Todos Med Ltd Ord

Welcome to the Todos Medical Business Update Conference Call. I am Helen Ngo, Chief of Staff at Todos Medical. In addition to myself, with us today are Gerald Kamisyong, our Chief Executive Officer, and Dan Hirsch, our Chief Financial Officer. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentations. If anyone should require operator assistance during this conference, please press the star followed by the zero on your telephone keypad. As a reminder, this conference is being recorded. Before we begin, I want to remind listeners that during the call, management's prepared remarks may contain forward-looking statements that are subject to risks and uncertainties. Management may make additional forward-looking statements in response to your questions today. Therefore, the company claims protection under safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from results discussed today, and therefore, we refer you to a more detailed discussion of these risks and uncertainties in the company's filings with the SEC. In addition, Any projections as to the company's future performance represented by management include estimates as of today, November 15, 2022, and the company assumes no obligation to update these projections in the future as market conditions change. This webcast will be available at www.totosmedical.com on the Investor Relations page. I would like to turn the call over to our CFO, Dan Hirsch. Dan.

Thank you, Ellen. Photos initiated a significant transition in its testing business in the third quarter of 2022. As financial markets continued to experience challenging times, the company had to survive primarily on cash flow for another quarter. And this was accomplished by continuing to focus COVID testing at our Provista Diagnostics subsidiary, where we were able to capture consistent revenue for the first half of the quarter while we were validating and preparing to launch our suite of non-COVID PCR tests. Unfortunately, a significant revenue hit in the second half of the quarter as a key COVID testing client temporarily suspended COVID PCR testing at their school as the Biden administration created urgency to utilize the remaining three tests from a government program and subsequently president biden said the pandemic is over while being interviewed on 60 minutes in early september this resulted in significant nationwide decline in interest from the public parents to continue to test for covid on a routine basis as a result we have to seek to accelerate our pilot launch of our new suite of pcr tests including urinary tract infection, wound, respiratory panel, gastrointestinal, sexually transmitted infections, and monkeypox. The pilot launch in the Dunellin, Florida area was successful and we gained valuable information related to accelerating turnaround times involving pharmacist review to speed treatment recommendation and engaging with physicians to optimize our reports to better explain the test results and recommendations. However, this pilot launch did not replace the revenue loss from our COVID testing decline. So as a result, we generally saw stagnancy in the provisional business quarter over quarter. Just yesterday, we restarted testing with that same large school COVID testing client and received the first 4,800 samples from their renewed school testing program last night. The client expects to continue testing at least through the end of winter, March 2023, as a result of the extension of the Biden administration's extension of the public health emergency and significant absences due to illness. Given that there are now multiple respiratory viruses circulating among school-age children, we do expect to see an increase in COVID testing as well as flu, ABRSV testing, and respiratory pathogen panel testing. Recent reports from the FDA further extending the window of time from four to five days that a COVID rapid antigen test may show a negative result when the patient is symptomatic and ultimately test positive for COVID seems to be driving fears among this large client that antigen tests may in fact be inadvertently driving COVID spread in their schools. Our 3CL Pharma joint venture partner, NLC Pharma, agreed to extend the window of time to December 31st, 2022 for TOTOS to assist 3CL Pharma in raising capital to fund 3CL's operations and clinical development programs. We have now substantially completed the creation of the marketing collateral for the crowdfunding campaign and intend to launch it in December of this year, which we expect will drive funding inflows to allow 3CL Pharma to begin clinical studies in early 2023. At this time, I would like to turn over the call to Gerald, our CEO, to discuss our strategic vision and plans for growth in order to build lasting value for our stockholders moving forward. Gerald.

Thank you, Dan, and good morning to everyone. As we have just outlined, we've managed to maintain operations at TOTOS by driving revenue through Provista in the third quarter of 2022 and worked to refine the planning for 3CL Pharma to raise funding to drive its operations and clinical development plans forward to reach its full potential. In that light, I'm going to focus on a few key items on the company as we look at our strategic plans for the rest of the quarter and heading into 2023. One of the major challenges for 3CL Pharma in discussions with investors as we were looking to raise capital was related to what would actually be required to achieve an emergency use authorization for Tolivir, now called 3CL001, in the treatment of hospitalized COVID. Some of the concerns that played into some of our decision-making over the last several months, there was a significant concern from our regulatory advisors and investors that the emergency use pathway that we were looking to utilize would disappear as a result of a cancellation of the public health emergency. This was especially significant in July and August, as we discussed with our advisors, given that the administration appeared to want to downplay the pandemic during that time. And this was further supported by the comments by President Biden indicating that the pandemic was over on 60 Minutes. Given the declining death rate, there was the expectation that this public health emergency would be rescinded. And there was also questions related to the posture of the FDA related to trial size. One of the major challenges we had in looking at funding 3CL Pharma was, in fact, that the majority of the revenues and the COVID cases that we've seen worldwide really has been driven by the United States and the UK. Yet the policies of those two countries where the majority of the revenue would be driven for hospitalized COVID as well as in Europe was a little bit uncertain. So this created pause among the investment community. What we heard from investors and what we also began to really understand was that the company called Veru, which had an adcom just last week, was going to provide a significant amount of clarity regarding the FDA's position And that adcom, which did hold last week, while there was a negative vote and we're still waiting for the actual results, whether the FDA will approve it or not, it did speak to, one, the FDA is looking for a significant trial size, two, somewhere between 200 and 500 patients, and they did accept 200 from VARU in order to be able to review the EUA submission. So that was important for us to understand. Two, it's clear that the FDA wants to understand the underlying mechanisms that are driving the potential benefit of any therapy in COVID. So for us, those two things gave us significant information. And after discussions that we've been having with institutional investors since last week, I think there's a renewed focus and interest on hospitalized COVID because it's clear that while the number of deaths in the United States and abroad has gone down, There is concern that we have hit a floor in terms of deaths and that heading into the winter months, if there is a significant surge in COVID, that there could in fact be another wave. And that really... once we have the third such wave from winter over winter over winter, that this is something that we can expect to continue into the future, i.e. it's more sustainable and therefore a significant need remains. And so I believe that now we've got a much better handle on the regulatory front. We have already drafted regulations the protocol for this larger set study with two interim reviews, one at approximately 100 patients and one at approximately 200 patients, which will allow us potentially multiple opportunities for an accelerated review with FDA once we complete enrollment. of those milestones while continuing to enroll patients. So we don't slow, we don't slow the recruitment towards that 500 number. This also provides us with the clarity on what we are likely to need to raise in terms of capital for 3CL Pharma. And so I'm going to spend a little bit of time talking about the strategy around that. One thing I will note, is Dr. Dorit Arad is coming to New York this week, and we are meeting with our regulatory advisor from Greenberg Trig to try and finalize an overall clinical development strategy for 3CL001. What we believe is the best path after speaking with investors is certainly that the hospitalized trial remains viable. And that clinical development opportunity is significant and will continue into the future. I think investors believe that that is the case. The second thing that's come out is that there's a significant interest in long COVID. And we already have a phase two trial planned for 3CL001, Tolavir, and a trial is designed. And this is separate and distinct from the clinical study we have planned for Tolavid, the dietary supplement. So with that now in mind, I believe that we have the key points to finalize our clinical development plan and strategy and raise the necessary funds in order to be able to drive those opportunities towards clinical milestones from a capital raising perspective. And that will be the focus of our crowdfunding campaign that we expect to initiate in December. With regards to the crowdfunding campaign itself, we will be releasing today some of the collateral that we intend to use for that crowdfunding. One of the reasons that we're planning to do that, and it will be up for a short period of time, just so that investors, TOTOS investors can understand exactly what we've been doing over the last several months and preparing for this. As well, we think that some feedback is related to that, and the significant involvement of Dr. Arad will give TOTUS investors comfort that, in fact, we are working closely together to make this a reality. I do know that that has been something that investors, our current retail shareholder base, has been asking about, and certainly it's something that we have been cognizant of. The next thing, of course, is we have, as mentioned, our clinical study plan for Tolovid, the dietary supplement at 3CL Pharma. We have applied for grant funding for that. So in the event, you know, in order to accelerate that prior to the crowdfunding, we are hopeful to hear back on some grant funding opportunities in the weeks ahead. So those are the primary updates that we have for the 3CL Pharma subsidiary. I will note a couple of other key items. We've now completed the submissions for approval to sell the dietary supplement Tolavid in Israel. There are a few additional documents related to some of the recent studies that we've completed on safety. as well as some of the mechanistic work that we had to submit. And we are now waiting for a response. So I know that, again, that has been something that investors have been asking about, and we have made progress now and have completed all the necessary requirements. And now we're waiting a final response. In addition, we're midway through with submissions in Singapore. And we are in discussions with several partners for the launch of Tolovid in various Southeast Asian jurisdictions. There seems to be significant interest given the background of Tolovid as a traditional Chinese medicine and some of the data that we've produced thus far. All right. Now, switching gears a little bit, I will be now focusing on revenue and just want to give a flavor, obviously, as Dan has discussed. We had COVID testing client that primarily drove our revenue with significant volumes that abated sometime in mid-August. And now, as of last night, has restarted. So our lab is right now in the middle of processing samples. So that's very positive that we expect that that revenue is going to come back to help drive operations. We have also in the meantime, while our revenue was down, we did focus on other revenue opportunities. So a few that we looked at, one obviously is the expansion of the pilot launch in Dunnellon, Florida. and looking at other jurisdictions in which to launch and acquiring sales staff with books of business in those jurisdictions. That's something that we're making progress on, and we believe that we'll be able to start executing on that later on this quarter, now that we have our COVID testing business back up and running. Additionally, we found some niche opportunities in the ESG space. So what we mean there is there are Fortune 500 companies that have mandates to deliver some percentage of the testing that their companies do to ESG minority controlled entities. We have been in discussions and are at the tail end of executing upon joint ventures with some of those minority-controlled entities that have the contracts with these ESG, with these Fortune 500 companies to deliver their testing volume to minority-controlled labs. And we are finalizing joint venture agreements to serve as the operational arm of a minority-controlled entity where we will be the minority partner in a majority-minority relationship. And we can do this on a multiple-scale basis, and our attorneys are finalizing the structure there. So with those what we like to call set-asides for minority-controlled businesses through some relationships that we've developed over the last several months, we do see significant revenue that can come in on a set-aside basis for ProVista, which will allow us to move from the concentration risk that we have now with our single school client to being much more diversified. So that is something that we've been working on over the last several months, and we expect to come to fruition in the very near future. Additionally, We are looking to make progress with our previous initiative around mobile labs. We expect that there will be some news on that very soon because the opportunity continues to be significant. And while we've had a couple of years of inactivity on that front, we see that the opportunity remains and we are better positioned to execute upon it than others who we were partnered with. So we expect that we will be able to, again, have some news on that in the weeks ahead that will allow us to expand the hub and spoke business model that we had originally planned for ProVista. With regards to the other revenue-producing asset that we have, which is Tolavid, we are completing a label change. So one, 3CL Pharma is going to be formally taking over the label contents. So you'll see 3CL Pharma on the Tolavid bottle, on the front of the Tolavid bottle, at least, as compared to 3CL. TOTOS will be on the back as we remain the manufacturer of the product. We have recently been asked the relationship between Tolavid and Tolavir. And we do want to note that they are, in fact, different raw materials. And Tolavid is not approved to diagnose, treat, prevent, or cure Tolavir. COVID-19, and we do not position it to compete with Paxlovid, which is an approved authorized therapy for COVID-19. However, it is positioned as a three-cell protease cleanse. And so we do see that cleansing the three-cell protease can be beneficial in today's challenging times. Where we have found significant revenue that we believe is highly scalable for Tolovid is in the long COVID period. market opportunity where supplements represent virtually 100% of what patients use to address their long COVID symptoms. The cleansing aspect does resonate more clearly in the long COVID community. And we are now working closely with data scientists to allow us to pinpoint exactly where we will be able to find those seeking solutions for their symptoms, their long COVID symptoms online. And so that's something that we intend to continue to work on. We decided to pause some of our marketing efforts as we optimize our funnel so that we don't waste resources and then intend to turn them back on with an expected much higher conversion rate. As we head into Thanksgiving and the Christmas season, that's when we have historically seen our highest sales of Tolovid. And so we are now preparing for that as we have started to see a rise in revenue in the very recent past. With regards to Tolovid distribution channels, um, and marketing, uh, we have, uh, decided to lower our spending, uh, in marketing on Facebook, uh, because we weren't seeing a significant return, uh, on our marketing spend. However, we have seen a significant return on our marketing spend on Amazon. Uh, and, uh, over in the last quarter, we came, we came much closer partners with Amazon. Uh, we became part of their, uh, new company package, their DSP package, where they are now actually delivering are packages from our mytolavid.com website. Amazon is delivering them, which has resulted in a significantly reduced turnaround time from order to delivery from three days down to 1.7 days. This is very important, especially over the holiday season that people look to cleanse their 3-CL proteas on a more regular basis as they interact and move indoors. One of the key differences, and it's important to note, our product as compared to competitors, is that we actually test for pyrolizidine alkaloids. And we have confirmation that our product does not have pyrolizidine. pyrrolizidine alkaloids as compared with other products that claim to mimic Tolavid that we have tested that do have these alkaloids. And that's a very important safety issue that we think gives Tolavid a significant competitive advantage in addition to our 3-CL protease inhibition assay that confirms the potency of our formula. So those are the primary updates on Tolavid. As Many of our investors know we did late in the third quarter enter into a manufacturing services agreement where we took over a manufacturing facility for the manufacturer of Tolovid and the capability to manufacture hemp-based CBD products and subsequently entered into an agreement to manufacture products for a client, Nerd Hemp. where we forecast significant revenues for this quarter. An update on that contract. One, the scope of the automated retail opportunity with NerdHab remains significant, but is not the totality of the scope of the automated retail opportunity in the United States for TOTOS. So with regards to NerdHamp, we are moving forward with the pilot launch in their locations. It's important to note that the automated retail group that we're working with has been behind several other automated retail successes. So, for example, when you see the vending machine like automated retail machines from Kylie Cosmetics at the airports or the iStore or the Best Buy store, those are the same automated retail machines that we will be deploying our products into, both for NerdHemp, through their stations, as well as through our own Todos Botanical Stations, which we will be making significant announcements on here into the future. So the key and several trends that we're working on and why we moved into this botanical manufacturing area, one, In general, since the beginning of the COVID-19 pandemic, there's been a massive increase in the market for immune support supplements. And one of the lasting impressions from this pandemic is that people have become more in tune to the need to support their immune systems with supplements on a more regular basis. So this trend is driving growth of approximately... 10.9% CAGR with an expectation that the immune support supplement market will reach nearly $132 billion by 2028. We believe Tolivit is the most important immune support supplement in that immune support category. And we think that that will remain the case as we move forward. And we believe that by leveraging that positioning of Tolavid and being able to sell other immune support supplements under our brand, we can create a multiple of the revenue as compared with selling Tolavid alone. And we have already had interest not only from our automated retail discussions, but some of those locations in which the automated retail will have, you know, their the machines. There are also brick and mortar opportunities based upon success in those machines. And some of those discussions are underway. Additionally, we see the trend of the automated retail market having significant increase. So over the last several years, I think no one would disagree that there have been challenges in finding an appropriate amount of labor available. for retail jobs. And as a result, there are fewer waitresses, fewer cashiers, and fewer retail workers available to work. As a result, this is driving large retail businesses to move more and more of their distribution, their onsite distribution from cashiered to automated. And this is driving significant interest in our partners' technology because of the technology and data that can be captured to optimize sales and improve convenience and experience for customers. Um, additionally, uh, what it does is it provides a certain amount of safety for the product, uh, to reduce theft. Uh, and this has been a problem that we've seen, uh, on, on a retail basis nationwide in the United States. Um, and so with those two trends, uh, we believe that we're moving in the right direction from an automated retail perspective, uh, and that we, um, we will be able to create forecastable significant month over month revenue growth as we roll out these automated retail machines to the different locations in the country. One of the last things I'd like to note is that we are getting significant interest from long COVID physicians. and long COVID groups on the use of Tolavid, uh, in that patient population. Uh, we did hold a, uh, webinar with the Alchemist Kitchen in which we had Dr. Leo Gallin, uh, who's one of the leading physicians in New York, um, who is now using Tolavid, uh, initially with all of his clients. Um, and we are, uh, now in pilot phases with multiple long COVID groups that are recommending Tolivid immediately to clients as they come into their long-haul clinics. We see this as something that will drive marketing for us. Obviously, as physicians use our product and make recommendations to their patients about our product, that drives interest in our product. And it also drives interest from larger brands who'd like to be associated with our product. And so all of these trends tell us that we're moving in the right direction with Tolovid. And we must continue to gather data, follow the science. and ensure that we understand other supplements that are being used with Tolavid that are helping patients on a daily basis and how we can leverage those to put into our offering and offer comprehensive solutions to the long COVID community. That's really what, you know, Todos Botanicals was about, and we intend to continue to execute upon that. Concurrent with that work, we'd like to note that our partnership with Amerimune in looking at markers related to long COVID is progressing very nicely. Not only are we gathering data on the T cells, B cells, NK cells, dendritic cells, their status, whether activated or inactivated, and particularly the memory versus naive population, we're starting to understand better how to use our products within the context of those markers. We are in the midst through some of the work we're doing with Amerimune around caspase and neutralizing antibodies, starting to understand better exactly what products should be used when. And we are supporting Amerimune as they look to complete an assay related to viral persistence that could be launched in the U.S. market. So, we believe that this partnership is yielding tremendous data for us and that we have some of the best data as it relates to objective outcomes with different supplements in long COVID. And this is driving our strategy as we move forward. With regards to our proprietary testing portfolio, obviously, as our testing revenue ramps up and we think stabilizes and grows with our COVID testing providing the base, our launch of our suite of PCR tests allowing for further growth, and as we execute upon some of these opportunities we have for minority set-aside contracts, that we will be able to generate sufficient cash flow to start to drive the VIDESA program towards commercialization, as well as our LIMPRO program for which we expect to get data in the weeks ahead. So this is the plan for our business. I have been asked recently, of course, about uplisting to a national exchange. As mentioned in previous communications with investors, we are now laser focused on the New York Stock Exchange, which has a lower price requirement for listing. And we expect very soon to be hearing kind of final verdict from them in terms of the requirements to meet their listing standards. So that is something that we are very excited about because that will provide an opportunity to open up the investor base of TOTOS to a much broader community. And when we do that, we think that between our revenue-based COVID testing, the significant opportunity for the Videsa breast cancer blood test and our Alzheimer's blood test, and obviously just the huge, very topical opportunity of our 3CL Pharma subsidiary working in both hospitalized COVID and long COVID, which we believe are the two areas that that require the most attention as it relates to the pandemic, that we could see significant increase in investor interest as it relates to TOTOS. With that said, we are being diligent. Over the last several weeks, we've been relatively quiet on the investor front. And we know that that has created some angst among our retail shareholder base. We do expect that going forward, we will have a number of announcements heading into the end of the year that we believe could drive investor interest, especially now that another COVID wave has officially kicked off. We have accomplished a great deal in the first three quarters of 2022. Before I turn the call over to your questions, I would like to thank our employees for their dedication in helping us to position the company for this sustainable long-term growth. I would also like to thank our investors for entrusting a portion of their investment dollars in our company. And we welcome new shareholders to TOTUS on what we believe will be a tremendous journey. one of the, uh, things that I've been asked recently, um, is regarding a lockup, uh, from some of our, uh, note holders, um, and the extension of that lockup so that we can see an appreciation in value. Um, as we make progress towards the New York stock exchange, um, We have had conversations with those investors to facilitate a smooth transition onto the exchange by extending and strengthening the lockup agreement. And we believe that we will be in a position to execute upon that very soon as we finalize our discussions with the New York Stock Exchange and position the company for growth. We look forward to building positive momentum upon the positive momentum we've generated so far in 2022 and implementing our plan so that we can see the results towards future growth. Operator, this concludes our prepared remarks, and you can now open the call to questions.

I'm not seeing any questions come through in the chat box and no hands raised on the attendees panel as of yet.

Well, okay. So if that's the case, then there are a couple of questions coming in. First question. Good morning. Are you also looking for companies to purchase the company to further along Tolivir? Absolutely. We are evaluating strategic options for the 3CL Pharma subsidiary. Again, the VERU adcom committee was very, very important for not only TOTOS, and NLC, but for others who are in the marketplace to understand the posture and the likely stance as it relates to the FDA and new treatments for hospitalized COVID. So now that we have some clarity while we're still waiting, I still believe that there is a significant potential that Veru will actually be approved. You know, obviously, I have no information on that, but I do think that it is possible based upon the need of the country. Yeah. We will then, I think, have a very clear understanding of just how much the FDA wants new products. And that will certainly, as we move to raise independent capital into 3CL through the crowdfunding, we think that will also drive a significant amount of interest from strategic transactions, whether they be jurisdictional. So, you know, certain jurisdictions, whether they're Europe or Southeast Asia or within the United States, where, you know, that opportunity will be significant and likely will extend given the endemicity of COVID here. Can we update you on the monkeypox and the New York State Health Department visit? Yeah, sure. So with regards to monkeypox, we've submitted an emergency use authorization for the lesion-based tests. We are waiting to hear back from the FDA, but while we're waiting to hear back, we've been authorized and we're one of the few labs across the country that can actually do lesion-based PCR testing. They have paused our ability to do saliva-based testing. while they conduct additional research. And so the saliva-based testing is no longer offered to the public. With regards to the New York State Health Department visit, unfortunately, they postponed the visit because the inspector got COVID. So we are waiting to get a new date for that visit. And we expect it to be sometime in early 2023. So that was very unfortunate. that the inspector got COVID right before our visit. However, you know, we did pass our CAP audit with flying colors. And so, you know, we do expect that when we do have that visit, that it will be successful. All right. With that, I'd like to thank our investors and for shareholders for listening into this conference call. And we look forward to a solid future of TOTOS as we move forward. Thank you.