Micro-X Limited ($MX1)

Thank you for standing by, and welcome to the Micro-X Limited quarterly investor call. [Operator Instructions] I would now like to hand the conference over to Mr. Kingsley Hall, Chief Executive. Please go ahead.

Yes. Thanks, Ashley. Hello, everyone. This is Kingsley. I'm pleased to welcome you all to the Micro-X March 2026 quarterly investor call, along with our Chief Operating Officer, Anthony Skeats; our President of Micro-X Inc., Brian Gonzales; and our recently appointed Chief Financial Officer, Peter Dickman. All of the team will be available for Q&A as part of today's call.

Hello, everybody. This is Anthony.

Hello, everyone. This is Brian.

And Peter here, CFO.

Thanks, guys. Today, we'll be providing listeners with details on our commercial and development progress during the quarter ending 31 March 2026 outlined in our Appendix 4C filed with the ASX on the 30th of April before we open up to a Q&A session. Now before we begin, I'd like to remind those on the call that today's call may contain forward-looking statements, which involve inherent risks and uncertainties. Those risks and uncertainties include those disclosed in our ASX lodgments, which we recommend that you review. While there are reasonable grounds for any forward-looking statements made today due to their inherent uncertainties, we recommend that you do not place undue reliance on those statements, and you note that actual results may, of course, differ materially from those forward-looking statements. So when we look back over the March quarter, it's clear that we've continued to make good progress across each of our commercial and development programs. We entered 2026 with 3 main priorities, targeting the creation of long-term value, and this quarter was about steady, disciplined progress across imaging, security and partnerships. On the commercial front, we showcased our Rover 2026 model at the RSNA conference late last year, and we've been working hard on several large opportunities in our pipeline with commercial and government customers, which I'll speak more to shortly. In terms of operational highlights, in our medical imaging portfolio, we delivered major milestones with both the Head CT and Full Body CT scanners. The first of the Head CT test benches is now installed and commissioned at the Royal Melbourne Hospital, activating our lead clinical site. And as we said before, completing this imaging study to support a 2027 regulatory submission is one of our highest priorities. And we'll talk more to that shortly. In parallel, the ambulance-ready Head CT prototype passed its first milestone with the government industry growth program and the first laboratory test bench of Our Full Body CT for the ARPA H program in the U.S. has also been completed, allowing us to move into critical design review. Now moving back to Rover. And as I mentioned at the beginning of the call, since unveiling the Rover 2026 model at RSNA late last year, we've seen a pleasing lift engagement from distributors, clinicians and procurement teams who are responding positively to the upgraded design. The combination of the glass-free Varex Lumen detector, integrated nbn charging, larger display and streamlined chassis has strengthened Rover's value proposition particularly for customers prioritizing portability and workflow efficiency. In the U.S., our work with the major hospital group we secured in mid-'25 remains a central focus. Since our last call, our team supported evaluation activities across their network. And while the pathway to material sales is inherently difficult to time, the increased level of engagement reinforces that this is a strategically important relationship with meaningful long-term potential. We also advanced several large pipeline opportunities this quarter with both commercial and government customers. These processes typically involve long sale cycles, but the Rover performs very well in competitive assessments and remains well positioned as these progress. And following last quarter's commercial success in Asia, we've continued to work closely with our regional distributors to build on that momentum. Recent customer experience and growing familiarity with Rover are helping open additional high-value opportunities, particularly in markets where governments and private providers are upgrading diagnostic capacity. Both the end customer being the Malaysian Ministry of Health and our distributor IMS will be at our facility at Tonsley next week. And while I mention our commercial focus, I'd like to highlight the appointment of Peter Dickman, as Chief Financial Officer in March, which greatly strengthened our leadership team. Peter, who will be speaking in a moment, brings more than 20 years of senior financial experience across large listed organizations, most recently as Group Chief Performance Officer at Domino's Pizza. I look forward to working alongside Peter as Ant and Brian do also to draw upon his expertise in capital management, planning and performance. Before I hand over to Ant, I'd like to give an update on our plans to monetize our security assets, which we intend will unlock vital capital to support our focus on medical imaging. Unfortunately, our progress this quarter was slower than expected. With our lead counterparty where we've reached advanced negotiations pausing discussions. While I can't go into detail, what I can say is that this is their own unrelated corporate matters and not as a result of anything on our side or from any diligence that they've conducted. We do, however, have several other qualified parties involved and we have good senior-level meetings at the passenger terminal expo in London in March, which was really constructive. And with that, I'll now pass over to Ant to provide further detail on our 2 medical CT programs.

Thank you, Kingsley. So on the Head CT program, this quarter marked a fundamental step forward as we activated our first clinical site at the Royal Melbourne Hospital, the installation and commissioning of the initial test bench is now complete, pacing our technology inside one of the world's leading stroke centers. Since completing the installation, which included safety and radiation testing by medical physics and biomedical teams at Royal Melbourne and confirming the test bench to safety use in an open corridor in fact, where it is located in radiology plus ensuring connection to the hospital at system for transferring of [ dichom ] is fully integrated and working, the device has been operated frequently to verify calibration and reliability using anatomical phantoms by a number of claims CT radiographers from the Royal Melbourne team. The commencement of first patient imaging is imminent, with timing being subject to a final governance signature from Melbourne Health who are the sponsor of the trial. We have faced an unforeseen delay in the commencement whilst agreements relating to cancer of data between the ASA and Melbourne Health are being adjusted to ensure patient data is always secure. Operations for patient enrollment have already begun. And the clinical team is ready to go as soon as the government document is signed. The second test bench, which is for the Royal Adelaide Hospital is also completed and is currently being used at Micro-X to trial different dose settings on phantoms to increase our knowledge of the dose to image quality ratio. We have been notified by the South Australian Medical Imaging, SAMI, team, that a location the Royal Adelaide Hospital has been secured. And we are now working with the SAMI team to plan the installation at the second test bench. And with 2 sites operating in parallel, we hope to generate the data we need for regulatory submissions planned for 2027 in a tiny manner. We're really excited to get the first human shots, and it will provide great data for our team to work with on the algorithmic tuning. The commencement of the human study is a significant milestone in the advancement of our next technology and really a pivotal moment in our company history as we seek to redefine CT. Once the initial images are tuned, the pilot study will progress with considerable momentum as we seek to validate the clinical diagnostic level of this past view cone beam CT, in comparison to conventional hospital grade, helical CT. The pilot study requires imaging 108 patients covering a range of pre-identified conditions related to stroke diagnosis. And will eventuate in a blind reader study report that assesses the scanners ability to identify contraindications to thrombolysis as well as evaluate its broader clinical utility. Beyond the pilot study, pivotal studies involving large patient numbers are planned by the ASA and also peers at Oslo University Hospital, who have expressed an interest in procuring test bench. Whilst the MRFF program with the ASA moves into this imaging trial phase, our engineering team has ramped up to work on the ambulance-ready version of the Head CT, which is funded by the industry growth program. Work continues to progress well. We have completed the first milestone delivery under the IGP, which covered system architect to an early design. That was in December. With the report submitted as per the contract timing date at the end of January. We submitted the March quarter reports for Milestone 2, which comes with a payment of just under $1 million on time last week. And detailed design solutions are moving into initial prototyping. So work is now underway to secure an ambulance, which we can fit out and test later in the year. With road and air ambulance services representing a major future market, this ambulance integration project is an important extension of the in-hospital program. It demonstrates that we can make CT small enough that's safe and simple to use in a pre-hospital emergency care vehicle, dispelling the challenges faced with mobile stroke units, whilst addressing the enormous patient benefit and subsequent health economic benefits that are well documented for rapid stroke imaging. The project continues to receive growing international awareness, including the invitation to present in Beijing at a pre-hospital emergency care Conference hosted by Fosun-Beiling, a large company in China that included key opinion leaders from Xuanwu Hospital and representatives from the National Health Commission of China. Turning now to the Full Body CT. The program achieved a major milestone this quarter with the completion of the first laboratory test bench for ARPA-H. This work required the integration of several core subsystems and now provides the foundation for detailed imaging evaluation and iterative refinement. Importantly, this also satisfied Milestone 6 triggering a $1.6 million payment as we continue to work through the first phase of the program. With the test bench now operational, the program moves into its critical design review stage. This next phase will focus on validating imaging performance refining, sorry, the system architecture and dining the engineering work that follows. The early results from the subsystem integration have been very promising, and the structured review process will help ensure that the technology advances with the discipline expected of a first-in-kind imaging platform. Overall, the Full Body CT program remains on track and continues to meet all of the expectations. And with that, I will hand over to Brian.

Thanks, Ant, and hello, everyone, from Seattle. I work with US DHS and TSA to develop a next-generation self-screening passenger checkpoint continues well. You may all be aware, the entire U.S. government was shut down at the end of last year, and DHS has been shut down since early February. Throughout this time, Micro-X was instructed to continue work on the project and to continue to invoice the government for that work. Unfortunately, the shutdown slowed DHS payments, but we have had to continue to spend on project material to continue progressing the work. This has contributed significantly to our quarter's burn rate, where we have had significant project spend and outstanding DHS invoices. The good news is that DHS is now funded again, and our commitment to continuing the project strengthens our relationship with the DHS. The shutdown also paused our testing with DHS and TSA, which we look forward to starting again in coming weeks. Despite these challenges, the overall project is progressing well. We are nearing completion of the next 2 self-screening boots in Seattle. The booths include 2 more of our innovative CT baggage scanners as key elements, along with the full system integration and automation. We've also made good progress developing automated detection algorithms based on data collected earlier with DHS. We look forward to the delivery of the 2 booths and integrating them into a [ 3 ] booth set for further workflow and lane testing. The timing of this testing is still being worked out as the government comes back to full-time work. As Kingsley mentioned, during the quarter, the team also attended Passenger Terminal Expo in London, the leading global forum for airport innovation. The event drew more than 11,000 representatives from airports and airlines, government and technology providers. Across 3 days, we held consecutive discussions with a range of decision-makers who are actively seeking next-generation screening solutions. The feedback reinforces that Micro-X's approached to compact CT aligns strongly with the direction of the future checkpoint transformation. Our other scanner project with Billion Prima, we also made solid progress this quarter. The partnership reached an important milestone of finalizing image quality and accuracy, key to ensuring that the scanner is suitable for the applications Billion Prima are pursuing. This also reflects the depth of the relationship with Billion Prima, where there is a clear long-term commercial value for us to sell them Micro-X X-ray tubes and high-power generators for the product. This is also another key pillar in scaling Micro-X's footprint across Asia. I'll now hand it over to Peter to run through the financials.

Thanks, Brian. Good morning, everyone. Happy to be here today from the first investor call as the CFO of Micro-X. Yes, since joining the business, I've been really impressed by the quality of the team and also the breadth of work underway, including commercialization of our Rover product, development of CT with government and industry partners and the ongoing work across the security portfolio. And turning to the financials for the quarter ending 31st of March, as reported in our Appendix 4C that we've launched on the ASX 30 April, just want to run you through those numbers fairly quickly, noting that all of the figures there in the Australian dollars. For the quarter ended 31st of March, our cash receipts from products. Product sales were $0.9 million. We also received $1.6 million from medical project work primarily relating to operate in the further $1.6 million from our security-related project work from DHS and Billion Prima. In addition, we received $0.9 million under the industry growth program in support of the ambulance Head CT project. Overall net cash outflows from operations for $2.7 million for the quarter. This was partially offset by financing cash inflows relating to the remaining proceeds from the December 2025 capital raise following shareholder approval at the March AGM, totaling $1.4 million for the quarter with the cash position as at 31st of March being $3.5 million cash in bank. In addition to that closing balances Brian alluded to, we currently have approximately $0.6 million of customer receipts outstanding from the quarter, which we expect to be paid shortly as the U.S. government opens up and approximately $0.3 million from our FY '25 R&D tax rebate remaining, which has been received. Looking ahead, we have contracted projects receipts of approximately $10 million across all of our contracts. So still fairly substantial, which obviously will be received over the remainder of this spin year and beyond and will be subject to milestone achievement. We've also reassessed the company's expected eligibility for the '26 R&D tax incentive and based on our current assessment, we believe that cash rebate will be broadly in line with the FY '25 rebate of $5 million, which, of course, will be subject to final review with our auditors, advisers and the ATO. More broadly, we, as a management team, continuing to carefully manage our cash position and operating cash flows trying to prioritize activities that support near-term commercial outcomes from key development milestones. Yes, that's all really from the finance update. So I'll hand back to Kingsley.

Yes. Thanks, Pete. Welcome on board once again. As we look to the near term, our focus is on converting the most advanced commercial opportunities and driving each program through its next set of value-defining milestones. For Rover, that means progressing active opportunities and scaling production so that we can meet demand reliably as orders firm up. In Medical Imaging, we move into a pivotal phase as the multisite CT imaging study begins the ambulance prototype enters the building phase and Full Body CT moves through design review stage with ARPA-H. In Security, our priority remains securing a strategic partnership to monetize the portfolio. And I would like to stress that while our leading counterparty pause for their own internal reasons, discussions with other qualified parties remain active and well supported at senior levels. With that, I'll now pass back to you, Ashley, for the Q&A portion of this call.

[Operator Instructions]. Your first question today comes from Jaime Fitzgerald with Fitzgerald Enterprises.

First of all, I'd like to thank the engineers, particularly Dr. Brian Gonzales and Anthony Skeats. My first question is to Andrew Hartmann, if he's unable to answer the question. I'd like the question to be taken or notice. I've recently been going over Varex investor presentations, and I note that the Varex's CEO replied to an investor recently that CT tubes are the future and Varex is working on its own single beam CNT 2.That's not to be confused with the multibeam IP that we sold them. The development is up for screening and the possibility of medical considering Andrew Hartmann sits on the Board of Micro-X and is also a Senior Vice President of Sales and Marketing, and Medical at Varex, who is Varex not purchasing Micro-X CNT chips and generators.

I might take that question, Jaime. Thank you. Andrew is not on the call. So let's take that on notice.

Fantastic. Next question is to Anthony Skeats. Anthony, I noticed that EMVision has already started trialing the EMU stroke helmet, you call it, it's already in the RFDS aircraft, next roll period, I think again about 4 weeks ago. How does that affect us moving forward? Obviously, they have got a fairly big head start on us.

Yes. Yes, Jaime. Look, the key difference between the Envision technology and our technology, of course, is they don't have ionising in radiation, right? So they're using Micro-X technology to be able to do measurements, which is a brand-new method, a brand-new technique that has got quite a lengthy pathway to becoming greatly accepted in our opinion. The ability for them to commence trials is simply because of the lack of radiation. They're basically out there just trying to collect as much data as they can, trying to see whether they can improve their algorithms to get a higher rate of specificity and accuracy at the moment, they don't quite meet the level they need to get there. Will they get there? Hard to tell. And I feel quite confident that once we get into our human trials, and we start collecting real patient data and showing that our CT is equivalent in diagnostic quality to conventional CT, our pathway into commercialization into the market is far more straightforward and faster.

Yes. I'd have to agree with you there. The research I've done, they would have to retrain staff in the detection of stroke. And the other issue there, I've noticed that they're only getting up round to about 90% accuracy compared to a Medical CT. And I think I read that Micro-X's images, a damn near medical grade CT quality already. Is that correct?

Based on imaging of anthropomorphic phantoms, that's correct. Obviously, we need to put that in with...

Excellent. Next question, Kingsley Hall, when you took over at Micro-X, you promised a more focused approach to the commercialization products, generate retail revenue growth to stop the dilution of shareholders after 3 years and 4 retail sales growth of the Rover, virtually 0 tube and generate sales separately from individual complete units sales and the cancellation of Argus, massive shareholder dilution and company valuation dilution, you'd have to agree that you have failed your own KPIs that you set out with Alan Kohler back in 2023 and 2025. How can shareholders still have any confidence in you anymore?

Well, I'll take that largely as a statement, Jaime. But what I would say is in the 3 years since 2023, I think our product revenue has been larger than it was in 3 or 4 years, both in terms of revenue and in terms of number of units sold. We've just had probably the best half year that we've had on record, underpinned by the Malaysian deal, our net cash outflow from operations over the last 3 years has been substantially lower than it was in the years prior to that. So I think the commercialization of our portfolio is progressing well. Argus was a difficult decision, and I think we covered that in quite some detail, probably 14, 15 months or so ago. If you've got anything specifically related to the March quarter that you'd like to ask, I'd be happy to answer it.

Just bring up the fact that you said that Rover sales have increased. I've got here from '21, maybe $3.6 million, $3.8 million -- $3.8 billion, $6.4 million and then back down to $4 million. So it has dropped off. We've only got 1 year there where a pickup and basically, it's been flat.

Yes. I don't mean -- that's not the information that I have. When I read our annual reports, '23 was higher than '22, '24 was higher than '23, '25, we dipped, obviously, and then the first half year for '26 was quite strong. And our total revenue in the '23, '24 and '25 years were all higher than in preceding years.

Our next question comes from Scott Power with Morgans Financial.

Just a clarification question first. Kingsley or Peter, just in relation to the customer receipt of $600,000 that you're expecting this quarter that relates to the delays that you've encountered with the DHS.

Yes, yes, Scott. That's right.

Yes. Great. And then just going back to the Head CT program. Just the pilot study and a rough estimate of timing. And just remind me how many sites we've got Royal Adelaide, and how many other sites were we looking to...

I might give that to Ant. Maybe just to add, if you can give Scott some outline on what the kind of next 6, 9, 12 months are like...

Yes, no problem. Scott. So the original plan was to put 3 units, in, 1 into Melbourne, 1 into Adelaide, 1 into Box Hill Hospital. The Stroke Alliance have decided that they feel that 2 units is sufficient in order to conduct the initial study in the short time frame, 6 to 9 months is what they're forecasting to recruit the patients. The third system is actually being reallocated and is going to be developed to be the first system to go into an aircraft. So researchers at the Stroke Alliance have received an HMRC grant, which we talked about, I think, the late last year. Background is specifically focusing on trying to put the first CT into a fixed-wing aircraft. And we've just started to work with the Stroke Alliance on the Royal Flying Doctors on that, and that's what the fair system will do. We do have -- I mentioned that we have some interest from the Oslo Hospital, also University. It used to be called Royal Oslo, now Oslo University Hospital. It's a leading stroke hospital. The researchers there have been on succumbent at the Royal Melbourne Hospital and there's a leading neuro research fellows, and they are also part of the Norwegian Luftambulanse -- one big, happy family. And the Director General of the Norwegian Luftambulanse came over last year and expressed an interest in conducting at Oslo Hospital a significant study, I'm talking to hundreds of patients. to try and really understand the full capabilities of the system outside of just being able to identify blood or no blood for stroke diagnosis. So we're in the process of discussing with them what that looks like. They'll get a very similar style test bench, preclinical test bench to what we supplied to the Royal Melbourne Hospital. It's hard to predict the exact time in. I need the right spread of patients to come through, we'll probably collect many more images than the 108 samples we need, but the indications are somewhere between 6 and 9 months to get enough clinical data for us to make our submissions.

[Operator Instructions]. The next question comes from Andrew Gray with Diogenes.

Can you clarify the scope of what's being monetized in the Security division? Is it the full programming, including the DHS contracts of a specific assets? Are you looking at licensing actually selling IP? Just some clarity around that.

Yes. Thanks, Andrew. So I think that one of the best example is probably the agreement that we reached with Billion Prima in, I think, January, February of 2025 where we agreed that they made an equity investment in the business. But in addition to that, they have paid us a development fee to develop for them a somewhat slightly different variant to the baggage scanner that we've developed with the DHS. They will have distribution rights in Southeast Asia, across about 9 countries, I think. But every time they sell one of those units, they -- the core technology that sits within the units being the X-ray tubes, the high-voltage generators and the high-voltage switching, they will need to buy from Micro-X. So we haven't licensed or we haven't sold any of the core IP to Billion Prima. And I think when we think about what a more global deal looks like for our security portfolio, whether that be geographical or broader, it would be a similar type of arrangement that we're looking at. So we're not looking to sell the core IP, we're really looking to find the right partner to commercialize the product at a quick pace where we can supply them the core technology that enables the product to be successful.

There are no further questions at this time. I'll now hand back to Mr. Hall for closing remarks.

Yes. Thanks, Ashley. Before we wrap up, it's interesting. I think we've covered a little bit of it in the call so far. And I think, Ant, your description of where we're at with the Head CT trial is really important. One of the other questions that shareholders have been asking as I've been speaking to them over the last little while is with regard to the Full Body CT and with ARPA-H. And so Brian, I just wonder whether you might just give people an update on what the next 6 months or so looks like on that project.

Yes. Sure, Kingsley. So the -- to date, as Ant mentioned, we've built a full laboratory test bench. And this is really important because in this, we've proven out all of the individual subcomponents, the control, multiple tubes, the detector. And we're going through the process of really proving out the imaging. And then in the next 6 months, we'll be doing is beginning to build the first full prototype -- full ring prototype. It will be heavier and it will be slower, and it won't be designed to be anything more than a full laboratory prototype, but it will demonstrate the entire system as a working system. And we're pushing for that towards the end of November to be finalized and demonstrated to ARPA-H as the conclusion of the first phase of the program to demonstrate that we can do a full ring and do full imaging that one that would be only capable of imaging phantoms and then hopefully could average if we can get all the permissions for that. But the goal of that is to demonstrate the full imaging system to ARPA-H in anticipation of the next phase, which would then be building full functional deployable prototypes.

Yes. Great. Thank you, Mark. I think the other major discussions or conversations we've been having recently is where is the short-term, medium-term, long-term value drivers of the business. And I think the human imaging trials with Head CT are at the forefront of demonstrating the value of that product. And Ant and his team are working really closely with the ASA and Royal Melbourne. And we've seen the Royal Adelaide, and I think we'll see some great progress there. Continuing to build Rover sales remains a high priority. I'd like to thank everyone on this call for your continued support and for joining us on the call. 2026 is shaping up to be a really exciting period for Micro-X as we look to recognize the value we've created over the last few years. And I look forward to speaking with you again very soon. Thank you. Thank you, Ashley.

That does conclude our conference for today. Thank you for participating. You may now disconnect.