Precipio, Inc. — Call Transcript 2026

All right. Good morning, everyone. Can you hear me okay? Yes. Okay, good. Is it better without the microphone? No, use the microphone. Use the microphone. It's a big webcast. Oh, that's right. Yeah. That's right. Okay. All right. Good morning, everyone. Great to be here. Thank you to the MicroCapClub for inviting us to present here today. I'll give you all a second to read the disclaimer, because we're going to be tested on it, hopefully everyone can read that ridiculous size one and a half font. Let's jump in. Just to cover a few milestones for 2025. As you can see, good revenue growth, nice share appreciation. One of the most important things for us as the company to achieve in 2025 was to become profitable. A couple of years ago, we did a capital raise. It wasn't the prettiest one. Our team sat around and said, "That's it. We're done. We're not doing any of the more ugly raises anymore. We're going to become financially independent." We did. We are profitable as of Q3 of 2025. If you look back at our history, you'll see that we had an ATM. We canceled that, and that was an important signal to our shareholders that we're not going to pull that stuff anymore that a lot of microcap companies do. What does our business do? This is a pretty bold statement. We develop products that save lives, and I'm going to share with you an example of one of our products that is related to acute leukemia. Acute leukemia is probably one of the most deadliest cancers that exist. About 30% of patients are at risk of dying within a week of diagnosis. When the patients are diagnosed with acute leukemia, there's really two types of treatment options. One is what's called conventional chemotherapy, and the other is called targeted therapy. The idea of targeted therapy, I'm sure you guys have heard of personalized medicine and personalized therapy. The idea is that you do a genetic profile on the patient to identify or look for certain mutations, and if the patient has a mutation in a certain gene, there's a targeted therapy that kind of blocks that gene from misbehaving. They're very effective. That's kind of the holy grail of being able to do that. The problem is those tests takes between 10 and 15 days to achieve results. Some of you guys are doing the math and say, "Wait a second, you just told us there's a chance of dying within a week. This doesn't work." That's part of the problem of the diagnostic world, is that it doesn't always serve the clinical purpose of the patient. What happens? Patient's been diagnosed. Doctor says, "We're going to do some genetic tests." The results are going to come back in 10 to 15 days, and now there's two options, neither of which are great. Option number 1 is you say, "Crap, the patient isn't doing well. We're not going to wait for the results. We're going to put them on standard chemotherapy," which oftentimes can be less effective. At that point, you have foregone the option of doing the call it better, personalized medicine. That option is gone now. Not great. The second option, I think is even worse, is let's wait and see. I don't know about you guys. If someone told me that I had acute leukemia, waiting and seeing doesn't sound very good. Neither of those options are attractive. We face that in our clinical lab with patients, with samples coming in, diagnosed with acute leukemia and now we got to tell a doctor we're going to have a result in 10 days, and we know that that's not a good option. In our lab, we decided we're going to fix that and create what we call a rapid AML, which is a four-hour test. We are the only company in the world that has this test. Our lab and our customers are the only one that can deliver these results in four hours. Typically, what happens in our lab, a sample comes in in the morning. By lunchtime, we know the patient has acute leukemia through various other tests. We run our panel, and we can tell the doctor, "This patient is IDH1 positive. You can put him on an IDH1 inhibitor on the same day." This saves patients' lives. This is just one example of what we call ineffective diagnosis, and this is a plague throughout the industry. There's various impacts to that. Either the test is too late, the test isn't accurate enough, the test fails to capture the patient's clinical situation. There's a plethora of problems that kind of fall into this bucket of ineffective diagnosis, which is what we're trying to solve. You can see the magnitude of the problem depending on which publications you read. Anywhere between 25%-40% of patients experience that. I'm sure there's people here in the room who have family, friends who have gone through that. I am no doubt about that. This is a $100 billion problem in the industry. What happens is, of course, when you have ineffective diagnosis, you have ineffective treatment, you're putting the patient on the wrong therapy, they get worse instead of better. They're more time in the hospitals, and all the costs of skyrocket that you know about in healthcare. This is a massive problem. People ask me, "How do you build a moat around your business?" I like to call it an unfair advantage, and this is what we've developed in our business. We have two divisions in our lab. The first is our Pathology Services Division. We operate a clinical lab just like all of our customers, and we'll get to that in a second. We operate a clinical lab that has what you would imagine in a lab. We have a facility. We have a lot of boxes on benches. We have reagents that run on those boxes. We have a staff, and most importantly, we have samples of patients coming in every day. This is a business that today is profitable, generates revenue. We bill insurance, we collect, and it's a profitable business. That is our core, kind of our legacy business. What we built on top of that is our Diagnostic Services Division. Like an example, AML, we were providing kind of the old tests that we were running. We realized it wasn't good enough, developed our own assay, and we run it in our lab. I want you to think for a second, what does it take to develop an assay? It takes three things, and they happen to be listed on the left. You need a facility with equipment. You need staff who will run it and test it. The most important thing is you need patient samples. We pay for none of those. They come in as part of our business. We essentially have a free R&D platform. That is our unfair advantage in our business. Number one, when I go to a customer, I can tell them we use our products, and there's no other manufacturer that does that. We use our product every day. We started with it. We've been using it for several years. We know that it works well. It gives the clinician what it wants. The workflow is optimized. We can bill and get paid for it with confidence, which no other manufacturer can provide. It gives us a really big advantage over any other product manufacturer. We have hands-on experience obviously, which we can help train our customers and help them bring the test up on live. Maybe not the most important thing is we can develop these products quickly and in a very cost-effective manner. One of the problems with biotech companies is the ongoing need for capital for innovation. In biotech, especially healthcare, especially in cancer diagnostics, you don't develop an assay, and that's the same assay for 10 years, because science changes. New genes are discovered to be relevant to this disease or another, you constantly to update your products, change them, modify them, make them more sensitive, extend coverage areas, and a whole bunch of things. This is something that requires a lot of capital in the things that we talked about. You need the equipment, you need the staff, you need the samples. Those are the ingredients that you need in order to develop it. All of those are free in our lab because it's part of our clinical division. What we've done is created a situation where our clinical lab and our R&D division are constantly collaborating together and we want to develop a panel for CML. Our R&D team will say, "Hey, lab, when you have CML samples coming in, throw a few our way so that we can test our new assay on them, and it doesn't cost us anything." Some of these samples are either super expensive or impossible to come by. It really gives us an advantage and one example I like to talk about is a recent product release of our BCR-ABL assay. BCR-ABL is what's called the Philadelphia chromosome. It's for chronic leukemia, and this is a test for monitoring patients that have chronic leukemia. We have probably the most advanced assay in the market. We recently came out with a study that we published with Memorial Sloan Kettering, citing its advantages. The beauty of it took us three months and less than $100,000 to develop. That's unheard of in this business. Any other company would take three to five years and probably $5 million or north of that to develop because they don't have the infrastructure that we have. We hit on the three elements that for a customer are important in the lab. If you're managing a lab, the first thing that's important is the workflow. How long does it take? Am I going to be able to deliver the turnaround time? Do I have lab staff that is properly skilled for that? That's point number one. Number two is the economics. What kind of equipment do I need to invest in? Most of our competing tests, $1 billion or more to purchase all the capital equipment that's required and what do the margins look like? Economics are important. A lab is a business that needs to make money. The third thing that labs are always measured by ultimately is how quickly we can get the results. I know this sounds like a benign kind of factor, but I want you to stop and think for a second. If someone in your family has been told they have cancer, but we're going to have to run some tests before we decide what treatment we're going to put them on, and now you got to wait for a week or two weeks or three weeks, and those three weeks are eternity. Turnaround time is really an important factor in our business. How do we scale this up? We've partnered with the four main distributors, to get us into the customers. The reason is that the hardest part of our business is getting in front of the right person in the lab manager. We're a small biotech company out of New Haven, Connecticut. Our relationships are limited. If you go to McKesson or Thermo Fisher or some of the other ones, these guys have been selling into those labs for 15 years. They have relationships. They can say, "Hey, I want to get in front of Arkansas Pathology Group. Thermo Fisher, you guys sell to them all the time. Get me in for a meeting." That's worth the 20% margin that we give them. Thermo Fisher has a 200 sales force, 200 reps that have been there an average of 12 years. There's no money in the world that I can replicate that. Being able to leverage those relationships and those distributors to get in, we believe is the right model, and it's starting to show its fruits. Where does this company go? Currently, we're focused on blood-related cancers. That's about a half a billion market in the U.S. and about equivalent overseas. For the next two to three years, that's going to be our focus. We have a full product suite for blood-related cancers. Our tests cover about 85% of blood cancer diseases. We've got a pretty good offering that our customers like. For the next two years, our focus is growing into that market. Down the line, we do see ourselves expanding and duplicating the model in solid tumors. What just happened? Did I do that? Okay. Duplicating that into solid tumors and going into other molecular tests outside of cancer. There's a lot of opportunities to take this model and really expand it far beyond that. In terms of our financial kind of outlook and product and resulting margin mix, we end the 2025 at about a $25 million run rate. About 90% are legacy business, our laboratory services business, about 10% are products business. That's going to change. There was a clever investor who said, "Oh, well, you're just going to drop your services." No, we're not going to do that. That's going to grow at probably about a 10% a year, although we're not focusing any resources on that because if you think about it, the services division is not the alpha of the business. That's not the growth engine, but it does what it needs. It's profitable, and it delivers samples for the R&D team to develop what they need the next generation of products. We're good with that. That'll grow kind of at a small clip, but really all of our resources of growth are focused on the products business. As we see the balance change and in the next three to five years, I expect it to go from 90/10 to 60/40. That's kind of the goal. Our margin mix will change as well because the products have a much, much higher margin. We see at scale, and it doesn't take much, we'll be at around 80% margin for the products. It's a really good business that we want to be in. There's some numbers on market share and where we think we can be in the future. Our focus, as I've said, in the near term is to capture significant market share on the blood-related cancers. This is a half a billion dollar market in the U.S. I see no reason why we can't have 20% of that in a few years. It doesn't take that much, and our products are certainly superior than anything the alternative has. This is our good-looking team. Lots of experience in the diagnostic field. We just hired Stephen Miller, our Chief Commercial Officer, been 35 years in the field. I mention him because he's going to be the driver of the growth on the product side, and that's his focus. In summary, five key points. I think this is a disruptive business that really takes a personal look at what's going on in the laboratory and says, "We can fix it. We can do better based on our own experience and our exposure to the market." We live this world ourselves. We've got a really good platform that enables us to innovate in a very capital-efficient manner. We're not going to have to, for every product, raise another $5 million to get the product into the market and dilute our investors. Big opportunity. I think it's extremely scalable. Just an example, and some of you may heard me say this, on the product side, we currently have capacity to produce about $50 million of product annually. We did three last year, plenty of room to grow with no further investment. If we had to go beyond that, if we had to double that capacity, it's about $700,000 to double our capacity from $50 million to $100 million. Extremely scalable in our business. Which is much more attractive than the Pathology Services Division. That's a much more stepwise way to scale it up. That's part of the reason why we like this business. Last of all, as being profitable at this level, and continue to operate a very cash-efficient business, I think it can create a very attractive business model. With that, I'm done. I'll hand it over to questions. 10 minutes. Yes, sir. You mentioned that you're superior to some of your competitors in blood testing. As a layman, can you help me understand why that's the case, and what are the reasons why your competitors can't make it or don't want to make a product as good as yours? I'll answer the first part of your question, going back to the example of acute leukemia. Go to any hospital website, any reference lab website, and do a search for turnaround time for acute leukemia genetic testing. You'll see 10 to 15 days. Ours is the same day. We're better. It's just as simple as that. We give answers. Remember, diagnostics are here to serve the clinician, to give the doctor information to treat the patient. A delay in information means they can't treat the patient properly. It's as simple as that. The reasons they don't do it, I think for the most part, I don't know what's going on in their head, but I think for a large part, the market accepts what is there. We go to labs all the time and we ask them, "What's your turnaround time for acute leukemia?" "10 to days." "How do you think about that?" "Well, pretty good. That's what the rest of the market does." Inside I'm thinking, "No, you suck." I'm not going to tell them that, of course. That's terrible. They know that for the patient, that's not good. There's a lot of inertia in the lab, and that's part of the challenge of growing this business. Labs are creatures of habit. Every other lab manager, like, "Oh, we've been doing for 25 years. Our doctors never complain." Well, that's not the indication, right? Of whether the customer complains or not. That's not how you measure if you're giving the right product. That make sense? Yes. You mentioned margins at scale could be 80%. The question was what drives the difference between our turnaround time that our products can deliver and the competitors. It's all about economics. When you have an expensive test that is complicated, what a lab does is batches. Think about an airplane, right? If they had the choice, they want to fill every seat because they've got the fixed cost of the pilot and the crew and the fuel and all that stuff, and that's critical to them. Our assay, because it's more economically attractive and it's easier, we reduce the threshold for batches. Instead of with other competing tests, they have to run 25 tests in order for it to make economic sense, ours can run five tests. Think about a lab with a workflow where every day you have five patient samples coming in, you can run the test every day, as opposed to if you're locked into the other product that requires 25 samples, you now have to wait five business days or a week in order for the bus to be filled so it can leave the station. That make sense? Okay. Yes, sir. If you're selling through distributors that they own the customer relationship, how do you get a sense of demand? How do you fulfill that demand, and how predictable is that view that you don't own the relationship? Excellent. I'm not sure I would agree that we don't own the relationship. The distributor largely makes introduction and gets our foot in the door. We have significant interaction with our customers, we're there for the first meeting. They're not pitching. This is a complex sale. No offense to a rep from McKesson, but they don't know our business. They don't know our product. They don't know how to answer the next level down of questions. We tell them, "Your job is to get us in the door." That is absolutely worth the 20%, but from there, we take it from there. We develop a relationship with all of our customers. We help onboard them. We have a whole lab implementation team that comes in and helps set them up. As part of that discussion, we understand complete with what their volume. That's part of the initial discussions. I was talking to someone last night about how do we create our pipeline. What we do is Thermo Fisher will open the door, we go see customer X. Okay. Then we walk them through our product line, and we say, "Okay, which panels do you want?" "Well, we want this one, this one, and this one." "Okay. Can you share with us your volume from last year?" Lab volumes don't change that much. They're pretty stable. Now we know the price we sell to the customer, and we multiply that by the volume, and we know exactly what the value of that customer is, and that's when it goes into our pipeline. Okay. I think we have much more of a deeper relationship than other distributors where they never talk to the customer. Yes, sir. You mentioned your products pipeline in the last earnings call. More about that products pipeline and the confidence level of it and the duration for that pipeline into revenue. Yeah. Sure. One of the things I mentioned that was a big change for us is this year we hired three commercial folks, Steve and two other guys. Before that, there was one person in a, call it 50% role, doing sales. We've kind of 6x'd our sales force, and they now start to build the relationship with the distributors and with the customers. With every customer that we're introduced, we go through the process I just described to assess the dollar value of that customer, and only then that comes in. At that point, you've had a pretty good discussion, probably two or three discussions, both on a technical, clinical, and economic discussion. There's a pretty good buy-in. Based on our experience, from that point, it's always been a when, never an if. We've gotten that far with a customer, they've said, "Well, we want this, and this product." They've looked at what they have in the lab and which ones they want to change or which one they want to bring in-house. They're committed to that, then it's just a matter of timeline of how long it takes. That's a challenge in terms of the pipeline. I want to be very clear, I've said several times we have now about a $10 million pipeline. That doesn't equate to $10 million this year because we're bringing on board next quarter a large customer, a large academic center out of California, which we first pitched to in November of 2024. They wanted it. They were in. We went through the numbers, everything. They had to buy one of the machines, which we plug into the internet. They need IT approval. You've heard me tell this story about Shane for the benefit of everyone else. They needed IT approval. That took 11 months for them to get IT approval. No one could've predicted that. That's the challenge. I think over time we'll get better in predicting and converting that pipeline to more concrete guidance. I don't think we're there yet. Yes. Who are your customers? We have three customer segments, hospital laboratories, reference laboratories, small regional and large reference laboratories, and physician office laboratories, which basically means a large oncology group that is big enough that they've built a lab in their practice and they want to run these tests in-house. Is that whom your salespeople are- All three. When they purchase, they purchase through McKesson? If it's through a distributor. We have direct customers as well, so it depends. Yeah. If the distributor brought us in, it's theirs, and now they'll purchase through McKesson, and basically we give McKesson a price, and they mark it up whatever they want for whatever margin they want. How many customers are there of the three combined, total? Probably about 15 right now. Say again? 15. 15? 15, one, five. How many customers do we have or available? How many customers are available? Oh, hundreds of each. Hundreds. Yeah. We did $3 million last year. Out of 15 customers. Yes, out of $500 million a year TAM. Yeah. We haven't even scratched the surface. You have a new COO. Is he running sales? Yes. His objective is to turn that 15 into 150? That's right. Yes. Mine's an educational question. For the four-hour test, well, there are two things you're really testing for. One, yes, that person has AML. Two, we have a genetic mixed presentation, I guess. No, just a second. At that point, we know they have AML, and we want to help the clinician decide which therapy they want. Okay, anyone who has this type of cancer, it's a genetic cause that's the case. Yes, it's a genetic cause. Not every genetic cause has a targeted therapy. We don't test for their entire genome. We test for the ones that we know there's a bingo. If you have a mutation gene X, drug X will work. You have a mutation gene Y, drug Y will work. If you have a mutation gene W, but there's no therapy to it, there's no point in doing the test. Right? A test is only worth it if there's an action to it afterwards. That make sense? Yeah. Thank you. Yes. What's the feedback been from those 15 clients you're currently selling? We've never lost one of them. Great. We've never lost a customer. They've been with us, some of them, for four years now. That's the nice thing about the business. It's a tough sell, but once you're in, you're in till death do us part. They don't go away. It's a routine. They've got it. They've now shrunk the turnaround time from 10 days to one. The doctors are not going back. Yeah. Just a couple things. Can you talk about the pertinent economics of the assays in the lab that you're using? Can you also talk about from your client customer's perspective of they're treating this patient, how does the price of your services compare to the total cost of treating the patient? I guess what I'm trying to get at. Yeah Do you have pricing power there? No. Okay, let me ask you the first question. In terms of economics, and you're talking about the customer economics, right? Yep. Okay. Our assays sell on between $200 and $450 per test, depending on which test they do. The reimbursement to the customer is about double. We ensure that our customers have a 50% margin, which makes it attractive for them. They make money, they don't leave me. All right? That's them. Your second question is far more complicated because it depends on the therapy, and you know that, of course. The other thing is there's no price control because reimbursement is set by the payers. If we're testing for AML, the reimbursement is $1,250. Nobody controls that. That's just set. That's based on CPT codes and reimbursement. Now the game is to create a product that leaves the customer margin and that leaves us margin, and we've accomplished that. You've heard our margin, we do very well. The customer does 50% margin, that's very attractive for them as well. Yes. Can you talk about how to see the insurance companies, how to make sure that they work and cover your products? Also just to get an idea of how they see Precipio whether the multiple paths Do you ever see them down-weighting you benefits? Right. It's not an individual product. The way you develop an assay is you look at the testing codes that exist, which typically exist because of clinical relevance, right? A payer's not going to pay for a gene W that doesn't give any therapy. They know when a new drug comes on board, there's a new CPT code established for that test. We play into that. It's not defined by us, we don't influence that. That's the downside. The upside is it's guaranteed reimbursement because the code exists and a rate exists for it. We don't really have an influence. I don't think Medicare knows who Precipio is, quite frankly. As far as the reimbursement from the payers, all they look for is the matching of the codes to the clinical situation, and then they pay. Does that answer your question? Okay. Yes, sir. What happens do you expect that the people who are doing more assay, [inaudible] days, may look at you and say, "These are the company take business away from us. Yeah. Therefore, we're going to change our legacy model to follow you. Right. Have you seen any of that kind? No, quite frankly, we're too small to really move the needle for anyone. We're talking about behemoths of companies like Qiagen and Abbott Diagnostics. They're huge companies. This is a fraction of a fraction of a percentage. I think, I hope it'll take a long time for them to wake up. That's good for us. I also think that going into our business model is not easy. It took us 15 years to build a successful laboratory. It's a pain-in-the-ass business, I'll be honest with you. There's a reason we're focusing on the products. It's a tough business, capital intensive. We've made it work, but you look at other competitors 20 times our size, and they're not making money. We've been able to figure out operationally how to really make an efficient business, but it's not easy. I think that large manufacturers, it would behoove them to jump into that business. I'm getting the wrap-up, but I'm around. Thank you all, and happy to speak to anyone afterwards.

Speaker 1: All right. Good morning, everyone. Can you hear me okay? Yes. Okay, good. Is it better without the microphone? No, use the microphone. Use the microphone. It's a big webcast. Oh, that's right. Yeah. That's right. Okay. All right. Good morning, everyone. Great to be here. Thank you to the MicroCapClub for inviting us to present here today. I'll give you all a second to read the disclaimer, because we're going to be tested on it, hopefully everyone can read that ridiculous size one and a half font. Let's jump in. Just to cover a few milestones for 2025. As you can see, good revenue growth, nice share appreciation. One of the most important things for us as the company to achieve in 2025 was to become profitable. A couple of years ago, we did a capital raise. All right. all right Good morning, everyone. good morning everyone Can you hear me okay? can you hear me okay Yes. yes Okay, good. okay good Is it better without the microphone? is it better without the microphone No, use the microphone. no use the microphone Use the microphone. use the microphone It's a big webcast. it's a big webcast Oh, that's right. oh that's right Yeah. yeah That's right. that's right Okay. okay All right. all right Good morning, everyone. good morning everyone Great to be here. great to be here Thank you to the MicroCapClub for inviting us to present here today. thank you to the microcapclub for inviting us to present here today I'll give you all a second to read the disclaimer, because we're going to be tested on it, hopefully everyone can read that ridiculous size one and a half font. i'll give you all a second to read the disclaimer because we're going to be tested on it hopefully everyone can read that ridiculous size one and a half font Let's jump in. let's jump in Just to cover a few milestones for 2025. just to cover a few milestones for 2025 As you can see, good revenue growth, nice share appreciation. as you can see good revenue growth nice share appreciation One of the most important things for us as the company to achieve in 2025 was to become profitable. one of the most important things for us as the company to achieve in 2025 was to become profitable A couple of years ago, we did a capital raise. a couple of years ago we did a capital raise It wasn't the prettiest one. Our team sat around and said, "That's it. We're done. We're not doing any of the more ugly raises anymore. We're going to become financially independent." We did. We are profitable as of Q3 of 2025. If you look back at our history, you'll see that we had an ATM. We canceled that, and that was an important signal to our shareholders that we're not going to pull that stuff anymore that a lot of microcap companies do. What does our business do? This is a pretty bold statement. We develop products that save lives, and I'm going to share with you an example of one of our products that is related to acute leukemia. Acute leukemia is probably one of the most deadliest cancers that exist. It wasn't the prettiest one. it wasn't the prettiest one Our team sat around and said, "That's it. our team sat around and said "that's it We're done. we're done We're not doing any of the more ugly raises anymore. we're not doing any of the more ugly raises anymore We're going to become financially independent." We did. we're going to become financially independent." we did We are profitable as of Q3 of 2025. we are profitable as of q3 of 2025 If you look back at our history, you'll see that we had an ATM. if you look back at our history you'll see that we had an atm We canceled that, and that was an important signal to our shareholders that we're not going to pull that stuff anymore that a lot of microcap companies do. we canceled that and that was an important signal to our shareholders that we're not going to pull that stuff anymore that a lot of microcap companies do What does our business do? what does our business do This is a pretty bold statement. this is a pretty bold statement We develop products that save lives, and I'm going to share with you an example of one of our products that is related to acute leukemia. we develop products that save lives and i'm going to share with you an example of one of our products that is related to acute leukemia Acute leukemia is probably one of the most deadliest cancers that exist. acute leukemia is probably one of the most deadliest cancers that exist About 30% of patients are at risk of dying within a week of diagnosis. When the patients are diagnosed with acute leukemia, there's really two types of treatment options. One is what's called conventional chemotherapy, and the other is called targeted therapy. The idea of targeted therapy, I'm sure you guys have heard of personalized medicine and personalized therapy. The idea is that you do a genetic profile on the patient to identify or look for certain mutations, and if the patient has a mutation in a certain gene, there's a targeted therapy that kind of blocks that gene from misbehaving. They're very effective. That's kind of the holy grail of being able to do that. The problem is those tests takes between 10 and 15 days to achieve results. About 30% of patients are at risk of dying within a week of diagnosis. about 30% of patients are at risk of dying within a week of diagnosis When the patients are diagnosed with acute leukemia, there's really two types of treatment options. when the patients are diagnosed with acute leukemia there's really two types of treatment options One is what's called conventional chemotherapy, and the other is called targeted therapy. one is what's called conventional chemotherapy and the other is called targeted therapy The idea of targeted therapy, I'm sure you guys have heard of personalized medicine and personalized therapy. the idea of targeted therapy i'm sure you guys have heard of personalized medicine and personalized therapy The idea is that you do a genetic profile on the patient to identify or look for certain mutations, and if the patient has a mutation in a certain gene, there's a targeted therapy that kind of blocks that gene from misbehaving. the idea is that you do a genetic profile on the patient to identify or look for certain mutations and if the patient has a mutation in a certain gene there's a targeted therapy that kind of blocks that gene from misbehaving They're very effective. they're very effective That's kind of the holy grail of being able to do that. that's kind of the holy grail of being able to do that The problem is those tests takes between 10 and 15 days to achieve results. the problem is those tests takes between 10 and 15 days to achieve results Some of you guys are doing the math and say, "Wait a second, you just told us there's a chance of dying within a week. This doesn't work." That's part of the problem of the diagnostic world, is that it doesn't always serve the clinical purpose of the patient. What happens? Patient's been diagnosed. Doctor says, "We're going to do some genetic tests." The results are going to come back in 10 to 15 days, and now there's two options, neither of which are great. Option number 1 is you say, "Crap, the patient isn't doing well. We're not going to wait for the results. We're going to put them on standard chemotherapy," which oftentimes can be less effective. At that point, you have foregone the option of doing the call it better, personalized medicine. That option is gone now. Not great. Some of you guys are doing the math and say, "Wait a second, you just told us there's a chance of dying within a week. some of you guys are doing the math and say "wait a second you just told us there's a chance of dying within a week This doesn't work." That's part of the problem of the diagnostic world, is that it doesn't always serve the clinical purpose of the patient. this doesn't work." that's part of the problem of the diagnostic world is that it doesn't always serve the clinical purpose of the patient What happens? what happens Patient's been diagnosed. patient's been diagnosed Doctor says, "We're going to do some genetic tests." The results are going to come back in 10 to 15 days, and now there's two options, neither of which are great. doctor says "we're going to do some genetic tests." the results are going to come back in 10 to 15 days and now there's two options neither of which are great Option number 1 is you say, "Crap, the patient isn't doing well. option number 1 is you say "crap the patient isn't doing well We're not going to wait for the results. we're not going to wait for the results We're going to put them on standard chemotherapy," which oftentimes can be less effective. we're going to put them on standard chemotherapy," which oftentimes can be less effective At that point, you have foregone the option of doing the call it better, personalized medicine. at that point you have foregone the option of doing the call it better personalized medicine That option is gone now. that option is gone now Not great. not great The second option, I think is even worse, is let's wait and see. I don't know about you guys. If someone told me that I had acute leukemia, waiting and seeing doesn't sound very good. Neither of those options are attractive. We face that in our clinical lab with patients, with samples coming in, diagnosed with acute leukemia and now we got to tell a doctor we're going to have a result in 10 days, and we know that that's not a good option. In our lab, we decided we're going to fix that and create what we call a rapid AML, which is a four-hour test. We are the only company in the world that has this test. Our lab and our customers are the only one that can deliver these results in four hours. The second option, I think is even worse, is let's wait and see. the second option i think is even worse is let's wait and see I don't know about you guys. i don't know about you guys If someone told me that I had acute leukemia, waiting and seeing doesn't sound very good. if someone told me that i had acute leukemia waiting and seeing doesn't sound very good Neither of those options are attractive. neither of those options are attractive We face that in our clinical lab with patients, with samples coming in, diagnosed with acute leukemia and now we got to tell a doctor we're going to have a result in 10 days, and we know that that's not a good option. we face that in our clinical lab with patients with samples coming in diagnosed with acute leukemia and now we got to tell a doctor we're going to have a result in 10 days and we know that that's not a good option In our lab, we decided we're going to fix that and create what we call a rapid AML, which is a four-hour test. in our lab we decided we're going to fix that and create what we call a rapid aml which is a four-hour test We are the only company in the world that has this test. we are the only company in the world that has this test Our lab and our customers are the only one that can deliver these results in four hours. our lab and our customers are the only one that can deliver these results in four hours Typically, what happens in our lab, a sample comes in in the morning. By lunchtime, we know the patient has acute leukemia through various other tests. We run our panel, and we can tell the doctor, "This patient is IDH1 positive. You can put him on an IDH1 inhibitor on the same day." This saves patients' lives. This is just one example of what we call ineffective diagnosis, and this is a plague throughout the industry. There's various impacts to that. Either the test is too late, the test isn't accurate enough, the test fails to capture the patient's clinical situation. There's a plethora of problems that kind of fall into this bucket of ineffective diagnosis, which is what we're trying to solve. You can see the magnitude of the problem depending on which publications you read. Anywhere between 25%-40% of patients experience that. Typically, what happens in our lab, a sample comes in in the morning. typically what happens in our lab a sample comes in in the morning By lunchtime, we know the patient has acute leukemia through various other tests. by lunchtime we know the patient has acute leukemia through various other tests We run our panel, and we can tell the doctor, "This patient is IDH1 positive. we run our panel and we can tell the doctor "this patient is idh1 positive You can put him on an IDH1 inhibitor on the same day." This saves patients' lives. you can put him on an idh1 inhibitor on the same day." this saves patients' lives This is just one example of what we call ineffective diagnosis, and this is a plague throughout the industry. this is just one example of what we call ineffective diagnosis and this is a plague throughout the industry There's various impacts to that. there's various impacts to that Either the test is too late, the test isn't accurate enough, the test fails to capture the patient's clinical situation. either the test is too late the test isn't accurate enough the test fails to capture the patient's clinical situation There's a plethora of problems that kind of fall into this bucket of ineffective diagnosis, which is what we're trying to solve. there's a plethora of problems that kind of fall into this bucket of ineffective diagnosis which is what we're trying to solve You can see the magnitude of the problem depending on which publications you read. you can see the magnitude of the problem depending on which publications you read Anywhere between 25%-40% of patients experience that. anywhere between 25%-40% of patients experience that I'm sure there's people here in the room who have family, friends who have gone through that. I am no doubt about that. This is a $100 billion problem in the industry. What happens is, of course, when you have ineffective diagnosis, you have ineffective treatment, you're putting the patient on the wrong therapy, they get worse instead of better. They're more time in the hospitals, and all the costs of skyrocket that you know about in healthcare. This is a massive problem. People ask me, "How do you build a moat around your business?" I like to call it an unfair advantage, and this is what we've developed in our business. We have two divisions in our lab. The first is our Pathology Services Division. We operate a clinical lab just like all of our customers, and we'll get to that in a second. I'm sure there's people here in the room who have family, friends who have gone through that. i'm sure there's people here in the room who have family friends who have gone through that I am no doubt about that. i am no doubt about that This is a $100 billion problem in the industry. this is a $100 billion problem in the industry What happens is, of course, when you have ineffective diagnosis, you have ineffective treatment, you're putting the patient on the wrong therapy, they get worse instead of better. what happens is of course when you have ineffective diagnosis you have ineffective treatment you're putting the patient on the wrong therapy they get worse instead of better They're more time in the hospitals, and all the costs of skyrocket that you know about in healthcare. they're more time in the hospitals and all the costs of skyrocket that you know about in healthcare This is a massive problem. this is a massive problem People ask me, "How do you build a moat around your business?" I like to call it an unfair advantage, and this is what we've developed in our business. people ask me "how do you build a moat around your business?" i like to call it an unfair advantage and this is what we've developed in our business We have two divisions in our lab. we have two divisions in our lab The first is our Pathology Services Division. the first is our pathology services division We operate a clinical lab just like all of our customers, and we'll get to that in a second. we operate a clinical lab just like all of our customers and we'll get to that in a second We operate a clinical lab that has what you would imagine in a lab. We have a facility. We have a lot of boxes on benches. We have reagents that run on those boxes. We have a staff, and most importantly, we have samples of patients coming in every day. This is a business that today is profitable, generates revenue. We bill insurance, we collect, and it's a profitable business. That is our core, kind of our legacy business. What we built on top of that is our Diagnostic Services Division. Like an example, AML, we were providing kind of the old tests that we were running. We realized it wasn't good enough, developed our own assay, and we run it in our lab. I want you to think for a second, what does it take to develop an assay? We operate a clinical lab that has what you would imagine in a lab. we operate a clinical lab that has what you would imagine in a lab We have a facility. we have a facility We have a lot of boxes on benches. we have a lot of boxes on benches We have reagents that run on those boxes. we have reagents that run on those boxes We have a staff, and most importantly, we have samples of patients coming in every day. we have a staff and most importantly we have samples of patients coming in every day This is a business that today is profitable, generates revenue. this is a business that today is profitable generates revenue We bill insurance, we collect, and it's a profitable business. we bill insurance we collect and it's a profitable business That is our core, kind of our legacy business. that is our core kind of our legacy business What we built on top of that is our Diagnostic Services Division. what we built on top of that is our diagnostic services division Like an example, AML, we were providing kind of the old tests that we were running. like an example aml we were providing kind of the old tests that we were running We realized it wasn't good enough, developed our own assay, and we run it in our lab. we realized it wasn't good enough developed our own assay and we run it in our lab I want you to think for a second, what does it take to develop an assay? i want you to think for a second what does it take to develop an assay It takes three things, and they happen to be listed on the left. You need a facility with equipment. You need staff who will run it and test it. The most important thing is you need patient samples. We pay for none of those. They come in as part of our business. We essentially have a free R&D platform. That is our unfair advantage in our business. Number one, when I go to a customer, I can tell them we use our products, and there's no other manufacturer that does that. We use our product every day. We started with it. We've been using it for several years. We know that it works well. It gives the clinician what it wants. The workflow is optimized. We can bill and get paid for it with confidence, which no other manufacturer can provide. It takes three things, and they happen to be listed on the left. it takes three things and they happen to be listed on the left You need a facility with equipment. you need a facility with equipment You need staff who will run it and test it. you need staff who will run it and test it The most important thing is you need patient samples. the most important thing is you need patient samples We pay for none of those. we pay for none of those They come in as part of our business. they come in as part of our business We essentially have a free R&D platform. we essentially have a free r&d platform That is our unfair advantage in our business. that is our unfair advantage in our business Number one, when I go to a customer, I can tell them we use our products, and there's no other manufacturer that does that. number one when i go to a customer i can tell them we use our products and there's no other manufacturer that does that We use our product every day. we use our product every day We started with it. we started with it We've been using it for several years. we've been using it for several years We know that it works well. we know that it works well It gives the clinician what it wants. it gives the clinician what it wants The workflow is optimized. the workflow is optimized We can bill and get paid for it with confidence, which no other manufacturer can provide. we can bill and get paid for it with confidence which no other manufacturer can provide It gives us a really big advantage over any other product manufacturer. We have hands-on experience obviously, which we can help train our customers and help them bring the test up on live. Maybe not the most important thing is we can develop these products quickly and in a very cost-effective manner. One of the problems with biotech companies is the ongoing need for capital for innovation. In biotech, especially healthcare, especially in cancer diagnostics, you don't develop an assay, and that's the same assay for 10 years, because science changes. New genes are discovered to be relevant to this disease or another, you constantly to update your products, change them, modify them, make them more sensitive, extend coverage areas, and a whole bunch of things. It gives us a really big advantage over any other product manufacturer. it gives us a really big advantage over any other product manufacturer We have hands-on experience obviously, which we can help train our customers and help them bring the test up on live. we have hands-on experience obviously which we can help train our customers and help them bring the test up on live Maybe not the most important thing is we can develop these products quickly and in a very cost-effective manner. maybe not the most important thing is we can develop these products quickly and in a very cost-effective manner One of the problems with biotech companies is the ongoing need for capital for innovation. one of the problems with biotech companies is the ongoing need for capital for innovation In biotech, especially healthcare, especially in cancer diagnostics, you don't develop an assay, and that's the same assay for 10 years, because science changes. in biotech especially healthcare especially in cancer diagnostics you don't develop an assay and that's the same assay for 10 years because science changes New genes are discovered to be relevant to this disease or another, you constantly to update your products, change them, modify them, make them more sensitive, extend coverage areas, and a whole bunch of things. new genes are discovered to be relevant to this disease or another you constantly to update your products change them modify them make them more sensitive extend coverage areas and a whole bunch of things This is something that requires a lot of capital in the things that we talked about. You need the equipment, you need the staff, you need the samples. Those are the ingredients that you need in order to develop it. All of those are free in our lab because it's part of our clinical division. What we've done is created a situation where our clinical lab and our R&D division are constantly collaborating together and we want to develop a panel for CML. Our R&D team will say, "Hey, lab, when you have CML samples coming in, throw a few our way so that we can test our new assay on them, and it doesn't cost us anything." Some of these samples are either super expensive or impossible to come by. This is something that requires a lot of capital in the things that we talked about. this is something that requires a lot of capital in the things that we talked about You need the equipment, you need the staff, you need the samples. you need the equipment you need the staff you need the samples Those are the ingredients that you need in order to develop it. those are the ingredients that you need in order to develop it All of those are free in our lab because it's part of our clinical division. all of those are free in our lab because it's part of our clinical division What we've done is created a situation where our clinical lab and our R&D division are constantly collaborating together and we want to develop a panel for CML. what we've done is created a situation where our clinical lab and our r&d division are constantly collaborating together and we want to develop a panel for cml Our R&D team will say, "Hey, lab, when you have CML samples coming in, throw a few our way so that we can test our new assay on them, and it doesn't cost us anything." Some of these samples are either super expensive or impossible to come by. our r&d team will say "hey lab when you have cml samples coming in throw a few our way so that we can test our new assay on them and it doesn't cost us anything." some of these samples are either super expensive or impossible to come by It really gives us an advantage and one example I like to talk about is a recent product release of our BCR-ABL assay. BCR-ABL is what's called the Philadelphia chromosome. It's for chronic leukemia, and this is a test for monitoring patients that have chronic leukemia. We have probably the most advanced assay in the market. We recently came out with a study that we published with Memorial Sloan Kettering, citing its advantages. The beauty of it took us three months and less than $100,000 to develop. That's unheard of in this business. Any other company would take three to five years and probably $5 million or north of that to develop because they don't have the infrastructure that we have. We hit on the three elements that for a customer are important in the lab. It really gives us an advantage and one example I like to talk about is a recent product release of our BCR-ABL assay. it really gives us an advantage and one example i like to talk about is a recent product release of our bcr-abl assay BCR-ABL is what's called the Philadelphia chromosome. bcr-abl is what's called the philadelphia chromosome It's for chronic leukemia, and this is a test for monitoring patients that have chronic leukemia. it's for chronic leukemia and this is a test for monitoring patients that have chronic leukemia We have probably the most advanced assay in the market. we have probably the most advanced assay in the market We recently came out with a study that we published with Memorial Sloan Kettering, citing its advantages. we recently came out with a study that we published with memorial sloan kettering citing its advantages The beauty of it took us three months and less than $100,000 to develop. the beauty of it took us three months and less than $100,000 to develop That's unheard of in this business. that's unheard of in this business Any other company would take three to five years and probably $5 million or north of that to develop because they don't have the infrastructure that we have. any other company would take three to five years and probably $5 million or north of that to develop because they don't have the infrastructure that we have We hit on the three elements that for a customer are important in the lab. we hit on the three elements that for a customer are important in the lab If you're managing a lab, the first thing that's important is the workflow. How long does it take? Am I going to be able to deliver the turnaround time? Do I have lab staff that is properly skilled for that? That's point number one. Number two is the economics. What kind of equipment do I need to invest in? Most of our competing tests, $1 billion or more to purchase all the capital equipment that's required and what do the margins look like? Economics are important. A lab is a business that needs to make money. The third thing that labs are always measured by ultimately is how quickly we can get the results. I know this sounds like a benign kind of factor, but I want you to stop and think for a second. If you're managing a lab, the first thing that's important is the workflow. if you're managing a lab the first thing that's important is the workflow How long does it take? how long does it take Am I going to be able to deliver the turnaround time? am i going to be able to deliver the turnaround time Do I have lab staff that is properly skilled for that? do i have lab staff that is properly skilled for that That's point number one. that's point number one Number two is the economics. number two is the economics What kind of equipment do I need to invest in? what kind of equipment do i need to invest in Most of our competing tests, $1 billion or more to purchase all the capital equipment that's required and what do the margins look like? most of our competing tests $1 billion or more to purchase all the capital equipment that's required and what do the margins look like Economics are important. economics are important A lab is a business that needs to make money. a lab is a business that needs to make money The third thing that labs are always measured by ultimately is how quickly we can get the results. the third thing that labs are always measured by ultimately is how quickly we can get the results I know this sounds like a benign kind of factor, but I want you to stop and think for a second. i know this sounds like a benign kind of factor but i want you to stop and think for a second If someone in your family has been told they have cancer, but we're going to have to run some tests before we decide what treatment we're going to put them on, and now you got to wait for a week or two weeks or three weeks, and those three weeks are eternity. Turnaround time is really an important factor in our business. How do we scale this up? We've partnered with the four main distributors, to get us into the customers. The reason is that the hardest part of our business is getting in front of the right person in the lab manager. We're a small biotech company out of New Haven, Connecticut. Our relationships are limited. If you go to McKesson or Thermo Fisher or some of the other ones, these guys have been selling into those labs for 15 years. They have relationships. If someone in your family has been told they have cancer, but we're going to have to run some tests before we decide what treatment we're going to put them on, and now you got to wait for a week or two weeks or three weeks, and those three weeks are eternity. if someone in your family has been told they have cancer but we're going to have to run some tests before we decide what treatment we're going to put them on and now you got to wait for a week or two weeks or three weeks and those three weeks are eternity Turnaround time is really an important factor in our business. turnaround time is really an important factor in our business How do we scale this up? how do we scale this up We've partnered with the four main distributors, to get us into the customers. we've partnered with the four main distributors to get us into the customers The reason is that the hardest part of our business is getting in front of the right person in the lab manager. the reason is that the hardest part of our business is getting in front of the right person in the lab manager We're a small biotech company out of New Haven, Connecticut. we're a small biotech company out of new haven connecticut Our relationships are limited. our relationships are limited If you go to McKesson or Thermo Fisher or some of the other ones, these guys have been selling into those labs for 15 years. if you go to mckesson or thermo fisher or some of the other ones these guys have been selling into those labs for 15 years They have relationships. they have relationships They can say, "Hey, I want to get in front of Arkansas Pathology Group. Thermo Fisher, you guys sell to them all the time. Get me in for a meeting." That's worth the 20% margin that we give them. Thermo Fisher has a 200 sales force, 200 reps that have been there an average of 12 years. There's no money in the world that I can replicate that. Being able to leverage those relationships and those distributors to get in, we believe is the right model, and it's starting to show its fruits. Where does this company go? Currently, we're focused on blood-related cancers. That's about a half a billion market in the U.S. and about equivalent overseas. For the next two to three years, that's going to be our focus. We have a full product suite for blood-related cancers. They can say, "Hey, I want to get in front of Arkansas Pathology Group. they can say "hey i want to get in front of arkansas pathology group Thermo Fisher, you guys sell to them all the time. thermo fisher you guys sell to them all the time Get me in for a meeting." That's worth the 20% margin that we give them. get me in for a meeting." that's worth the 20% margin that we give them Thermo Fisher has a 200 sales force, 200 reps that have been there an average of 12 years. thermo fisher has a 200 sales force 200 reps that have been there an average of 12 years There's no money in the world that I can replicate that. there's no money in the world that i can replicate that Being able to leverage those relationships and those distributors to get in, we believe is the right model, and it's starting to show its fruits. being able to leverage those relationships and those distributors to get in we believe is the right model and it's starting to show its fruits Where does this company go? where does this company go Currently, we're focused on blood-related cancers. currently we're focused on blood-related cancers That's about a half a billion market in the U.S. and about equivalent overseas. that's about a half a billion market in the u.s and about equivalent overseas For the next two to three years, that's going to be our focus. for the next two to three years that's going to be our focus We have a full product suite for blood-related cancers. we have a full product suite for blood-related cancers Our tests cover about 85% of blood cancer diseases. We've got a pretty good offering that our customers like. For the next two years, our focus is growing into that market. Down the line, we do see ourselves expanding and duplicating the model in solid tumors. What just happened? Did I do that? Okay. Duplicating that into solid tumors and going into other molecular tests outside of cancer. There's a lot of opportunities to take this model and really expand it far beyond that. In terms of our financial kind of outlook and product and resulting margin mix, we end the 2025 at about a $25 million run rate. About 90% are legacy business, our laboratory services business, about 10% are products business. That's going to change. Our tests cover about 85% of blood cancer diseases. our tests cover about 85% of blood cancer diseases We've got a pretty good offering that our customers like. we've got a pretty good offering that our customers like For the next two years, our focus is growing into that market. for the next two years our focus is growing into that market Down the line, we do see ourselves expanding and duplicating the model in solid tumors. down the line we do see ourselves expanding and duplicating the model in solid tumors What just happened? what just happened Did I do that? did i do that Okay. okay Duplicating that into solid tumors and going into other molecular tests outside of cancer. duplicating that into solid tumors and going into other molecular tests outside of cancer There's a lot of opportunities to take this model and really expand it far beyond that. there's a lot of opportunities to take this model and really expand it far beyond that In terms of our financial kind of outlook and product and resulting margin mix, we end the 2025 at about a $25 million run rate. in terms of our financial kind of outlook and product and resulting margin mix we end the 2025 at about a $25 million run rate About 90% are legacy business, our laboratory services business, about 10% are products business. about 90% are legacy business our laboratory services business about 10% are products business That's going to change. that's going to change There was a clever investor who said, "Oh, well, you're just going to drop your services." No, we're not going to do that. That's going to grow at probably about a 10% a year, although we're not focusing any resources on that because if you think about it, the services division is not the alpha of the business. That's not the growth engine, but it does what it needs. It's profitable, and it delivers samples for the R&D team to develop what they need the next generation of products. We're good with that. That'll grow kind of at a small clip, but really all of our resources of growth are focused on the products business. As we see the balance change and in the next three to five years, I expect it to go from 90/10 to 60/40. That's kind of the goal. There was a clever investor who said, "Oh, well, you're just going to drop your services." No, we're not going to do that. there was a clever investor who said "oh well you're just going to drop your services." no we're not going to do that That's going to grow at probably about a 10% a year, although we're not focusing any resources on that because if you think about it, the services division is not the alpha of the business. that's going to grow at probably about a 10% a year although we're not focusing any resources on that because if you think about it the services division is not the alpha of the business That's not the growth engine, but it does what it needs. that's not the growth engine but it does what it needs It's profitable, and it delivers samples for the R&D team to develop what they need the next generation of products. it's profitable and it delivers samples for the r&d team to develop what they need the next generation of products We're good with that. we're good with that That'll grow kind of at a small clip, but really all of our resources of growth are focused on the products business. that'll grow kind of at a small clip but really all of our resources of growth are focused on the products business As we see the balance change and in the next three to five years, I expect it to go from 90/10 to 60/40. as we see the balance change and in the next three to five years i expect it to go from 90/10 to 60/40 That's kind of the goal. that's kind of the goal Our margin mix will change as well because the products have a much, much higher margin. We see at scale, and it doesn't take much, we'll be at around 80% margin for the products. It's a really good business that we want to be in. There's some numbers on market share and where we think we can be in the future. Our focus, as I've said, in the near term is to capture significant market share on the blood-related cancers. This is a half a billion dollar market in the U.S. I see no reason why we can't have 20% of that in a few years. It doesn't take that much, and our products are certainly superior than anything the alternative has. This is our good-looking team. Lots of experience in the diagnostic field. We just hired Stephen Miller, our Chief Commercial Officer, been 35 years in the field. Our margin mix will change as well because the products have a much, much higher margin. our margin mix will change as well because the products have a much much higher margin We see at scale, and it doesn't take much, we'll be at around 80% margin for the products. we see at scale and it doesn't take much we'll be at around 80% margin for the products It's a really good business that we want to be in. it's a really good business that we want to be in There's some numbers on market share and where we think we can be in the future. there's some numbers on market share and where we think we can be in the future Our focus, as I've said, in the near term is to capture significant market share on the blood-related cancers. our focus as i've said in the near term is to capture significant market share on the blood-related cancers This is a half a billion dollar market in the U.S. this is a half a billion dollar market in the u.s I see no reason why we can't have 20% of that in a few years. i see no reason why we can't have 20% of that in a few years It doesn't take that much, and our products are certainly superior than anything the alternative has. it doesn't take that much and our products are certainly superior than anything the alternative has This is our good-looking team. this is our good-looking team Lots of experience in the diagnostic field. lots of experience in the diagnostic field We just hired Stephen Miller, our Chief Commercial Officer, been 35 years in the field. we just hired stephen miller our chief commercial officer been 35 years in the field I mention him because he's going to be the driver of the growth on the product side, and that's his focus. In summary, five key points. I think this is a disruptive business that really takes a personal look at what's going on in the laboratory and says, "We can fix it. We can do better based on our own experience and our exposure to the market." We live this world ourselves. We've got a really good platform that enables us to innovate in a very capital-efficient manner. We're not going to have to, for every product, raise another $5 million to get the product into the market and dilute our investors. Big opportunity. I think it's extremely scalable. I mention him because he's going to be the driver of the growth on the product side, and that's his focus. i mention him because he's going to be the driver of the growth on the product side and that's his focus In summary, five key points. in summary five key points I think this is a disruptive business that really takes a personal look at what's going on in the laboratory and says, "We can fix it. i think this is a disruptive business that really takes a personal look at what's going on in the laboratory and says "we can fix it We can do better based on our own experience and our exposure to the market." We live this world ourselves. we can do better based on our own experience and our exposure to the market." we live this world ourselves We've got a really good platform that enables us to innovate in a very capital-efficient manner. we've got a really good platform that enables us to innovate in a very capital-efficient manner We're not going to have to, for every product, raise another $5 million to get the product into the market and dilute our investors. we're not going to have to for every product raise another $5 million to get the product into the market and dilute our investors Big opportunity. big opportunity I think it's extremely scalable. i think it's extremely scalable Just an example, and some of you may heard me say this, on the product side, we currently have capacity to produce about $50 million of product annually. We did three last year, plenty of room to grow with no further investment. If we had to go beyond that, if we had to double that capacity, it's about $700,000 to double our capacity from $50 million to $100 million. Extremely scalable in our business. Which is much more attractive than the Pathology Services Division. That's a much more stepwise way to scale it up. That's part of the reason why we like this business. Last of all, as being profitable at this level, and continue to operate a very cash-efficient business, I think it can create a very attractive business model. With that, I'm done. I'll hand it over to questions. Just an example, and some of you may heard me say this, on the product side, we currently have capacity to produce about $50 million of product annually. just an example and some of you may heard me say this on the product side we currently have capacity to produce about $50 million of product annually We did three last year, plenty of room to grow with no further investment. we did three last year plenty of room to grow with no further investment If we had to go beyond that, if we had to double that capacity, it's about $700,000 to double our capacity from $50 million to $100 million. if we had to go beyond that if we had to double that capacity it's about $700,000 to double our capacity from $50 million to $100 million Extremely scalable in our business. extremely scalable in our business Which is much more attractive than the Pathology Services Division. which is much more attractive than the pathology services division That's a much more stepwise way to scale it up. that's a much more stepwise way to scale it up That's part of the reason why we like this business. that's part of the reason why we like this business Last of all, as being profitable at this level, and continue to operate a very cash-efficient business, I think it can create a very attractive business model. last of all as being profitable at this level and continue to operate a very cash-efficient business i think it can create a very attractive business model With that, I'm done. with that i'm done I'll hand it over to questions. i'll hand it over to questions 10 minutes. Yes, sir. 10 minutes. 10 minutes Yes, sir. yes sir

Speaker 2: You mentioned that you're superior to some of your competitors in blood testing. As a layman, can you help me understand why that's the case, and what are the reasons why your competitors can't make it or don't want to make a product as good as yours? You mentioned that you're superior to some of your competitors in blood testing. you mentioned that you're superior to some of your competitors in blood testing As a layman, can you help me understand why that's the case, and what are the reasons why your competitors can't make it or don't want to make a product as good as yours? as a layman can you help me understand why that's the case and what are the reasons why your competitors can't make it or don't want to make a product as good as yours

Speaker 1: I'll answer the first part of your question, going back to the example of acute leukemia. Go to any hospital website, any reference lab website, and do a search for turnaround time for acute leukemia genetic testing. You'll see 10 to 15 days. Ours is the same day. We're better. It's just as simple as that. We give answers. Remember, diagnostics are here to serve the clinician, to give the doctor information to treat the patient. A delay in information means they can't treat the patient properly. It's as simple as that. The reasons they don't do it, I think for the most part, I don't know what's going on in their head, but I think for a large part, the market accepts what is there. I'll answer the first part of your question, going back to the example of acute leukemia. i'll answer the first part of your question going back to the example of acute leukemia Go to any hospital website, any reference lab website, and do a search for turnaround time for acute leukemia genetic testing. go to any hospital website any reference lab website and do a search for turnaround time for acute leukemia genetic testing You'll see 10 to 15 days. you'll see 10 to 15 days Ours is the same day. ours is the same day We're better. we're better It's just as simple as that. it's just as simple as that We give answers. we give answers Remember, diagnostics are here to serve the clinician, to give the doctor information to treat the patient. remember diagnostics are here to serve the clinician to give the doctor information to treat the patient A delay in information means they can't treat the patient properly. a delay in information means they can't treat the patient properly It's as simple as that. it's as simple as that The reasons they don't do it, I think for the most part, I don't know what's going on in their head, but I think for a large part, the market accepts what is there. the reasons they don't do it i think for the most part i don't know what's going on in their head but i think for a large part the market accepts what is there We go to labs all the time and we ask them, "What's your turnaround time for acute leukemia?" "10 to days." "How do you think about that?" "Well, pretty good. That's what the rest of the market does." Inside I'm thinking, "No, you suck." I'm not going to tell them that, of course. That's terrible. They know that for the patient, that's not good. There's a lot of inertia in the lab, and that's part of the challenge of growing this business. Labs are creatures of habit. Every other lab manager, like, "Oh, we've been doing for 25 years. Our doctors never complain." Well, that's not the indication, right? Of whether the customer complains or not. That's not how you measure if you're giving the right product. That make sense? Yes. You mentioned margins at scale could be 80%. We go to labs all the time and we ask them, "What's your turnaround time for acute leukemia?" "10 to days." "How do you think about that?" "Well, pretty good. we go to labs all the time and we ask them "what's your turnaround time for acute leukemia?" "10 to days." "how do you think about that?" "well pretty good That's what the rest of the market does." Inside I'm thinking, "No, you suck." I'm not going to tell them that, of course. that's what the rest of the market does." inside i'm thinking "no you suck." i'm not going to tell them that of course That's terrible. that's terrible They know that for the patient, that's not good. they know that for the patient that's not good There's a lot of inertia in the lab, and that's part of the challenge of growing this business. there's a lot of inertia in the lab and that's part of the challenge of growing this business Labs are creatures of habit. labs are creatures of habit Every other lab manager, like, "Oh, we've been doing for 25 years. every other lab manager like "oh we've been doing for 25 years Our doctors never complain." Well, that's not the indication, right? our doctors never complain." well that's not the indication right Of whether the customer complains or not. of whether the customer complains or not That's not how you measure if you're giving the right product. that's not how you measure if you're giving the right product That make sense? that make sense Yes. yes You mentioned margins at scale could be 80%. you mentioned margins at scale could be 80% The question was what drives the difference between our turnaround time that our products can deliver and the competitors. It's all about economics. When you have an expensive test that is complicated, what a lab does is batches. Think about an airplane, right? If they had the choice, they want to fill every seat because they've got the fixed cost of the pilot and the crew and the fuel and all that stuff, and that's critical to them. Our assay, because it's more economically attractive and it's easier, we reduce the threshold for batches. Instead of with other competing tests, they have to run 25 tests in order for it to make economic sense, ours can run five tests. The question was what drives the difference between our turnaround time that our products can deliver and the competitors. the question was what drives the difference between our turnaround time that our products can deliver and the competitors It's all about economics. it's all about economics When you have an expensive test that is complicated, what a lab does is batches. when you have an expensive test that is complicated what a lab does is batches Think about an airplane, right? think about an airplane right If they had the choice, they want to fill every seat because they've got the fixed cost of the pilot and the crew and the fuel and all that stuff, and that's critical to them. if they had the choice they want to fill every seat because they've got the fixed cost of the pilot and the crew and the fuel and all that stuff and that's critical to them Our assay, because it's more economically attractive and it's easier, we reduce the threshold for batches. our assay because it's more economically attractive and it's easier we reduce the threshold for batches Instead of with other competing tests, they have to run 25 tests in order for it to make economic sense, ours can run five tests. instead of with other competing tests they have to run 25 tests in order for it to make economic sense ours can run five tests Think about a lab with a workflow where every day you have five patient samples coming in, you can run the test every day, as opposed to if you're locked into the other product that requires 25 samples, you now have to wait five business days or a week in order for the bus to be filled so it can leave the station. That make sense? Okay. Yes, sir. Think about a lab with a workflow where every day you have five patient samples coming in, you can run the test every day, as opposed to if you're locked into the other product that requires 25 samples, you now have to wait five business days or a week in order for the bus to be filled so it can leave the station. think about a lab with a workflow where every day you have five patient samples coming in you can run the test every day as opposed to if you're locked into the other product that requires 25 samples you now have to wait five business days or a week in order for the bus to be filled so it can leave the station That make sense? that make sense Okay. okay Yes, sir. yes sir

Speaker 2: If you're selling through distributors that they own the customer relationship, how do you get a sense of demand? How do you fulfill that demand, and how predictable is that view that you don't own the relationship? If you're selling through distributors that they own the customer relationship, how do you get a sense of demand? if you're selling through distributors that they own the customer relationship how do you get a sense of demand How do you fulfill that demand, and how predictable is that view that you don't own the relationship? how do you fulfill that demand and how predictable is that view that you don't own the relationship

Speaker 1: Excellent. I'm not sure I would agree that we don't own the relationship. The distributor largely makes introduction and gets our foot in the door. We have significant interaction with our customers, we're there for the first meeting. They're not pitching. This is a complex sale. No offense to a rep from McKesson, but they don't know our business. They don't know our product. They don't know how to answer the next level down of questions. We tell them, "Your job is to get us in the door." That is absolutely worth the 20%, but from there, we take it from there. We develop a relationship with all of our customers. We help onboard them. We have a whole lab implementation team that comes in and helps set them up. As part of that discussion, we understand complete with what their volume. Excellent. excellent I'm not sure I would agree that we don't own the relationship. i'm not sure i would agree that we don't own the relationship The distributor largely makes introduction and gets our foot in the door. the distributor largely makes introduction and gets our foot in the door We have significant interaction with our customers, we're there for the first meeting. we have significant interaction with our customers we're there for the first meeting They're not pitching. they're not pitching This is a complex sale. this is a complex sale No offense to a rep from McKesson, but they don't know our business. no offense to a rep from mckesson but they don't know our business They don't know our product. they don't know our product They don't know how to answer the next level down of questions. they don't know how to answer the next level down of questions We tell them, "Your job is to get us in the door." That is absolutely worth the 20%, but from there, we take it from there. we tell them "your job is to get us in the door." that is absolutely worth the 20% but from there we take it from there We develop a relationship with all of our customers. we develop a relationship with all of our customers We help onboard them. we help onboard them We have a whole lab implementation team that comes in and helps set them up. we have a whole lab implementation team that comes in and helps set them up As part of that discussion, we understand complete with what their volume. as part of that discussion we understand complete with what their volume That's part of the initial discussions. I was talking to someone last night about how do we create our pipeline. What we do is Thermo Fisher will open the door, we go see customer X. Okay. Then we walk them through our product line, and we say, "Okay, which panels do you want?" "Well, we want this one, this one, and this one." "Okay. Can you share with us your volume from last year?" Lab volumes don't change that much. They're pretty stable. Now we know the price we sell to the customer, and we multiply that by the volume, and we know exactly what the value of that customer is, and that's when it goes into our pipeline. Okay. I think we have much more of a deeper relationship than other distributors where they never talk to the customer. Yes, sir. That's part of the initial discussions. that's part of the initial discussions I was talking to someone last night about how do we create our pipeline. i was talking to someone last night about how do we create our pipeline What we do is Thermo Fisher will open the door, we go see customer X. what we do is thermo fisher will open the door we go see customer x Okay. okay Then we walk them through our product line, and we say, "Okay, which panels do you want?" "Well, we want this one, this one, and this one." "Okay. then we walk them through our product line and we say "okay which panels do you want?" "well we want this one this one and this one." "okay Can you share with us your volume from last year?" Lab volumes don't change that much. can you share with us your volume from last year?" lab volumes don't change that much They're pretty stable. they're pretty stable Now we know the price we sell to the customer, and we multiply that by the volume, and we know exactly what the value of that customer is, and that's when it goes into our pipeline. now we know the price we sell to the customer and we multiply that by the volume and we know exactly what the value of that customer is and that's when it goes into our pipeline Okay. okay I think we have much more of a deeper relationship than other distributors where they never talk to the customer. i think we have much more of a deeper relationship than other distributors where they never talk to the customer Yes, sir. yes sir

Speaker 3: You mentioned your products pipeline in the last earnings call. More about that products pipeline and the confidence level of it and the duration for that pipeline into revenue. You mentioned your products pipeline in the last earnings call. you mentioned your products pipeline in the last earnings call More about that products pipeline and the confidence level of it and the duration for that pipeline into revenue. more about that products pipeline and the confidence level of it and the duration for that pipeline into revenue

Speaker 1: Yeah. Sure. One of the things I mentioned that was a big change for us is this year we hired three commercial folks, Steve and two other guys. Before that, there was one person in a, call it 50% role, doing sales. We've kind of 6x'd our sales force, and they now start to build the relationship with the distributors and with the customers. With every customer that we're introduced, we go through the process I just described to assess the dollar value of that customer, and only then that comes in. At that point, you've had a pretty good discussion, probably two or three discussions, both on a technical, clinical, and economic discussion. There's a pretty good buy-in. Based on our experience, from that point, it's always been a when, never an if. Yeah. yeah Sure. sure One of the things I mentioned that was a big change for us is this year we hired three commercial folks, Steve and two other guys. one of the things i mentioned that was a big change for us is this year we hired three commercial folks steve and two other guys Before that, there was one person in a, call it 50% role, doing sales. before that there was one person in a call it 50% role doing sales We've kind of 6x'd our sales force, and they now start to build the relationship with the distributors and with the customers. we've kind of 6x'd our sales force and they now start to build the relationship with the distributors and with the customers With every customer that we're introduced, we go through the process I just described to assess the dollar value of that customer, and only then that comes in. with every customer that we're introduced we go through the process i just described to assess the dollar value of that customer and only then that comes in At that point, you've had a pretty good discussion, probably two or three discussions, both on a technical, clinical, and economic discussion. at that point you've had a pretty good discussion probably two or three discussions both on a technical clinical and economic discussion There's a pretty good buy-in. there's a pretty good buy-in Based on our experience, from that point, it's always been a when, never an if. based on our experience from that point it's always been a when never an if We've gotten that far with a customer, they've said, "Well, we want this, and this product." They've looked at what they have in the lab and which ones they want to change or which one they want to bring in-house. They're committed to that, then it's just a matter of timeline of how long it takes. That's a challenge in terms of the pipeline. I want to be very clear, I've said several times we have now about a $10 million pipeline. That doesn't equate to $10 million this year because we're bringing on board next quarter a large customer, a large academic center out of California, which we first pitched to in November of 2024. They wanted it. They were in. We've gotten that far with a customer, they've said, "Well, we want this, and this product." They've looked at what they have in the lab and which ones they want to change or which one they want to bring in-house. we've gotten that far with a customer they've said "well we want this and this product." they've looked at what they have in the lab and which ones they want to change or which one they want to bring in-house They're committed to that, then it's just a matter of timeline of how long it takes. they're committed to that then it's just a matter of timeline of how long it takes That's a challenge in terms of the pipeline. that's a challenge in terms of the pipeline I want to be very clear, I've said several times we have now about a $10 million pipeline. i want to be very clear i've said several times we have now about a $10 million pipeline That doesn't equate to $10 million this year because we're bringing on board next quarter a large customer, a large academic center out of California, which we first pitched to in November of 2024. that doesn't equate to $10 million this year because we're bringing on board next quarter a large customer a large academic center out of california which we first pitched to in november of 2024 They wanted it. they wanted it They were in. they were in We went through the numbers, everything. They had to buy one of the machines, which we plug into the internet. They need IT approval. You've heard me tell this story about Shane for the benefit of everyone else. They needed IT approval. That took 11 months for them to get IT approval. No one could've predicted that. That's the challenge. I think over time we'll get better in predicting and converting that pipeline to more concrete guidance. I don't think we're there yet. Yes. We went through the numbers, everything. we went through the numbers everything They had to buy one of the machines, which we plug into the internet. they had to buy one of the machines which we plug into the internet They need IT approval. they need it approval You've heard me tell this story about Shane for the benefit of everyone else. you've heard me tell this story about shane for the benefit of everyone else They needed IT approval. they needed it approval That took 11 months for them to get IT approval. that took 11 months for them to get it approval No one could've predicted that. no one could've predicted that That's the challenge. that's the challenge I think over time we'll get better in predicting and converting that pipeline to more concrete guidance. i think over time we'll get better in predicting and converting that pipeline to more concrete guidance I don't think we're there yet. i don't think we're there yet Yes. yes

Speaker 4: Who are your customers? Who are your customers? who are your customers

Speaker 1: We have three customer segments, hospital laboratories, reference laboratories, small regional and large reference laboratories, and physician office laboratories, which basically means a large oncology group that is big enough that they've built a lab in their practice and they want to run these tests in-house. We have three customer segments, hospital laboratories, reference laboratories, small regional and large reference laboratories, and physician office laboratories, which basically means a large oncology group that is big enough that they've built a lab in their practice and they want to run these tests in-house. we have three customer segments hospital laboratories reference laboratories small regional and large reference laboratories and physician office laboratories which basically means a large oncology group that is big enough that they've built a lab in their practice and they want to run these tests in-house

Speaker 4: Is that whom your salespeople are- Is that whom your salespeople are- is that whom your salespeople are-

Speaker 1: All three. All three. all three

Speaker 4: When they purchase, they purchase through McKesson? When they purchase, they purchase through McKesson? when they purchase they purchase through mckesson

Speaker 1: If it's through a distributor. We have direct customers as well, so it depends. Yeah. If the distributor brought us in, it's theirs, and now they'll purchase through McKesson, and basically we give McKesson a price, and they mark it up whatever they want for whatever margin they want. If it's through a distributor. if it's through a distributor We have direct customers as well, so it depends. we have direct customers as well so it depends Yeah. yeah If the distributor brought us in, it's theirs, and now they'll purchase through McKesson, and basically we give McKesson a price, and they mark it up whatever they want for whatever margin they want. if the distributor brought us in it's theirs and now they'll purchase through mckesson and basically we give mckesson a price and they mark it up whatever they want for whatever margin they want

Speaker 4: How many customers are there of the three combined, total? How many customers are there of the three combined, total? how many customers are there of the three combined total

Speaker 1: Probably about 15 right now. Probably about 15 right now. probably about 15 right now

Speaker 4: Say again? Say again? say again

Speaker 1: 15. 15. 15

Speaker 4: 15? 15? 15

Speaker 1: 15, one, five. How many customers do we have or available? 15, one, five. 15 one five How many customers do we have or available? how many customers do we have or available

Speaker 4: How many customers are available? How many customers are available? how many customers are available

Speaker 1: Oh, hundreds of each. Oh, hundreds of each. oh hundreds of each

Speaker 4: Hundreds. Hundreds. hundreds

Speaker 1: Yeah. We did $3 million last year. Yeah. yeah We did $3 million last year. we did $3 million last year

Speaker 4: Out of 15 customers. Out of 15 customers. out of 15 customers

Speaker 1: Yes, out of $500 million a year TAM. Yeah. We haven't even scratched the surface. Yes, out of $500 million a year TAM. yes out of $500 million a year tam Yeah. yeah We haven't even scratched the surface. we haven't even scratched the surface

Speaker 4: You have a new COO. Is he running sales? You have a new COO. you have a new coo Is he running sales? is he running sales

Speaker 1: Yes. Yes. yes

Speaker 4: His objective is to turn that 15 into 150? His objective is to turn that 15 into 150? his objective is to turn that 15 into 150

Speaker 1: That's right. Yes. That's right. that's right Yes. yes

Speaker 3: Mine's an educational question. For the four-hour test, well, there are two things you're really testing for. One, yes, that person has AML. Two, we have a genetic mixed presentation, I guess. Mine's an educational question. mine's an educational question For the four-hour test, well, there are two things you're really testing for. for the four-hour test well there are two things you're really testing for One, yes, that person has AML. one yes that person has aml Two, we have a genetic mixed presentation, I guess. two we have a genetic mixed presentation i guess

Speaker 1: No, just a second. At that point, we know they have AML, and we want to help the clinician decide which therapy they want. No, just a second. no just a second At that point, we know they have AML, and we want to help the clinician decide which therapy they want. at that point we know they have aml and we want to help the clinician decide which therapy they want

Speaker 3: Okay, anyone who has this type of cancer, it's a genetic cause that's the case. Okay, anyone who has this type of cancer, it's a genetic cause that's the case. okay anyone who has this type of cancer it's a genetic cause that's the case

Speaker 1: Yes, it's a genetic cause. Not every genetic cause has a targeted therapy. We don't test for their entire genome. We test for the ones that we know there's a bingo. If you have a mutation gene X, drug X will work. You have a mutation gene Y, drug Y will work. If you have a mutation gene W, but there's no therapy to it, there's no point in doing the test. Right? A test is only worth it if there's an action to it afterwards. That make sense? Yes, it's a genetic cause. yes it's a genetic cause Not every genetic cause has a targeted therapy. not every genetic cause has a targeted therapy We don't test for their entire genome. we don't test for their entire genome We test for the ones that we know there's a bingo. we test for the ones that we know there's a bingo If you have a mutation gene X, drug X will work. if you have a mutation gene x drug x will work You have a mutation gene Y, drug Y will work. you have a mutation gene y drug y will work If you have a mutation gene W, but there's no therapy to it, there's no point in doing the test. if you have a mutation gene w but there's no therapy to it there's no point in doing the test Right? right A test is only worth it if there's an action to it afterwards. a test is only worth it if there's an action to it afterwards That make sense? that make sense

Speaker 3: Yeah. Thank you. Yeah. yeah Thank you. thank you

Speaker 1: Yes. Yes. yes

Speaker 4: What's the feedback been from those 15 clients you're currently selling? What's the feedback been from those 15 clients you're currently selling? what's the feedback been from those 15 clients you're currently selling

Speaker 1: We've never lost one of them. We've never lost one of them. we've never lost one of them

Speaker 4: Great. Great. great

Speaker 1: We've never lost a customer. They've been with us, some of them, for four years now. That's the nice thing about the business. It's a tough sell, but once you're in, you're in till death do us part. They don't go away. It's a routine. They've got it. They've now shrunk the turnaround time from 10 days to one. The doctors are not going back. Yeah. We've never lost a customer. we've never lost a customer They've been with us, some of them, for four years now. they've been with us some of them for four years now That's the nice thing about the business. that's the nice thing about the business It's a tough sell, but once you're in, you're in till death do us part. it's a tough sell but once you're in you're in till death do us part They don't go away. they don't go away It's a routine. it's a routine They've got it. they've got it They've now shrunk the turnaround time from 10 days to one. they've now shrunk the turnaround time from 10 days to one The doctors are not going back. the doctors are not going back Yeah. yeah

Speaker 3: Just a couple things. Can you talk about the pertinent economics of the assays in the lab that you're using? Just a couple things. just a couple things Can you talk about the pertinent economics of the assays in the lab that you're using? can you talk about the pertinent economics of the assays in the lab that you're using Can you also talk about from your client customer's perspective of they're treating this patient, how does the price of your services compare to the total cost of treating the patient? I guess what I'm trying to get at. Can you also talk about from your client customer's perspective of they're treating this patient, how does the price of your services compare to the total cost of treating the patient? can you also talk about from your client customer's perspective of they're treating this patient how does the price of your services compare to the total cost of treating the patient I guess what I'm trying to get at. i guess what i'm trying to get at

Speaker 1: Yeah Yeah yeah

Speaker 3: Do you have pricing power there? Do you have pricing power there? do you have pricing power there

Speaker 1: No. Okay, let me ask you the first question. In terms of economics, and you're talking about the customer economics, right? No. no Okay, let me ask you the first question. okay let me ask you the first question In terms of economics, and you're talking about the customer economics, right? in terms of economics and you're talking about the customer economics right

Speaker 3: Yep. Yep. yep

Speaker 1: Okay. Our assays sell on between $200 and $450 per test, depending on which test they do. The reimbursement to the customer is about double. We ensure that our customers have a 50% margin, which makes it attractive for them. They make money, they don't leave me. All right? That's them. Your second question is far more complicated because it depends on the therapy, and you know that, of course. The other thing is there's no price control because reimbursement is set by the payers. If we're testing for AML, the reimbursement is $1,250. Nobody controls that. That's just set. That's based on CPT codes and reimbursement. Now the game is to create a product that leaves the customer margin and that leaves us margin, and we've accomplished that. You've heard our margin, we do very well. Okay. okay Our assays sell on between $200 and $450 per test, depending on which test they do. our assays sell on between $200 and $450 per test depending on which test they do The reimbursement to the customer is about double. the reimbursement to the customer is about double We ensure that our customers have a 50% margin, which makes it attractive for them. we ensure that our customers have a 50% margin which makes it attractive for them They make money, they don't leave me. they make money they don't leave me All right? all right That's them. that's them Your second question is far more complicated because it depends on the therapy, and you know that, of course. your second question is far more complicated because it depends on the therapy and you know that of course The other thing is there's no price control because reimbursement is set by the payers. the other thing is there's no price control because reimbursement is set by the payers If we're testing for AML, the reimbursement is $1,250. if we're testing for aml the reimbursement is $1,250 Nobody controls that. nobody controls that That's just set. that's just set That's based on CPT codes and reimbursement. that's based on cpt codes and reimbursement Now the game is to create a product that leaves the customer margin and that leaves us margin, and we've accomplished that. now the game is to create a product that leaves the customer margin and that leaves us margin and we've accomplished that You've heard our margin, we do very well. you've heard our margin we do very well The customer does 50% margin, that's very attractive for them as well. Yes. The customer does 50% margin, that's very attractive for them as well. the customer does 50% margin that's very attractive for them as well Yes. yes

Speaker 5: Can you talk about how to see the insurance companies, how to make sure that they work and cover your products? Also just to get an idea of how they see Precipio whether the multiple paths Can you talk about how to see the insurance companies, how to make sure that they work and cover your products? can you talk about how to see the insurance companies how to make sure that they work and cover your products Also just to get an idea of how they see Precipio whether the multiple paths also just to get an idea of how they see precipio whether the multiple paths Do you ever see them down-weighting you benefits? Do you ever see them down-weighting you benefits? do you ever see them down-weighting you benefits

Speaker 1: Right. It's not an individual product. The way you develop an assay is you look at the testing codes that exist, which typically exist because of clinical relevance, right? A payer's not going to pay for a gene W that doesn't give any therapy. They know when a new drug comes on board, there's a new CPT code established for that test. We play into that. It's not defined by us, we don't influence that. That's the downside. The upside is it's guaranteed reimbursement because the code exists and a rate exists for it. We don't really have an influence. I don't think Medicare knows who Precipio is, quite frankly. As far as the reimbursement from the payers, all they look for is the matching of the codes to the clinical situation, and then they pay. Does that answer your question? Okay. Right. right It's not an individual product. it's not an individual product The way you develop an assay is you look at the testing codes that exist, which typically exist because of clinical relevance, right? the way you develop an assay is you look at the testing codes that exist which typically exist because of clinical relevance right A payer's not going to pay for a gene W that doesn't give any therapy. a payer's not going to pay for a gene w that doesn't give any therapy They know when a new drug comes on board, there's a new CPT code established for that test. they know when a new drug comes on board there's a new cpt code established for that test We play into that. we play into that It's not defined by us, we don't influence that. it's not defined by us we don't influence that That's the downside. that's the downside The upside is it's guaranteed reimbursement because the code exists and a rate exists for it. the upside is it's guaranteed reimbursement because the code exists and a rate exists for it We don't really have an influence. we don't really have an influence I don't think Medicare knows who Precipio is, quite frankly. i don't think medicare knows who precipio is quite frankly As far as the reimbursement from the payers, all they look for is the matching of the codes to the clinical situation, and then they pay. as far as the reimbursement from the payers all they look for is the matching of the codes to the clinical situation and then they pay Does that answer your question? does that answer your question Okay. okay Yes, sir. Yes, sir. yes sir

Speaker 5: What happens do you expect that the people who are doing more assay, [inaudible] days, may look at you and say, "These are the company take business away from us. What happens do you expect that the people who are doing more assay, [inaudible] days, may look at you and say, "These are the company take business away from us. what happens do you expect that the people who are doing more assay [inaudible] days may look at you and say "these are the company take business away from us

Speaker 1: Yeah. Yeah. yeah

Speaker 5: Therefore, we're going to change our legacy model to follow you. Therefore, we're going to change our legacy model to follow you. therefore we're going to change our legacy model to follow you

Speaker 1: Right. Right. right

Speaker 5: Have you seen any of that kind? Have you seen any of that kind? have you seen any of that kind

Speaker 1: No, quite frankly, we're too small to really move the needle for anyone. We're talking about behemoths of companies like Qiagen and Abbott Diagnostics. They're huge companies. This is a fraction of a fraction of a percentage. I think, I hope it'll take a long time for them to wake up. That's good for us. I also think that going into our business model is not easy. It took us 15 years to build a successful laboratory. It's a pain-in-the-ass business, I'll be honest with you. There's a reason we're focusing on the products. It's a tough business, capital intensive. We've made it work, but you look at other competitors 20 times our size, and they're not making money. We've been able to figure out operationally how to really make an efficient business, but it's not easy. No, quite frankly, we're too small to really move the needle for anyone. no quite frankly we're too small to really move the needle for anyone We're talking about behemoths of companies like Qiagen and Abbott Diagnostics. we're talking about behemoths of companies like qiagen and abbott diagnostics They're huge companies. they're huge companies This is a fraction of a fraction of a percentage. this is a fraction of a fraction of a percentage I think, I hope it'll take a long time for them to wake up. i think i hope it'll take a long time for them to wake up That's good for us. that's good for us I also think that going into our business model is not easy. i also think that going into our business model is not easy It took us 15 years to build a successful laboratory. it took us 15 years to build a successful laboratory It's a pain-in-the-ass business, I'll be honest with you. it's a pain-in-the-ass business i'll be honest with you There's a reason we're focusing on the products. there's a reason we're focusing on the products It's a tough business, capital intensive. it's a tough business capital intensive We've made it work, but you look at other competitors 20 times our size, and they're not making money. we've made it work but you look at other competitors 20 times our size and they're not making money We've been able to figure out operationally how to really make an efficient business, but it's not easy. we've been able to figure out operationally how to really make an efficient business but it's not easy I think that large manufacturers, it would behoove them to jump into that business. I'm getting the wrap-up, but I'm around. Thank you all, and happy to speak to anyone afterwards. I think that large manufacturers, it would behoove them to jump into that business. i think that large manufacturers it would behoove them to jump into that business I'm getting the wrap-up, but I'm around. i'm getting the wrap-up but i'm around Thank you all, and happy to speak to anyone afterwards. thank you all and happy to speak to anyone afterwards