Artrya Limited ($AYA)

Hello, and welcome, everyone, to the Artrya investor call for the March 2026 Quarterly Results and Outlook. My name is David Allen from Hawkesbury Partners. I'll be your host for today's call, and the Artrya host for the call is John Konstantopoulos, CEO, Co-Founder. He's joined by 3 Tanner Health executives. And in Perth, we have Richard Jarvis, the CFO of Artrya. I'd add for everyone listening that the call is being recorded and everybody is in a listen-only mode. [Operator Instructions] We will also be putting a recording of today's call on the Artrya website shortly. I'm now going to hand over to John Konstantopoulos, CEO of Artrya. Please go ahead.

Thanks, David, and welcome, everybody. It's a pleasure to be here with everybody again, and I apologize that we're sitting in a small room. We are in Melbourne at the moment, on a beautiful day just walking through a number of meetings with internal and external shareholders and new existing shareholders. So it's great to be here again and have this opportunity to give an update on what's really been a very active start to the year for us with our U.S. team and Australia teams working rapidly on a number of commercial and regulatory activities over the last 3 months. The engagement with our hospital customers, our partners, some of the clinical collaborators that we've have with the key opinion leaders as well as the SAPPHIRE network has remained really high, and we are very confident on the work that we're undertaking at the moment to -- that is laying a strong foundation for us as a business so that we can deliver the financial returns that we expect this calendar year. I mentioned our strong working relationship with customers, and I'm incredibly delighted to have some very senior executives from the Tanner Health System that are sitting next to me here. We've been working very closely together over the last number of months around the rollout of Salix within the hospital system. And we're very fortunate enough to have a U.S.-based hospital system join us here in Australia to talk to some of our key shareholders. So without further ado, just a quick introduction from my side. On my right, you've got Dr. Benjamin Camp, who is the Executive Vice President and the Chief Medical Officer; and to my left, we've got Steve West and who is the Managing Director of Healthliant Ventures, Tanner Health venture arm as well as Greg Schoenberg, the Chief Administration and the Chief Information Officer. So really, 3 major clinical stakeholders for us as a company and ones that we've worked very, very closely with. I'll take some time now to just go through some of the key developments for the quarter, which includes some of the updates of our U.S. commercial pathway, including the flow module submission update and an update on the SAPPHIRE study, which is all supporting our expansion and growth through 2026 and leading into financial year '27. So if I start with our U.S. commercial activities. This quarter, we delivered really good progress with all 3 of our customers, which are Tanner Health, Cone Health and Northeast Georgia Health System. Each of them are at varying stages from Tanner Health, which we are in clinical use already and Northeast Georgia and Cone Health who we're working very closely with from an integration and onboarding so that we can progress them towards full clinical adoption leading into financial year '27. So I'll start off with the Tanner Health team, where we've already rolled out the Salix Coronary Anatomy platform system-wide across their hospital system. And the plaque module is now available for all the cardiologists to start using across their 5 hospitals. The clinicians are now using Salix Coronary Anatomy on a daily basis. So all their scans are going through the platform. And we're seeing some considerable benefits, which the Tanner can talk about shortly. On an operations side, we are also working very closely with the Tanner team to complete all the reimbursement coding and the shifting of those processes for them so that we are able to more efficiently help them reimburse for plaque more effectively across their network with all their payers and their pay mix. And just talking with Dr. Khawaja, who heads up the vascular and Cardiology division of Tanner Health and his colleagues, we're continually hearing really good stories about the ease of use of Salix, the time that they're saving and which is really translating into some monthly growth in their scan volumes. And as you expect with any new process, the conditions and hospital technicians are becoming a lot more familiar now with Salix, and we're starting to see -- and we'll also continue to see even more increase in those scans as we go forward into this next quarter. So we'll hear shortly from the Tanner team who'll give a first-hand experience on the use of Salix across their hospital system. For Northeast Georgia and Cone, the focus has been very much on the integration and onboarding of the coronary anatomy platform into their pack systems. We've completed much of the pre-integration work during the quarter, and we expect that this is going to enable very much a smooth transition as we go into full integration and onboarding, which we expect to start now in May. And so that we can lead into revenue generation with them leading into our financial year '27. And what's been really important for us is that having the right team on the ground to support these activities. So not just someone like myself from Australia, but really having a U.S.-based team on the ground has been important for us because that helps us strengthen our partnership with our customers. It also brings in a lot more leadership and subject matter expertise on the ground in the U.S. And because of that, we've hired a general manager in the U.S. who has deep operations experience and has experience running a number of health care teams across the U.S. So his focus is predominantly around the operational side, making sure that we're not only bringing a great product to our customers, but the customer experience and the customer support is at a high level and seamless so that we're able to support our customers very effectively on the same time zone. At the Board level, we are also very pleased to have brought in Dr. Jeffrey Le Benger, our U.S.-based non-Executive Director. Jeff is not only a clinician, but is also a has a strong commercial background in his long tenure with Summit Health, which he led into 2 highly successful multi-billion dollar sale transactions. So we're very grateful to have him on our Board because he brings a lot of that commercial and operational expertise to our Board, which will help us as a company in our rollout into the U.S. and some of the nuances that are part of the whole U.S. hospital system. From a regulatory perspective, our core priority for this year has really been to strengthen our coronary anatomy platform together with the plaque module by bringing our Salix Coronary Flow module to the market. The Salix Coronary Flow module process for FDA submission has made really good progress this quarter since the Q submission meeting that we had with the FDA in October last year. We've completed all the calibration work over the last quarter. The accuracy of the product is very, very good at the moment. We are very excited about how this plays into a commercial setting with some of the additional work that we brought in that makes -- and brings a lot of strong commercial benefits to the hospital systems once the product is cleared. We're in the last stage of the process for FDA at the moment, which is the clinical study of the SCF module, which would really then builds on the data we need for validation to submit a high-quality submission into the FDA once that data and study is finalized, we'll submit that, and we believe we've got a high-quality submission, which we believe, similar to the Salix Coronary Plaque module reduce the review time for the FDA. And I'd also like to add that we've been preparing quite a lot of background work from a commercial perspective so that by the time the product is cleared that we're able to successfully and seamlessly roll out the Salix Coronary Flow module in the second half of 2026. And our customer success team has been working heavily on the training materials, the coding pathways and supporting -- and making sure that we can support deployment once it's cleared. And as many of you know, it's just a button that appears on the top right-hand corner of the screen. And once it's cleared, that button will appear and will be available immediately for clinicians to start using clinically. We will provide the flow module to our hospital partners, Tanner Northeast George and Cone once the submission goes in, so that they get pre-FDA clearance access to a research use product only, so they can get like -- start getting used to it and comfortable with it. And we're very excited that will help them get up to speed a lot faster pre the clearance as well. So go to the SAPPHIRE study. We've made very good progress on that. And now that we've got the planned group of 6 major health care systems all locked in, which is now including Dignity Health and HCA that have come -- that came on board in late December, early January this year. They are really round out our offering for the SAPPHIRE study by bringing in 2 substantial high-volume centers into the study that can contribute significantly to the study, and that rolls out the full set of Mass General, Piedmont Health, Ascension and Huntsville Heart Center as part of that group and our foundation customers like Tanner Health and some of the others will all form part of that as well. As many of you know, the study is designed to assess how Salix Coronary Plaque analysis and our plaque dispersion score can support the earlier and more accurate detection of patients of heart disease. But what we've also done and which we may have announced previously is that the study also has a substudy which focuses on a female patient cohort called the SAPPHIRE IND study, which really focuses on understanding how this group is impacted by coronary artery disease and how we can make a better impact for that in the future of shifting away from only how men are currently diagnosed. Operationally, the protocol is in its finalization and ethics submissions are underway across all health care systems. We've really started demonstrating Salix, and there are some initial pilots underway, and this is a mechanism of -- from a commercial perspective, starting that commercialization process already with some of the key hospital systems that we're focusing on for SAPPHIRE. We also expect to start collecting scans for the study at the start of FY '27 and have a meeting scheduled at the Society of Cardiovascular disease and computed tomography in July and San Diego, we will kick off the study with all the participants together so that we can really move forward as a collaboration. And before I hand over to Richard, just a few other things from my side that I think are worth mentioning from a capital markets perspective, in March, Artrya was added to the ASX All Ordinaries Index following the latest rebalance, which improves how we are benchmarked and also reflect the progress we've made in building a scalable listed company. On the investor engagement front, we presented at the Bel Potter Healthcare Conference in Sorrento. We've also presented at the Barrenjoey Healthcare Conference as well as the ASX small to mid-cap event a few weeks back. And this was followed by a few non-deal roadshows here in Australia, which allowed us to talk more about our progress with some of our existing shareholders as well as new potential ones as well. We've given a number of media interviews and investor interviews over this period, and we're continuing to see an increased interest from many of the brokers and analysts and institutional investors that are looking to support us as we progress our focus and execution leading into the remainder of FY -- or calendar year '26, apologies. So with that, I'll now hand over to Richard to take you through the financial results. And Richard, please go forward.

Yes. Thank you, John, and it's great to be here with everyone again today. I'll now take a few minutes to walk through the key financial highlights for the quarter, as outlined in our Appendix 4C that was lodged with the ASX yesterday. The numbers I'll be referring to are all in Australian dollars and in accordance with the ASX listing rules, these are not audited. So as this marks our first full quarter as a commercial business, there are several important operational points to cover. Firstly, in respect to cash receipts from customers, we reported a total of 46,000 for the quarter, bringing the year-to-date proceeds to 116,000. It's important to note that the plaques and revenues are invoiced in arrears. So associated cash receipts will be reported in the future quarters. And looking ahead, we expect customer receipts to materially increase as our 3 foundation customers become fully integrated and as per scan revenues from the plaque module grow. This will be further supported by the flow module once the FDA clearance is achieved. Other cash inflows included $530,000 interest income which was generated from funds held on term deposits and in capital growth accounts. Currently, as reported last quarter, we've got $30 million from last year's capital raise invested in the term deposit, with the remaining balance held in capital growth accounts. And based on current interest rates, we expect these investments to generate circa $2 million per annum interest income. Furthermore, we received $5.6 million R&D tax rebate in the quarter, which relates to our 2025 financial year, which is consistent with prior guidance that was given. And given our ongoing investment in the flow module, we also anticipate a further material R&D rebate for FY '26. In respect to operating costs and excluding interest income and R&D rebate, operating costs were $6.8 million for the quarter, which is an increase of about $1.1 million, $5.4 million as reported in the December quarter. The increase was primarily driven by $1.1 million rise in R&D expenditure including the acquisition of Scan data annotation services, clinical studies and clinical readers for training and validation. Staff costs also increased by $400,000, reflecting headcount growth particularly in the U.S. to support customer rollout as noted by John. In respect to financing activities, we also received an additional $750,000 from the exercise of options. With the significant number of in-the-money options outstanding, we're expecting these to contribute further to cash inflows over the next 12 to 24 months. So overall, this resulted in a marginal increase in our cash position compared to the prior quarter, which is encouraging outcome for a business in a strong growth phase. To conclude, as at 31 March, the company held $46.6 million in cash and $30 million in term deposits for a total of $76.6 million. I'll now hand back to John to discuss our outlook and priorities moving forward. Thank you.

Thanks, Richard. And I'd like to outline those key priorities for us going into this next quarter and the remainder of the year. And as many of you know, obviously, the commercial process for us is very important, really getting the 3 foundation customers in the U.S., fully live using the Salix Coronary Anatomy platform and then using the Salix Coronary Plaque module and we'll start seeing that progress at rapid pace going into this next quarter with Northeast Georgia and Cone and then Tanner Health as they start moving into the plaque analysis and then ultimately, the some with the other 2 customers as well. Lodging the Salix Coronary Flow module with the FDA is our highest short-term priority. We're proceeding very well through the process at the moment. As mentioned, we are very excited about the results we're seeing that we believe, will significantly differentiate us commercially once the product is clear, and we're in the final stages through the study to build the validation data to -- for the study itself so that we can add that result once the study is completed into net occupation and submit to the FDA. And the last thing really for us, this calendar year is focusing on the SAPPHIRE study with all of the 6 high-volume centers now expected to begin accessing those retrospective scans from July. We're really focused on this kickoff in July at the Society of Cardiology Computer Tomography in San Diego and the process of commercialization now has already started with many of these partners that you really know of and aware of. And with that, I'd like to hand over to the Tanner team with some questions that we have that's really exciting this thing to them talk just generally about the U.S. hospital system challenges that they're seeing but also where the challenge they've seen and what the benefit they've seen using Salix and why they chose Salix as a whole. So David, maybe from your side, if you're able to just ask some questions, I think it would be great and get that open to the audience as well.

No problem. And welcome to the 3 gentlemen from Tanner. It's great to have you here on the line today, and I'm sure Australian shareholders will be very interested to hear your perspectives. I guess maybe just setting the scene, it'd be interesting just if you could tell the listeners just a little bit about Tanner Health, they've read, obviously, our announcements, but just to sort of set the scene as to your health system.

Sure. So Ben Camp, EVP, Chief Medical Officer of Tanner Health. So Tanner Health is a 5-hospital health system located in the southeastern United States, West Georgia and East Alabama, so outside that 285 perimeter moving into Alabama. These 5 hospitals, we have a little over $1 billion in annual revenue. We have, just from an access standpoint, around 200,000 department visits, 100,000 kind of urgent care visits. And then we have an employed medical group that has north of around 600,000 visits as well. Our scope of services is pretty broad. We provide all services to our community with the exception maybe coronary care like transplants, but otherwise provide all can resources. So that's a little bit of who Tanner is.

Thank you. And I guess one of the questions is really one of the key challenges that you see to your business and for U.S. health care systems more broadly that you're working your way through today.

Sure. So I would be pretty definitive that all senior management executive teams of U.S. health care systems right now are facing the same kind of financial headwinds. So we are sitting here determining how do we provide efficiencies and decrease cost across our health system. The other component of that right now is a lack of resources and physicians. So how do we provide efficiency in their daily workflow and how do we also decrease that cognitive burden that they're facing right now. So that is part of the potential that we see with Artrya in regard to affecting those 2 areas.

And I guess I was sort of heading down that path. If we narrow down to those patients that are coming through our system with coronary artery disease or potentially suspected coronary artic disease, how do you see the challenges there? Are they the same? Are they different? And how are you looking to address those for that patient cohort?

Sure. So chest pain as a diagnosis is the #1 reason people visit the merger department is the largest reason that we admit people into the hospital. And so it's a significant challenge in regard to how do we manage the specific patient population. So again, kind of going back to , we have had CCPA, coronary scans as a Class I indication for a long time. It's a much more accurate diagnosis. But has not been as widely adopted as other less specific test because of the amount of time it takes to read these scans. So it's not more into the workflow. With Artrya, what we've been able to see from our cardiologists and our clinicians is the decreased efficiency has made them much more likely to use the test more accurate. So it's been able to provide efficiency into their daily work but also efficiency in the throughput of patient flow throughout the hospitals.

Thank you. So I mean, you've made the point around the efficiencies and looking for a technology solution. I guess just going back a step, did you look at other technologies? And why was it that you chose Artrya and their Salix platform to move forward?

Yes, I can answer that. So Steve West, Managing Director of Healthliant Venture. So we were actually approached by our colleagues at Northeast Georgia around this opportunity to meet with Artrya. It was actually somewhat of an inopportune time because we had just been in kind of final implementation stages of our heart flow product. When we brought our group together, however, our cardiologists and other lead physicians, including Dr. Camp, we're very much impressed with the turnaround time on the coronary plaque analysis, the goal to have a quick turnaround of the flow analysis as well. But then also the level of editability and customizability of the actual CDTA reads themselves. I don't think we really appreciated it at the time. And I think as we've gotten more and more utilization of the tool, I think that's really become the surprise winner in a whole host of ways for not just the cardiologists, but the CT techs as well in terms of the efficiency of doing these reads. We've gone down from I guess the -- or CT techs are about 40 minutes in our Philips platform down to about 20 minutes with Artrya the cardiologists go from about 30 minutes down to 15 minutes for complex cases or for routine cases about 5 minutes. So you're seeing for a cardiologist, which are some of the most well remunerated folks in the organization, time savings for those test reads at anywhere between 50% to 80%. This has reduced the amount of time that they needed to take this on. It's reduced the drama time after their day is done doing these reads. It's reduced time reading over the weekends. It's a pretty significant quality of life for folks. And I just don't think that most folks when we were initially looking at this tool really understood the level of impact it was going to make on the efficiency side.

Thank you. And obviously, having that broader perspective is obviously very interesting for our listeners. I guess, maybe just going to the rollout. How did that progress your early experiences, I guess, were there any teething problems? Or is it gone as you would have expected?

No. I think we can start a little bit at the implementation. I think contracting was easy. The initial implementation, even though we had to have some custom build to integrate with Epic was rather simple. I think Greg can probably speak to some of the IT implementation pieces.

Yes, pretty straightforward from that perspective, early on security protocols, of course, and those were known to Artrya as well as Tanner. So we spoke the same language, their cloud computing, so secure web clients over VDMs and talking to one another in the kind of the most efficient way. So all known to us at Tanner and Artrya. So it was pretty smooth on the IT side. HL7 from a data exchange and really seamless, clean, which is what we would prefer at Tanner and what we've got. So really nothing monumental there in IT on the Tanner side of things to be an enabler and not just a gatekeeper. So happy for that.

That's good to hear. Look, I guess, early days so far in your usage of the plaque module, but I guess one of the things that our shareholders are interested in is how do you see your usage of that module moving forward? And what are the key factors? Is it that you see that being used in your sort of every day or weekly clinical flow?

Yes. I think that we're starting to see a significant uptick in terms of our utilization of these tests. I think Dr. Camp can certainly speak to why having a CT scan as opposed to a stress test is certainly a better option for most folks that present with chest pain. We're seeing growth 200% month-over-month. Obviously, there's going to be a plateauing over time. But I think just the excitement around being able to utilize this for the 2 CT scans has been quite palpable from the cardiologist perspective. I think the fact is that they are pulling Artrya to train faster and the train the trainer approach with Dr. Khawaja, the Dr. Green to Dr. Arad, all of those folks, it's been really organic in terms of how they've moved forward. So we expect that the analyses are going to go up, the plaque clicks are going to go up as well, just as there's more comfort with the tool and the closer the deeper clinical integration that we have from a workflow perspective are being worked through. But the Artrya team and the technical developers they've been wonderful to work with. A lot of feedback that we provided has gone into releases very quickly thereafter, which we can't really say for a lot of our other vendors. So I think it's a real credit to that team. But Dr. Camp can speak more to the diagnostics.

Sure. So we talked about what a large population chest pain patients are in regard to admission to the hospital. And so current state right now as someone gets a minute to the hospital. But really, what you're doing is you're ruling out have they had a heart attack. You're not able to rule out during that short hospitalization, do they have heart disease or not. So moving away from current clinical pathways that just allow testing like stress tests and things like that, that are not as accurate to diagnosing heart disease is really the great opportunity here. I mentioned earlier CCTAs, coronary scans have been a Class I indication for a long time, but they have not been able to because of the timing of the reads to get adopted into the average clinical workflow. I think one of the most exciting things that we've seen from our cardiologists and other clinicians is now with the ability to get readings back in regard to plaque and efficiencies around just the CCTA reads themselves that they are now asking, they're coming to us leadership and saying, how do we shift our entire clinical pathways. How do we start to incorporate CCTAs into our order sets into our clinical path waves which will be utilized in a much more robust way across this large population of chest pain patients. So that's really where we see the significant increased adoption, and I think that it's not unique to Tanner. I mean these same numbers this population is so significant across all U.S. hospitals in the same way that we feel financial headwinds, so are other hospitals. So we're all looking, again, to be able to compete it, but we're looking for how do we create efficiency in our physicians and our limited resource and how do we create efficiencies in the hospital. Just to elaborate a little bit more, chest pain patients come in, we are reimbursed with the ability to expecting them to be in the hospital for kind of 24 hours or so. So we're reimbursed in that level. What is kept utilizing CCTAs in the past more frequently is the fact that it's taken so much longer to get the reads done. It hasn't been into the workflow of our clinicians. Now with increased efficiency of these reads, now we're starting to look at ways to adopt that and give a more accurate diagnosis of these hospitalized chest pain patients just as a matter of reference. When we look at reducing length of stay in the hospital by a half day, it has $20 million of benefit to our health system. So there's constant push across the U.S. health care system right now to provide efficiency of throughput.

Thank you. I guess just closing out, you mentioned you first became aware of Artrya through your friends at Northeast Georgia. How aware do you think other clinicians and hospitals are at sites? Are you getting calls and inquiries. Obviously, you've had the benefit of being the first U.S. customer, but is that something that you think is a growing awareness and how do you see the use of a product like this growing through a market like the U.S. health care system?

Well, I mean, first of all, it is new. But in the same way that it's our cardiologists that are coming to us as leadership asking us to find new ways to adopt this. I think we're going to find that same attraction in regard to other cardiologists and other hospitals as well, in regard to how we are kind of being approached from other hospitals in our network. I'll turn that over to Steve real quick.

Yes. So we've already started having additional reference calls with other hospitals and talking about our early experiences, the implementation piece. I know there's a lot of IT teams that are always worried about the amount of impact this is going to have on their ability to deliver all of the projects that get prioritized in their organizations. I'd say our colleagues, we're getting a lot of inbound interest, not just from the clinician side. It's obviously a large quality of life piece for them on the improved efficiency. But I think with some of the financial pieces and the benefit we're seeing on that side to compare to our prior organization that we were working with. We're starting to get more inbound from the business leaders and the CFOs of the world, which as you could expect, both the physicians and the bean counters, if you will, are both asking about it. Usually, it becomes quite a quick turnaround for them in terms of prioritizing this, let's say, as an investment and as a partnership.

Thank you. That's all the questions we had today. I'm sure on behalf of our listeners, very interesting to the voice of customer. It's always a great perspective. John, did you want to add anything before we move to general Q&A?

No. Look, I think, as I mentioned earlier, it's been a great opportunity to have a U.S.-based hospital system here just talking up to our community shareholders as well as people on the call about the benefits of Salix. And it's not just me saying at the company is saying this is a real life customer. So I really appreciate the time that Tanner Health has done being here for us. And thank you for everybody on the call today.

Great. We might move to the Q&A portion of the call. [Operator Instructions] Our first question comes from Martyn Jacobs, analyst at Bell Potter. This question is, will you look to be disclosing your scan volumes, presumably for plaque from the June quarter?

At this point, we won't be -- we're busy working closely with our customers to really make sure that we've got a solid foundation in place first. But over time, as we become more mature, in our revenue duration into FY '27, we will start looking at metrics that we will be disclosing back to shareholders.

Another question from Martin. Would you comment, please, on -- well, I think we may have touched on this in the earlier portion of the call, the kind of growth that Tanner Health is seeing in terms of their volumes compared to -- of scans that is before the Salix was turned on. And I think Dr. West did touch on that. But do you want to add anything further?

Dr. Steve.

I wish I was a doctor, but I appreciate the compliment. No, I think that we're trying to figure out a way that we can work with folks to disclose the actual numbers on that side is actually ends up being a compliance issue rather than anything else for us. I think that the 200% on that end, though, our cardiologists are looking at this from a clinical perspective and what they're maybe anecdotally seeing on that side. And that was the response I was given from Dr. Khawaja on that end. So as soon as we can provide that information in a compliant way, we will do that. But until that point, it's difficult.

Apologies, I misspeak. We've got a few questions obviously around the coronary flow filing. Again, from Martyn Jacobs, what's your best estimate of the date you're looking to make your submission and your expected decision from the FDA?

Yes, we're working heavily on that at the moment, and we'll submit that as soon as we have a quality data sets that we're going through the FDA study at the moment. So we'll advise our shareholders as that goes through. Yes, we're working heavy on that, and it's a major priority for us.

Okay. And then one final one from Martyn on the financial side things. What level of OpEx or operating costs are you expecting in the June quarter?

Look, it probably be slightly lower than what it currently is. As Richard mentioned a little earlier, the uptake that was predominantly because of the data we needed for the SCF study. And to put that in perspective, in the Salix Coronary Plaque module, we only needed CCTA scans for the Salix Coronary Flow module, we need CCTA scans as well as invasive fractional flow reserve scans. So the cost of acquiring those across multiple centers in the U.S. increased, which is where that increase for this last quarter happened. So we do expect that to come down, but we are still finalizing the FDA study and submissions. So it will come down slightly. And then leading into FY '27, it will probably go down to more normal numbers and that will shift then towards the commercialization and execution phase.

We've got some questions here from Andrew Wilkinson, analyst at Venn Brown. We've got some commercial questions which you might just start with first. One of them is in relation to the timing between signing a customer and actually integrating and rolling out, is that 6-month time something that investors should expect for future customers? Or is that going to shorten?

from signing the agreement. So usually, the from signing agreement to the actual clinical usage, I'll probably say it's probably around about 4, 5-month period. That just depends on how quickly we can get the prioritization of IT to really focus on our project. And I think, as Greg mentioned earlier, there's simple way. It's a simple process. So I don't think it's a complex process to do it, but we've got ways now, which we've learned through the interactions with Tanner with Northeast Georgia and Cone, how we look at managing their priorities, so we can get a bit of priority of our integration into the different hospital systems.

And just moving forward, when do you think that Tanner your first 3 customers will reach that run rate required. You've mentioned earlier about FY '27 is when you're expecting to have all 3 fully operational? Do you still believe that's going to be the case and would deliver somewhere in the order of 15 -- the question is somewhere in the order of $15 million of annual revenue. 2 parts.

So we've mentioned in the past that the 3 foundation customers perform roughly about 15,000 scans a year with our blend rate, which is about USD 12.5 million in revenue, and that's the goal and focus for us that we have that exit run rate in -- at the end of FY '27.

We've got several questions around management and the Board. The first one is, are you still looking to expand your Board? And what is the current -- if you are, what is the current status of feeling that position? We are, and the Board is actively in the recruitment process for that. And I will say, similar to what we did with Dr. Le Benger, we're looking for the right candidate and the board is looking for the right candidate to be on the board that fits the type of company who we are and the type of Board that we have from a culture and an operational and commercial perspective. Thank you. Now turning to the executive side. There's a new U.S. GM, who looks to have a background in sales. Is he focused on commercialization efforts or operations. And the question then goes on, does this mean that you're still looking to relocate to the U.S.? Or has that changed?

So the first answer is no, his primary focus is building the operational side. From our perspective, customer experience is a major priority going forward. We believe we've got great product experience. It's now shifting that into customer experience, and that encompasses onboarding, support, integration, reimbursement, et cetera, and his primary focus is to build operations in the U.S. and not sales. I will -- and I am still planning to move to the U.S. as well to really drive a lot of our business over there.

And a related question, do you wish to comment on your search for CFO? And any -- are there any other senior management positions in your leadership team you're looking to fill in the near term?

Yes. Similar to what I mentioned around the Board member, we are focusing on bringing high-quality candidates and people into the business that have experience in a similar space to ours, all the same space as ours have listed market experience from a CFO perspective and have cross-quarter experience as well. So we're progressing really well on that at the moment and have identified a number of candidates that we're very excited about.

Thank you. Moving on. We've got a question here from Tanu Jain, analyst at Petra. Thank you, John and the team for your insights. Could you please talk about what you're thinking for new product development place, the flow module and your R&D budget? What sort of milestones can we look for in terms of new modules, if there are any in the works. There's some other questions I'll pause there first.

Yes. No. So it's a good question. I mean, our major focus is now obviously to get the commercial execution side and then really move into -- from an R&D perspective into looking at the structural at the valves, valve replacement, valve intervention and bringing that -- some of the novelty that we have in mind and some of the differentiation we can bring into that for customers like Tanner, for example, and others, that's going to be a focus, and we're starting to kick that off as in now. And those modules -- that module specifically will go through the normal process of R&D, AI development, any of the flow work that we're doing and go through the standard regulatory process as well.

There's a related question and what would a customer, and I know you've got one in the room there, what would they like to see if you were to develop any additional modifications or enhancements to the Salix platform?

I'll let Steve answer that because it's better coming from his voice than my voice.

Yes. So I think from the new product development, I mean, we've been incredibly pleased with the coronary anatomy piece and kind of think about that as the underlying platform by which a lot of other things can be bolted on in kind of a fully integrated way from a platform perspective rather than point dilutions. Because we're now thinking about this as more of a replacement more broadly to Philips plus heart flow, we're kind of going into, okay, we've got coronary plaque. We've got coronary flow, I think that we'd love to get into structural heart. We've got a point solution there that we like to wrap up in a platform play as well. And Greg can certainly speak to the idea that there's lower risk when you have one platform as opposed to integration points between multiple and maintenance contracts and all of those other things that are really problematic. So I think structural heart for us is a real focus as well. And looking forward to seeing the elegant solution that Artrya provides there.

Perfect. The next question is around the integration, and it is how is the reimbursement procedures integrated? How did that go with Tanner. I think all listeners are well aware that it's a complicated system. Has it been seamless? And how do you expect that might go with your next 2 customers having now done at once?

Yes. Look, I think Steve has got a really good discussion point around that. And some of the interesting points that he made over the last couple of days is helpful. So I think I'll leave Steve to answer that. But what I will add is that I think what's really in a positive way has impacted Tanner is in the past, they've had to wait 24 hours for results to turnaround because of some of the other competitors in the field, they've got a real-time solution now, which means that preauthorization has to happen real time as well. So I'll just talk about that and maybe what the benefit of that is for our hospital system and it's easier coming from you than me.

Yes. I mean there's certainly reimbursement-based pieces where kind of the pricing model for Artrya is definitely more compelling when you look at a blended reimbursement rate between Medicare and Medicaid commercial on that end, I would say that with the expiration of the ACA subsidies back in January, that was a real hit to our commercial volumes. And that means that our margins have gone down pretty precipitously. So former vendor, it's not as easy to make the return on that as it is with Artrya. In terms of the actual process for receiving reimbursement, I mean, Tanner is very new to coronary plaque in general. And Cone and Northeast Georgia have been utilizing it for a much longer time. So for us, I think there's a little bit more of a philosophical question, not just of how do we integrate coronary plaque into our utilization. But the downstream effect from reimbursement going to real time, we had to get into preauthorization mode rather than waiting for 12, 14, 18 hours for fine to get those prior authorizations completed. So puts a little bit more pressure on our revenue cycle folks. Now that said, they always deliver very well, and it especially helps when there's margin to capture on that side. Our CFO gets extra interested in those types of things. In terms of denial rates, we have not seen anything above the normal standard. I think normally, it's about 6% to 8% denial rates for category 1 codes and cardiology-related authorizations and kind of billing pieces. We haven't seen any sort of issues on that side where it's been higher than normal. We've been monitoring that from a revenue cycle perspective. So I think overall, it's been pretty smooth. But obviously, with larger transformations and larger opportunities, it sometimes requires a little bit more work to custom fit the process to make it work for the opportunity that we're looking to seize.

The next question relates to your ramp-up. And I guess shareholders are keen for you to get the customers better down as quickly as possible. And the question is, do you feel a need to increase your ground -- on the ground staffing to more efficiently onboard your customers to get to that first revenue point. So the question is in relation to, are you looking to or do you plan to add more people, resources and more costs to achieve that revenue point more quickly?

Look, we will, in a structured manner, add more resources to support our existing customers, which are the 3 foundation customers as we bring on some of the SAPPHIRE partners, and we've mentioned Huntsville, and Piedmont, as an example that are sort of in the same geographic location. The current team that we're building in the U.S. will be able to support those. We already have a team on the ground. So we will scale accordingly as we bring on more customers and bring customers in the right areas. Now if we bring in a big gorilla like HCA, they'll definitely be requesting that we have their own support team. That's a happy problem to have, but we will scale accordingly and we all know well in beforehand that that's going to be happening.

We have another question related to reimbursement. And it is in around, is there any risk that reimbursement decision makers that the process might be stopped or blocked by a competitor, for instance, or somebody else so that the reimbursement doesn't flow to the hospital. So I think the question is really around, is there any challenges to receiving that reimbursement? Is there any potential external influences like a competitor that might lobby that might influence the ability for Artrya's product to be reimbursed?

Yes. Look, I'll give my view, and if anybody in the U.S. guys going to let -- the reimbursement codes for CCTA for plaque and for flow are competitor or company independent. So it's not a company cannot go lobby to stop a reimbursement because it's for the better care of a patient that a doctor has seen or a hospital system has seen. So we don't see any -- at least from a company perspective, see any impact of that happening. But I don't know if you've seen that before. I don't think of that.

I don't think I've ever seen that before.

No, I don't think that's possible, to be honest.

Okay. The next question moves over to the SAPPHIRE. And how are you going with that early process? And how confident are you that you might be able to secure some of those as potential commercial customers. Do you wish to comment on that?

Yes. So we're -- as I mentioned, we're finalizing the whole product called ethics process at the moment and looking to get the first set of scans coming in from the new financial year, kicking off the collaboration group, the primary investigators CCTA later this year. We worked closely around a demonstration and piloting process, and we're confident that this calendar year, we will be bringing at least one of them on as a commercial customer.

Wonderful. That looks to be good news. Just in relation, is just a clarification. When you do talk about revenue and billing, do you talk about the revenue to Artrya? Is it on a net basis is the question.

I'm not quite sure I understand the question, but we charge, let's say, for plaque, we charge $750 from Medicare, there's $950 in reimbursement. So we take the $750 and then the hospital system gets the $950 from Medicare and then whatever the commercial payer reimburses and the 2 to 3x that they take that as well. But we take $750.

There's a question in relation to the actual scans during January, February, March. I'm not sure you wish to comment on that, but it's really a case of I think trying to get a sense of the number of scans that are coming through at the moment and where they're heading.

Yes. I mean we're getting all of the Tanner Health CCTA scans coming through the base platform. And as Steve mentioned, I think I mentioned earlier as well, the plaque numbers are going to start growing and increasingly now that we're starting to put the right revenue cycle or reimbursement process in place for Tanner so that they can do the preauthorization with the real-time capability that we're giving them.

Just a different question in relation to competitive landscape. Recently, reports in the news that heart flow and having a litigation with clearly. Do you wish to make any comments on that? And how do you see your IP position in Artrya?

Was a very big document. No, look, we don't want to comment that -- and I don't want to comment on that, but we are comfortable with our IP process and where we stand from an intellectual property perspective, and we're confident with our freedom to operate.

Well, thanks, John. Look, there's no further questions on the line at this time. I'll leave you to make any closing remarks before we wrap up the call.

I appreciate the, as usual, the support from everybody on the call and our shareholders, new and existing. And it's been a really strong quarter for us operationally. And I know that not much is seen in the news or for what we disclosed, but a lot happens in the background, and we'll continue to progress at pace as we've always done, and we expect to see a lot more going forward in the coming months. So thank you, everybody, for the time day and I appreciate the time.

Thank you, everybody, who's been listening. As I said, a recording will be on the company's website shortly. We appreciate your attendance, and we look forward to speaking to you in the near term. Thank you very much.