And so that’s why I actually announced that we went from two to four significant brands that we’re now in discussions with. The other two could move much more quickly. Although the first two of the global brands, we’ve been working with them for so long, in effect, they could move very quickly now too. So, we’ll just have to see how this all plays out. So, we’re building capacity as quickly as we can. We think that there’s significant demand as we build the capacity, and it’s a great place to be in.
Noella Alexander-Young: Thank you, Ted. Your next question, “What quarter do you expect to become profitable?”
Ted Karkus: It’s a great question. And I’m not going to give you an answer because Pharmaloz is profitable now. We’re developing our BE-Smart Cancer Test, our Equivir product, and some other smaller projects that I don’t need to get into on this call. But most importantly, Nebula, when we decided to build out the lab and the way we’re building out the lab now, we are absorbing an enormous amount of expense to build it out rather than send our specimens abroad. The long-term opportunities are enormous because we made that decision. But in the short term, we’re losing money at Nebula. How long we lose money for? It depends on how quickly the B2B business ramps up. Because the D2C business, we could have just sent all those specimens abroad and never had a lab, never had any of this infrastructure or overhead.
The reason why we’re investing in this is really the same thing that we did with COVID three years ago. We invested heavily in the COVID lab, bought an enormous amount of equipment, enormous amount of consumables, spent an enormous amount of money, and then it paid off in a dramatic way. Now, we’re doing the same thing with Nebula. The difference being COVID was two years of testing and COVID is over now. The reimbursement rates are close to nothing. Nobody cares. There’s no more HRSA. There’s no more public health emergency. That business is over. We got out of that business for all intents and purposes entirely. And so, we decided to also exit the clinical lab business because this is so opportunity, so enormous. But understand we’re investing in a lab, we’re in effect, we don’t have revenues associated with it yet because all of that could have gone to the labs abroad that we’re working with.
And so, when you look at it that way, we’re investing in and building a world-class lab. And so then the question is, “How quickly do these B2B deals?” First, we have to sign them and then we have to get all the infrastructure in place, we have to figure out a game plan and then it has to roll out. That’s going to happen in stages. I can’t tell you how quickly that’s going to ramp up. Once it ramps up, the value of Nebula, I believe could be enormous. I don’t even want to put numbers on it. I believe it’s going to be enormous. So, we invest fives or tens of millions of dollars in Nebula and the payback is $50 million or $100 million in revenues or $200 million in revenue. I don’t know what the numbers are going to be. I just know that the numbers are going to ramp up over time and Nebula’s can be incredibly valuable.
If Nebula was its own standalone startup company, I would suggest to you that venture capitalists might value us at $50 million or $100 million right now. But because we’re part of a public company, then people want to focus on the earnings right now. But you have to understand, you have to look at this as a startup development stage company and focus on the revenue ramp and the opportunity. It’s like a startup internet company that becomes worth a $100 billion in its first five years probably didn’t make a profit. So, profit is a very subjective thing to focus on, but we’re profitable formulas. Obviously, as those profits grow, they can contribute to building out Nebula, but at some point Nebula is going to explode. So, I hope — and then in the meantime, we have our accounts receivable, money continues to come in every week from our accounts receivable that also helps fund all of our development.
So, we’re in really good shape right now to build some very valuable businesses.
Noella Alexander-Young: Thank you very much, Ted. Next, we have a question from Hunter Diamond from Diamond Equity Research. “Can you discuss the sales process for the BE-Smart test? Would you sell directly with a sales force or plan to partner with pharma. What is industry gross and profit margin for similar products to this?”
Ted Karkus: I’m sorry. I apologize for cutting you off. But I did get the whole question. First of all, we can go in several directions. We have to see. One example, there’s a multi-billion dollar cancer testing company out there that might be interested in just taking this off of our hands and paying us a block of money upfront in a royalty. That’s one possibility. There just may be a company out there that’s waiting for our final statistical analysis, which is why we hired an independent, well-renowned company to go through all of our statistics. And you’ve got to understand, the amount of data we’re talking about is enormous. It takes a month or two, not a day or two, to go through all of this data. And when all this comes together and because we have this new package designed for green, yellow, orange, red, it’s a really exciting prospect for this test.
