Scientific Industries Inc

Good morning, and welcome to the Scientific Industries Fiscal Year 2022 Financial Results Conference Call. All participants will be in a listen-only mode. Should you need any assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. Please note that this event is being recorded today. I would now like to turn the conference over to the Managing Partner, Joe Dorme. Please go ahead.

Thanks, Joe. Good morning and thanks for joining us today to review the financial results of Scientific Industries, Inc. for the fiscal year 2022 ended June 30th, 2022. With us today on the call are John Moore, Chairman, and Helena Santos, Chief Executive Officer. After the conclusion of today's prepared remarks, we'll open the call for questions. Before we begin with prepared remarks, I would like to remind everyone certain statements made by the management team of Scientific Industries during this conference call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Except for the statements of historical fact, this conference call may contain forward-looking statements that involve risks and uncertainties, some of which are detailed under risk factors and documents filed by the company with the Security and Exchange Commission, including the end report on Form 10-K for the fiscal year ended June 30, 2022. Forward-looking statements speak only as of the date the statements were made. The company can give no assurance that such forward-looking statements will prove to be correct. Scientific Industries does not undertake and specifically disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise. Now I'd like to turn the call over to Helena Santos, CEO of Scientific Industries. Helena?

Thank you, Joe. Welcome to the Scientific Industries 2022 Fiscal Year-End Earnings Call. We are happy to report strong revenue growth from both our business units. We were also able to make important investments in our fastest growing segments, which are Torbell and our bioprocessing. The unifying theme of our growth businesses is that we automate previously manual workflows for highly skilled life sciences workers and pharmacy workers. We call the change and the categories we create digitally simplified bioprocessing, and pharmacy. Our products make these highly skilled workers more productive and help improve their job satisfaction, thereby reducing staff turnover and improving our customers' profitability. Now, the Benchtop Lab Equipment Business Unit saw a $937,000 increase in revenue, and that's about 11%. This increase in revenue composed of a $586,000 increase in Gini product sales and $351,000 increase in Torbell division revenues. And this was due primarily to the sales of our new Vivid automated pill counter. Margin stayed strong at approximately 47% despite the inflammation and supply chain pressures. The newest and fastest-growing part of the benchtop lab equipment business is the automated pill counters from the Torbell division. We acquired Torbell in 2014 for a combination of cash, stock, and earn-out that totaled $1.5 million. We were able to earn back our purchase price in the first three years. Over the past six years, we have been investing the growing earnings from this division in Vivid. a new family of automated pill counter products. Vivid One was launched two years ago, and we have sold over 600 units. Its software is our first cloud-based subscription product. We are currently upgrading the installed base with a new software release of Vivid Plus, that is what we refer to it as, which has key features that closes the performance gap with competitive products that sell for two times our price. We have integrated new key features into our Vivid Pill Counting solution that will streamline workflows and offer a cloud-based solution for pharmacies, and that will generate a meaningful recurring revenue stream for scientific industries in years to come. This Vivid Plus subscription is a revolutionary cloud-based feature that takes advantage of the company's prior experience in cloud-based data collection. This service, which is free for the first year, incorporates customized reporting with unlimited transaction logs and data backup, transaction analytics, allowing a user to do searches and view the statistics. It has the ability to export data, access from any computer or mobile device, for easy access from anywhere, automatic reporting via email, including miscount alerts, inventory reports, user management, and in addition, the Vivid Plus service will now provide the user with access to a premium drug database. It'll also feature automatic software updates to the Vivid, an extended warranty, lifetime technical support with remote assistance, and to top it off, a free pill counting tray replacement. Our plan is for a family of at least three Vivid models. And in November of 2022, which is just around the corner, we are launching the second product, the Vivid Light. It is a lower-priced model targeting price-sensitive independent and major pharmacy chains. This product has the potential to expand the market exponentially. Now, turning to our bioprocessing systems operations. Bioprocessing grew its revenues significantly from $526,000 in fiscal year end 2022 consisting of royalties and two months of Aquila BioLabs revenue to $1.4 in this fiscal year. And this includes a full year of product sales and $200,000 or just about of royalties from Sartorius. And this represents a 100% revenue growth. Our ion processing business started with the acquisition in 2011 of Fluorometrics. This was done for $400,000 in cash and stock. Since that time, we've collected over $4.5 million of net royalties, and we've received the final payment during this year, in August of 2021. Not only was this an excellent use of shareholder capital, but it also provided important early insights into an exciting future market for scientific industries. that offers rapid growth as well as highlights the need by the biotech industry for high-throughput screening tools for cell cultures. We were able to identify one company, now the eight-year-old startup, Aquila Biolabs in Basweiler, Germany. They shared our vision for a need for a substantially lower-cost version of the Sartorius AMBER system that incorporates our sensor technology. We paid approximately $8 million for the business back in April of 2021, and we are investing aggressively to expand their offerings and improve the value customers receive from using these products. We couldn't be happier or have more confidence in our investment in Aquila or its founders. We consolidated the two businesses under the SDI brand. Daniel Gruenis The co-founder and CEO of Aquila was elevated to CEO of SBI in the spring of this year. To take advantage of the excellent technical leadership of the Aquila co-founders, we moved our research staff from our Pittsburgh facility to our German facility and consolidated R&D in Basweiler. We have established a marketing, product management, and finance team and we are continuing our investments into building up a sales force, which will allow us to capture the available market potential. The integration of the two businesses has gone very smoothly, and the growth of the organization to now 45 employees has allowed us to acquire additional knowledge through hires from industry leaders such as Hamilton, Eppendorf, and Eurofence. The results from our substantial investment in R&D are bearing fruit. In September, we released our DOTS software platform, which is a game changer in value and use, easy user interface, and interoperability with other sensor systems and data loggers. Also, it allows customers to combine our previously isolated actuator and biomass sensor portfolio, whereby we increase the value proposition from our existing products. The DOTS platform will have two more important additions in the next years. First, the introduction of the DOTS multi-parameter sensor, and next will be the first optical glucose sensor of its kind. This important development work is being performed in our new state-of-the-art chemosensor lab and our German facility. And lastly, before I turn it over to Mr. John Moore, I would like to summarize what we consider the important milestones for our company over the next six to 12 months. First is, are we launching new products? And more importantly, are they on time? Second, are we adding new important customers to our database? Customers that lend credibility to our products and our solutions. And lastly, Are customers willing to pay for the solutions we offer through our product offerings? Because there comes a time where the measure of a product's success is reflected in your ability to sell your product and, in turn, generate a profit for our business. I would now like to turn it over to Mr. John Moore, the chairman of our company, NSBI, so he can tell us about some very important recent national events and their importance to our bioprocessing business. So I turn it over to John. John?