Q1 2025 ProPhase Labs Inc Earnings Call

Today's presentation. My name is Noah, let Alexander young virtual event moderator here about <unk> financial communication.

Noella Alexander: My name is Noella Alexander Young, Virtual Event Moderator here at Redmark Financial Communications. On behalf of our team, we want to thank everyone for joining us today for Prophase Labs first quarter 2025 results. Prophase is trading on the NASDAQ under the ticker symbol PRPH.

Speaker Change: On behalf of our team we want to thank everyone for joining us today for Prophase Labs first quarter 2025 results propane is trading on the NASDAQ under the ticker symbol PR ph presenting today is Ted carcass, chairman and CEO.

Noella Alexander: Presenting today is Ted Karkus, Chairman and CEO. Following the presentation is a Q&A session through which you can participate using the chat box in the top right hand corner of your screen.

Speaker Change: Following the presentation is a Q&A session in which you can participate using the chat box in the top right hand corner of your screen, but that being said I will now handle for over to Ted.

Noella Alexander: With that being said, I will now hand over over to Ted.

Speaker Change: Yes.

Speaker Change: Yes.

Ted Karkus: Greetings, everybody, and thank you for joining today. I'm Ted Karkus, the CEO of Prophase Labs. I'm really pleased. with where we are right now relative to where we've been in the last six to nine months.

Speaker Change: Greetings, everybody and thank you for joining today.

Speaker Change: <unk> is the CEO of <unk>.

Speaker Change: Thanks Labs.

Speaker Change: I'm really pleased.

Speaker Change: With where we are right now relative to where we've been in the last six to nine months. It doesn't sort of incredibly tried in time, but we are at the.

Ted Karkus: It has been an incredibly trying time, but we are at the turning point, I believe, in the company, where you're now going to see second quarter all the moves and transformations and transactions and changes that we made in the first quarter also going to start to show up in the second quarter. We also have major liquidity events, which we think are coming very soon. So we're basically bridging the company.

Speaker Change:

Turning point I believe in the company, where you are now going to see second quarter, all the moves and <unk>.

Speaker Change: Transformations and transactions and.

Changes that we made in the first quarter also going to start to show up in the second quarter. We also had a major liquidity events, which we think are coming very soon so we're basically bridging the company, but before I get into all of that I am excited to talk to you about all that we really should do the forward looking statements first and.

Ted Karkus: But before we get into all that, I'm excited to talk to you about all that, we really should do the forward looking statement first. And since this is a quarterly conference call, and not simply a virtual non deal roadshow, I'm actually going to read it, except for the historical information contained here. And this document contains forward looking statements within the meeting of the private security litigation reform act of 1995, including statements regarding our strategy plans, objectives, and initiatives, including our expectation to enter into new agreements. for Nebula Genomics, our expectations regarding the future revenue growth potential of each of our subsidiaries, our expectations regarding future liquidity events, the expected timeline for commercializing our B-Smart esophageal cancer test.

Speaker Change: Since this is a quarterly conference call and Thats simply a.

Speaker Change: Virtual non deal Roadshow, I'm actually going to read it except for the historical information contained herein. This document contains forward looking statements within the meaning of the private Securities Litigation Reform Act of 995, including statements regarding our strategy plans objectives and initiatives, including our expectation to enter into new agreements.

Speaker Change: Nebula genomics, our expectations regarding the future revenue growth potential of each of our subsidiaries alright expectations regarding future liquidity events, we expect the timeline for commercializing our <unk> cancer test.

Ted Karkus: and our ability to enter into new domestic and international long term contracts for nebula genomics business and the financial impact of any such contracts into the anticipated timing for the receipt of new equipment and installation of additional lozenge lines.

Speaker Change: And our ability to enter into new domestic and international long term contracts for nebula genomics business and financial impact of any such contracts into the anticipated timing for the receipt of new equipment and installation of additional lozenge lines well, that's no longer relevant we'll have to update that.

Ted Karkus: That's no longer relevant. We'll have to update. etc, etc. And the anticipated timing, the expected timeline for the launch of Equivir capsules. Management believes that these forward-looking statements are reasonable as and when made. However, such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from those projected in the forward-looking statements. These risks and uncertainties include, but are not limited to, our ability to obtain and maintain necessary regulatory approvals, general economic conditions, consumer demand for our products and services, challenges relating to entering into and growing new business lines, the competitive environment, the risk factors listed from time to time in our annual report on the Form 10-K for the year to December 31, 2023, our subsequent quarterly reports on Form 10-Q and any other filing with the SEC.

Speaker Change: Et cetera, et cetera, and the anticipated timing.

The expected timeline for the launch of Ecuador capsules management believes that these forward looking statements are reasonable as and when made however, such forward looking statements involve known and unknown risks uncertainties and other factors that may cause actual results to differ materially from those projected in the forward looking statements. These risks and uncertainties include but are not limited to our ability to obtain.

Speaker Change: <unk> and maintain necessary regulatory approvals general economic conditions consumer demand for our products and services challenges relating to entering into and growing new business lines, the competitive environment and the risk factors listed from time to time in our annual report on Form 10-K for the year ended December 31, 2023, our subsequent quarterly reports on Form 10-Q and any other.

Speaker Change: Filing with the SEC.

Ted Karkus: And these forward-looking statements are based on current expectations, estimates, forecasts, and projections, are not guarantees of future performance and development. The company undertakes no obligation to update forward-looking statements, except as required by applicable securities laws. Readers are questioned that forward-looking statements are not guarantees of future performance and are questioned not to place Undue reference on any forward-looking statements, so You know, we have our company presentation, and then we have our earnings report.

Speaker Change: These forward looking statements are based on current expectations estimates forecasts and projections are not guarantees of future performance and development. The company undertakes no obligation to update forward looking statements, except as required by applicable.

Speaker Change: Applicable securities laws readers are question that forward looking statements are not guarantees of future performance and a question not to place.

Speaker Change: Undue reference on any forward looking statements so.

Speaker Change: You know we have our company presentation and then we have our earnings report I think the question is how many people on this call are shareholders and have been following the company for a long time, how many are new shareholders.

Ted Karkus: I think the question is, how many people on this call are shareholders and have been following the company for a long time? How many are new shareholders? The number of shares outstanding grew, and the stock price is so low, my sense is we have a lot of new shareholders. So I want to find a balance for the new shareholders. but really tell everybody where we are and what's going on.

Speaker Change: The number of shares outstanding grew and the stock price is so low my sense is we have a lot of new shareholders. So I want to find a balance to the new shareholders.

Speaker Change: But really tell everybody, where we are and what's going on.

Ted Karkus: Overall, we have Prophase Biopharma, that's our our B-Smart esophageal cancer test. We have DNA-completed nebulae genomics. We have Prophase supplements. My thought is, and look, I can tell you, I have a history, 40 years of success in executing. I turned around ID Biomedical, which was ultimately sold to GlaxoSmithKline for $1.4 billion. It was a $15 to $25 million market cap when I got involved with that company. I don't take credit for the sale, but I take credit for turning around a potentially bankrupt company. I did the same thing with our company, Prophase Labs. I took over as an activist shareholder from a prior management that none of us that were shareholders were very happy with.

Speaker Change: Overall, we have.

Speaker Change: <unk> Biopharma, that's our best smartest epigeal cancer tests, we have DNA completed nebula genomics, we of Prophage supplements.

Speaker Change: My thought is and look.

Speaker Change: I can tell you I have a history 40 years of success in executing.

I turned around and <unk> biomedical, which was ultimately sold to Glaxosmithkline for $1 $4 billion. It was a $15 million to $25 million market cap when I got involved with that company I don't take credit for the sale, but I take credit for turning around a potentially bankrupt company I did the same thing with our company Prophase Labs I took over as an actavis shares.

Speaker Change: Folder from a prior management that none of us are with shareholders. We're very happy with lots of proxy contest one control had to turn around a company that was nose diving turned around a cold. These brand that was nosedive and a soldier from $50 million that led us to have the capital to get us into Covid testing, we had never done COVID-19.

Ted Karkus: I launched a proxy contest, won control, had to turn around a company that was nosediving, turned around a Colby's brand that was nosediving and sold it for $50 million. That led us to have the capital to get us into COVID testing. We had never done COVID testing, I had never been a CEO before, before I took over, I had to learn the consumer product industry and turned around the Colby's brand and sold it for $50 million. I learned marketing from the bottom up, I figured it all out and killed it. The issue has been in the last year is that we did not get reimbursed for all the COVID testing that we were supposed to.

Speaker Change: Does he never been I've never been a CEO before before it took over and to learn the consumer product industry and turned around the cold These brands and so $50 million.

Speaker Change: I I learn marketing from the bottom up I figured it all out and killed it.

Speaker Change: And then we then did the same thing with Covid testing now I Gotta give Jason Charcas, a tremendous amount.

Jason Charcas: Of credit for building the Covid testing business, we did it together he he built he built the business in terms of the revenues I built a lot of the infrastructure and provided the capital and so forth and the new lab and all those great things.

Speaker Change: But the point is we killed it again.

Speaker Change: Grew the business dramatically the issue has been in the last year is that we did not get reimbursed for all of the Covid testing that we were supposed to in the meantime, we're branching out we knew the COVID-19 was going to decline.

Ted Karkus: In the meantime, we were branching out, we knew that COVID was going to decline. And so we looked for the future of the company. We acquired I went through probably 300 potential acquisitions, we acquired Acquired Nebula Genomic which we are now putting up for sale. We acquired the Be Smart, Stop the Geo Cancer test and we acquired Equivir and that's what we're developing today. They all have tremendous potential. They're all good acquisitions. We didn't overpay for them. The issue has been the same way we built out the COVID testing business. We built a tremendous lab.

Speaker Change: And so we look for the future of the company. We acquired I went through probably 300 potential acquisitions, we acquired.

Speaker Change: We acquired Nebula genomics.

Speaker Change: Which we are now putting up for sale are required to be smart esophageal cancer test and we acquired equity or and that's what we're developing today. They all have tremendous potential there all good acquisitions, we didnt overpay for them. The issue has been the same way we built out the COVID-19.

Speaker Change: Testing business, we built a tremendous lab.

Ted Karkus: We started buying a very small lab. Once we saw that the business was there, we built a tremendous lab in Garden City, New York, 25,000 square feet, that ultimately became 30,000 square feet. At our peak, we had hundreds and hundreds of employees. We went through 800 employees while doing more tests, COVID tests than 95% of the labs in the country. We went from never being in the lab business to outperforming almost every lab in the country, other than, you know, the handful of the really big ones. The issue is, when we went to build out Nebula Genomics, We did it with the understanding that the COVID testing.

Speaker Change: We start off by in a very small lab. Once we saw that the business was there we built a tremendous lab in Garden City, New York 25000 square feet that ultimately became 30000 square feet at our peak, we had hundreds and hundreds of employees went through 800 employees, while doing more test COVID-19 test at 95% of the labs and the <unk>.

Speaker Change: Country, we went from never been in Atlanta business to outperforming in almost every lab in the country other than the handful of the really big ones. The issue is when we went to build out nebula genomics.

Speaker Change: We did it with the understanding that the Covid testing.

Ted Karkus: Kessler was going to continue, and it didn't. It got cut off for two reasons. One, the government ran out of money when they guaranteed testing. Number two, the insurance companies stopped paying the way they were paying. And a part of that, I learned after the fact, is because the government was subsidizing the insurance companies. And so when the government ran out of money, cut back the insurance companies, but the insurance companies still lowest that money. So I'm going to get into that in a moment. But because of that dynamic, it put us in a situation where we were building businesses where I thought I had tens of millions of dollars coming into company, all of a sudden, they're not there.

Speaker Change: Cash flow was going to continue.

Speaker Change: And it didn't it got cut off for two reasons one the government ran out of money when they guarantee testing number to the insurance companies.

Speaker Change: Stop paying the way they were paid and a part of that I learned after the fact is because the government was subsidizing the insurance companies and so when the government ran out of money cut back the insurance companies, but the insurance companies still lowest that money, so I'm going to get into that in a moment.

Speaker Change: But because of that dynamic and put us in a situation, where we were building businesses, where I thought I had tens of millions of dollars coming into the company all of sudden they are not there and we had overhead as if it was there put me in a precarious situation I've never been in 40 years.

Ted Karkus: And we had overhead as if it was there. Put me in a precarious situation. I've never been in 40 years. made me look like all those other managements that don't know what they're doing. Some of you out there that are long-term shareholders probably think I don't know what I'm doing. I promise you I do. And so now we've gone through the last six months. rough roughly doubled.

Speaker Change: Made me look like all those other managements that don't know what they're doing some of you out there that are long term shareholders, probably think I don't know what I'm doing I promise you I do and so now we've gone through the last six months.

Speaker Change: Did everything I could to keep the company on solid footing, yes, we got dilution, but now we have tremendous underlying assets. We've restructured we shutdown the genomics laboratory, which was costing a fortune we sold manufacturing facility cleaned up the balance sheet a lot when we sold the manufacturing facility that by the way.

Speaker Change: <unk> increased our our shareholders equity or net assets.

Rough roughly doubled and now we have nebula genomics for sale, if and when we saw that that's going to significantly increase our net assets on a per share basis in our total assets as well. So we have a lot to look forward to I wanted to go through the past.

Ted Karkus: And now we have nebula genomics for sale if and when we sell that that's going to significantly increase our net assets on a per share basis and our total assets as well. So we have a lot to look forward to.

Ted Karkus: I wanted to go through the past took all of seven minutes. All right.

Speaker Change: We took all of seven minutes alright.

Ted Karkus: I want to talk about our esophageal cancer test. So we came out with an announcement. And if you want to, I can go a little bit through the press release first.

Speaker Change: I wanted to talk about our Softgel cancer tests. So we came out with an announcement today.

Speaker Change: And if you want to I can go a little bit through the press release first.

Ted Karkus: And if you don't mind, I'm going to turn over here. You know, I mentioned some of the highlights of it. We did sell the formula for $23 million in January. We shut down the laboratory that was costing us over $6 million a year. in February, in March, we were able to once we shut down the lab, the following month, we were able to shut out and cut down on a number of IT services that were costing us a fortune. We also reduced our headcount dramatically. And I don't want to read the press release to all of you, but we went from 96 employees in December to we're now currently at 25.

Speaker Change: And if you don't mind I'm going to turn it over here.

Speaker Change: I mentioned some of the highlights of it we did sell the formula for $23 million in January we shut down the laboratory that was costing us over $6 million a year.

Speaker Change: And in February and March we were able to once we shutdown. The lab. The following month, we were able to shut out and cut down on a number of services that were costing us a fortune. We also reduced our head count dramatically and I don't want to read the press release to all of you, but we went from 96.

Speaker Change: Employees in December So we're now currently at 25.

Ted Karkus: And when we sell nebula genomics, if we sell it, that number will drop even further. So when you look at our overhead going forward, it's going to be dramatically less than what we had last year. And at the same time with the liquidity events that we're looking forward to, we should be in a situation similar to the way I ran the company for 10 years, where our overhead was tight as a drum, we weren't spending the money. And we had a ton of money and a ton of flexibility. And at the time, all I was thinking about was stock buybacks and stock dividends, not how am I going to raise debt capital without the company being ripped?

Speaker Change: And when we sell nebula genomics, if we sell it that number will drop even further so when you look at our overhead going forward, it's going to be dramatically less.

Speaker Change: Then what we had last year and then at the same time with the liquidity events that were looking forward to we should be in a situation similar to way I ran the company for 10 years, where our overhead was tight as a drum we weren't spending the money.

And we had a ton of money and a ton of flexibility and at the time when I was thinking about stock buybacks and stock dividends not how am I going to raise debt capital without the company being ripped off so.

Ted Karkus: So I'm looking forward to much better times.

Speaker Change: So I'm looking forward to much better times, you can wait until the dust is settled and everything is clear.

Ted Karkus: You can wait until the dust has settled and everything's clear. in three or four months. But my guess is you're not going to be able to buy the stock at current prices. That's called risk and reward. That's the way the stock market works. So I can only outline for you what I believe is going to happen. It's up to you whether you invest, whether you hold, what you do.

Speaker Change: And three or four months.

Speaker Change: But my guess is youre, not going by and be able to buy the stock at current prices, that's called risk and reward and that's the way the stock market works. So I can only outline for you what I believe is going to happen. It's up to you whether you invest when you hold what you do I shouldn't even mentioned the word stock price.

Ted Karkus: I shouldn't even mention the word stock price. It only plays a role if we're issuing shares. And right now, my goal is to focus on debt financing, not issuing shares, because I believe there's only a period of time of a few months. before the cash is going to start flowing into the company, and we're going to start paying down debt as opposed to looking to take on new debt. And the last thing I want to do Since I so believe that our management team and our director so believe and the cash flow is going to be coming into the company in the liquidity events in the second half of this year.

Speaker Change: It only plays a role if we're issuing shares and right now my goal is to focus on debt financing not issuing shares because I believe theres only a period of time of.

Speaker Change: Of a few months.

Speaker Change: Before the cash is going to start flowing into the company and we're going to start paying down debt as opposed to looking to take on new debt and the last thing I want to do.

Speaker Change: Since I still believe that our management team and a director so belief.

Speaker Change: And the cash flow is going to be coming into the company and the liquidity events in the second half of this year.

Ted Karkus: It makes sense to take on debt financing even if it's incredibly high interest rates, because even at an extremely high interest rate it's significantly less dilution. If we have such large amounts of money coming into the company that issuing shares right now, for me to, you know, raise $3 million by issuing shares. somebody's going to want a deep discount, they're going to take, you know, 10, 20, 25% of the company for a few million dollars. Totally absurd. So I'm not interested in doing something like that. If we think we have 50, 60, 70 million dollars of gas, potentially coming into our company over the next, I like to say the second half of the year, it doesn't mean it's all coming in the second half of the year, but a substantial amount of that could.

Speaker Change: It makes sense to take on debt financing, even if it's incredibly high interest rates because even at an extremely high interest rate.

Speaker Change: It's significantly less dilution.

Speaker Change: If we have such large amounts of money coming into the company than issuing shares right now for me to <unk>.

Speaker Change: Raised $3 million by issuing shares.

Speaker Change: Somebody's going to want a deep discount they can take.

Speaker Change: 10, 20, 25% of the company for a few million dollars totally absorbed so I'm not interested in doing something like that if we think we are 50 60 $70 million of cash potentially coming into our company over the next I like to say the second half of the year. It doesn't mean, it's all coming in the second half of the year, but a substantial amount of that quote okay. So that that gives you.

Ted Karkus: Okay, so that gives you a little background, a little what I'm thinking about. I put it in the press release. We actually did this. I've never even mentioned this before. But this is a decision we made months ago. that myself I've reduced I am deferring two thirds of my compensation of my salary until We have a liquidity We have two other senior executives, Jason Karkus and Stu Hollinshead, who agreed to the same thing. They cut theirs in half, and our directors agreed to cut in half. So we're all on the same team here. We're all on the same side with the shareholders.

Are you a little background, a little what I'm thinking about I put in the press release, we actually did this ive never even mentioned this before but this was a decision we made months ago.

Speaker Change: That myself I reduced.

Speaker Change: I'm deferring two thirds of my compensation of my salary until.

Speaker Change: We have a liquidity event.

Speaker Change: We have two other senior executives, Jason carcass, let's do Hollinshead, who agreed to the same thing that they cut in half and our directors agreed to cut in half.

Speaker Change: So we're all on the same team here, we're all on the same side with the shareholders.

Ted Karkus: I by the way used to be the largest shareholder in the company. I have no idea with all the volume and all the craziness in the stock and the fact that it's so cheap. But understand, I bought my first million shares more than a decade ago, six, $8 a share. I still own that stock. I've never sold any of that. I have a larger investment in our company than anybody by a long shot. And I bought a lot more shares too. My point being, you know, when people now report to me that they have 100,000 shares or 200,000 shares, that used to sound like a lot.

Speaker Change: By the way.

Speaker Change: Used to be the largest shareholder in the company I had no idea with all the volume in all the craziness in the stock and the fact that so cheap, but I understand I bought my first million shares more than a decade ago six $8 here I still own that stock I've never sold any of that stock.

Speaker Change: I have a larger investment in our company than anybody by a long shot and I bought a lot more shares to my my point being when people now report to me that they have a 100000 shares or 200000 shares that used to sound like a lot and believe me I. Appreciate everybody that is under 200000, but if you paid 30 400000 shares.

Ted Karkus: And believe me, I appreciate everybody that has 100 or 200,000 shares. But if you paid 30 cents for 100,000 shares, you have a $30,000 investment. I have a $10 million investment. Okay, just to put that in a little bit of perspective. So believe me, everything I am doing right now is for the shareholders, everything, every move I make. And since I have a track record and a history of doing right by shareholders and running companies the right way, I know the last six months may not look like it, but I promise you what we are doing now going forward, you will see I am still fully aligned and our management team is fully aligned with the shareholders moving forward.

Speaker Change: Do you have a 30000 dollar investment I'm, a 10 million dollar investment in this company. Okay. Just just to put that in a little bit of perspective. So believe me everything I am doing right now is for the shareholders everything every move I make and since I have a track record and a history of doing right by shareholders and running company is the right way I know the last six months may not look.

Speaker Change: Like it but I promise you what we're doing now going forward you will see I am still fully line at our management team is fully aligned with the shareholders moving forward and that's how we're executing as by cleaning up all the overhead.

Ted Karkus: And that's how we're executing it, by cleaning up all the overhead. making sure we get to those liquidity events. Then we get to clean up the balance sheet. And then all of a sudden, we're a very strong company. and very different than the penny stock the way it's trading right now.

Speaker Change: Making sure we get to those liquidity events than.

Speaker Change: Then we get to clean up the balance sheet and then all of a sudden we're from a very strong company.

Speaker Change: And very different than the penny stock the way its trading right now okay. So I hope that answered.

Ted Karkus: Okay. So I hope that answered some of your questions and some of your issues.

Speaker Change: Some of your questions and some of your issues.

Ted Karkus: So you know, just yesterday, I know, because a lot of people have this question on their mind, the NASDAQ listing qualifications, the fact that we've been under $1 for five months, what's going to happen?

Speaker Change: So you know just yesterday I know because a lot of people have this question on the mine the NASDAQ listing qualifications. The fact that we've been under a dollar for five months, what's going to happen or are we going to get delisted.

Ted Karkus: Are we going to get delisted? I have no intention, no guarantees. I am not NASDAQ. But I spoke to NASDAQ yesterday, they went through all of their qualifications with me on the telephone. We meet or exceed every single qualification other than stock price. And what NASDAQ said to me yesterday, as long as we meet every qualification, other than NASDAQ, other than stock price, we will get the six month extension. I said, Well, can't you give me the six month extension now, since we meet all qualifications? And she said, No, because that's not the way it works.

Speaker Change: I have no intention I can no guarantees I am that NASDAQ, but I spoke to NASDAQ yesterday. They went through all of their qualifications with me on the telephone we meet or exceed every single qualification other than stock price and what NASDAQ said to me yesterday as long as we meet every qualification other than NASDAQ.

Speaker Change: Other than the stock price, we will get the six month extension I said well can you give me the six month extension that since since we meet all qualification and she said no because that's not the way. It works, we don't give the extension until the first six months expires. So I fully anticipate late next month I don't remember the exact data things around June 24.

Ted Karkus: We don't give the extension until the first six months expires. So I fully anticipate late next month, I don't remember the exact date, I think it's around June 24, June 25. When the first six months expires, I am highly confident. In fact, I am virtually certain that we will get the next six months.

Speaker Change: 25th.

Speaker Change: When the first six months expires I am highly confident.

Speaker Change: In fact, I am virtually certain that we will get the next six months.

Ted Karkus: Maybe I shouldn't say the word virtually certain forward looking statement, because I can't I don't want to be sued if something happens. But we went through all the qualifications. And then one of them was the net assets or shareholders equity. And what's interesting is, she said that we qualified based on the December 2024 financials. Since that time, we sold formalized manufacturing, that boosted our net stockholders equity for about $7 million to $15 million. So we right now have about $15 million. And I think you only need five. So we have triple the shareholders, the net equity or the net assets that you need in order to qualify.

Speaker Change: I shouldn't say the word virtually certain forward looking statements because I can't guarantee and I don't Wanna be sued if something happens but.

Speaker Change: We went through all the qualifications and then one of them was the.

Speaker Change: Net assets of shareholders' equity and what's interesting is it's a she said that we qualified based on the December 2024 financials since that time, we sold <unk>.

Speaker Change: Formalized manufacturing that boosted.

Speaker Change: Our net stockholders equity for about $7 million or $15 million. So we right now are about $15 billion and I think the only need five so we have triple to shareholders. The net equity of the net assets that you need in order to qualify so we will more than qualified a month from now and that's why that is.

Ted Karkus: So we will more than qualify a month from now. And that's whether the stock price is over $1 or not. We clearly are going to get that extension.

Speaker Change: Stock prices over a dollar or not.

Speaker Change: We clearly are going to get that extension again, I cannot guarantee but we are going to get it okay.

Ted Karkus: Again, I cannot guarantee it, but we are going to get it. Okay, I you know, like She said, we're going to get, she said. In fact, she said, there's never been a situation like ours where you didn't get the extension.

Speaker Change: Like.

Speaker Change: She said, we're going to get she said in fact, she said there's never been a situation like ours, where you didn't get the extension. So for those of you really worried about the extension.

Ted Karkus: So, for those of you really worried about the extension. I wouldn't worry about the extension more important.

Speaker Change: I wouldn't worry about the extension more importantly.

Ted Karkus: And this is another question that people are asking with what's going to happen to get the stock price back above a dollar in the next six months, actually, in the next seven months. I think the stock price is going to take care of itself. If we have tens of millions of dollars coming into the company. And we have a market cap right now. I don't know what the market cap is today. And I haven't looked at the stock price, but we have a market cap of 13, $14 million. And we have many tens of millions of dollars of cash in the company.

And there's another question that people are asking with the lift.

Speaker Change: What's going to happen to get the stock price back up above a dollar in the next six months actually in the next seven months.

Speaker Change: I think the stock price is going to take care of itself.

Speaker Change: If we have tens of millions of dollars coming into the company.

Speaker Change: And we have a market cap right now I don't know what the Mark campus today and I've looked at the stock price, but we have a markup of $13 million to $14 million and we have many tens of millions of dollars of cash in the company. What do you think is going to happen to the stock price. Okay, I'm really not worried about the stock price I will also tell you.

Ted Karkus: What do you think is going to happen to the stock price? Okay, I'm really not worried about the stock price.

Ted Karkus: I will also tell you Okay, let's talk about, you know, I have Prophase Biopharma up here.

Speaker Change: Well I don't really want to focus on that I am aware of.

Speaker Change: People out there that really believe in the company and they are accumulating a lot of stock and they're telling all their friends to accumulate a lot of stock and I assume that's what all the volume is I'm not getting in the middle of it I'm not doing any deals with anyone just people love to inform me of what they're doing there are some people that are very bullish on our company.

Speaker Change: Okay, let's talk about propane biopharma up here.

Ted Karkus: So, you know, why don't we Unknown Executive, Noella Alexander, Prophase Lab literally has multi-billion dollar potential. And I'm not going to go through the whole thing. We don't have time. I'm just going to go to this slide right here. Our target market is in the bottom. Approximately 7 million adopters. per year in the United States for people at high risk of esophageal cancer, every single person getting that endoscopy. should be getting our test alongside the endoscopy. Understand there are a lot of esophageal cancer tests popping up in the market. They are all before you get the endoscopy.

Speaker Change: So why don't we.

Speaker Change: Let's see how much time, we have here and I did a lot of talking which is interesting because I didn't know how much time was going to spend on all this.

Speaker Change: Our be smarter esophageal cancer diagnostic test.

Speaker Change: Literally have multibillion dollar potential and I'm not going to go through the whole thing. We don't have time I'm just going to go to this slide radio.

Speaker Change: Our target market.

Speaker Change: Is in the bottom of approximately 7 million endoscopies.

Speaker Change: Per year in the United States for people at high risk of esophageal cancer every single person getting that endoscopy should be getting our test alongside the endoscopy understand there are a lot of esophageal cancer test popping up in the market. They are all before you get the endoscopy, if you test positive on many of.

Ted Karkus: If you test positive on many of these tests, the next step is to get an endoscopy. kind of like when you used to get COVID tested, you would take the quick test if you tested positive, the next step was to get the PCR test. So this is exactly the same thing. This is the way it works. So the idea with a lot of these tests. and I sincerely apologize because I took this call from my home office. Hang on one quick second. Apologize for the interruption. This is probably unheard of. and I am back. So now you know, I'm a, I'm a real human being.

Speaker Change: These tests. The next the next step is to get an endoscopy.

Speaker Change: It's kind of like when you used to get Covid tests did you take the quick that because you've tested positive. The next step was to get the PCR test.

Speaker Change: So this is exactly the same thing this is the way it works so the idea with a lot of these tests.

Speaker Change: And I sincerely apologize because I took this call from my home office hang on one quick second.

Speaker Change: Our guidance for the interruption is probably unheard of.

Speaker Change: Okay.

Speaker Change: And I am back.

Speaker Change: So now you know I'm, a real human being.

Speaker Change: Okay.

And I'm not a model or whatever so the bottom line of this is.

Ted Karkus: and I'm not a model or whatever. So the bottom line of this is If you're at high risk of esophageal cancer and you go, you know, and you're worried, you want to get the endoscopy, that's the that's the standard. But if you get that endoscopy, our test makes the results of the endoscopy significantly more valuable. Right now, if you get an endoscopy, there's a pathologist studying, and an endoscopy is where they take tissue specimens out of your esophagus and study them under a microscope, a pathologist studying those specimens. and then with the naked eye. there's no way that is nearly as accurate as our test.

Speaker Change: If you're in a high risk of esophageal cancer and Hugo.

Speaker Change: And you're worrying you wont get the endoscopy, that's that's the standard, but if you get that endoscopy. Our test makes the result of the endoscopy significantly more valuable.

Speaker Change: Right now if you get an endoscopy, there's a a pathologist studying in our industries, where they take tissue specimens out of yourself, because it's studying them under a microscope and pathologists studying those specimens.

Speaker Change: And then with the naked eye.

Speaker Change: There is no way that is nearly as accurate as our test and as proven by the fact that if that's the standard and 80 almost 80%.

Ted Karkus: And it's proven by the fact that if that's the standard and almost 80% of people are dying of esophageal cancer, the reason they're dying is because they're getting diagnosed too late. The reason they're getting diagnosed too late is because the endoscopy... is an inexact science. We take an inexact science and make it much more exact. And not only do we tell you whether or not you have a salvageable cancer or not, we tell you if you're at high risk or low risk. If you're at high risk, there's a procedure you can get called an ablation.

Speaker Change: People are dying of esophageal cancer and the reason, they're dying is because they are getting diagnosed late and the reason they're getting diagnosed to latest because endoscopy is an inexact science, we take an inexact science and make it much more exact and not only do we tell you whether or not yeah esophageal cancer not we tell me if you're at high risk or low risk.

Speaker Change: If you are at high risk, there's a procedure and get called an ablation.

Ted Karkus: GIs would love to give an ablation on everybody at risk, but the insurance companies won't reimburse unless they definitely know they have esophageal cancer, but by then a lot of times too late. Our test tells you ahead of time. We may get reimbursed $1,000 to $2,000 per test for 7 million endoscopies at the $7 to $14 billion market with virtually no competition because we are testing you when you get the endoscopy. It makes the endoscopy a much more accurate. There are GIs that love this test. I can't wait to commercialize it. We just announced today that the Mayo Clinic, Dr. Chris Hartley from the Mayo Clinic has submitted a paper and this is to the same journal that Castle Biosciences submitted to.

Speaker Change: Gee I would love to give you an ablation and everybody at risk, but the insurance companies won't reimburse unless they definitely know they have esophageal cancer, but by then a lot of times too late hour test tells you ahead of time.

Speaker Change: We may get reimbursed 1000 to $2000 per test for <unk> 7 million endoscopies into $7 billion to $14 billion market with virtually no competition, because we are testing new when you get the endoscopy. It makes the endoscopy a much more accurate test there are G is that loved us.

Speaker Change: I can't wait to commercialize it we just announced today.

Speaker Change: That the Mayo clinic, Dr. Chris Hartley from the Mayo clinic.

Speaker Change: Has submitted a paper and this is to the same journal that castle Biosciences submitted to I'm not going to compare our test to their test I don't Wanna be sued but what I can tell you is of our statistics are really really good and there are other esophageal cancer testing companies out there that are doing really really well.

Ted Karkus: I am not going to compare our test to their test. I don't want to be sued, but what I can tell you is our statistics are really, really good. And there are other esophageal cancer testing companies out there that are doing really, really well. There's an enormous demand for these tests. And the reason is because so many people are dying and they're looking for more accurate diagnosis. And that's what we give you. We also say billions of dollars, if you're at low risk, because then you don't have to get industry. It gives the patient peace of mind that they don't have to worry.

Theres an enormous demands for these tests.

Speaker Change: And the reason is because so many people are dying and they are looking for more accurate diagnosis and that's what we give you. We also save billions of dollars if you're a low risk. Because then you don't have to get a dusty it gives the patient peace of mind that they don't have to worry. They don't know us. They also don't have to get industries. Alton. It's also this is very important.

Ted Karkus: They also don't have to get industry. It's also, this is very important. We're the most convenient. The reason we're the most convenient is you don't have to take the test at home. You don't have to make a separate visit to the doctor's office. When you're getting the endoscopy, you're already getting the endoscopy. That's a decision made that has nothing to do with us. But if you're already getting an endoscopy, we're simply making the result significantly better. And there's no way a computerized piece of lab equipment with AI isn't going to give you a better diagnosis.

Speaker Change: We're the most convenient the reason where the most convenient is you don't have to take the test at home you don't have to make a separate visit to the doctor's office when youre getting the endoscopy, you're already getting the industry. That's a decision made that has nothing to do with it but if you were already getting the endoscopy, we're simply making the result significantly better.

Speaker Change: And there's no way a computerized piece of lab equipment with AI isn't going to give you a better diagnosis and we have proprietary IP.

Ted Karkus: And we have proprietary IP. We have IP and the eight key proteins that shift you have hundreds of thousands of but there's eight key proteins that shift, almost always express themselves when you're developing esophageal cancer. We have a brilliant scientist, Dr. Joe Abdu, who's working very closely with us as a consultant, and working very closely with Dr. Chris Hartley at Mayo Clinic. And he also has helped commercialize other tests. And so now that we're ready to commercialize this, he's working very closely with us. Publishing this paper is a key step because then that brings attention to the GIs, it brings credibility, and our hope is that this gets published in roughly the next four to eight weeks.

Speaker Change: We have IP out of the eight key proteins that shift you have hundreds if not thousands of proteins.

Speaker Change: But there are eight key proteins that shift almost always express themselves when you're developing esophageal cancer. We have we have a brilliant scientist Dr. Joe Abdul was working very closely with us as a consultant and working very closely with Dr. Chris Shortly and Mayo clinic and he also has helped commercialize other test.

Speaker Change: And so now that we're ready to commercialize this he's working very closely with it.

Speaker Change: <unk> seen this paper is a key step because that brings attention to the Gis it brings credibility and.

Speaker Change: Our hope is that this gets published in roughly the next four to eight weeks I'll certainly give you an update when it does I spent a lot of time happy to do that do more on Q&A, but I'm really excited about this test and can't wait for it.

Ted Karkus: I'll certainly give you an update when it does. I spent a lot of time, happy to do more on Q&A, but I'm really excited about this test and can't wait.

Ted Karkus: All right, I'm going to skip ahead. Nebula Genomics. So again, this is this is now a liquidity event. Here's the bottom line. We explored in the first quarter strategic alternatives and strategic possibilities for Nebula and DNA Complete. We decided to sell. One of the reasons is because of the capital structure of the company. We want to clean it up. We want to take the pressure off the stock price. We want to clean up the debt. We want to stop raising capital. We want to have excess capital, DNA complete and Nebula Genomics can do that for us.

Speaker Change: Alright.

Speaker Change: Skip ahead.

Speaker Change: Nebula genomics. So again. This is this is now a liquidity event.

Speaker Change: Here's the bottom line, we explored in the first quarter strategic alternatives and strategic possibilities for Nabila and DNA complete we decided.

Speaker Change: To sell it.

Speaker Change: One of the reasons is because of the capital structure of the company, we want to clean it up we want to take the pressure off the stock price, we want to clean up the debt and we want to stop raising capital we want to have excess capital DNA complete and nebula genomics can do that for us.

Speaker Change: This literally just happened and I think in the last 48 hours Regeneron.

Ted Karkus: This literally just happened in, I think, the last 48 hours. Regeneron, you know, monster. Drug Research Development Company. Interestingly, I worked as a brokerage firm 30 years ago that took Regeneron public. Regeneron just acquired 23 and me. for $256 million. a big part of the reason why was your genomic database. I don't know what else went into it. I don't want to say that, but I don't want to compare. We're not getting acquired for anywhere near that amount of money. You know, I'd be happy with 10% of that. But what I can tell you, we have one of the largest genomic data sets in the world.

Speaker Change: <unk>.

Speaker Change: Drug Research development company Interestingly I worked at the brokerage from 30 years ago. The chip regenerative public regenerative just acquired 23 and me.

Speaker Change: For $256 million.

Speaker Change: A big part of the reason why it was a genomic database I don't know what else went into it I don't want to say that I don't want to compare we're not getting acquired for anywhere near that amount of money you know I'd be happy with 10% of that but what I can tell you. We have one of the largest genomic data sets in the world.

Ted Karkus: For those of you that don't know, and I'm just going to, you know, and I mentioned this, our data set, 16 petabytes. For those of you who don't know, and I didn't know. It's an enormous amount of data. It's one of the largest data sets in the world. And the reason is because a 23andMe or Ancestry.com or MyHeritage Ancestry test, most of their tests, I won't say they don't do some whole genome sequencing, but mostly they used to do SNP based tests. These study less than 1% of your DNA, which is great for ancestry testing, not so good.

Speaker Change: For those of you that don't know.

Speaker Change: And I'm, just going to and I mentioned this.

Speaker Change: Our dataset.

Speaker Change: 16 Petabytes.

Speaker Change: For those of you don't know and I didn't know.

Speaker Change: It's an enormous amount of data, it's one of the largest datasets in the world and the reason is because.

Speaker Change: A twenty-three Amir ancestry dot com or my heritage ancestry testing most of their test I won't say they don't do some whole genome sequencing, but mostly they used to do SNP based test. These study less than 1% of your DNA, which is great for ancestry testing Nassau good.

Ted Karkus: if you want to learn about deep health insights and learn about your genetic makeup, but it's great if you just want ancestry information. And so if they're studying less than 1% of your DNA, we're studying your whole DNA. That's what it means when you say whole genome sequencing. The data that we collect is 1000 to 5000 times as much. Furthermore, Nebula was founded by Dr. George Church, world renowned in the field of genomics. And by the way, he's agreed to be an advisor if we sell it. That's another great asset. Everybody wants to work with Dr. George Church up at Harvard.

Speaker Change: If you want to learn about deep health insights and learn about your genetic makeup, but it's great. If you just won ancestry information.

Speaker Change: And so if they are studying less than 1% of your DNA. We're studying in your whole DNA. That's what it means when you say whole genome sequencing. The data that we collect is 1000 to 5000 times as much. Furthermore, nebula was founded by Dr. George Church World bring out in the field of genomics and by the way has agreed to be an adviser if we sell it that's another great asset every.

Speaker Change: Who wants to work with Dr. George Church up at Arbor.

Ted Karkus: But the point is, this is over seven years that we've been collecting the data from over 130 countries. And so our database, those more than 60,000 whole genome sequencing tests are the equivalent in size to over 150 million ancestry tests. So just the database alone is incredible. And then, as I said, in the press release, Jason has restructured. Nebula Genomics and DNA complete so that it's a clean business now, it's no longer losing money. It's operating probably at about breakeven. and the only reason it's not making money is two reasons. Number one, because we haven't spent the marketing dollars because we've been very careful on how we spend cash right now.

Speaker Change: But the point is this is over seven years that we've been collecting the data from what over 130 countries.

Speaker Change: And so our database.

Speaker Change: More than 60000 whole genome sequencing tests are the equivalent in size to over $150 million accessory tests. So just the database alone is incredible and then as I said in the press release, Jason has restructured.

Speaker Change: Nebula genomics and DNA complete so there's a clean business downs no longer losing money, it's operating probably at about breakeven.

Speaker Change: And the only reason, it's not making money is there's two reasons number one because we haven't spent the marketing dollars because we've been very careful in how we spend cash right now and we spend cash the this business will grow dramatically quickly and number two.

Ted Karkus: If we spend cash, this business will grow dramatically quickly. And number two, unlike some of our competing companies, we have a subscription model where you renew the second year and a significant percentage of those who buy it the first year renew the second year. When you renew the second year, that cash flow into the company. We used to do lifetime and three years and all this stuff, Jason actually figured out, just have them renew and it turns out just many people renew them second year anyway, that's free cash flow. So for like private equity that might be looking to acquire it.

Speaker Change: Unlike some of the competing companies we have a subscription model, where you renew the second year in a significant percentage of those who buy it the first year renew the second here. When you we knew the second year that cash flow into the company.

Speaker Change: We used to do lifetime in three years and all this stuff.

Speaker Change: James could actually figure it out just have them renew and it turns out just many people renew then second year anyway that free cash flow so for like private equity that might be looking to acquire us They love a business model, where it's breakeven the first year.

Ted Karkus: They love a business model where it's breakeven the first year. Unknown Executive, Noella Alexander, Prophase Lab a large number, dozens. I don't want to say a number. I don't know how specific I should get. Dozens of potential acquirers. They're filling out NDAs as we speak. We already did. I mean, we literally just went to market with this about a week ago. We already did our first due diligence call. We separately have some in the industry who are interested. It's possible within weeks we could have our first LOIs coming. Not a guarantee. Don't quote me on this, but realistically, we really could sell this in three or four months.

Speaker Change: You spend more money and grow more if you can just operated breakeven, but the second year half of those who purchased the first year renew their subscriptions at almost no cost for the company. It becomes a big growing cash flow company overtime. So I think this is very attractive both in terms of the business as well as the dataset.

Speaker Change: We'll see what happens I think equity or investment bankers and.

Speaker Change: They have.

Speaker Change: Located.

Speaker Change: A large number of dozens I don't want to say a number I don't know how specific I should get dozens of potential acquirers, they're filling that NDA is as we speak we already did I mean, we literally just went to market with its about a week ago. We already did our first due diligence call we separately.

Speaker Change: I have.

Speaker Change: Some in the industry, who are interested it's possible within weeks, we could have our first LOI is coming not a guarantee don't quote me on this.

But.

Speaker Change: Realistically, we really could sell this in three or four months, how much we're going to sell it for I don't know, but it and I don't want anybody to be disappointed, but theres. The possibility we sell this for more for.

Ted Karkus: How much we're going to sell it for? I don't know. But and I don't want anybody to be disappointed. But there's the possibility we sell this for more, you know, for approximately the market cap of the company.

Speaker Change: For approximately the market cap of the company.

Ted Karkus: Alright, so I would like to get into and I don't have a lot of time before Q&A, although we can have a shorter Q&A. We obviously have to talk about, you know, it's written here 50 million opportunity with crown medical. Um, and, you know, that's not even an I don't know if that's even on our slide. So what's going on with Crown Medical?

Speaker Change: Alright, so I would like to get into it or not I don't have a lot of talk before Q&A. Although we can have a short Q&A.

Speaker Change: We obviously have to talk about.

Speaker Change: It's written here 50 million opportunity with Crown medical.

Speaker Change: And that's not even in I don't know if that's even in our slide presentation.

Speaker Change: So what's going on with Crown medical.

Ted Karkus: I have to be careful what I say because when you get into litigation, you can't talk about it. And so they warned me, don't say too much. crowd medical spent several months going through our entire set of specimens that we tested. I mean, it's just an enormous amount of data. As I said, we tested. more than a million patients. I don't remember what the exact number was, but it was a ridiculous number. Maybe it approached 2 million. I don't remember the exact number. Hundreds of millions of dollars. They went through all of it. They didn't just go through.

Speaker Change: I could be careful what I say, because when you get into litigation.

Speaker Change: Talk about and so they warn me don't say too much.

Speaker Change: Crowd medical spent several months going through our entire.

Speaker Change: Set of specimens that we tested.

Speaker Change: It's an enormous amount of data as I said, we tested.

Speaker Change: More than a million patients I don't remember what the exact number was but it was a ridiculous number.

Speaker Change: Maybe it approach 2 million I don't remember the exact number hundreds of millions of dollars.

Speaker Change: They went through all of them they didn't just go through.

Speaker Change: The testing, where we didn't get reimbursed they went through the testing where we did get reimbursed because they're also analyzing for those insurance companies that underpaid.

Ted Karkus: the testing where we didn't get reimbursed. They went through the testing where we did get reimbursed because they're also analyzing for those insurance companies that underpaid. So an interesting component of this initiative. is that insurance companies may have reimbursed us but paid us less than they were supposed A lot of insurance companies regularly did that. But as a lab, most labs just accepted whatever they got paid, we just had to calculate, okay, this is what our gross margins are on average, based on this is what the insurance companies are reimbursing. So we just accepted, we didn't know that we could fight, we didn't know how to, nor did any of the other smaller labs.

Speaker Change: So an interesting component of this initiative.

Speaker Change: Is that insurance companies may reimburse us with pay this lesson they were supposed to.

Speaker Change: A lot of insurance companies regularly did that.

Speaker Change: But as a lab most labs just accepted whenever they got paid we just had to calculate okay. These this is what our gross margins are on average based on this is what the insurance companies reimbursing us for.

Speaker Change: So we just accepted we didn't know that we can find and we didn't know how to nor did any of the other smaller labs. What's interesting is when crowd medical goes after these insurance companies.

Ted Karkus: What's interesting is when Crown Medical goes after these insurance companies. for those that underpaid, the insurance company has already paid something, which means they've already Committed to is having been a valid test, you know, with a valid order, you know, for a medical doctor, a valid patient that has insurance, and they pay, but they underpay and they have no defense for underpaying. Those, what I am told from the head of Crown Medical, those are the easiest collections, those settlements start happening very quickly. we have an enormous amount of dollars of underpaid.

Speaker Change: For those in Underpay, the insurance company has already paid something which means they've already.

Speaker Change: Committed to having been a valid test.

Speaker Change: With a valid.

Speaker Change: For a medical Doctor a valid patient that has insurance and they pay but they underpin they have no defense we're underpaying.

Speaker Change: Those what I'm told from the head of Crown medical those are the easiest collections those settlements start happening very quickly.

Speaker Change: We have an enormous amount of dollars of underpaid.

Ted Karkus: So that could that could be, you know, for the company, I don't want to say it's a lot of fun, we're in litigation, or we will be in litigation. But those could be fun dollars coming in pretty easily. In addition to that, We are getting very close to filing. And I again, I don't want to get into too many details. But within a short period of time within a couple of months, maybe sooner. We will be able to crowd medical will be able to start serving all the insurance companies, but now knowing that based on what's going on the courts, they can, they will be in the not too distant future going to the insurance companies saying we're going to be serving you.

Speaker Change: So that could that could be for the company I always say, it's a lot of fun with litigation or we will be in litigation.

Speaker Change: But those could be fund dollars coming in pretty easily in addition to that.

Speaker Change: We are getting very close to filing.

Speaker Change: And again I don't want to get into too many details.

Speaker Change: But within a short period of time within a couple of months maybe sooner.

Speaker Change: We will be able to the crowd medical will be able to start serving all the insurance companies, but now knowing that based on what's going on in the courts. They can they will be in the not too distant future going to the insurance companies, saying, we're gonna be serving you.

Speaker Change: And the next four to eight weeks.

Ted Karkus: in the next four to eight weeks. Would you like to settle now for less? Or would you like to get your attorneys involved? Because if you do, this is how much you owe us. We're not gonna back down on the total amount and you're gonna have to pay. and you're going to have a lot of expenses involved, or you can pay less now and settle. A lot of the insurance companies want to settle for less and pay now and not get into litigation. It just so happens. the head of Crown Medical told me that he's working with a number of insurance companies right now.

Speaker Change: Would you like to settle now for less or would you like to get your attorneys involved because if you do this is how much you owe us we're not going to back down on the total amount and youre going to have to pay.

Speaker Change: And you're going to have a lot of expenses about or you can pay less now it's up a lot of the insurance companies want to settle for less and pay now and not get into.

Speaker Change: Litigation.

Speaker Change: It just so happens.

Speaker Change: The head of Crown Medical told me that he is working with a number of insurance companies right now and there may be settlements coming in the next I don't know.

Ted Karkus: And there may be settlements coming in the next, I don't know, one to two months, I don't want to guarantee it. But I think we could end up with with some surprises. Some people have told me once they see the first million dollars come in, they know that this is real and that more is going to is going to follow. So it's possible the first million dollars comes in the next couple of months. not a guarantee. I don't know. I'm not managing this. All right, but then the money is going to start to flow.

Speaker Change: One to two months I don't want to guarantee it.

Speaker Change: I think we could end up with with some surprises. Some people have told me once they see the first million dollars come in they know that this is real and that more is going to is going to follow so it's possible. The first million dollars comes in in the next couple of months not a guarantee I don't know I'm not managing this alright, but then the money's going to start to flow.

Ted Karkus: So that's a little bit about crowd medical. Again, I spoke a little bit about be smart and being pure for peer review in the Journal of Clinical Gastrointestinal Hepatology. That is a very important journal. We get published there. We go to next steps on commercialization. And by the way, I also mentioned in the press release, the FDA, and I mentioned this last year, and my team was spot on. They said, there's no way the FDA was talking about oversight on all LBTs. My team said, no way that's ever going to pass muster. They just don't have the bandwidth, the manpower.

Speaker Change: <unk>, that's a little bit about.

Speaker Change: Crowd medical.

Speaker Change: Again, I spoke a little bit about be smarten being pure.

Speaker Change: For peer review and the journal of clinical gastrointestinal Herpetology that is a very important journal, we get published there. We go to next steps on commercialization and by the way I also mentioned in the press release, the FDA and I mentioned this last year and my team was spot on is there's just no way the EF.

Speaker Change: Yeah, I was talking about oversight on all L. D Ts.

Speaker Change: My team said no way that's ever going to passed muster. They just don't have the bandwidth to manpower. It's just not going to happen short enough they've now backed off of that and so for a test like ours, which are very safe test.

Ted Karkus: It's just not going to happen. Sure enough, they've now backed off of that. And so for a test like ours, it was a very safe test. We should be able to fly through the LBT, that's the Laboratory Developed Test, which means we can start commercialization later this year. Joe Abdu is an expert at that. And so we have to start getting the GIs involved and key opinion leaders. In order to do that, we have to get published. So this was the next step. They've been working. on this submission for many, many months. That's what I was waiting for.

Speaker Change: We should be able to fly throws a L. D. T. That's laboratory developed test, which means we can start commercialization later this year.

Speaker Change: Joab do is an expert at that and so we have to start getting that she is involved in or and key opinion leaders and we do that we have to get published so this was the next step they have been working.

Speaker Change: On the submission for many many months that's what I was waiting for it. This is a big deal. So I'm really looking forward to next steps there.

Ted Karkus: This is a big deal. So I'm really looking forward to next. Okay.

Speaker Change: Okay.

Speaker Change: We're a little bit over time.

Ted Karkus: We're a little bit over time. I think I covered virtually everything that I wanted to cover. I know that we have a lot of questions.

Speaker Change: I think I covered virtually everything that I wanted to cover I know that we have a lot of questions. So why don't we go to the questions I will I will tell you I ask noelle and by the way no. One I don't even know if I said a lot of you can I always love having you on these calls it's awesome steel.

Noella Alexander: So why don't we go to the questions? I will tell you, I asked Noella. And by the way, Noella, I didn't even know if I said hello to you today. I always love having you on these calls. It's awesome to see you. I did ask Noella if there are questions about, you know, what are your revenues? What are your earnings in the report?

Speaker Change:

Speaker Change: I did ask novella. If there are questions about you know what are your revenues what are your earnings and the reports first of all I'm not going to give you projections, because we don't give projections and number two if it's in the in the press release the financials. There. Please read them for yourself, let let's spend time on strategy questions as opposed to.

Ted Karkus: First of all, I'm not going to give you projections because we don't give projections. And number two, if it's in the, in the press release, the financials are there, please read them for yourself.

Ted Karkus: Let's spend time on strategy questions, as opposed to the numbers. And quite frankly, the numbers in the past are irrelevant. Anyway, as I just described, our second and third quarters are going to be dramatically different than what we saw last year. We're losing an enormous amount of money. Now, you also have amortization, depreciation, stock options, all these other things that go into it that are non-cash expenses, but there are real cash expenses also last year. We've dropped those real cash expenses dramatically going forward into the second quarter and beyond.

Speaker Change: The numbers and quite frankly, the numbers in the past are irrelevant anyway as I just described our second and third quarters.

Speaker Change: Are going to be dramatically different than what we saw last year, we were losing enormous amount of money now you also have.

Speaker Change: Amortization depreciation stock out all these other things that go into it to the noncash expenses, but there are real cash expense social last year, we've dropped those real cash expenses dramatically going forward into the second quarter and beyond okay without knowing the well why don't I turn it over to you for.

Noella Alexander: Okay, with that, Noella, why don't I turn it over to you for questions? Thank you, Ted, for the presentation. As you said, we'll now take some questions.

Speaker Change: For questions.

Speaker Change: Thank you for the presentation and he said well now take some questions.

Noella Alexander: Your first question is, what's a realistic timeline we should expect to see BeSmart commercialized? Will it be this year? That's a good question. So it depends on how you define commercialization.

Speaker Change: Your first question is.

Speaker Change: What's the realistic timeline, we should expect to see Peacemas commercialized will it be this year.

Speaker Change: That's a good question. So it depends on how you define commercialization this will probably be a multi year process.

Ted Karkus: This will probably be a multi year process. but the very first patient being tested. Absolutely. I on a commercial basis. I absolutely anticipate that being later this year. How many? I don't know right now. It's premature. I don't want to give estimates. I don't want to over promise and under deliver. I want to do the opposite.

Speaker Change: But the very first patients being tested absolutely.

Speaker Change: On a commercial basis I, absolutely anticipate that being later this year, how many I don't know right now its tour its premature I don't want to give estimates I don't want to.

Speaker Change: Over promise and under deliver I want to do the opposite and it may not feel like that for the last six months, but I under promised and over delivered for a decade and I did that most of my career and I Wonder I want to get back to doing that again, so what I will tell you is we're going to be very methodical. The question wasn't asked and it isn't normally raised but I.

Ted Karkus: It may not feel like that for the last six months, but I under promised and over delivered for a decade. And I did that most of my career. And I want to get back to doing that again. So what I will tell you is, we're going to be very methodical.

Ted Karkus: The question wasn't asked, and it isn't normally raised, but I just thought of it. Very important question. We are not going to spend millions and millions of dollars. We're not going to do what 23andMe did on drug development, spending hundreds of millions of dollars. We're not going to do what other cancer testing companies I've seen, where they spend an enormous amount of money, and then they go bankrupt. Good friend of mine runs the company.

Speaker Change: I just thought of it very important question, we are not going to spend millions and millions of dollars. We're not going to do with 23 and me did on drug development spending hundreds of millions out we're not going to do what other cancer testing companies I see where they spend an enormous amount of money and then they go bankrupt.

Speaker Change: Good friend of mine runs the company.

Speaker Change: The company is struggling because they spent on building out a big Salesforce I will not do that what I would rather do we think we are going to have one of the best cancer tests in the world and so we're going to go to companies that have networks of salespeople already visiting the G is offices or the medical.

Ted Karkus: Unknown Executive, Noella Alexander, Prophase Lab Unknown Executive, Noella Alexander, Prophase Lab spends all of our money trying to build out a sales I don't want to ever be in a situation again, like we've been in the last six or nine months. So I'm really looking forward to later this year, and I'm sure I will be updating you.

Speaker Change: A lot of these by the way you don't just have a Gi and its own office. So there theyre going in to these buildings that are dozens of medical doctors come.

Speaker Change: Covering everything including the Gis and so these salespeople we can give them our test is valid and they get a percentage on what they sell so there's a profit center for us as opposed to being a big expense upfront so I will not.

Speaker Change: Spend all of our money trying to build out a sales force I don't want to ever be in a situation again like we've been in the last six or nine months. So I'm really looking forward to later this year and.

Speaker Change: I'm sure I will be updating you we do these red Mark presentations by the way once a month. Obviously this one is for our first quarter results, but we do them. The other two months out of every three as well.

Noella Alexander: We do these red mark presentations, by the way, once a month, obviously, this one is for our first quarter results, but we do them the other two months out of every three as well. Noella, next question. Thank you, Ted.

Speaker Change: Next question please.

Speaker Change: Thank you Pat your next question.

Ted Karkus: Your next question is specifically what vaccines or illnesses are are we working on? And is anything past clinical studies? Thank We're not working on any vaccines. We're not we're not spending a lot of money on anything related to FDA drug development, prescription drugs. We're not doing anything of significance. right now.

Speaker Change: Specifically, what vaccine to illnesses are we working on and if anything past clinical studies. Thank you.

Speaker Change: We're not working on any vaccines, where now we're and we're not spending a lot of money on anything related to that.

Speaker Change: F D a drug development prescription drugs, we're not doing anything.

Speaker Change: Significance.

Speaker Change: Right now okay.

Ted Karkus: Okay, we're developing an Equivir. We're still waiting. you know, the It's unfortunate, our CRO is in another country working with our consultant here and they're going back and forth on the final results. It's been incredibly frustrating, I expect to be able to report the final results soon. The reality is we're looking to commercialize this the next cold season anyway, so we have a few months on that.

Speaker Change: We're developing a scrubber, we're still waiting.

Speaker Change: It's unfortunate our.

Speaker Change: Crow is in another country working with.

Speaker Change: Our consultants here and they're going back and forth on the final results. It's been incredibly frustrating I expect to be able to report the final results soon.

Speaker Change: Reality is what we're looking to commercialize this the next cough cold season anyway. So we have a few months on that but other than that we are be smarter south of Geo cancer tests. We have other dietary supplements were developing and we have nebula genomics, which now as I said nebula genomics as an entity by itself is now operating at breakeven, we're looking to outgrow it and sell it.

Ted Karkus: But other than that, we have Be Smarter, Stop the Geocancer Test, we have our other dietary supplements we're developing, and we have Nebula Genomics, which now, as I said, Nebula Genomics as an entity by itself is now operating at break-even. We're looking to now grow it.

Noella Alexander: Thank you, Tab.

Ted Carcass: Thank you Ted.

Noella Alexander: Next, I believe you touched on this in the presentation, but if you were to ask what steps are being taken to meet NASDAQ compliance, well, you need to file for an extension. Yeah, so I went through that in great detail already. And the bottom line is I already filed for the extension. They just don't answer the extension. Request until the end of the six month period at the end of next month. But of course, I already stated I fully I believe it was indicated to me that we will get the I there there are no issues.

Speaker Change: Next I believe you touched on this in the presentation, but any way to ask what steps are being taken to meet NASDAQ complaint will you need to file for an extension.

Speaker Change: Yes, so I went through that in great detail.

Speaker Change: Alrighty and the bottom line is I already filed for the extension. They just don't answer the extension.

Speaker Change: Requests until the end of the six month period at the end of next month, but of course already stated.

Speaker Change: I fully.

Speaker Change: I believe it was indicated to me that we will get the six month extension.

Speaker Change: There are no issues.

Ted Karkus: So to be honest, there's nothing to talk about other than the fact that I'm not allowed to say we got the extension today, which is incredibly frustrating because we meet all the criteria. And she said to me yesterday, if you meet all the criteria, you automatically get the extension. So we're going to get the extension, but for some reason, I'm not allowed to say that today. So we are going to get the extension.

Speaker Change: There is nothing to talk about other than the fact that I'm not allowed to say, we got the extension today, which is incredibly frustrating because we meet all the criteria and she said to me yesterday. If you meet all the criteria you automatically get the expenses. So we're going to get the extension, but for some reason I'm not allowed to say that today. So we're going to we're going to get the extension.

Ted Karkus: But for those listening to this call, don't sue me if we don't get it. But as far as I'm aware, we're getting the extension and that's it. And as I said, the only variable I believe would be that they would check our shareholders' equity, which actually increased since we went over yesterday. So with the 10Q coming out today, our shareholders' equity virtually doubled. We went from like 7 point something million to over 15 million.

Speaker Change: For those listening this call don't show me, if we don't get it but as far as uncle, where we're getting the extension.

Speaker Change: That's it and as I said, the only variable I believe would be that they would check our.

Speaker Change: Shareholders' equity, which actually increased since we went over it yesterday, so with the 10-Q coming out to their shareholders equity virtually doubled our.

Speaker Change: And we went from like seven.

Speaker Change: Seven point something million to over $15 million.

Noella Alexander: What's next? Thank you.

Speaker Change: What's next.

Ted Karkus: The next question is, has the DNA complete division started generating revenues? Yeah, so that was so I know for some people, it might be a little confusing between nebula genomics and DNA complete, they're part of the same company. DNA complete as developed into a more sophisticated, direct-to-consumer product. It's more consumer-friendly. And so the combination is doing I don't know about $5 million a year right now in revenues, maybe a little bit more than that. But we We spent the money on marketing, we'd get $10 million very quick. Unfortunately, we've just been tight on capital. So depending on when we sell it, I mean, if we get a liquidity event earlier rather than later, we spend some money, you know, obviously, we have a world class marketing Um, and we've perfected the marketing, we've perfected the platform, the website, etc.

Speaker Change: The next question.

Speaker Change: The Danny complete division started generating revenue.

Speaker Change: Yes, so that was so.

Speaker Change: I know for some people it might be a little confusing between.

Speaker Change: Nebula genomics and DNA complete there are part of the same company.

Speaker Change: DNA complete.

Speaker Change: It is.

Speaker Change: Developed into a more sophisticated direct to consumer product, it's more consumer friendly.

Speaker Change: So the combination.

Speaker Change: Is doing I don't know about $5 million, a year right now and revenues, maybe a little bit more than that but we.

Speaker Change: If we spent the money on marketing, we'd get $10 million very quickly.

Unfortunately, we've just been tight on capital so depending on when we sell it I mean, if we get a liquidity event earlier rather than later, we spend some money.

Speaker Change: We have a world class marketing team.

Speaker Change: And we've protected the marketing we protected the platform the website et cetera, the upside.

Ted Karkus: The upside It is enormous. But we can certainly also spell that out to anybody that potentially is going And as I said, the database also is hugely valuable in a potential sale.

Speaker Change: It is enormous but we can certainly also spell that out to anybody that potentially is going to acquire.

Speaker Change: And I just said the database also is hugely valuable and a potential sale.

Noella Alexander: Thank you, Ted, for that response.

Speaker Change: The next question.

Ted Karkus: The next question is, are we still looking at June slash July for COVID testing payments? So let's see, we're in the middle of May. June is next month.

Speaker Change: Are we still looking at June last July for Covid testing.

Speaker Change: So let's see we're in the middle of May.

Speaker Change: June is next month.

Ted Karkus: So I had to go by when Crown Medical was ready to go into the court system. So I think I gave the accurate statement, it is possible we will get we will get our first payments actually, in the month of June, the timeframe for when we went into court took longer than I expected. But on the other hand, we could get a surprise sooner than I So it's possible we're still on track. I don't know.

Speaker Change: So I had to go by when Crown medical was ready to go into the court system. So I think I gave the accurate.

Speaker Change: Statement.

Speaker Change: It is possible we will get we will get our first payments actually in the month of June the timeframe for when we went into court took longer than I expected, but on the other hand, we could get a surprise sooner than I expected. So it's possible. We're still on track I don't know what I can tell you is I am confident a significant amount of capital is.

Ted Karkus: What I can tell you is, I am confident a significant amount of capital is going to come into our company in the second half of this year. When it starts exactly is hard to time. I can tell you that the head of crowd medical is very confident, number one, in the amount that's going to come in. And number two, that once it starts to flow, it's going to flow significantly. And it's in the not too distant future. But in the not too distant future, in the next few months, I really don't know if that's one to two months or three to four months.

Speaker Change: When it come into our company in the second half of this year. When it starts exactly is hard to time I can tell you that the head of crowd medical as battery confident number one in the amount that's going to come in and number two that once it starts to flow as Gordon flow significantly and it's in the not too distant future, but not too distant future in the next few months.

Speaker Change: I really don't know if that's one to two months or three to four months.

Ted Karkus: I'm sure if you ask him, he's going to give you the more optimistic time frame.

Speaker Change: I'm sure if you ask him he's going to give you.

Speaker Change: The more optimistic timeframe I'm, just afraid to do that on this call right now I don't think we're far away, but by far away. It could be three months, but that's life changing game changing for our company once that happens and as you said you can buy the stock now you can buy it after the money starts to come in.

Ted Karkus: I'm just afraid to do that on this call right now. I don't think we're far away. But by far away, it could be three months. But that's life changing game changing for a company. Once that happens.

Ted Karkus: And I said you can buy the stock now you can buy it after the money starts I'd be shocked if the money starts to come in, I'd be shocked if the stock's at the same price. Shocked. But, you know, we'll see. People do silly things when it comes to stocks.

I'd be shocked if my starts come in I'd be shocked if the stocks of spare price shot, but we will say people do silly things when it comes to stock more.

Ted Karkus: What's next? Thank you for the clarity on that Ted.

Speaker Change: What's next please.

Speaker Change: Thank you for the clarity on that.

Ted Karkus: Next is, you announced an agreement with a global private equity group for debt financing. Have you accessed the line of credit yet? Yeah, so we did take in a small amount of capital. And then we moved on from that. And we did put up shares of stock as collateral. And by the way, when we pay back the debt, we're supposed to get those shares back. So it's possible we'll have a significant reduction in share count down the road.

Speaker Change: Next thing you announced an agreement with a global private equity for debt financing have you accessed a line of credit yet.

Speaker Change: Yes, so we did take in a small amount of capital.

Speaker Change: And then we moved on from that and we did put up shares of stock as collateral and by the way.

Speaker Change: When we pay back the debt we're supposed to get those shares back. So it's possible, we'll have significant reduction in share count down the road I don't want to get more into that now.

Ted Karkus: I don't want to get more into that now. But the bottom line is I'm looking at other sources of debt financing currently to continue to bridge the gap between where we are now and the liquidity events, the combination of crown medical collections and selling nebula. either one of which we could have a material amount of cash flow could come into our company from either one of those initiatives, you know, in the next and I just don't know if it's gonna be two months, three months, four months, and that's both for the sale of Nebula and for collections to start.

Speaker Change: But the bottom line is I'm looking at other sources of debt financing currently to continue to bridge the gap between where we are now and the liquidity events the combination of Grand medical collections and selling the ability to know us.

Speaker Change: Either one of which we could have a material amount of cash flow could come into our company from either one of those initiatives in.

Speaker Change: And the next and I just don't know if it can be two months three months four months and that's both with still a nebula and for collections to start.

Ted Karkus: Thank you for that Ted.

Speaker Change: Thank you for that.

Ted Karkus: Next is what are the milestone items shareholders should be aware of for the balance of 2025? So those are two big ones. And then following the development of our esophageal cancer test, and then ultimately rolling out Equivir and building our dietary supplement business.

Speaker Change: Next thing what are the milestones items shareholders should be aware of for the balance of 2025.

Speaker Change: So those are the two big ones and then following the development of our esophageal cancer test and then ultimately rolling out <unk> built in our dietary supplement business I am not looking to diversify.

Ted Karkus: I am not looking to diversify. into more businesses. By the way, when we come into a lot of cash I want to sit on that cast, figure out how to earn a decent interest rate. I mean, it's amazing what we're paying in interest to borrow money right now. I know there are tremendous opportunities when that cash comes in to loan it at a higher interest rate. And if you're sophisticated in how you do it, you know, even though you get some defaults, the overall total return is tremendous. I'm not saying we're even going to do that.

Speaker Change: Into more businesses by the way when we come into a lot of cash.

Speaker Change: I want to sit on that cash figure out how to earn.

Speaker Change: A decent interest rate I mean, it's amazing what we're paying in interest to borrow money right now.

Speaker Change: No there are tremendous opportunities when that cash comes in to loan and at a higher interest rate.

Speaker Change: And if you're a sophisticated in how you do it.

Speaker Change: Even though you've got some defaults. The overall total return is tremendous and I'm going to say, we're even going to do that it's just amazing to me what we're paying in interest rates for debt financing right now, it's so frustrating I can't wait for the cash come in I will never take that guests are granted.

Ted Karkus: It's just amazing to me what we're paying in interest rates for debt financing right now. It's so frustrating. I can't wait for the cash to come in. I will never take that cash.

Noella Alexander: Thank you, Ted.

Speaker Change: Thank you Ted. The next question is does the company still have a high degree of confidence in collecting the $25 million of uncollected E. R.

Ted Karkus: The next question is, does the company still have a high degree of confidence in collecting the 25 million of uncollected AR? Yeah, so on our books, we have about 20 million of uncollected AR. We believe that's conservative.

Speaker Change: Yeah. So on our books, we have about $20 million of uncollected, a or we believe that's conservative.

Ted Karkus: The auditors said that technically, you're not supposed to increase, you know, when you have enough accounts received while standing for a while, you're not supposed to then increase the estimates on it. We're It's not a guarantee. We're anticipating that the amount we actually collect could be a lot more than $20,000. So the answer, you know, I've already gone through this in a lot of detail over the last 45 minutes. So the answer is yes, we're confident we're going to collect what's on the books and we are hopeful that it's going to be significantly more than that.

Speaker Change: The auditors.

Speaker Change: Said that technically you're not supposed to increase when you have an AR accounts receivable outstanding for while you are not supposed to then just increase the estimates on it.

Speaker Change: Where.

Speaker Change: It's not a guarantee we are anticipating that the amount, we actually collect could be a lot more than $20 million.

Speaker Change: The answer I've already gone through this.

Speaker Change: And a lot of detail over the last 45 minutes. So the answer is yes.

Speaker Change: We're confident we're going to collect what's on the books and we are hopeful that it's going to be significantly more than that.

Ted Karkus: But to be honest with you, we just collected what was on the bus. Plus we sell Nebula. We're home free. We're gonna be we're gonna be a great company.

Speaker Change: But to be honest with you, which is collectibles was on the books plus we saw Netherlands.

Speaker Change: We're home for it we're going to be we're going to be a great company, our esophageal cancer tests myself, we had nothing else.

Ted Karkus: Our esophageal cancer test by itself we had nothing else the industry for esophageal cancer tests. If you look into it, it's a hot market. And again, the reason is because the endoscopy by itself is an inexact science. and the industry patients need a better test. So all these new tests coming up, the doctors are just buying them, they're just selling. Some of these tests, as I said, by the way, if you test positive, the next step is you're directed to go get an Our test. is for those getting it done. So, and again, we test eight specific proteins.

Speaker Change: The industry for Sotheby's Youll cancer tests, if you look into it it's a hot market and again the reason is.

Speaker Change: Because the endoscopy by itself is an inexact science.

Speaker Change: And.

Speaker Change: The industry patients need a better test so all of these new tests coming out the doctors, who are just buy them. They're just selling some of these tests as I said by the way if you test positive. The next step as you directed gogan endoscopy.

Speaker Change: Our test.

Speaker Change: As for those getting industry.

Speaker Change: So and again, we test eight specific proteins.

Ted Karkus: but it's the proteins that are almost always expressed when you're developing esophageal cancer. There's another test out there that tests 400 proteins, but it's not testing the eight, which we think are the most important.

Speaker Change: But it's the proteins that are.

Speaker Change: Almost always expressed when you're developing esophageal cancer. There's another tests out there the test 400 proteins that testing the eight which we think are the most important and then there are other test I don't want to get into the science B I'm not a scientist is complicated.

Ted Karkus: And then there are other tests. I don't want to get into the science piece. I'm not a scientist, it's complicated. Personally, based on spending a couple of years with this and talking to multiple scientists about this, I truly believe in my heart, this is the best esophageal cancer test on the market by far and that there will be enormous demand from the GIs. As soon as they hear about it, word's going to spread very quickly. This thing's going to go.

Speaker Change: Personally based on spending a couple of years with us and talking to multiple scientists methods I truly believe in my heart. This is the best esophageal cancer test on the market by far and that there will be enormous demand from the G is as soon as they hear about it where it is going to spread very quickly. This thing is going to go.

Ted Karkus: So if we get to a position later this year where we're sitting in a large block of cash and we only have to spend a small amount of money to develop this, and the market understands that we don't have to do the load of financing to finance the commercialization of our Be Smart South Geocancer Test. The market value of that alone could be enormous. It could easily be 10 times the current markup, our entire markup right now. And that's without all the cash coming in, which I anticipate is going to be significantly more than the whole markup of our company.

Speaker Change: So if we get to a position later this year, where we're sitting in a large block of cash and we only have to spend a small amount of money to developers.

Speaker Change: And.

Speaker Change: The market understands that we don't have to do dilutive financings to finance the commercialization of our beef ourselves Geo cancer test.

Speaker Change: The market value that alone could be enormous.

Speaker Change: It could easily be 10 times the current markup, our entire Mark up right now and that's without all the cast coming in which I anticipate it's going to be significantly more than the homework gap of our company. So there are interesting dynamics at play here, but obviously I'm very excited and bullish on the future.

Ted Karkus: So there are interesting dynamics at play here, but obviously I'm very excited and bullish on that.

Unknown Executive: Thank you for that, Ted. Next, a viewer says, Not a question, but a preference. If and when we receive payment for past-due COVID testing, think smaller dividend and more cash in the bank. I hold position of nearly $200K. Right. So I have no idea when you bought your 200,000 share. Thank you for being a shareholder. If you bought those shares at 30 cents a share, you know, what is that a $60,000 investment? Those two same 200,000 shares that I probably paid $8 for. You know, I paid $1.6 million. You paid $60,000. And I'm not saying to belittle the investment.

Speaker Change: Thank you Matt that Pat next.

Speaker Change: The next day, he always says.

Speaker Change: Jim.

Speaker Change: Got it.

Speaker Change: When we receive payment for past Covid testing, Inc, smaller dividend and more cash in the bank I hold position of nearly two indications.

Speaker Change: Right. So I have no idea when you bought your 200000 sure. Thank you for being a shareholder if you bought those shares at 30 cents a share.

Speaker Change: What does that a 60000 dollar of investment.

Speaker Change: Those two are the same 200000 shares that I, probably paid $8 four.

Speaker Change: I paid $1 $6 million, you paid $60000 and I'm, not saying to below will be investment I'm more just sitting here in amazement.

Ted Karkus: I'm more just sitting here in amazement of what's happened. And, you know, obviously, well, I don't seem upset right now. I'm not upset, because I'm really looking forward to the future. But it's kind of frustrating. But the answer is, I totally agree with you. There's no way I will ever allow our company to get into the position it's been in over the last six, nine months. Now, and to be clear, I still have to get through the next three months and I still have to do debt finance. So we're not out of the woods yet, but we're getting very, very close once we're completely out of the woods and the coast is clear.

Speaker Change: What's happened.

Speaker Change: And.

Speaker Change: Obviously, well I don't seem upset right now I'm not upset because I am really looking towards the future.

Speaker Change: But its kind of frustrating, but the answers I totally agree with you.

Speaker Change: There's no way I will ever allow our company to get into the position it's been in over the last six nine months.

Speaker Change: Now and to be clear I still have to get through the next three months and I still have to do debt financings. So we're not out of the woods, yet but were getting very very close once we're completely out of the woods in the coast is clear.

Ted Karkus: I doubt the stock can be trading where it's trading right now, again, but that's not for me to decide, that's for the market to decide. That's one of the reasons the market's here, because obviously we're tight on cash, that's not hard to figure out. By the same token, I anticipate some new debt financing deals very shortly and then we'll be home free, because I'm really just looking for a bridge to when the liquidity...

Speaker Change: I doubt the stocks can be trading where it's trading right now again, but that's not for me to decide this for the market to decide is one of the reasons the markets here because obviously, we're tight on cash it's not hard to figure out by the same token I anticipate some new debt financing deals.

Speaker Change: Very shortly and then we'll be home free because I'm really just looking for a bridge to when the liquidity that story.

Ted Karkus: Also, by the way, the not too distant future, there's also the possibility, but not a guarantee that we'll be able to do debtor in possession financing. where they get the money back. We don't have to ever pay that back. They get that back directly from the court system when the insurance companies start to pay, it goes into a lock box and they get paid first. So we don't have access to that, but I think we could have access to that in the not too distant future, which would then take the pressure off of me having to do other types of debt financing.

Speaker Change: Also by the way in the not too distant future. There's also the possibility that a guarantee that we'll be able to do.

Speaker Change: Debtor in possession financing.

Speaker Change: We are they get the money back we don't have to ever pay that back that gets that back directly from the court system. When the insurance companies start to pay it goes into a black box and they get paid first so I may I don't we don't have access to that but I think we could have access to that in the not too distant future, which would then take the pressure of EMEA, having to do other types of debt financing. However.

Ted Karkus: However, to be honest, it's a little premature, but I just want you to know there are potential other options. I don't know, I haven't gone into detail.

Speaker Change: For it to be honest.

Speaker Change: It's a little premature, but I just want you know there are potential other options I don't know I haven't gone into detail. That's one of the things are going to be working on over the next two or three weeks and as we progress.

Ted Karkus: That's one of the things I'm gonna be working on over the next two or three weeks as we progress with the crowd medical initiative. Thank you for the input on that, Ted.

Speaker Change: With the Grand Medical initiative in the court system.

Ted Carcass: Thank you for everyone on that Ted next says how do you plan to bring up the stock price.

Ted Karkus: Next is, how do you plan to bring up the stock price? Great question. I don't think I'm gonna have to do anything. I think it's going to take care of itself. depending on how much cash flow comes in and when it comes in. I don't think I'm allowed to discuss in advance what I might do.

Speaker Change: Great question.

Speaker Change: I don't think I'm going to have to do anything.

Speaker Change: I think it can take care of itself now.

Speaker Change: Depending on how much cash flow comes in and when it comes in.

Speaker Change: I don't think I'm allowed to discuss in advance what I might do but if you look.

Ted Karkus: But if you look at my past in the last 10 years when we sold the coldies brand for $50 million I did two Dutch auctions. I had one shareholder that was adversarial to the company. He owned 14.9% of the shares I sold. It did a duck talk. took him out virtually off of his stock. The Dutch auction was oversubscribed. So he did a second Dutch auction specifically because I wanted that guy gone. All right. But by doing the two Dutch auctions took out everybody that ever wanted to sell. and the stock, you know, proceeded, you know, in a few years after the stock went up 10 times, that's it, because it was one of the tightest held stocks in all of NABZAC.

Speaker Change: At my past in the last 10 years, when we sold the call these brands with $50 million.

Speaker Change: I did to Dutch auctions, I had one shareholder than adversarial to the company owned and 14, 9% of the shares that state.

Speaker Change: I did a Dutch auction.

Speaker Change: Took them out of virtually all of the stock the Dutch auction was oversubscribed. So we did a second Dutch auction, specifically because I wanted to ask I got right, but by doing the two Dr choices took out everybody that ever wanted to sell.

Speaker Change: And the stock.

Speaker Change: Preceded you know in a few years out of the stock went up 10 times that because it was one of the tightest held stock and all of NASDAQ and so I love to have the opportunity to do something like that again I can't talk about that I'm going to do that now, we'll see we'll see where the stock prices, but as I said.

Ted Karkus: And so I love to have the opportunity to do something like that. Again, I can't talk about that. I'm going to do that now. We'll see. We'll see where the stock price is. But as I said, I expect that we're going to get the six month extension.

Speaker Change: I expect that we're going to get the six month extension, but oh by the way this is really important.

Ted Karkus: But Oh, by the way, this is really important. We are not. In our upcoming annual general meeting in the proxy, you know, we have to file that. I'm not sure probably within the next month. We are not intending to even put a reverse split. We're not looking for authorization for reverse split, even in our proxy. Now, there is a requirement if in the second six months the stock is not above $1, they will agree to reverse stock to split, you know, reverse split the stock. Of course, we would have to or we would get delisted, I don't want to get delisted.

Speaker Change: We are not.

Speaker Change: In our upcoming annual general meeting and the proxy we have to file that I am not sure player within the next month, we are not intending human put a reverse split were not looking for authorization for a reverse split even in our proxy.

Speaker Change: Now there is a requirement if in the second six months of stocks that above a dollar though will agree to reverse stock split.

Speaker Change: Reverse split the stock of course, we would have to war will get do you listen I only get delisted.

Ted Karkus: But All right, but you can look at my history. I'm shareholder friendly. I think like a shareholder, I was an investor for 40 years. I was an investor for 30 years before I became CEO of this company. And so you better believe I'm not spending that money. I want the shareholders, the shareholders that have stuck with me, I want them to benefit. So that's the way I'm thinking we'll, we'll see what happens.

Speaker Change: But.

Speaker Change: If we even get a portion of the liquidity events I think we're going to I don't think that's going to be an issue at all and that's without me considering stock buybacks, but that's not something I am considering today, we don't have any Katherine clearly not doing stock buybacks and dividends. The last thing I'm thinking about is dividends right now alright, and even when the cash comes in laughing I'm thinking about a dividend.

Speaker Change: Right, but you can look at my history I'm shareholder friendly.

Speaker Change: I think like a shareholder I was an investor for 40 years.

Speaker Change: I was an investor for 30 years before I became CEO of this company and so you better believe I'm not spending that money.

Speaker Change: I want the shareholders vendors shareholders that have stuck with me I'll, let them benefit.

Speaker Change: That's the way I'm thinking, we'll we'll see what happens again, we're jumping the gun, though because we have to wait for what are the major liquidity events.

Ted Karkus: Again, we're jumping the gun though, because we have to wait for one of the major liquidity events. But you can bet if. If the past is any indication of the future, you can bet I will be shareholder friendly again in the future.

Speaker Change: But you can bet.

Speaker Change: If.

Speaker Change: If the past is any indication of the future you.

Speaker Change: You can bet I will be shareholder friendly again in the future.

Noella Alexander: Thank you for that question. Noella was next.

Noelle: Thank you for that question Noelle It was next.

Noella Alexander: Thanks, Ted.

Ted Karkus: The next question is, can you tell us what you're going to do with the funds you get in from Crown Medical or possibly selling Nebula? I think I just answered those those questions in the last question. No need to repeat myself. Look, we'll see what happens. Obviously, I care about stock price, I care about NASDAQ lifting, and all those good things. And we'll just play it by ear.

Noelle: The next question can you tell us what you're going to stay with the funds you've got in from kind of medical or possibly selling nebula.

Noelle: I think I just answered those those questions in.

Noelle: And the last question no need to repeat myself look, we'll we'll see what happens.

Noelle: Obviously, I care about stock price I care about NASDAQ listing and all those good things and we'll just play by ear I can just tell you my background on Wall Street, So I want to make the right decisions that are best for shareholders certainly going forward, we weren't a stressful time last six or nine months or things that we did that I wish you a millionaire is I never had to do.

Ted Karkus: I can just tell you my backgrounds on Wall Street. So I want to make the right decisions that are best for shareholders. Certainly going forward.

Ted Karkus: We were in a stressful time the last six or nine months of things that we did that I wish in a million years I never had to do. And I absolutely this cast comes in. I can virtually guarantee you I will never do again. But the things that I do like doing are all shareholder friendly. And we'll just see when the time comes.

Noelle: And I absolutely this guest comes in.

Noelle: I can virtually guarantee we'll never do again, but the things that I do like doing are all shareholder friendly and we will just see when the time comes but I'm really excited among other things.

Ted Karkus: But I'm really excited among other things. commercializing our Be Smart and Stop the Geocancer test and not spending a lot of money doing it. Also, I didn't even mention this. There's a very real possibility that as we gather a little more momentum later this year, somebody's going to want to acquire our esophageal for a lot of money or Excuse me, we're partnering it. Partnering it would be great because then you just make a lot of money. You have somebody else that already has a huge distribution network. It becomes an overnight success. You get a significant, you have milestones and a significant royalty.

Noelle: Commercializing our these smarter esophageal cancer tests and that spending a lot of money doing it.

Noelle: Well also I didn't even mention this there's a very real possibility that as we gather a little more momentum later this year.

Noelle: Somebody's going to want to acquire or esophageal cancer testing.

Noelle: For a lot of money at work.

Noelle: Excuse me or partnering partnering it would be great. Because then you just make a lot of money you have somebody else and already has a huge distribution network. It becomes an overnight success you got a significant you have milestones and a significant royalty not a bad business to be in to have monster cash coming into the company every year.

Ted Karkus: Not a bad business to be in. To have monster cash coming into the company every year. I mean, I would love a business. I think I could send you to retire on that.

Noelle: I would love a business I think I could semi retirement alright whats next question.

Ted Karkus: All right, what's the next question?

Ted Karkus: So your next question is, what happened to Equivir? Yeah, so that's where we are. The only reason I'm talking a lot about it is I'm frustrated like everybody else. I'm just waiting for our consultants. and the CROs to get on the same page and finalize the results. We have some time because this is a product for the cough, cold season, and we're initially going to introduce this online anyway. So we have a little bit of time, but it is a little bit. It is a little frustrating and I'm waiting like everybody else. So we have phenomenal preliminary results and I'm just waiting for the actual final results that we can both publish and also use to make claims on the packaging.

Speaker Change: Your next question is what happened to equity here.

Speaker Change: So that's where we are the only reason I'm talking a lot about it is I'm frustrated like everybody else I'm just waiting for our consultants.

Speaker Change: And the <unk> to get on the same page and finalized the results.

Speaker Change: We have some time gives us a product for the cough cold season, and we're initially going to introduces online anyway. So we have a little bit of time, but it is a little bit it is a little frustrating.

Speaker Change: And I'm waiting like everybody else.

Speaker Change: So we had phenomenal preliminary results and I'm just waiting for the actual final results that we can both published and also used to make claims on the packaging, although as an over the counter dietary supplement.

Ted Karkus: Although as an over-the-counter dietary supplement, you can't make any of the claims that you can make with the drug anyway. So I'm not sure how much it's going to even affect the claims you can make on the package other than basic claims, but it'd be nice if and where we have statistical significance would be nice to be able to say that. So I'm frustrated like everybody else, to be honest.

Speaker Change: Can't make any of the claims that you could make with the drug anyway. So I'm not sure how much it's going to give an effect.

Speaker Change: The claims you can make on the package other than basic claims, but it'll be nice where we are and where we have statistical significance would be nice to be able to say that so.

Speaker Change: I'm frustrated like everybody else to be honest there.

Ted Karkus: But again, we have much bigger fish to fry and much bigger things to look forward to at the moment. Although Ecomovir could be a very big product, we have some things that are front and center right now that could be very big. As one thing to generate, you know, $25 million of revenues and make a few million dollars, it's not a thing to generate $25 million of cash with no overhead. And again, when we talk about $50 million coming in from Crown Medical, that's net. We're not paying them anything. By the way, they have dozens of attorneys working on this.

Speaker Change: But again we have.

Speaker Change: Much bigger fish to Fry and much bigger things to look forward to at the moment, although equity or it could be a very big product. We have some things that are front and center right now that could be very big.

Speaker Change: It's one thing to generate $25 million of revenues and make a few million dollars. So nothing to generate $25 million of cash with no over it and again when we talk about $50 million coming in from Crown Medical that's net we're not paying them anything by the way they have dozens of attorneys working on this we're in.

Ted Karkus: We're not paying them a single penny. They would not be doing that if they were not highly confident that they were going to collect a lot of money. It's all contingency fees, all based on collecting the money. They take out the percentage, we get the rest. They believe that we're going to net after their contingency fees up to $50 million. And he said, and if possible, it's more, but it could be some kind of big number. So even at 25 million, that's game changing for the company. And that's not revenue. It is revenues, but it's revenues without costs associated with it.

Speaker Change: Kaine them a single Penny they would not be doing that if they were not highly confident that they were going to collect a lot of money. There. It's all contingency fees all based on collecting the money they take out the percentages, we get the rest they believe that we're going to net after their contingency fees up to $50 million and he said and as possible tomorrow, but it.

Speaker Change: Could be some kind of big number like that so even if its 25 million that's game changing for a company. That's not revenue. It is revenues, but it's it's revenues without without cost associated with it we.

Ted Karkus: We, you know, we expense the cost of this when we did COVID testing, you know, two and three years. Well, do we have more? We have time for one or two more?

Speaker Change: We expect the cost of this when we did the Covid testing.

Speaker Change: And three years ago.

Speaker Change: Well, we are more we have time for one or two more that are coming to you havent ended the presentation, but I think we have time for one more question.

Noella Alexander: Yeah, so we're coming to the other end of the presentation. But I think we have time for one more question here.

Ted Karkus: The question is, what is the forward looking perspectives from here? Boy, so that's sort of like sets me up to just give my summary.

Speaker Change: What is the forward looking perspective from here.

Speaker Change: Boy, So that's sort of like steps now to just give my summary, so why don't why don't we just moved this.

Ted Karkus: So why don't why don't we just move this To summary, since that's the last question and we're out of time, I want to thank everybody for joining us. I think I covered virtually everything that everybody would want to know on this call. Obviously, if you can't tell, I'm very bullish on the future of the company. We have a few months. of debt financing that we have to get through. I am optimistic, actually, based on some recent conversations I'm having, that we're gonna have some solid debt financing very, very shortly. And then following that, I may have an opportunity to do the debtor and possession financing.

Speaker Change: Two summary, since that's the last question and we're out of time.

Speaker Change: I want to thank everybody for joining us I think I covered virtually everything that everybody would want to know on this call. Obviously, if you can't tell I'm very bullish on the future of the company we have a few months.

Speaker Change: Of debt financing that we have to get through I am optimistic actually based on some recent conversation I'm, having that we're going to have some solid debt financing very very shortly and then following that I may have an opportunity to do the debtor in possession financing I can do that where home for it.

Ted Karkus: If I can do that, we're home free. Because now we don't have to pay, we never have to pay that back that comes out of the collections. So we'll see. And then at that point, then the liquidity events start. And again, Crown Medical, we can have a, the first liquidity event for Crown Medical could surprise us. I hate saying that in case it doesn't. but the first liquidity event for Crown Medical could be upon us within the next two months. And to be honest, it could be sooner than that. Don't want to commit to it because I don't want anybody to say that I misled them or it didn't happen.

Speaker Change: That we don't have to pay we never have to pay that back because that comes out of collections. So.

Speaker Change: So we'll see and then at that point, then the liquidity event start and again crowd medical we could have a.

Speaker Change: The first liquidity event for crowd medical could surprise us I hate, saying that in case it doesn't.

Speaker Change: But the first liquidity event for crowd medical could be upon us within the next two months and.

Speaker Change: And to be honest it could be sooner than that.

Speaker Change: Don't want to commit to it because I don't want anybody to say that I misled them or it didn't happen, but I think there's a good chance.

Ted Karkus: But I think there's a good chance we're going to be pleased within the next couple of months on the Crown Medical and on the nebula front, given that Regeneron just paid $256 million for 23andMe. And again, I don't want to compare the two. We're not getting $50 million and $100 million for nebula. Okay. And I don't want to tell you what kind of numbers we think we're going to get because we specifically made the decision. Let's see what the market is in So what I can tell you is the numbers kind of all over the place.

Speaker Change: We're gonna be pleased within the next couple of months on the Crown medical and on the Nebula front given the Regeneron just pay $256 million were twenty-three me and again I don't want to compare the Joe we're not getting $50 million and $100 million for nebula. Okay.

Speaker Change: And I don't want to tell you what kind of numbers, we think we're going to get because we specifically made the decision let's see what the market is interested in.

Speaker Change: So what I can tell you is the numbers kind of all over the place, but what's interesting is.

Ted Karkus: But what's interesting is fact that we're breakeven business is actually a good thing with a huge data set and a business that number one, we can grow very quickly. Number two, we can grow it efficiently. And number three, it creates Positive cash flow and earnings the following year with the subscription and renewals makes us a very interesting business as an investment to be acquired by private equity. And then of course, potentially you have your drug development companies that want to acquire the business because you get the data set that goes along with it. And again, there are all sorts of issues with privacy, with sharing data.

Speaker Change: The fact that we're a breakeven business is actually a good thing with a huge data set and a business that number one we can grow very quickly number two we can grow it efficiently and number three it creates.

Speaker Change: Positive cash flow and earnings the following year with the subscription renewals makes us a very interesting business as an investment to be acquired by private equity and then of course potentially you have your drug development companies that want to acquire the business because you've got the dataset that goes along with it and again there are all sorts of issues with.

Speaker Change: Privacy with sharing data, we don't share our data with anyone.

Ted Karkus: We don't share our data with anyone. But if you buy the whole company, obviously the data set comes with it. So there's some interesting dynamics. We'll see how it plays out. As I said, NDAs are going out. LOIs may be coming back short term. We'll see how it plays out.

Speaker Change: But if you buy the whole company obviously the data set comes with it. So there's some interesting dynamics, we'll see how it plays out as I said and Tas are going out <unk>, maybe coming back short term, we will see how it plays out I do these run more calls once a month.

Noella Alexander: I do these Renmark calls once a month. Stay tuned. I hope to have some nice positive updates by the time that we do our next Renmark virtual non-deal roadshow. Many thanks, Noella. Have a great day.

Speaker Change: Stay tuned.

Speaker Change: I hope to have some nice positive updates by the time that we do our next run work virtual non deal Roadshow.

Speaker Change: Many thanks, Noelle I have a great day I think that concludes you're supposed to say I think that concludes the call Gulfport.

Noella Alexander: I think that concludes, you're supposed to say, I think that concludes the call. Go for it.

Noella Alexander: Thank you, Ted.

Speaker Change: Thank you Ted and that concludes our Q&A. Thank you to everyone for joining us today per prophase labs first quarter 2025 assault paresthesia trading on the NASDAQ under the ticker symbol PRP age the playback will be available on our web site 24 to 48 hours. After this presentation I never belonged Dr. Lal D.

Noella Alexander: And that concludes our Q&A. Thank you to everyone for joining us today for Prophase Labs first quarter 2025 results. Prophase is trading on the NASDAQ under the ticker symbol PRPH.

Noella Alexander: The playback will be available on our website 24 to 48 hours after this presentation under the VNDR library tab.

Noella Alexander: Please stay tuned for other presentations in your area and see you next time.

Speaker Change: Please stay tuned for other presentations.

Speaker Change: Thanks, Tim.