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spk00: Greetings. Welcome to the Pressure Biosciences first quarter investor conference call. At this time, all participants are in a 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, Rich Schumacher, CEO of Pressure Biosciences. Mr. Schumacher, you may begin.
spk01: Thank you, Alex. Welcome everybody to our first quarter 2021 financial review and business update. Before we begin, I would like to read a short statement. The following remarks may constitute forward-looking statements within the meaning of 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 to reflect any change in our expectations or any change in events, conditions, or circumstances on which such statement is based. So today in the agenda, the first thing I'd like to do is is, uh, announced that once again, I'm very pleased, uh, to welcome Jeff Peterson to our call. Jeff, as I'm sure most everybody knows, uh, is our chairman of the board. Uh, and he is a, uh, a terrific chairman. I've said this oftentimes at, uh, that all public companies should be blessed to have sound like Jeff, uh, running the board and helping with the company. So Jeff, I've asked Jeff to come here today to help answer some of the questions. to offer his insight, which is sometimes not exactly the same as mine, but often is, on the progress we've made over the past three months and to discuss what we consider to be our exciting future. Jeff, welcome today.
spk02: Good afternoon, everybody. It's always a pleasure to join you.
spk01: So for today's meeting, we're going to start with a brief discussion of the 2021 first quarter results, which we sent out on Monday night and again today in a press release. And Jeff and I will highlight some of the accomplishments so far in 2021, followed by a general business update afterwards. We're certainly going to be pleased to take a few questions. In the financial overview, I'd like to go through a few of the major things that happened in Q1. First of all, total revenue was $559,900 compared to 253,900 for the first quarter of 2020. This was an increase of 121%. The revenue was driven by sales of our leading products. First, our instruments. Instrument sales for Q1 were 319,500 compared to 95,200 for the first quarter of 2020. This is an increase of 235%. Obviously, added a great deal to our our large increase in revenue for the first quarter over last year. Consumable sales, for the second time ever, broke $100,000, and the first time was several years ago. We did $102,000 compared to $56,300 for Q1 of last year. This is an increase of 81%. We have a small instrument called the shredder, which... sold well in the first quarter of 2021. We had $56,600 in revenue from this shredder. It's about a $5,000 instrument, and that's compared to $34,000 for Q1 of last year, 67% increase. Gross margins, Q1, we had a gross margin of about 60%. And in Q1 of last year, our gross margin was 31%. some of the reasons behind this we did less distributor sales in the first quarter of this year than last year we had less discounts therefore have to discount of course any company will discount its its product line usually pretty much to a good distributor since we did most of the sales directly we were able to capture all of that ourselves we also had more consumable sales which have a terrific uh gross margin and we sold these uh these shredder kits which also have a terrific gross margin uh so when you add all this together we almost doubled in our in our gross margin and that certainly added to uh to our lessening of our operating loss for the quarter operating loss itself was a million seventy five thousand one hundred compared to a million three hundred ninety five thousand one hundred for q1 last year So we decreased it by 23%, and again, driven by these much better gross margins. So the basic and diluted net loss per share went from $1.62 last year down to $1.45 this year. So we're very pleased with the first quarter. And as we said in the press release that went out, we have also started the second quarter well. The second quarter is just about now equal to, maybe even slightly better than, and this is through half of the quarter through last year's full quarter. So we don't look at this as a one-quarter anomaly. We didn't see much evidence that this was like a built-up demand through the pandemic, and it all kind of came in at once. We're seeing that these orders are coming from a multitude of different labs, both U.S. and outside of U.S., in Europe and in Asia, very well spread across a number of companies and also good consumables and good shredder kits. So we're very, very pleased with the first quarter, and we're pleased with the way the second quarter started out. So with that, I'll just turn it over to Jeff to see if there's anything at all that he'd like to comment on that.
spk02: I think you summarized that well there at the end, Rick. There's been a lot invested in building up the knowledge, awareness, and key opinion leader base around the traditional instrument platforms in our pressure cycling technology over a period of many years. We were really anticipating reaping some of the benefits of that a year ago when COVID did get in the way. But what we're seeing is it is kicked right into the kind of gear we were expecting and seeing such a strong second quarter underway as well as just helping to validate that. And this is really without even talking about progress being made in the barrel fold and ultra sheer portions of the business. And we'll talk about that in the next section.
spk01: Thanks, Jeff. So, again, I'll remind everybody, when we finish in just a few minutes, we're going to open up the telephone line for questions. The second part of the agenda here is to talk about some of the operational and technical highlights in addition to the financial highlights. So, first of all, we've announced plans to acquire the assets of a global eco-friendly agrochemical supplier. We expect these assets to be accretive with sustained profitable revenue growth. And we think that there's certainly many synergies that we anticipate with their green, environmentally friendly agrochemical line that is going to fit in with some of our product lines. So we're very excited about this and working hard to get this closed as soon as possible. So I think, Jeff, what I'm going to do is just, you know, ask you to briefly comment on any of these. You don't have to as we go along so that we don't build them up and go back.
spk02: Yeah. So I'll be happy to do that. As I indicated in my comment in the press release announcement we put out for the conference today, I think the particularly exciting dimension of this is for the UltraShear platform and all of the enablement in oil and water nanoemulsions and many different markets that that is opening up for us. Our overall strategy is a combination of equipment leasing and service and licensing of our technology for use by those clients. And that's a model well proven in many markets and one that we think will serve our clients well in making it relatively easy for them to initiate and engage and then scale with us. But a stable, rapid growth sort of continuous monetary flow platform, not a big upfront capital bolus and then smaller amounts downstream. So we're very pleased with how that's being received and all of our interactions with the prospective client base that we're addressing. But in this case, this is a specific test we're doing of forward integrating into one of the market segments so that we get to participate directly in the application of our ultra-shear technology in the agrochemical sector. And I'll comment maybe a little more on some of those synergies later on but as a overall strategic or element of our strategic mix we're very excited about this test in terms of a direct participation and in in this case the fact that we are engaging with an already eco-friendly agrochemical supplier so not the you know the long breakdown time, you know, pesticides and fertilizers and so on, or pesticides in particular, but eco-friendly products that do not have, you know, an unpleasant environmental impact and are considered to be green solutions. So we're really pleased with this and looking forward to getting this off and running here very quickly.
spk01: Great. So the second thing in the first quarter that we announced was a collaboration with a company called Sinuses Corporation. They're a company that's developing a product for post-nasal surgery to keep the sinus area open and drained. And they are developing an implantable, disposable device that will take a a certain enzyme and release it over time and they think that that we have the answer to to make this work perhaps even better than it's working now through our ultra shear technology which jeff just talked briefly about so with the ability to to break for instance oil oil drops down into nano sized droplets and make an oil drop go into a million droplets we're able to nanosize or reduce the size of some of the oil particles or oil droplets that are holding the active ingredient. And so we signed a collaboration with this company a couple of months ago. We announced it. It's the first collaboration we've had that's going to go deeply into using nanoemulsions or our ability to make nanoemulsions for an active ingredient that's going to use in a potential human therapeutic. So we're excited about it. We're well into it. We're hoping, of course, that results come out good. We have every reason to believe so far that they have. And, of course, Sinusys is hoping the same because this would allow them, they think, to better control the dosage of the enzyme, the active ingredient that they're trying to release. So we said for several years that one of the biggest markets for our ultra-shear technology is in the pharmaceutical area. Although we're more deeply involved in nutraceuticals like CBD in the beginning, that's our so-called low-hanging fruit, perhaps one of the largest markets of all would be in pharmaceuticals. So we're excited to have announced this, excited to be working in this. And Jeff, anything you want to add?
spk02: Yeah, I'll just follow up that across so many of the different market applications that UST will be addressing, a fundamental benefit is the fact that these ultra tiny droplets in the nano emulsion are so small that they literally only have enough room to hold a handful of the active molecules. So the active molecules are actually pressed up against the surface of the droplet and exposed at the surface for the body to see, touch, and absorb all of them efficiently. That's the critical breakthrough of getting down to this ultra tiny scale of a nano emulsion that UST achieves. And the benefit of it is from a dosing point of view, traditional emulsions that have much larger droplets where more of the active, much more of the active is hidden and trapped in the internal part of the droplet and not easily exposed and absorbed by the body, The net effect is most of that oily material passes through the body without being absorbed. And you end up having to put a much larger amount of dosing into the patient. And you then get variation in the efficiency of one patient to another and how much is absorbed. So you can get overdosing and underdosing results because of the inefficiency that is presented to the body there. With UltraShear and the super tiny droplets we're referring to, it allows you both to reduce the amount that you dose the patient with, so there is a cost saving potentially on the production and supplier side, but you also have a safety. You have a dosing speed, rapid absorption, and a safety factor that comes through. And this can be important in many of the applications we're dealing with, but none so important as pharmaceutical therapeutic applications. So we have very high hopes and ambitions for what we will achieve. About roughly 50% of therapeutics tend to be oily type substances or molecules that need to be effectively presented to the body. So the opportunity is very large. We're very excited about this first collaboration with some great prospects for a beneficial impact and hopefully lots of other folks who will be watching and following down this path with us.
spk01: The third achievement that we announced during the quarter dealt with the putting together of a food industry consortium with our partner in the ultra sheer technology field, Ohio State University. and this was announced a couple of months ago. We're very excited about this. This consortium is going to be made up of food industry folks, a lot of liquid food people, beverage people, who are always trying to find a better way to infuse things into their liquid beverages and infuse them in a way where they will not shed out or fall out, infuse them in a way where they will be absorbed Um, and of course, to try to do this in a way that's not deleterious and therefore you're not adding a lot of chemicals to try to pull things into, into the beverage. So there's a lot of interest, uh, in, in the food industry and ultra sheer technology. There's been a lot written over the years and using nano emulsions to, uh, because of the, uh, the much better absorption, but much better bioavailability of a nano emulsion that is known. But to be able to make certain things in a nanoemulsion at a level that is or a scale that could be commercialized has been a very, very difficult thing over the years. And we believe we've solved that. We believe that ultra-shear technology can, in fact, be scaled to almost any level. and so we're very excited about that, very excited about working with Ohio State and their College of Food, Agriculture, and Environmental Sciences, and very excited about this consortium. We really think that between now and the end of the year, there are going to be some very, very big names and some very important companies that don't have big names that are going to join the consortium, and one of the major goals, objectives of the consortium is to Let them become more knowledgeable. Let them have availability to ultra-shear technology. We are building a prototype of a very large instrument. We call it the MAX. And we'll be shipping it in a matter of weeks to Ohio State. They'll be putting it into their pilot plant that has a number of other instruments. And as companies join the consortium, they're going to have ready access to this instrument, to our prototype, and they'll be able to use it for formulation, for actually proving out that it, in fact, can work for what they want to do. So you can see why we're excited about it. We'll have access to some amazing companies, and they'll have access to some amazing technology. Jeff?
spk02: Yeah, I'll just add that the technology exciting difference in terms of this collaboration and the food and Bev area in particular is although they will also benefit from many of the same effects of these tiny droplets for more rapid absorption and controlled dosing, so to speak, of the nutrients, what's of particular importance in the food and beverage industry is how our technology and the shear forces that are applied in the UST process shear and destroy microbial content. So bacteria, viruses, spores, and so on are shredded through this process. And it is that effective sterility that results from it that is the driver in many of the food and BEV applications. For folks that have spent time in Europe and in the grocery store in Europe, there you'll often see milk being sold at room temperature in rectangular cardboard cartons stored long-term on the shelf. And for those of us that have tried that product, this is the result of a high-temperature process that has made it safe for that kind of room temperature storage, but it also damages the taste profile of the milk. And it's really not the pleasing product that we're used to purchase cold in a grocery store here in the US. The US tea process with its sheer forces and very little high temperature exposure that occurs in the process and a well controlled exposure as well, is a path to that same kind of room temperature stability without destroying the sensory factors, the taste, smell aspects of whether it's milk or any other product. So in the food bev area, there is a different balance of benefits that are being focused on. And this partnership with Ohio State bringing in a significant number of major food and bed players to get early exposure, demonstrations, do some initial formulation work, and have a fast, well-developed path to our licensing access, we think will be a very effective commercialization strategy for us.
spk01: So the fourth thing that we talked about during the quarter was an interview that I gave One day to the Stock Day podcast. This is an extremely well-regarded podcast. It's published in a number of areas. It's published by Yahoo Finance and many, many other dailies. And I talked about the consortium, but I also talked about our partnership with Leica Microsystems. Leica is a Danaher company. Danaher is about a $200 billion... holding company of a number of very, very strong and well-used companies, products. They have companies that they've purchased over the years that have great reputations for quality instruments and quality kits and products. And Leica is the microscope manufacturer. It's, I think, 103, 104 years old. And they have a laser microscope that is used for looking at pieces of biopsies to go in and actually cut out a very specific part of a biopsy tissue. And Dr. Tom Conrad, who's in Arlington, Virginia, he's at several hospitals there. He also runs the Women's Health Center as part of the NIH. He's a very well-known cancer doc, cancer researcher. He's developed a work plan that uses a Leica laser microscope on the front end and a mass spectrometer from a couple of companies on the back end. Both of these are $300,000, $400,000, $500,000 instruments. And in between, the bridge that holds them together is our system, our Barocycler system. And we've had several press releases. You've seen they've given us several testimonials and the press releases about how important our system is to what he's doing. He is able to generate additional data, data that he has not been able to generate in the past. And this is what he says, he and his colleagues say in these releases we put out over the past two years, and that they believe the data they're generating would not be possible if we weren't there with our system in the middle for the processing between the time they extract it out of the biopsy and they read it, analytically read it in the mass spec. We're the guys in between. And he believes and they believe that it's going to lead to better diagnostics and better therapeutics, primarily for cancers that affect women. So we're very excited about this and very excited that they're going to, that they're using our system and they're publishing on our system. And we are certainly, you know, there's been a bit of a quiet period for the last year in many things, including in in research, but now we're starting to get phone calls from people who are reading the papers and want to learn more about what Dr. Conrad has been doing with his work plan using our system. Jeff?
spk02: Yeah. You know, what I would focus on here is the strategy of a number of years of focusing on key opinion leaders and academic settings that provided tremendous testimonials and scientific journal articles backing the use of our technology and paving the way for the differentiation in sample quality and results that are achieved with pressure cycling was a strategy to get the word broadly out into many potential application areas But the ultimate intent is for that to take hold and to scale in organizations that can apply that at a larger scale. And we have seen major biopharmaceutical client partners of ours who have now purchased 11 of these PCT platforms and major cancer research groups in Australia and in China that we've talked about before. you know, that have six, eight, you know, and getting more of these platforms. This is another example that's particularly exciting where the laser microdissection capability is just revolutionary in how well it can zero in on exactly the bad actor cells in a sample and identify and isolate them And when you focus on just those carefully dissected bad actors and do research on those, the markers found and so on, what was eye-opening for me is what dramatically different results were being revealed, where when you use a grosser sample of tissue, one conclusion was reached when versus when careful laser microdissection put the attention just on the specific bad actor or cells in question, an entirely different outcome and decision is reached. That's a monumental breakthrough in terms of the quality of the science and the quality of the resulting medicines and therapeutics and interventions that follow. And for us to now be coupled in on a platform with a partner that can automate and bring to scale these kinds of solutions is a very exciting development for us. And we value this partnership a lot and look forward to a lot of impact with them over the next few years.
spk01: So the next achievement we want to talk about is talking about our Barifold services. I think investors on the call will recall that our primary business up to now has been through what we call pressure cycling technology with roughly 350 instruments and 225 sites all around the world. And that's what we've been talking about a lot over the last few years and these key opinion leaders and all. And then we've talked today a lot about ultra-shear technology, which is We think going to eclipse everything we've done so far in its potential is just so exciting. And we're looking to get our ultra-shear technology instrumentation out by the end of the year. In between is our Barifold. This is the business we purchased three and a half years ago. It's eight issued patents with several more that are marching through prosecution. And it basically uses pressure to manipulate proteins As we said before, when you're making a protein drug in the lab, a number of things can go wrong as you actually grow it in the lab, the proteins in the lab. The two biggest things, or two of the biggest things, are the proteins can stick together, we call them aggregate, or they can be misfolded. They're not exactly in the right shape. They're misfolded. And if you put those proteins under pressure, You can sometimes disaggregate, which means now if you're building this into a product, you now can use this in your product on the market. Or if it's misfolded, it will not have, it could actually be hurtful to the patient. It will not have the beneficial effects of what you need from that protein. So when you put it under pressure under certain circumstances, you can what we call unfold it. And then, you know, take your fist and open it up and then put it back. And when it goes back together, sometimes it goes back in the exact way that nature mother nature wanted it to be. So we own those patents and we started working on them a couple of years ago by offering services. And we've had six or seven companies, several multi-billion dollar multinational companies, several small startups, and a couple in between. And they're developing protein based drugs, which as I said, a couple of months ago, I've read that 22% of all drugs on the market are protein-based. And sometime in the near future, in the next five or ten years, half the drugs on the market will probably be protein-based because they're so much more beneficial. So the Barifold services that we offer, one of our companies, one of our customers has now elevated to the point where they've asked us to go to what we call stage two. Stage four is going to be when they commercialize and they need us. They need our system to, when they make their drug for sale, they need our system as part of the manufacturing process. But to get there, we have to be there from the very beginning through every step, through all of their IND and their phase trials, et cetera. So for our phase one, this is work we do in our own lab, and we can generate data which gives them an idea, can pressure help fix a problem, or maybe even they don't have a big problem, but pressure can often reduce the cost of manufacturing appreciably and decrease the time to get the market. So we have different reasons that companies come to us. And we've had one company, a well-funded startup company, that has now asked us to go to what we call stage two. We need to start working with their contracting manufacturing organization, the CMO or CDMO, side by side because now they want to expand and develop larger amounts of their protein potential drug and start doing other studies with it with larger amounts, amounts that can't be done just in the lab. They need to be done more in a manufacturing facility. So we are now building a system that will go into a CMO. We're so excited about this. because this is a system that was going to generate and be able to apply the pressures and what we do to a much larger amount of material than we can do in just tiny little test tubes in our lab. And so we're graduating, and this is probably a couple of years to go through the process. If it works, then we go to the third process, which is to get into human trials and get approvals from FDA and other countries, and then the fourth stage would be they're out on the market. Our big payday, we get paid throughout the entire process, and it's profitable for us, but our big payday is when we help a company that might not be able to get to market, get to market, and they depend on our patents to get them there to help them manufacture their protein-based drug. And so to get there, we have to go through stage one and then to our stage two, which we're now doing So this is very, very exciting for us because in two years, this is the first time a company has gone through enough of our stage one to say, okay, we're convinced it can help. Now let's try it on much larger batches. Jeff?
spk02: Yeah, I think I'll just emphasize a couple of points. You know, the whole area of protein folding, you know, is important. kind of unfamiliar to many people but these are very large molecules and in fact very long long chains of amino acids that have ability to fold up into these complex shapes and we've all seen pictures or representations of these on magazine covers and so on and what people many folks don't appreciate is As scientists and engineers study the field of thermodynamics, one of the things you learn is how pressure and temperature control the state of matter. You can boil or condense or freeze a material just by manipulating pressure or temperature or both. And these manipulations in terms of different crystalline states or different folding states of proteins are manipulated by pressure and temperature. And And we learned that we can manipulate them with great control and finesse as we learn how to apply it to a particular problem. And for pharmaceutical manufacturers trying to manage protein folding and aggregation problems, when they have to tangle with these problems today or remediate them, they have to use some pretty unpleasant chemicals try and disaggregate or unfold and then have to try and get back to the correct state and then get all those unpleasant chemicals back out of the process. And the opportunity to do this with a clean pressure controlled process with great finesse is something that has tremendous upsides and appeal. It is a new approach and new technology for the pharmaceutical space. That's why it is taking some proselytizing and a partnering and development pathway to get the initial traction and prove its worth for some initial partners. But we anticipate that this is something that will be a standard of practice and a preferred approach in this biopharmaceutical arena in the years ahead. So we're very excited about it and excited that The first one of our handful of partners has moved on to the second stage, and we look forward to building a success and doing this with many more.
spk01: So the last thing that I want to highlight, and it won't take much to add to this for either Jeff or me, is that we're awarded three additional patents for our revolutionary Altasheer technology platform, one in Japan, one in Australia, and another in China. And we're very excited about this. It takes our patent estate now up to six, including one in the U.S. And we have others that are marching their way through multiple countries in Europe and other countries in Asia and Canada and in other places. So we think it's just a matter of time. And we have other patents that have been filed, too. Very excited that we've added to, in the last three months, added to our patent estate. Jeff, anything to add to that?
spk02: Well, I was going to say, that's just an ultra sheer, those initial six patents and additional ones. I think we're up to, what is it, 28 now issued patents, or maybe higher.
spk01: Actually, 29, Jeff.
spk02: 29. Yeah, thanks.
spk01: You got to hit 30.
spk02: And I would just emphasize that patents are an important part of the intellectual property strategy, but Trade secrets and know-how are another one that makes it more difficult for others to, you know, copy or rip off, you know, our technological innovation. So we maintain a healthy mix of both, you know, patented, disclosed intellectual property as well as trade secrets.
spk01: So I think at this point it's time to turn it back to Alex and have her answer open up the lines for any questions there might be. Appreciate you guys. I know sometimes it's a little long, but it's important. We've made some, you know, not only did we have a terrific quarter in our financial part of the business, but we made some very good progress in the other parts of the business, and so wanted everybody to know that. So, Alex, are you there? And we're happy to have you open up the lines for any questions if there are any.
spk00: Of course. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Gary Zwetschgenbaum with Plum Tree Consulting. Please proceed with your question.
spk04: Thank you, Rick and Jeff. As a long-term investor, I'd like to offer my personal congratulations. First quarter revenue up 121%, insurance sales up 235%, doubling gross margin and a decline in operating loss. I'm very excited to hear about that. I'd like to focus my question on the announcement that you made, the recent announcement to acquire the assets of a global, eco-friendly agrochemical supplier with assets that would be accretive, as you said, and revenue beginning almost immediately? It's a two-part question. I want to ask you, Rick, and then I want to ask Jeff. I want to ask that you said it would close in the coming weeks. With that said, When could we expect to see revenue from this acquisition? Is it possible that it could even be in Q2, which doesn't end until the current quarter until June 30th? And then my second part, to ask Jeff, I'd like to ask him, what do you think the overlapping benefits and synergies are to pressure biosciences on this relationship?
spk01: Hey, thanks for the nice words, Gary. I'll take the first part. At this time, we are close to closing, we believe. We're trying to get this closed, if possible, within the next several weeks. If we do close this acquisition in the next two or three weeks, your question is, when might we start seeing revenue? It is very possible. that if we close this deal by the 10th of June, which we hope to do, we'll have revenue that will be generated in the second quarter, to your point and to your question. It is very possible. This is a group that hasn't been in business for the last two years, but they do have a brand name. They do have customer base. They do have distributors, they do have assets that we're very much in love with. And, uh, their, their biggest market, uh, was in the U S for agriculture. Uh, they have products that are already EPA and, uh, approved and FDA registered, uh, USDA registered. They, they, they have products, they have, they have it set up. Uh, we are logistically strong in the U S. Of course, although our customers are all over the world, we have a number of assets in the U.S., whether they be sites that can be used for storage or for dispensing, for shipping, distribution, et cetera. So I would say we're going to do our darndest to get this thing done in the next two to three weeks because if we do, there's a – I think a more than 50-50 chance that there'll be revenue, profitable revenue that we can book in the second quarter. And that would bode extremely well, wouldn't it, Gary, for the third and fourth quarters if we could hit the ground running in two or three weeks at the end of June and get some revenue in. So that's the answer to your question. Right.
spk04: I think you mentioned that this current quarter, is proceeding even considerably as you know, that we're looking that we've already brought in the amount of money that we did in the quarter a year ago already. And the, and the quarter is half over. I think you said that as well, right?
spk01: I did say that. And, um, about, um, about five minutes before I came into the conference room to, to take the call, we got a purchase order from the FDA for one of our, uh, instruments so um it's it's exciting it is it is very exciting uh because some of these are coming from many of them are coming from word of mouth as as you know gary we we only have two people in sales and uh that are actively out there chasing down sales and but as jeff said earlier we've paid a price over many many years and we've now planted a seed and it's starting to sprout so that there is word of mouth is working very well for us. Jeff, you want to tackle the second question about the synergies?
spk02: I do, but I was actually going to hop onto the note you and Gary were just on here in terms of the sales performance, and you touched on something I was going to emphasize, which is this, you know, exciting opportunity momentum we're seeing in first quarter and second quarter and so on, this is occurring with perhaps the slimmest sales and marketing organization and resource spend that we've had perhaps in a decade. I'm using that broadly, but as I think about, you know, Salesforce numbers we have experimented with and marketing resources we've brought to bear at different points in time. This may well be the slimmest we've ever been. The company is very slimmed down at the moment, focusing hard on UST and preparing for this next growth phase of transition. And we're working with our bankers on bringing in funding for this next phase. And we're excited about, you know, the Agrochem addition to and and how that will play in as part of the growth strategy but it's it's very heartening that all of the past investment in building up this opportunity is is coming to bear now or bearing fruit at a time when we really have a very slim sales and marketing capability you know out there able to drive it we're pleased with the talent that we have in-house doing this but as we begin to fund up and apply more resources we're just excited about how even the traditional piece of the business is poised to grow and accelerate and yet we're putting so much focus now on these new growth platforms in barrel fold and then ultra sheer as a really big dominant opportunity so just hats off to rick and the team for what they've been accomplishing with pretty darn slim resources.
spk04: Isn't that a validation of the technology to do it with four or five less people and less operating? Well, it just tells me that over time this technology has been validated by customers around the world. And I was hoping you'd mention a little about the overlapping synergies and benefits, if you would, Jeff, on this agri- Yeah, I will.
spk02: So, Ultimately, in many different market segments that we'll serve, oil and water emulsions are the fundamental product that is out there and trying to deliver active ingredients, whether it's a nutritional, pharmaceutical, or an agrochem product. For many traditional agrochem products, whether they're pesticides or fertilizers or a variety soil improvement and other kinds of products, the active is an oily molecule. And our ability to allow less pesticide or fertilizer to be used to achieve the same or more beneficial effects in the plant is an enormous leverage point, both in terms of cost and profitability for the supplier in terms of environmental impact and not having a traditional pesticide or fertilizer that can have some unpleasant side effects or ecological damage and so on. It can reduce the load in the environment of those sorts of materials. And in this case, the Agrochem partner that we're going to be working with was already a visionary in putting their focus on eco-friendly green solutions. So even if you did have larger quantities in the environment, you don't have that ecological impact. But the opportunity to use less and deliver the same or more benefit, do it more rapidly or with controlled release, depending on what the product design is, and leverage UST nanoemulsions along with that already green solution is the kind of partnership that we want to be associated with, and we're just very excited about it. In these eco-friendly solutions in agrochem, these are typically what they call essential oil active components. Many folks may be familiar with, you know, ant sprays they buy that have orange oil in them as an eco-friendly solution. That's an example of an essential oil. But there are many, many different kinds, and many of these produced, you know, in Asia that have different kinds of beneficial impacts, whether it's as a pesticide or a plant growth or finishing type, you know, products and so on. So, this is just a delightful combination we're going to have as we integrate our new agro-camera assets.
spk04: Jeff and Rick, in the coming weeks and months and three-quarters of this year, I'm excited to look forward to what's going to be happening. Already, you've set the stage now in Q1 and talking about Q2 with these developments and
spk03: know weeks as opposed to months so please keep us informed and thank you for taking the time to break this down for me thanks for your question thank you thank you thank you our next question is from alan stone with wall street research please proceed with your question yeah hi rick and jeff uh uh thanks very much for the update it's been a while since we last took a close look at pbio and uh Congratulations on your Q1 growth. A couple of questions. First of all, were you able to get any of these PP&E loans from the federal government last year? And I know they've renewed that program and just wondering. Yes, we have. How much was that?
spk01: We're happy to be a poster child for this. I mean, the government stepped in and really helped us out. Both the PPP as well as the EIDL, the emergency loans. The PPP, we received both, you know, about $650,000 over the last year, and that first half has been forgiven. So we as investors in this company don't have to worry. It's been totally we've already applied and got approval for forgiveness. We expect the second one, which we got several months ago, to be forgiven. And the SBA loans that we've taken or applied for, are at like three percent over 30 years so they're very uh very low rate uh long-term loans so yes it's been very helpful thanks alan helpful yeah yeah and i know you were uh a year or two ago you were looking to get into like the cbd market uh uh i was wondering if that's still an area of interest for you absolutely absolutely we had a uh we had a gentleman come by um on on friday who is pretty much in Massachusetts and pretty well connected and is vertically integrated from, as he said, seed to sale. And he knows us. He's been here before. We haven't had many guests here in the last year. We've had maybe five total in a year, but we've had two in the last three days. But this gentleman came by because he is setting up something that's very exciting here. And he said, I need to come see you. And he came and I had Jeff on the phone and John Hollister, whose name you guys might have seen in some press releases, who's doing a bang-up job and taking over sales and marketing. And, of course, Dr. Alex Lazaroff, our head, our chief science officer. We're all on the phone or here in person. And he has a need to nano-emulsify some CBD oil that he has. He thinks there's a huge market for it. And he said, the only place I want to go is to come see you guys, because I've been here before and I know, you know what you're doing. So we are Alan. We're, uh, we're, we're talking to him right now about, uh, uh, he is one of the, one of the first 12 who gave us a purchase order and he has no issue. In fact, he loves the idea that we've changed it. As Jeff mentioned earlier, uh, from a sale, uh, to a long-term lease. This gives us consistent revenue over years to come, gives us an ability to put a license fee in there, a minimum license fee, and get something out of the royalty that we'll charge when they start doing well, we do well. So, yeah, we're in that game. We're excited about it. It clearly is an area that we can do extremely well in. We've proven it multiple times. Go on our website and look at some of the videos. the nanoemulsions that we make are clearly of the best quality, in my opinion.
spk03: Okay. And the third and last question, you were looking at a company a year ago in the skincare line. Is that something you're still trying to do? Is that deal on the table?
spk01: No. We and they decided it probably wouldn't work. We haven't totally mixed it, but We mentioned on the conference call a couple months ago that we're not going to go ahead with that. It doesn't mean that someday in the future we wouldn't because we do know that skin care, cosmetics, personal care items clearly can use our nanomotion technology. But, no, at this time, our focus is on the agrochemical supplier asset acquisition. We think we have a winner there, and it's – We're very close, Alan, to having this happen, we think.
spk03: You mentioned on the call today that you're working with your bankers. Do you have some sort of an offering that's going on right now or planning something?
spk01: No, we don't have an offering that's going on, but as a company that's growing, we need operating capital, we need growth capital, so it's always good to to have a bank that can, uh, can fill the need when you have it. So there is no offering going on right now, but, uh, uh, you know, as, as, uh, but as you see over time, you know, uh, we might, so everyone should keep their eyes and ears open, but right now, no. Okay, great.
spk03: Okay. Well, thanks. So it's good to hear from you, Rick and Jeff and, uh, and, uh, keep up the hardware.
spk01: Yeah, thanks, Alan.
spk00: Thank you. Ladies and gentlemen, we have reached the end of the question and answer session. I will now turn the call over to Rich Schumacher for closing remarks.
spk01: So, as always, I want to thank everybody for taking time to be with us, and I appreciate, Jeff, I appreciate you coming on, as always, and adding your highlights to everything, and I appreciate the questions we got to, and Again, I'm always available. Jeff's available. If you lie in bed tonight and go, darn, I should have asked about this, please don't hesitate. And we're always happy to take one-on-one phone calls at any time. It's your company. It's our company. We're growing it together. So let's just keep that in mind. And, yeah, this is much different than last year. Had a rough year. We owned up right up to it, as everybody knows, a couple months ago. We had a tough year. This year we think is going to be on the opposite end of the curve. We're very excited. It's not hard to come into work and work hard when things are going like this right now. So, Jeff, thank you, and everybody on the call, thanks a lot. And we'll talk again in about three months. Thanks, Rick. Thanks, everyone.
spk00: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation, and have a great day.
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