Q1 2024 iSpecimen Inc Earnings Call

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Speaker Change: Good day, everyone and welcome to ice Pessimists first quarter 2024 results conference call. At this time participants are in a listen only mode.

Operator: Good day, everyone, and welcome to iSpecimen's first quarter 2024 results conference call. At this time, participants are in a listen-only mode.

Operator: A question and answer session will follow management's remarks. This conference call is being recorded. A replay of today's call will be available on the investor relations section of iSpecimen's website and will remain posted for the next 30 days. I will now hand the call over to Phil Carlson, Investor Relations, for introductions and the reading of the Safe Harbor Statement. Please go ahead.

Speaker Change: Question and answer session will follow management's remarks. This conference call is being recorded.

Speaker Change: Play of today's call will be available on the Investor Relations section of I, especially on its website and will remain posted for the next 30 days I will now hand, the call over to Phil Carlson Investor Relations for introductions and the reading off the Safe Harbor statement. Please go ahead.

Phil Carlson: Thank you operator.

Phil Carlson: Thank you, operator. Good morning, everyone, and welcome to iSpecimen's first quarter 2024 conference call. With us on today's call is Tracy Curley, our Chief Executive Officer and Chief Financial Officer, and Leslie Hoyt, our Senior Vice President of Operations. Before we begin, I would like to remind you that today's call contains certain forward-looking statements from our management made within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, concerning future events.

Phil Carlson: Everyone and welcome to especially in its first quarter 2024 conference call.

Phil Carlson: Where does that today's call is Tracy clearly chief Executive Officer, and Chief Financial Officer, and that's the way our senior Vice President of operations.

Phil Carlson: Words such as may project, Intends, Plans, Believes, Anticipates, Hopes, Estimates, and variations of such words and similar expressions are intended to identify forward-looking statements. These statements are subject to numerous conditions, many of which are beyond the control of the company, including those set forth in the risk factor section of the company's 10-K for the year ended December 31st, 2023, filed with the SEC. Copies of this document are available on the FCC's website at www.fcc.gov.

Phil Carlson: Before we begin I would like to remind you that today's call contains certain forward looking statements from a measured made within the meaning of section 27, a of the Securities Act of 1933 as amended and section 21 E of the Securities Exchange Act of 1934 as amended concerning future events.

Phil Carlson: Words, such as May should probably projects.

Phil Carlson: Intends plans believes anticipates hopes estimates.

Phil Carlson: The variations of such words and similar expressions are intended to identify forward looking statements.

Phil Carlson: These statements are subject to numerous conditions, which many of which are beyond the control of the company, including those set forth in the risk factors section of the company's 10-K for the year ended December 31, 2023 filed with the SEC.

Phil Carlson: Copies of this document is available on Sec's website at Www Dot <unk> Dot Gov.

Phil Carlson: Actual results may differ materially from those expressed or implied by such forward-looking statements. The company undertakes no obligation to update these statements, revisions, or changes after the date of this call, except as required by law. Now, it is my pleasure to introduce Tracy Curley, Chief Executive Officer and Chief Financial Officer. Tracy, please go ahead.

Phil Carlson: Actual results may differ materially from those expressed or implied by such forward looking statements.

Phil Carlson: Company undertakes no obligation to update these statements revisions or changes after the date of this call except as required by law.

Phil Carlson: My pleasure to introduce Tracy Curly Chief Executive Officer, and Chief Financial Officer Tracy. Please go ahead.

Tracy Wilson Curley: Good morning, and thank you for joining our call.

Tracy Wilson Curley: Good morning, and thank you for joining our call. In the first quarter of 2024, we focused largely on leveraging our streamlined operational infrastructure to advance the specific initiatives we undertook in the second half of 2023. On today's call, I will provide an update on our success in advancing these initiatives to create a runway for continued growth and scale for our business. I will then turn the call over to our Senior Vice President of Operations, Leslie Hoyt, who will speak specifically about how these operational achievements are enhancing the way in which iSpecimen interacts with and provides value to our supplier partners and researcher customers, thereby continuing to transform the biospecimen procurement Finally, I will review our financial results for the first quarter and open the call to questions.

Tracy Wilson Curley: In the first quarter of 'twenty 'twenty, four we focus largely on leveraging our streamlined operational infrastructure to advance the specific initiatives. We undertook in the second half of 'twenty to 'twenty three on today's call I will provide an update on our success in advancing these initiatives to create a runway for continued growth and scale.

Luke White: For our business I will then turn the call over to our senior Vice President of operations, whereas like White, who will speak specifically about how these operational achievements are and you can see the way in which I, especially interact with and provide value to our supplier partners and researchers customers, thereby continuing to.

White: Transform the Bios Beckman procurement process finally, I will review our financial results for the first quarter and open the call for questions.

Tracy Wilson Curley: As we noted during our fourth-quarter 2023 earnings conference call, we have undertaken a measured and disciplined strategy to ensure our long-term financial success. By strategically reducing our capital and operational expenditures and realigning our resources to focus on key market opportunities, we are setting the stage for revenue growth in the second half of 2024 and beyond. Strategically reducing our spending in various operational areas to focus on our core capabilities has resulted in a reduction in our quarterly cash burn.

Speaker Change: As we noted during our fourth quarter 2023 earnings conference calls, we have undertaken a measured and disciplined strategy to ensure our long term financial success.

White: By strategically, reducing our capital and operational expenditures and realigning our resources to focus on key market opportunities.

White: You're setting the stage for revenue growth in the second half of 'twenty 'twenty four and beyond.

White: Strategically, reducing our spending in various operational areas to focus on our core capabilities has resulted in a reduction in our quarterly cash burn compared to the first quarter of 2023 we reduced compensation cost by 41% and technology costs by 66%. In addition.

Tracy Wilson Curley: Compared to the first quarter of 2023, we reduced compensation costs by 41% and technology costs by 66%. In addition, of the $2.5 million cash used in the first quarter of 2024, $1.2 million was attributable to one-time events, which included consulting and legal expenses, franchise tax compliance, and fees associated with our ATM offering. Without these one-time charges, our burn rate for the quarter would have been approximately $1.2 million, or a little over $400,000 per month, which is significantly improved from where we were a year ago.

White: Of the $2 $5 million cash used in the first quarter of 'twenty 'twenty four $1.2 million was attributable to one time events, which include a consulting and legal expenses franchise tax compliance and fees associated with our ATM offering without these one time.

White: Our burn rate for the quarter would have been approximately $1.2 million or a little over $400000 per month, which is significantly improved from where we were a year ago.

Tracy Wilson Curley: Now that we have secured a strong foundation to scale our business, we are diligently focused on maximizing the potential of our online marketplace and uncovering additional value in our supplier network to strengthen our competitive position and drive increased top-line growth opportunities. In the fourth quarter of 2023, we shared the success of our Next Day Quotes program, which significantly reduces the amount of time from opportunity to quote and improves our quote-to-purchase order conversion ratio.

White: Now that we have secured a strong foundation to scale. Our business. We are diligently focused on maximizing the potential of our online marketplace and covering additional value in our supplier network to strengthen our competitive position and drive increased top line growth opportunity.

White: And if fourth quarter of 2023, let me share the success of our next day quotes program, which significantly reduces the amount of time and opportunity to quote and improves our quote to purchase order conversion ratio given the incredible impact. This program. It has had on strengthening our sales slow and the benefit it is providing to us.

Tracy Wilson Curley: Given the incredible impact this program has had on strengthening our sales flow and the benefit it is providing to our customers to successfully advance their scientific research, we are diligently working with many of our suppliers to participate in the Next Day Quote program and to further this program throughout 2024. Leslie Hoyt, our senior vice president of operations, has played an integral role in developing the next day quote program and reshaping our entire supplier network to better engage with the suppliers that offer the strongest capabilities.

White: Customers to successfully advance their scientific research.

White: Diligently working with many of our suppliers to participate in the next day quote program and to advance this program throughout 'twenty 'twenty four.

White: I think like our senior Vice President of operations. That's played an integral role in developing the next day quote program reshaping our entire supplier network to better engage with their suppliers that offer the strongest capability. This effort aligns with our goal of improving the quality of our supplier network.

Tracy Wilson Curley: This effort aligns with our goal of improving the quality of our supplier network, as opposed to simply expanding it in size, and, in the process, creating the highest quality supplier network in the market. I would now like to turn the call over to Leslie to review the operational achievements we have made in the first quarter and how they are reshaping the biospecimen procurement process with the goal of delivering the most highly sought-after biospecimens in real time and producing greater financial returns for iSpecimen. Leslie, please go ahead. Thank you.

White: As opposed to simply expanding it inside and in the process, creating the highest quality supplier network in the market.

White: I would now like to turn the call over to Leslie to review the operational achievements. We have made in the first quarter and how they are reshaping the bio specimens procurement process with a goal of delivering the most highly sought after by assessments in real time and produce greater financial returns for ice. That's it wasn't please go ahead.

Leslie Hoyt: Thank you, Tracy. As Tracy mentioned, we are advancing a lean and efficient business model by continuing to streamline our operations, cutting unnecessary costs, and focusing on quality over quantity. To that end, I am pleased to report that we have made incredible progress in the first quarter, recontracting with our supplier network to deepen our relationships with biospecimen suppliers capable of adapting to today's increasing biospecimen demand. We are seeing strong initial results from both our Next Day Quotes program and Supplier Network Refresh initiative. Next day, quote.

Leslie: Thank you Tracy that's Tracy mentioned, we are advancing a lean and efficient business model by continuing to streamline our operations.

Leslie: Unnecessary costs and focusing on quality over quantity.

Leslie: And I am pleased to report that we have made incredible progress in the first quarter re contracting with our supplier network to deepen our relationships with bio specimens suppliers capable of adapting to today's increasing by a specimen demands. We are seeing strong initial results from both our next day quotes program and supplier.

Leslie: Network refresh initiative.

Leslie: Next day quotes.

Leslie Hoyt: The percentage of total quotes and orders qualifying for the Next Day Quotes program, including remnant and biobank specimens, as well as prospective collections, continues to increase quarter over quarter. The Next Day Quotes program continues to grow For all quotes provided to customers in Q1 2024, 40% qualified as Next Day Quotes, as compared to 34% in Q4 2023 and 25% in Q3 2023. In the first quarter of 2024, across all lines of business, 50% of all purchase orders originated with Next Day Quotes.

Leslie: A percentage of total quotes and orders qualifying for the next day quotes program, including remnant biobank specimens as well as prospective collection continues to increase quarter over quarter. The next day quotes program continues to grow for all quotes provided to customers in Q1 2024, 40%.

Leslie: By the next day quotes as compared to 34% in Q4, 'twenty 23, and 25% in Q3 'twenty two 'twenty three.

Leslie: In the first quarter of 2024 across all lines of business, 50% of all purchase orders originated with next day quotes.

Leslie: Our next day quotes program, it's fueling significant growth in our perspective collections line of business in the first quarter of 2024, 91% of prospective next day quote dollars converted to purchase orders as compared to 32% in the fourth quarter of 2023.

Leslie Hoyt: Our Next Day Quotes program is fueling significant growth in our prospective collections line of business. In the first quarter of 2024, 91% of prospective Next Day Quote dollars converted to purchase orders, as compared to 32% in the fourth quarter of 2023. Also, the next day quotes prospective purchase order dollar value increased by 190% in Q1 2024 from the fourth quarter of 2023. Overall, the Next Day Quotes program's highest value is an improving conversion rate from quotes purchase orders.

Leslie: Also the next day quotes prospective purchase order dollar value increased by 190% in Q1 2024 from the fourth quarter of 2023.

Leslie: Overall, the next day courts programs highest value isn't improving conversion rates from quotes purchase orders. The overall year to date conversion rate for all next day quotes opportunities was 52%, which means that greater than 50% of next day quotes were turned into sales.

Leslie Hoyt: The overall year-to-date conversion rate for all Next Day Quotes opportunities was 52 percent, which means that greater than 50 percent of Next Day Quotes were turned into sales. These growth metrics clearly demonstrate the value of our Next Day Quotes program in driving stronger sales. Fire Network Refresh.

Leslie: These growth metrics clearly demonstrate the value of our next day quartz program and driving stronger sales growth.

Leslie: Higher network refresh.

Leslie Hoyt: As we are focused on the highest quality provider sites and growing our Next Day Quotes program, we strategically reduced, as part of our supplier network refresh, the size of our supplier network, terminating over 100 contracts tied to the lower value suppliers, reducing the size of our supplier network from 243 suppliers in January of 2024 to the current 140 suppliers. The terminated supplier contracts represent sites that were not providing consistent and or quality human specimens or collaborating with us in a manner that benefited both parties.

Leslie: Because we are focused on the highest quality provider sites and growing our next day quotes program, we strategically reduced as part of our supplier network refresh the size of our supplier network terminating over 100 contracts tied to the lower values suppliers, reducing the size of our supplier network from 243.

Leslie: Suppliers in January of 'twenty 'twenty four to the current 140 supplier.

Leslie: Terminated supplier contracts represent sites that were not providing consistent and our quality human scotsman or collaborating with us in a manner that benefited both parties.

Leslie Hoyt: As part of the Supplier Network Refresh Program, we have identified opportunities to expand our Embedded Coordinator Program as we see evidence of supplier capability potential expansion with additional resources. We've been working diligently to renew existing contracts with the remaining suppliers, including an in-depth discovery of their capabilities, realignment on pricing, and increasing the transfer and use of their inventory data. By doing so, we have identified new types of specimens and services to offer our customers and have successfully added those capabilities to the Next Day Quotes program.

Leslie: As part of the supplier network refresh program, we have identified opportunities to expand our embedded coordinator program as we see evidence of supplier capability potential expansion with additional resources.

Leslie: We've been working diligently to renew existing contracts with the remaining suppliers, including an in depth discovery of their capabilities.

Leslie: Realignment on pricing and increasing the transfer and use of their inventory data by doing so we have identified new types of specimens and services to offer our customers and have successfully added those capabilities to the next day quotes program.

Leslie: With fewer suppliers to manage we are working closely with our remaining suppliers to better understand the breadth of those capabilities. So that we can optimize how we collaborate with them and more efficiently supply specimens to our end customers.

Leslie Hoyt: With fewer suppliers to manage, we are working closely with our remaining suppliers to better understand the breadth of their capabilities so that we can optimize how we collaborate with them and more efficiently supply specimens to our end customers. The goal is to partner with the best suppliers with the highest quality products in the marketplace. Achieving these goals will greatly enhance our competitive position, allowing us to begin fulfilling biospecimen orders in some cases before our competitors can even provide a quote.

Leslie: The goal is to partner with the best suppliers with the highest quality product in the marketplace.

Leslie: Achieving these goals will greatly enhance our competitive position, allowing us to begin fulfilling buyout persimmon orders in some cases people are our competitors can even provide a quote.

Leslie: As we move forward a key component of the supplier network refresh initiative is increasing the number of specialized and monthly inventory files, we received from suppliers.

Leslie Hoyt: As we move forward, a key component of the Supplier Network Refresh initiative is increasing the number of specialized and monthly inventory files we receive from suppliers. Receiving data from suppliers allows us to market existing inventory and allow customers to choose specimens directly. This enhanced automation is intended to fuel sales and grow the next day quote program. In short, we are well on our way to vastly improving our operations, offering greater capabilities to serve the medical community due to stronger collaborations with capable biospecimen suppliers. I will now turn the call back over to Tracy to discuss the technological advancements made to the iSpecimen marketplace.

Leslie: Receiving data from suppliers allows us to market existing inventory.

Leslie: And allow customers to choose specimens directly this enhanced automation is intended to fuel sales and grow the next day Cort program.

Leslie: In short we are well on our way to vastly improving our operations offering greater capabilities to serve the medical community due to stronger collaborations with capable bio specimens suppliers.

Leslie: I will now turn the call back over to Tracy to discuss the technological advancements made to the ice specimen marketplace.

Tracy Wilson Curley: Thank you that's it.

Tracy Wilson Curley: Despite changes to our technology staffing model over the last year, we have kept a keen eye on organizational efficiencies and growth opportunities fueled by technological advancements. The success of the Next Day Quotes program has relied heavily on our sales team's ability to quickly and accurately determine the feasibility of a customer's request. This matchmaking is fueled by the capabilities and inventories provided by our global network of suppliers, empowered by iSpecimen proprietary technology.

Tracy Wilson Curley: Slight changes to our technology staffing model over the last year.

Tracy Wilson Curley: Have kept a keen eye on organizational efficiencies and growth opportunity fueled by technological advancement.

Tracy Wilson Curley: Except for the next day quotes program has relied heavily on our sales team's ability to quickly and accurately determine the feasibility of a customer's request.

Tracy Wilson Curley: This matchmaking is skewed by the capabilities and inventories provided by our global network of suppliers and powered by ice specimen proprietary technology.

Tracy Wilson Curley: Beyond our emphasis on proprietary technology enhancing the accuracy of our sales marketing and operational insights about teams through deliberate business intelligence strategy has significantly amplified our capacity to create and and respond to customer demands. This proactive approach has assisted.

Tracy Wilson Curley: Beyond our emphasis on proprietary technology, enhancing the acumen of our sales, marketing, operational, and site development teams through deliberate business intelligence strategies has significantly amplified our capacity to preempt and respond to customer demands. This proactive approach has assisted in the markedly improved conversion of quotes to purchase orders discussed earlier, setting new benchmarks for performance.

Tracy Wilson Curley: And the markedly improved conversion of quotes to purchase orders discussed earlier set a new benchmark well performance I would like to now turn the discussion to our revenue enhancement initiatives.

Tracy Wilson Curley: I would like to now turn the discussion to our revenue enhancement initiatives. Our Embedded Coordinator Program remains a key priority for our long-term growth and has been impacted by the rollout of our Supplier Network Refresh Program. We currently have Embedded Coordinators at three sites, each of which has very strategic growth plans tied to them. These sites have all moved over to the Next Day Quotes program due to the support of our Embedded Coordinators.

Tracy Wilson Curley: I'm very coordinated program remains a key priority for our long term growth and has been impacted by the rollout of our supplier network refresh program.

Tracy Wilson Curley: We currently have embedded coordinators at three sites.

Tracy Wilson Curley: Which had very strategic growth plans tied to them. These sites have all moved over to the next day quotes program due to the support of our embedded coordinators. Our goal is to place embedded coordinators in additional site as we work in partnership with suppliers on our supplier network refresh program.

Tracy Wilson Curley: Our goal is to place Embedded Coordinators in additional sites as we work in partnership with suppliers on our Supplier Network Refresh Program. Our Cancer Sequencing Initiative remains an important longer-term growth driver now that we have created an inventory of mutation-characterized formalin-6 paraffin-embedded, FFPE, cancer tumor tissue. There is significant value in having access to these biospecimens due to the fact that they are extremely difficult to find and hold significant potential to support cancer research.

Tracy Wilson Curley: Our cancer sequencing initiative remains an important longer term growth driver.

Tracy Wilson Curley: Now that you have created inventory of mutation characterized winnowing fixed paraffin embedded at that P E cancer tumor tissue.

Tracy Wilson Curley: There is significant value in having access to these bio assessment due to the fact that they are extremely difficult to find and holds significant potential to support cancer research.

Tracy Wilson Curley: As he had mentioned in our call at year end established a pipeline of new business opportunities in the fourth quarter of 2023 that pipeline now totals approximately $1 $5 million from new and existing customers.

Tracy Wilson Curley: As we mentioned in our call at year end, we established a pipeline of new business opportunities in the fourth quarter of 2023. That pipeline now totals approximately $1.5 million from new and existing customers. Through our internal due diligence, we have 27 confirmed new orders across 65 ongoing projects. As we stated previously, several outstanding projects that had not resulted in a win were the direct result of not having found the exact markers being requested.

Leslie Hoyt: Our internal due diligence, we had 27 complain new orders across 65 ongoing project.

Tracy Wilson Curley: As we stated previously several outstanding projects that had not resulted in a win where they're directly fault not having found the exact markers being requested given the pricing and value proposition. This program continues to be well accepted by our customers and we will provide further updates.

Tracy Wilson Curley: Given the pricing and value proposition, this program continues to be well accepted by our customers and we will provide further updates as we are still working to upgrade the targeted marketing plan for this program. I will now turn to our financial results. With a quarter ended March 31st, 2024, revenue was approximately $2.3 million, compared to approximately $3 million for the quarter ended March 31st, 2023. The decrease in revenue for the first quarter of 2024 was primarily due to a decrease of 3,388 specimens, or 39% in specimen count from 8,629 specimens in the three months ended March 31st, 2023, to 5,241 specimens in the quarter ended March 31st, 2024. to $437 per specimen in the three months ended March 31st, 2024, cost of revenue decreased by approximately $147,000 or 13% from approximately $1.1 million for the three months ended March 31, 2023 to approximately $1 million for the three months ended March 31, 2024.

Tracy Wilson Curley: We are still working to upgrade the targeted marketing plan for this program.

Tracy Wilson Curley: I will now turn to our financial results.

Tracy Wilson Curley: Although there was a 39% decrease in the number of specimens accessioned during the quarter ended March 31, 2024, over the same prior year period, the average cost per specimen increased by $58 per specimen or 44% from $133 per specimen for the quarter ended March 31, 2023 to $191 per specimen for the quarter ended March 31, 2024.

Tracy Wilson Curley: For the quarter ended March 31, 2024 revenue was approximately $2.3 million compared to approximately $3 million for the quarter ended March 31, 2023, the decrease in revenue for the first quarter 'twenty, 'twenty, four which primarily due to a.

Tracy Wilson Curley: Technology expenses increased by approximately $78,000, or 9%, to approximately $912,000 for the quarter ended March 31, 2024, from approximately $834,000 for the same period in the prior year. The increase was related to increases in amortization of internally developed software of approximately $99,000, professional fees of approximately $11,000, and general operating expenses of approximately $1,000, which were partially offset by decreases in headcount and payroll and related expenses of approximately $33,000. Sales and marketing expenses decreased by approximately $296,000, or 31%, to approximately $660,000 for the quarter ended March 31st, 2024, from approximately $962,000 for the same period in the prior year.

Tracy Wilson Curley: Decrease of 3388 persons or 39% and specimen count from 8629 specimen and the three months ended March 31 2023.

Phil Carlson: Two 5241 specimens in the quarter ended March 31, 2020 for the effect of the decrease in Cessna account.

Tracy Wilson Curley: What partially offset by a change in the assessment mix, which caused the average selling price per specimen to increased by $95 per specimen or 28% from approximately $342 per specimen in the three months ended March 31 2023 two.

Tracy Wilson Curley: $437 per specimen and the three months ended March 31 2024.

Tracy Wilson Curley: Cost of revenue decreased by approximately $147000 or 13% from approximately.

Tracy Wilson Curley: Between one $1 million for the three months ended March 31, 2023 to approximately $1 million for the three months ended March 31 2024.

Tracy Wilson Curley: Although there was a 39% decrease in the number of assessments of sessions during the quarter ended March 31 2024.

Tracy Wilson Curley: Over the same prior year period.

Tracy Wilson Curley: Average cost push that's been increased by $58 perspective for 44% from $133 per specimen.

Tracy Wilson Curley: And at March 31, 2023 to $191 of course specimen for the quarter ended March 31st 2024.

Tracy Wilson Curley: Technology expenses increased by approximately $78000 or 9% to approximately $912000 for quarter ended March 31, 2024 from approximately $834000 for the same period in the prior year.

Tracy Wilson Curley: Increase was related to increases in amortization of internally developed software of approximately $99000 professional fees of approximately $11000 and general operating expenses of approximately $1000, which were partially offset by decreases in head count and payroll and related expenses.

Tracy Wilson Curley: Approximately $33000.

Tracy Wilson Curley: Sales and marketing expenses decreased by approximately $296000 or 31% to approximately $660000 for the quarter ended March 31st 2024.

Tracy Wilson Curley: <unk> $962000 for the same period in the prior year. The decrease was primarily attributable to decreases in payroll and related expenses of approximately $217000.

Tracy Wilson Curley: The decrease was primarily attributable to decreases in payroll and related expenses of approximately $217,000, external marketing expenses of approximately $95,000, and general operating expenses related to sales and marketing of approximately $20,000, which were partially offset by an increase in advertising and promotion expenses of approximately $36,000. General and administrative expenses increased approximately $286,000, or 16%, from approximately $1.8 million for the quarter ended March 31, 2023 to approximately $2.1 million for the quarter ended March 31, 2024.

Tracy Wilson Curley: External marketing expenses of approximately $95000.

Tracy Wilson Curley: In general operating expenses related to sales and marketing of approximately $20000, which were partially offset by an increase in advertising and promotion.

Tracy Wilson Curley: Expense of approximately $36000.

Tracy Wilson Curley: General and administrative expenses increased.

Tracy Wilson Curley: Possibly $286000 or 16% from approximately $1.8 million for the quarter ended March 31, 2023 to approximately $2 $1 million for the quarter ended March 31 2024.

Tracy Wilson Curley: The increase was attributable to increases in professional fees of approximately $329,000, taxes and insurance of approximately $267,000, and bad debt expense of approximately $45,000, which were partially offset by decreases in compensation costs of approximately $250,000, general operating expenses of approximately $78,000, depreciation and amortization of approximately $23,000, and utility and facility expenses of approximately $4,000.

Tracy Wilson Curley: The increase was attributable to increases in professional fees of approximately $329000 taxes and insurance of approximately $267000 and bad debt expense of approximately $45000, which was partially offset by decreases in compensation cost of approximately 250000.

Tracy Wilson Curley: General operating expenses, and approximately $78000 depreciation and amortization of approximately $23000 and utility and facility expenses of approximately $4000.

Tracy Wilson Curley: As of March 31, 2024, iSpecimen had approximately $2.1 million of cash and cash equivalents and approximately $466,000 of securities available for sale with maturities ranging from one to six months for a combined total of approximately $2.6 million, compared to a cash balance of $5 million as of December 31, 2023. For the first quarter of 2024, $1.2 million of our $2.5 million of cash used was attributable to one-time charges, which included consulting and legal fees, franchise tax compliance, and fees associated with our at-the-market offering.

Tracy Wilson Curley: As of March 31, 2024, I Speckman had approximately $2 $1 million of cash and cash equivalents and approximately $466000 of available for sale securities with maturities ranging from one to six months for a combined total of approximately $2 $6 million.

Tracy Wilson Curley: Compared to a cash balance of $5 million as of December 31, 2023 for the first quarter of 2024.

Tracy Wilson Curley: $1.2 million of our $2 $5 million of cash use was attributable to one time charges, which included consulting and legal fees franchise tax compliance and fees associated with our aftermarket offering.

Tracy Wilson Curley: As I mentioned earlier, without these one-time charges, our burn rate for the quarter would have been approximately $1.2 million, or a little over $400,000 per month, which is significantly improved from where we were a year ago.

Tracy Wilson Curley: As I mentioned earlier without these one time charges, our burn rate for the quarter would have been approximately $1.2 million or a little over $400000 per month, which is significantly improved from where we were a year ago.

Tracy Wilson Curley: Also, as we mentioned in our last earnings call, on March 5, 2023, we entered into an at-the-market offering agreement so that we may issue and sell shares of common stock from time to time with an aggregate offering price of up to $1.5 million through our shelf registration statement. We may also seek additional funding through public equity and other sources to fund further capital investments or for general corporate purposes. Reductions in our workforce in 2023 and continuing through the first quarter of 2024 resulted in an estimated reduction in monthly compensation costs of approximately 41% in the three months ending March 31st, 2024 when compared to the same period in the prior year, which was possible after streamlining operations and rationalizing resources to focus on key market opportunities.

Tracy Wilson Curley: Also as we mentioned in our last earnings call on March 5th 2023 we entered into an at the market offering agreement.

Tracy Wilson Curley: May issue and sell shares of common stock from time to time with an aggregate offering price of up to $1 $5 million to our shelf registration statement. We may also seek additional funding through public equity and other sources to fund further capital investments or for general corporate purposes.

Tracy Wilson Curley: Actions in our workforce in 2023 and continuing through the first quarter of 'twenty 'twenty four resulted in an estimated reduction in monthly compensation cost of approximately 41% in the three months ended March 31, 'twenty 'twenty four.

Tracy Wilson Curley: When compared to the same period in the prior year.

Tracy Wilson Curley: Which is possible after streamlining operations and rationalizing resources to focus on key market opportunity.

Tracy Wilson Curley: While we have taken steps to reduce the current number of suppliers in our network, as we have discussed, our long-term strategy is to add additional customers and suppliers to increase revenues through our Revenue Enhancement Projects and our Next Day Quotes Program, while continuing to reduce and manage expenditures to improve our financial position and ensure continued funding of operations. This concludes our prepared remarks. Now I'd like to open the call for questions. Operator, please go ahead.

Tracy Wilson Curley: While we have taken steps to reduce the current number of suppliers in our network as just discussed our long term strategy is to add additional customers and suppliers to increase revenues through our revenue enhancement projects and our next day quotes program, while continuing to reduce and manage expenditures to improve our financial position and.

Speaker Change: It sure continued funding of operations.

Speaker Change: This concludes our prepared remarks now I'd like to open the call for questions.

Tracy Wilson Curley: <unk>. Please go ahead.

Speaker Change: Ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press the star followed by the number one on your Touchtone phone, who you will hear a prompt that your hand has been raised should you wish to decline from the polling process. Please press the star fall.

Operator: Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the number one on your touchstone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the number two. If you are using a speakerphone, please lift the handset before pressing any button.

Operator: Or by the number two.

Operator: If you are using a speaker phone please lift the handset before pressing any keys one moment. Please for our first question.

Operator: One moment, please, for our first question. Your first question comes from Matt Hewitt from Craig, Harlem Capital. Please ask your question.

Matthew Gregory Hewitt: Your first question comes from that do it from Craig Hallum Capital. Please ask your question.

Matthew Gregory Hewitt: Good morning and thank you for taking the questions. Maybe first up, a remarkable increase in the conversion rate on your next day quotes. I'm just curious, is that sustainable? How should we think about, especially as you add several more kinds of people embedded with those customers, how will that kind of drive or accelerate growth as the year progresses?

Matthew Gregory Hewitt: Good morning, and thank you for taking the questions maybe first up.

Matthew Gregory Hewitt: Market will increase in the conversion rate on your next day quotes I'm just.

Matthew Gregory Hewitt: Curious is that sustainable how should we think about especially as you add several more kind of.

Matthew Gregory Hewitt: People embedded with those customers, how how will that kind of drive or accelerate growth as the year progresses.

Tracy Wilson Curley: Good morning, Matt. Thanks for that. I have a huge smile on my face because we are really excited about this, and we do believe it's sustainable. I'm going to turn it over to Leslie to talk a little bit more about that. Leslie

Speaker Change: Good morning, Matt Thanks for that I have a huge smile on my face because we are really excited about this and we do believe it's sustainable I'm going to turn it over to Leslie to talk a little bit more about that language.

Leslie Hoyt: Hi, Matt Nice to meet you and I agree Tracy next day quotes is absolutely sustainable and will.

Leslie Hoyt: Hi Matt, nice to meet you. I agree Tracy, next day delivery is absolutely sustainable. And we'll, you know, it's planned to be the way we operate on two fronts with our bank and remnant business, as we continue to work through our supplier network refresh program. We are working with each and every supplier to understand where they are and their ability to provide inventory data files to us. And all of those conversations are moving them towards where they are and towards getting us more and better data.

Leslie Hoyt: It you know.

Leslie Hoyt: It was planned to be the way, we operate them on two fronts with our banks and remnant business.

Leslie Hoyt: We continue to work through our supplier network refresh program.

Leslie Hoyt: We are working with each and every supplier to understand where they are and their ability to.

Leslie Hoyt: Provide inventory data files to us and all of those conversations are moving them towards where they are and towards getting us more and better data. We're then able to have more data and our inventory we can market more specimens customers can look at them directly.

Leslie Hoyt: We're then able to have more data in our inventory, we can market more specimens, and customers can look at them directly. Those are all next day quotes and how we will grow our banks and remnant next day quote programs. On the prospective side, it's a little bit different.

Leslie Hoyt: Those are all next day quotes and how we will grow our thanks and remnant Mexico program on the.

Leslie Hoyt: Spectrum side, it's a little bit different it's understanding and partnering with prospective spikes entire supplier contracts. If you will where we understand their capabilities and trust and their ability to perform.

Leslie Hoyt: It's understanding and partnering with prospective sites, entire supplier contracts, if you will, where we understand their capabilities and trust in their ability to perform adequately. And we allow those whole sites and what they do into our program. We have added three sites in the last two months to that program and will continue to do so. So, yes, extremely sustainable in the business plan going forward.

Leslie Hoyt: Adequately and we allow those whole sites and what they do into our program.

Leslie Hoyt: We.

Leslie Hoyt: Have got added three sites in the last two months to that program and we'll continue to do so so yeah extremely sustainable in the business plan going forward.

Tracy Wilson Curley: And those embedded coordinators will be most helpful for us in a prospective area.

Leslie Hoyt: And doesn't matter coordinators.

Tracy Wilson Curley: Sorry, there was some study coordinators will be most helpful for us in a prospective area.

Leslie Hoyt: That's fantastic. Kind of similarly, with the reduction in suppliers, how does that change access to samples? Or are your remaining 140 sites able to increase their supply? Or the, you know, some of the things that maybe the prior suppliers weren't capable of Providing Data on or Whatnot.

Speaker Change: That's fantastic I'm.

Leslie Hoyt: Kind of similarly.

Leslie Hoyt: With the reduction in suppliers, how does that change access to samples or are your remaining 140 sites are they able to increase their supply or the you know some of the things that maybe the.

Leslie Hoyt: Prior suppliers weren't capable of providing data on or whatnot.

Tracy Wilson Curley: That's a good question. We always have good questions, Matt. But the answer is, we've been really energized and excited about these conversations we're having with suppliers, the existing remaining hundred plus, because we are finding out that they have more capabilities than we were aware of. And so while we are contracting the size of our supplier network, we're able to expand the capabilities of those that are existing because of these more robust conversations we are having with them right now. And Leslie, maybe you can add a little bit more to that than I just did.

Speaker Change: That's a good question you always have good questions, Matt, but the answer is.

Leslie Hoyt: We've been really energized and excited about these conversations we're having with suppliers.

Leslie Hoyt: The existing remaining hundred classes, because we are finding out that they have more capabilities than we were aware of and so while we are contracting the <unk>.

Tracy Wilson Curley: Guys.

Leslie Hoyt: Our supplier network, we're able to expand the capabilities of those that are existing because of these more robust conversations we were having with them right now.

Tracy Wilson Curley: Leslie maybe you can add a little bit more into that then that's good.

Leslie Hoyt: Yeah, So you're 100% agree Tracy.

Leslie Hoyt: Yes, I 100% agree, Tracy. We actually have access to more supply with fewer suppliers. And the reason why is that we have time to be able to focus on those suppliers and understand the breadth of their capabilities. I would say, in almost every case, as we renew our relationship, those companies have grown in their ability to provide different services and different types of specimens. And we're now able to grow with them because we have the time to understand their pricing, understand their capabilities, and for that to be known across the company for them to be used in sales and marketing through our feasibility process.

Leslie Hoyt: We actually have access to more supply with less suppliers and the reason why is we have time.

Leslie Hoyt: To be able to focus on those suppliers and understand the breadth of their capabilities we.

Leslie Hoyt: I would say its been in almost every case as we renew our relationship with those companies have grown and their ability to provide different services and different types of specimens and we're now able to grow with them because we have the time to understand their pricing I understand their capabilities.

Leslie Hoyt: And for that to be known across the company for them to be used from sales and marketing through our third visibility process.

Leslie Hoyt: We are probably halfway through this process of recontracting and already have a greater supply of specimens, if you will, with fewer suppliers. The last thing I'll say is that the other reason that is true is that the supplier contracts that we terminated were with suppliers that we weren't working much with. They really weren't representing a quality supply of specimens, nor were they working with us in an efficient way where we were able to deliver these projects on time and under expectation. So not much was lost on the terminated contracts and a lot gained on the recontracting process.

Leslie Hoyt: We are probably halfway through this process of re contracting and already have a greater supply.

Leslie Hoyt: Assessments, if you will with less suppliers. The last thing I'll say is the other reason that is true is that the supplier contracts that we terminated where suppliers that we weren't working much whether or not they really werent, representing a quality supplier of specimens nor were they working with us in an efficient way, where we were able.

Leslie Hoyt: To deliver these projects.

Leslie Hoyt: On time and under expectations, so not much lost on the terminated contract from lots gained on the re contracting process.

Speaker Change: That's great. Thank you and then maybe one last one and I'll hop back in the queue, but bird flu has been hitting.

Matthew Gregory Hewitt: That's great. Thank you. And then, maybe, one last one. I'll hop back into queue.

Tracy Wilson Curley: But Bird Flu has been hitting the headlines quite a bit here recently, and I'm just curious if that creates an opportunity for you. If so, have you already started to work with some of your supplier network to ramp up their capabilities of obtaining samples and the necessary data? Are you already seeing demand on the purchasing side of those types of samples? Any color on that front would be helpful. Thank you.

Tracy Wilson Curley: The headlines quite a bit here recently and I'm just curious if that creates an opportunity for you. If so have you already started to work with some of your supplier network to ramp up their capabilities sort of obtaining samples and the necessary data are you already seeing demand on the purchasing side.

Tracy Wilson Curley: Of those types of samples any color on that front would be helpful. Thank you.

Tracy Wilson Curley: So any opportunity Blake all are always.

Tracy Wilson Curley: Unfortunately.

Tracy Wilson Curley: Fortunately for US an unfortunate you know for the general population are an opportunity for us.

Tracy Wilson Curley: We know well we have a lot of requests for samples this year, but that allegedly third pool do you know it's difficult I have not yet heard of demand from bird flu, but we will certainly follow up on that right. After this call I agree Tracy we're getting my usual flu.

Tracy Wilson Curley: So any opportunities like that are always, unfortunately for, or fortunately for us, and unfortunate, you know, for the general population, an opportunity for us. We know that we have a lot of requests for samples this year, but Leslie, do you know specifically? I have not yet heard of demand from bird flu, but we certainly will.

Leslie Hoyt: I have not yet heard of demand from bird flu, but we'll certainly follow up on that right after this call. I agree, Tracy, we're getting the usual flu A and B and, you know, market demand wanes with the different threats to us, but I will follow up on that.

Leslie Hoyt: A and B.

Leslie Hoyt: And.

Leslie Hoyt: Market demand wanes with the different threats.

Leslie Hoyt: To us but.

Leslie Hoyt: But I will follow up on that I have not seen any demand yet.

Matthew Gregory Hewitt: Understood. Thank you. Thank you now.

Tracy: Understood. Thank you.

Speaker Change: Thank you Paul.

Matthew Gregory Hewitt: Okay.

Matthew Gregory Hewitt: Okay.

Speaker Change: As a reminder, if you wish to ask a question. Please press star one should you wish to decline from the polling process. Please press the star followed by the number too.

Operator: As a reminder, if you wish to ask a question, please press star one. If you wish to decline from the polling process, please press star followed by number two. Once again, if you wish to decline from the polling process, please press star followed by number two. And if you wish to ask a question, please press star one. I will show no further questions in the queue. I have no further questions in the queue at this time. I'd like to turn the call over to Ms. Tracy Curley, CEO, for closing remarks.

Tracy Wilson Curley: Once again, if you wish to decline from the polling process. Please press star followed by the number two and if you wish to ask a question. Please press star one.

Operator: Yeah.

Tracy Wilson Curley: I show no further questions in the queue.

Operator: Yeah.

Tracy Wilson Curley: I show no further questions in the queue at this time I'd like to turn the call over to MS. Tracy Curly CEO for closing remarks.

Tracy Wilson Curley: I'd like to thank everyone again for joining us on our call today and for your continued support.

Tracy Wilson Curley: I'd like to thank everyone again for joining us on our call today and for your continued support. We believe the operational advancements made this quarter will play a significant role in our future growth. We are changing the landscape of our business and the biospecimen procurement industry at large by more rapidly and effectively connecting biospecimen suppliers with researchers. Our next day quotes program has proven successful, and we are really excited about the long-term capabilities of that. And we look forward to updating you with our continued rollout of this program. Thank you. And have a great day!

Tracy Wilson Curley: We believe the operational advancements made this quarter will play a significant role in our future growth. We are changing the landscape of our business on the ball spokeman procurement industry at large by more rapidly and effectively connecting bio's second for players with researchers are next day quotes program has proven.

Tracy Wilson Curley: 644, and we are really excited about the long term capabilities about and we look forward to updating you with our continued rollout of this program with that thank you and have a great day.

Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect have a good day.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. Have a good day.

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