iSpecimen Inc. Q4 FY2023 earnings call

• Tracy Curley discussed 2023 efforts to streamline operations, reduce costs, and right-size the business. In Q4 2023, the company completed a review, launched marketing initiatives, and realigned sales efforts, with December 2023 generating $1.7 million in revenue, the strongest sales month. Q4 sanctioned over $3.1 million in specimens but was negatively impacted by $545,000 in one-time customer credits due to a more robust returns process. • The Next-Day Quote program launched in September 2023 led to a 39% increase in conversions of quotes to purchase orders in Q4 2023, with 32% of total sales attributable to it. • Launched supplier contract refresh program to mine supplier information and increase samples via Next-Day Quote. Paused embedded coordinator program in 2023 but prepared to advance it in 2024. Shifted focus from quantity to quality in supplier network, terminating contracts with non-meeting criteria suppliers while expanding high-demand specimen categories. • Eric Langlois discussed technology advancements like updated search, user interface, automation, and matchmaking. Cancer sequencing program had longer sales cycle but secured $1.5 million in new business opportunities in Q4 2023 and Q1 2024 with 25 confirmed orders. • 2024 sales and marketing initiatives include a new team and line of business-oriented sales structure with key account management, and a pilot program with TriMetis Life Sciences to enhance tissue sample evaluation.

For the fiscal year ended December 31, 2023, revenue was approximately $9.93 million compared to approximately $10.4 million for the fiscal year ended December 31, 2022. The decrease in revenue was primarily due to a decrease of 2,938 specimens or 11% in specimen count, from 27,503 specimens in 2022 to 24,565 specimens in 2023. The effect of the decrease in specimen count was partially offset by a change in the specimen mix, with the average selling price per specimen increasing by approximately $26 or 7%, from approximately $378 per specimen in 2022 to approximately $404 per specimen in 2023. Cost of revenue increased by approximately $63,000 or 1% from approximately $4.76 million in 2022 to approximately $4.82 million in 2023. Although there was an 11% decrease in the number of specimens, the average cost per specimen increased by 13% from approximately $173 per specimen in 2022 to approximately $196 per specimen in 2023.

• Plan to have significantly lower levels of operating expenses and capitalized investments in 2024. • Goal of being cash flow positive in 2024. • Continue to build the Next-Day Quote program, advance the embedded coordinator program as part of supplier contract refresh, and continue efforts with the cancer sequencing program to drive growth. • Entered an aftermarket offering agreement on March 5, 2024, to issue and sell shares up to $1.5 million for further capital investments or general corporate purposes.

• Q4 revenue negatively impacted by one-time customer credits of approximately $545,000 due to adoption of a more robust returns process. • Sales cycle for cancer sequencing program took longer than anticipated. • Economic uncertainty in the industry could impact business. • Execution risk related to technology investments and operational adjustments in 2024.

Q: Operator: Good day, everyone, and welcome to iSpecimen's Full-Year 2023 Results Conference Call. At this time, all participants are in a listen-only mode. This conference call is being recorded. A replay of today's call will be available on the Investor Relations section of iSpecimen's website and will remain posted for the next 30 days. I will now hand the call over to Phil Carlson, Investor Relations for introductions and the reading of the safe harbor statement. If there are any questions for the management following the call, please e-mail iSpecimen@kcsa.com. Please go ahead.

A: Phil Carlson: Thank you, operator. Good morning, everyone, and welcome to iSpecimen's 2023 full-year results conference call. With us on today's call is Tracy Curley, Chief Executive Officer; and Eric Langlois, Chief Revenue Officer. Before we begin, I would like to remind you that today's call contains certain forward-looking statements from our management made within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities and Exchange Act of 1934 as amended concerning future events. Words such as may, should, projects, expects, intends, plans, believes, anticipates, hopes, estimates and variations of such words and similar expressions are intended to identify forward-looking statements. These statements are subject to numerous conditions, many of which are beyond the control of the Company, including those set forth in the Risk Factors section of the Company's Form 10-K for the year ended December 31, 2023, filed with the SEC. Copies of this document are available on the SEC's website at www.sec.gov. Actual results may differ materially from those expressed or implied by such forward-looking statements. The Company undertakes no obligation to update these statements or revisions or changes after the date of this call, except as required by law. Now it's my pleasure to introduce Tracy Curley, Chief Executive Officer. Tracy, please go ahead.

Q: Operator: Thank you. And ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

A: Operator: Thank you. And ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.