Precipio Inc (PRPO) 2024 Q2 法說會逐字稿

Welcome to the Precipio second-quarter 2024 shareholder update conference call. (Operator Instructions) Please note that the conference is being recorded.

歡迎參加 Precipio 2024 年第二季股東更新電話會議。（操作員說明）請注意，會議正在錄製中。

Statements made during this call contain forward-looking statements about our business. You should not place undue reliance on forward-looking statements as these statements are based upon our current expectations, forecasts, and assumptions and are subject to significant risks and uncertainties. These statements may be identified by words such as may, will, should, could, expect, intend, plan, anticipate, believe, estimate, predict, potential, forecasts, continue, or the negative of these terms, or other words or terms of similar meaning.

本次電話會議期間發表的聲明包含有關我們業務的前瞻性聲明。您不應過度依賴前瞻性陳述，因為這些陳述是基於我們當前的預期、預測和假設，並面臨重大風險和不確定性。這些陳述可以用「可能」、「將」、「應該」、「能」、「期望」、「打算」、「計劃」、「預期」、「相信」、「估計」、「預測」、「潛力」、「預測」、「繼續」等詞語或這些術語的否定詞或其他詞語或術語來識別。類似的意思。

Risks and uncertainties that could cause our actual results to differ materially from those set forth in any forward-looking statements include, but are not limited to, the matters listed under Risk Factors in our annual report on Form 10-K for the year ended December 31, 2023, which is on file with the Securities and Exchange Commission, as well as other risks detailed in our subsequent filings with the Securities and Exchange Commission. These reports are available at www.sec.gov.

可能導致我們的實際結果與任何前瞻性陳述中所述結果存在重大差異的風險和不確定性包括但不限於我們截至 12 月的年度報告 10-K 表格中風險因素項下列出的事項2023 年3月31 日，該文件已向美國證券交易委員會備案，以及我們隨後向美國證券交易委員會提交的文件中詳細說明的其他風險。這些報告可在 www.sec.gov 上取得。

Statements and information, including forward-looking statements speak only to the date they are provided unless an earlier date as indicated. We do not undertake any obligation to publicly update any statements or information, including forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

聲明和訊息，包括前瞻性聲明，僅代表其提供日期，除非註明較早的日期。我們不承擔公開更新任何聲明或資訊（包括前瞻性聲明）的義務，無論是由於新資訊、未來事件或其他原因，除非法律要求。

Now, let me turn the floor over to Ilan Danieli, Precipio's CEO. Please go ahead.

現在，我請 Precipio 執行長 Ilan Danieli 發言。請繼續。

Thank you very much. Good afternoon, everyone, and thank you for joining our 2024 Q2 shareholder update call. I'd like to thank those of you who have send the questions. As always, I will try my best to address them during this call.

非常感謝。大家下午好，感謝您參加我們的 2024 年第二季股東更新電話會議。我要感謝那些提出問題的人。像往常一樣，我將盡力在這次通話中解決他們的問題。

As you saw in our recent 10-Q filing last week, we are on track to hit our goals for this year. Revenue continued to grow, with the pathology division reaching breakeven at the end of Q2. I'm pleased to inform that so far, we've continued on that track. And in Q3 to date, we are exceeding our breakeven target for the pathology division. We have a solid team, our existing customer base is stable, and our new customer base is growing.

正如您在上週我們最近的 10-Q 報告中看到的那樣，我們有望實現今年的目標。收入持續成長，病理部門在第二季末達到損益平衡。我很高興地告訴大家，到目前為止，我們一直沿著這條軌道前進。到目前為止，第三季我們已經超過了病理部門的損益平衡目標。我們擁有堅實的團隊，現有客戶群穩定，新客戶群不斷成長。

We will continue to build an excess cushion of revenue to ensure that the pathology division fulfills its purpose within the company's strategy, which is to serve as a cost-neutral rapid R&D facility to develop our products, while itself remaining profitable and generating cash to the company.

我們將繼續建立超額收入緩衝，以確保病理部門實現公司策略中的目標，即作為成本中立的快速研發機構來開發我們的產品，同時保持盈利並為公司創造現金。

In the products division, we also continue to make progress towards breakeven. In the past, we discussed three large customers that we are working with to go live with our HemeScreen program. And when they do, this division will reach its target. Once we reach breakeven for this division, the entire company will be profitable. In this quarter, two of the three customers have gone live and are growing their volume and adding panels. We expect that by the end of this quarter, they will be in full-fledged activity, which means they're going into Q4, we can expect that these customers will contribute to an increase in revenue.

在產品部門，我們也持續在損益平衡方面取得進展。過去，我們討論了正在與我們合作實施 HemeScreen 計劃的三個大客戶。當他們這樣做時，這個部門就會達到目標。一旦我們這個部門達到收支平衡，整個公司就會獲利。本季度，三個客戶中的兩個已經上線，並且正在增加產量並添加面板。我們預計到本季末，他們將全面開展活動，這意味著他們將進入第四季度，我們可以預期這些客戶將為收入增加做出貢獻。

The third customer is still in progress and is working through several operational issues before they go live. We are working diligently with them in order to ensure that this third customer will also be fully onboarded too. Of course, we have quite a few other small and midsized customers that are either in the process or have gone live during Q2 and we're starting to see the orders come in. Each of these customers formed yet another building block of recurring revenue to the company and brings us closer to hitting our breakeven target.

第三個客戶仍在進行中，正在解決幾個營運問題，然後才能上線。我們正在與他們努力合作，確保第三位客戶也能完全加入。當然，我們還有很多其他中小型客戶，他們要么正在處理中，要么已經在第二季度上線，我們開始看到訂單進來。這些客戶中的每一個都構成了公司經常性收入的另一個基石，使我們更接近實現損益平衡目標。

In the previous shareholder call, I commented on our work with the distributors to revamp the working relationship and identify the recipe for success. We work closely with the management teams of our distributors to formulate the plan, and in Q2, we began to put it in place. We've begun to see the fruits of the new recipe with our distributors in the form of better customer targeting, more introductions in conversations with the right decision makers, and progress towards bringing those customers on board.

在先前的股東電話會議中，我評論了我們與經銷商的合作，以改善工作關係並確定成功的秘訣。我們與經銷商的管理團隊密切合作制定計劃，並在第二季開始實施。我們已經開始與我們的經銷商一起看到新配方的成果，包括更好的客戶定位、與正確的決策者對話中的更多介紹，以及在吸引這些客戶方面取得的進展。

Some of you have asked why are we spending time and effort with the distributors when so far, we've been more successful with our direct sales effort. The reason is we believe that distributors are the key to scaling up the business. Although for now we're focused on reaching profitability, the total market, just for the HemeScreen product, is approximately $400 million annually in the US and a similar amount worldwide. We are not even at 1% of that market share. And the way to scale up is through our distributors.

你們中的一些人問為什麼我們要花時間和精力與經銷商合作，到目前為止，我們的直接銷售工作已經取得了更大的成功。原因是我們相信經銷商是擴大業務的關鍵。儘管目前我們的重點是實現盈利，但僅 HemeScreen 產品的總市場在美國每年約為 4 億美元，全球也有類似金額。我們甚至還不到該市佔率的 1%。擴大規模的方法是透過我們的經銷商。

Our US distributors, Cardinal Health, Thermo Fisher, and McKesson collectively employ hundreds of sales reps that have spent years building relationships with customers. They know who the decision-makers are within those customers and what is the process and best approach to sell products to them. And most importantly, they have access to these customers.

我們的美國經銷商 Cardinal Health、Thermo Fisher 和 McKesson 總共僱用了數百名銷售代表，他們花了數年時間與客戶建立關係。他們知道這些客戶中的決策者是誰，以及向他們銷售產品的流程和最佳方法是什麼。最重要的是，他們可以接觸到這些客戶。

It's no secret that in the health care field, leveraging the distribution network has the potential for a business to scale up far more efficiently and rapidly by tapping into those established channels, expertise and resources and enabling faster market penetration and broader reach as opposed to attempting to go only direct. Therefore, as we establish our presence in the market and build our customer base, we believe that the way to scale up this business and capture significant market share is through our distribution channel.

眾所周知，在醫療保健領域，利用分銷網絡可以使企業透過利用現有的管道、專業知識和資源，實現更快的市場滲透和更廣泛的覆蓋範圍，從而更有效、更迅速地擴大規模，而不是嘗試只能直接去。因此，當我們在市場上建立自己的地位並建立客戶群時，我們相信擴大業務規模並佔領重要市場份額的方法是透過我們的分銷管道。

But like with any other partner you work with, it takes time to build successful relationships. We continue to work closely with our distributors to refine the program and messaging and to build the relationships to help foster growth in our sales.

但與您合作的任何其他合作夥伴一樣，建立成功的關係需要時間。我們繼續與經銷商密切合作，完善計劃和訊息，並建立關係，以幫助促進我們的銷售成長。

Next, I'd like to discuss our cash position. As you saw in Q2, we actually had an increase in cash of approximately $300,000. While this is terrific news, and yes we are getting close, this is not to be confused with us being profitable just yet. We're still dealing with the aftermath issues from the Change Healthcare hack earlier this year, including fund transfers from Change Healthcare, delayed payments for Medicare and other payers, and we've not yet returned to a steady state of billing and collection. However, we believe that the situation is getting much better and we are moving towards returning to that stable situation we had prior to that.

接下來，我想討論一下我們的現金狀況。正如您在第二季度看到的，我們實際上增加了大約 30 萬美元的現金。雖然這是一個了不起的消息，而且我們已經接近盈利了，但不要將其與我們尚未盈利相混淆。我們仍在處理今年稍早 Change Healthcare 駭客事件造成的後果問題，包括 Change Healthcare 的資金轉移、醫療保險和其他付款人的延遲付款，而且我們尚未恢復到穩定的計費和收款狀態。然而，我們相信情況正在好轉，我們正在努力恢復先前的穩定局面。

From an operational perspective, we are reducing our cash burn and moving towards breakeven. And as we stand today, we believe that we have sufficient cash to meet our obligations and reach that target of profitability by year end. You've heard me say this many times, it's time for our company to be financially independent and stand on our own two feet. I still believe that we have sufficient resources to reach that point.

從營運角度來看，我們正在減少現金消耗並走向損益兩平。就我們今天的情況而言，我們相信我們有足夠的現金來履行我們的義務並在年底前實現盈利目標。你已經聽我說過很多次了，我們公司是時候實現財務獨立、自立門戶了。我仍然相信我們有足夠的資源來達到這一點。

Next, I'd like to provide an update on our process with the FDA. We've submitted to the FDA the required materials for pre-submission meeting. Those materials have been accepted and the meeting with the FDA has been scheduled for later this year. We feel that we are in a good position to submit our application to the FDA soon after the meeting and we hope to receive approval sometime in 2025.

接下來，我想向 FDA 提供我們流程的最新資訊。我們已經向 FDA 提交了預提交會議所需的資料。這些資料已被接受，與 FDA 的會議定於今年稍後舉行。我們認為，我們有能力在會議結束後立即向 FDA 提交申請，並希望在 2025 年的某個時候獲得批准。

We're still seeing in the market significant confusion around the FDA's ruling; both from customers, we're not sure how to handle the situation; and for manufacturers, who have not yet decided what they're going to do.We actually view this as a competitive advantage for us and believe that this ruling will read out quite a few of the competitors. Once received, we believe having an FDA field of approval on our product will help us gain further market share and provide additional credibility to our trial.

我們仍然看到市場對 FDA 的裁決存在明顯的混亂；均來自客戶，我們不知道如何處理這種情況；對於製造商來說，他們還沒有決定他們要做什麼。一旦收到，我們相信我們的產品獲得 FDA 領域的批准將有助於我們獲得進一步的市場份額，並為我們的試驗提供額外的可信度。

Finally, I'd like to comment on our share price performance. For the recent months, we've been hovering around the $5 to $6 range, and it seems that the share price is at least stable and no longer suffers from the tremendous sorting pressures we used to experience. So that's a good thing. Having said that, if you take our Q2 revenues of $4.4 million, which translates into about $17.5 million annualized run rate, this still equates to a market cap of less than 0.5x our revenue multiple.

最後，我想評論一下我們的股價表現。最近幾個月，我們一直在 5 美元到 6 美元的區間徘徊，看來股價至少是穩定的，不再遭受我們過去經歷的巨大排序壓力。所以這是一件好事。話雖如此，如果我們第二季的營收為 440 萬美元，折算成年化運行率約為 1750 萬美元，這仍然相當於我們的市值不到我們收入倍數的 0.5 倍。

Looking at comparables in the market and at the company's situation, this doesn't seem to us and to many outside observers as a reasonable multiple. So we ask ourselves what's keeping the stock price at its current place? We consider two factors.

看看市場的可比性和公司的情況，對於我們和許多外部觀察家來說，這似乎不是一個合理的倍數。所以我們問自己是什麼讓股價維持在目前的位置？我們考慮兩個因素。

The first is the market is still skeptical of our performance, our revenue growth and our cash needs and believe we will still need to raise dilutive capital. As we continue on track, the next couple of quarters will hopefully dissolve this notion entirely.

首先，市場仍然對我們的業績、收入成長和現金需求持懷疑態度，並認為我們仍然需要籌集稀釋資本。隨著我們繼續走上正軌，接下來的幾個季度有望完全消除這個想法。

The second factor is that the company, and we personally have not spent any significant time and resources on the IR side of the Investor Relations, all companies and especially microcap companies such as ours, battle for investor attention and work to build their presence and brand with an investment community. For the past few years, we expect our effort building our business and have spent very little time on the IR side. Our plan is that upon achieving our goals by the end of this year and demonstrating the market that we are indeed a profitable company, with a growing customer base, with a backlog and pipeline of new business and the road map to scale this business through our distributors, then we have a story that we can go out and share with the investor community.

第二個因素是，公司以及我們個人沒有在投資者關係的投資者關係方面花費大量時間和資源，所有公司，尤其是像我們這樣的微型公司，都在爭取投資者的關注並努力建立自己的影響力和品牌與投資界。在過去的幾年裡，我們期望努力發展我們的業務，並且在投資者關係方面花費的時間很少。我們的計劃是，在今年年底實現我們的目標並向市場證明我們確實是一家盈利的公司，擁有不斷增長的客戶群，有積壓的新業務和管道，以及通過我們的路線圖擴展該業務的路線圖。

A combination of presence at investor conferences and meetings, coupled with work on the digital side and help build a substantial audience of people who will potentially follow the company with continuous performance and results, that should translate into an increase in trading volume and presumably a collection of our company's revenue multiple for its current 0.5x revenue to a number that is more in line with industry comparable. Needless to say, our company is working hard to achieve its business results and the impact of the business results on the company's share price is a key focus point at all times.

出席投資者大會和會議，再加上數字方面的工作，有助於建立大量受眾，這些受眾可能會關注公司的持續績效和結果，這應該會轉化為交易量的增加，並可能會帶來交易量的增加我們公司的收入倍數為目前收入的 0.5 倍，這個數字更符合行業可比性。不用說，我們公司正在努力實現其業務成果，而業務成果對公司股價的影響始終是重點關注點。

In summary, we're in a good place, and I'm really excited to continue with the momentum we have. With the pathology division stabilized and exceeding its breakeven target and product division heading in that direction, we have enough gas in time to get there. I think the hard work will pay off when our company reaches its goal for 2024.

總而言之，我們處於一個良好的位置，我很高興能夠繼續保持我們現有的勢頭。隨著病理部門穩定並超過其損益平衡目標，產品部門也朝著這個方向前進，我們有足夠的氣體及時實現這一目標。我認為當我們公司實現 2024 年的目標時，努力就會得到回報。

Furthermore, as you can see, we're also thinking about our strategy for 2025 in terms of scaling up the Product business as well as rekindling our IR strategy, so that we can translate all the good work that our team have accomplished into shareholder value. I'd like to thank you for your support, and I look forward to connecting with you on our next quarterly call.

此外，正如您所看到的，我們也正在考慮 2025 年的策略，即擴大產品業務以及重新啟動我們的 IR 策略，以便我們能夠將我們團隊所完成的所有出色工作轉化為股東價值。我要感謝您的支持，並期待在下一次季度電話會議上與您聯繫。

Thank you, and have a nice week.

謝謝您，祝您有個愉快的一週。

Ladies and gentlemen, the conference has now concluded. We do thank you for attending today's presentation. You may now disconnect your lines.

女士們、先生們，會議現已結束。我們非常感謝您參加今天的演講。現在您可以斷開線路。