And as we’ve been stating, we expect to achieve this some point in during late 2025. In 2024, we continue to expect the burn from cash to be $12 million to $18 million and this will include some potential CapEx during the year. And as I’ve stated previously $25 million to $35 million of total cash will burn before we turn positive — cash flow positive again expected in late 2025. As you can see, our liquidity position will remain very strong with no immediate need to raise or borrow capital in the current markets. I’ll now hand the call back over to Larry for final remarks and our Q&A session.
Larry Heaton: Thanks, Peter. As you can tell, we continue to be excited about the future of Zomedica. We followed the most successful year in company history with our best quarter — our best first quarter ever. To help continue that momentum, as outlined earlier, we have a significant number of initiatives in place to help drive growth in the business, while doing the work behind the scenes to set ourselves up to achieve profitability. So let me end our prepared remarks by again thanking those that have been supportive of Zomedica including animal health professionals and pet parents worldwide and the many, many shareholders of Zomedica. With that, I’d be happy to open the line for questions. Operator?
Operator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions]
Larry Heaton: Operator, if there’s not questions on the line now, we can go to the web questions.
Operator: Yes, please. No questions as of the moment.
Larry Heaton: Okay. Great. So, let’s take some of these from the web. Here’s one. How many of your products are approved for overseas sales? So currently, we are selling the Assisi Loop products, which include the loop, the loop lounge, the dental loop, calmer canine and we’re also selling, of course, PulseVet system outside the U.S. for equine applications and now for small animal applications in an increasing way. We just received CE Mark for VetGuardian and we expect CE Mark for TRUFORMA yet this quarter and that we expect TrueView CE Mark also shortly. So once we have CE Mark that means that we can, they’re approved for sale, not exactly like that, but it means the same thing. But they’re approved for us to sell into any country in the European Union.
And there are several other countries around the world that use CE Mark even though they’re not in the European Union. So we get a really large exposure to international opportunities with the CE Mark and then certain countries have their own individual requirements. And as we assess those markets for potential, we’ll do whatever we need to get those approved, should the market opportunity be significant enough. So two for now, well, actually three, as we sit here today, four and maybe five by the end of this quarter. Second, do you expect to be able to show profitability, it says, probability, but profitability in the near future, especially with your EU approval? Pete, you want to take that one?
Peter Donato: Yeah. I stated in my prepared remarks that we expect profitability on a cash flow basis when the annual revenue reaches about $50 million for that run rate anyways, and we expect that in late 2025 with direct reference, anything, whether it’s EU approval or any kind of accelerated growth, might move the timeline. But right now, we’re going to hold to the guidance I just said.
Larry Heaton: Okay. We have a couple of questions on here, Pete, about the potential for a stock buyback. Do you want to comment on that?
Peter Donato: Yeah. That seems to always be a top question, both when we’re out in person and on the web, on these calls. Larry, we’ve been very clear that preserving our cash to cover our burn and reduce losses through interest income is very important to us. We’re investing as you just went through, lots of commercial expansion. You went through in great detail the R&D and the new products. We highlighted a lot of that today. We want to be ready to acquire new companies and technologies without incurring any debt. We feel that this far outweighs any short term gains and share price that we would get from a share repurchase program. And in most cases, we just wouldn’t have any satisfying appreciation of the stock. So, we don’t believe there would be any buyback large enough to have a meaningful and long term impact on the stock price.
We don’t believe that, that would help us regain compliance and certainly wouldn’t help us retain compliance over the long haul. So long answer, Larry, to no buyback.
Larry Heaton: Yeah. Here’s one. Where are most of your customers? West Coast, East Coast, or Central? So that’s a good question. We currently sell, as I mentioned earlier, we have PulseVet being sold in all 50 states in the United States. But since it’s primarily been up until the last couple of years that it’s been for equine applications, those tend to be clustered where there’s a lot of equine horse activity. So lot in Florida, lot in California, lot in the West, fewer in say, some of the eastern areas, but it’s in every 50 — it’s in all 50 states. TRUFORMA, of course, we don’t disclose the installed base for TRUFORMA, but I will tell you that as of a couple of days ago, somebody asked me a question and it’s we now sell TRUFORMA in 47 states in the United States.
And I chatted with Kevin Klass and suggested why don’t we make that an even 50 and so we’ve got focus on the remaining three states. So pretty much the products that we sell to small animal vets, those should really be everywhere. There’s a question on here, do we sell, make it sales in Virginia? And the answer is, yes, we do, both for PulseVet and also for TRUFORMA. I’d have to check to see about some of the other products. Peter, there’s a couple of questions about where we stand with the American Exchange. You want to take that one?
Peter Donato: Yeah. There’s been no changes since our public guidance. We had a good conversation with the exchange in March. I think we had a press release. There’s been no changes to that. What that means is, there’s no specific duties or tasks that the exchange has asked from us. They head down operating trying to get the stock to $0.20 organically. So they are monitoring us. They’ve made it clear. We continue to dialogue with them. At this time, there’s been no updates other than the one I just said.
Larry Heaton: Okay. All right. Let’s see. There’s some questions about cash. How much cash do we have now and what will be our low point?
Peter Donato: Yeah. So it was also in my prepared remarks. We ended the quarter with $90.9 million and I mentioned that we had an operating cash burn of $4.4 million in Q1 that analysis said that’s likely the high watermark for the year. We’ve been very clear that we think the burn for the entire 2024 is $12 million to $18 million. Now the second or third time, we’ve guided folks to that. And we also — I think either in February or certainly in April and I repeated it again today, we believe the low watermark of cash will be $25 million to $35 million from year end cash, which was $100 million.
Larry Heaton: So then the low watermark for cash would be around $65 million to…
Peter Donato: $65 million to $75 million.
Larry Heaton: Right. And that’s not counting on any acquisitions, of course. And what do we think about acquisitions? There’s a couple of questions for that. And I mentioned that in the remarks and that is, we’re going to be opportunistic. The products that we have today are capable of generating hundreds of millions of dollars of revenue over time. And we have a strategic plan that sets out a pathway for us to get to that $50 million milestone and the $100 million milestone that we have talked about previously. And that’s with the products that we currently have. There is no reason, however, especially since our low cash mark, as you just heard from Peter is going to be around $65 million and we have no debt, there’s no reason why we can’t make additional acquisitions.
Of course, they need to fit with our product line and our portfolio, but also what we look at for now would be those that would be accretive to earnings so that we would get to profitability even sooner than we currently anticipate. Have you solved the refrigeration obstacle with the TRUFORMA cartridges in order to expand internationally? Because I mentioned on a previous call that sending international was made more difficult by the need for refrigeration and it is that is absolutely true. The need for refrigeration makes it a little more complex. However, as I’ve been out and talking to international distributors, particularly of equine distributors, but also small animal distributors, as it turns out, many of them and the ones that we currently are doing business with have cold chain capability.
So a lot of vaccines and certain drugs for animals have to be refrigerated. So they already have that capability. And so for us, either we already have a distributor that has it or the ones that we pick up as we move forward, we insist that they do have that cold chain capability. And then the other thing that helps us to sort of address that issue is the extended dating, which is one of the benefits of having control over the entire development process since we picked up QBT. That extended dating not only allows us to do larger lot sizes, but also gives us a little more dating to allow for the shipping time to international markets. So we’re pretty happy with that as we move forward. What percentage of future earnings do we feel will come from overseas?
So that’s almost a trick question, right? So it really depends upon the relative rate of growth. In the U.S, if we stopped now selling in the U.S, then the increase the percentage of sales from international would increase and increase and increase. However, far from stopping in the U.S, we expect to accelerate growth in the U.S. And so, as long as they’re on par, I’d be super happy with 15% growth going forward as long as that includes all of our five products and we’re making significant increases in international revenue. It just means that the U.S. revenue would be growing at the same pace. So we expect for…
Peter Donato: I don’t think you meant — did you mean 15% growth, Larry? You meant 15% of the overall – total revenue, yeah.
Larry Heaton: Of the revenue, yes. Yeah. I mean, and listen, 15% growth is nothing to sneeze at. I mean, that’s among the highest growth rates in the animal health industry. But, we feel we can do a lot better than that as we move forward. Let’s see what else we got on here. There are some — there’s lots of questions on here about the stock price. And the thing that I would have to say to that even to the ones that are maybe not so nice in the way they ask the question. The thing I would say about that is that, as a company, what we can control is the ability to operate the company efficiently and get to profitability and efficiently deploy capital to grow the value of the company, which at the end of the day is the value to the shareholders.
It will fluctuate with the stock price, of course, as the market sets the price today and changes it tomorrow. But the underlying value of that stock is the value of the company. And the value of the company increases as we increase revenue, as we maintain industry leading margins, as we gain profitability, these are the things that we’re working on. Remember, it wasn’t that long ago, 2.5 years ago, when the company had no products on the market and really not a lot of opportunities at that point in time. Today, you have a company, the shareholders own a company that has last year $25 million in revenue, growing revenue this year, industry leading margins, a competent management team, manufacturing capacity, a good sales force that’s growing.
Inherently, it is a more valuable company. However, a few years back for whatever reason, the market priced the stock pretty high. Today, the market is pricing the stock differently. We can’t control that. As Pete talked about, we could artificially try and impact the stock price by doing a buyback. There are other things that we’ve talked about before and aren’t doing now to affect that in different ways. But at the end of the day, what we can focus on is to build the value of the company, and that is what we’re doing. Pete, any additional commentary on that?
Peter Donato: No. I think that’s right. Yeah. I mean, the key is to put guidance out there. We did that for the first time in company’s history and it’s our job to hit that guidance and in fact exceed those numbers. So that’s what we’re trying to do. And we’ve given guidance, I think some aggressive guidance up to 40% or 39% potential revenue growth year-over-year 65% to 70% margins. You know, what? And we’ve reiterated those several times already this year. So it’s — that is what we’re paid to do and that’s what we’re going to continue to try to do.
Larry Heaton: Yeah. I think we should also clarify something. So we had a question that says, you bought all the revenues you have from raised money from shareholders, not an accomplishment. And what I would say on that is that we did acquire companies with cash that the company brought in from people that bought shares, right. We sold shares, brought cash in, cash was on the balance sheet. I came in, we began deploying that capital. But it’s not the case that we bought the revenue that we have today. For example, PulseVet revenue, when we acquired it for early 12 months was $12 million. They had about what 1200 — installed base of around 1,200. I just announced we have an installed base of over 2,000 two years later. They spent 10 years getting to 1,200.
