Pressure Biosciences

Greetings. Welcome to the Pressure Biosciences Investor Conference Call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Richard Schumacher. You may begin.

Thanks, Shamali, and thanks, everybody, for joining us, and welcome to the Fourth Quarter and Fiscal Year 2020 Financial Review and Business Update. Before we begin, I'd like to read a short cautionary statement. The following remarks may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the company to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such factors include, among others, those detailed from time to time in the company's filings with the Securities and Exchange Commission. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements and to reflect any change in our expectations or any change in events, conditions, or circumstances on which such statement is based. So, first of all, I'm pleased once again to welcome Jeff Peterson, companies chairman Jeff is also on the call with me and I know many of you know who Jeff is you've heard Jeff on this call occasionally in the past and I've asked him to join us so that he can add color to some of the things that maybe answer some of the questions and give you a second point of view so welcome Jeff hey Rick it's a pleasure to join everybody again today so For today's meeting, we're going to start with a very brief discussion of the 2020 fiscal year results, including the fourth quarter. Then Jeff and I are going to go over some of the accomplishments of 2020, and particularly those so far in 2021 as part of a general business update. Afterwards, we're going to be pleased to take a few questions. So first of all, on the financial end, what I can say is that we certainly had a very poor year in 2020. Uh, we were hit like many with, uh, with, uh, a lot of issues related to the COVID pandemic. Um, we had trouble with our suppliers, our, our, as many of, you know, our customers are primarily, um, nonprofits and academic research institutes and, and pharma companies. And, um, For the most part, throughout the entire year from March until just about a couple of months ago, we hardly heard from anybody. We couldn't get a hold of anybody. Most of our customers, the folks we worked with were working at home. If they're working at home, they don't need our instrument. They don't need our consumables. There were a few people that were working in COVID, which we can talk about briefly, that were working and we were in touch with. There are some other people working in other areas that were considered essential. So of our 200 and roughly 225 customers, I'm going to say we might have heard from 25 of them throughout the entire year. And it certainly showed in our results, our financial results. In 2020, our revenues were at $1.2 million compared to $1.8 million the previous year, down 33%. Our operating loss was down about 20%. It went down to about 4.5 million for the year. But I think what's important there is not only, as you might have expected, would the COGS have declined because our sales were so low, but also we had decreases in all areas of research, development, selling, marketing, general, and administration. So in all areas, Our costs were down so that it reduced our loss for the year to $4.5 million. This was not a good year. We will freely admit it's not a good year. It is something that we tried hard to try to make it better, but we honestly just had difficulty getting in touch with people. We had months going in when we literally several months where we might not have heard from anybody that we put calls into. But we took advantage of that downtime, and we worked on projects with some of our researchers that were working at home and could work on the computer, and particularly some of the marketing and salespeople, and some of the companies that are our customers. We also worked with some of the scientists during this time, and we certainly worked on internal issues. We had certain upgrades we wanted to make to our pressure cycling technology, instruments, particularly our Xtreme instrument, our 2320 Xtreme. And we spent months last year, and we're ready to roll those out in the second quarter and on. We also spent time working on our Berrifold services, which were pretty much brand new about a year and a half ago. And I'm happy to say that those have now paid off, and we'll talk about that in a few minutes. And of course, we worked a lot on ultra-shear technology. We have a lot of faith that this is the killer app that every company wants. We believe we have it. This is an application and an instrument with a number of applications actually that are very exciting to us and I'm sure to many people on the phone who are investors in the company. So we did spend a lot of time during 2020 working on our existing and soon to be released programs in Ultrashear. We lost six people over the last 15 months, and we only replaced one, so we're down five people. That certainly talks about how our SG&A costs have gone down appreciably over the year, and we're still doing our best to keep them down until things are picking up and picking up strongly, and then we'll go back out and bring some additional people in. Last year was a loss when it comes to financial performance, but it was not when it comes to development and progression of our product and product line and upgrades to our equipment. We spent a lot of time on that, and we believe that we're going to see the fruits of that coming out in 2021. If we talk briefly about what happened in 2020 and 2021 in terms of accomplishments, one of the things that we highlighted middle of the year was a co-marketing agreement with Leica. Leica is a part of the Danaher Group, which is a $200 billion group. Leica is the second oldest microscope and lens company in the world. They've been around for 104 years now, I believe. And they're very well respected in the science field because they have a number of systems that they sell into the laboratories. And one of them uses a laser. It's a laser microscope that's used for biopsies for really being able to pick out some very, very minute parts of a biopsy tissue and get a lot of data that really wasn't available before. And so this laser microsystem is one that needs our system to help once they've taken out that piece of tissue that they've honed in on and they've cut it out with a laser, that tissue needs to be processed and then it needs to be analyzed. And the processing is done using our system. A number of companies have laboratories, in fact, have talked about using our system to process the of the bits of the pathology samples that are being cut out by the laser microscope. And Dr. Tom Conrads in Arlington, Virginia, who's a very well-known, internationally known cancer expert, has been leading the charge and using our system as published and presented on our system, got us in touch with Leica. So we're very excited to announce that about during the summer of 2020. But then all of the meetings that they were going to roll it out in were canceled. And so the rollout never really happened. I'm happy to say that we're back in touch with them. We have been for about two months now. We have routine meetings every two to four weeks. There was a flyer that went out just last week that I got just being on their list, but it was good to see. There's a flyer that really promotes the use of pressure cycling technology as a well-established way to process the samples that are coming out of the biopsy tissues. There are, of course, millions and millions of biopsies that are done every year. That's exciting. But there's also 3 billion biopsy tissues that are stored away in what we call FFPE, And these are stored and they're good for, really, for ages and ages. And there are scientists now that are going back and using our system to pull the proteins and DNA and RNA out of these biopsy tissues that are now formalin-fixed and paraffin-embedded. So not only do we have a play in the current pathology as this picks up, but we'll have a play in the research as they go back and look at samples that were drawn from sequential samples perhaps from the same person over a number of years. So we're very excited about the work with Leica, and we're excited that although it's been clearly on the back burner, Leica is now just now coming back to work. They were working at home, but we were working with the marketing people. So very excited about the laser capture microdissection that we are part of. Jeff, if you want to add any color to that.

Sorry, I took a moment to get off mute there. You know, I'll just add some color to the overview you were giving as well. As Rick indicated, many companies were swamped by the impact of COVID, swamped in a bad way in terms of demand and customer contact sort of disappearing into a chasm as so many companies were severely impacted and caught in lockdowns and so on. And there is certainly some variability in the timing of things. We had a nice third quarter, relatively speaking, last year, but surrounded by first, second, and fourth quarters that were reflective of the overall environment. But we are seeing the impact the beginning of the end of that and a clear shift that occurred in the first quarter with companies coming back to staffing and back into the offices more and suddenly ready to start catching up on so many things that basically had to be dropped and put on ice during 2020. So we had a very robust first quarter and we'll have some exciting results to announce on that here very soon. And we're seeing a very strong start to the second quarter. So we're optimistic about that bit of perturbation relative to impact of COVID and then sort of the underlying business. But overall, as Rick has been teeing up here, our business is in three different platform areas where pressure cycling technology is the oldest one and one that we've been building over time with key opinion leaders and sort of a slow conversion process of building up academic and government lab background and support and then seeing that begin to convert into momentum in the industrial or company settings as large customers begin to use multiples of the instruments and move from R&D into more manufacturing and quality-driven applications. And we were very excited about the Leica partnership in that it's yet another use of that PCP platform in a way that can begin to move into a more industrial level of application and biomarker discovery and finding the differences between disease and undiseased and aggressive disease and slow disease and responders to a drug and non-responders to a drug and letting those biomarkers point the way to breakthroughs in new therapies and treatment guidance and so on. So, we're very excited about the Leica dimension being added in and I'll hold comments on Barofold at UST for a few minutes and let Rick go a little further along.