ProPhase Labs, Inc.

Q4 2022 Earnings Conference Call


spk_0: hello and welcome to the trophy trophies lab financial results for the year ended december thirty first twenty twenty two conference call all participants will be and listen only mode should you need assistance please signal a conference specialist referencing the starkey followed by zero after today's presentations there will be an opportunity to ask questions to ask the question he may for star than one on your telephone keep had to withdraw from the question to you prefer stars them to please note this event is being recorded i would no interest in the conference over to chairman of the board and ceo of for of a lab said carcass please go ahead
spk_1: but you mj and thank you all for joining me today the for we get started i like see i have to be the forward looking statements of fortunately or for is gave me a shorter version for that i said god i would like to remind you of the company safe harbor language during the presentation we will make forward looking statements including statements regarding our strategy plans objectives and initiatives and the underlying us elton while we believe that the forward looking statements are reasonable as and when made forward looking statements are based on expectations that about rift and uncertainties that could cause actual results to differ materially these resist the big i'm sorry these risks and uncertainties include but are not limited to our ability to obtain and maintain the sorry regulatory approval general economic conditions consumer demand for products and services challenges relating to entering into and growing new business lines the competitive environment and a risk factors lifted from time to time and are filing for the fcc filing this call will prove that nine gap financial measures such as adjusted either a reconciliation of these non gaap measures to the most comparable got measures are included in the earnings release furnished to the fcc prior to call and available on our website right now that i got that out of the way am i gonna want to thank everybody for joining me today i don't want to reread the press release and quite frankly the depressingly is pretty self explanatory if you don't get what's going on from the press release and you're waiting to die but i don't know why you're on the floor first and foremost and and by the way i first saw a couple things estimated what we have to fantastic investment bankers investment banking firm so we work with that's critically important when you're small caps about the same company is critically important he will have good relationships with investment banking phones and particularly high quality investment banking farms farm and an arcade who smoke as the golden state companies you watch investment banking firm said focus on smoke affidavit states companies like ours more capital think of her company a small cabin fact i think our cover you can be larger than small cap soon but in any that i'm talking about six equity and eighty might write a book cover exactly both a great job and and i appreciate both firms in addition to that we work with remark financial for are primarily for retail investors if you've never seen a red marks virtual nine the road roadshow call for am i do these probably every two or three weeks if you want to get updated feel free to reach out to read more can sign up for the next one also on our website we have to company presentations one is on the whole company one is your son the by a former division the main company presentation probably updated every couple of weeks you can go there to learn more information and so with that the tone of our got other call a simple and by trying keep it brief and then go into q and a half later questions in the queue and a to if i'd known more details first and foremost and i said that in the press release if you're investing in our company or your vaccine and any smoke half a dozen states companies you have to be invested in madison i learned that when i the lottery thirty and forty years ago if you're management doesn't execute i don't care what your products or services it's probably going to turn out to be a about after the one thing i can tell you as you can look at my track record the track record of i'm your managed to see our coverage over the past ten years and i've we were killed it right we had a sixty five said and ten years ago since that time we paid our two daughters and forty cents and special dividend and our staff is up you know however many multiples yeah from hundred sixty five cents and i'd say the majority of our shareholders in a company employee bed with me said years or longer and they've been well rewarded for their patience and i thank you for your patience having said that not just over the last ten years but even over the last two years or from our performance has been phenomenal that we turned around and sell to call these friends fifty million dollars and then i didn't wonder of petting a that money or i did everything i do is towards building value in the company long term and i i pay as in at a personal basis and that's why we do fact that i think about terminal value on first your bases what's the value of our company the by number sure that any what's the value of a company can be years without divided by the the number sure that seven years from now that's how i say us from my was a background every see out of every company should say that was anybody that doesn't like stock buybacks with stocks evidence should have their had a and self and any event on the largest shareholder in the company everything i do i am therefore allies with our shareholders everything i do it for the shareholders and believe me i put our shareholders are about myself and and before myself so having said that on like when we felt the all these parameters a thought five actually pay dividends and we waited for the right opportunity came on the come along and it came along with kobe we quickly pivoted built a fantastic lab and last two years results speak for themselves you know frankly they're pretty phenomenal tell me another company that ways you know and we re thirty seven have million dollars in january two years ago and now we have over forty million enough working capital
spk_2: and that's after hours
spk_1: spending tens of millions of dollars in stock buybacks tenzin i love you know be playing stock buybacks dividends and acquiring several companies that we're now going to build out that hopefully my goal is is the tardis into a multi billion dollar company that the gulf so he pivoted demonstrate that we executed obviously you know look at the numbers are the so you very briefly a revenue for twenty twenty to one hundred and twenty two point six nine of revenues that's an all time record in the thirty plus year history the company eighty have million that income all time record thirty four a point six by an adjusted ebitda all time record and we still have forty four point six million that working capital as a deterrent and as after all the accusations that are going to transform our company that we were primarily a coded happening companies covered and flu upper respiratory company for two years we are now a well diversified company it has been transformed moving forward as covered slows and i know that's why the thoughtful back and blah blah blah but i explain this ad nauseum or last couple months for anybody the watch their a remark bnd the are were not transforming our company with the underlying value from the other assets in our company are growing rapidly and the growth in value of these other assets is going for more than makes up for the decline in value are coated attacking business and the truth matters we never got a multiple on are called a testing business anyway so quite quite frankly it's apples and oranges is it almost doesn't matter and so you have to look at some of the pieces and is lot of value in the piece of our companies are are messing very briefly our manufacturing facility and you can go back for less roughly six personally to that given an update i'm most of subsidiaries or manufacturing is growing like wildfire the last into business is a growth industry right now combined with the fact that our largest competitor was acquired by private equity couple years ago they really screwed up the business or there are unreliable and several of the largest laws into brands in the world are all coming to us they've all got us to be their primary manufacturer other lawsuits are willing to sign one from prague they wanted to build out you know the equipment or and bill that our capacity some of them or even willing to invest in equipment necessary to build our capacity that's how much they are impressed by how we do business they are impressive or customer service or impressed with the reliability and frankly it's almost like they're definitely have one company from another country household name muttering want to mention the bretton right one of the biggest brands in this country they're actually base another country they they not only one to do the manufacturing for the minutes country they potentially wanted to do their lives and manufacturing probably so our lives luggage manufacturing business is going to explode a magazine about that of course are no guarantees by this is basically a fast as we can build the capacity that this is going to grow so just imagine a year from now we're doing you know it i put this in a press release i believe we were targeted to do by twenty five my revenues and twenty twenty four and our manufacturing well with the type of growth think about what's happening with could be worth i don't know could be worth sixty seventy five million dollars that does not allow this one this is the nobody pays attention so how's that working capital to be worth or the you know the hot market cap apple the company how ridiculous is as of now we get into the nebula genomic the are start up companies with fifty eight hundred million dollar valuation citizen price three years behind us that would have the relationships that we have they don't have the infrastructure flu as they don't have the business of the business model searched their stories off and yet they have fifty hundred million dollar valuation so let me tell you what nebulous worth but nebula is actually potentially growing even faster center manufacturing facility we are our goal is to be below cost provider in the country for whole genome sequencing imac when explaining what whole genome sequencing and i can tell you it is it's the heart of the future of something called personalized medicine whole genome sequencing studies your whole genome as opposed to competing companies whose products only study very small percentage of your genome would you take great france or three information local for health related information if you want high level health information and the whole country is going going towards find to be more healthy and wall of the research is all about starting with the whole genome sequencing assassin and figuring out how your genetic makeup plays a role in your health and so this is all in the first any this is like where the internet with for yourself and we're so perfectly positioned we have world we now oh george church the founder who that are advisory board with the shareholder in our country we have was altman equal equally well known out of stanford university there on our advisory board will working with them regularly a building our company they're introducing a full it's and a large company into the world i said before we are working meddling in this country but we are and
spk_3: abu dhabi
spk_1: and in the u a e and working with some of the largest our little companies working with some of the largest companies in the world on our nebula genomics initiative a lot more to come enormous potential and then our sovereignty or cancer test i can't tell you how excited i am we're going to help so many people say so many lies and make our shareholders an enormous amount of money that's the goal and i can tell you oh is since we took over the number of scientists and people and i got bob and with this have only further increase my enthusiasm and confidence in our ability to developer sausage you'll catch a test of people once to want to culinary i can going to need more detail explain it at the bottom line is we have ongoing studies there's a real possibility that we well is testing at towards the end of this year in the thigh free as a research use only test the cafe our goal ultimately if to get the insurance company the behind us back know with a c p t code with that cpt code we believe will be reimbursed thousand into two thousand dollars for test and our initial target is two million people to a bar to start to get to get enough leave once per year the main test time two thousand and two thousand dollars in the two to four billion dollar market in the country and we believe we could get the cpt codes as early as the beginning of next year we're working with key opinion leaders major cancer institutions who are all getting more and more involved in as and this is going to i believe lot more and more like a reality as the you're goes on and look at our market cap just the this is the how much of that is reflected in our market cap right now given the potential and and given how real nurses and getting the timeframe for commercialization and then finally we're working on the linebacker a cancer five how we're not going to break the bags and spend a lot of money on it it has enormous potential but as longer term five our our goal really is if life inside
spk_4: major form of
spk_1: sometime next year after we can play to save one study you some time maybe right next year so we want a lot of money on it says that it's possible be fed to licensing deal after the face on science was the entire more cap of a company know right now that something low rent for us because we're not going to spend a lot of money enormous reward and it for the icing on the case to everything else we're working on and then of course we have an effort you're a broad based at the viral that we will see potentially introduced into the marketplace and commercializing later this year initially we would sell it online and ultimately the goal to get into the retail stores we are experts and selling se viral salty sea similar to what we did did you know with all these and i personally was involved in the turn around and sell of the call these brands and we still have some the same we still have the same senior salesman john brennan has been an assistant for decades he kills that he has relationships with the number one national broker that we want read and with every major retailer and so there's so much going on earth oh with our current dietary supplements with license xl and from alleged which is actually gaining momentum as we speak and then once he has ever the are introduced the marketplace and then it is it's and that nebulous you know next we can introduce a test a whole genome sequencing tessa we're working on to do to restore and that could build into a whole range of health tests we could actually be a little leaders in providing health have in retail stores so there's so much in so many directions there's a lot of overlap he love synergies between albury subsidiaries and so i'm really excited about the future of the company any by the focus on us and called assessing company beer completely missing the boat that's going to be the least important part of our company down the road and certainly friends in the value or ice covered testing obviously has the revenues but we never got a multiple those revenues anyway so now we've other businesses off his you'll catch it doesn't have zero revenue that you and your by the other this year who knows what's the value of that such can be and then the kicker is we're working globally we have global initiative that we're working on to commercialize to develop and then commercialized or sausage you'll catch a test in other parts of the was just think about everybody the guess i started you'll cancer in the country catholic the get in every other country to it all starts with go i just gastroesophageal reflux disease that acid in your stomach it so many people get a huge presented to the of of the population average outskirts and then sometimes it develops into barges africa and one out of if you wanna hundred people they get our cytokines it's or than cancer and right now in fact we we just met with is one of the fights and flashlight today ah i search him and he operates on people time where the sausage or cancer and little telling me how excited for a test and how desperate that for it the industry and four cats like this and it's just sad right now when you get diagnosed with the south is your cancer and into that i seventy three to eighty percent of ha various numbers i'm sorry seventy nine percent of the navy for said i've seen five ninety percent of people diagnosed with a sausage your cancer diet south as you're careful as because you're diagnosed too late our test let's you know well in advance so you have a chance to do when ablation procedure to kill the precancerous cells before they become cancerous and to wait it's going to we believe it's going to save a lot of life so he will be things going on with the company i'm really excited about the future the company i want to cover a few out a couple of healthy items related to the numbers for those of you better focus on the numbers so que for reporting a queue for with complicated because we have five point nine million dollar accounts receivable right off the right was was related to testing we did in the first half of the or pressure which is the government funded and city so with actually pain for all the patients been tested the did not have insurance inertia people walking out on the streets of new york muslim didn't have insurance insurance with without whatever the case may be the bottom line is if we can collect the years and short from insurance company do we can collect the inserted into by the first it was pay all of a sudden that funding stop they gave us one weeks notice and then there was the promise that hurts it was going to be find it again we continue to have this went on for many months and so there was a real possibility that we were going to collect on stations and then at addition to that when herself finally became her was going to be funded we look yeah to potentially tracking down the information his patients to see if they had insurance even if we collected initially the complicated matter we're talking about tens of thousands have an ultimately we have a new senior financing we hired three a tacit senior level executives and are financing they all have see how decades the next ten years or more experience police any one of the three could be or cfr right now robert morris has or departments that heather engraver equally fantastic that we have a very strong finance same as they recommended to be conservative and to be prudent so we take the five point nine million dollar rival what makes a complicated is that were right at a fluffy around and even though it's it's it's related to caffeine activity in the first half of year when you know frankly we did five point nine million less revenue for five years it wouldn't have even it would be negligible wouldn't it wouldn't have been noticed because our revenues were so ridiculously large but a for sli because it's a year and here we report quarter that income number we would have to report it with a five point nine million dollar right off which frankly i think would have been leading the road with doing that we gave you the full your numbers that so you know var numbers you know we still the twenty one point eight million of revenues not counting of course you gotta cancer five point nine million but i just want to give you a a fair the picture on what a fourth quarter look like not counting the five point nine million we were reported one point eight million americans and furthermore we had performance payments related to our testing activities throughout the year which actually probably should have been expensive as the years at his the fourth quarter so because all that has a quarter you know we would have we had one point eight million and adding some of that had been expelled from your are letting some would have been significantly over two million or net income but we do have we we did accounts for those performance payments in the fourth quarter and so and then of course you have the five point nine million dollar right off which like now like to other things to mention very quickly why is there i see and i am so high actually it's because not five point nine million that that's the jump in our dna and finally our couch receivables while our count receivable or looks like it hasn't changed understand it's because was still doing ongoing testing thermal part of the council feeble frayed receivables related to nebula economics and parmalat manufacturing but of course the bark is fantastic but understands that as we get paid by insurance companies we have new tests that creates no caf receivable and as i noted there was a backlog because we had all these patients that we tested this is not like working walking into a doctor's office where you stop at the front desk you fill out all these forms give your insurance card it takes a few minutes it's all in the system seizure of people are a lot of a even more people walking up to it's has and getting a quick how the chest you know taking a quick search for them without the sophisticated equipment and without taking the time to properly collect replacing a insurance infamous so efficiency now we've now sounds were working with a couple of different companies one in particular another country was like fifty people working on this work it's waller county feelings about literally tens of thousands of tests and patients and are working for every single one of them and they're doing a fantastic job and i can tell you i've actually had a going just watching films before the quality such a great news for me and basically we're working through that accounts receivable very quickly out some accounts receivable why we're doing that because of the other day we have to organize the information get it through the insurance companies an insurance company takes for sixty eight weeks on five suppose it's it's high quality coffee table but nonetheless it'll take that forty eight weeks so it's always gonna be rolling where we always have no conceivable replace it all because it's a bubble having said that i believe it or county favorable is going to be suggest it's going to be less well report report first quarter second quarter to be significantly less what about is concerned about accounts receivable as a long winded way of saying don't be concerned about it at all it's coming down to reasonable level in addition to that we may be able to find insurance and patience that previously did not provide insurance that is not in our country feasible it is not in our revenues and so we may actually get a nice bonuses i'm down here from had settled not only do we have a squeaky clean financials with our new finance the team of experts in in addition to that we may actually have some upside and the coming colors and so i press the few quick questions are now or you know i never been speaking for about twenty five minutes i covered an awful lot i just want to review before you open up to you and i fear if i want to mention anything else i say i think i pretty much covered luck at the other day i personally have executed my entire career the shareholders and i'll be for long time know that the people that i hire are people that execute and i tell them that and you know it for every three senior level people that i hire one what south of the one that works out for supply go through an incredible screening process so the three are all great but having said that you never know until you hire somebody and so we've gone through a transformation in terms of america came over last couple years where to get better and better and better we have a kick ass
spk_5: madison see
spk_1: he literally notice or finance department while the people in it it starts with my son jason carcass i had of i see is amazing sergio mariah out what we live have so much not only in the lab but also on the bio pharma side is the most loyal people in the world i've worked with the last couple yourself dealer has been an unbelievable addition to our team he's he's ah leading the way and other dhabi he has a multi year relationship with a very big players in abu dhabi in around the world and helping us become a global company i don't wanna leave anybody out certain seen her some of the senior people we hired a great guy said latvian who may become a senior executive right now is a senior adviser to everybody working virtually full time at a few decades of experience as an entrepreneur in the city of other small caps about the states companies i'm sure i'm leaving somebody out i apologize if i am but i'm really really excited about the team that we have and i'm really excited about the assets that we're not developing it is my destiny to build a multi billion dollar company and i believe that we now have the assets to develop second make that a reality and again i just want to highlight everything and i tell you i believe in my heart number one and number two if i tell you are working on something we're really working on it if i tell you we're working on local initiatives initiative our little companies really worried about global initiative so please stay tuned i think that a lot more to come and without and yes i would like to open up the questions i hope that there's some questions line up i'll have it like a real
spk_0: thank you very much we will now begin the question and answer session to ask a question in a press start than one on your telephone keypad if you're using a speaker phone please pick up your hands before pressing the to withdraw from the question do prefer star and him and at this time they will pass momentarily to assemble our roster the a first question comes from me china with h when we go ahead
spk_1: thank you for taking my questions my first question is could you common and the current trend of copy testing at your lap dark souls it's obvious that flowing i think it was lab labcorp one one of the largest labs and country saturday spectacle itself to be that like the percentage you know what's interesting about our testing is that we'd like it new york city with tense as people are still i'm painfully walking up for any has to get tested some people when it's convenient for them they still want to get tested does not like the testament go anyway so different than when i walk into the gym and are still people wearing masks i saw people are still being cautious still it if you get covered you know the best thing you can do it gets tested article from the yeah covered if you do with the quarantine people finally realized that vaccines something that you from getting coverage and now it's coming out that actually might actually be more dangerous than getting covered and some people are still getting tested or cathy is clearly propping and is becoming a less and less significant or important piece of a company certainly are you from of value proposition point of view i highlighted all the other divisions in doing so much better so there's no question that the trend in as you find continued rough having said that you know i have to figure out what i can or cannot say right now so good i'm sorry for for of and with although incompetence and were we when we got into the business we blew a ninety five percent a lab and i bet with the for me ninety five or even less color coded testing is dropping it's it's not dropping as much as it is in the industry i apologize he that i catch us when we don't give the future estimates and we don't get more detailed information i hope that answers your question of the best i can do on confidence
spk_6: it's not you mentioned that use split nutrigenomics to grow more than one hundred percent in two thousand twenty three and also the manufacturing six subsidiary to grow up to one hundred percent you you to as so i don't know if you can provide some general comments regarding the
spk_1: total revenue top line grills in tony tony three shorter's of you know machines are computed sometimes
spk_7: sure so
spk_1: with or formalized manufacturing i and i don't have the exact numbers there and i don't know that we reported and for don't want to give numbers that were not reported maybe i'll do an updated press release i know farm life i believe of thought my head we did about seven or eight million in revenues last year and our goal is about twenty five million and twenty twenty four and i think that we will continue to grow up to twenty twenty four quite frankly i think we could do fifty million and as pick we have demand for a fifty million dollars a business annually if we had the capacity to serve a matter of how quickly we built out the capacity so we're starting with were buying individual piece of equipment right now said are ramping up as we speak a larger pieces of equipment a whole new laws in fly so we're building saddle huh often in the fourth quarter this year's or fourth quarters really going to jump one such operational for numbers are growing right for cassidy it's not clear exactly what or numbers will be this year they're going to grow significantly this year or between twenty five to where we did seven or eight million you know right now are targeting twenty five million or approximately and twenty twenty four ld somewhere in between and for nebula genomics is concerned that a little more complicated because people water test and then sometimes it all it takes them a while before they said in the test to be processed in some cases they i felt for the subscription really really makes money isn't the subscription will sell the tacit class that that's how we will continue to be the local provider holding on to the discovery nobody can compete with and decisions for failing to isn't going to float is no question about that but right now the were business model works is when you purchase a test we're falling apart from my class the real money is made on a subscription although if you don't said it and that we make the money on purchasing it's have battle subscription but we have process has a lot of money to make a lot of money but in any that we don't get the but the revenues for the subscription until they send the test and so there's a lot with the for revenues the other thing is that other was historically the lifetime subscription we have food but the revenues are the three years a lot of different rabbits i think we have thick that issue now we have changed the agreements that you sign when you purchase test so that we will be able to but the revenues the same within twelve months of parking see not a lifetime subscription will be a m m it's really kind of phillies and accounting it's you were we sell a subscription we get the money up front or we can profit is revenues and tell the way he provided the service or that subscription but now we're working out in a way we're actually getting paid for the set up as opposed to the ongoing subscription so at any that i apologize and sharing a complicated def accounting matter and we're working through that now and i'll get more details maybe not in a press release that's what i can tell you is nebula genomics numbers are growing dramatically i want to say that we have a target
spk_8: i am
spk_1: i guess advice i don't know if i'm allowed to say that you not let let's move on to next question but suffice it to say our nebula genomics is probably growing at an even faster rate than or manufacturing and i would say that our revenues and nebula genomics will be are going to be greater than or manufacturing revenues this year how much greater i just want to get more specific five nebula genomics is the type of business you know where we can be doing one hundred million two hundred million dollars in revenues are more if they could be valued at a billion on monday and i'm not saying we're still on it then but certainly i think it's worth a lot more than was rather than in the stock price today i'll nice question is the opera expenses in the fourth quarter to to be significantly higher so you expect to maintain this are pretty spouses level twenty twenty three and also the have separate him capital to do that will continue to buy back shares quick great question so forth i will never buy back shares a with focus on jeopardy it's number one the by of shares
spk_9: it is nice
spk_1: a significant relative to the amount of working capital and didn't catch that we have you know we have a significant amount of cat our bucks and are networking cobbled over forty million sold by backstop doesn't really play a role of number one number two as mentioned out with the fourth quarter or the that one time as dna a off his one hit the fourth quarter which made are operating expenses was hi i am i make a point to be very very efficient with are operating expenses or one we had performance pay off with shows that we're going to find spread around them out over the you're going for this post negative hitting the fourth quarter by because those perform faith of payout for paid out the fourth quarter pay for the fourth quarter that showed up in our fourth one which really understates how stronger fourth quarter really was but having said that the bigger expenses the actually an eight hours and one time for granted as i finally for if anything we're now in the opposite position where we have done testing that is not on our buffs that is not in our accounts receivable that we believe that we're not going to find insurance for somebody patients because there are there ways are companies that can do research blacks find insurance and patients that have been tested even have any provider insurance information and we are now starting to uncover that information so if anything operating expenses to the last guy for the same time that our we can have some surprises in collections what if they're operating expenses are going to be less money like to see money just pull a second on that same as we're building for five subsidiaries have enormous potential or formalize we're building although our our revenues right such a fast clip that can be profitable no matter how much we spend and benefits question of how much do that with equipment we parted can be capitalized on how much of it is going to be fair we have an enormous amounts of equipment that gets appreciate it very very quickly even know that equipment could last twenty years the kids appreciate very very quickly so lot of the you know or at least a knife has expenses are and and that's it's a question of building our businesses so we're growing at a rapid rate we're building businesses i think i'll finally could make as a multi billion dollar company so you have to put in that respect and i can't say exactly what the operating censored but i can tell you see amount of management we have over we it we have pales in comparison to the value of the businesses that we're building we'll i really believe we're one of the most offensive efficiently runs more kept development states companies are you ever come across and that's why all these other companies are apple two years ago sports with or capital or stocks trade down ninety percent aren't coming back can't raise capital we did the office every dollar that we felt we generated and created two or three or five dollars about and that's why after we re capital two years later with a lot more careful the will be raised two years ago probably not only fantastic the is making only fantastic back with it so are operating expenses yeah i know you're an analyst and you're gonna get his numbers are are are offering fact is you have to take out the us you know which one time as the performance payouts will be spread out over time it's a hidden for for the future so i would not take our fourth quarter numbered say those are operating expenses
spk_6: or not
spk_1: okay thank you
spk_0: that is what you do some oh thanks so much the following are properly really appreciate your support and thank you so much for the question mk can we got in the next qualities
spk_10: yes the next question his friends hunter dynamic with diamond equity research has
spk_1: firstly congratulations on a recent progress on can you provide more details on the a yields diagnostic tests and potential economics yeah it's great sex excellent question so far from a weekend commercialized this is a cash only test but until the key opinion leaders and cancer institutions and insurance companies get behind you the question is how effective will we be and distributing that tests and therefore even up and commercialize it later this year i've no idea what the numbers i'm certainly not going to jacket or rely on revenues from this year from a calculator and it'll be a good way to start we might hire some sales people to get the difference off the ground but where the real money is why we get to cpt coach or and again as the cpp codes cpt codes where'd you get reimbursed it's based on the complexity of the test we believe we estimate that the cpc code will potentially reimburses for thousand to two thousand dollars
spk_2: right now oh one estimated the tests
spk_1: queso under five hundred dollars so that means you know the growth of marks could be anywhere from let's say fifty to seventy five percent however once we start doing a test and volume it's possible that tesla costs or three hundred dollars or two hundred fifty dollars or even less and at that point the growth profit margins become ridiculously large and again we're going after birth mothers over seventy million and ah studies performed per year a specific to the eyes and sober fifty million i only focus style the first two million which are people with our to sapphic against that understand says can be performed on more people to just people back to topic and so the starting point is the go after those two million for the get it and duffy every year and understand in an to be they're removing biopsy seven or eight tissue samples were simply take a sliver of a tissue sample running it through our test to predict whether or not you're going to get us off a deal cancer if you have better facade to continue as you of what out of fifty or one at a hundred people get a savage your cancer that have started out as i mean i sound like a lot unless you're the person bad soft also you think oh my god i'm a guy hard to think about your the person even if you had to pay cash you wouldn't a thousand and two thousand dollars either know you're going to get us out of you'll cancer down the road and you can do and ablation to destroy the precancerous cells before he goes up and you'll get or when you want to know for piece of my know you know not can go savage you can either way who wouldn't pay that thousand and two thousand ah especially since getting into the anyone from an insurance companies points of view we believe his way to be motivated because people right now that are a diagnosis our topic of you're getting dumped the beach or video which costs the insurance company two three four thousand dollars and they get him every year year after year after year in the insurance company as one of the insurance company rather pay a thousand or two thousand dollars one time la sell for the people actually get us off kids are and we can prevent them from getting a savage your kids to think of how much money that facing sorts of is so we believe that the insurance companies month are quite of you are going to be motivated to provide us and fifty seek out and the way to get the cpp coach is the get a key and team leaders and cancer and behind you that's what we're doing right now you're in a guess that's one of the building right now so when you read about how our scientists are going as a digits few weeks got to present their findings and are soft a deal cancer tests as easy as these major conferences that's all about building momentum and getting the key opinion leaders and captured sitting behind you and love were involved male clinic in the united states i mentioned that was a working globally which means that we're working with major institutions and companies in other countries that are just as big as male clinic and so i that's only the tip of the i forgot me and got listeners as there may we may be developing a even more effective it easier to use test that could be done and more than just people with industries the as potentially to be done in a doctor's office and it is the potential of this test is enormous and i can just tell you we have a phenomenal relationship with doctor hardly as mayo clinic my same as it speaks to him i almost a daily basis we just met with a castro sergeant last night who is usually behind the tests and he's just as excited and we're now working with healthcare companies and other countries sword fight about the tests so there's a lot the highness the numbers have enormous potential but understand it's development states such as it's no different you know the a as cancer drugs that's been under development for ten years and then one day to commercialize it also worth billions of dollars we're i believe in the eighth inning of developing our topic you can't use it
spk_10: i hope that gave you some perspective of i appreciate question
spk_4: how did you have another know it it was adapted to it definitely did one yeah one more but no i agree and ah studies are sort of the standard of care so i mean i think it's it's definitely a needed offering arms shifted shifting over to nebula i know you recently announced the pricing you're looking to differentiate on lower price can you comment on other aspects are you going
spk_11: to differentiate other than price and how much price you view is a component of consumers purchasing our genome sequencing
spk_1: yeah so this really two components his price and there's turnaround time and reliability and service our lab this happens have better turnaround times liability services berkeley any lab in the country which is what if we went over all because it was two years ago why business exploded and we are performed ninety five percent labs and because so we have that down pat having said and we are building out or genomics lab as we speak at oh by the way i did mention to everybody i just walk into our lab downstairs in the first time in a few weeks at blow me away the carpeting is it all the equipment is that we have a full built our clinical lab it's absolutely beautiful blew my mind heavily how nice it is and and same thing happened with our genetics lab you know genomics lab and i feel do the whole genome sequencing again are these labs a really impressive anybody in the garden city new york area for one of the that i promise you will be an impressed i look at sixty labs the choir they will slap in the last year or so or paled in comparison to well as so number one from a lab point of view pants down people are going to come through our company to do whole genome sequencing an engine alex you know the perfect number two price certainly for the university's prices t and also the direct to consumer prices take the reason why the major companies like five remaining assets we got caught never got into whole genome sequencing that because it's snorkeling success and you can't sell of a test the consumers as as as at a thousand dollars that it's not going to pay for and so the whole genome sequencing so expensive so they instead have a built their whole model based on a technology that study the very small percentage of your genome which is why you need to get fantastic ancestry information especially when you test as many people they have around the world you tie altogether together you don't have the study a big percentage of your genome to get very i food etc information fight as a try get into health related information problem is they're doing it with it's hasn't studied a small percentages you know which maintenance not going to give you the type of results that you get with whole genome sequencing it's at like apples and oranges technically our whole genome sequencing test provides more than a thousand times more data points san what these other companies for by with it's a select number one number two universes doing research clearly they're going to have a whole genome sequencing that's not even a question but with universe is your on tight budgets and so it's critically important to them one at a certain budgets they want to touch with many people as they can within the purchase price is critical
spk_12: so first of all the consumers and consumers from can pay a fortune so if we can provide a whole genome sequencing sets that class how can anybody compete first of all because of our relationships
spk_13: with
spk_1: the global leaders we literally are working with the global leaders who in turn want us to be their number one lab in the united states rep and so we literally are getting the best feels have any company in the country for it not only for their equipment but for their considerable sort of the day consumable what right price the we don't believe that there's anybody that can actually process the whole genome sequencing test as inexpensively if we had and then and sell it to the consumers week we can sell at a cost because of our model or subscription model where we tell if it's we make all the money on the subscription so i don't see how anybody can beat us and then as far as the going overseas the concerned i say eighty percent of the fish is actually based on price so clearly we're going to mark up the price of we're not selling them a scripted we're going to market the price of we make a profit for even and marking up the price for someone to be able to offer to them than anybody else and
spk_14: meanwhile the university's doing research in profile precision medicine that is exploding when the first and in the amount of research settle into the ongoing in the coming years is going to be ridiculously large again it's like the internet twenty years ago we are so well physicians are company so well positioned know it's like if you found
spk_1: the leading your next company twenty years ago you know in advance and users wrote it at you know and for a few years it's amazing how much money when was the same thing with what we're doing now in the field the genomics with their whole genome sequencing were in the first city where leader in terms of ah a lab at our reputation or turnaround time customer service and inevitable what with largest companies in the world for providing us with the least expensive consumable so that nobody can compete when a and then addition this is that we're working on potential strategic initiatives when some of the largest companies in the world that what a partner with for the really impressed with our library and other strategic initiatives or enemies a global companies that wants a partner potentially partner with it's not only a nebula genomics but also with up as you catch yourself and also their linebacker mm i didn't want to long white label our whole genome sequencing says that we're going to be selling into retail stores they may want to take our test our packaging let us do everything because we're actually for that and they wanted to ship it and distributed for them and other countries so it's really for ranging and i really have leverage is or the office of a company
spk_10: hope that accurately answered your questions
spk_1: no it is it absolutely did i think it's a it's a great growth area and like you mentioned it's it's just the whole industries and hyper growth rate so your ideally positioning yourself it it's a very are you know high growth arena arm and the market some again thank you for take my questions of course has a tax on my said three artists in our company as well
spk_0: and as a bachelor or next question or please
spk_6: can the next question can from patrick patterson retail investor pizza hut
spk_1: morning to yeah thanks for much finally signed your work working has just sounds great
spk_6: thank you are you're quite welcome and sexy continued support that
spk_1: or ten i want i asked a question about how to do not mix also some it's pretty clear from just your discussion just now this
spk_6: never genomics is just a really important ingredient in the company's future and yet it doesn't even seem to be included in our market cap to stock price i just wonder if you're given thought to what we could do to try to
spk_1: literally uncorked nebulous cannot values could you talk about that song if you're researchers your great great question edited for thing is it as that's because i was just added to discuss about that this morning oh look there's a lot of strategic initiatives that we're working on there's a lot of things are doing with our coffee when when you build a company that has assets with big that's all it gives you a lot of options and what to do with those assets now in my mind if i faced an asset is worth hundreds of millions of dollars and negatives out that the or hundred million dollars of i think it as a rebellion the dog like the opportunity for the my on i think somebody asked me i was on us virtual nine the old are rochelle call and somebody asked me would be tell yourself a gym cancer test i can be very said a hundred and fifty million dollars or two hundred fifty and like i wouldn't consider selling you're right now why you know could could you imagine
spk_15: yeah amazon or tesla you know whether whatever the market cap is ten years ago somebody said i'll give you all fifty percent more for it's know there were been forced to take it off if i really believe in the assets that we're developing i really do why would i sell any of a mil so with something like nebulous honestly i think that we could sell the business way
spk_1: right now and create significant value for shareholders today but i say sad a year from now nebulous can be worth romantically more quite frank i think i mention of once before i was having a conversation with george church was world renowned and genomics
spk_16: you could a retired at all the company to sounded you know he's a professor of up at harvard and he does that because of his love of genomics he doesn't do it for money
spk_1: and you know how to i don't even know what i want to figure out a farmer he's he's he's made enormous amount of money probably more than a my cup of coffee and like one day was joking with a minute during whatever advisory board meeting and i said we might we might protect we have a buyer for nebula genomics of one hundred million he's a don't you dare tell know below genomic for one hundred my adult like he was mad if i go you even consider it as a no no no joined some worry when i go into so i hope that gives you some perspective that at the rate of growth and you gotta understand or the last two years the market has not put a multiple on our revenues or earnings because they didn't believe that they would be long term and their request you know it's a foreigner it's actually last your walker said a but expected we did significant more doesn't offend anybody expected last your goggles anybody expects it and yet the same time we never got a multiple those are they are those revenues and i've ever on the other hand i believe that as nebula growth is year and then numbers really starts apart from a small base to a bigger base we could get an enormous multiple of revenues out a company like that the on especially when it's parents have no revenues it all their fifteen hundred dollar valuation so the type of valuation so much hypothetically hypothetically we can i feel the i happen to be working on some other effects that i want to do first but hypothetically there are companies that i think with alibaba just announced the stocks up based on the fact that they want to split up into six separate companies you can unlock a lot of value without the us so it is possible down the road that i can i feel nebula i'd rather do that and sell it if i think it's to be worth so much more than once you in three years i wouldn't want to sell us because the company does need the money right now of shareholders the know for a long from shareholders and i want to build value over the next two three four five years i don't want to sell it shorts because we can make a quick fuck over the next week so just it gives you an idea of how i'm thinking i'm thinking for boyfriend shareholders but having said that long term that have three five to ten years it can be wonderful
spk_17: two years with what we're working on so we just had to wait and see how this plays out but and i feel of nebula is why is a possibility i would consider that before i'd consider fell just because it has so much potential and it's growing so quickly and also from your done
spk_1: thank you cannot reach that it
spk_0: yeah i really appreciate your continued support pattern i really do thanks for the call and day onto the next one please
spk_18: the next question it's from fred mcdonald private investor go ahead
spk_1: is how you doing excellent site sexes different calling him and and for your sport fred how can i help you to be yeah can you please reconsider you talked about the global opportunities to be smart
spk_19: the didn't previously you indicated eg going over the united arab republic in a couple weeks is this to close a deal with be smart witty forty two
spk_1: so actually as a massive sam dealer has been his actually tries you up for a nebula and has tremendous relationships with companies including fee for to healthcare which was acquired by from the bottle over to the forty three billion dollar company and they are very very big in health care of the primary focus of there's there are huge and genomics they are responsible for the emeraude a genome program which is a test one million residents in the uae for have to do hold the don't see i think and so this is a prime focus of the earth and then if the same time they have a tremendous lab with a sword i don't remember last summer's over in abu dhabi them american six weeks ago i swear the lab at it's really interesting we're building our our lab here almost unparalleled really interesting the equipment us in both and then what's an interesting coincidence is we have very specialized equipment that we use the door sergio cancer tested or what a coincidence he points to your happens at that exact same equipment and so edgy understand the point to healthier isn't the only large company over there were talking to him and so there's a lot going on both with nebula genomics as well as weather with our be smart as off a deal catcher test on ice it's it's it's it's not appropriate for me to get more specific what i have something two now so analysis i don't want to mislead anybody i don't want to say we're better now it's a big deal or there's some big deal or anything like that i'm i'm just working and is working developing the value of our assets is a lot of opportunities were working on a lot of opportunities about what i can tell you is what we're working on number one is very real and number two everyone around us from key opinion leaders the cancer institutions to large healthcare companies are all interested in what we're doing so all taking our cloth they're all talking to us and we're discussing strategies with all them as i mention i just spoke to literally deserted of my office last night was a i g i surgeon who were super excited about our that you'll catches us and at the same time luck people going to stop and you can't around the world every everybody gets guard sentence in this country edits as growing at a rapid rate especially on with the health or apparently people the gain weight of morgan as you regard and and it's it's taking lots around the world and it's a big problem over the way as enough in the elementary or middle east or north africa that whole area as a the numbers are taking off for our guard the numbers are taking off for bad
spk_20: it's off against and obviously to take it off or suffered your catcher
spk_1: as a wouldn't the leader and abu dhabi when he loves to take credit for introducing and as soft as you'll catch a test says that save thousands of lives and a be great have a great motivation and he does have happens the back the largest healthcare company not and lesson he backs largest i i have a dhabi as others lot going on over there are we have a lot opportunities and a follow up on all of them when i have more to announce i promise you i will update or shareholders as quickly as i can i hope that answers your question appropriately i really don't want to get people to
spk_21: i did about to say thank him for propaganda softly so
spk_1: they said set hundred and one more question the kinda did smart technology to be used in other procedures so to be more technology is is literally taken a sliver of a biopsy are a tissue biopsy we're actually working on other technologies at and what's interesting about it what it's actually doing were studying and and it's it's proprietary unique proteins what happens is
spk_22: and everybody has a mix of protein
spk_1: people with that develop a top of your cancer the ratio of certain proteins changes and so the key is to find the right protein markers it's a what i understand nobody else has uncovered the protein markers or we're currently working with those same protein markers painfully be used for more than just a suffered your cats are well first of all i can be used for more than just passing to predict the south of your cats are ultimately understand more about of protein markers could help us develop a therapeutic to threes hats off a deal catcher that sort out way out there that sort of say so and then also at the same time and parallel
spk_23: i haven't even yeah this is not something i've i've even gotten into detail ah yes it's possible
spk_1: we could develop the test
spk_24: the work in a different way where we don't even need an endoscopy worth the procedure that could be done in a doctor's office that i don't want to go into more detail than that now i'm totally about down to the first others two or three different ways that it's it's apogee of yes it's as could play out for have enormous potential
spk_1: doesn't exactly as your question but i can tell you that that's what will focus on it further
spk_0: great thank you ted
spk_1: oh you're quite welcome i think that includes are close calls mj as anyone else no my questions in the queue at this time i'll turn it back to you for closing remarks the catholic so left i we ended up this is an hour call which is perfect that's what i would have targeted i hope it in thought too much i hope everyone got an idea what we're working on everything working at is real there are no guarantees in life but if you're going to best and smoke development phase companies at least you're investing in a management team that has historically executed i'm also the largest shareholder the company so you can bet on going to continue to execute on behalf of the shareholders we have a fantastic management team and place we have a demonstrated history not only of last ten years but of last two years of executing and now we have horses in the race that we never had before we have assets that we never had for that have enormous potential we executed the only time we had assets all these only took it over i don't even know about any potential we turned around and southern fifty million i'm working on now has ten twenty times the potential of what we did we call this and then with our lab again we got into the business we few literally from the first week we were in the business is ridiculous how much does of the dead and now we have all these are for now said and you can bet with a set against us but we're developing all these different assets and i'd be surprised if at least one of these assets doesn't turn into something really big and the truth of matters i don't see why all the assets are going to for and something right
spk_0: and with that i i really appreciate everybody joining the call today

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