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Fireside Chat with CFO Torsten Hombeck

Fireside chat with CFO Torsten Hombeck. On September 7, 2023, we held a fireside chat with AWH’s CFO Torsten Hombeck. We discussed several topics. Hombeck recently joined AWH, and we talked about what drew him to the company. He saw the very large commercial market opportunity for AWH’s diagnostic tests and for him, this has significant market potential. It serves an unmet market need, since the only other way to diagnose ovarian cancer is an invasive procedure to remove the ovaries. We also discussed other aspects of the uniqueness of AWH’s diagnostic tests. The tests give a rapid result (in just a few days). The test is highly accurate, with minimal false negative and false positive rates. AWH plans to launch a serial monitoring test later this year, OvaWatch, which gives physicians the ability to monitor the status and risk of ovarian cancer over time. We asked Hombeck to talk about recent fundraising efforts. The company successfully raised $4.7 million in cash in July, in a straight common stock deal. The proceeds from this offering will be used for the final development of EndoCheck, a new test to assess the risk of endometriosis. The plan is to launch before the end of this year. We discussed the agreement with the University of Oxford. In the first week of September, AWH announced that it was able to secure additional blood samples from the UK-based University of Oxford. These blood samples will help validate the algorithm and signature for the new EndoCheck before it’s launched. Hombeck talked about 2Q23 financial results and current cost-cutting efforts. 2Q23 revenue growth was 23% and gross profit margin was 62% in the quarter, up from 51% in 1Q23 and 47% from 4Q22. This improvement was due to higher ASPs and increasing cost containment and process efficiencies. AWH will continue to focus on cost containment from a cost of goods perspective. In addition, overall cash use per quarter is decreasing and is expected to continue to do so. Revenues for the rest of this year are expected to continue to increase, with increasing use of OvaCheck and the expected launch of EndoCheck before the end of the year. We also discussed partnerships with other marketing partners. AWH is looking at opportunities to grow the business through the use of co-marketing agreements and larger-scale regional and national partnerships. AWH is also looking at ways to address markets outside the US. Another topic was reimbursement. The company already has reimbursements in certain states and with certain payors, including Medicare. Hombeck discussed positive user feedback. Both physicians and patients appreciate the fast turnaround from test to results. The non-invasive approach is also valued. This report contains a transcript of the fireside chat from September 7, 2023, which can be accessed on demand in our full report.