Polarean Imaging plc (POLX) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Polarean Imaging plc Full Year Results Briefing. [Operator Instructions] The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and publish responses which is appropriate to do so. Before we begin, I would like to submit the following poll. I would now like to hand over to our CEO, Christopher Von Jako. Good afternoon to you.

Thank you. Thank you very much. Thank you, everybody, for joining us today. Really appreciate it. So the way we'll set the presentation of today is we released an RNS this morning that reviewed our 2024 end results, our audited results and some updates from this year as well. So I'll provide a little bit more color on that with some slides, and Chuck and I -- Chuck is here with me, our CFO. And then I'll run through kind of an updated presentation for anybody new to the story or needs a refresher on our value proposition and our business model. I'll do that. And I've included some new slides that may also include some information as I go through that. So before we begin, as a reminder, these are the normal disclaimers. As the moderator did say earlier, please put some questions in at the end of the presentation, we will go through some Q&A. So I've been on Board for now almost 2 years. The platform is in use. It's growing and it's being reimbursed in the United States, which is great. Obviously, we got our FDA approval at the end of 2022 for the first and only FDA-approved MRI contrast agent. And as I said, it's supported by that brand new code. Usage is growing at all of our centers, whether it's clinical or research or in some cases, doing pharma supported trials, and it spans on all 3 of the major MRI vendors. So that's GE Healthcare, Philips and Siemens. As I mentioned already, the reimbursement is active. Sites are billing. They're successfully receiving payments, which is great. It's really validating what we have from the reimbursement pathway. I will cover this during the reimbursement side, but in the United States, there are 2 paths for reimbursement. There's the governmental insurance, which is the safety net for Medicare for people that are 65 and older. Some people actually under 65 can also get that reimbursement, but then there's private insurance. And we have successfully been getting reimbursed for both the governmental as well as the private insurance, which is really, really nice. We did announce a couple of months ago that we were starting a third vertical for revenue, and that was looking at specifically pharma-sponsored trials. We're really excited to announce that new vertical and something that we've been really working on for the last several years to be able to do that, and I'll kind of hit upon that. But I was really excited to make that announcement. And the technology really has been around for a few decades but has really taken off. And so lots of publications that have been out there globally on really how to hyperpolarized our xenon-129 as well as really over the last decade, more and more about clinical studies. And from time to time, we do put those clinical studies out, we really kind of heightened our social media aspect on that. We've been kind of announcing some of those things with some of our players. And just recently, again, I think Cincinnati Children's had a really nice publication and just a few weeks ago, Duke as well. So just starting off first from the financial aspect. As we mentioned in the earnings this morning, we exceeded our guidance. We finished at $3.1 million. Last year, obviously, we raised a gross amount of $12.6 million. And at the end of last year, we had net cash of $12.1 million, and still to this day, we have no debt on the books, which is great. We continue and work really hard, Chuck and I, to strengthen our operational efficiencies in order to make sure that we're spending the cash from what we want to be spending it on, which is obviously mainly on our commercialization efforts, but we did announce this morning that we have extended our cash runway through Q2 of 2026. Previously, our projections were sort of Q1 of 2026. So that's quite nice. Obviously, we continue to accelerate our commercial traction. We now have 22 customers, 7 of which have clinical systems that have either been installed or on order. And obviously, we announced -- obviously, we got University of Alabama complete the installation last year, and they will be up and running quite shortly, which is quite great. Our consumables were up over 50%. It's really reflecting an increase in scan volume both from our clinical sites as well as our research sites as well as some of the -- of our customers that are doing pharma trials. A big effort for us last year was really to build and optimize our team, specifically on the commercial side. As many of you know who have been following our story, we hired a new VP of Global Sales. Alan Huang, who came on last year in September with us. He now has 4 direct area sales directors below them, who are mainly focused on the capital expansion of our technology, and we have 1 clinical rep. Those 4 area directors come with a great deal of experience, 2 have background specifically in capital, specifically in using high-tech technology and then 2 of the reps also come with good capital experience in pulmonology, which is really nice. The other 2 actually have backgrounds more in the radiation ecology and as well as imaging side. So really nice complement of reps and doing quite a bit. And I would say to this date, they are really coming up to speed with the technology. Our sale is very clinical. I've mentioned this in a number of times, more so than any product that I have ever worked with in my past 30 years. It's really, really clinically focused, and they are coming up to speed really, really nicely. What has really helped us out, obviously, is bringing on our chief medical adviser. He came on board just at the same time Alan did last year and really strengthening a lot of what we're doing from a clinical perspective and also been very, very supportive and helpful for us in our FDA discussions as well. So with that in mind, obviously, we have a few things that are trying to expand the platform. One in particular, obviously, we're trying to expand and go lower our minimum age. Our age has been from 12 and above. As I mentioned before, and if you've heard me say it before, this is the first time in my career where the FDA after you submitted something to them, typically, you're looking at adults 18 and older. The FDA had come to us and allowed us as long as we gave them data, and we do have 4 specific children's hospitals, gave us data and they were quite accepting of that data. They gave us down to the age 12 and now we're looking to get down to the age of 6. So hoping for some good news by the summertime around that expansion. I will talk a little bit more about what that means a little bit later in the presentation as well. We've also expanded our patents. We had 1 new one last year and another new one that came this year, both around the gas exchange and around the cardiopulmonary blood flow imaging. I actually will show an image today around that. We also did submit a Type C meeting for gas exchange at the end of last year. We did have that meeting in March of this year, and I'll give a little bit of an update on that as well. But last year, we -- I think we did an amazing job at really increasing the visibility of the Xenon MRI. If you remember way back when the American Thoracic Society, which again is in May last year -- in May, had well over 40 presentations that were done there. And one of the things that I've seen is that even though this technology has been around in the research side, for a number of years is still new to a lot of folks, and we're getting out to more and more people in educating. And that's a really big thing that we've been doing is really educating people about the technology and what it does, and that's been nice obviously with the new commercial team. But we've been able to increase that visibility across a number of the major clinical conferences that we had last year as well as some of the clinical conferences that we have this year. So we did reconfirm our guidance despite the market headwinds. If you read the notice, there had been some changes with the new administration that came in to the United States, particularly around NIH funding. I'll give a little bit of color on this. Essentially, obviously, the -- we're really focused on academic medical centers. That's where new technology is typically focusing on. These academic medical centers are doing a lot of work from a research perspective and doing a lot of work with the National Institute of Health when researchers there actually submit to get a grant. There is also a money that goes to the institution, and they're paid an overhead rate. For overhead rates -- so let's say a researcher gets about $1 million to do something, and this researcher is at Harvard, the overhead rate at Harvard is over 70%. So that institution gets an additional $700,000. So the research gets $1 million, and the institution gets $700,000. What the new administration do, they want to cap that overhead rate at 15%. So a number of these institutions that we're working with and very closely working with have really tightened down because that -- their overhead rates have dropped from whether it's 60% or 70% down to 15%. So there's been a really tightening of the belt for capital as well as potentially hiring new staff members. So that has actually unfortunately kind of pushed out some of the deals we had hoped to get early in this year. So it's caused a little bit of headwinds for us, but we feel really good with the pipeline that we have as well as some of the backlog that we already have on our books today that we have not delivered yet in making our guidance this year for the $5 million to $6 million. We obviously -- I mentioned this before, extending our strategic collaborations. We talk a lot of times about the 3 MRI vendors that are out there. Obviously, Philips, we have a specific -- a particular collaboration with them, assigned collaboration with them, but we're working very closely also with Siemens as well as GE. But we're really excited to announce this first -- launching of this first pharma-sponsored trial, which is another vertical for us that I mentioned. We did about -- probably about 18 months or so ago announced a collaboration with VIDA Diagnostics. They are CRO, particularly in the lung space. They work with a lot of large pharma companies, and we're working together with them. They are the lung CT, and we are the MRI lung option and working very closely with them. And we did announce a major pharma company has looked up our services, which we're really excited about. We also talked about advancing outside of the United States. So we obviously added to our IP. Our IP is growing. As Chuck always likes to say, there are particular things that are very, very tight in our IP, like gas exchange. If anyone wants to do gas exchange, they have to go through us. But we -- our IP is not only focused in the United States, but outside the United States, in particular territories that we have like in China. We did announce our first international distributor in Taiwan and working very closely with them to work out the regulatory rates. As I've mentioned a number of times, we are trying to be very specific and look for like-minded distributors outside the United States that work closely with us. When I talk about like-minded, they have to be using similar technology, like high sophisticated imaging technology. They have to have capabilities to allow for servicing and maybe installation of the equipment. And in addition to that, they have to work with us closely to get the regulatory clearances in those particular areas. So we're really excited about Taiwan. We're hoping to add several more this year. I had been asked this quite a bit when I first joined the company. Obviously, when we launched our brand-new product, the brand-new polarizer, I wanted to make sure that I felt very good about the stability of the system before we start doing stuff outside the United States. So I've gotten to that point where we really feel good about that. So we continue to work really hard on the commercial and clinical momentum, as we've talked about a number of times from a strategic standpoint, we're really focused on the top 100 hospitals. It really does expand a little bit more than that. In the United States, there are some very, very top pediatric-only hospitals. And I would say, since Alan came on board back in September, we have also kind of started to focus on cancer centers as well. And I have it here that we've engaged over 65% of the top U.S. academic hospitals, and it's probably a little bit larger than that. Every week, we're talking to more and more centers, which is great. In particular -- sometimes it's really hard to get into these centers and have these discussions. Just this week, in fact, we gave a presentation to a very well-known pediatric center, and it's taken 18 months to get to that point to get to the right person and have those conversations, which is great. So -- and I mentioned already that -- obviously, there's growing interest and it's really reflected in some of the conferences that we've been going to. We have a number of conferences that we're going to be coming up going to ATS, which is the American Thoracic Society later this month. and I'll actually be heading to the main MRI meeting, which is next week. One other big announcement that we've talked about this morning, obviously was from a gas exchange standpoint, we lowered the total cost that after our discussions that we had with the FDA in March. Prior to those conversations and prior to getting really more information on what we were going to do around gas exchange and the trial that we need to do to get the FDA approval, the company had stated before publicly, somewhere between $9 million to $10 million, maybe even as high as $11 million to run and conduct that trial. We feel very good right now with our discussions with the FDA that, that trial will be smaller in size. It could be shorter in time, but definitely, the cost will be significantly lower. We believe it will be around that $4 million range. So it's really good news. And as I already mentioned, obviously, the pediatric indication. We're hopeful to get it in the summer. Once we get into the summer, that approval, we plan to launch at our first site at Cincinnati Children's. For those of you that tuned in, in March, where Dr. Walkup from Cincinnati Children's has talked about it. Obviously, today, we're only treating one-third of the pediatric population because we're only doing the 12 to 18, but going down to 6 will give us another 1/3. And as I mentioned already previously publicly, that will give us roughly about another 1 million potential candidates within that group. So I'll run through the presentation. I'll kind of maybe do it at a high level and a quick level here. But in our presentation, I wanted to state really what our mission is. Many of you heard me if you've been following the story. Really, our mission is to revolutionize pulmonary medicine. That is what we are doing today with our technology, and that's what we'll continue to do. But our vision is really to optimize lung health, right? That's really what we're trying to do in the end. And you'll hear me talk about this in the presentation today. It's really about preservation of the lung, what we can do to preserve the lung. As people -- lungs, they get -- their lung capacity typically is probably at their best in their late 20s and early 30s that tends to denigrate from there on. But if they run into problems or they have chronic illnesses like asthma or develop something like COPD, that's where your -- or potentially cancer, you have to look at ways of really preserving lung function to be able to live a healthy life. So this is the team that's working together to really allow us to do our mission every day as well also allow us to fulfill our vision. And it's a really great team that we have assembled here and we're working very hard every day to make that happen. At a glance the company, as I mentioned before, we have now 22 customers. We're in the commercial stage. We have this amazing product that is the first and only FDA product. If you look on the right-hand side there, you can see that image on the left, that's the MRI image of a lung and you see nothing in the lung. That's basically because MRI is looking for water content and the lungs are basically filled up with about 80% to probably 90% of air. But on the right-hand side there, you can see a traditional MRI with inclusive of the -- gas, which is what is image that noble Xenon-129 gas, which is imaged. You also see below, obviously, our indication. Right now, we have an indication for looking at ventilation. I will talk about ventilation and gas exchange in a minute. And then, of course, we're on all 3 MRI, the main vendors there. I think most notably and one of the big things when I was looking at the company, my undergrad and graduate work was in MRI, although it'd be many years ago. But I would say that one of the things that really struck me was how quick the images are done. Typically, when people think about MRI, they think of long time in sitting in the board for an extremely long time and that's not the case with our technology. It really is a breath hold, could be 10 seconds, it could actually be less than 10 seconds. And I mentioned our IP. Our IP is growing. We have a number of things that -- we're still waiting on from a patent perspective, but we have -- our patent portfolio goes at least out another decade plus, which is great. And I've already mentioned the partnership with Philips a little bit earlier. When I look at the investment opportunity, I really look at it in 4 particular boxes, as I've mentioned this before. Obviously, our advanced imaging technology. It's noninvasive. It's radiation-free. It has reimbursement. And there's some really obviously the one thing that I really like about it is I mentioned this a number of times, is the razor, razor blade nature of it, right? So you own the razor and then you have to buy the razor blades to go along with it. That's really important, especially today in health care because it really allows our team access into the medical centers, which is quite important. Obviously, the second thing I have on here is the total addressable market of our first indication. It's $2 billion, right? This is just for the consumable market for lung diseases like asthma, COPD, cancer as well as transplants, including, say, lung transplants, but also like bone marrow transplants as well. It's a really underserved space, and it's really ready for disruption. I also added the total global number here because I wanted to give you a perspective of what the global number here, as well as our expansion market. Obviously, this is adding gas exchange capabilities. This would unlock another $3 billion plus into the market and also looking at vascular indications as well. And then last thing, obviously, is partnerships. We've talked about it as well from a pharma perspective as well as medtech. And I think the pharma side really is going to help us really accelerate our adoption and obviously, it will lead to some good revenue from that side as well. I will talk a little bit about how our technology helps in drug development as they go through this. So on the right-hand side, you have the lung, right? So the lungs really do 2 things. They bring air in and they bring air out. And conventional technology only allows you really to see big things if you're looking from an imaging perspective. So it's really the large airways. And it's really that which you can't see, and that's where our technology comes into place. So the silent zone is we're all -- what I say where all the magic happens, right? This is where obviously oxygen goes into the blood and carbon dioxide comes out of the blood and you exhale that. And when I look at the challenge, and this is something that we've worked on quite a bit. Traditional tests really miss this early dysfunction, which happens in the solid zone, which then can lead to delaying diagnosis and really causing potentially irreversible harm in the long run, trying to catch this early is really important to having that data and be able to see down into the zone is so important. And that's really what our technology does. It really allows the illumination of sort of where that hidden loss is happening, helping with early detection better from a treatment decision standpoint and potentially also in the future to make predictions on prognostic about what medication or what therapy someone should be taking. So it's really an amazing technology. And here, you can kind of see what's some of the other technologies that are used. I put up here chest X-ray, CT scans. Those are the 2 main imaging things. They really have kind of focused on structure. The negative sides with those, obviously, as well is that they're using radiation or ionizing radiation to create those images. And really the gold standard where you're looking at functional of the lung is really spirometry. That's where this device where you blow into, it gives you this global number. The problem is it's very insensitive, right? And all those technologies really insensitive. Insensitive to the silent zone, which is really what you want to see. So just elaborating a little bit. I talked about this quite a bit. And some people don't always grasp really what the difference between structure and function is. So I tried to give an example here. Structure is like looking at a GPS, where you can see a bridge or the roads or the highways, and what you're not really seeing is what the function is, and that's where you're actually adding the information around the traffic and trying to really understand how are these roads and bridges and everything, how is it functioning. And that's really what our technology does. So CT allows you to see structure but very large structure. And sometimes what happens is the function will start going bad, and you don't see it until later with the structure. And that's really what our technology allows you to see. It allows you to see what's happening and really down to very, very small area in what we call the silent zone, some of those things that you really can't even see with the human eye. So if you look at spirometry, trying to understand a little bit of the difference between spirometry. You probably -- I went — underwent spirometry a few months ago, actually when I did my Xenon test. It's -- our technology is much more less effort dependent, right? You have to blow into this device, you're having to actually do 3 acceptable blows into this device. You have to follow instructions very well, which is something that you don't have to do with our technology. The other thing is with spirometry, it can be very variable depending on the patient, depending on the -- maybe a younger patient can't even do it. An older patient may be not able to listen to the instructions. So you're getting a lot of variability when you're doing it. With our technology, it's much less variable. And that comes into play specifically when we're talking about drug development as well. Our technology is extremely sensitive. So these patients have cystic fibrosis. This was a study that was done that looked at cystic fibrosis patients, not to make this so much of an eye chart. But just if you're looking at the healthy patient, and you're looking at a cystic fibrosis patient, you're doing the spirometry. It's very difficult to understand whether the patient has cystic fibrosis or not with a healthy patient. And with our technology, you can actually truly tell there's a difference with that. You can see that on the chart on the right-hand side. Here is a true indicator, obviously, with our technology is that with spirometry, you're getting a global number. And with our technology, you're actually visibly able to see a difference. So on the top, you can see a very healthy 20-year-old female. She blew a spirometry at 101%, and you know that we have this metric called VDP, it's ventilation defect percentage, that basically shows how much defect is in the image. And you can see the top image looks very, very healthy. It's very bright. And on the bottom image, that patient is a 13-year-old male that blew about 106% spirometry. So that would show that there are kind of an outstanding lungs, but you can see that there are some gaps in the lungs that are there. So if I show the VDP image, it's 1%, which is very good. That's actually what I ahead with my VDP as I did it a couple of months ago. And the VDP for this particular patient is at 26%. We typically see normal kind of -- the edge of normal, it's about 7%. So anyone with sort of the 5% to 6% or lower, that's -- they would have a very healthy. So you can see in this particular case, that 26% is giving more information than you'd get from spirometry. So we have a very large market that we're going after. I'm including the airway disease that we have FDA approval today, but I'm also including -- as well as the cancer area, but I'm also including some of the areas for gas exchange that we will be going after. So unexplained breathlessness, you've heard me maybe talk if you've been listening to our story. Tissue disease, as well as vascular disease, as well as cancer. So these are the annual potential of scans that are out there. So it's a very, very big market, and there are lots of factors really driving demand for advanced diagnostics in these areas. This is a video we tend to show about the technology, about some breathing the Xenon in once it's been prepared and then actually doing the image, it's very, very quick. Here, we say 10 to 15 seconds, but obviously can be done in less time, so there are benefits around it. It goes everywhere. It's not effort-dependent. It's very quick. It allows you to really evaluate regionally what's happening with the lung. You can see in this image up in the left-hand corner. There's some reason -- even on the right-hand side, there's some reason why the Xenon gas is not getting there. As a reminder, obviously, the Xenon is going in the same direction as oxygen. It really acts as a surrogate to oxygen. So just quickly, this is our technology. If I talk about the razor blade, it's obviously our gas. We have this multidose cylinder that we deliver to our customers, along with a dose bag that goes where once the Xenon has been activated, so it will show up in the MRI. It goes into that dose bag. So that's the device that it has to go through. And really, the preparation takes about 10 minutes to develop it. And then we check it on our machine here to make sure that the dose is going to show up in MRI. Once it's brought over into the MRI, the patient would lie down, they would inhale the dose and then that 10-second image would take place. Again, the Xenon is going everywhere. It possibly can go all the way down into the silent zone into the patient. Chuck and I were just at Duke actually a few weeks ago. We were seeing a research patient being conducted there. The patient was really -- they were doing a number of different scans because it was a research patient, but the patient was basically in and off the table in about 3 minutes. So it's a very, very quick procedure. The patients are also wearing a chest coil. We have 3 specific chest coils for each of the different vendors that we have FDA cleared processed. And of course, we have our software that allows us to take the information, combine it with the standard MRI image and do the analysis to understand how the patient is doing from a perspective and looking at those biomarkers that we have. One of the new things that we recently developed is the ability to have this optional dose transporting case. Sometimes where the hyperpolarization lab is, is not as convenient to the MRI machine. So we allow these dose bags to go into this, specifically magnetic field developed dose transport case, which we developed, and we've been testing at a number of centers, including actually in Oxford in the U.K., where they may have to transport the dose a little bit farther than, say, about a 4- or 5-minute walk. It allows us to keep the dose or the bags actually hyperpolarized within that time period, which is quite nice. Our software, this is the biomarker that we have. This is just showing a patient. You can see here that ventilation defect percentage is 34% in this case. All what you're seeing there is the defect. So 34% of the volume there is in that red. That's basically what's it's showing. In this particular place, we're looking at the ability to take quantitative visual map this image and kind of combine it together and really make it quantitative. In this particular case, we -- the patient inhale a bronchodilator, and they want to see what the difference it would be with the VDP afterwards. You can see the patient went from about 34% down to 19%, which is still not the normal, but they did show that it did have an effect. And essentially, what you're looking here is you see less red. So from a gas exchange perspective, we're looking up here on the top left. We took a cross-section of alveolus. Everybody that's on the -- listening to this call I've mentioned this before. We all have about somewhere between 300 million to 400 million alveoli in our bodies, and this is where the gas exchange is actually happening, what I said is where all the magic is happening. If you see up there, you have the airway where the oxygen is going from the alveolus into -- across that membrane into the red blood cells. That alveolus, the diameter is very small. It's about 3 to 4 hairs in thickness. That's the complete diameter. And if you're looking at that membrane, that membrane is much, much smaller. It's invisible to the human eye, but we're able to detect down to that area. And the beauty is that Xenon, as I mentioned, is a surrogate for oxygen. So it goes from the airway through the membrane into the red blood cells. And the beauty is, no matter where it is in those 3 compartments is it resonates to a different frequency. And all that means to anybody here that's listening on the call is that we can image all 3 of those locations separately. So we can look at ventilation, which is what we have our FDA approval for today, we can also look at membrane as well as the red blood cells and see what it is. In this particular case, it's a healthy patient. So what you're looking is a green is this acceptable level of xenon in each one of those areas. But we can look at different types of patients. In this case, we'll look at a COPD patient. So with COPD, you're getting either inflammation or mucus buildup and what you can see there is the red area. There's no Xenon or no oxygen that's getting down into that area that allows us to see where that's happening. For somebody that has idiopathic pulmonary fibrosis, this is a tissue disease. So they're getting a hardening or a thickening or getting fibrosis in that tissue. It's really that membrane where the oxygen is trying to go through. So the oxygen is getting caught up in that area because it's getting that thickening, that fibrotic look. And in some cases, this will happen before it even shows up on other technologies like CT. So you see that pink or purplish there because you're giving a high level of xenon. And the last area is looking at sort of pulmonary hypertension patients. I will give you an example of sort of what we're doing in that particular area. But what you see on that last image is really areas where the Xenon is not getting picked up by the red blood cells, and that's why you have that red or even that low area where you have that orange area. So it's not getting picked up. But one of the beautiful things is once it's actually going across and getting into the red blood cells, since we're imaging for somewhere between, say, 6 to 10 seconds, we're actually looking at the flow of the hemodynamics of the blood, which is quite incredible that we can do that, and I'll give you a particular example. So some people ask me quite often where is the technology being used clinically, where can it be used clinically. And here are just some examples of where -- just like any other diagnostic imaging is used. So disease characterization or trying to understand and detect early hidden disease, therapeutic response, maybe they're giving a particular medication, they're trying to understand, they want to monitor it. And the beauty with our technology is that it doesn't have ionizing radiation. So then from an image guidance perspective, we can use our images to help guide physicians to do certain things. And here are just a number of different indications in different places, whether it's an airway disease, unexplained breathlessness, tissue disease, pulmonary vascular lung cancer as well as what's happening from an image guidance perspective. Lots of different things that are being done. So here is just maybe just a few indications, obviously, when you're looking at lung airway diseases, like, say, asthma or COPD, trying to understand a little bit better what's happening with these patients or cystic fibrosis, trying to really characterize it. Or from a therapeutic response, you may have checked in and heard our webinar that we had in October of last year, where Dr. Hall spoke specifically about a couple of areas where biologics are helping people that have severe asthma also looking at people that have moderate asthma, where typically with spirometry, it will take sometimes up to a year, maybe even longer to know whether that biologic is helping those asthma patients. And with our technology in 2 particular studies that were done, after 28 days, we were able to predict whether the technology would work. So really predicted out what the 1 year would look like. So really making some nice advancements in this. And obviously, we have a number of centers that are working in this area and using this technology clinically today. Unexplained breathlessness. This is something that happens quite often. What is causing -- when somebody has a breathlessness, it's because the oxygen is not getting into the body. So something is preventing it from getting there. So we mentioned this on the webinar that we had a few weeks back. This was 1 of our customers -- our clinical customers. Patient came into the A&E or emergency room with difficulty breathing. Traditionally what they do is they take a chest x-ray, trying to understand there's something going on with the lungs that's filling up fluid. Nothing is there. They ended up doing a CT scan of the patient, nothing showed up on the CT scan. So something must be happening functionally, so they gave a patient spirometry. This is at 80% or 82% in this case, which is on the lower end, but still normal for a patient. So they probably get the patient a bronchodilator, sent them home. Four months later, he returned with -- into the emergency room with worsening symptoms, and they ended up looking at spirometry, which is relatively just about the same. They ended up doing a xenon MRI on the patient. You can see here clearly places in the lower parts of the lung on both sides that we're just not getting ventilated properly. And these images were actually used to help guide to do a biopsy of this patient. I just heard from our -- our clinical rep was actually down in Missouri again this week. And lots of times, they're actually using this technology to try to better attain and understand what's happening with these patients that have unexplained breathlessness. So just moving into tissue disease. This is obviously 1 of the areas that are near and dear to my heart. I mentioned publicly a number of times, my father had passed away 10 years ago this November from idiopathic pulmonary fibrosis, which is a disease where the tissue gets hardened and thickened. But what you see here, and this was exactly the case for my father. He had a CT scan, they saw nothing. And he was having this unexplained breathlessness, they didn't know what it was. But what you can see here with our technologies, we're actually seeing the thickening happening on our membrane images before you're seeing it on CT. What they didn't have back then, and they have today is they have the ability to use antifibrotics. This patient, you can see on the bottom half of the image there, you can see the CT is actually showing the fibrosis. But what you're not seeing is on the top of the left and the right lung, you see the -- on the image on the below with the membrane being pink and dark pink is that the patient is actually getting fibrotic already. So they would set this patient up already to -- for a lung transplant. This is the antifibrotic. So obviously, to be able to see a treatment response is pretty incredible. And you may have heard last year, some of the work that's been done at Duke, has had great benefits to be able to predict out whether these antifibrotics are working or not. So in this particular case, you see 94%, very, very dark purple in that case, where we're getting a lot of thickening in this patient. But after 3 months of being on the antifibrotic, about a 50% improvement in the lung images there, but they're also looking at potentially how they can predict nonresponders. So these medications are very expensive, and there's new medications coming out every day. There's one in the works right now for these antifibrotics and the ability -- These medications can be upwards about $100,000. So the ability to be able to predict whether these are working or not, and that's a lot of the work that's been going on at Duke as well. Just quickly, the last example I wanted to show you as a patient that had pulmonary hypertension -- a particular version of pulmonary hypertension. There is a -- our ability to what we call oscillations. This may be new for some of you. But what we're seeing in that bottom left image there is that there's some particular reason preventing the blood from flowing and that's where you see all that red there. In this particular case, that patient ended up having some tissue removed. It was a clot that had to be removed and then the treatment response, and you can see here now all the blood is flowing correctly. So just to give you a quick example of that. And then the last one really is around lung cancer. We -- there are lots of examples, and we've been talking to lots of particularly lung cancer centers here in the United States around where our technology can be used. And there are really 4 particular areas, whether you're going to do something from a surgical oncology perspective, and trying to understand how much of the tumor you should remove or not? And what type of condition is the lung in today before you do that removal? And what would the patient be dealing with after? These are really important decisions that need to be made because it's all about lung preservation. Sometimes, they like to try to take out more lung because they're worried about recurrence of the lung tumor, but they're also worried about trying to preserve that lung for that patient as they go on. One of the really great key indicators is trying to understand how the lung is functioning. Radiation therapy is something that's really been used quite effectively in the lung and patients are living longer because of it. But one of the things they're trying to do is they're trying to avoid the healthy lung. And with our technology, both using the ventilation application as well as the gas exchange application they can understand better where the healthy lung is and where they can avoid that healthy lung as they're treating with the radiation. One of the issues is as they're treating with radiation, it induces pneumonitis or inflammation to the lung that radiation does and that could actually turn to long-term fibrosis, which is in the lung. And a lot of times, when you're looking at Stage III lung cancer, they want to treat radiation and then they want to do chemo afterwards, and they want to understand whether that inflammation has gone away before they're putting them on the medical oncology. And also sometimes lung do react negatively when you're looking at chemotherapy and the ability to kind of understand what's happening to the lung with the chemotherapy. And then lastly, you've heard us talk and may have dial in for our webinar with Dr. Walkup from Cincinnati Children's. We've done a lot of work with them, particularly on bone marrow transplants and the effective bone marrow transplants, and how it may actually attack the lung particularly in the silent zone, creating early inflammation there, which is preventing the oxygen from getting into the blood. And these are some very young patients, obviously. In this particular case, you could see they all blew roughly about 80% spirometry. You don't need to be a radiologist, but to see the top image there is quite bright and good. That's why the VDP was at 3%. But even though the other spirometries blew about roughly about the same percent, about 80%, both, you can see from the images and from the data there, is not very good. So it's having that information and knowing how to treat these children, which is quite good. And I think you heard from Dr. Walkup if you listen in to that, that roughly you're looking at about 50% of patients that they treat with bone marrow transplant are under the age of 12. So we're very excited about getting that additional application there. So our technology just in a nutshell, really allows us in the 10 seconds to get a whole deal of information. We have many different entry points into the hospital, really starts with pulmonology and ends with radiology. But obviously, we're talking to a number of different doctors within the group in order to get acceptance into the hospitals. This is our current map of our centers. Most of them obviously are in North America, and this will be growing as the year goes on. You've heard me talk about all about our 5 pillars and our growth strategy around that, really focusing the first 3, which is on the commercialization strategy. The next 2 is to expand our total addressable market as well as develop our partnerships. Our commercial strategy is still the same. We're working to convert research basis. You've heard us talk quite a bit about Duke. Obviously, they're one of our closest collaborators, and we're working very feverishly there to get them to convert it to clinical usage there as well as talking to a large amount of these top 100 hospitals and even more so with some of these direct pediatric hospitals as well as these cancer centers and then obviously drive the utilization. And I think utilization continues to grow at all of the hospital customers that we have today. We mentioned quite a bit before, obviously, with our reimbursement. If you look at everything all encompassing, you're looking at roughly about 2.5 patients to break even on the technology. This has been really, really important from our perspective on building what we call a return on investment for the hospitals and allowing them to adapt their technology. So just from a planned growth, obviously, the thing growing from 12 to 6 years old. We're waiting to hear back from the FDA, many benefits around it. You maybe heard me talk about this before. But today, we only have the ability to have 1-liter bags, and that's really what the FDA was wanting to do is for us to protect -- to develop additional bags sizes that will allow us to treat down to the pediatric sizes. So you can see we have 750 milliliters to 500 milliliters and 300-milliliter bags here as well. So pretty excited about that. When Chuck and I were at Duke a few weeks ago, there was an adult patient there that was -- had idiopathic pulmonary fibrosis that was doing that study that they're doing at Duke. And that patient, he was quite large about 190 centimeters tall, thin gentleman. He was only able to use a 500-milliliter bag, couldn't even use a 1-liter bag because of the conditions that his lungs were in. So these different bag sizes will not only help us with pediatrics, but also adult patients. So from a gas exchange perspective, we did get great feedback from the FDA, and we're quite excited about kind of moving forward with that. Obviously, we wanted -- we're doing some things internally to get ready for that, continuing to develop our software to make sure that we're ready for that. But we feel very good about the proof-of-concept study that was conducted on really over 230 patients with the work that was done at Duke to really give us that confidence that we'll move forward. Really lastly here is our last model. As I mentioned before, we -- this is really the third vertical from a research perspective. That partnership with VIDA really allowed us to advance drug development. You heard me talk about it before, but spirometry is really what's used in drug development. And just to give you an understanding, because our variability and our sensitivity is much greater than you can have a spirometry it really allows drug companies to be able to see with much less patients and try to understand what's happening potentially with their therapies as they're trying to accelerate it to market with much less patients. So just to give you kind of an understanding, maybe we could do with about 30 or 40 patients what they would need to do with about 500 patients to get those confidence [ intervals ]. So really, our technology can help out there. And we're really excited to really sign up with this huge global farm partner. This study will probably begin over the next couple of months, and our section of the study will begin later in the year. So very excited about where that's going, and really allowing us to strengthen our market position and it really helps add to our growth strategy. Obviously, this is just a list of some of the companies that are using our technology today with some of our customers, but we're looking to do more multiset of pharma trials with our technology as well. I kind of already covered the financial stuff. So maybe what I'll do is I'll just kind of go over the last slide to sum it up with our great technology. I just want to thank you all and maybe turn it over to some questions now in the last minutes that we have.

All right. So just looking at some questions here. Some of these were presubmitted. We also have some coming in live if you have there. So the first one really is what impact have NIH funding changes in hospital budget constraints had on your sales momentum. Okay. So I mentioned, obviously, we're working with mainly academic medical centers. These [ ACO ] medical centers do a lot of NIH grant funding, and we're talking about some of these hospitals, if you think about it like Harvard or University California, San Francisco,or Vanderbilt or some of these -- University of Pennsylvania, they're talking about several hundreds of millions of dollars that are threatened that are being reduced from their budget flows so they really have tightened down, and in some cases, have kind of pushed out decision-making with ours. But as I mentioned earlier, we have confidence with the growing pipeline that we have and some decision makings that are going to be happening in the second half of this year and also with some of the backlog that we already have on hand, giving us confidence of hitting our 2025 number. All right. The next question here, what was the company's cash burn rate during 2024 maybe I'll take a sip of water here, Chuck, and I'll let you kind of take this one.

Okay. Thanks, Chris. Yes. We started 2024 with a little over $6 million of cash, and we raised a financing that got us net proceeds of about $11.6 million. And then we finished 2024 with a cash balance of a little more than $12 million. So that implies a cash burn of about $6 million during 2024. I will bring up that -- this is down significantly from 2023. We implemented a bunch of cash -- strict cash controls, and we brought the cash burn down from $10 million in 2023 to $6 million in 2024.

All right. Thanks, Chuck. There's another similar question here. What is the current cash burn? And what kind of runway does your current cash burn -- or current cash provide [indiscernible]

Yes, I'll take this one, too. Thanks, Chris. Yes, we disclosed that our 2024 cash balance was $12.1 million, and that will fund us through Q2 of 2026. This implies an average annualized burn rate of about $8 million. As we discussed, we have made significant investment in building our sales team and efforts. This causes our expenses to be higher in 2025 than they were in 2024, but expenses will be partially offset by the higher gross margin dollars as a result of our increasing revenue.

Okay. How our commercial activity is tracking so far in 2025? So good question. Obviously, we continue to build momentum. We see encouraging customer feedback, and also, obviously, as I mentioned already, consumable reorder activity has been very good. But we're making strides, I think, every day. If I think about a year ago, we had 1 sales person on the team. Now we have 6 people that are really focusing on it. And our sales team is really -- their learning curve has been great. I would say, Alan, while he had an amazing understanding of MRI, obviously, having a PhD in MRI from his background and worked with Philips for more than a decade. He's been coming up to speeds, particularly on the pulmonology side. And I think that -- I think after about 6 months, he was really fully up and running, which has been great for us, and his team has been doing great. And if I think about it, we have now looked at some of the recent statistics that we have. And I mentioned before, we're over -- probably even more than 70%, I would say, into those top academic medical centers that we've been really going after. And I would say that we've probably more than doubled from where we were about a year ago, and we continue to kind of track particular KPIs around what we're doing and having good discussions. As I mentioned earlier, there is 1 particular pediatric -- major pediatric hospital that we were trying to penetrate into over the last 18 months and talked to a number of players around there, but had a very substantive conversation just this week earlier. I was on the call as well, which was great. So we're making some good strides there. Can you talk about the current sales team structure and how they're executing the commercial plan? Well, I kind of already mentioned that already before. Obviously, we have 4 capital team, which is led by Alan, who is our VP of Global Sales. And I mentioned, again, obviously, he joined about 8 months ago. And then we have 1 particular person that's really focused on driving the utilization at our centers. And as I mentioned, I think the learning curve has been quite good and really understanding the technology and making a number of, obviously, substantive and meaningful presentations. Are you seeing meaningful uptake or expansion at early customer sites? Yes, I think these -- what was great was a couple of months ago, we were at the xenon consortium meeting at the end of January. That's always a nice place for presentations to be made, and a number of our customers there are presenting some of the early cases that they have and talking about how the technology was being used, and being used to help patient care, which is always a great thing to hear. And then we hear anecdotes from time to time. Last week, they had the Society of Pediatric Radiology meeting. And when I was talking to that gentleman earlier this week, he mentioned that there was a presentation that was being done on Xenon at the Society of Pediatric radiology meeting, which really kind of got him engaged to kind of follow up with us, which was great. So we're expanding usage all the time. We're talking to new people at these sites and things are really picking up, which is great. What are the KPIs that you're using to track commercial success beyond new installs? Obviously, we look at reorder frequency from the gas perspective, which is really important to us. And then obviously, we had a funnel and we're try to understand. We have certain metrics within our funnel and new people coming into the funnel and then people moving down the funnel and we're actively talking about those each week. Alan and myself and Chuck are meeting on a weekly basis to kind of go through those and understand deeper into the metrics and what we need to do and how we need to move particular sales along, which is great. Can you walk through how you are executing on your 5-pillar commercial strategy? I think I've talked about that quite a bit. Obviously, we announced about 18 months ago, our 5-pillar strategy. If I can't remember them off the top of my head. Obviously, the first 3 are really commercially focused with install -- increasing the installed base, driving the recurring revenue, obviously, from the consumable base, which is really driving utilization and really to bring the technology to the next level. And of course, supporting -- that also goes along with supporting the evidence. But I said the third pillar really is the reimbursement. We spent quite a bit recently and really looking and trying to work out new strategies for reimbursement as we go further. Obviously, strengthening the partnerships is really important. That's sort of the last pillar that we have. And I think the 1 before that is really increasing our total addressable market. So I think these strategies -- these 5 particular pillars, they remain sort of what we call like the North Star for us to be able to drive scalability and growth. That's what we're really focused on. So let's see. When do you expect to hear back from the FDA on lowering the minimum age? I think as I mentioned, we're hoping to hear back in the summertime. We have been, I would say, even up to today, I'll mention it before I got on the call today, have been having as far back as I would say, we submit it in July, started having dialogue with the FDA. I would say it was probably October and had some dialogue today with the FDA as well. So we're hoping we'll get a positive response by the summer. We expect it to be positive, will allow us to, as I mentioned earlier, to expand out to at least another 1 million potential candidates going from 12 down to 6. But I think really shows kind of the safety and the technology. I mentioned, I think, maybe in the RNS this morning, a few weeks ago, there was a published article, which was in JAMA, Journal of American Medicine, talking about sort of the heightened risk, again, about radiation CT scanning. We know with pediatric patients, they really try to limit the ionized radiation. This really were another benefit with our technology since it's being used in MRI. And I know the folks at Cincinnati Children's are really excited about getting the technology. Maybe a few more we have here. Are there plans to raise additional capital in the near term? Chuck, I'll take another swig of water and let you take this one.

Yes. Thank you. Yes, we are, of course, considering the appropriate time and structure to raise the next round of financing. We will need to raise more money before we start the gas exchange clinical trial. We are funded through Q2 of 2026, so we can be very deliberate about the timing of the next financing.

Okay. Maybe a couple more before we sign off. A question here about clinical trials, including gas exchange. I think I kind of hit upon that. Obviously, great news from our Type C meeting that we had in March, and I think we have a good understanding of where we're at there. We will probably sometime in the fall submit our clinical trial to get -- our final clinical trial to get feedback from the FDA. And as I mentioned, I think, before, probably later in the fall, we'll be starting that pharma trial. Quite excited about that getting up and getting started. Are you engaging internationally, particularly in the U.K.? I think I've obviously mentioned this while our focus does remain in the U.S., we are aware of strong international interest even from sites in the U.K. currently. We've been in discussion with some sites in the U.K., more from a research perspective, I would say right now. But we are obviously looking for international partners. And traditionally, we'll look at places like Japan, Hong Kong, China, India, the Middle East, maybe even Australia for particular places where we're going to focus in, but always looking for like-minded partners in that standpoint. Are you exploring anything beyond pulmonary imaging, for example, into oncology or cardiology? Well, our technologies, I showed you today, obviously, we're mainly focused in pulmonary. But if you think about our technology, the heart and lung were so intertwined as the blood is getting oxygenated in the lung and then sending back to the heart. So there are lots of kind of threads there together with technology, where it could be used. We call it on the pulmonary vascular, pulmonary cardiology side, how our technology can be used. And then from a cancer perspective, hopefully, give you a high-level view from a cancer perspective, but we think that we are talking to more and more cancer centers today, where our technology can be used. Obviously, we're in one of the top cancer centers in the United States, MD Anderson, and we're getting a lot of great feedback from them on where they see the technology where it's going to go. So we're pretty excited about that particular areas. And then let's see one last question here. You have 21 customers currently, how many target customers do have over 1 to 3 to 5 years in your estimates? How big is the total addressable market in the U.S. for adult and children's? I think I tried to give some answers to that before. We talked about the number which stands. The market is really huge. I mean if we just think about -- you saw the numbers on there for about 350,000 potential scans just cancer alone. Cancer is a huge market alone, if you're looking at the total addressable market just from -- that's probably well over $300 million in that range just from a cancer perspective. But if you're thinking about something like asthma and severe asthma, there's 25 million people with asthma. Some of these severe asthma people have are children as well. But you're talking about, if you're looking at just 10% -- up to about 10%, that's 2.5 million people that's quite large. When we look at the number of hospitals, we're really mainly targeting academic medical centers, of which there are upwards of over 400 of them in the United States. But obviously, our partnership with SimonMed is we're looking sort of beyond academic medical centers as well. But as we know and we've talked about in the past, we really believe if we get to about 50 or 60 centers, that would get us roughly to our breakeven point to where we need to get to. So with that, I'll just leave it, and I want to thank you all for joining the call. I'm sorry, we ran over a little bit today, but thank you very much for joining the call, and enjoy the rest of your day.

That's great. Christopher, Chuck, thank you once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide feedback and also that the Board can better understand your views and expectations. This will only take a few moments to complete and I'm sure will be greatly valued by the company. On behalf of the management team of Polarean Imaging plc, we would like to thank you for attending today's presentation, and good afternoon to you all.