more thing before we can move there and we're working on that diligently. It's a contract we have to work on and when we get that done we'll move the machine downstairs.
And and everything else over to this site.
Which is called artisans I'd say I gave that name in the press release and that will be hopefully in the next two weeks, we will have a complete it will move over they have everything that we need we don't need to use water, where they have a massive commercial chiller that will take the place of the water.
They have the electricity that we need they have everything that we need so we will no longer be encumbered and so I've asked John .
Ken are two guys that are in marketing and sales to do everything they can to steps to start going out there and closing on those deals. So the first thing is the machine.
Is able to do a lot more than we can do but we're not able to do it here.
Number two when we made that statement in in November or whenever that was it was absolutely positively true one of those one 5 million dollar contract is the one that we're working on and one of those one 5 million contracts came from a gentleman in Colorado, who is now.
And sanctioned by the state in the last couple of months two four.
Payment of or lack of payment of taxes and so unfortunately, we have to replace them because he's no longer in business.
And the third one is the group that we had out in Montana that we shipped a.
A lot to add.
And they are meeting this week.
You talked about the they they use the samples to talk about whether or not they're going to continue with CBD or not and if they do we expect it will be with us. So.
At the time, there was a contract of <unk>.
For the a an agreement for what would be a million and a half and a contract.
For that we also have a gentleman.
Who we think the world of named John Westlake, who is a guru in cannabis and he is a fourth guy who is.
Also working on our behalf and we're working on a contract for for him and as soon as that signed we expect this his big it will be turned on so I know you don't want to hear Tom. These arent excuses. These are things that have happened, we're working past them.
We found this additional $1 5 million dollar contract, we have a potential contract from a gentleman right here in Massachusetts number two and we're going to replace the gentleman in Colorado.
I think pretty quickly now now that we have a facility that 30 days from now 20 days. So now we should be up and running.
Well I know they want to sample quantities, but in theory, you just mentioned.
You have potentially two 1.5 million dollar contracts why can't they be done by the end of this quarter, which you could do there.
June 30th.
None of them are going to be done even if even if I were in the space and never said. These are one point nobody's going to take $1 $5 million of a brand new contract you test drive the car before you drive it so he's test driving the.
The gentleman in Maryland is test driving with.
We made 600 vials and where in which we got as labels, we're shipping them down or bringing them down to them and they will be available online I've told him that I believe he will sell out in a matter of a couple of weeks. He's not sure. He said of ICL out in couple of weeks rig. The next door I want the next pilot. The next pilot is 10 times the first one.
So you know if if he's getting he's getting to 300.
Vial.
Shipments in the first one I might myself bring down and then he's got a second one coming I think you will sell out of that first one and a couple of weeks you'll start selling the second one and we'll start making the next vial, which I believe is 3500.
I think we'll be working on that in June So Dom maybe maybe that 3500, we can do 3500 in the new facility I Couldnt do it here, but we can do it in a new facility. So maybe we reshaped the 3500 in June that $1 5 million is for a year and I I believe however.
I believe that.
It's a very good possibility that the whole thing will be shipped before this year is out even though that would only be about eight months.
Okay, well, that's good to hear that the customers slowing the process versus you know I know you had this application but yeah.
Yeah, So if it's really.
Throttled by the customers seeing examples samples samples before you give them a large batch then okay, but they're not all just being crimson.
Paying for the pilots.
So when we send them three to 600, they're paying for those who pay them 3500, they're paying for those they just don't want to take 25 or 30000 vials on something that they never tried to sell it. This is a brand new product that doesn't exist in this world that I'm aware of this isn't all plan base.
No preserve it is.
40, Meg per Mil CBD product there is nothing like this in the world that I'm aware of and I'm very excited about it and.
The feedback we get I'll turn it over to John because John has been right on the front lines of this in his talk that and it's talking to people know about contract any sent samples out to a number of people John .
Yeah Tom.
A great question I'm glad you heard from Rick.
Announcements of $1 5 million dollar contracts are the year projection of that and that it actually builds into that and then obviously we ran into a very disappointing our learning in terms of.
The cooling necessary for production.
That that's even on small level production button.
Large scale production for our big lots, which are going to be rolling out over the course of the year.
Those reflect large volumes that are accepting systems, just couldnt take so we've had to pivot from that.
But I've just gotten back from a meeting in Las Vegas.
Last week and literally people were seeking a samples from us for all sorts of products, whether it was CBD.
Or other essential oils because.
They're looking for ways to get higher bioavailability reduce their costs of goods in terms of there.
Cost per dose.
Which they can do with us and they're just.
One after another just one startled by the clarity of our products are there.
That's the gating, putting this into beverage beverages for different products and just endless enthusiasm and then yesterday I received a call from somebody who had participated.
Yeah.
Isn't a THC studies that Rick mentioned.
And he wanted to report that one of the people who had been there an older woman who had a knee pains reported that she had put the product on her knee and really almost.
Disability that keeps you from walking in is very very uncomfortable. She said that within minutes. She was able to walk around a really remarkable and so and he was just calling to say that he had been a skeptic.
About this particular topical use and wanted to report how excited he was about learning this.
So I'm.
Confident that we will have a number of different contracts and in the near term to be able to report that will overlay on top of the three that Rick was discuss it. So these will all layer on top of each other and build towards the exit of this year.
Entry into a 2024.
So with that I'll turn it back over to Rick.
And I'll turn it to Paul.
Okay.
Once again, ladies and gentlemen, you can press star one on your phone if you wish to enter the queue and the next question is coming from Gary Zwetchkenbaum.
From Plum tree consulting Gary Your line is live.
Thank you, Rick and Jon Congratulations gentlemen, 740000 per quarter.
54% increase you.
You mentioned that a quarter, where half and youre looking for seven figures, which is over $1 million.
Wanted to see if we could focus I noticed.
But you said the cash burn.
For the quarter was reduced by 44%. So you Werent 740, or burn was only for 'twenty two I think that's fair.
Reflective of our disciplined cash management I wanted to ask you guys John in particular on on one area.
The Agra Agra count.
If I'm not mistaken John if you can help me, but we did 130000 in the previous quarter.
I'm not mistaken we are sitting with inventory.
Currently over.
Over a half a million dollars worth I wanted to get an understanding of what it looks like we could do in sales.
For the rest of the year, John we had conversations about it it might be more than 500000 could you just give me a little input on what's happening on that side and where are you where you are selling at 130000.
<unk> are phenomenal and if we have inventory over a five or 600000, that's a lot of money to that.
For revenue and.
If you could talk about that I'd appreciate it.
Sure and I appreciate the question.
So last year, we were.
I think everybody knows California was deeply affected by the drought, which impacted particularly the San Joaquin Valley, which is historically where materials like this gets sold in great volume and the odd distributors in in the San Joaquin Valley became very conservative.
And they drew back then they stopped looking for new materials. They were buying materials as needed which was very limited of course, we've had kind of the opposite ended the blessings. If you will I actually live in California and in the heart of it all.
We got a lot more water than you know the annual problem 240%.
Which is having kind of an interesting opposite effect a lot of the San Joaquin Valley is underwater.
A lot of places are to saturated.
But.
Having said that we are beginning to see the return of growing seasons and our the person who is the primary sales.
Person for us in the San Joaquin Valley, One reports that our products are the best in the business. There's nothing quite like them. He is an incredible champion for it and we're rebuilding a market that.
Has that.
This product line has not been in the market for a while so it takes a little to reestablish but we're encouraged with his.
The initial uptake we're hearing positive comments and I, certainly I'm, hoping that we continue to pull some inventory that we have sitting in our warehouse are up in the Reno area that is.
It's paid for material.
So.
To your point, we should look to some more positive results from that I'm not going to forecast exactly what that is because I don't think we've stated anything publicly but we definitely are looking to have more contributions from our AG Chem side over the course of these next three quarters.
I wanted to ask if this is you mentioned the inventory we already have if we sold.
The full amount of inventory that we've already paid for.
We're talking about can you give me a little more than five or $600000.
At the current prices that we're paying whether it took three months six months or nine months.
Isn't this quite a bit of inventory that we have yes.
So certainly in that range or even a little higher than that in terms of the full value of sales of that material.
That's great.
But and in California, John you might talk about you cant I Couldnt go there you couldn't go there and sell it it has to be sold from a licensed person to a licensed person.
So so the technical term is a P. C. H. So these are people who are professionally trained licensed.
By the state to and are authorized to sell.
Cell pesticide products.
Which covers herbicides it also covers.
Uh huh.
There are all sorts of different categories. These but these license people are the only people that can actually sell to the farmers. So in essence, what they're saying is this material is the appropriate material and it's safe for you to use give.
Given all of the many rules and regs that exist in the aggregate agribusiness.
As much as I grew up on a farm so I'm very familiar with this but I couldn't actually go sell these materials you actually have to have licensed people who do that.
John if I'm not mistaken you've met in person with this gentleman and he was responsible for making the sale of the 130000, you met with them in person recently in the past few weeks or months am I correct.
I have met with him and he's as I've mentioned he is.
In absolute champion for the product and he is as great credibility as a a very senior person in in this environment.
And has a great reputation. So we have a lot of confidence in what he is going to be able to achieve for us.
Well look forward to more sales in the coming quarters. Thank you guys great. Thank you.
I do want to.
Im not quite sure but.
Gary was going in a certain place I want to clear that up.
He sent it made it sound like I was predicting a million dollars quarter for the second quarter I wasn't our goal.
Our goal. This year is to have one of the remaining three quarters be a million dollars a quarter. That's our goal and our goal next year is to have every month.
At least one quarter could be a million dollar month times three for the quarter. So these are lofty goals because when you look back at our sales.
But we think there are achievable, we think they're achievable and then it'll tell every until the whole world. We're moving in the right direction. So Paul are any other questions.
Richard There were no other questions at this time I'd like to hand, the call back to you now for closing remarks.
Sure John Thank you for joining me and everybody. Thanks for.
Taking the time to two to come here and listen and somebody to ask questions and you know you can always.
Call.
Theres a lot of good things that are happening I mean, we had a good quarter, we expect to have great quarters going forward. We have a lot of things I said in the press release, we've had people talked about about immune boosters, we've had people talk about sleep.
Help for help for sleep, we've had people talk about anti.
Anti aging.
Creams and Serums.
We have a play in all of these we can't do it all but we have a play in all of them. We are still talking to two major multimillion dollar firms that I have said I expect to get a deal done with one or both this year and I still do we're talking to people about some of these other compounds that are way outside of cannabis and cannabis market is huge.
It's huge but it's a drop in the bucket to some of the other markets that we're gonna be going into and we've proven ourselves over and over again.
If you can get CBD out and into the bloodstream. If you can get THC out of the oil into the bloodstream very quickly.
It stands to reason that you can get almost any if not any active ingredient and of oil. We don't touch was inside the oil we break down the oil. This is the difference between us and many others. We don't adversely effect, we don't positively effect, we don't touch the active ingredient <unk>, we break the oil.
Down so that it's in it's in hundreds of millions or billions of nano sized oil droplets, which makes it far more available far more soluble form of bio available. So that's what we do and it doesn't to me it doesn't matter, whether that's prednisone or retinol.
Turkey men or aster xanthan or THC.
It doesn't matter what's in the oil I believe that we're onto something very very big and and I believe that we've we've started to see it in next week's gonna be a great week does next week will be the first time, we've made and shipped the product it's actually going to be for sale, it's going to be on our website nationwide.
You know my my family in Washington State My family in Florida can all just dial in and go online and buy the product and they're asking for it because they've had some free samples. So and this is for US a C. D. C. B D not not T. C of course, there's limits there so anyway.
I'm excited about the past I'm very excited about the future I'm looking forward to everyday I'm looking forward to next week seen our product.
You know on our web site, where it says made by ultra here because it will say that on a label process by ultra share. So thanks again, everybody I look forward to the next time, we're on the call, which is going to be right around mid August thanks, again, and God bless everyone.
Okay.
Thank you. This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation.
Thanks, Paul we all set.
Okay.