Pressure Biosciences Inc (NASDAQ:PBIO)
Q4 2015 Earnings Conference Call
April 06, 2016 04:30 PM ET
Richard Schumacher - Chief Executive Officer
Alan Stone - Wall Street Research
Tony Fitzgerald - Axiom Capital
Greetings and welcome to the Pressure BioSciences Incorporated Fiscal Year 2015 Financial Review and Business Update Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation [Operator Instructions]. As a reminder, this conference is being recorded.
I would now like to turn the conference over to your host, Mr. Richard Schumacher. Thank you, Mr. Schumacher. You may begin.
Thank you, Tim, and welcome everybody to our fiscal year 2015 financial review and business update. Before I begin, I’d like to read the following cautionary statement. The following remarks may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
Such factors include among others those detailed from time to time in the Company's filings with the Securities and Exchange Commission, we expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions or circumstances on which any such statement or statement is based.
For today’s agenda I'm going to give a brief overview of the 2015 fiscal year. I’m then going to follow with the general business update. And afterwards, I will be pleased to take a few questions. And I will remind everybody that unfortunately a wonderful person Richard Thomley, who is our CFO for three years retired. So in the middle of last year and so Dick will not be with us today as he was not with us in the third quarter review back in November. He is off doing his retirement.
So, in the 2015 financial year was the most successful year in our short history. And just like the third quarter when we talked about it in November, we believe that the year was a pivot point in our financial progress. It’s also we believe a pivot point in our operational progress and we’ll be able to talk about that. In terms of the financials review, we met or exceeded a number of significant milestones in performance improvements to which hopefully all stakeholders in PBI will join me an offering, appreciation for the hard work, the focus, the drive, the loyalty of all of the entire PBI team that help make this possible.
For fiscal year 2015, we reported total revenue of $1,797,691 versus $1,374,744 for fiscal year 2014. This was an increase of about 31% in total revenue. Total revenues made up of two categories as everyone pretty much knows on the call, our products and services revenue that amounted to $1,409,991 versus $1,350,150 for the same period in 2014, which is the year of 2014. This was an increase of about 4.4% in products and services. Grant revenue in 2015 was $387,700 and this compared to $24,594 in fiscal year 2014. This was an increase of $363,106 in granted revenue or about 1,500% due to the receipt of an NIH SBIR Phase II grant that we announced in February of 2015.
What happens here with the Company of nine people, we’ve spoken about this before, we are now a Company of 11, I am very happy to say, and was happy to say in November. But for most of the year we were a Company of nine people for all of the last four years plus we’ve been a Company of nine people. And when a grant like this comes in, which necessitates a lot of work from a number of people, we have to actually pull these people away from their work in engineering and R&D and operations and sometimes in marketing and sales and have them work on the grant. And this can adversely affect our products and services revenue.
I am happy that we’re able to beat the 2014 products and services, I know it was only 4.4% but to be able to exceed that revenue, while we booked $387,000 of revenue from the grant, which is a lot of work in developing this new DNA related product. I am very happy that we were able to do both and do it with basically the same nine people. We expect this will be different going forward as we continue to get more on our feet financially. We envision a time in the not too distant future where we believe we will not have to pull people totally away from other projects but we’ll have enough people that we’ll be able to fill in and support and continue to support sales, marketing, product development, as we’re working on grants.
The operating loss in 2015 fiscal year was $3,565,182, and this compared to $3,338,350 in fiscal year 2014. There is an increase of about 7%. And this increased operating loss was primarily due to increases in our R&D and also increase our G&A expenses. We also had our awards of stock options, which also helped increase this operating loss. This loss was somewhat offset by our increases in total revenue and our increases in product gross margins. The loss per share both basic and diluted was $0.36 for this past year of 2015 compared to $0.44 per share in the year of 2014.
I’d like now to briefly discuss some business update and then we’ll open it up for questions. The events I am going to talk about are operational and strategic events that occurred during 2015, and I won’t spend a lot of time on those, because we talked about them during the year of 2015, most of them. But also in the 10 weeks that have occurred since the end of the 2015 year, the first three months of 2016. And some of these were reported and all of them were reported in our Form 10-K yesterday, filed yesterday. There’re also reported in the press release that was sent out this morning. And we believe that these events are very important to the stability in growth of our Company. So it's worth going over several of these right now.
So, first of all, I want to say that we are pleased with the quarter. We’re pleased that we could have our best ever total revenue quarter by over 30% over our previous 2014 year. We’re pleased that we’re able to have sales and revenue in our products and services that exceeded last year’s products and services so it's our highest products and service number in the history of the Company.
But we’re also happy that we received this $1 million grant we announced back in February 2015 and that we were able to bill almost $400,000 on this grant, which means we were working very hard on developing the product, which is a method using our pressure cycling technology to help researchers and hopefully non-researchers, clinicians and laboratorians down the road that work in clinical apps, help them use this procedure to extract DNA from their samples.
As I think we all know on the call, the measurement of DNA now mostly by next generation sequencing is an extremely exciting and fast growing and large market. And we believe that there is a potential play for us in the sample preparation aspect of next generation sequencing and we believe that the folks at NIH and others believe it because they gave us this $1 million grant and we have little bit less in the year more funds in it and we are working on adapting our system so that it possibly could be used to extract and break apart DNA to be used in next generation sequencing.
So talking more about some very recent announcements, just last week, we have the seventh and final closing of our $5 million PIPE. I think everybody remembers that the PIPE had a termination day, the March 31st, so we had six previous closes. It was $5 million PIPE, so it was oversubscribed. We ended with a total of $6,329,667, so we were over $1.3 million oversubscribed. Of that $6.3 million, the Company netted approximately $5.1 million. And as we know about $3 million, a little bit less of $3 million was used to pay off all of the variable rate debt that the Company had accumulated, which is what kept us going and kept us moving forward, a risky situation.
But as we said before, we didn’t allow any of this debt to convert under the terms of the debt. We had several lenders convert but they converted under a negotiated rate, which was at $0.25 a share, or higher, so that we never allowed in this debt to convert. Very risky play but it was the best way and pretty much the only way we’re able to get funding for last year and ultimately paid it all off.
So about $3 million a little bit less than $3 million went to pay off our variable rate debt, about $0.5 million went to the expenses of the PIPE, so you’re looking at about somewhere around $3.5 million. And we netted $5.1 million in cash. So that’s about $1.6 million, $1.8 million total that we netted that has been used to run our operations since last summer. And this is what’s kept us going without the need to borrow much money. Our increasing sales, our accounts receivable, and the $1.6 million to $1.8 million net that came in after expenses were paid and after we paid off the variable rate debt.
So, we did have a closing last Friday -- last Thursday, March 31, Thursday, and I’d like to say that all five members of the Company’s Board of Directors participated in that closing. We did not know whether or not we were going to be oversubscribed but we didn't know if we would hit the actual limit of 7.5 million and so we felt it very important, it was very important that we allow investors outside investors existing shareholders and new shareholders to come into the deal. So wasn't until the very end last week when we realized there was still room in the deal so that all five members of the board of directors participated in this deal to the tune of almost $200,000 total.
So I'm very happy that my colleagues and I were able to have the opportunity to invest in the company as I think everyone knows, this board of directors has been investing in this company as did the previous board for quite some time. Several of us have been buying in the open market when they're not blackout periods.
All of us have participated in all of the financings that have been done since 2012 when the existing board came on, that were available to us to invest in, so this your company has a board of directors that believes firmly in the company and in the progress and in the future of this company and not just in what we say but all five members have put in hard earned dollars into this deal when it looked at the end like there was room for us to come in, we all came in and as I said it was a about a $167,000 that we all put in at the end of last week into the deal. On January 12th, we had a major announcement, it really wasn't our announcement, SCIEX a leading life science instrument company in the world, a worldwide leading company announced and they're part of the Danaher Group which is a $60 plus billion holding company that owns a lot of very-very exciting companies in the Life Sciences area.
SCIEX announced that they had signed an exclusive two year deal co-marketing deal with Pressure Biosciences and that they were going to be working with us to co-market our system, our pressure cycling technology systems, or platform if you will to users of their mass spectrometer which is a known in a friendly way as SWATH, and their mass spectrometer their SWATH mass spectrometer has been combined with our PCT by one of the leading protein experts in the world Dr. Ruedi Aebersold and saying that if essentially if you want to get your best results you should consider doing all of your front end sample prep work using pressure cycling technology and the backend work using the SCIEX mass spectrometer. And so this deal this co-marketing deal is announced by SCIEX January 12th.
Since that time there've been several stories that I think many of you have probably seen, particularly dealing with Children's Medical Research Institute which is near Sydney, Australia. This Children's Medical Research Institute received a very large $10 million grant in Australian money, Australian dollar grant and their goal is to test about 70,000 samples, screen about 70,000 samples for biomarkers and they decided they wanted to do this using PCT SWATH. And so we have been, we've had Dr. Lazerith already went and visited. We've been working with the group there. We are expecting to receive the first purchase order during the second quarter which we think will be for as much as a $125,000 to a $150,000. We think it'll be for at least three of our instruments and for a number of consumable and then we expect further purchase orders after that during the seven year period of this.
SCIEX has had several publications out, both articles as well as press releases indicating that they believe that what they call industrialized proteomics, that is running their instrument as if it was an industry where there's multi machines running 24/7. They believe that this is going to catch on and be done by many other sites around the world and we believe that they are correct. We think that Children's Medical Research Institute may be the first of many. We hope that when laboratories decide to bring on and do their industrialized proteomics that they'll think of PCT SWATH and so we and our friends at SCIEX will be there to support them with the frontend instrumentation through PCT platform and the backend using the SCIEX SWATH mass spectrometry. To do so we mentioned in November slightly and haven't had a lot of news on this but we're building a new instrument. We've taken the existing Barocycler, pressure cycling instrument the Barocycler, which we call the NEP 2320. And we've made some major changes and we are at a point where we've built what we call the breadboard.
We're just about done building the prototype which is the instrument that has all of the parts that are going to be in the final configuration and we expect to go to manufacturing the first let's say four or five of these instruments next month in May, and we expect to ship three of these instruments in June to Children's Medical Research Institute and we expect to build about 25 of these instruments starting in June and July.
We are going to a wonderful contract manufacturer down the street from us, CBM, that are ISO certified and have make instruments for a number of very important companies. And we worked out a deal with them where we will have them develop and/or manufacture this new instrument. We are -- it's crunch time to get everything in. So far, the breadboard is working perfectly and we’re very excited this is the first change in our major instrument the 2320 that we’ve made in really sometime and it's really some amazing changes to it. The instrument is going to be far more robust. It's going to be computer controlled. It's going to have far more options than we have on our existing systems. And quite frankly, we think our existing systems are working quite well. So we’re going to one step beyond.
So we’re very excited that in June we will be releasing the first of what we call the 2320 Extreme. We also announced in December and in terms of the highlights of last year I’ll repeat it that 100% of our variable rate loans have been eliminated. We do not have any more floorless loans on our balance sheet. They were all gone in middle of December. And as I mentioned earlier today, we did not allow any of these to convert under the terms of the loans, even though we had probably as much as $4 million to $5 million in the last three years, and $3 million that we paid off with this financing. This is the money that got us to where we are. It's a risky way to get there. And I am just very happy that we were fortune enough to have the strong support of a number of investors who came in on our PIPE, oversubscribed to our PIPE, and allowed us to pay all of these notes off and to start working on the business as we have since the first closing of the PIPE last July.
Our collaborators and customers have published a number of really interesting, exciting, future looking papers, menu scripts, presentations, over 2015 and these are in a number of areas that we are very proud of that our system can be used for those areas. These in areas like drug discovery and design, major areas in the pharmaceutical area. cancer detection, stroke, heart disease, the analysis of contaminated soil, profiling proteins and classifying them in prostate cancer tissue biopsy samples, the potential acceleration of the discovery of new biomarkers for the early diagnosis and prediction and complications in diabetes. They’re using the instrument for potential improvement in the extraction of DNA from kits and other forensic samples. They’re using the PCT for the potential improvement and extraction of new potential new biomarkers and underlying pathways in the emergence and progression of COPD associated lung cancer.
So that’s some of the papers that have been either published or presented over the course of the year from some pretty exciting well known researchers, not just in the U.S. but around the world. So these are the things that have happened. In particular, we mentioned again Professor Aebersold in Zurich who published in a major journal, called Nature Medicine, back in June of last year and he talked about the ability to use PCT SWATH to get in and do mass spectrometry analysis by using PCT upfront on very-very small needle biopsy samples. And in the past, most needle biopsy samples cannot and have not been run or analyzed by mass spectrometry, which is a gold standard for analyzing proteins. They’ve been analyzed using methods that can only do several hundred proteins, tops, and now you’re looking at several thousand proteins by being able to do them using PCT SWATH.
So we’re very happy with Professor Aebersold’s work of [GORS] and what he published and he colleagues Dr. Tina Gall and others have published, all last year. And I am very happy that with our friends at SCIEX who understand as we do the importance of PCT and the overall scheme of mass spectrometry as a major front end piece and we were able to work out a two year deal with them, a co-marketing deal where we will be working with them hand and glove to try to bring PCT SWATH to a number of people using mass spectrometry.
And I mentioned the grant. Of course, last February, over $1 million of government funding to help us look at the use of PCT to play a role in this very-very large marketing and growing market of next generation sequencing, reading DNA and all the things that it can bring to us and helping healthcare, improve healthcare.
So Tim, I am done with my overview. I’d like to open it up now for any questions that our investors might have who are on the phone.
Thank you. At this time, we will be conducting a question-and-answer session [Operator Instructions]. Our first question comes from the line of Manny Kay, a private investor. Please proceed with your question.
Hey Rick, congratulations, sounds like things are going great. I wondered if you could speak to on a capital rates being oversubscribed when things are tough out there for a lot of OTC stocks. Trying to raise capital just maybe give us some color on the success and what your thoughts are.
Hi Manny, thank you. We're -- you know when we started this last July we had a lot of trepidation because it’s tough out there as a lot of people know, it’s very tough, it’s a different world than it was five years or ten years ago when I raised money multiple times over those years and now as an OTC company makes it even more difficult. Let's just say it probably took a little longer than we expected but it was oversubscribed and we actually went back and because we were, we'd already had one level of over subscription to take it to 6.25 million when it looked like we're going to exceed that we went back to all of the investors who gave us a 100% unanimous consent to go ahead and increase the over subscription by another 1.25 million.
So I’d say it was a very successful raise, over 6.3 million, it’s a convertible debenture and the way that it is written is that it will convert at a fixed price $0.28 over the next two years. So it's not, it’s a very safe instrument in that it is not a variable rate it's a fixed rate, so yes oversubscribed I think it was, I think the board was mixed feelings. One we'd hoped there would have been actually fully subscribed for both of the over subscriptions, but when the second one wasn't and we ran out of time the board was very pleased to be able to get into this deal. So it has changed the landscape we've used the cash to bring on two people that are very important to the company. We've used the cash to pay off all of the variable rate notes.
We've used the cash to paydown a number of payables, and to put us in good stead with a number of our suppliers and we've used the cash to also start building the 2320 extreme which although it's built for the SCIEX deal and built for along the lines of what Dr. Aebersold had suggest in terms of what he'd like to see is able to do. It is going to be available to everyone. So Manny it's I think the very successful raise and the money has been a godsend to us because we're able to use it for all of these very important purposes.
Thanks very much and congrats again.
[Operator Instructions] Our next question comes from the line of Alan Stone of Wall Street Research, please proceed with your question.
Hi Rick, good afternoon and congratulations again on a very successful quarter and your last year, and the stock penetrating new highs from where it traded last year, so I'm sure the shareholders are quite happy about that. With the completion of the offering maybe you could potentially shed some light on what the next phase of your capital raising you know program might be. I guess you know you'd probably like to see the any convertible at a higher price point because that was a pretty favorable price at the $0.28 level and as well as maybe comment on you know the growth and potential growth in the revenue of the company this year if you're giving any outlook in that direction.
Hi, Alan. Yes I certainly pleased that the stock has shown some response to what we consider a successful year and a particularly a successful beginning of ending of 2015 and beginning of 2016. You mentioned the conversion at $0.28, it's ironic when we started the deal the stock was around $0.32 and this is before it was shown to the street. Once it got to the street it feel to between $0.20 and $0.25 and stayed there for most of the time, and I have to say that the first half of the raise was done when the stock was below the stock at the price when the purchase price is below the price of the stock in the deal.
So people were paying up. So I would say I don't know the exact number but I think it's safe to say about half of the 6.3 million that came in came in when the market price was at $0.28 or below. So we felt that these investors, our belief was that they believed that the stock was even though it was below $0.28 that the deal was well worth at the market price or where it was at the time, and they came into the deal. And the other half came in when the stock exceeded, starting around December, I think, $0.28 and has been in the $0.30 to $0.40 range since.
So, that’s when the other half of it came in. So, one can look back and say oh darn, the stocks at $0.45 one day and/or even 51 day and you’re selling it to $0.28, but we also looked at it and said some days the stocks at $0.22 and we’re getting at -- we’re getting people in at $0.28. So, we can’t look back. Our goal is to continue to do everything we can to succeed.
We’ve laid a great framework for 2016. And in our belief we have and you know for sure because you’ve heard me speak and you’ve also been on this call a number of times. You know we laid out our plans in 2015 and part of it was raised $5 million, part of it was used in money to pay off our variable rate notes, part of it was to use the cash to start building a marketing and sales, strengthen marketing and sales. Part of it was to try to bring in some operating people. We’ve done all that. We haven’t actually hired the sales, but we’ve done a number of things in marketing that have helped we think get the sales moving. And our next step is actually bringing some sales people, which we will do.
So to your point of 2016, I think it's clear to me and to us here that we need to get some sales strength. But we also have got to take care of the business, and the business is the new instrument. So we put a lot of focus on not only finishing the year strong and starting 2016 strong and not only doing the other things we said, but we’ve got to make this new instrument because this instrument is going to be our bread and butter instrument we believe; although, we have five or six day of an instrument now. The one we’re building, the 2320 Extreme is the one that fits right into PCT SWOT and fits right into PCT HD, high definition PCT, which means anybody doing mass spectrometry should be able to use this new instrument more coming out to get what we think is much better sample preparation upfront through their downstream mass spectrometry.
So, where we’ve set the stage and I think we set the stage pretty well for a small company that remains reasonably under-capitalized. We’ve said it and then we have a wonderful partner in SCIEX. We’ve said it and we don’t have this debt looming on us. We have money in the bank now. We started put money into marketing. We will soon put marketing and money into sales. We have the new instrument that we think will be ready for shipment in June that can do so much more than the existing instrument, which we think can do a lot as it is.
So we’re, I think you can check, we’re pretty excited about 2016. We’re going in -- we went in 2015 with a lot of unknowns, a lot of dreams, a lot of goals. And I think we met almost everyone of those goals I’ve laid out. Almost every one of them, if not everyone, we met them. 2016 is different. Our major goal this year is to look at an uplift at sometime before the end of the year. We’ve out to our shareholders. They’ve given us permission and we’re going to look in and uplift at the right time to put this Company back on either NASDAQ or go to the Venture Exchange or New York Exchange.
Separate from that, our goal is to focus on getting the new instrument out and focus on sales, because we have taken care of the business around us, now it's time to take care of the sales. And so I think what you will see is 2016 is going to be a year of sales focused, the guidance I will give you is that we certainly expect, right now we expect that this Company will exceed, significant exceed, this 2015 record revenue and we’re going to do everything we can to get those sales significantly higher than they were in 2015.
And with the seeds I’ve been planting Alan I think we have a very good chance of succeeding with that goal of I guess you have two goals this year; one is to do an uplift if and when it's right, which we think it will be later this year; and number two is focus on sales and start hitting the sales, bring some sales people in and start moving this Company forward on a top line.
Thanks Rich. How big can this SCIEX Danaher relationship turn out to be for you from a sales perspective?
We haven’t given out any of those numbers. But what I can tell you is the mass spectrometry market is a very large market. It's a multi multi-billion dollar market. The numbers I have seen and I’ve given out many times are we believe there is about 16,000 laboratories, 16,000 laboratories around the world that have at least one mass spectrometer. And we’ve also recently read that our friends at SCIEX are the number one leading provider of mass specs into the protein world worldwide. So, we’re dealing with the number one supplier of mass specs that are being used for protein analysis.
We’re dealing in a market that’s in multi-billion dollars, and the neat thing here is we don’t have to develop this market. The market exists, people 16,000 labs have one, two, five, whatever mass spectrometers and almost everyone of them has to have something upfront to take the protein to break it open to take the cell, I should say, break it open, get the protein out of entrance to break the protein down to its building blocks, which are called amino acids and peptides and then to analyze those in the mass spectrometer.
Somebody has to be in front. We think we should be in front. We have a level of credibility now Alan that we've never had. And I can tell you just from the response that we've had since this announcement. The credibility level has gone up in my opinion to a great degree since the SCIEX announcement. So you know it's a -- we love the people at SCIEX we think we fit in perfectly. It's -- but our deal with them doesn't preclude us from selling to other mass spect customers either. So there's all 16000 labs, so it's time for us to, now that we’ve got a little bit of credibility, now that we have Professor Aebersold one of the top guys in the world in proteins, now that we've cleaned up our balance sheet, it’s time to get some salespeople in here with the new instruments that will be available in June, and to start knocking on the doors and letting people know that you know who we are and why they should be considering us.
Thank you Rick, appreciate it.
Our next question comes from the line of Tony Fitzgerald of Axiom Capital. Please proceed with your question.
Hi Rick. Thank you for the call and congratulations on a successful raise and my question is, are you giving any guidance on the number of devices that you need to sell to break even.
It's an interesting question, I haven't recently but I've given it, so I think it's kosher for me to give it again. The numbers really haven't changed, I know in 2013 and '14 I presented numbers saying that roughly a 1000 instruments in the field and we will be not only profitable but cash flow positive at a 1000 instruments in the field. We have say roughly 300 instruments in the field now. It's taken us you know five years or six years to get 300 instruments, so if you want to extrapolate that way it's not very exciting. But that's not the way you want to extrapolate it.
We've never a deal like the deal with SCIEX. We've never had a co-marketing partner that's in a 100 countries that is in tens of thousands, or thousands, let's just say thousands of laboratories all over the world. And we've never had the credibility that we've gotten in the last two months from having a group like SCIEX be a partner of ours, so. So when there's 16,000 labs that have a mass spectrometer and we need a 1000 labs total I think the numbers are very reachable and Tony I got to remind you and everyone else.
The mass spectrometry market is just one of many markets that our machine can go into. It's our low hanging fruit because it happens to be that the best and most supportive papers out there we believe have been from scientists who are leaders in the field that are writing about the advantages of using our system in front of a mass spectrometer. But we can be in front of many other machines, so we're not relying only on the mass spectrometry market but that market alone of the 16,000 labs and they all need you know at least one or two of our instruments.
If all we did was mass spec I think we would get to the point of being profitable on a cash flow positive in a reasonable amount of time. But we've got other markets that are available to us and that do not use mass specs, such as the DNA market. So that number's a 1000 Tony and it really hasn't changed much. We need to get to a 1000, can we get to a 1000. If there's 16,000 labs with a mass spec, if there's tens of thousands of labs with an HVLC instrument, if there's thousands of labs with DNA-sequencers that there's thousands of labs that have other types of instruments, yes, we fully expect to get to profitability and cash flow positive. And we fully expect to get there, we think in the near future. I haven't guidance on when but we feel we can get there soon.
How many sales guys does SCIEX have?
They have not published that so I can't say. But let's just say that we are training their specialty sales guys now and they have sales people and distribution networks all over the world. They're a very large company. I think they have over 2000 employees as a company and they're part of the Danaher Group which is a $60 billion holding company. So they're very large, their trust, their ability to get us in is not the question.
The question we have is making sure we take advantage of this opportunity and that means we want to make sure that we jump when any of their customers say hey, we're interested in PCT SWATH and we're prepared for that even though there's only 11 of us, we're prepared for that and we're looking forward, and it's already starting I mean it's, I keep telling people this is not going to happen overnight, but it's going to happen, in our belief we'll have impact from the SCIEX deal in the second half of the year. Quite frankly I already mentioned that we have, we expect to ship three instruments to Australia in the second quarter. So it's already starting to happen.
Fantastic, best of luck.
Our next question comes from the line of Daniel Wong, a private investor. Please proceed with your question.
Hey Rick congratulations on the SCIEX deal and getting all the convertible debt out of the way and great to hear you're going to be focusing on the sales part. You mentioned Professor Aebersold's your relationship here. How big might that small needle biopsy market be?
The numbers we’ve seen Dan are there as many as 5 million to 6 million needle biopsies taken in a year. So, I go back to the old days when you’re taking one biopsy from an organ and big chunk of tissue now they’re taking very-very-very small pieces of tissue from multiple sites in the organ. They realized that cancer is not homogeneous. It's not the same throughout the organ. So, the surgeon is now taking multiple biopsies from different parts and then all of these have to be tested. And the tissue they get is so small that they cannot in most cases run the number one method for proteins, which is the mass spectrometry method.
But using our consumable, which we call a micro pestle and using a procedure that professor Aebersold and Dr. Gall and others in their group have developed a long with our guys, you’re able to take this tiny bit of needle biopsy tissue, break it apart, extract out the proteins, digest them or break the proteins down to the building block and put it into a mass spec, sometimes all in the same tube. And the problem in the past has been changing tubes where you can lose material and contaminate. Using our system, you can do almost all of this in one tube, IR tube, and then put it into the mass spectrometer.
So, it's a big market, it's growing. Just imagine I mean it's both in the research level where they’re doing biopsies on animals and it's also in the clinical area. And imagine if our method catches fire and we’ve had, as I mentioned in previous call, we’ve had at least one pathologist who said I am going to do this method and if it works out, I am going to go to try to get a accreditation for the method. Imagine if that happens and you’ve got millions of biopsy samples that are being tested by methods that were developed 20 years ago when now they could perhaps be used PCT SWATH could be used to analyze that small needle biopsy.
Well, congratulations, that sounds like fantastic potential there, I hope that goes well.
Thank you, Dan.
Our next question comes from the line of Charlie Boyd, a Private Investor. Please proceed with your question.
Last year, you started talking about Poland quite a bit, and the opportunities that laid in front of you out there. And I am just wondering if you can maybe update us real quick on what’s happening on there? I know that you had mentioned I think about starting to grants not be cared as to where those are at?
Well, we did start two grants and one in particular. And what happened is that we were very-very bullish about going one group and the people that are hired on the other end to actually write the grant in Polish and submitted for us felt that the market wasn’t big enough in what we wanted to do. So, we were back and forth with them until about October and then quite frankly what happened is we put Poland on the back burner. I think you will see a lot in this year about Poland and us we have very good ties with the number one leading small cap bank in Poland and we called Graviton and we have all met a number of fund managers. As I think you know Charlie, we have one fund manager in particular who owns million shares of our stock and we’re hoping that this fund will grow and that they will purchase more or open some of the other funds we’ll participate.
One of the issues that we have are most of the funds will not participate unless we’re a NASDAQ or marching towards a NASDAQ listing. So, that’s been one of the issues we’ve had. But with respect to the grants, we literally put them on the back burner, because we had to focus on the deal. Everything changed in September and October with professor Aebersold when he presented in Vancouver and it looked like hey, we’re getting close now with PCT SWATH.
So we put the grants in the back burner and we started focusing on getting a deal with a mass spec company which we did. As you know, announced in January. And then we got really tied up into our own fund-raising and our own grant. So, there was a limited number of things we can do. That said, I believe that Poland holds a big potential for us and I am certain you will be hearing more about Poland and how Poland and the funds and the people and the groups in Poland can work with us in 2016 maybe even soon.
At this time, there are no further questions in the queue over the audio portion of the conference. I would now like to turn the conference back over to management for closing remarks.
Thanks Tim. And thanks everybody for taking time to be on the call. It’s exciting year. I think we met or exceeded most of the goals we set up. We have fewer goals in this year but they’re probably just as important. And as I say, two of them just come to mind; one is we need to look at getting the Company back listed on a regulated exchange like New York stock exchange or NASDAQ and we have permission to do that before the end of the year. It should open up the company to a number of investors that cannot buy right now.
I'm not knocking the OTC, I love the OTC, I love the people and they've been very-very good to us but the fact of the matter is we need to graduate and we're looking at that and we'll continue to look at that and number two is this is the year of sales. This is the year that we're taking care of business we cleaned up our balance sheet. We've gotten rid of all the ugly debt. We've done so many things, we have our deal now in the mass spec with a leading mass spec company. This is the year that we're going to focus on sales and our expectation is to not just beat our 1.7 million number but to significantly beat our 1.7 number in 2016, and those are the two.
We have many-many other projects on the line and many things roll into those two major goals but those are the two major goals right now that this company has, and if we're successful in both I believe that we will add much value to this company. I can't promise that the market will see the value, we can't control that, but our job is to add value to the company and with those two goals that we meet them I believe we will add tremendous value to this company. So again thanks everybody for coming and believe it or not it's just 45 days or 40 days and we'll be speaking again after the first quarter, thanks again.
This concludes today's conference, thank you for your participation you may disconnect your lines at this time.
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