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spk00: Good afternoon and welcome to the BioAffinity Technologies Third Quarter 2022 Business Update and Financial Results Conference Call. I will now turn the call over to Jonathan Nugent, Investor Relations for BioAffinity. Thank you. Please go ahead.
spk03: Thank you, Operator. Good morning, everyone, and thank you for joining the call. With me today is BioAffinity's President and Chief Executive Officer, Maria Zanes, who will provide an update of the company's recent business activity, and Michael Edwards, the company's chief financial officer, who will provide more detail on the company's financial results. Earlier this morning, BioAffinity issued a press release detailing business activity for the third quarter ended September 30, 2022. BioAffinity encourages listeners to review the press release, which is available on the company's website at www.bioaffinitytech.com. This call is being recorded and replay will be available on the investor section of the BioAffinity website for approximately 45 days. This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties. The company may, in some cases, use terms such as predict, believe, potential, proposed, continue, estimate, anticipate, expect, plan, intend, may, could, might, will, should, or other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. Such forward-looking statements include, but are not limited to, statements about the company's programs and the potential for side path launch. Such statements are subject to numerous important factors, risks, and uncertainties, and may cause actual events or results to differ materially from the company's current expectations. These and other risks and uncertainties are most fully described in BioAffinity's periodic filings with the Securities and Exchange Commission, including the risk factors described in the section titled Risk Factors in the quarterly and annual reports that the company files with the SEC. Any forward-looking statements that are made in this presentation speak only as of the date of this presentation. Except as required by law, BioAffinity assumes no obligation to update forward-looking statements contained in this presentation, whether as a result of new information future events or otherwise after the date of this presentation. Finally, BioAffinity's third quarter 10-Q will be filed soon after today's call. Now I'd like to turn the call over to Maria Zaintz.
spk01: Thank you, John, and thank you all for joining us today for this, our first conference call to report financial results as a public company. Since our founding, BioAffinity has been dedicated to addressing the urgent need for non-invasive, early-stage cancer diagnosis and cancer treatment. And now that we have successfully raised the needed funds, we are confident that the outstanding scientific and commercialization team we have assembled will demonstrate the clinical value of CYPATH Lung in the marketplace. and we will continue the development of additional non-invasive diagnostics for early-stage disease. With funds raised from our recent IPO and the exercise of warrants, BioAffinity also will pursue its promising research and development of broad-spectrum cancer therapeutics. As you likely know, CYPATH-Lung is a non-invasive, cost-effective, and accurate test to detect lung cancer at early stage by analyzing the lung microenvironment using advanced flow cytometry and automated analysis that we developed by machine learning and AI. The SciPath lung test provides physicians and their patients a more accurate diagnosis of cancer's number one killer, leading to lower healthcare costs, earlier diagnosis, and longer, healthier lives. Recently, we have started to recognize revenue from sales of SciPath Lung by our licensee, Precision Pathology Services, a CAP accredited CLIA certified clinical pathology laboratory. Although Precision Pathology Services placed SciPath Lung on its list of tests offered physicians in the second quarter of 2022, there was limited marketing of the product until September's IPO made funds available to assemble a marketing team of experts focused on demonstrating the clinical value of CYPATH lung in the marketplace. We have begun a limited test market launch in the San Antonio area that will evaluate our marketing program and help us ensure each step in the care pathway from the initial order by the physicians to sputum collection and processing to generating and delivering the patient report is both efficient and effective. This limited test marketing approach allows us to refine future positioning and to develop strategic insight for our side path lung test before expanding to a larger national market. We believe our current efforts will be essential to developing a strategic and a cost-effective plan for a robust national rollout. Supporting our work is a strong intellectual property portfolio. that protects our diagnostic and therapeutic discoveries. We were pleased to announce recently that our wholly owned subsidiary, OncoSelect, has been awarded patents to protect novel porphyrin conjugated compounds for selective delivery of cancer treatments by the government of Mexico and Australia and the People's Republic of China. Cancer is a scourge across the world, impacting people in every country. And it's the leading cause of death in China, where more than 3 million people are expected to die this year alone from the disease. The awarding of these patents is further evidence that BioAffinity can be a global leader in advancing novel approaches for both diagnosing and treating this deadliest of diseases. In addition to our commercial and corporate advances, we continue to make strides in our research. In October, we were pleased to announce that the results of research into the use of flow cytometry for analyzing the lung environment to detect diseases of the lung were accepted for presentation at the American College of Chest Physicians 2022 conference. The data, which were presented on October 19th, showed we have used flow cytometry to identify reproducible cell populations from whole sputum samples that can be used in the development of diagnostics for COPD and asthma, similar to how we successfully used flow cytometry in our CYPATH-1 test to detect early stage lung cancer. With recent improvements in antibody panels, with fluorochromes, and methods of detecting fluorescent signals, flow cytometry allows for rapid analysis of large numbers of sputum-derived cells. We continue to show how flow cytometry can be used to assess lung health, similar to the way flow cytometry gives insights into hematopoietic health and other diseases by analyzing blood and bone marrow. Earlier this fall, we announced publication of our research into high-throughput flow cytometry analysis of sputum in the journal PLOS One. The article, titled Sputum Analysis by Flow Cytometry, an Effective Platform to Analyze the Lung Environment, reports on results of analyzing sputum by flow cytometry as the basis for high-throughput diagnostic tests to determine the health of the lung. Importantly, this paper presents our unique method for determining the health of an individual's young. Specifically, our research provides a better understanding of how disease changes the lung environment and how flow cytometry can be used as a diagnostic tool by analyzing sputum. Of course, central to all of this work is a strong financial position. And on September 6th, we made significant strides towards that goal with the announcement of the successful closing of our initial public offering. The transaction included approximately 1.3 million units consisting of shares of common stock and warrants for aggregate gross proceeds of approximately $7.8 million prior to detecting underwriting discounts, commissions, and other offering expenses. Then, just a few weeks later, and subsequent to the close of the IPO, we announced receipt of approximately $7.7 million in additional gross proceeds from the exercise of tradable and non-tradable warrants. Combined with the company's underwritten public offering, BioAffinity received an aggregate of approximately $15.6 million as of September 28, 2022. Equally important, the company converted almost $11 million in debt and related accrued interest as a result of the IPO. I will now turn the call over to Michael Edwards to provide more detail about our third quarter 2022 financial results. Michael?
spk02: Thank you, Maria, and good morning. I will now provide an overview of the key financial results for the third quarter of 2022. For the three months ended September 30th, 2022, we reported revenue of just over $1,000. This was just the second quarter in which we recognized revenue, and so there was no revenue to compare to the prior year. We reported a loss of $4.6 million, or $1.10 million. per share for the three months ended September 30th, 2022, compared to a net loss of 1.5 million or 57 cents per share for the same period in 2021. Research and development expenses for the three months ended 2022 were approximately 320,000 compared to 331,000 for the third quarter of 2021. This decrease is primarily due to a decrease in legal costs related to patents and annuities compared to the prior year. Clinical development expenses for the three months ended September 30th, 2022 were approximately $61,000 compared to $34,000 for the third quarter of 2021. This increase is primarily due to an increase in clinical study activities related to site costs compared to the prior year. We reported general and administrative expenses of approximately $596,000 for the third quarter of 2022 compared to $162,000 for the same period in 2021. The increase was primarily attributable to an increase in consulting, legal, and professional fees incurred in 2022 compared to 2021, which were related to costs due to activities associated with being a public company. as well as the addition of personnel and support services to support the launch of sales of our diagnostic test, SciPath Lung. On September 30, 2022, the company had cash and cash equivalents of approximately $13.5 million compared to $1.4 million at December 31, 2021. The difference is primarily due to the completion of our IPO in September of 2022, as well as the exercise of warrants during the quarter. As mentioned earlier, the IPO, along with the exercise of warrants, resulted in net proceeds to the company of approximately $15.6 million. The company expects that current cash and cash equivalents will be sufficient to fund its operating expenses through mid-2024. I'll now turn the call back over to Maria.
spk01: Thank you, Michael. I would like to conclude the call with some additional parting thoughts. I would like to thank all of our scientists and other professionals who are dedicated to taking our discoveries from bench to bedside, as well as our investigators and our collaborators for their continued support and hard work on our behalf. I'd also like to thank the patients who have participated in the clinical trials for SciPath Lung. And to reiterate our commitment to the commercialization of SciPath Lung, our non-invasive, cost-effective, and accurate test to detect lung cancer early, as well as our commitment to the development and the commercialization of additional tests to detect other cancers and lung diseases and the pursuit of our therapeutic research. Finally, and most importantly, I'd like to thank our shareholders for their support of the company. We are dedicated to protecting shareholder value and delivering returns through the advancement of our programs. I want to thank you for joining us today.
spk00: This concludes today's BioAffinity Technologies Third Quarter 2022 Earnings Call and Webcast. You may disconnect your line at this time and have a wonderful day.
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