ProPhase Labs, Inc.

Hello and good afternoon, everyone. Welcome to today's presentation. My name is Noella Alexander-Young, Virtual Event Moderator here at Renmark Financial Communications. On behalf of our team, we want to thank everyone for joining us today for ProPhase Labs' second quarter 2025 results. ProPhase is trading on the NASDAQ under the ticker symbol PRPH. Presenting today is Ted Karkis, Chairman and CEO. Following the presentation will be a Q&A session for which you can participate using the chat box in the top right-hand corner of your screen. With that being said, I will now hand it over to Ted.

Noelle, thank you as always. Let's go back to the beginning. We're on the wrong slide. There we go. Look, thank you, Redmark. Love doing these VNDRs. I am really excited about everything going on with our company and Looking forward to updating everybody today. So I will assume that you have all read the forward-looking statement. This presentation, by the way, is on our website. So after this call, you can go to the website any time, read it yourself. Of course, read the forward-looking statement, which basically says everything I say today is true as of today. I speak from the heart. I speak from the mind. I don't type out notes like most CEOs and just read off a piece of paper. I talk about the company. I live and breathe this every day. But everything I say is accurate as of today. It doesn't mean that things don't change in the future. There's no guarantee that you won't get updated if things do change in the future. That's primarily what the forward-looking statement says, but I'll assume that you have read it. And let's move on to the next slide. These are the basic Components of the company today now, this is a quarterly press release as opposed to our typical red mark presentations. This is really a combination of the 2 red mark. You may not know how they're set up, but we basically do a once a month. This month, we may actually do two, but we typically are doing one a month where we're in effect virtually in a different city and sometimes different state each month. And this is oftentimes new investors. But of course, we've also invited all of our shareholders and all the people that read our quarterly press release to come on the call as well. So it's really a combination of potential new investors, as well as people that are interested in just a quarterly update. I could care less about our earnings right now. That's not the focus of the company. The focus of the company is we're a development stage company with some operating businesses that are operating, but also we have other businesses with enormous potential that are ready to kick in and go to next steps. So we have BeSmart, I'm going, Prophase, you know, labs, BioPharma, BeSmart, that's our esophageal cancer test. We have DNA Complete and Nebula Genomics. That's where we do whole genome sequencing primarily directly to consumers. We have prophase supplements, and we have two other things. Actually, we should update this slide. This is interesting. On the left, it's not in the picture, but this is a critical component of our company is the prophases entered into initiative with Crown Medical Collections targeting over $50 million in net near-term cash recovery from COVID-19 receivables. That $50 million, given the market cap of our company today, if $50 million comes to the company, that's more than three times the entire market cap of the company. I'm highly confident in that, by the way. And that's why I actually put that as the first bullet point when you look at the ProPhase Labs, quote, verticals. There may be another vertical coming, our crypto treasury strategy initiative. And I will get into that. I'll get into that at the end of the presentation. It's not actually a slide. in our presentation today, but it wouldn't surprise me if it will be in the near future. But with that, and by the way, I'm going to touch on the crypto treasury strategy today. There are a couple of important bullet points I really want to cover. But then next week we may have a separate press release and we'll have a follow up via during two weeks specifically primarily focused on the crypto treasury strategy. It could be an enormous new opportunity for the company. So with that said, I'm not going to go too much into this slide, Most of you have seen this before. I do have a history of success. And it's not just since I took over control of our company. This goes back 40 years of success. I've gone through nine months that have not been fun with the stock price crash. We suffered dilution, all those things that I've never done in my entire career. that we had to suffer through, but now we're coming out the other end of that. I like to think of ourselves at our current stock price, around $0.35, not that different than when I took over control and turned around the company back in the day when our stock price was $0.65. I turned around the company, sold the Coldies brand for $50 million, did stock buybacks and paid out $2.40 in special dividends, and then got COVID tested. or even with COVID testing, we did $100 million a year revenues. Now, isn't it interesting? We have a 35 cent stock price, same CEO, same mentality. We're potentially going through this time, instead of selling coldies for $50 million, we may come in to $50 million from crowd medical initiatives for our prior COVID testing. And just like the opportunity that we then got into with COVID testing. We'd never been in COVID testing before, never been in the lab business before. And then we proceeded to outperform 95% of the labs in the country. Well, it's the same thing with the crypto treasury strategy. What's the most important component is to have a CEO that's smart and that can execute and that can attract great people. And so now we have the potential to enter the crypto treasury strategy And if we have even 50 percent of the success of what we had with the covid testing and given the competition, I don't really consider them competition, but the upside could be absolutely enormous. So I'm going to get into that towards the end of the presentation. But that's sort of an overview. Let's first start with Crown Medical. So what's going on with Crown Medical? I'll try and get those of you that don't know up to date with those of you that are completely up to date. Well, nobody's completely up to date, but the bottom line is we have 1,100 insurance companies that were reimbursing us for COVID testing. The government guaranteed reimbursement. When we did the COVID testing, the government ran out of money. Interestingly, behind the scenes, the government, through their subsidiary, HRSA, which ran out of money, interestingly, HRSA was also funding some of the insurance companies. And so when HRSA ran out of the money, insurance companies also started cutting back, even though legally they weren't allowed to. So we got into a situation where legally the insurance companies owe us an enormous amount of money. And so what we're doing is we're about to sue 1,100 insurance companies. We're doing it through a company called Crown Medical Collections. They have a couple of dozen attorneys all working on contingency. We are not paying them a single penny. They've done enormous amount of work in the past several months, an enormous amount of analysis. You should see the analysis. I have a spreadsheet of literally like eleven hundred insurance companies, how much billing we did, what we got paid, what we didn't get paid. A critically important component of this is that insurance companies in many instances reimbursed us, but it reimbursed us at a lower rate than they were legally supposed to. As a general business practice, many insurance companies did this. They knew that they could do this because they could get away with it because what were the laboratories going to do? All the most or all the laboratories in the country just accepted what they got paid and figured, what are you going to do? It's the cost of doing business. At least we're getting something. We're getting more than what it costs us to process the test. And so every insurance company was paying differently and we just had to put up with it. The bottom line is if the insurance company reimbursed us, But they reimburse us for less than they were legally supposed to reimburse us. That means they've underpaid us. They do not have a defense. So what we are doing is we are bankrupting the lab subsidiaries that are not doing any business now anyway. It doesn't cost us anything to bankrupt them. We are awaiting... a court date with the judge. I anticipate that court date is going, don't count on this. I anticipate that court date is going to take place in roughly four to eight weeks, at which point Crown Medical goes hog wild. They start reaching out and say, we're now in bankruptcy court. We're now serving you with litigation. Up to this point, Crown already reached out to probably 100 of the 1100 insurance companies. But a lot of them, their response is when you actually get the court date in bankruptcy court and you're actually about to serve us, that's when we'll sit down and talk seriously with you. Now, the other part of this is the amount of underpayment. So in many cases, it was underpayment. There's no defense. So I'll just go off on a slight tangent here. Crown is not only representing us, they're representing about 40 other laboratories. In many instances, in most instances, these other laboratories are suing the same insurance companies, and they may be in different states. So imagine being in court in front of a judge suing an insurance company. They're representing five different labs suing the same insurance company. The same insurance company did the same unethical underpayment practices with five labs. It shows... a history of and a pattern of behavior that at a minimum is unethical. The insurance companies don't want the exposure. They don't want the press, the politics involved, plus they owe the money. So they settle. And so what Crown also did when they took all of our claims They discounted them for how much they know they're going to have to discount. When you're litigating with somebody and you settle out of court, you always settle for less. So they figured out what the percentage is that they're going to have to discount. They took that out of our gross total, came up with a net amount. That net amount is roughly $73 million. They take out a 30% contingency fee. We get the rest. It's roughly $50 million cash. I'd be happy, I don't want to say a number, I'd be happy with a lot less, but understand even the lot less I'd be happy with would still probably be a multiple of the entire market cap of our entire company. That's why I had to spend the first 10 minutes just on Crown Medical. The other thing is once this money starts to come in, we can be done with debt in our company. One of the biggest expenses of our company in the last year has been the interest expense on the debt. If we were a debt-free company, the biggest expense of the company would be God. We have done a phenomenal job, and I'll get into this when I talk about Nebula, and this is really Jason Karkas, the president of Nebula, that did this. He cut out an enormous amount of expenses and overhead. I'll get into that when we talk about Nebula. We are a much leaner, cleaner company now. If we get rid of the debt, we barely need any capital oil. Meanwhile, we have potentially $50 million of cash coming in from Crown. That's just one of... the opportunities with our company in terms of risk reward as an investment in our company. And just one of the things that I'm excited about. All right, let's move on. Prophase Biopharma led by our esophageal cancer test. So we just came out with news that we were awarded a very important patent. Why is this patent so important? Our scientists uncovered the key proteins that are expressed virtually every time you're developing esophageal cancer. What does that mean? Esophageal cancer, and I know many of you have seen my presentations, I'll just tell you very quickly, the acid in your stomach over time, you know, that you take in acids for over time, it will start to eat away at the bottom of your esophagus, which is connected to your stomach. You'll start to develop precancerous cells. That's a condition known as Barrett's esophagus. People with Barrett's esophagus have between 1 in 50, 1 in 100 chance of developing esophageal cancer. And the reason that's so serious is because once you are diagnosed with esophageal cancer, you have a 75, 80% probability you will die of esophageal cancer. It's one of the deadliest cancers. Why is it such a deadly cancer? It's because it's diagnosed too late. So by definition, what does it mean is diagnosed too late? It's diagnosed too late because there isn't an adequate diagnostic test for diagnosing it early enough. That's where we come in. We have a test that diagnoses esophageal cancer earlier and more accurately. Not only that, it will tell you if you're at high risk or low risk. The reason why that's important is because endoscopies there's roughly 67 million endoscopies performed each year just in this country and by the way esophageal cancer is growing around the world there are other countries where it's growing a lot faster than here all right so this is a global problem but just in the united states 67 million endoscopies per year the reimbursement rate from insurance companies is three four thousand dollars per endoscopy we're talking about so many billions of dollars Just on people that are at risk of esophageal cancer, it's about 7 million endoscopies per year. That's up to $28 billion a year the insurance companies are reimbursing. This is a very serious issue and it's very serious to the insurance companies. We have a test that'll tell you if you're at high risk or low risk. Well, so the beauty of our test, our test is done in combination with the endoscopy to make the diagnosis of the endoscopy more accurate. There's nothing additional the patient or the doctor has to do. That's critically important because in the world of medicine, convenience is an important factor. In addition to the fact that obviously we have a test that when you get the endoscopy, we only need one sample. So an endoscopy, basically they stick a tube down your throat. They take out tissue specimens. They take out roughly seven or eight. Now, by the way, I don't want to say we have competition because we haven't been, we're not commercialized yet, but our competition is going to be, I don't, you know, I feel funny even mentioning the name of competition. The only real competition out there is a product that came out a couple of years ago. And the beauty is actually paved the way because they got the insurance companies paying for cash based or what's known as a laboratory developed test. And the insurance companies now pay for that. So they paved the way they didn't, In the past, they weren't fast to reimburse for these extra esophageal cancer tests. Now they're doing it. So for us to enter the market, they and a couple of other companies paved the way. They already did the hard work. It's going to be easier... for us to enter the market. And the key is with this patent, we have the eight protein biomarkers that are expressed virtually every time you're developing esophageal cancer. And depending on how much they're expressed tells you whether you're at high risk or low risk. If you're at low risk, you don't have to get endoscopies as often. That will save the insurance companies billions of dollars. If you're at high risk, there's a procedure you can get called an ablation. It destroys all the precancerous cells and literally saves your life. And if it was up to GIs, they would give anybody coming in for an endoscopy, they'd say, just to be safe, do the ablation. The problem is the ablations are relatively expensive. And so insurance companies don't want to reimburse unless you're close to death. The problem is once you're close to death, maybe too late to do the ablation. So it's sort of a chicken or egg situation. In the end, not enough people are getting ablations. We have a test that'll tell you you're at high risk. If you're at high risk, the insurance company will reimburse you. You get the ablation, it saves your life. And it saves the insurance companies the five years that it might take for you to die from the esophageal cancer and all the medical bills that they have to reimburse. So this is huge for the insurance companies. It will save them billions of dollars. At the end of the day, you know, it's sad to say, but when it comes to medicine, it's all about insurance companies and, you know, where they're making money or losing money. And in this case, we would save the insurance companies billions of dollars if we can isolate the people at high risk. And on the other hand, the people at low risk, they don't have to worry about getting esophageal cancer. They don't have to get endoscopies as often. They'll save the insurance companies billions of dollars as well. And nobody has these eight proteins. Critically important. Now, there's more to come. I anticipate in the coming weeks at least one or two more press releases. positive developments towards commercialization for b smart esophageal cancer test so i'll leave it at that for now but suffice it to say this is very exciting our just i mean i don't even know how to say this without it sounding ridiculous we have i don't know 13 14 15 million dollar market cap it's nuts our this test could be worth hundreds of millions of dollars in one year it just gives you and that's an addition to 50 million potentially coming in from crown medical Just gives you an idea of the potential of our company. Let's move on. I can talk more in the Q&A about it, but it gives you a really, really good idea. We happen to have started to build a really nice advisory board with Dr. Joe Abdu, who actually is one of the scientists that invented this. And again, I'm going to have more to talk about about commercialization. I'd like to do that when the next press releases come out. But suffice it to say, we have the patents. We have players interested. There's a lot more to talk about. I don't want to do it today, but a key, I will just say for the path to commercialization, a key factor is getting published in journals, getting key opinion leaders involved, et cetera, et cetera, because then the GIs will start ordering the test. All of that is coming. It's all in the pipeline. I'm really looking forward to next steps with our test. Okay. Let's move on. Nebula Genomics. Are we on time? We're pretty good. Quick sip of water. All right. Nebula Genomics. So we hire ThinkEquity to pursue strategic alternatives for Nebula Genomics. But there's a couple of different ways I want you to think about Nebula and also within the context of our whole company. One, as I mentioned, Jason Kark has completely restructured this business. I wish he had taken over sooner. We shut down the lab. We never should have built the lab in the first place. He was not a part of that, right? Shut down the lab, cut out an enormous amount of IT, which we had to absorb when we had the lab, cut out an enormous number of people, also restructured the whole go-to-market strategy for selling Nebula so that we now get subscription renewals each year from everyone. Anybody who wants to renew, there's none of this lifetime stuff where you just get it for the rest of your life and you don't pay for it. Every year you have to renew. So even if we operate this as a break-even business, the following year, there will be profits from anybody that renews and a high percentage of people renew. The reason they renew? So I'm not really going to go into the whole explanation of what nebula genomics is. We don't have time, and that's not the purpose of this specific call. But to be clear, what we do is we do direct-to-consumer, and this is our DNA complete direct-to-consumer business. We do whole genome sequencing, which studies your whole genome. It studies your whole DNA compared to 23andMe or Ancestry.com that studies less than 1%. If you want accurate ancestry information, you'll do one of those tests. It'll be fine. It'll link you up to all the other people in the world based on that 1% of your DNA. If you want accurate health information, though, you want to study your whole DNA. It's more expensive. That's where we come in. We do it very efficiently. but critically important for us. We have eight years of doing this. We've developed a database of roughly 60,000 people that have been whole genome sequenced. That's the equivalent of over 150 or 160 million ancestry tests in terms of the entire amount of data. The real point is a whole genome sequencing test provides you 1,000 to 5,000 times more data than an ancestry test. So just imagine how much more accurate the health-related information is going to be. And that's why if you want health-related information, you've got to get whole genome sequenced. And so it's an extra couple hundred dollars. And there are various levels of whole genome sequencing, 1X, 30X, 100X. I'm not going to go into it. The more you want it analyzed, even 1X gives you a much more significant amount of data than an ancestry test of 30x. It's how many times it studies the DNA in the sequencing. In any event, I went to probably more detail than I had to. The bottom line is this has been completely restructured and cleaned up now. So we could sell it now, but now that it's been cleaned up, if we get money in from our Crown Medical Initiative, then it may not be necessary to sell Nebula Genomics now because Nebula could be worth, you know, two, three, four, five times as much, literally just nine to 12 months from now. So I have to, this is all strategy. There's no definitive answer. So while we're working with Think Equity to potentially sell the business, we're also working, led by Jason, on building the business now that it's been cleaned up. With a little bit of capital and some advertising, this business will take off really nicely. All right, that's enough about Nebula for now. Again, we can go do it in the Q&A. I'll just tell you very quickly, this is our historical business. I'm less interested in this right now, and I do want to talk about the crypto, and we don't have a lot of time to do it. So we're led by Legends XL, which we've been selling for many years. It's a small brand. It keeps a direct-to-consumer business open for us. It's probably the least important of everything I'm going to talk about. Equivir, I know a lot of you still want to know what's going on with Equivir. complicated to say the least. The preliminary studies were fantastic. The final studies gave us some good stuff, not as good as the preliminary. And I'm waiting for a final report. Our consultant goes back and forth. The problem is the CRA, the CRO, the Clinical Research Organization is in another country. Every time our consultant asks five questions, it takes a week or two to get the responses. They're literally finalizing it right now. The one thing I learned from building the Cold Ease brand The claims on the package are critically important. The claims on the package are based on the clinical studies that back those claims. If you don't have clinical studies to back the claims, either the FDA will shut you down or more than likely class action attorneys will sue you and put you out of business anyway. That's why we can't move forward with this without the final clinical study results. Okay. Moving on, you know, that's our management team, our investment highlights. I really want to talk about our crypto treasury strategy a little bit and our upcoming, we have a new proxy coming up, which are critically important, right? Again, we can go through this completely restructured and transitioned to significantly leaner company during the first half of 2025. Again, we sold formalized manufacturing in January for $23 million. We shut down the Nebula Genomics Laboratory later in the first quarter. We dramatically reduced headcount and IT and related overhead in the end of the first quarter and throughout the second quarter. The third quarter, we will now look like a much cleaner company. A lot of the savings are really just now coming. It will be coming into the third quarter. All right. I reviewed the Crown Medical Collections with you in the Q&A. I can discuss more with that. I talked about the Smart Esophageal Cancer Test. Be on the lookout in the coming weeks for some more positive developments towards commercialization. I told you some of the things that are very important with a new test. You need acceptance from your peers. That happens in the form of getting published, of having a clinical study and getting it published, and getting the key opinion leaders involved, and then reaching out to the GIs Find a network of GIs that are interested in using your test. You start there, you get good results. It builds from there. We have some great partners in Mayo Clinic and MPRO. We have some great players. The lead scientist at Mayo Clinic loves this test. All right. And of course, our chief science guy that created it, who's on our advisory board, Joe Abdu, you know, he's worked and developed and commercialized other LDTs. And he thinks that this was going to be absolutely huge. I could go on with this. I want to talk about a crypto strategy where we're on this last slide anyway. So this is really important. And I need to give you a little perspective before we get into the Q&A. We had an ATM. which stands for at the market. It's where you sell shares in the marketplace. When the stock's trading, you just sell shares that the company issues and you take in money. We had an ATM for, I don't know, a half a dozen years and never used it a single time. Just because you have an ATM doesn't mean you're going to use it. Same thing with authorized shares. We had tens of millions of shares authorized that we never used. Now, we got into a difficult situation the first half of this year where we did, and that's why the share count grew. But we stopped doing that a while ago. We had something called an ELOC. We're not going to be using. We haven't used the ELOC in months, and we're not using it anymore. I don't even know if I want to say this, but we're going to be canceling the ELOC. Now, we have a proxy coming out. that you have to vote for no later than August 29th. We have two weeks to vote. One of the things in the proxy, one of the items, is to vote on increasing our authorized shares to 1 billion shares. Now, why 1 billion? Frankly, it's an arbitrary number. I could have done 100 million instead of 1 billion. I could have done 200 million. Whatever it is, it doesn't matter. We're not dumping hundreds of millions of shares of stock on the marketplace. That's not the purpose of it. The purpose of it is if we initiate the right crypto treasury strategy, understand if I get into this business, I'm going to go into it the same way we went into the COVID testing. The reason we got into COVID testing, we were investing with some of the money from the sale of coldies. We invested in another public company that already had a laboratory, was already one of the first validated for COVID testing with the saliva test for COVID testing. It was like, wow, this can be great business. Let's invest in your company. They went bankrupt and we generated hundreds of millions of dollars.

So just because we're not the first in with a crypto treasury strategy doesn't mean we're I'm not going to be successful. I think we're going to be alone.

I am not doing what's called the reverse merger so that there's no confusion here. And I wanted to say this for the end because I just went through a whole presentation where I told you about all the underlying value and all the different ways that we can be successful with our company. Given that, why would I throw that all away in something called a reverse merger? In a reverse merger, all they want is your shell. NASDAQ shells are in demand right now. They're paying $5 million, $10 million for the show. So what they basically do is they might do a deal with a company that's going to be a crypto treasury company. They basically, in effect, buy your company, but it's called the reverse merger because basically you issue enough shares so that when you're acquiring this other company 95 they get 95 of the shares so in effect they now own your company because they own 95 of the shares i've seen basically eventually they weed the other company that's what you do if the shell is a relatively worthless company that's exactly what we're not doing we are not doing a reverse merger we are doing something different we are going to get into the crypto treasury Mark Doyal- Business potentially if we do this we're going to do this with world class partners i'm not stupid Okay, I promise you, I think, most of you know that has known me for a while. Mark Doyal- We have significant potential here to bring in large partners, they are not going to be attracted to our company if we don't have a large authorized share account. Why is that important? Because if our stock goes to one, two, three, four, five dollars a share, ten dollars a share, we have to be able to issue tens of millions of shares of stock or 100 million shares of stock. Suppose our stock's at five dollars and we sell 100 million shares and raise 500 million dollars that day. Would anybody on this call be upset if I raise 500 million dollars at five dollars a share when we have a 35 cent stock today? We need the authorized because if we don't have the authorized, no big player is going to want to get involved with us. I don't want to get into who I'm talking to right now. We will have updates. I think I'm going to be coming out with a press release next week. But one of the key things of the strategy is I need the authorized so that the players that I attract to our company, if we bring them in, They know that the potential will be there to raise $1 billion, $500 million, $200 million, whatever the number is. We would start at 200. We want to raise billions of dollars, but not at $0.35 a share. I'll give you a couple of quick examples. Not that that means we're going to do anything like these companies, but there are companies out there. Think Equity, we have a great relationship with Think Equity. Guess what? They did one of the biggest deals of the year with Bitmine, BMNR. Went from $4 to $40 the first day. It went to $136. I think it pulled back to like, I don't know, $30 a share or something like that. Now it's just going up. It's trading whatever, hundreds of millions of shares a day. They're able to raise $100 million a day if they want to, literally. And they want to raise a billion, two billion, multiple billion. I don't know the exact details of that deal. And I'm not saying we're going to do a deal nearly as successful as them. But then there are other smaller companies that I could point to. 180 Life Sciences, stock symbols AT&F. This literally just happened the other day. It was a $0.90 stock last month. They came out with news that they were doing a crypto treasury strategy. The stock started trading at $2. Then somebody named Peter Thiel comes in. He's a really well-known guy that he invested in the company. The stock went to eleven dollars a share. So just imagine if we attract some big players. Do you think somebody like Peter Thiel is going to come into our company if we have two million shares available that are authorized to be sold in the marketplace? Of course not. We have to have the ability to raise money. But again, this is no different than all the years. that we had an ATM, we had authorized shares before. I just didn't run out and use them. That's not the point of it. So I hope I made that clear. This is a critically important proxy. I hope you all vote for it. We also have other items in there that are voluntary, like stock buyback and other things that are really positive that are easier for shareholders to understand. But increasing the authorized does not mean we're selling any stock. And the idea is once we have this billion shares if our stock is going up and it's trading high volume. Now, like yesterday, for example, our stock traded over 200 million shares of stock. Now, I'm not going to get it. It's a little technical. Algorithms kicked in before the market opened. Obviously, these aren't real shares trading back. This isn't our shareholders. And we didn't sell a share on that. We haven't sold a share in the stock market in a very long time. We're not doing that. As I said, we're going to cancel the ELOC. We're going to have an ATM. It doesn't mean we're going to use the ATM. And quite frankly, if the crown medical dollars start to come in, depending on where the stock price is, if it's this kind of stock, I could be buying back stock, which is exactly what I did seven years ago. So all of this is a dynamic situation, but it's critically important that you tell all the other shareholders to vote for the authorized shares. It is really bullish for our company if you do that. I'm going to give you more information about the crypto treasury strategy next week. I'll do another VNDR in two weeks. But understand, if you want me to attract some of the biggest players in the industry, I don't even know if I should tell you this. I'm talking to a multi-billion dollar crypto company right now. I don't know if I should have even said that. But they're not going to be interested if we don't have any authorized shares and an ability to raise capital as our stock price goes up. All right. So I hope you understand that this is bullish. I hope you understand as a CEO. That I have a 15 year history of doing right by shareholders, I'm the largest shareholder in the company. I still even with the dilution that we had to suffer, I suffered by more than anyone else. But to be clear, I still own just under 10% of the shares outstanding. But to be honest with you, I'm not just motivated by my shares. I'm motivated to do what's right for the shareholders and for the company to rebuild the value. I just, I care. Maybe I care too much. You know what Think Equity tells me? they love me as the ceo because i care more than any other ceo that they know i shouldn't say any other ceo i don't want to alienate other ceos that they have relationships with but and they just did two of the most successful crypto deals of the year they're connected to a ton of people i don't want to go into more but i can just tell you there's a lot of potential on a crypto treasury strategy and uh if everybody votes for the proxy um I think all systems could, we could have a lot of fun together. Okay. And again, just remember, this is no different than we've got into COVID testing. We weren't the first step. And to be clear with crypto, there's a limited amount of Bitcoin that will ever be manufactured or mined. And that's it. And so it's interesting, every government in the world, including ours and especially ours, is now backing these currencies. You now have the government putting government money you know, 401ks, whatever, into cryptos, into Bitcoin. This isn't a fad. So unlike COVID, which lasted two or three years, this is 10 years. This is, you know, forever. This, in some respects, is like gold, holding as a store of value. So there's a very interesting opportunity here. I want to seize it, but I need the shareholder support to do it. Okay. That was a little bit of a rant. I hope you don't mind. Noella, thank you for... Staying by, I know that I ran over, but it was really important that I covered all that. We always do a Q&A at the end. We still have about 20 minutes for the Q&A. So I hand it over to you. Thank you.

Thank you very much, Ted, for the presentation. And as you mentioned, we do have a Q&A. So your first question is, very excited on the progress for Be Smart. What are the next steps?

Okay, so the next steps, very specifically, We have to get a study published in a major journal. Wink, wink, it's coming. The next step after that, pull in key opinion leaders. We already are getting them lined up. Once you have the legitimacy of a published study of our clinical study in a major publication supported by key opinion leaders, you can then start reaching out to a group of, you know, a hospital network, a network of gastroenterologists, get them to start using your test. It's very similar to what Castle Biosciences did with Tissue Safer. I don't want to compare to them. I think that we have a significantly better test than they do. And they already paved the way towards LDTs, laboratory developed tests, getting reimbursed by insurance companies. Insurance companies now understand the purpose and value of a esophageal cancer test that gives you a more accurate diagnosis. So they're already starting to reimburse. And we believe our test is even more accurate. I don't want to go into the details now, but I will just tell you as a quick example. Everyone says, oh, no, a tissue cipher is better. What could you have? Tissue cipher requires up to 12 specimens in order to give you accurate results. In order to get 12, sometimes it requires two endoscopies, which have a lot of risk. Or I don't know if the endoscopy, the GI specifically has to go. A GI typically when doing a routine endoscopy will take out seven or eight tissue specimens out of your esophagus. You have to take out more than that. That adds risk. Sometimes it turns into two endoscopies. In addition to that, I don't want to go into the differences. There's some other difficulties, but also they don't have our eight key proteins. They're also using a technology that was developed 30 years ago. I heard 60 years ago, but say even 30 years ago. It's antiquated technology. It gives you antiquated results. What we do is that a mass spectrometry machine, which is very advanced, the latest ones even have AI associated with it. And so again, I always compare it to right now when endoscopy is done, you're taking tissue specimens and a pathologist studies the tissue specimens under a microscope to give you a diagnosis. The human eye looking into a microscope does not compare to a mass spectrometry machine with AI analyzing those same specimens. There's no comparison. Plus, we have the patents on the eight proteins that are regularly expressed whenever you're developing esophageal cancer. So we have a really special test, and I can't wait to go to market with it. I hope that answers that question. What's the next one, Noella?

Thank you, Ted. The next question is, when will the esophageal cancer test hit the retail markets?

Yeah, so when you say retail markets, this isn't like, I don't know, you know, Cologuard, where they send it to your home, and you do the test at home. This is for people already getting an endoscopy. So there's nothing additional that the patient needs to do. When the patient gets the endoscopy, The GI or the pathologist simply has to take one of those specimens, send it to our lab or the lab that we partner with to run it on our mass spectrometry. So when you say retail markets, this isn't something we're selling retail. This is a test that will be added to the endoscopy. And again, this is for patients already getting the endoscopy. So it's 100% convenient in that there's nothing additional that the patient or the doctor has to do, other than the specimen that they're already extracting and send it to our lab for sequencing or processing. And in terms of timing, I think I already said the next step. Next step is publication in a major journal. get the key opinion leaders involved and then start reaching out to GIs, which is in that not too distant future, actually. So in terms of commercializing, we're not we're actually not that far away, but it starts off slow. We start with one group. of gis they start using it the insurance companies start reimbursing they have to learn what the test is the first time they'll probably they might reject you and then you send it back and they say oh wow this is actually very interesting these results are actually very important they start reimbursing and then word gets out there and then you go start going to more gi group and then it spreads So the key is to find a group of GIs or a network or a hospital network that will take your test and start using it. That's where advisory board comes in because the two gentlemen on our advisory board have vast experience and vast networks of people that they can go to and tremendous relationships, you know, with Mayo Clinic and MPRO who are already our partners. And then I don't even want to go into the names here, and I don't want to get anybody in trouble, but there are vast networks of hospitals that our advisory board has relationships with. So that part should actually be relatively easy, getting one of these networks to start using our tests, and then the word spreads, and then this will become a big success. And then somebody like an exact sciences, I haven't looked them up in the last few months, you know they've been worth somewhere around 10 billion dollars this would be a rounding error for them they could give us 50 million dollars up front and and a royalty and the royalty you know one day i don't know could be 50 million dollars a year or something like that i mean the numbers could be crazy on the same well for our little company whether or not even i don't even think we have 15 million dollar market cap next question please your next question is are you able to give us an update on timing of when you expect to start collecting from crown Yeah, so I already addressed that. When the bankruptcy court, I would say, I want to be conservative here. Within four to eight weeks, once we're in court with the judge, then we go hog wild on the insurance companies. And again, Crown has already reached out to I can't remember what the number is. I think they told me they already reached out to about 100 insurance companies. And the common answer is we know you. We hear you. We understand we're going to have to settle with you when you officially file. Let us know and then we'll talk again. And then it's just a matter of timing. Does it take two weeks or four weeks to negotiate with them? How long does it take for the check to come in and so forth? you for the clarity on that ted the next question is can you tell us what line of crypto investing opportunities you're looking at yeah i i think it's a little premature i will tell you that the powers that be that we're working with their first focus is bitcoin they don't want me to say anything other than bitcoin they want me to say michael saylor micro strategy Their approach is that our company becomes the next MicroStrategy and that we do it just as well or even better than MicroStrategy is doing it. They were first, doesn't mean they're the best. And you know what? It's no different. Here's the concept that I've been thinking about. If you think about somebody that's a really big hedge fund manager, you know, that's managing $100 billion, right? And you say, what do you need another hedge fund for? There already is a hedge fund. What do you need another hedge fund for? There's more money out there to be managed than one big hedge fund or 10 big hedge funds can manage. And it's the same thing with crypto. And there are more and more cryptos and there are more and more strategies. But the bottom line is, if we attract big players, we will attract big investor interest. Knock on wood, our stock price will go up. Our shareholders will do the right thing and vote to increase the authorized. We'll raise money as the stock price goes up. And before you know it, we could be sitting on half a billion dollars of cash in the stock price that's multiples of where it's trading right now, many multiples. And we take it from there. So I'll have more to say about this. And I really want to do this in a separate press release and go into more detail. I don't want to speak out of line. And I don't want to talk about people and partners without their permission. But I can tell you that we're already talking to major players.

Thank you, Ted. The next question is, will investors be diluted because of the crypto? We trust Ted, but we're afraid.

Love that question. The answer is we don't have to sell a single share of stock if we don't want to. The idea is to build value. And given all the things that we just covered, Crown Medical, $50 million. Richard Kelley, M.D.: : commercializing or suffrage you'll cancer test potentially selling nebula genomics. Richard Kelley, M.D.: : By the way, I should also mention on the crown medical. Richard Kelley, M.D.: : We are very we are working already on doing something entering what's called a dip financing debtor and possession, that is basically a financing against the collections. If we do that, then every shareholder should be thrilled because they know that there's a company of experts. This is all they do is they finance litigation where they know that there's going to be a positive outcome from the litigation and they'll give you money and then they collect as the funds actually come in. So, you know, they give you the money at a discount. I don't know what the discount terms will be or whatever. I guess I don't know if that technically I don't even know if that's considered debt because I don't believe we even have to pay it back. Their collections come straight from the Crown Medical Initiative. And so if that money comes in. Hell, if enough money comes in, then I don't have to raise money. I can pay off some of the debt that we have right now. We can potentially even buy back stock. and build our company. I would love to put some money to work at Nebula. I think we could double or triple the revenues of that company very profitably, very quickly. I can't do it while we're tight on capital. Just an example, the B-Smart esophageal cancer test. That's not initially going to be profitable, but I can tell you this much. I'm not spending a lot of money either in the early days. We're going to do a grassroots, and likely once we gather some momentum, I guarantee you they're going to be multi-billion dollar companies knocking on our door wanting to buy us or partner with us so we have those kind of opportunities so the last thing in the world i'm going to do is destroy our stock price from here i want to do the opposite i want to build the value of it the idea is to get the stock price going up raise money as the stock price going up that's the purpose of the crypto treasury strategy as i said i can give you five or ten examples of companies who have just recently not even three months ago three days ago who are executing on successful crypto treasury strategies and their stocks are going up one, two, three, four, five times. 100%, 500%. Crazy mess. I don't care if ours goes up 500% or not. But for you guys to worry, am I going to destroy our stock price from here? Absolutely not. There's no reason to. If we were going to destroy the stock price, then what's the point of doing it? I wouldn't do it. I just won't do it. So it's the same thing with COVID testing. We started off small. And by the way, I just want to point this out to everybody. When we got into COVID testing, I think we had about a $2 stock when we decided to get into COVID testing. Within about six months, and we had the ATM, we had the authorized shares, I didn't all of a sudden start dumping stock in the marketplace. In fact, I remembered our stock went up And then somebody wanted to do a deal with us. Our stock got to about $10. Somebody wanted to do a $6 deal. And by the end of the day, and I was talking about doing a raise with them, then at two hours before 4 o'clock, they said, at $6, and I said, are you kidding me? My stock's $10. Why would I do that? And they crushed the stock. They said, that's the only price we'll do. I said, no. And you know what happened? After they crushed the stock for a day, the stock starts right back up again. Where did we do it? I did $5 million and I think I want to say about 11 bucks a share. I can't remember exactly, 10, $11 a share. And then two or three weeks later, we raised $37.5 million at $12.5 a share. We had the idea for the COVID testing when the stock price was two. We didn't raise money at two. We had the ATM. We had the shares authorized. I didn't go dumping stock at $2 to go get into the COVID testing business. So if That's real life what I actually did. Don't assume that I'm going to do just the opposite and destroy everybody, one of the largest shareholders in the company. And we don't have to do this deal. And we're not doing a reverse merger to just give away the company. Our company doesn't exist. So I know that there's a lot of fears out there, but they're irrational once you understand our strategy and what we're really trying to do. And again, I want to deploy the same strategy. Get the stock price moving up, sell stock is going up, raising money. So it's actually anti-dilutive. If you're raising money as a stock price going up and you're raising the money opportunistically, it can actually be anti-dilutive, which is what a lot of these other strategies are. They raise money at high stock prices, they invest, into crypto as long as you're trading at a premium to your net asset value then all any additional money that you raise if you're raising above your net asset value then you're increasing your net asset value on a per share basis once you're increasing your net asset value on a per share basis and if you buy more crypto and you continue um trading at a premium you're just continuing to be actually empty a little you're actually increasing your value on a per share basis it's a phenomenal strategy And it's one that we can make work the right way. But one of the keys to it is attract big players to work with you that the investors get excited about because that's how in the early days you get a premium on your stock price. So that's one of the keys. So it's a little more complicated than that. I'm happy to go into it more, but suffice it to say, I'm not here to crush the shareholders. I'm the largest shareholder. I'm here to build value. There's an opportunity here. I want to seize the opportunity. It's that simple. We don't need this opportunity. But we didn't need COVID testing opportunity either. We didn't have to do that, but we generate $100 million a year revenues. We made a lot of money for a while. And the only reason we're in this position now and our stock price isn't $5 or $10 a share right now is because the insurance companies and the government cut us off. And if I knew that they were going to cut us off, I wouldn't have spent all the money that we spent, which was actually a rounding error at the time if the money came and it was supposed to come in. But because the money didn't come in, what was around the hour all of a sudden put us in financial distress for a period of time. I was embarrassed for it for a while. I've gotten over it now. It's my fault from the point of view that I'm the CEO. But the fact of the matter is the government pulled the rug out from under us. And so now we've cleaned up the whole company. I did exactly what I did when I turned around the company a dozen years ago. And our stock price was 65 cents. We've now cleaned up the company. We have tremendous opportunities ahead of us. And I'm really excited about the future of the company. Thank you for all those questions. I think we have time. Do we have another question or two?

Yeah, we have quite a few questions left, but we can squeeze in.

OK, so let's at least do a couple more. Go for it.

Sounds good. The next question is, how many years of protection do you have with the Be Smart patent?

Yeah. So with the be smart, don't quote me on this, but since we just got the patent, it might be 20 years, but even if it isn't 20 years, there are ways of continually updating the patents with new inventions, additional protein markers, As we roll this out and we start to commercialize this product, we will be gathering more data. In effect, especially in the early days, we in effect will be building a larger and new clinical study on real patients live at the time. Our previous studies were done where there was a bank of specimens that we tested. that were from patients that might have been tested two, three, four, five years ago. And so we get to see how they progress. So we do the test on the specimen and see what our test results were and then compare it to what happened to the patient. That's why we know that the test works so incredibly well, because we already know the result. So now if somebody is at high risk in our test, Well, guess what? Since it was on a patient, we might have collected the specimen three or five years ago. We now see, did the patient actually get esophageal cancer? What happened? That's how we know that our results are so phenomenal. But what we're going to do now is, as we roll this out with the GIs, we'll be testing patients as they're going. We're going to be building a big database of information. It's going to be like a monster clinical study that's going to continue to validate what a great test we have. And as that happens, we will be able to formulate and build additional patents around our test. So not only do we potentially have 20 years on these patents, we're going to keep building on those patents. It's just going to be more valuable over time. Thank you. Great question. What's the next one, Noelle?

Thank you, Ted. And then your last question or more of a comment for today is, as a great number of biotech companies and healthcare in general has been very disappointing in the past year, aside from a few exceptions, prophase could have the blockbuster product of the year.

We can have multiple blockbusters. So first of all, yes, our B-Smart esophageal cancer test could absolutely be a blockbuster. And 12 months from now, it could be worth 10 times the entire market cap of our company. Is it gonna happen? Maybe. Let's see how this all plays out in terms of timing, in terms of capital, et cetera, et cetera. What I can tell you is all the scientists I am working with on this are all super excited. They believe this is the best diagnostic test in the world for esophageal cancer. And the key with esophageal cancer is An accurate diagnostic test is critically needed to save lives. It'll save insurance companies billions of dollars, but it will also save an enormous amount of lives. And in addition to that, it will also give other people that think that they are at risk peace of mind, that they're not walking around every day saying, shit, am I going to die one day with esophageal cancer? It's a really awful way to live. And so we have a test that says, no, you're at very low risk, don't worry about it. It gives them peace of mind. It also then saves billions of dollars as well. So that's a very exciting test. I'm also excited about the Crown Medical Initiative. I also think that nebula genomics is a hidden value now that Jason Carcass has turned it around. And it's just a matter of what we do with it. And a lot of that depends on capital and it depends on how the initiative goes with Think Equity, whether we sell it or keep it. If a lot of money starts coming in from Crown Medical and You know, we grow. It might be smarter strategically for the company to grow Nebula rather than sell it. And then at the same time, you know, a crypto treasury strategy could dwarf everything else we're doing right now. So we'll have to see as all these things play out. I really enjoyed the call tonight. I anticipate a press release probably next week. Don't quote me. It might be the week after on our crypto treasury strategy initiative and next steps. and then we have the proxy in two weeks we will have another vndr before the proxy before the final um um date of the proxy the proxy is august 29th i don't know what day shareholders will start to get their proxies in the mail relatively soon please it's really important to the company um that you vote number one we need a quorum so please vote and number two it's in the best interest of the shareholders to vote For all of the items on there, you know, one of the big ones obviously being the authorized shares. That's what gives us the ability to move forward and attract, you know, multi-billion dollar companies and multi-billion dollar individuals to partner with us to build this into something really special. So I'm looking forward to next steps, looking forward to the BNDR in two weeks, potentially a press release either next week or the following week on our crypto treasury strategy. I anticipate a press release or two coming on BeSmart, on things in the works. So there's a lot of good things going on. I'm excited for the future. And I appreciate everybody listening to me for an hour. I love to talk. And this is the one time I don't get in trouble for talking a lot. Noelle, you're the best. I love having you on these calls. Thank you so much. Thank you to Renwar. And have a great day.

Thank you so much, Ted. And once again, thank you to everyone for joining us today for ProPhase Lab second quarter 2025 results. ProPhase is trading on the NASDAQ under the ticker symbol PRPH. The playback will be available on our website 24 to 48 hours after this presentation under the VNDR Larapie tab. Please stay tuned for the next quarterly call and see you next time.