But we have some enormous opportunities to distribute our tests around the world now on a B2B basis based on the fact that we’re using our lab now, which we’re just ramping up and our bioinformatics that they couldn’t access anywhere else. And that package plus great pricing, which they then have room to mark up to their customers. It’s really, I think, going to be explosive. And in many ways, it’s like the COVID testing three years ago, where Jason is developing relationships with these B2B customers similar to when he had the specimen collection partners who did all the work at the consumer level. They made a lot of money in doing that, but we made a lot of money and it was just an explosive business because we provided the whole platform.
This platform we built is quite serious, it’s quite substantial, makes us quite unique. And I understand whole genome sequencing is a whole new business. What people don’t understand this literally is the internet 20 years ago, not the internet five years ago. This is a new business that 99% of consumers don’t even know what whole genome sequencing is. But as the ancestry companies now start getting into health, studying a very small percentage of your DNA, just imagine as we teach them what whole genome sequencing is that it’s so in-depth and we provide all these great reports and we can provide a financial package that’s so competitive compared to a simple ancestry test. The sky’s the limit. I’ll also mention, I don’t know if I should mention this or not, well I’m going to mention this on future calls, there are other avenues that we’re working on.
I’m just touching the surface here. Suffice it to say, obviously, I’m very bullish, and I hope that answers your question.
Noella Alexander-Young: Thank you so much, Ted. Your next question is, “How large a mortgage did you take on for the lozenges plant during Q1 2024?”
Ted Karkus: Okay. So for Q1 — for the first quarter that we’re about to exit right now, our run rate of revenues, we haven’t reported this, I guess it’s a shareholder’s conference call, so I can talk about this. So, we were $8 million to $10 million revenue company last year. We increased prices. So, we were just over $9 million last year, if you want to be more exact. So, we increased prices. That probably got us to $11 million. We immediately started manufacturing already for one company that’s $2.5 million. That gets us roughly $13.5 million. The profit margins, I’ll tell you I’m being conservative when I say 20% to 25%, it’s a very healthy profit margin for the business. The second of the two customers we just signed, it’s just a matter of the timing of when we start manufacturing their lozenges, it will be short term.
I can’t tell you if it’s going to be in one week or four weeks, so I can’t tell you if it’s before the second quarter starts. As soon as that starts, then we’re at $15 million, $16 million in revenues. But now, because our automation equipment is working so well, even before we introduce the second line, we may be able to expand our volumes further. The truth of the matter is it’s a profitable business, it’s growing very quickly, it doesn’t really matter the exact week or month when we get to that next $1 million or $2 million or $3 million or $5 million of revenues. The business is going straight up, and the sky’s the limit, and we’re just starting with it. And because the demand globally is so great, we have so many opportunities with different kinds — the two global — if either of our global brands that we’ve been working with for more than a year decide to do business with us, it could easily add between $10 million and $40 million dollars of revenues very quickly and more thereafter.
Forget about Pharmaloz being worth $100 million or $125 million, it could be worth $200 million. So, it has that kind of potential. So how quickly another $2 million or $4 million comes in, I don’t know, I don’t really care. We’re building to have capacity of $100 million. We actually have a three to five year plan to have capacity of over $200 million. All right. Now, I’m not saying that we’re going to build it ourselves, but then you might have either private equity or strategic buyer coming and says oh my god if the capacity is going to be that big, let me just buy the whole thing now for $125 million because it’s going to be worth to me, $250 million or $400 million in a few years, or let me buy it now for $200 million because it’s going to be worth $400 million.
These are the types of numbers that I hope to be talking about and the type of strategies that I’m working on as we progress through the year. And so, understand also from a global brands perspective, they then have to ask themselves, do they want to give us the business, or do they want to acquire the manufacturing facility? So — or do we want to spin off Pharmaloz to the public? Maybe we spin off 20%, do something like that, do an IPO with it. I have all these strategic alternatives as the business now ramps and is profitable, I have lots of strategic alternatives that we will be figuring out with our investment bankers in the coming months. Thank you for that question.
