Artrya Limited (AYA.AX) Earnings Call Transcript & Summary

[Audio Gap] a quorum is present and accordingly declare the meeting open. My name is Bernie Ridgeway and as Chair of -- and I'm Chair of the Board of Directors, and I will chair today's meeting. I would like to introduce my fellow directors, our CEO, our Company Secretary and other attendees today. So nonexecutive directors, Jacque Sokolov, should be -- he's attending virtually. He's in the U.S. and Kate Hill to my right. John Konstantopoulos, our CEO; Kevin Hart, our Company Secretary, is sitting right next to me; and then Harvey Farrington, our acting CFO. Also present is Mr. John Ward from KPMG, our auditors. The format for today's meeting will be as follows: Firstly, I will present my Chair address. We will then attend to the formal business for the meeting, including a poll on all resolutions. The meeting will be closed once the formal business is concluded. Following the close of the meeting, John will present a business update. So I'll now proceed with the Chair address, and I'll summarize some of the highlights for FY '25 and into the first quarter of this year. So continued development of our technical management team and AI-enabled software, the U.S. Food and Drug Administration clearance of our Salix coronary anatomy software. This is an enterprise-wide platform that is connected through the picture archiving communication system, otherwise known as PACS, of the particular health system we are dealing with. After year-end, FDA clearance of our Salix Coronary Plaque module, work on our Salix Coronary Flow module in preparation for the Q-Sub meeting with the FDA, which took place in early October. I'm pleased to say that as reported to the ASX on the 10th of October, the meeting was positive, provided valuable guidance and confirmed a clear pathway to 510(k) clearance. Moving from a research and development focus to a commercial phase as the company matures and moves into the U.S. market in earnest. The U.S. is the best place for us to help save lives and increase shareholder returns. The following advantages exist today. It is a large and growing market with 4.4 million CCTA scans performed every year, currently growing at 6% per annum. This growth rate is likely to increase with the adoption of the CT first approach by the American College of Cardiology and the American Heart Institute. Attractive reimbursement codes or Category I code, I should say, for SCA, SCP and SCF, and that's a major advantage for us. Our differentiated point of care capability being the only provider with this capability in the space. Lack of market penetration of our main competitors, who have a human in the loop approach and are expensive. Initially, the emphasis is on our first commercial partners in Tanner Health, Cone and Northeast Georgia and will progress to our smallest Sapphire study partners, and John will say more about this in his address. In order to support the partners mentioned and others, we are employing necessary U.S.-based expertise with our first base in Atlanta, Georgia, and we have our first U.S. employee, operational employee sitting right up there at the moment. And please say hello to Allison after the meeting. So subsequent to year-end, we raised $80 million and I expect we are fully funded to profitability. We are at a very exciting phase in the growth of the company, and John will cover the outlook in his address. I would like to take this opportunity to thank my fellow directors and the Artrya executive team for their dedication and contributions throughout FY '25. I all stand my sincere appreciation to our long-term shareholders for their continued support and trust and I warmly welcome our new shareholders to the Artrya register. Finally, I wish to acknowledge Matt Regan for his work during the financial year. Also, I'm delighted to be working alongside John, our newly appointed CEO as we continue to grow the business and bring to life the vision we set out to achieve. John has been pivotal in establishing strong relationships in the U.S. health care sector and opening that key market for our [indiscernible]. I will now proceed with the formal aspects of the meeting. The purpose of this meeting is set out in the notice of meeting, which was made available to all shareholders on 13 October 2025. Unless anyone has any objections, I will take the notice as read. There are 3 items of business for today as detailed on the slide you should now be seeing, and we'll present on individual slides that proxies received for each. 2 of these require formal resolutions. The specific voting preferences indicated by proxies who had either directed their voting preferences or had left their voting preferences open to be cast by the nominated representative or the Chairman are available for inspection. Where a proxy vote has been given to the Chairman with instructions to vote in favor of a resolution in accordance with the directions on the proxy form we intend to vote in favor of the resolution. Any undirected proxies will be voted in favor of a resolution. Voting on all resolutions at today's meeting will be by way of poll. The company's share registry or Atomic will process the poll votes at the end of the meeting. and the results will be announced to the ASX once they are available. So the first item is to receive and consider the financial statements for the financial year ended 30 June 2025, consisting of the directors' report, the financial report, the directors' declaration and the auditor's report. It is not a requirement that shareholders vote in relation to the accounts. However, we are pleased to answer any questions relating to them and any other matters you would like to raise at the moment. As I mentioned earlier, we have John Ward from KPMG with us today and Harvey Farrington, our CFO. Are there any questions on the accounts? Given that there are no questions, we will move to the formal resolutions that need to be considered. So proxies received in relation to the formal resolutions are set out in the following slides. The first item requiring the resolution is the adoption of the remuneration report forming part of the directors' report for the financial year ended 30 June 2025. The Corporations Act replies that a resolution be put to members to adopt the remuneration report as disclosed in the Director's Report section of the 2025 annual financial report. That's pretty worthy, right? In accordance with the legislation, the vote on the resolution is advisory only and does not bind the directors of the company. However, the Board will take the outcome of the vote into consideration when reviewing the remuneration practices and policies of the company. I now refer shareholders to the screen displaying the resolution and the valid proxy results. As Chair, I now formally move that Resolution 1, the remuneration report be put to the meeting in the form set out in the Notice of Meeting, and I call a poll on this resolution to be held at the end of this meeting. Do any shareholders have any questions or comments in relation to the resolution? Given there are no questions, we'll move to Resolution 2. The second resolution seeks the approval of shareholders for the reelection of Kate Hill as a Director of the company. I now [indiscernible] as shareholders of the screen displaying the resolution in full and the valid proxy results. I now formally move the motion that Resolution 2 be put to the meeting in the form set out in the Notice of Meeting calling a poll on this resolution to be held at the end of the meeting. Do any shareholders have any questions or comments in relation to this resolution. Well, given the votes, Kate, welcome back.

Thank you.

That brings an end to the resolutions required to be voted on at this meeting. As advised, all resolutions for consideration at today's meeting will not be decided upon by a poll of shareholder votes. I will ask Mr. Eric Mervin from our share registry at Automic to act as a returning officer. If you require a ballot paper, please raise your hand. No one requires a ballot paper. Eric, they're making your job very easy here. Yes. So does everyone have -- does anybody have a dollar paper?

Yes.

Okay. So you should record your vote now by placing a cost in either the for or against Square on the paper. You should also print on the ballot paper your name if you're a shareholder or the name of the shareholder whose proxy representative or attorney you are. If you hold multiple proxies, please state this, and we will complete the information from the proxies. [Voting]

Have all persons who intend to vote now voted? I'll take that as a yes. So at an Annual General Meeting, shareholders are entitled to ask questions or make comments on the management of the company. Do any shareholders wish to take -- to avail themselves of this opportunity. So you've got everyone here. Jack online. So if you've got any questions, now is the time.

When you talk [indiscernible] presentation.

We will. So the format is that we'll -- when in fact, we -- we'll close the meeting, Bruce and then we can get into John's presentation, which is the interesting part of the meeting where we find out more about what's going on. And certainly, we'll be taking questions as -- during the course of that presentation. So ladies and gentlemen, thank you for your attendance. That concludes the formal items of business for today's meeting. As mentioned earlier, the results of the AGM will be announced to the ASX later today and placed on the website. I now declare the meeting closed, and I'll ask John to provide a business update. So thank you, ladies and gentlemen. We're getting into the interesting part of the meeting, and John has got a really good presentation to make and a demonstration of the software during the course of the presentation. Over to you, John.

Thanks, Benny. And I appreciate the time, and thank you, everybody, on behalf of Artrya for being here as well. From my side, it's just a quick presentation on what we are as a company and the product we've built but also the pathway to the U.S., which is a very big focus for us going forward. So please feel free either to ask questions during the presentation or get into afterwards as well. And then I'll demo the software as well. I won't go through the detail because Benny gave you a really good summary of this. But it's been a really good and solid year for us here in FY '25. And the major focus really for us has been to shift from this R&D type of company to a commercial company. And from the commentary that Bernie gave as well as that you can see on the slide here, you can really see shift from where we were with FY '25 with a number of the FDA applications and clearances that we received as well as the foundation we set in FY '25 to really where we are now as a company into FY '26 where we have our first U.S. commercial customer of Tanner Health. We're working very closely with Northeast Georgia and Cone to finalize the commercial agreements, and we do expect those to be completed by the end of this year and really have set up a foundation with the SAPPHIRE study, which I'll talk about a little bit later on what our pathway to revenue is in the U.S. and really establishing ourselves in the U.S. with that study as a commercial pathway, but also as a clinically driven study to really lift ourselves into the West. Maybe as a summary, we know it's a big market. The big challenge we see over there is that the standard of care in the U.S. is still very predominantly focused on the traditional mechanism of looking at coronary arteries, which is around the narrowing of the coronary arteries, but over the past 3 to 4 years, there's been a major shift towards CCTA, which is now considered the first-line test for anybody with chest pain and then defined by the American College of Cardiology as well as the American Heart Association. And what that really means is that the market has grown substantially since then. And with the usage of CT now driving that volume as well as the reimbursement that's available, we see a major push in that volume growing a lot bigger. And it's opened up a clear opportunity for us with our Salix Coronary Plaque platform as well as our Salix Coronary Plaque module, which is our first entry into the U.S. to start generating revenue. And we'll do that with some of those foundation customers that we have as well as we expand towards the SAPPHIRE partners as well. We are also working on our Salix economy Flow module at the moment, which is running its course through our FDA preparation and submission and clearance in the New Year. That really leads to our approach into the U.S., which we've been very, very focused on, firstly, on our foundation customers and then leveraging SAPPHIRE as a mechanism to grow and lift our volume into the U.S. as well. So what does that really mean? And what's the value proposition for us as a company many of the existing shareholders and the new shareholders have seen the slide, but I think it's important to reiterate what our value proposition is compared to some of the other players in the market. We focused heavily on a CT coronary angiogram. And what we really look at is processing that scan once the scan is taken, and within an 8- to 10-minute period, provide a full overview of risk to the doctor that is seeing a patient. And what that means is that a CCTA report is written in 8 to 10 minutes, a plaque analysis has performed and I'll explain during the demo, why that's important as well as a noninvasive blood flow assessment is performed in its same 10 minutes. And we've put a huge effort into that real-time processing, and we'll continue to do that with our product as we go forward because that's the additional value that we add over and above 2 competitors. It is a unified reporting platform, and it means we're able to consolidate multiple solutions into 1 single platform. So doctors don't have to look at multiple screens and try to shift between screens as they report. The primary financial opportunity really for this is that because we are cloud-based, our unit cost to process a scan is in the single-digit area, which means we're able to share in the reimbursement with the hospital systems and make their profit centers versus the -- some of our competitors that charge more than reimbursement and are really putting pressure on the systems to generate revenue from patients as they come through, which also means that they are really considering whether the patient should be going for a procedure or not, which means the patient is ultimately not getting the right care. We change all of that. So what does that really look like from a reimbursement perspective? And there's been a lot of questions on where the reimbursement is coming from. Our base platform, Salix Coronary Artery, which was cleared by the FDA in March earlier this year is -- will be the reporting platform of choice. It's an enterprise-wide solution. So it will be integrated into all the different databases that a hospital system has as well as the reporting systems. And as the scan comes in, it gets processed, the doctor gets the results and they're able to manipulate image or the scan based on the findings we provide them and then report a lot more efficiently. There is $325 in U.S. reimbursement available, and we charge roughly about $50 for every patient that goes through that system. About 70% of patients that come through a hospital system will have plaque of some sort, and we'll run through a plaque analysis. And we then process that in the same 8 to 10 minutes of results provided there's $950. That's a new reimbursement code it was established earlier this year as a category 1 code and will be fully transitioned by the end of this year. And that really means that we are able to provide plaque analysis to a hospital system and allow them to get reimbursed at $950 for that. We discount off that amount charged roughly about $750, so that they're profitable of that specific procedure. And the final module, which is with the FDA at the moment is our Salix Coronary Flow module, which roughly about 35% of patients will go for that specific procedure. And a similar process to the plaque module. We discount off the reimbursement, which is $1,017 and we charge roughly about $800 per patient, same reasoning, but incentivizes the hospital system to really process the scans and not worry about whether they're losing money of the patient or not. In a workflow setting, before I get to the demo, what it really looks like. And there's 2 parts to the slide, there's the current approach from a workflow, and I'll talk about some of the inefficiencies that happen over there. as well as how we provide that drill time analysis back to the doctor. In the top swim lane, you can see that if a patient has chest pain or has a history of heart disease or smoker diabetic, et cetera, based on the guidelines, they will be sent on for a CT coronary angiogram, and the scan will be taken -- and that will be sent to, it's called the picture archiving and communication system or PAC system, which is a database where scans get sent to. That then is assessed by a radiographer. They prepare the inventory for the doctor. And that may take anywhere from a couple of hours to potentially a few days before that is done. But we'll go into the doctor's work list and when they get to their reporting time, they will report that patient. In this top swim line over here. they cannot perform a detailed place analysis because the tool sets available do not provide them the opportunity to do that. They cannot also perform a noninvasive blood flow analysis for the same reason, which is really where the competitors have been born from. Clearly, is a company out of the U.S. that performs plaque analysis half flow, as many of you may know, performs predominantly FFR of blood analysis, no invasive blood analysis and have a small component of plaque and elusive plaque analysis. All of these -- so once the doctor once 1 of these assessments done, there will request analysis from these players. That will be then sent to a data center where they have humans working on that inventory that gets quality controlled and they get sent back to the doctor within 24 hours and sometimes even longer. That's a fixed report. The clinician cannot edit the report. So if the doctor disagrees with any of those findings, they've got to discuss that with 1 of the players, and that may take days or weeks before it actually comes to a resolution, which as you know here in Australia, but predominantly in the U.S., there's a huge -- there's a lot of pressure on the hospital systems for throughput because they've got big backlogs. So any time they wait, accentuates and compounds that wait time. What we've done is combined basically to both of these into 1 single reporting platform. And as I mentioned, same thing, patient comes in with chest pain or history, et cetera. scan gets taken. And within 8 to 10 minutes, we perform the CCTA report, which is the automation of this top line over here. And that report is written based on standard guidelines. The plaque analysis performed as well as a noninvasive blood flow analysis in the same 8 to 10 minutes. We provide the doctor with all the tools for them to make edits and restimulate those results in real time so that they can make a quick decision on the patient and the patient care and then move them on to the white treatment pathway a lot faster, whereas in the top line over here, we've seen a lot of days of delay in where the patient and when the patient is actually being sent for treatment. So I'll stop there and maybe put some flavor around that through a live demonstration because that will just give some view on that. Just load up the screen.

So while John is doing that. One of the other things apart from the time delays that the current competitors take, they also charge equal 2 or more than the reimbursement. So the cost of doing that scan is actually a cost center to the health system. So we're changing that to become a profit center -- turn me to a profit center because we're charging less than the reimbursement, as John said.

Yes. So if you think of that top silane that I just showed you, basically how that represents on our software is if you look at the center of the screen left, that is basically what the doctor normally sees. So scan comes in -- patient gets scanned, scan gets taken and what the doctor sees on their work list is effectively named data scan, demographic, et cetera. And every patient is treated the same way. So there's no risk ratification, there's no triaging. They are treating high-risk patients in the same manner as they're treating healthy patients, which becomes quite complex when you're seeing healthy patients and you can keep those at Bay and bring in the more disease patients to get that workflow moving. What we really perform in that 8 to 10 minutes is a Kelsen score. I'll talk about the impact of that in a second. But more importantly, there's a narrowing assessment. And what we saw that on, there's a risk score 1 being low risk, 5 being high risk. And then there's really a high-risk plaque assessment that looks at inflammatory plaque that causes a heart attack early and allows the doctor to make an assessment whether that's dangerous or not. And to give you some info on why this is important, study -- quite a substantial study showed that only a 5% burn -- 4% burden of this LAP low attenuating soft inflammatory plaque increases the likelihood of you having a heart attack by 5. So it's a very small burden with a massive impact to the patient. And it's incredibly hard to see. So you can quickly see that in both an inpatient or an emergency room setting or an outpatient setting or like an imaging center, you can quickly triage patients coming through just this worklist over here. And if the doctor decides to go into a scan, they can click on the stand itself. That will show a few things. Similar to what you saw on the dashboard, there's the information of there. There's an additional risk score, which looks at plaque predominantly. And that is categorized based on how much they are in each 1 of the vessels, and that really defines a treatment pathway for the patient. The CCT report is written for the patient, both on a patient basis but also on a per vessel basis, and that's standard reporting for every doctor. We extract an interactive model of the patient's coronary arteries that are specific to that patient and overlay the disease and show the severity and risk for that patient. And maybe just for context, this branch over here is called the widow maker. So anything from the center of the screen upwards is considered critical for assessing pretty quickly. So doctors want to know whether this area here is blocked or their substantial disease so they can treat effectively. But I think the most important piece really is around the Diagnostics side, which really is focused on 2 parts. One, the button up here, which says Plaque analysis, and the other 1 up here, which is CTFFRofliftfr analysis. If the doctor clicks on the plaque analysis, what they'll get is an overview of the type of plaque and how much of that plaque there -- excuse me, there is, and why it's important, that's broken down into calcified, which is a stable plaque on your corner arteries, a calcium, a yellow plaque, which is like an LDL fatty plug and then it down the some red flag over here, you can see that over there, which is that below attenuating high-risk plaque that forms early and effectively progresses and causes heart attack. What the doctor normally sees is that so you can quickly see why it's important for them to know the subtype of plaque because they are able to treat more effectively. -- and knowing the type of park allows them to be a lot more specific on how to treat the patient. They'll try to transform this red plaque over there into a more stable place through certain drugeograph therapy. Same thing with the yellow plaque, they'll give a certain drug therapy like high-intensity statin, the culture seen, et cetera, to try to transform that plaque. The second thing we provide them is how much of that platthere is, and that really sets a baseline for treatment. So if you come in for a scan on day 0, you get sent for a certain drug therapy. What the doctor wants to know is, is that -- is this drug therapy making a difference to the patient, yes or no. If it is, you'll see the volumes changing into more of a stable area or reducing totally. If it's not, they can change the therapy for the patient. And this combination of how much of this plaque there is and the type of plaque gets us access to that first reimbursement of USD 950. So when we click this button, we will charge the hospital system and then they can go recover that through reimbursement. The second pathway then is the 1 that the doctor then wants to know is, is the plaque causing enough narrow rate at its blood flow restricting to the heart, and this here, this is 1 part of your muscle, heart muscle. This artery supplies blood to that part over there. And what they want to know is that is the blood flowing through the operable area here enough to keep this heart muscle pumping. And that's really where the second button comes into play. The doctor clicks that. They get a blood flow analysis, which really looks at how much blood is going from the top part of this is the aorta, flowing through the coronary artery and going past the lesion to see whether that's enough. Now if you think of a host pipe, as you start bending the host pipe, that becomes more constricting, that's a similar mechanism to what we're trying to assess how much of that construction is post that bend. And you can see -- I hope you can see it has 0.68. That means that there's only 68% of the blood going through that lesion that's available to supply the heart. The normal cutoff point clinically is 0.8% or 80%, which means that this patient is not -- there's not enough blood flow going through that area, and that needs to be opened up. So this patient will not only get drug therapy to treat the plaque, they will also be sent on for an invasive procedure like a stent or potentially Bioplus graft defending depending on how restrictive it is. And that's really where 1 of the major mentions will provide is our ability to do virtual procedure planning. So instead of having to send the patient on for diagnostic catherization which means you put a wire in the patient's leg and push it to their heart. you can do that planning of the same CT scan noninvasively through tools like this measurement piece of here where the clinician is able to measure the lesion length. So you can see at the top marker over here that equates to the screen, it says 2.4 millimeters diameter and the bottom marker to this bottom here, 2 million was diameter and a length of 45 millimeters. That is effectively the stent that the doctor has to go order from 1 of their manufacturers, whether it's Abbott, Boston Scientific, Medtronic you name it. So that's 1 of the first opportunities that we provide. The second opportunity, which is a major differentiator is we allow the clinician to also simulate whether the blood flow opening through that stent is going to make a difference and not by adjusting the walls of the coronary artery and opening it up under the assumption that there's a stent there and resimulating that in almost near real time so they can judge whether that's stating to difference. That is a major opportunity and differentiation we have to our competitors. Same thing as the plaque button over here, once they click that, we charge about $100, they get reimbursed $1,017, They make money off that as well. And that really then goes on to the final report screen where everything is written for them and provide it as part of the initial review with the first 8 to 10 minutes. They can edit it, they can send us on to other doctors for review if need be. But once they hit approved, this will then be sent to the electronic medical record system, and they get -- and that activates the whole reimbursement process for that specific patient. I'll stop there on to the presentation. If there are any questions on that.

I think just pointing out that the flow module is the way we're going through the approval process with the FDA currently, so we do not have clearance for that yet. But we do have for the platform and the plaque module.

If I may make a comment, John. One of the things that doctors are increasingly becoming aware of, especially in the United States, is there's really no reason to do a diagnostic cardiac catheterization. And AI-enabled CTA similar to what John just described, literally eliminates the need for much more invasive procedures freeing up the cath lab, keeping the patients safer and basically enabling the doctor to go in and see what they need to do much more clearly. So they're spending much more time doing interventions rather than diagnosis. Diagnosis can be done with this transformative technology.

Thanks, Jacque. I agree with that, yes. And 1 of the things just to note is that most hospital systems in the U.S. want to use CT from an imaging perspective because they can really grow -- obviously grow volumes from that there, but their main interest is to get the patients on to the right elective procedures Unfortunately, the U.S. is a payer-based system. So getting them to the right procedures over here is really where they make money. And using CT and using a solution like ourselves where you can get the patient through a lot faster allows them to increase the volumes for downstream testing and -- sorry, for downstream procedures as Jacque just mentioned. patient-wise, obviously, the major benefit is that because of its real time, there's a faster pathway to treatment and ideally removing unnecessary invasive procedures possible systems, especially when in the U.S., they have 4- to 6- or 8-week backlogs, a system like ours or solution like ours enables them to increase their throughput and reduce that backlog but it also allows them to get the right patients on to the white electric procedures, as I just mentioned. And hospital systems really benefit from that because they are now making money of a modality, which helps -- allows them to grow their volumes, but also they're making money because they're able to get more patients through to the right procedures. So what is our approach into the U.S. look like? And we've been very focused in a structured pathway in how we actually going to tackle the U.S. And that's really based in 3 pillars. One, our foundation customers, Northeast Georgia, Cone and Tanner Health; two, our SAPPHIRE study, which is a mechanism of not only showing future clinical value through changing standard of care, but also bringing on high-volume, high-quality centers that we can look at commercializing as part of the study. and then really using key opinion leaders as part of that platform to leverage their expertise and their network into other hospital systems in the U.S. And there's a lot of precedent of that here in Australia through companies like ProMedica have done that. The Sapphire partners who we've got brought on. And today, we announced Ascension, who is the sixth largest hospital system in the U.S. That was an introduction through a key opinion leader. So we're starting to see that will turn a lot more efficiently now through that network as well. And as we go forward into the U.S., you'll see a lot more focus in how we hit each of these pillars to drive that growth for us in the U.S. In 2026, leveraging those 3, our focus is really on revenue growth, and that's focusing on those 3 foundation customers that I mentioned and generating revenue initially of Salix on random platform, the CCTA reporting platform as well as the Salix Coronary Plaque module, which is now cleared by the FDA, and when we cleared by the FDA for Salix Coronary Flow, that will bring in the combination of those 3, which brings that value to each of these systems to really drive 1 opportunity for us, but opportunity for them as well. We're focusing on accelerating the SAPPHIRE study from an operational perspective. We should have all those partners announced by the end of this year. We're expecting to have our flow module cleared in the new year as well and really build on our customer support and customer experience team in the U.S. to be able to work with customers locally instead of us flying from here and trying to support them from there. And as Bernie mentioned, Allison Plummer is our first key hire in that space. She's our Customer Success Director, who to be honest, it's quite a unicorn in because she's not only experience in customer success and customer support, but she's also a payer and insurer expert. So we've got sort of 2 in 1, which is rare, to be honest, so welcome Allison. Yes. The third pillar is really then scaling and building the foundational platform to scale, which is setting up an executive structure in the U.S., building a clinical advisory board to help us clinically be front-facing to many of these hospital systems and as well as setting up the team members together with Allison to help support the foundation customers as well as the SAPPHIRE partners as we bring them on board as well. So if I look at the first pillar from our foundation customers, many of you know, we have that. We signed them up earlier this year in a commercial agreement, a 5-year commercial agreement. That is really based on Salix Coronary Anatomy as the first component of that, which is the $600,000 you see of their U.S. But in that pricing agreement, we have priced for Plaque, Salix Coronary Plaque as well as Salix Coronary Flow. At that point, we weren't cleared for Sonepar, so revenue from Tanner will be over and above the $600,000 as they start picking on the plaque model as well. Cone Health and Northeast Georgia, we're well down the pathway and advance with them around commercial discussions for the pricing agreement. And as mentioned, we expect to have that completed by the end of this year. And really, the use of -- or the partnership that we've had with these 3 has helped us build that foundational platform and blueprints to learn and understand what the U.S. health systems like so that we can accelerate and provide key people like Allison, the resources to help us accelerate in the U.S. as we go forward. And we'll be using -- and we'll be working a lot closely with these as reference points for other hospital systems in the U.S. as well.

John, is it worth mentioning the number of scans a and the blended right?

Yes. So these hospital systems perform about 15,000 scans per year. And on the previous chart, the pillar chart that I mentioned around our different pricing, the blended rate fall of those modules of ours is around about $850, which means from these 3 partners, we expect it to generate roughly about USD 12.5 million in revenue. from these 3, which as we go forward, will get us towards breakeven in FY '27. And then as we progress into FY '28, starting to extend that further. We are very -- working very closely with these and will accelerate these as we go forward. The second part of our pathway to commercialization in the U.S. is the SAPPHIRE study. And that really has 2 major benefits: one, a clinical opportunity for us where we have a novel component called Plaque dispersion, which is a patented technology that really looks at patient risk and tries to identify what that risk may mean for a patient and whether they are going to have a heart attack or not and then help shape the way we treat those patients going forward. The second pathway, which is a commercial strategy of ours is bringing on the like Mass General, Ascension, Piedmont and Huntsville and a few others that allow us to, in parallel, bring those on as commercial customers so that we don't have to predict sales team on the ground, but use the study as a mechanism to drive that pipeline for us towards commercialization, which is really we're focusing on that support structure that I mentioned a little earlier. So we're going to continue to push these and you'll start seeing more of the collaborators being announced as we go forward through the next couple of weeks. And in the new year, we will start kicking off the study but also then start looking to address the commercialization pathway with some of these partners as well. And what really means for us as well is not only commercially, are we able to have long-standing partnerships with them, but we're able to market our products and build awareness in the U.S. through publications and through conferences, which is key to the U.S. and clinical system for building credible -- building awareness of who we are as a company.

So it's worth mentioning, how many scans...

Yes, that's a good one. So the reason why we're focusing on these is that they perform about 400,000 scans a year, this group over here. So it's a sustantial volume for us. So at the $850 blended rate, that's USD 300 million plus in revenue opportunity for us, which is really why we focused on this pathway and not having to build a big sales team in the ground to try bring in as many customers as we can because, a, we're not going to be able to support it; and b, we've got enough build-out here just through these partners by accelerating through SAPPHIRE as well. So it's a very strategic part that we've taken through SAPPHIRE and key opinion leaders to help us grow our opportunity in the U.S. The third pillar, as I mentioned, was the operational infrastructure. And what we are now actively working on is expanding into executive team in the U.S. that will help drive our growth over there. So we're looking at bringing in a U.S. president that will lead the operational structure of our U.S. entity. And underneath that person will have U.S. reimbursement specialists, which is currently a combination of customer success and reimbursement with Allison, and we may extend those as we bring on more partners. Clinical field specialists, we've made our first hire Siemens imaging employee, but also exaflow employee. So we're very excited about her coming on board. She's got great technical experience. And that role really is a mechanism for us to help work closely with the clinical team in the hospital systems so that they are providing us with the best image quality, and we're helping them on best practices as well. Integration specialists, which instead of us and to perform all that work over here in Australia, we'll have a team on the ground over there that can work with our team in Australia and provide the 24/7 integration support when we bring on new customers. And then we really now look at establishing a clinical advisory board, which will be a combination of our SAPPHIRE key opinion leaders and forming part of that clinical advisory board to be the clinical face of the company not only to drive future product opportunity, but also be the front for investors as well as introductions into other hospital systems in the U.S. And from that group, as I mentioned, Tanner Health, Northeast Georgia Cone, if you look at where they are geographically placed, all in that Atlanta, Georgia area, Ascension is in Missouri. So it's a little further out. But from those 3 foundation customers and Piedmont and Huntsville, they're all in a very close geographic location to each other, which means that U.S. support part that we're trying to set up is it just makes sense to put that in that Georgia, North Carolina area so that we can focus on those customers. And as we bring on the other hospital partners, we'll start expanding those into other team members that were put in the right locations for each of those groups that we've been on. As an example, HCA is headquartered Nashville, but they have 220 hospitals across the whole of the U.S. there will more than likely be a dedicated support team just to support the size of that type of group. Same thing with Ascension they've got 92 dedicated hospital systems, plus another 27 partner hospitals. So it's a very, very large system that we'd have to work with. So us focusing on -- sorry, us focusing on that location is a strategic move for us to be focused on the key partners first, the foundation customers and then expanding on to the SAPPHIRE partners and then move on from there into others.

And the fact that you're moving there?

Yes. And I'll be moving into the U.S. next year, and that will -- well, roughly help drive a lot of the business as we go forward as well, just purely because of the relationships we have with a lot of the hospital systems in the U.S. and what we've opened up until now. So to wrap up where we are as a company, we're very, very focused on 3 major areas of driving customer and commercial success. The first 1 is we've got a superior product compared to what's out there in the market, and we'll continue to enhance it through an ongoing innovative road map that will keep on bringing value to customers. The second part is now through the team with Allison is really showing the customer experience and making sure that we've got that great customer experience to our customers because a product is only 1 part, the customer experience and the support that the provider keeps them sticky and keeps embedded into a software like ours. And then the final piece is really making sure that we're able to be creative in the value we bring through pricing structure, and I don't mean cheap, I mean, creatively, being able to work with those hospital systems so that they are seeing revenue opportunity and profitability while we generate revenue as well. So these are the 3 major areas we're focusing on. And ultimately, those will lead us into what our major purposes as a company is saving a life. And we're driving that heavily as the more we get this product into the hands of our customers, the more patient -- opportunity for a patient to go through our software is and be treated well and be diagnosed properly and hopefully saving their life. So to summarize where we are and the outlook from a company, our commercialization activities are moving very well, and we'll continue to push for revenue growth through our foundation customers. We will be looking to move more of the discussions with our SAPPHIRE partners and closing that off by the end of this year and then moving towards commercial discussions with them over the course of '27 and '28. We have Sunny to Park and Casasonatomy cleared. Our focus to get the flow product cleared to solidify our foundational platform and really then drive the operational infrastructure in the U.S. so that we can make a meaningful impact in a structured manner and an efficient manner in the U.S. as we go forward. for 2026 and beyond. So I will stop over there and leave it open for questions if anybody has any thoughts.

Thank you very much for that, John. And Andy is my name. My question is, does the Board have a target margin for financial year 2026 in terms of earnings and the money that the company gets to keep and grow with.

Yes. Look, I mean, Andy, I appreciate the question. The -- I mean it's a typical SaaS product. So margin-wise, it will be typical SaaS margin is really high. We are focused on making sure we're getting the product into the hands of the customers first and generating revenue. And then as we grow the business, margin will come from that. But you can just -- it's a SaaS product, so margins will be high. as we go forward.

So I didn't quite to get the question, but are you talking about the financial performance in FY '26?

Well, do you [indiscernible] I was curious about whether the Board is thinking about earnings margins at the moment.

Yes. I mean I'm happy to take that. As John said, we're born in the cloud, typical SaaS margins. And I guess if you know Promise they're generating sort of 90% plus GP. Their NPAT margin is north of 50%. So that's what you can expect from us in a few years' time when we've got generating sustained revenue, controlling our cost base. But in terms of our FY '26 performance, obviously, we're still building out. So we're expecting to make a loss pretty similar to what we're doing -- what we've done in FY '25. So it's really around FY '27, we've been guiding the market to having those foundational customers, about 15,000 scans. So hitting like '27 that full cadence so that we're around that currently burning around $5 million a quarter. If you convert that, I think John said that 15,000 scans at $850 blended rate about USD 2.5 million converts to about USD 20 million at the current exchange rate. So that's sort of around the breakeven number for FY '27. And we aim to bring on at least 1 of the SAPPHIRE partners during the course of FY '27, so that when we hit FY '28, we can be profitable and move on from there.

Bruce fielding. Is the development pathway beyond SCF?

Yes. Yes. Yes. We've got a strong and rich road map as we shift away from just the coronary arteries, we're shifting into whole heart as well. And the coronary artery provide a massive opportunity for us. But if you look at some of the other major diseases or issues that the heart has like the structural side, the muscle, the valves, there's things called transcatheter aortic valve replacement, which are high-value procedures. And when I say high value, this costs $30, $40, $50, just for the procedure in the U.S. There's a big focus for us to move beyond just the contracts, but we really wrap the whole heart as a whole. -- into what our ported road map looks like. So that's just the 1 part, then obviously, things like expanding on virtual procedure planning so that there's -- we're not only combining the imaging doctor, but also the interventionist into using CT is a major focus for us.

So Bruce, you can be rest assured that we'll continue to spend on R&D because it's what we're saying to our customers in the U.S. is that this is what we have now, which is the clinician is telling us it's a game changer, having flow and plaque in the same point of care setting. But that's not where it stops for us. And as John just explained, we'll continue to develop these new products, but we don't want to get the market too focused on what those new products are until we have the current suite of products in the market generating substantial revenue and profits for shareholders.

Shareholder. Obviously, your focus on the U.S. market driven by the size of the market and your ability to penetrate through the partnerships, which is -- seems to be playing out well. Has there been any consideration given to some form of not listing in the U.S., but perhaps deposit recertificate approach or something like that to create liquidity for the company in the U.S.?

Look, I think it's a good question. If you look at the IPO of heart on the NASDAQ, so sort of 3 months ago or they are about massively successful in terms of shares being issued at $19 currently trading around $35, $36 per share. market cap around USD 3 billion, ASD 5 million -- ASD 5 billion, I should say. So the sophistication in this space by investors in the U.S. is markedly different from what it is here. There are lots of specialists in the U.S. The understanding of the health care sector is very sophisticated. This company going forward will have a more U.S. look about it every time we have these meetings as to ultimately where it is listed. That's a decision for the future. It's not for now, but we're certainly aware of that. We've had some discussions around that, but we're firmly fixed on ASX and helping to educate our shareholder base and the investor community around what we're doing, how we're doing it. And we've been very fortunate that half did list a few months ago because it's core of sort of North Star in terms of someone who's operating in this space. Yesterday, John and I had a call with an instothat had Harlow out here as the leading example of what you do in this space. I would argue that it's not. I mean, fantastically successful listing, but they've got less than 2% of the market. Their main product is a flow product. So 99% of the revenue comes from their flow product, 1% from their plaque product. So we're not -- initially, we're not competing directly with heart flow because we've got Park approved. They've got their flow product, but they've got that human in the loop approach, they're expensive, they charge more than the reimbursement. And they've been around for 10 or 15 years. So it's a hybrid architecture or technology that's taking to market initially was sort of server-based. And it's -- the legacy is the fact that it was server-based and they're now applying AI to it once the human has done their work on the skin. So fantastic for us that they're out there, shows what can be done in terms of valuation uplift. Here we are at sort ourselves. So we're a tenth of the market cap. So we're around -- we're here to -- we're representing all shareholders and trying to deliver value for shareholders. So we would be direct in our duty if we did not consider something like that down the track, but it's too early.

Yes. I will say as well, Bruce. The interest we get every time I go to the U.S. and represents hospital systems, all investors over there is substantial because of all the reasons Bernie just mentioned, I'm in New York from next Tuesday next week, presenting at a large investor conference over there and primarily because there was immediate interest when we demoed the software, and we showed the analysts, the senior analyst that was part of this group, what we do was an immediate inflight 2% in front of our competitors at the conference. So there's substantial interest and I do agree with Bernie, I think there's so much upside just being where we are now that there's a long runway of opportunity before we actually think of what happens in the future.

So David, how do we handle any questions...

There was 1 from Bill Lester, which I'll address is a shareholder of ours. He asked the question do we generate revenue through the study -- SAPPHIRE study itself or are we able to get reimbursement to the SAPPHIRE study itself. It's a retrospective study. So we are connecting to the hospital systems, pack systems and getting scans that are already being performed and being sent to us so that we can analyze those and then perform a correlation to see whether we can predict risk or not. So the answer is no, we won't get paid for that. But as I mentioned earlier, the pathway is really in parallel to look at commercializing those customers as we go in.

So if you think about an implementation integration with those partners, apart from the negotiations around a commercial contract and so on, a key part of it is integrating into their PAC system, so we're actually doing that as part of the study. So we'll tick that box. And it's easy for them to become a commercial customer because the integration of their packs has already been done.

John, you've spoken about the reimbursement quite a lot. There's obviously a bit of policy volatility in the U.S. as well. How stable have those reimbursements been? And how important is the level of the reimbursement to the potential growth if it was to produce change. It seems like you've got a competitive advantage, but perhaps you could just...

No, it's a great question, Matt. So maybe just to reiterate how stable of the reimbursement codes in the U.S. for what we have. I'll give some perspective on where it's currently come from. So the CCTA reimbursement doubled over the last year. And the primary reason is because there's a big shift away from invasive procedures and stress testing because of the inaccuracies or the inefficiencies around downstream testing from those type of procedures. So costs ensures a lot more sending them down those procedures. So CMS, the Centers for Medicare and Medicaid Services doubled CCTA reimbursement. So that hasn't decreased. That will continue to increase because you are able to see more patients of a CT scan compared to some of the procedures. So they really see an opportunity to put throughput there. The second 1 around plaque analysis, that has stabilized at USD 950. We don't see that changing in the near term or midterm because same reason the cost to perform downstream procedures are substantially more then paying $950 here that CMS is giving. So they are trying to incentivize, I won't say, I'll put it [indiscernible] screening by looking at Clark, which is a precursor to narrowing and that narrowing is a precursor to an event. So using the reimbursement and throwing a carrot out to hospital systems and the doctors to look at park save money downstream and get patients to the right care as well. So we don't see that changing either. The third 1 around the blood flow reimbursement, that increased from $987 to $1,017 probably about 8 months ago. similar reason, insurers, specific of the private insurers are pushing back on doctors sending their patients to diagnostic catheterization or invasive wire in your leg, because it is cheaper to have them do this blood flow analysis through CT that having go for a secondary or third test. So we don't see that changing. What we do see is that there's a massive push in the U.S. for value-based care, which means that hospital systems are going to be incentivized through the government to report better efficiencies. And if they do report those efficiencies will be incentivized to a monetary incentives to meet those and fishers and standards or to get through more procedures office-type. And that will continue to support us because we can obviously help those efficiencies and drive the throughput through there as well. So a long story for -- a long answer, very for probably a short answer. We don't see that changing in the near term.

All right, if there are no more questions, then we'll wrap it up. Thank you very much for your attendance, both online and in person. Thank you, and have a good day. Thank you.

Thank you.