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Operator
Ladies and gentlemen, thank you for holding. We will be beginning shortly. Thank you. Good day and welcome to the ProFace Labs second quarter 2023 financial results and corporate update. All participants will be in a listen-only mode. Should you need assistance, please signal a content specialist by pressing star, then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the call over to Ted Karkis, CEO and Chairman of ProPhase Labs. Please go ahead, sir.
Ted Karkis
Thank you very much, and thank you all for joining today for our second quarter conference call. Look, I like to talk a lot, but I also explained an awful lot in our press release this morning. I really don't want to read the press release. I'm going to presume that you've all read it. Having said that before, let me start by reading the forward-looking statement. I would like to remind you of the company's safe harbor language. During this presentation, we will make forward-looking statements, including statements regarding our strategies, plans, objectives, and initiatives, and underlying assumptions. While we believe that these forward-looking statements are reasonable as and when made, forward-looking statements are based on expectations that involve risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include, but are not limited to, our ability to obtain and maintain necessary regulatory approval, 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 filings will be SEC filings. This call will present non-GAAP financial measures such as adjusted EBITDA. Reconciliation of these non-GAAP measures to the most comparable GAAP measures are included in the earnings release to the SEC prior to this call and available on our website. And with that, I always like to give a couple of shout outs at the beginning of the call. First of all, Renmark does a great job on the retail investor side. We do a virtual non-deal roadshow or presentation. We're currently doing them about once a month. So any shareholders on this call that ever want an update about what's going on with the company, I don't provide material non-public information. I have to be very careful about that. But I do give overviews about our company, what we're working on to give you better perspectives. and to understand how I'm thinking. I am an open book. I really am here for the shareholders. I'm the largest shareholder in the company, but I don't just do this for myself. I do this for all the shareholders. I really want to continue to build value in the company. I and our management team have had a history of success in doing so for more than a decade. Really, honestly, our management team has been incredibly successful over the last decade in building value in our company. Even now, you know, with their stock going back a little bit today, we're still up significant multiples over the last few years while paying out a significant amount of stock dividends. So anybody that's been with us, first of all, over the last three or four years, the returns have still been phenomenal. Anybody that's been with us over the last 10 years, the results and returns have been even more phenomenal. Interestingly, we're at a point in time right now where My expectations and what I really believe for the future is going to be significantly greater than anything we've accomplished in the past. We have support from not only Redmark, but also we have a number of analysts that follow us and investment bankers that we're working very closely with. Think Equity did a phenomenal job in raising capital for us a couple of years ago. They also have done a great job in showing us opportunities over the last couple of years, acquisitions, some of which we made. We probably reviewed a couple hundred acquisitions, targets, and we picked the absolute best. We cherry picked. And those are the assets that we're now developing that I'm going to be talking about shortly. A.T. Wainwright also does a great job of following us on the analyst side. And then also Joshua Levine at Third Screen Research and also Diamond Equity Research has done a phenomenal job recently of covering them. So if you want to follow our company, you can also follow the analysts and their updates as we move forward. So that's a little background. I really don't want to read the press release again, but I really want everybody to be on the same page so that you understand if you're going to be an investor in our company, what to expect. As I mentioned in the press release, you know, we turned around and sold the Colby's brand many years ago. From that, we then pivoted into COVID testing. We knew that when we pivoted into COVID testing, It was not going to be a long-term proposition. However, we decided to get into the business in late 2020. We bought a small lab for $2.5 million. It's probably only worth $400,000. That's sort of the running joke. And we built a $200 million business out of that. And we, quite frankly, in the first quarter, we were in the business. In the first quarter of 2021, we outperformed 95% of the labs in the country. The reason I bring that up It's not because of anything having to do with COVID, but it's incredibly similar to what we're working on right now with Nebula Genomics. Nebula Genomics, of course, was founded by George Church and his two PhD students five years ago. George had a vision 20 years ago. He's been a world renowned in genomics for literally the last 20 years. He had a vision that one day every single person in the country would be tested, potentially every baby. when they're born, would be genetically tested to know about genetic predispositions and all the research that's going into your genetic predispositions. And I'm going to get into that a little bit more. But what's eerily similar, and the reason I bring up the COVID testing, because we're no longer a COVID testing company, the reason I bring it up is because we got into the COVID testing business after not knowing anything about the lab business, but we saw an opportunity And yet we outperformed 95% of the labs the first quarter, the very first three months that we were in the business. And over that first year, I don't remember what we generated, but over those first two years, we generated over $200 million in revenues. So what's interesting is we're now in the exact same place with Nebula Genomics. We've just built up this state-of-the-art laboratory. So of course we have a state-of-the-art high complexity molecular laboratory that not only does COVID tests, it does all upper respiratory. We just built out a fantastic clinical lab. And now we have this literally world-class lab for doing genetic testing. And we provide whole genome sequencing at a lower cost than anybody in the country. So just imagine, we're in the same place now with Nebula Genomics that we were with COVID testing two and a half years ago. The difference is everybody thought that COVID was going to last, you know, for six months or a year. It ended up lasting for two years. Now, by the way, there's another round of COVID coming around, but people aren't taking it seriously. They're not testing like they were. And I'm not focusing on the company on it. If we get some COVID testing, great, but that's not the focus of the company. But my point is now we're getting into something where we're literally in the first inning with genetic testing, and we're the leading lab already. Now, instead of getting into a business where we have no experience, we have three years of experience in the lab business. And you've got to understand, when we first started that business, I hired a bunch of people with great resumes that were not great employees, but they helped build the lab initially. And then I worked on weeding out the weaker employees and hiring better employees. We have a team here that I would put up against any lab team in the country. And we just had an, uh, a inspection and I don't know that I'm really allowed to talk much about it, but it went fabulously well. And I can't tell you the compliments we got from our inspectors regarding our lab team. And so now this, what I think is a world-class lab team is focusing on building a world-class genomics lab where we're essentially a leader in the space. So we're a leader in the space of selling whole genome sequencing direct to consumers. And maybe more importantly, and that's really been sort of the focus, We're now also a leader in providing the sequencing to businesses. And so we just built a lab. We're literally just finishing the validations now. We're literally just starting to do testing in our lab. And the types of calls and inquiries we're getting, you know, it's really interesting. My son, Jason, who's the president of ProPhase Diagnostics, he started the lab business with me. And we decided together when we were exploring it back in 2020, and we were traveling the country and looking at opportunities. And, um, we literally were just talking in the last two days and like, oh my God, this is deja vu. The sense that we're getting from the interest levels of companies that want to do business with us is eerily similar to the sense that we got about the COVID business. The difference is. The genomic business, we're in the first thing. This is a business that's going to be a huge growth industry for, you know, years, if not decades to come. All the medical research is going in this direction towards personalized precision medicine. And, again, for those of you who don't know, and most of you probably do at this point if you've been on my other calls, personalized precision medicine. It's all about studying your genetic makeup and how that plays a role in diseases that you're predisposed to, the risks of the disease, The risk, what we call polygenic risk scores, which are the reports that we provide to you when you get tested, tells you about your gene mutations, tells you about diseases you're at high risk of. And then if you know you're at high risk of a dangerous disease, hopefully you'll do things preventative to prevent you from getting that disease. That all starts with knowing your genetic makeup. Maybe more importantly though, if you get a disease, how do you treat it? Turns out drugs work differently on different people, depending on your genetic makeup. The research is literally just starting in this field. And in order to do this research, you need data. That data comes in the form of whole genome sequencing tests. And that's what we do best. So what's interesting is not only do we see opportunities in the United States, we are also seeing opportunities in other countries. We just have to decide how much we want to focus on the other countries versus how much we want to just focus on our business in the United States. So we have a direct-to-consumer business. But what could be really explosive, and the direct-to-consumer business has obviously grown. We're growing over 100% year-over-year, and honestly, we're just getting started in the direct-to-consumer business, and we're growing 100% year-over-year. And as prices come down, that only helps us even more because as prices come down, we're making our money in the consumer business on selling subscriptions to our library where we provide the polygenic risks for it, and we provide updates twice a week on all of the clinical research going on around the world. some of which is related to the disease that you're at risk of, your gene mutation. It's really interesting stuff and our subscribers love it. And the profit margins are very, very high for the subscription. So that's a great business model in and of itself. But the B2B model, the volume that we see, the potential volume that we see is enormous. And so we built out the state-of-the-art lab, but what's interesting, I am spoiled, and we're spoiled by when we were doing COVID testing because the amount of tests you can do on one machine in COVID testing is quite large, whereas with whole genome sequencing, it's significantly less. So for us to get the kinds of volumes to do the kinds of revenues that we want to generate means buying more equipment and building out potentially a larger lab. The only reason we would do that is because the potential demand that we're seeing is awfully significant. So right now for the lab that we have in Garden City, I see that most of that capacity is going to be used up by our current customers and our B2C business that is growing. But if we want to do a substantial B2B business, we're going to want to continue to expand. which is a good thing because we can make an enormous amount of money and we won't have success just in the short term like COVID testing will have success in the long term. So I'm happy to talk more about Nebula Genomics in the Q&A if you want to ask about it. That's a little bit of background. I gave a lot more, I think, in the press release. I also just want to touch, people have asked me in recent quarters about our accounts receivable. So I just want to clarify that so there's no confusion. We're not the least bit concerned about our accounts receivable. So when somebody asks, you know, at year end, we had 37, approximately $37 million of accounts receivable. As of the end of June, we had 38. We'll overrate 38 million in accounts receivable. So everyone's like, oh, my God, what's wrong with your accounts receivable? What you don't understand is if that's 37 million in accounts receivable at year end, we already collected a 19 million of that. So it's not a substantial amount that's left. So, you know, we're, we're talking about from 2022, we're talking about, you know, about $18 million. That's not a $200 million code of roughly $200 million COVID business. We have 18 million left to collect. And so you understand why didn't we collect it? First of all, uh, accounts receivable it's with the highest quality payers. It's with insurance companies. So we're not really worried about collecting. The issue was with collecting the patient data. So understand we did, and I don't know what the exact number is, if we did 2 million COVID tests over two years, that means that's 2 million times we had to collect the specimen and we had to collect patient data. And unlike a patient that goes into a doctor's office that sits for 20 minutes with the receptionist and you get the driver's license and you get the insurance card information, and if everything doesn't check out, you don't even get to see the doctor until everything checks out. We couldn't do that with COVID testing when we were collecting specimens. Our specimen collection partners were basically setting up tents on streets in New York City. That was a big part of our business. And you just had people randomly walking up. You also had from HRSA at the time, HRSA was the government funded and anybody that didn't have insurance, HRSA would just reimburse. That all ended last year. And when that ended, you had people that still wanted to be tested. So sometimes they wouldn't give their correct information. They wouldn't have their insurance information with them. We would still test them. And now we're collecting on all that just takes time. But you have to understand we have to one by one go through every single one of those claims. So even on, you know, roughly $15 million, you know, we're talking about tens of thousands of tests and we have to go through each one individually. So we hired a company who were experts. I mentioned this a couple of months ago. They've made enormous progress. in collections and they had about 25 people in another country working on this going through literally every single claim so i just wanted to say um that our cash receivable is not an issue obviously as we're doing business and we were doing some covered business in the first quarter that created new accounts receivable and replaced the accounts receivable that we collected on last year so not an issue we're making a lot of progress in the accounts receivable and i'm i'm not really worried about it at all we did it right off the end of last year, a small write-off. I think it was $5 or $6 million. It's not a $200 million business. So we're pretty set there. Separately, before I get to questions, obviously I talked a lot without even covering a lot. Formalize. The potential at Formalize, our manufacturing facility, is enormous. What's interesting is when I first sold the Colby's brand, I didn't even care, I don't know, if they wanted to acquire or manufacturing facility, I wouldn't have put up a big fight. That is now becoming an enormously valuable business. I mentioned on a previous call that one or two of the largest lozenge brands in the world want to do business with us. Capacity is tight all over the place, and the most important thing for a lozenge brand when it comes to selling, if you're selling to a Walgreens, Walmart, CVS, and obviously we have a lot of experience there, critically important is that you don't have empty shelf space. When the buyer at Walgreens sits down with you and goes over the plan, they're responsible for every square inch of shelf space in their department. If a shelf is empty, if that space is empty, it's not generating a profit. They look really, really bad. So what happens is with lozenge brands, as with any consumer product, if you don't deliver the product on time, the retailers get really upset and they cut back your shelf space. And so we have major brands who need the reliability and we have the best reputation in the industry when it comes to lozenge manufacturing. And so we have large brands that want to do business with us, uh, that would be very profitable to our, to our manufacturing facility. And so we are now working on building out that capacity. Uh, one thing we're doing is purchasing. We already, ordered another lozenge line that's being manufactured. But in addition to that, there's other pieces of equipment that we can buy to increase our capacity, which we're doing now. And it's a wrapper and it's other types of machinery. And quite frankly, we never really upgraded to new equipment and never really built it out before. It wasn't a big focus of the company before, but now the potential is really enormous. We can go from a roughly you know, break even type of business to a business that literally we put in, um, or press release, you know, that could be earning $10 million. That's just on the new business plus the existing business. We're in the process of raising prices and also making our facility more efficient. So the opportunity at Formulaz is enormous over the next 12 months. And so anybody worried about us building value in the company, first of all, Nebula, to me, that's a layup. And we have this attitude with COVID, if you build it, they will come and they came. Well, if you build it in the genomics business, I can already see they're coming. And what's interesting is a lot of the companies you have, first of all, you have consumer product companies that are selling genetic testing. I'm not only talking about whole genome sequencing. I'm also... talking about the type of testing that ancestry companies provide. And they're only studying a very, very small percentage of your genome compared to all genome sequencing. But even those companies potentially could do testing at our lab. None of them want to be in the lab testing business. And what's interesting, particularly with academic institutions doing research, some of them have small labs. They don't want to invest in an expensive lab and have expensive equipment to do whole genome sequencing. They would rather outsource it. because they're only doing testing on whatever research they're doing. Nobody's doing enough testing individually to support building out the type of lab that we're building. And so that's why the opportunity is there for a company like ours. We now have a phenomenal reputation in the industry in the lab business. As I said, the inspections in New York, New York is one of the most stringent, difficult from a regulatory perspective, based in the entire country. And we are literally one of the top labs in the state of New York from a regulatory point of view. And I'll leave it at that. I won't talk more about the inspection, but it went incredibly well. And I'm really pleased with our lab. And so now we have this great reputation. We now have the best equipment. We're working with literally the leading global leaders in the equipment that is used They manufacture the equipment and they manufacture the consumables that are needed in order for us to process the whole genome sequencing test. And we have relationships with literally every major company in the world. George Church was a part of it. He made a lot of those introductions. A lot of it we inherited when we acquired Nebula Genomics. When we acquired Nebula, I don't know, two and a half years ago, they were already doing business with some of the largest. And we've now developed those relationships further. So I'm really excited about these two subsidiaries getting revenues now. And the revenue growth, I believe, is going to be dramatic over the next 6, 12, 18 months. And the earnings associated with it next year are going to be significant. And so we're using this year to invest, to build out the equipment, to build out the to purchase more manufacturing equipment, purchase more genetic testing equipment, hiring lab techs. I mean, we're hiring very sophisticated lab techs to build this business. And so you got to understand, yes, of course, we're going to lose money for a couple of quarters. We're hiring. We built out the state of the art lab. We have some of the best lab techs in the world now working at our company. And we weren't doing any genetic testing in our lab because it wasn't validated yet. So obviously, there are going to be losses short term. developing that's what it means to be a development stage company. But what's nice about us is the amount of money we're losing tells in comparison to the value of our company, our networking company, the value of the assets we have and the potential for growth. So those are two businesses that I mentioned, um, esophageal cancer. I could spend the whole call just talking about esophageal cancer. I'm not going to, uh, I'm happy to in the Q and a, everything is going really well there. We're working with an independent professional statistics company called StatKing that did a full analysis of all the testing we've done so far. And the idea is not to do more, not to run the clinical study any further than we have to. And how you determine the number of specimens we need in the clinical studies is based on the statistical analysis. So we have an independent company. right now calculating how many specimens we need to process in order to apply for CPT codes and in order for physicians and the various cancer organizations around the country and around the world to accept us for commercialization. And so we believe that with the number of specimens that have been coming in recently and that we're studying now, we should be in really good shape later this year. And so I'm just looking forward to completing current studies which have been done exactly the same as the studies that were done on the first specimens and so we are highly optimistic that we're going to get the same results and then we're going to be able to run with this and again i i think the topical cancer test by itself has multi-billion dollar potential happy to go into the numbers if anybody wants to i don't want to do it in my presentation but in the q a i'm happy to cover what anybody wants to cover so That gives me background. I want to stop. It's 1129. I probably spoke for a little over 20 minutes just to give you a little bit of background and update on our company. I'm happy to move this over to the Q&A. And I'll hand it back over to our conference call company to start the Q&A. And my, actually in my, there we go. My computer just froze. Okay. Okay. Vice Navi, if you want to start the Q&A, I'd appreciate it.
Operator
Sure. Sure. Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. Our first question comes from Adam Waldo with Lismore Partners. Please go ahead.
Adam Waldo
Yes, good day, Ted. Thanks very much for taking our questions. You know, you have a lot of very attractive shots on goal here on which you're working as we look out over the next year or two and pretty decent probability that several of them are going to score. But in the next several quarters, there isn't a lot of visibility, I think, for investors into the cash trajectory, liquidity trajectory of the company. You're sort of at a cash burn run rate of around 14, 15 million annualized based on the first half results. You have cash and marketable securities on the balance sheet of about $9 million. You could factor your accounts receivable. There are other things you could do in terms of, if you will, bridge financing if you need it. Can you lay out for people how you're thinking about bridge financing opportunities if needed? But more importantly, can you lay out what you see the cash progression, liquidity progression looking like over the next three to four quarters?
Ted Karkis
Sure. That's a great question. I don't know. I don't have the first quarter numbers in front of me. But when I look at our cash burn, I like to focus more on our adjusted EBITDA than anything else. Our adjusted EBITDA was negative, I think, 2.2 million in the second quarter. And it was much better than that in the first quarter. So I'm not sure where you get your numbers from. If we burn cash, it's to buy equipment. If we buy equipment, we certainly have the ability to finance that equipment. So cash doesn't become a major obstacle for us. If you're asking me, am I thinking about doing a raise for ProPhase Labs? The answer is no. At these prices, I... I don't know what's appropriate to say or not say, but I think Nebula Genomics could be worth right now more than the entire market cap of our company by itself. And especially if you include our networking capital, then just those two things. If we had nothing but Nebula and our networking capital, I'd tell you that our stock's probably undervalued. When you include our formalized manufacturing facility, You know, look at the type of numbers. I really think we could generate $10 million in pre-tax profits just from the new business we're going to. So even if we say to break even, but the truth of the matter is we're increasing our gross margins. We're increasing our pricing. We're getting more efficient. We're, we're, I don't want to go too much into it, but there's some short things, short term things. We brought in an efficiency expert. There's some short term things that we can do to even increase the profitability right now in our current business. But with the business that we're adding, And with the negotiations that have taken place, you know, I've been told that a manufacturing facility, that private equity loves manufacturing facilities and will pay 10 or 15 times EBITDA. So we potentially, and I'm not saying that FarmLaw is going to be worth $100, $150 million in a year, but it could be worth $75 million in a year. And then meanwhile, you know, more importantly, Nebula Genomics, that business is exploding and all the things we're doing. So if we want to do something creative, it wouldn't be raising capital through ProPhase Labs. As I mentioned on the call already, the cash receivable isn't an issue. Cash flow is flowing in from that. Also, since our COVID testing slowed, it actually improves our cash flow and our cash receivable going forward. because as their accounts receivable slows, you see the issue as I explained earlier in the call, we had significant accounts receivable at year end and it looked like our accounts receivable actually grew a little bit six months later. It looked like we didn't make any progress. We made a lot of progress. We collected on more than 50% of our accounts receivable, but we had new accounts receivable that was generated particularly in the first quarter from the new COVID testing business that we're doing. So now we're in a situation and understand we're paying a lot of expenses upfront when we do the COVID testing, and then we're getting paid on the backend when the insurance companies reimburse us. And of course, for the specimens that are associated with faulty patient data, it takes a lot longer to collect. And so on those, all those expenses go out upfront, we get paid later. So now we're in a situation where we're doing significantly less COVID testing. We have accounts receivable coming in where we're starting to collect that now for the second half of the year. while at the same time, we don't have the expenses going out on new COVID testing because we've downsized that business significantly. So our cash flow is actually pretty good and we have plenty of opportunities. First of all, hypothetically, if I want to finance Farmilaz, we have this amazing building, amazing business operation, but even besides the business operation, uh just the the building itself and it's on 12 acres across from a walmart we could we could take out a mortgage on that very very quickly uh we could finance your accounts receivable so the last thing i'm going to do or that i want to do is to do a dilutive round of financing the pro phase labs at the same time we have subsidiaries and i can't really talk about this but you know we we just might have a subsidiary that as i mentioned by itself might be worth the market cap of the company So just think of, and you've got to understand, my background is on Wall Street. So with a background on Wall Street and with these great investment bankers that we're working with, there are all sorts of creative ways we can finance this company without doing the dilutive round of financing, you know, with a secondary for ProPhase Labs. And I don't want to go into it more, and, you know, I don't know. We'll see where this goes, and I really shouldn't talk about it more in detail. But I can just tell you I have plenty of opportunities if I want to bring out the underlying value in our company. And at some point at the right time in the right market conditions, it's quite possible that I would do that. And we'll just have to wait and see. I don't want to say more than that. I'm not interested in getting in trouble with the SEC. But I just wanted you to know that I have plenty of options that don't include anything to do with the loot around the finances. That's the way I manage the company. The way I manage the company, again, I'm the largest shareholder in the company. personal friends of mine are also large shareholders and I believe in watching their backs even more than watching my own. And the one thing I understand is raise capital when the stock market's hot and there's lots of capital around and stock prices are high. When stock prices are low, you buy back stock and you pay dividends. And so I have a history of doing exactly what I just described. There's no reason why I want to do anything to all of a sudden change my style from what it's been for the last dozen years, which have been very, very successful. It's really the Warren Buffett style to some point. I really think long-term in terms of just building long-term value for the company. I hope that answers your question. I went a bunch of tangents, but I think I brought it all together.
Adam Waldo
No, I think that's helpful, and you'd asked early in your answer the source of the cash flow commentary. That's just your first half. free cash flow from your press release today and your wife. So you had maybe free cash flow of about $7 million the first half of the year. Back in the envelope, simple math, you analyze it, it's $14 million-ish. So I'm trying to get a sense of the bridge for the next three or four quarters. I think what I've heard you say, and again, clarify if you think it's appropriate, as you think appropriate, but I think what I've heard you say is, look, we have $39 million of AR that we could securitize or factor in. We have the ability to put a mortgage on the lozenge manufacturing business, PharmaLaws. We have the ability to do various and sundry things in the capital markets that might unlock value in one or more of our five main business lines. And we see, obviously, the PharmaLaws business ramping quite significantly next year, plus the genetic testing business. And so the business should be solidly free cash flow positive in 2024. Is that a fair summary?
Ted Karkis
Yes. I'm really impressed, Adam. I don't know what you do for a living, but you might want to come work for us if you're looking for a job because that was really well done. Yes, that's an excellent summary. Thank you.
Adam Waldo
Okay. Thank you.
Ted Karkis
All right. Do you have any other questions or should we move on? Vice Navi, let's go to our next question, please.
Operator
All right. The next question comes from Fred McDonald, a private investor. Please go ahead.
Fred McDonald
Chad, you say the value of Nebula is greater than our market cap, but the market isn't recognizing that. Would you consider doing an IPO on Nebula, or is there some other ways that you could get the true value of Nebula to be recognized?
Ted Karkis
Yeah, so what's interesting, it's a great question. I alluded to it earlier. from the last caller's questions. I'm not allowed to talk about things like IPOs, but what I can tell you, and again, I said this before, it's so eerily similar, it's almost scary, what happened two and a half years ago, where we raised a block of money with ThinkEquity, led by ThinkEquity, we built out this tremendous lab, we built tremendous capacity, and then we did this enormous business. It really is a deja vu where we're in the exact same situation now, almost exactly three years later. But it's with the business Nebula Genomics where the upside is, you know, dramatically greater than COVID. And it's an upside that's going to last potentially for not only for years, but for decades. I mean, this is the future of personalized precision medicine. So as I said, my background is on Wall Street. I am really, you know, tell me I'm terrible at everything I do. The one thing I can tell you is I understand Wall Street and I understand the value of Nebula and I understand the best ways to bring out that value as needed. So, to me, the real issue is I want to build, we already have a state of the art whole genome sequencing facility, but now I want to build capacity. I want to be the leading laboratory in the country It's not in the world for whole genome sequencing and for all genetic testing. And not only from the point of view of having the best equipment, which we have, we have the best equipment in the world right now. We have equipment in this country that nobody else in the country has. We're the first one to get the latest leading state of the art whole genome sequencing equipment. But now I want to build the capacity so that the bigger deals, we're the lab of choice for the bigger deals. And I believe there's an opportunity right now to do it right now. That opportunity may not be there in three years, but it's there right now because we're first in because George Church had the vision five years ago to found this company with his two PhD students who, by the way, work for us. And they're great guys, by the way. Kamal and Dennis, you can see they're in our company profiles. Great guys. Really happy they came and joined us. And we're building this. Great company. And to be honest with you, we have a whole team that's doing a phenomenal job of building Nebula. So I'm sorry I can't directly answer your question. And I'm not saying we're going to do something. We're not going to do something. But also the previous caller asked about cash flow. Well, I mean, certainly, if I wanted to, I could raise capital off the value of Nebula. And there's multiple different ways that I could do that if we want to do that. We'll just have to see. We'll explore things over time. So my point is I have lots of options without having to do a dilutive round of financing for propane. And if I did some sort of financing, as I said, I could finance formulas with a mortgage, or I could do something with Nebula. And I don't want to go into more detail now, but the answer is yes, we have lots of options to explore. See, the beauty is, When you build a company that has significant underlying value, and we do with multiple subsidiaries, it gives you options for how to finance going forward. So to me, the real question is, do I want to do a financing in order to scale up Nebula because the opportunities are so large and that we just have to balance? What I don't want to do is a dilutive round of financing at ProPhase Labs. All right, so, and we'll just have to see. But the same way we built out a COVID testing lab and outperformed 95% of the labs in the country, I expect to do the same thing with whole genome sequencing, except I expect to, my goal is to outperform 100% of the labs in the country. And that's our goal. And I think I've also mentioned that we have significant opportunities, not only in the United States, but abroad. But what's interesting over the last couple of weeks, and I've been talking about our opportunities abroad for a while, What's interesting over the last couple of weeks is the interest level is so high for Nebula Genomics, for our lab, for B2B business. And we're literally just starting. We're barely even in the business yet. And the interest level is high from some of the largest testing companies in the world. And so it's really interesting. We'll see where this goes. But I can tell you, if we build it, they will come. I really believe that that's applicable to nebular genomics, and I believe that's here right now, and that opportunity is here right now. And I'm really looking forward to taking advantage of that opportunity. Hope that answers your question.
Fred McDonald
Thank you, Ted.
Ted Karkis
All right, great. Let's now be on to the next question, please.
Operator
Our next question comes from Dennis K. Wallman with Barrett Productions. Please go ahead.
Dennis K. Wallman
Hi, Ted. Thank you for taking my call. I have about three or four questions, if you don't mind. I'm trying to wrap my head around Q1 versus Q2. In Q1, you did about $19 million, and here you did about $13 million. I would assume that the consumer products of Nebula and the PharmaLaws increased from Q1 to Q2, and I see that diagnostic testing in Q1 was $120,000 with an average price of about $121,000. In Q2, it went up to $126,000, about 5% increase. So I'm trying to understand how we have a 30% drop in revenue where we had increases across at least unit volume in diagnostic testing, unless the price went down per test.
Ted Karkis
You know what? I apologize. I would have to get back to you on an answer to that question. Our testing was definitely down in Q2 versus Q1. It will be down in Q3 versus Q2. It's not the future of the company. It's not my focus. And your numbers, we're also doing a lot of antigen testing, which is different from laboratory PCR testing. Antigen testing is done at the point of service when you go up to the tent. The numbers, I'd have to go back and look at the numbers. Our COVID revenues are definitely higher going down every quarter. Now, having said that, the fourth quarter, they may pick up substantially. I hear that there's more COVID around. The question is, are the positivity rates are going up? I believe and we believe that's because people who actually have COVID are getting tested, but nobody else is. Whereas before, everybody was getting, when a few people, you heard about somebody getting tested or having COVID, you immediately went down and got tested too. So for every person that actually had COVID, You probably had 15 other people that went and got tested. Now people are getting COVID again, but the people around them aren't. So the testing is a lot less. The opportunity is a lot less. It's really not the focus of the company. I apologize. I'll get back to you offline to get more into the numbers. But there's no question our COVID revenues are going down. But the market never gave any value to our COVID revenues anyway. As I said, it actually improves our accounts receivable if we're doing less COVID business. and our nebula genomics business and our formalized business are growing. Certainly year over year, they're growing. Second quarter is seasonally, by the way, second quarter is typically the seasonally slowest quarter of the year for all of our businesses. And they're going to be growing, but I'm less concerned with the quarter to quarter because there are various things we're doing in the various businesses that affect the quarter to quarter. But the year-over-year growth is tremendous in both, and that's going to continue. I hope that answers your question. If you need to offline, I can get back to your other people.
Dennis K. Wallman
Yeah, I appreciate you getting back to me on that. And I was going to bring up the fact that the positivity rates have tripled in the last month and a half. I'm hearing that's because everybody's traveling overseas now. And even though it hasn't hit the mainstream media, a lot of the other articles I've been reading are saying that there is a tremendous concern that that we're gonna have another virus, another upswing. This is the worst positivity rates we've seen in over 18 months. So I was wondering if you've seen any uptick at all.
Ted Karkis
Yeah, yeah, no. So you just indirectly pointed to the fact that the mainstream media isn't even picking up on it. They're not picking up on it because people don't care. And the positivity rates, without an explanation, doesn't mean anything. And as I explained, the positivity rates are high because only people that actually have COVID are being tested. So therefore, the positivity rates don't mean anything. What would matter is the total number of people testing positive now versus previously. So is it upticking? Yes, it's upticking. Yes, is it coming from abroad? Yes. Was there a new big COVID spread in China over the last few months? Yes, you know, there was. So there's definitely going to be some positive upticks here. It'll lead to some business, but I'm not focused on the COVID business. I don't even want to focus anymore on this call on the COVID business. It's a waste of time. It's not where we're focused at. It's not what we're doing. Is that another question?
Dennis K. Wallman
Yeah, let me jump. Last week you made a great announcement about Linebacker and the relationship with CERTUS. In there, I just want to read, it says, with this extensive data set now in hand, ProPhase will proceed to the next level. So I'm just curious, what level was linebacker at and what level is it going to?
Ted Karkis
Yeah, so the best way, and look, I'm not a scientist, but the best way I can explain this is that it's always a case of balancing between how much money you want to spend, how many clinical studies you want to do, how much time you want to take before you go into humans. You can go into humans quickly, you know, or you can go into humans 10 years from now. And my point is with a compound like Linebacker, it has several different opportunities for commercialization to make a meaningful difference in the world of cancer and treating cancer. And so the question is how many cell lines do we want to test? How many different types of tests do we want to do? We originally thought of this test just as a co-therapy because it's worked so well. with multi-billion dollar drugs like doxorubicin and others. And we found that it works significantly better. Doxorubicin works significantly better with linebacker than without. And we were like, wow, this will be a great co-therapy. But then we found in certain cell lines, and there's so many different types of cancer. So what do you want to do? Do you want to test Do you want to test in preclinical studies? Do you want to test linebacker with every single type of cancer? So you have to narrow it down to which cancers do you want to focus on, both in terms of commercial opportunity, but also in terms of which one is going to be most effective. And that's why you do clinical studies to begin with. Preclinical studies, I should say. So we're doing preclinical studies. We're now working with an AI leader to help perfect the path to commercialization, to figure out exactly which cell lines we want to focus on in humans and which directions we want to go in. That's the stage now. Our goal is to be in humans next year. Once we go into humans next year, you start with phase one human clinical study. Once you complete that, I am optimistic that linebacker, we could end up doing a licensing deal that would be extremely valuable for it. As I've mentioned on previous calls, you know, when you acquire assets and you first start to develop them, you can do all the due diligence in the world. It's very difficult, or it's not the same, when you actually acquire the asset. You hire the CROs, the clinical research organizations. You do the research yourself, and you see the actual results yourself. And I can just tell you, we have been pleasantly surprised every step of the way with linebackers so far. I don't like to focus on it on these calls because it's the future. The stock market isn't going to give us any value anymore. or linebacker or anything we're doing long-term with cancer. And so all I can tell you is we have a very promising compound. If it's successful, it will dwarf the value of our company down the road. We could potentially do a licensing deal for the value of our company 12 months from now. That would be a nice surprise. I'm not guaranteeing, I'm not betting on it, but we're not spending a lot of money either. We're using AI to perfect the path to commercialization. And again, as I mentioned, we're talking about spending $3 million over the next 12 months to get us to a point where I believe we could be in licensing negotiations after spending another $3 million. Hope that answered that question. We do have a bunch more calls. Do you have a quick one?
Dennis K. Wallman
I have a quick one. Equivir, kind of excited to see that on the market. What is your worst-case scenario where we'll see it on the store shelves?
Ted Karkis
I'm sorry, Equivir?
Dennis K. Wallman
Equivir, yeah. Yeah.
Ted Karkis
Yeah, no, it's pronounced Equivir. Equivir, I'm sorry. There's a difference between store shelves and commercializing it online. We're doing studies, the first set of studies. The preliminary results will be good enough for us to finalize claims that we put on packaging to sell to consumers online. And then we have a second round, or it's really the same clinical studies, but additional As we get through the complete clinical study, we're actually doing a prophylactic study and a therapeutic study. And I'm really looking forward to the results that will be done over the winter. And then with those results, we'll be able to put very powerful claims on the packaging. As far as putting it into the stores, we're up to the mercy of the stores. We're not ready to introduce it to the stores yet because I wanted to finalize claims on the packaging. A package sitting on a store shelf will not sell if it doesn't have good claims on it. I know that from the cold these days. All right. I know that I am an expert in that and just take my word for it because I turned around the cold, these brands myself, I was very involved in that. And so with actually here, we got to get the claims, right? So we're doing that now in the coming months, then we'll sell it. You know, we're talking about fourth quarter, introducing it online. And as far as the stores, you know, we're really talking about next year. And I can't tell you the timing. A part of that is going to be based on how strong the claims are, how excited the retailers get and the timing. And when they're doing their planograms, there's a number of variables out of our control. But the potential for this is huge. And I just want you to know there's long-term potential with Equivir because, you know, immune defense products, really good immune defense products, that's a great business in the dietary supplement category. If you come out with a great immune defense product like Equivir, I think it could be very valuable. And historically, that was our business and So we have a whole infrastructure for making that a very successful product. But, again, first step is finish the preliminary results so we can get some claims on the packaging and start selling that to consumers online. And then, you know, the bigger push will be in stores. Interestingly, we actually have some other countries that are potentially interested in distributing that as well, but I don't want to get too much into that on this call. All right. Having that said, thank you.
Dennis K. Wallman
That's it. Thank you.
Ted Karkis
You're quite welcome. Vaishnavi, next question. Caller, please.
Operator
Okay, our next question comes from Yi Chen with HC Wainwright. Please go ahead.
Yi Chen
Hi, Ted. Thank you for taking my questions. My first question is, so for the second quarter, within the second quarter revenue, is there any significant revenue actually has come from that regionomics?
Ted Karkis
Well, when you say significant, I don't, uh, let's do over 1 million, over 1 million coming from that with the genomics. Oh yeah, of course. Oh yeah. Yeah. We're at, we're at a run. We're at a run. See now the problem is, and I probably said this in the last quarter too, it gets complicated and we sorted this out. We have two sources of revenue when we sell a whole genome sequencing test. There's selling the test itself for which we do the sequencing, but then also there's, the sale of a subscription to our library. And so of course, when we sell a test, we get that money up front and we recognize that as revenue immediately. When we sell a subscription to a library, the SEC is really tough where even though we're getting the cash up front and accountants are very tough on this, they want us to recognize that revenue over the course of the subscription. So if it's a three year subscription or if it's a lifetime subscription, they don't want to, they want us to recognize that revenue over three years, even though we get it up front. So if we sell a subscription today and we collect $200, they want us to recognize that $200 over three years, even though we collected that $200 today. And there's, so what we've done is we've been, uh, we spent months now with our attorneys working out the language. in terms of what we offer to the consumer so that it's recognized as a setup fee as opposed to an ongoing subscription. We think we have perfected that language. As we perfect that language, we will be able to recognize the revenues in the quarter in which they're generated as opposed to having to spread it out. So there are some timing issues there right now, but our revenues are significant. Josh, I don't want to be quoted with numbers, but off the top of my head, ballpark, I guess we're on a shareholder conference call. Off the top of my head, we're at like a $15 million plus run rate at Nebula right now, but that's probably a non-GAAP number. But that number is growing, and it all depends on how quickly we ramp up our Garden City labs. But as soon as we ramp up the Garden City Lab, our profitability for selling these tests goes up significantly. We'll also be able to drop our pricing even further for the whole genome sequencing, which will drive even more volume. And the higher volumes, the bigger the volume, the more subscriptions we sell, and the subscriptions are where the margins are. So it's actually good for us if we drop price because it drives volume, which in turn drives more subscriptions, more revenue, and more profits. And we're literally in the infancy of growing this business right now. And, again, for the others out there that are listening, there are genomics companies out there with no revenues, you know, with $50 and $100 million valuations that are years behind us in development. And so we're already a revenue-generating company, but the run rate of those revenues, I believe, besides growing dramatically year over year, they're growing every day. I mean, the numbers we got just in the last couple of weeks from some new um ads that we ran uh the volumes were significant some of the largest volumes we've ever received in fact i think the largest volumes we ever received on a daily basis so there's no question this business is growing by leaps and bounds and we haven't even started in a significant way with a b2b business and that's all coming
Yi Chen
Actually, that's related to my second question. So as you wrap up the volume of sequencing services going forward, will your main target customer be consumers or businesses or both?
Ted Karkis
So there's sort of an internal debate going on. It's a great question because if you ask George Church, He'll tell you, and we're working very closely with George Church at Harvard and Russ Waltman at Stanford. And George's vision has always been for every single person in the country and on the planet to be tested. And that's what in the UAE and Abu Dhabi, that's what they're doing with the Emirati genome program. They're testing 1 million residents. That's 1 million residents out of 9 million residents in the UAE. So think about if we did the same percentages here, You know, we're talking about 30, 35 million people testing. You know, we're a multi-billion dollar company if we committed to the same type of program here. But the point is, we're literally just testing the surface. And then the question is, how much of that is direct to consumer? I still think only, you know, 1% of consumers even know what personalized precision medicine and whole genome sequencing are. I didn't know what whole genome sequencing was two years ago. you know, before we acquired Nebula. And I think most of the country doesn't even know what it is. So the question is how quickly they learn, consumers in the United States and around the world, learn about whole genome sequencing and learn how important it is and learn how important the difference is between whole genome sequencing and what the ancestry companies do, where they test less than 1% of your genome, which is great for ancestry information, but pales in comparison if you want health related information. And so it's only a matter of time. I think the consumer business is literally, it's in its infancy. It's where the internet was 20 years ago. But then on the business side and with academic institutions and other types of businesses, they can bring enormous business to us right now. And so this really is what I was talking about earlier on this conference call is now that we've built this lab, we're starting to get inquiries that are scary large. And I have the utmost confidence if we build a larger capacity lab, we will fill it with an enormous amount of business. So, you know, you can focus on whatever business we're doing now. I think I put in the press release what our capacity is in our current lab for Nebula. It's around $40 million. I want to build a lab that potentially has the capacity to do five or ten times that. And I believe if we do, I believe we'll fill it. You know, so we're talking about an opportunity with Nebula to be a multi-billion dollar company. And we're in the right place, right time. We're already in the business. We're already growing quickly. We already have all of the relationships. We have everything. We have the entire infrastructure, the entire relationships to build an incredibly successful genomics business. And so you can focus on our current revenues. But again, I mentioned there may be ways that we could bring out value in Nebula, and I think it would be substantial, and that would just be the starting point.
Yi Chen
My next question is, could you provide a rough timeline with respect to the Be Smart esophageal cancer test in terms of when it could be commercialized?
Ted Karkis
Sure. Okay, so there's a difference between commercializing without CPT codes as commercializing with the CPT codes. There's a major conference in the first quarter of next year. We have a expert consultant who is confident that we will get the CPT codes at that, at that conference. So first quarter of next year, we're looking for CPT codes. We can commercialize without it. Um, and so basically, um, our lab here, and, and again, we have a world-class lab, uh, team working here and, uh, headed by Alice Leoy and, uh, Alice said as soon as we do these next 300 specimens, 200 of which we're doing right now, 100 are supposed to come in the next couple of weeks. So, you know, within the next month or two when we complete those 500 specimens, that should be enough data to then do a validation for what's called, you know, research use only. And, you know, this would not be reimbursed by insurance companies. This would be a test-based test. I'm not really focused on it as a cash-based test right now. But once you get the CPT codes, the key is to get the key opinion leaders and the cancer institutions behind you. And then that brings in the physicians wanting to order the test. So there's a whole ramp up we can do where this could build up into an incredibly valuable test very quickly. But this is really a 2024 project. But it's a 2024 project that could be very big. And I'll also tell you there's the possibility that there are very large companies out there who might love to have our esophageal cancer test become a part of their portfolio, as opposed to us building out the infrastructure ourselves. So the opportunities here are enormous next year once we get the CPT codes. Actually, it's not even so much the CPT codes. Once we complete the current studies and StatKing does their independent analysis to show that we have studied enough specimens that you know it's all based on confidence levels you know that at the 95 confidence level our sensitivity and specificity are the following numbers and the bottom line is so far our numbers have been fantastic uh much better than most of the other cancer tests on the market and so i'm very confident that we're going to get commercialized and ultimately get some cpt codes and once we do you know i i've outlined this previously you know There's a potential multi-billion dollar market out there. And then phase two is to develop this test where it doesn't have to be performed on people that got endoscopies. Then it becomes an even larger, exponentially larger business because ultimately you can go into a doctor's office with a brush technology. You stick a brush down your throat. It picks up cells. It picks up the proteins that we need to test in order to tell you whether you're at high risk or low risk. of esophageal cancer, whether you have esophageal cancer right now. And so that test, then it becomes ridiculous. Everybody go into a GI before you even get an endoscopy. Just everybody go into a GI that has GERD to say, hey, what's going on? And the physicians should say, hey, let's do this quick test to see if you have esophageal cancer right now or if you're at high risk or low risk. And based on that, we can determine next steps, whether you need an endoscopy and so forth. And our test is more... Yeah, okay, I'm sorry. Go ahead in your next question.
Yi Chen
Yeah, thank you. Yeah, my last question is, I wonder if you can comment on what would be the baseline level of diagnostic revenue if COVID testing is completely gone?
Ted Karkis
Oh, so we are not yet doing clinical lab testing. And so just very, very quickly, we've developed, and this, again, was led by Jason, who's the president of a diagnostics business and, you know, he built the multi hundred million dollar COVID business. He has, and we have significant relationships in the industry. We are dying to exploit those relationships to build out a clinical lab. The gating issue or factor is getting in network with insurance with COVID testing. You didn't have to be in network, especially during the public health emergency. So now it's a completely different business. Turns out it's somewhat of a, the insurance, I'm sorry, the lab business is somewhat of a monopoly. It's really incredible. I've never seen such anti-competitive practices. It's really disappointing. And I don't want to pick fights with anyone. But if you're not in network with some of the major insurance providers, then the physicians don't want to send you their specimens because if they send you the specimen, then the patient is going to have to pay out of pocket and then the patient complains to the physicians. So it's all linked between the physicians want to see that the lab is a network. And meanwhile, the insurance companies are like, if you're already not, if you weren't the big customer of ours, we don't want to let you network. And so you have insurance companies that for the exact same test, two labs will perform, three labs will perform the exact same test from the exact same patient. One lab will get $300 for that test. The second lab will get $100 for the test. The third lab won't get reimbursed at all. And so it's really important to be a network. So we have some opportunities right now to get in network by acquiring, and I'm looking for the right small lab, but we have some opportunities right now. I don't want to get too much into it, but I am optimistic that we will get in to network acquisition in the not too distant future. And then as soon as we do, we will build out our clinical lab business in a significant way. But for now, I would say the main focus of our revenues is going to be our nebula genomics business and farm labs.
Yi Chen
Got it. Thank you very much.
Ted Karkis
Yeah, sure. And, you know, what I just throw out there, you didn't really ask the question, nebula genomics, again, if the capacity of our lab is 40 million, and I'm telling you that we're thinking about building out a significantly larger lab, it gives you the kind of idea that of what the revenue run rate should be for Nebula Genomics for next year, just from our lab. And I think that our demand is going to be significantly greater than what's in our lab. We also have the ability to outsource specimens, which is what we've been doing that till we built up the lab anyway. So without even building another lab or building more capacity, we have the potential to be at a run rate of more than 40 million in revenues for Nebula next year. And then of course, once we build out more capacity, those numbers could only go up from there. So that's on the nebulous side. On the formalized side, I think I've mentioned previously that we want to build our capacity to $25 or $35 million, and I think that we would have no problem filling most of that capacity when we do so. So there's equipment that we're bringing in right now, short-term, to increase the capacity, and then a whole new logistics line. Essentially, we might want to bring in two more logistics lines. There's room for it. And so building our capacity to $25 million, $35 million next year seems like it should be straightforward, and quite frankly, it might be more than that next year. And, again, our pre-tax profits on the new business that we're talking about bringing in could generate $10 million of profit by itself next year. So I'm really looking for Nebula and Pharmalize, the revenues to be really quite substantial next year and the earnings associated with both to be quite substantial next year. And I'm sorry, you know, it's really just the next six months, you know, figuring out the ramp up. And it really has more to do with ramping up the capacity, ramping up the businesses coming into Nebula, and how quickly we ramp up farm allows in terms of the capacity and increasing prices and so forth. Thank you so much. I really appreciate you on the call. All right. And let's try and get to the last questions as quickly as possible. I thought this was going to be a shorter call. Next question, please.
Operator
All right, the next question comes from Lee Lapper with Hammock. Please go ahead.
Lee Lapper
Hey, Jay. Thanks. The last couple calls, you were excited about what was happening over the UAE. You did not mention anything today. Can you give us some color? Sure.
Ted Karkis
So here's what's interesting about UAE. So a couple things. I have to weigh – that's actually a great question. Yeah, there's a lot potentially going on in UAE. I'm trying to be careful to not talk about things until they're sort of set in stone. So we have some major companies that are very interested in nebula genomics and potentially interested in joint venture opportunities for us to actually build a nebula genomics laboratory in their country. Most countries don't want to send their specimens outside the country. It's one of the reasons why we built a lab in New York, even though we had access to relatively inexpensive whole genome sequencing abroad. Now, of course, we can offer even lower pricing doing it in our lab because we're getting, I believe, some of the best prices in the world for the consumables. So we have opportunities. And then it's a question of how thin do we want to spread ourselves. The opportunity in our own lab is so huge. I really want to focus on that more than abroad. The other aspect of this is joint venturing or esophageal cancer tests. And we already have a clinical research organization that's excited and ready to go. There's a Mayo Clinic and a Cleveland Clinic actually in the UAE that wants to work with us. We have specimens lined up. But I'll only do that if there's a joint venture partner up front. Otherwise, I could do a study over there, and then all these companies over there will jump on and want to commercialize it. But I think we'll make a lot more money if we commercialize the United States first and then have them come scrambling for us. But on the nebulous side, yes, there's lots of opportunities over there. I just don't want to get too far ahead of myself. There's so much opportunity with what we're doing right in the United States, and I can touch it, taste it, feel it. And that's what we're building. But in parallel, we are working with investment bankers in both the UAE and Saudi Arabia. There's ongoing discussion. And I would just like to leave it at that for now. I always want to under-promise and over-deliver. And so there's definitely opportunities. We're definitely following up on them. But the other thing I've just noticed And this is true of all small-cap companies. They all move slowly. And so in the UAE, the bigger companies, they move even slower. So they're all interested. They all want to do deals. But I don't have time. There's an enormous opportunity right now with Nebula Genomics today. And that's why literally we had one of the world-class genomics manufacturers in our laboratory just literally a few business days ago. And we were discussing, hey, we've got to build out something 10 times the size. There's just too much demand out there. There's just too many large players out there that want to bring us business. So why do we have to go build a lab, even a joint venture, even if I have a billion-dollar company abroad that says, hey, we'll pay for the lab. You build it. We'll pay for it. We'll joint venture in the profits. I'm interested in doing that. But Nebula Jones could be a billion-dollar company pretty quickly right here in the United States. So I just have to weigh opportunities and how attractive they are today versus down the road. I know that was sort of a long-winded answer to your question. Yes, I'm so excited about the UAE, but I have other opportunities at the same time that I can touch, taste, and feel today. Okay, thanks. Yep. All right, you're quite welcome. And I think we have one more question.
Operator
Yes, we have a follow-up from Adam Waldo with Lismore Partners.
Adam Waldo
for the follow-up, I should have asked it on the front end, but during the quarter you made an unsolicited all-cash offer for a business unit of NAVB, NVIDIA Biopharma. Can you say anything publicly about where that stands? Is that a dead letter at this point, or could that still come back around? And in a general sense, are you still looking at opportunities with your resource base or are you really focused on the five you have and bridging you know the liquidity you have to to really get to you know strong revenue and cash flow generation from those in 2024 thanks um i really like your your question was a or b i really like b i really like the latter that's really what i'm doing i want to focus on our assets and to some extent that dovetails into
Ted Karkis
The last caller who just asked about the UAE, we have lots of opportunities over in the UAE. I don't want to spread myself too thin. I don't want to spread our company too thin. So I want really great opportunities or I don't want to focus on them because I have great opportunities. Just what we, if we do nothing, but just focus, even forget about linebacker. Okay. Forget about Equivir. All right. If I, we just focused on nebulant genomics, pharma laws, and esophageal cancer. We should be a blockbuster company over the next one, two years. We could be unicorn in a couple of years. All right. And so that's my focus. And it said that there are opportunities. So with the company you talked about, I really don't want to talk about that company, except that they happen to have an asset that is underutilized that we could commercialize. We happen to have these phenomenal relationships in the UAE and we can commercialize it today. And it happens to be an asset that fits in perfectly with the MENA region. And that reason, so it just happens to be a perfect fit. It's still a perfect fit. I don't want to say more about it, but the one thing I'll say in general, small cap companies in general, most of the management perform, and I'm not saying anything about this company, but in general, you know, I looked at hundreds of acquisitions over the last couple of years. They settled on two or three. They were based on how great the assets were and the opportunity was, but it was also partially based on whether or not we could work with the management teams. So the question is, can we work with this management team? And I don't know why a management team wouldn't want to exploit the assets that they have unless there's ulterior motives that the shareholders don't know about. So that's all I can say about that. But the bottom line is they have assets that I think that we could exploit to be worth an awful lot of money very quickly. But if we don't acquire the assets, we don't acquire them. So am I open to it? Yes. What I particularly liked about it is it fit in really well my scientific team at prophase could be able to handle this i wouldn't have to hire other people and the relationships we have are already developed and i think we could roll out very quickly that's why i looked at that opportunity in general i'm not looking for acquisition unless it builds upon um and accelerates the growth of the subsidiaries we already have so for example if i can find a small lab to get this in network for insurance so that we can accelerate the development of our clinical lab, I'll do that because we have this fantastic clinical lab that's ready to go. So that's a perfect example.
Adam Waldo
Right. No, that makes sense. So again, for all intents and purposes, should we assume NAVB is a dead letter or, I mean, given that the company continues to have significant cash burn, you know, their financing options look to be increasingly limited. Could that potentially morph into a more advantageous deal down the road? We'll just have to wait and see.
Ted Karkis
You said it perfectly. I couldn't have said it better myself. Look, I certainly don't control the company. I don't know what they are thinking, and we'll just have to play it by ear. I don't know if you have an investment there or if you have an interest there. I don't know if you do or not. You don't have comments on that. The bottom line is there's an opportunity, and that's the only reason why ProPhase Labs got involved and made the offer letter in the first place. No, that's fair.
Adam Waldo
We're not involved in the stock, but it just obviously came across your press releases, and I looked at the financials. This company's cash runway is not very long, so I don't know what the court's doing, right?
Ted Karkis
Yeah, well, look, we acquired the esophageal cancer test under similar circumstances. The company that owned it couldn't finance it. We were in a bear market, and they couldn't finance the company. And they were under a lot of pressure, but they were a great management team to work with. In fact, the gentleman who was the acting CEO at the time that we acquired the esophageal cancer test, Jed Lapkin, is working for us as a senior consultant. He's very involved with our company and with the developer right now. That deal worked out great, but a part of it was because the management was amenable to working with us. And the asset is fantastic. I mean, since we acquired esophageal cancer, I'm so excited about the development of that. It's a lifetime opportunity, quite frankly. You know, of course, there's nothing in our market cap for it, but it's a lifetime opportunity, and it's all systems go. So I'm just excited about that for the future. And again, some people don't like it when I make this reference because it's night and day, but Exact Sciences, you know, I've been talking about them since they were a $10, $11 billion company. I don't know, they're a $15 billion company. They have a... their primary business is colon guard. It's a colon, you know, it's a test for colon cancer. We have a test for esophageal cancers, right? Theirs requires you to make a bowel movement. Ours right now are on people that are already getting endoscopies anyway, so they don't have to do anything extra. And ultimately, it may be a test where you just put a brush down your throat. And we believe that our sensitivity and specificity may be greater than colon guard. And so I'm not looking for our company to be you know, esophageal cancer would be a $15 billion company, even a $1 billion company. All right, what if it's 100 million in revenues? That would still triple the value of our company. So, I mean, the opportunity there is enormous. Anyway, I think I pretty much answered your question. I'm pretty sure we're out of time.
Adam Waldo
No, you did. I think the exact times is analog, you know, Cologuard analog is a pretty interesting one. Thanks for the answer to my question on an AVB, though.
Ted Karkis
You're quite welcome. Have a great day. I really appreciate everybody. Joining the call today, Vaishnavi, I'm sorry, I hand it back over to you. Obviously, I'm really excited about the future of the company, and I thank you all for joining today. I'm looking forward to a lot of progress in the next 3, 6, 9, and 12 months. Vaishnavi, I think that ends our call.
Operator
All right. Thank you. This concludes our Q&A session and the call as well. You may all now disconnect. Thank you for participating today.
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