Welcome to the Precipio Fourth Quarter 2021 Shareholder Update Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note that the conference is being recorded. 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.

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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, 2021, 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.

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Statements and information, including forward-looking statements, speak only to the date that they are provided unless an earlier date is indicated and 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.

Now, let me hand over the call to Ilan Danieli, Precipio's CEO..

diagnostic services and product division, that differentiates our companies from any other diagnostic company. We developed a unique three-pronged business model. So one side, we have an R&D team that can develop proprietary technologies that solve real world problems.

In parallel, we have functional operating diagnostic laboratories, where we identify the technological needs, we test the products we develop and end up using them within our own laboratory. But let's not forget, diagnostic laboratory is a revenue generating nearing cash flow breakeven division, essentially creating a low cost R&D function.

If you look at other competitors, they are either diagnostic services companies facing continuous scale up, revenue and margin challenges or they are biotech companies creating products, while spending tens of million dollars on R&D, and they seldom become the user of their own technologies.

We feel that we have a unique value proposition both from a customer, operational and financial perspective through the combination of both divisions. I'd like to close with a few thoughts on our company goals for 2022 and how we see those goals translating into shareholder value.

Keep in mind that while we feel that with the focus and dedication they're attainable, we also need to be mindful of the fact that we live in a world where pandemic, hostile nation invasions and other market instabilities can always impact our ability to achieve these goals.

And I thought it'd be helpful to share them with you so you know how we're looking at the future and where we want to go. As my marketing professor from business school recited the famous Alice in Wonderland quote, “If you don't know where you're going, any road will take you there.” Well, we're laser focused on our goals and where we want to go.

So let me map out for you where I'd like to see our company and each of our divisions at the end of 2022. And then I'll discuss the potential impact to shareholder value. We have three goals in mind. Number one, we start with the goal of our diagnostic services division. We ended the year at a run rate of approximately $8 million in revenue.

Given the business operation and cost structure of operating a lab, this division breaks even at around $12 million. Our goal for 2022 is to reach that revenue model.

At that point we will not only have a division that could potentially grow to profitability from there, but we’ll also have a cash neutral R&D operation that enables our products division to create new products at virtually no cost. This is unparalleled in the biotech healthcare world.

As mentioned, we recently added a new customer with a $1 million revenue potential. So with that account, we will be at 25% on the way to achieving that goal. Goal number two is for the product division. We are at a current annualized revenue run rate of approximately $2 million per [quarter] (ph), all generated solely from our HemeScreen MPN panel.

Our goal by the end of 2022 is to reach an annual run rate $10 million led by our two current product, HemeScreen with its [four life panels live] (ph) and IV-Cell each with a total available market north of 100 million, and with customers generating recurring revenue both domestically and internationally.

Our sales pipeline is more than adequate to help us reach that goal even without the organic growth I described previously. Our team will be working hard to add customers every month. The goal is aggressive, but I also believe it’s attainable.

I also want to see us live with two to three new products from our development pipeline, with similar market potential ready to be launched in 2023. At that point, given the attractive margins that the product division generates, our company is expected to be either close to or profitability with a strong growth trajectory for this division.

The combination of these goals will make us one of the few biotech companies that are able to reach profitability and cash independence at a $20 million revenue run rate. Look around the industry, I challenge you to find another company with that kind of attractive financial structure. Goal number 3 is our balance sheet cash position.

We ended Q1 2022 with 9.2 million in cash. That gives us approximately 5 quarters of runway, if we were to remain at our current operating cash burn rate, which we’re decreasing with each new customer we onboard.

If we achieve our goals as mentioned earlier, we expect that we will have no need to raise capital defensively, in other words to cover operating cash losses, we'll be able to move into the profitability zone, building up our cash reserves to further reinvest in our growth.

Now, I'd like to consider what would be the value of a company that has accomplished the following. A, as a revenue generating diagnostic service division that doubles as a cash neutral R&D facility to develop future products.

B, as a product division with existing products that have demonstrated the value within major markets and are trying to capture major market share and a division with a pipeline of additional disruptive technologies in the pipeline.

And C, a company with a strong balance sheet either at or very close to cash flow positive and with plenty of runway to achieve profitability. Now ask yourself what might a company like that be worth? At our current market cap, we're trading at approximately four times revenue.

And this is with a split between diagnostic services and products revenues of approximately 90 to 10. Now imagine if it's 50-50.

With strong margins and demonstrated market penetration both domestically and internationally, and the company with cash flow positive with a strong balance sheet, what might the multiple be then? I’ll leave you with those thoughts. That's where I'd like to see the company at the end of the year of 2022.

I hope these closing thoughts have provided you with an insight beyond our recently filed financial statements. These are the goals that our management team is focused on and this is the best way we believe the company can create tremendous shareholder value. Thank you all for your [unwavering] (ph) support and have a great evening..