Edap Tms SA (EDAP) 2021 Q1 法說會逐字稿

Greetings, and welcome to the EDAP TMS first-quarter 2021 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Jeremy Feffer with Investor Relation. Thank you, please go ahead.

Thank you, Donna. Good morning and thank you for joining us for the EDAP TMS first-quarter 2021 financial and operating result conference call. On today's call, we will hear from Marc Oczachowski, Chief Executive Officer and Chairman of the Board; and Francois Dietsch, Chief Financial Officer.

Before we begin, I would like to remind everyone that management's remarks today may contain forward-looking statements, which include statements regarding the company's growth and expansion plan. Such statements are based on management's current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in such forward-looking statements. Factors that may cause such a difference include, but are not limited to, those described in the company's filings with the Securities and Exchange Commission.

I would now like to turn the call over to EDAP's Chairman and Chief Executive Officer, Marc Oczachowski. Marc?

Thank you, Jeremy, and good morning, everyone. I will start by providing a brief operational update, and then turn the call over to Francois Dietsch to review our financial performance.

First, let me start by saying that we believe the first quarter of 2021 and subsequent period marks an important point in the growth trajectory of our business. Without question, the successful commercialization of any novel technology must be supported by prudent and timely investments.

In April, we had the opportunity to raise substantial capital that will enable us to fully support our ongoing US Focal One commercialization effort, while also advancing a key clinical program in endometriosis. This capital raise was strategically important for several reasons.

First and foremost, our strengthened balance sheet now provides us the additional resources to fully engage multiple channels across the US healthcare market. In addition to investing further in market access and reimbursement, which I will discuss in a moment, these additional funds will allow us to attract top-tier talent with vast expertise in driving adoption of innovative technologies, such as Focal One.

In addition, we are building out our US clinical, marketing, and sales organization so that we are well positioned in this most important market. With HIFU gaining broader acceptance as an effective and less invasive paradigm for the management of prostate cancer relative to surgical options, we will firmly establish ourselves as the leader and clearly at the right place at the right time.

To that end, we will continue to invest in our US infrastructure. And these activities will be complemented by the many top-tier hospitals that have already adopted Focal One, that are serving as important reference accounts for our company. Some of these include Mount Sinai, Cleveland Clinic, Ochsner Medical Center, UCSF, and many others. And our pipeline continues to grow, notwithstanding restrictions on some sales and outreach activities resulting from the pandemic.

While our strategic marketing efforts will clearly involve engaging leading KOLs, it's equally important that Focal One reaches a wide breadth of urology medical practices. And the added resources provided from this funding will help us maximize the opportunity to develop these important relationships.

Secondly, our recent financing was also a clear sign of investor confidence that our HIFU technology represents an important advancement in the management of prostate cancer. As we all know, clinical data generated from well-controlled trials, ultimately drive medical decision making over time. Without question, the capital we raised during the first quarter clearly reflects a recognition by the investment community that Focal One is becoming an important new treatment option for patients battling prostate cancer.

Finally, I would also like to add that we truly appreciate the high-quality healthcare-focused investors that participated in this offering. It is gratifying to know that after spending so much time conducting due diligence on our technology and studying the competitive dynamic of our end market, this firm has placed their capital with us based upon the shared vision of bringing an important new innovation to the market. This financing also resulted in expanding research coverage, which we believe will help raise the awareness of our company and the significant unmet need that we are addressing.

Of course, launching a new medical technology in the US healthcare market brings several challenges, not least of which is navigating a complex reimbursement third-payer landscape. Changing the longstanding medical practices is never easy. And while having a superior technology, sufficient capital, and a sizable marketing apparatus are all essential elements to a successful product launch. We also recognize that building productive relationships with private insurers and government entities like CMS are critical to establishing Focal One as an accepted mainstream procedure.

In early March, we announced increased partnerships with two of the leading reimbursement consultancies: MTP and Argenta Advisors. These partnerships are off to a strong start, and we anticipate positive momentum on the reimbursement and market access front across key hospital networks and physician practices throughout the remainder of the year and beyond.

Securing effective reimbursement level and achieving the broadest possible patient coverage for Focal One remain top priorities for our company. And these two strategic partnerships coupled with the previously announced establishment of the Category 1 CPT code and reimbursement for physicians, performing ablation of malignant prostrate tissue with HIFU in the US will help us drive further adoption and growth across the US From a sales perspective, our combined Focal One executive offering continues to resonate with healthcare institution as the only end-to-end urology suite available on the market today.

Now I will provide a brief update on our endometriosis program. As noted during our last conference call, this Phase 2 study will enroll a total of 38 women across 5 major hospitals in France, who will be assessed over a six-month follow-up period. Investigators will evaluate the safety and efficacy of HIFU for this pathology.

At the end of April, we opened a second trial site (inaudible) France that has already successfully treated two patients. Across both trial sites, we have now treated a total of 19 patients. Enrollment is tracking closely with our internal expectations as we are pleased to be able to execute this study according to our original timeline.

We believe the treatment of endometriosis could be greatly improved with application of placing basic processes. And the use of HIFU technology could offer an important, minimally invasive treatment option for these patients. We look forward to updating you on this important program throughout the year.

Francois will cover the financials in a moment but let me provide a few highlights from the first quarter. I am happy to report that we generated first-quarter total revenue of EUR10.3 million or $12.4 million, which represents a strong growth of 35.4% year over year and a new Q1 record revenue for the company.

We expanded our gross margin to 42.4%, an increase of 220 basis points as compared to 40.2% in the first quarter of 2020. The revenue growth and margin expansion led us to achieve a profitable quarter for the company, both on the operating and net income basis.

Our HIFU revenues were down slightly versus the fourth quarter of 2020. This was a difficult comparison as we had a particularly strong December signing key accounts, a few of which we outlined in the press release on December 30. We also experienced some softness in HIFU treatment-driven revenues in Q1, particularly in Europe where the pandemic has hit especially hard. However, it is important to note that there is a natural lag between treatment-driven revenues and cases performed as hospitals buy kits in bulk and use them over time.

In the US, particularly, we are pleased by the continued growth in the number of treatments performed in Q1. Most of our key academic centers have increased their HIFU treatment numbers as compared to Q1 of last year and also sequentially as compared to Q4 of 2020. This is in part driven by the adoption of the Category 1 CPT code since its official implementation in January of 2021, as well as the broadening awareness of HIFU as an important addition to the urologist's armamentarium.

Turning to our very strong cash position. We ended the first quarter with cash and cash equivalents of EUR4.4 million (sic - see press release, "EUR24.4 million") or USD 28.6 million as compared to EUR24.7 million or $30.2 million as of December 31, 2020.

As noted earlier, subsequent to the end of the first quarter, we completed an underwritten public offering of American Depository Shares that yielded gross proceeds of approximately $28 million. We have a strong balance sheet with which to advance our accelerated growth plan in the US and elsewhere.

And now our CFO, Francois Dietsch, will provide some details of our financial results. Francois?

Thank you, Marc, and good morning, everyone. Please note that all figures, except for percentages, are in euros. For conversion purposes, our average euro-dollar exchange rate was [1.1990] for the first quarter of 2021.

Total revenue for the first quarter was EUR10.3 million, an increase of 35.4% versus EUR7.6 million in Q1 2020, reaching a new record level for first quarter. Total revenue in the HIFU business for the first quarter of 2021 was EUR1.8 million, a decline of 6.2% compared to EUR1.9 million for the first quarter of 2020. The modest decline is driven primarily to the effect of the COVID pandemic, which continues to add up really, in fact for heavier volumes, also we are not noticing a positive trend.

Total revenue in the LITHO business for the first quarter of 2021 was EUR2.9 million, roughly flat compared to EUR2.9 million for the first quarter of 2020. The total revenue in the distribution business for the first quarter of 2021 was EUR5.6 million, a 102.5% increase compared to EUR2.8 million for the first quarter of 2020. Thanks to the Exact Imaging and major sales development.

Gross profit for the first quarter of 2021 was EUR4.4 million compared to EUR3.1 million for the year ago period. Gross profit margin on net sales was 42.4% in the first quarter of 2021 compared to 40.2% in the year ago period. The increase in gross profit year over year was due to the higher sales effect on fixed costs.

Operating expenses were EUR4.1 million for the first quarter of 2021, compared to EUR4.5 million for the same period in 2020. Operating profit for the first quarter of 2021 was EUR0.2 million compared to an operating loss of EUR1.5 million in the first quarter of 2020.

Net income for the first quarter of 2021 was EUR0.8 million or EUR0.03 per diluted share, taking into account the EUR0.2 million of financial income linked to the US Paycheck Protection Program for [units], as compared to a net loss of EUR1.3 million or EUR0.04 per diluted share in the year ago period. We ended the first quarter with cash and cash equivalents of EUR24.4 million or USD28.6 million as compared to EUR24.7 million or USD30.2 million at the end of December 2020.

Subsequent to the end of the first quarter, we completed an underwritten public offering of American Depository Shares that yielded net proceeds of approximately USD25.6 million. As a result, our pro forma cash currently stands at approximately USD54 million. Our pro forma ADS share count stands at approximately 33.4 million shares, including of 4.15 million ADS issued pursuant to the underwriting offering.

I will now turn the call back to Marc.

Thank you, Francois. Before turning the call back to the operator, to start our question-and-answer session, I would like to impress upon our investors that we now have in place the essential ingredients necessary for an accelerating commercial ramp, a clinical proven technology leading to better patient outcomes, a clear and consistent messaging into our distribution channel, a strengthened balance sheet capable of supporting our future growth and key strategic partners who are helping us secure attractive reimbursement for Focal One procedures.

Despite continued challenges from the pandemic, 2021 promises to be a year in which our company transforms the treatment of prostate cancer. And longer term, we remain extremely confident in the potential of HIFU technology to address multiple therapeutic opportunities.

We will now open the call to your questions. Operator?

(Operator Instructions)

Jason Bednar, Piper Sandler.

Hello. I hope everyone's well.

My first question, Marc, you mentioned growing demand with HIFU here in the quarter. Has the uptick in utilization continued thus far into the second quarter? And then can you talk about how new Focal One conversations have been going here just the last few months?

Hi, Jason. Well, thank you for joining.

Yeah. What I said is that the trend and the number of cases performed in the US during Q1 has shown a significant growth as compared to last year Q1 as well Q4. So that's -- again, that shows some momentum in the adoption and in the recruitment of patients in different machines that are, again, that have been bought by academic centers and many KOL sites.

I didn't get the other part of the question, sorry.

It was just on what -- just how new Focal One conversations have been going here just the last few months, basically what the funnel looks like from a demand perspective?

Yeah. And as I said, I mean we continue to grow our pipeline of projects. And again, I mean we continue to get one more leads in our pipeline. So it's doing pretty well.

Okay. Great. And then maybe a two-part question on the investments that you're planning. Are you willing to talk about the pace and sizing of this deployment over the coming quarters? And then understanding you still need to make the investments; can you talk about at any timeline when we should expect to see returns from the investments and account for this in our models?

Can you -- sorry, Jason, maybe the line is not too good, but I didn't get the first part of your question. Can you repeat that?

Yeah. I was just wondering if you could talk about the pace and sizing, how quick and how much we'll see as far as the investments go. Any kind of just guidance or color there for the rest of the year.

And then the second part of the question was kind of similar on the pace and sizing of when the returns might be showing up, whether that's -- how much of a lag should we be building in? And I understand this won't come immediately, should we be expecting a three- to six-month lag, six- to 12-month lag? And when these -- again, the fruits of the investments start showing up?

So -- well, actually, as I said a few times, it's -- and still we are at the beginning of the year, the beginning of the budget cycle, so -- and within the context of the pandemic, still it's difficult to have a very clear visibility on the advancement of the different projects and lead that we have. So it's -- it will be difficult for me to clearly answer your first part of the question.

Now for the second part, again, it's -- we work on the building coverage and market acceptance. And as we discussed several times, this is something that takes a lot of time, though we expect to achieve milestones and increase covered lives at a significant pace. And as this grows, definitely the return on investment will start building, so the one is linked to the other. And again, we will put in action, in execution, all of our accelerated plans and actions in order to get into that as quick as possible and, therefore, generate returns as fast as possible as well.

Okay. All right. Understood.

And then maybe just one last one for me. Marc, you mentioned some key wins on the reimbursement front. Could you expand on what these wins were and maybe, again, expectations on what further progress there might be on the reimbursement front from a coverage standpoint here for the remainder of '21?

It's all about coverage. Again, as I said, we got the CPT code implemented at the beginning of the year.

Now we need to build company coverage. We need to recruit and need to get more covered lives. So this is the goal, and these are the milestones. So again, the idea is to get as much max for the CMS part as possible, having automatic coverage and positive LCDs issued.

And on the other hand, the idea is to get private payers starting to get into their policy the HIFU reimbursement. So this is the plan and these are the mixes.

All right. Understood. Thanks so much.

Thanks, Jason.

Andrew D'Silva of B. Riley.

Hey, good morning. Thanks for taking my question.

Just a few quick ones for me to start. Could you start by just letting us know how many Focal One, Ablatherm, ESWL, and ExactVu systems were placed in the quarter? And while that info is being pulled, I'm just kind of curious why ExactVu seems to be moving at a much stronger pace than even the HIFU segment?

Can you just talk about maybe what's driving that relative to even Focal One, which had its own reimbursement and is really a very, very complementary offering and both have capital equipment needs? So I was just very surprised by the product mix.

Okay. Hello, Andrew, thanks for the question.

So it's a long question. So may I ask you for -- to repeat the second part of the question. But as far as equipment sold, we got six lithotripter, five ExactVu machines, and we had no HIFU devices in the first quarter as we -- as the same as last year. And the rest of the question was with what?

Just really trying to understand why ExactVu is progressing so quickly even relative to Focal One, particularly both -- since they're both capital equipment items and very complementary to one another. So I've just been very surprised by the overperformance of ExactVu, particularly in regard to HIFU.

Yes. Actually, it's a good question.

Though the capital investment distribution is significantly different in purchasing a Focal One or an ExactVu. It's like more than 3 times more expensive to buy a Focal One. So it's very different.

The indication is different as well. I mean the ExactVu is used to perform diagnostic of prostate cancer when Focal One is for the treatment. So these are two different things.

Just to give you an idea, in terms of number of equipments or markets -- and again, the price is different, it's significantly higher on Focal One. There are, in the US, as I shared on a frequency basis, there are about 1 million biopsies performed every year on prostate. And typically, ExactVu addresses that market of diagnostics.

When on prostate cancer, newly diagnosed cases, it's about 250,000 cases in the US every year. So it's a different type of market. And the volume of equipment sold will be different between an ultrasound diagnostic tool and a surgical minimally invasive equipment tool. Even though, as you said, they are very complementary, but usually have much more diagnostic equipment in the field than treating equipment.

That makes sense. And as it relates to Ablatherm versus Focal One, is there a strategy with that system? And the reason I ask is I noticed that last or during the fourth quarter, you actually placed a couple of systems. So I wasn't sure if we should be thinking about Ablatherm in any sort of material way going forward or if those are more one-off situations?

Yeah. No, that's more punctual. And the important thing as well is that we don't manufacture Ablatherm anymore. And the Ablatherm machine we sold are usually secondhand or refurbished equipment, and in the case of the equipment we sold at the end of last year that were secondhand machine.

We did, in the past, some trading program for our Ablatherm users in the US to upgrade to a Focal One. So they were buying Focal One and we were traded in the Ablatherm. So for those that want to invest little money in getting into HIFU to secondhand Ablatherm are good opportunities. So it's really a punctual and opportunistic business.

Okay. Okay, perfect. And last quarter, you referenced your partnership with MTP and Argenta. I was just curious how things were progressing with commercial reimbursement and maybe let us know what initiatives we should be looking for next out of those partnerships?

Yes, we started. And actually, we started -- we announced the increased partnership with those company's last time. But we started to work with them before, that's how we got the C-code and then the CPT code. That's a long relationship that we've had.

We increased the relationship now because we want to focus on coverage. And most of the initiative is to really get started on speaking with private players. And we actually already started to do some meeting with the medical directors of private insurances. So we work on that.

We also build our hotline to give support to our existing users so that they can claim the right way and properly we support their cases and get this claim done and covered. So it's all about this kind of initiative.

And as I said as well, as we now have completed the financing, we will increase further the action plan in helping our sites in lobbying the payers and in building more coverage with these partners, but also with the key people that we're going to get into our team.

Okay. But nothing should really materially deviate beyond what we've previously talked about as far as the commercial co-efficient multiplier being 1.5 to 3 times higher than that of Medicare, correct?

Yeah. We're not there yet, but that's -- ultimately, when they decide to cover, they will use their usual multiples that can be viable from one to the other.

Okay. And then last question, just kind of getting a little more granular on what kind of investments we should be expecting from a US commercialization standpoint now that you've got the recent capital infusion. Could you maybe just discuss where you are today with your sales force and support of reps that are focused on US sales, and maybe where you hope to be by the end of the year from a sales rep standpoint?

And then if someone could just talk around what we should kind of think about OpEx looking like for the year, that would be helpful. Obviously, the first quarter was very well managed, particularly relative to the fourth quarter of last year. So any guidance or assistance there would be very useful. Thank you very much.

Yeah. No, thanks for the question. Though -- I mean, I don't have yet the way and the name of the guys, but we're talking with a number of people.

And again, the idea, like I said today, and I said that before as well, we really want to build and increase the company. We really want to bring and strengthen our clinical marketing and sales team. It's not only about salespeople, it's also about, again, helping building the coverage by more marketing initiatives, by more clinical initiatives, gathering the clinical data from our top-tier academic centers that are already using the technology.

So we will definitely, before the end of the year, grow significantly the company. And again, not only in the sales force that will increase, but also in the marketing and clinical department so that we have more actions and initiatives on that side as well.

Okay. But just say, today, do you expect it to be like 2 or 3 times bigger as far as the size of the sales force and marketing team and clinical teams domestically in aggregate?

Yeah. That will be -- again, as much as possible, now we have all the ingredients, like I said, to move forward and deliver and execute. Now it's all a question as well of opportunity.

And again, the idea is not just to double or triple the sales force. The idea is to get the best guys. So I don't want to double my sales force with people that will not sell. I want to get the best salespeople, and that's what we are building.

So we're looking for speed, but we're also looking for quality. So the idea is a good compromise. And again, that's the difference between theoretical. So I can tell you we're going to double it in theory. But if I can -- if I can triple it because I find the right guy, I will do. If I can just increase by 50% because I only find the right guys 50% of increase, that's what I will do.

So it's a compromise -- that realize, it's a compromise between quality and speed. And again, our idea is to go the fastest way possible with the best quality of people and partners involved in our program so that we can achieve it successfully as quick as possible.

A very good point. Thank you very much, and the best luck.

Thanks, Andy.

Really looking forward watch your progress.

Frank Takkinen, Lake Street Capital Markets.

Hey, thanks for taking my questions. Wanted to start with ExactVu. Marc, could you update us on, roughly speaking, the overlap of sites with both ExactVu and Focal One? And then I wanted to kind of target the sites that do have an ExactVu installed, and how you view that opportunity to sell Focal One into?

Yeah. That's a good question.

And again, the complement between the two technologies and devices is evident on the synergies as well. Again, as one is very dedicated to precisely and on a targeted way diagnose where prostate cancer is in the prostate, so that's ExactVu.

And then once you have that level of capability of diagnosing prostate cancer, then you want certainly to do some targeted and focal treatment, and that's where Focal One fits perfectly ExactVu. So again, that's really the way it has a good complement. And that's really the way they work perfectly together.

On your -- on the second part of your question, it is true that the pipeline of projects or the installed base of ExactVu, which is about 100 systems around the world now -- certainly, for those that don't have a Focal One yet, the logical next step when you're able to do targeted diagnostics is to be able to do focal treatment or targeted treatment. So these are extremely good candidate to initiate a Focal One project. So that's -- I mean, indeed, all those existing ExactVu users are extremely good candidate and target for building projects in Focal One in generating sales.

Perfect, thank you. And then next on endometriosis, I think this is kind of a little bit of a hidden gem here given all the attention given to HIFU for prostate cancer. Could you just update us? I heard the comments about the new site enrolling a couple of patients, but could you just update us on expected milestones over the next 12 to 24 months?

And then if I remember correctly, I believe the Focal One is already -- the regulatory landscape for Focal One already has endometriosis in place. So you don't have to go through another regulatory process, rather, it's more about generating data to support the use of the system and indication. Am I thinking about that correctly?

Not really. Not exactly.

Focal One is approved for prostate tissue ablation or prostate cancer treatment, depending on where you are in the world. But the device is the exact same in the investigation for the endometriosis program.

Now the study that we're doing, the Phase 2 study, and probably a Phase 3 study that we'll conduct after this one, will be a key in the regulatory path towards CE marking and then FDA clearance. So it's not yet approved or cleared for endometriosis treatment.

And as far as the milestones, and the regulatory aspect is one of the milestones ultimately. The milestones are to conclude recruitment on the Phase 2 study within the year. And hopefully, that will be also based on how the pandemic will impact on us.

But so far, we are doing very well. As I said, we've done already half of the treatment. We've done 19 out of 38, and that goes pretty well. We opened the second site; we will soon open other sites.

As a reminder, we have five centers that are involved in the multi-centric study Phase 2. So the idea is to -- within this year, is to conclude the recruitment and treatment of patients. Then we have a follow-up of six months, so that gives you an idea of the next milestone, which is the end of the study.

And then based on that, the idea would be to discuss with healthcare authorities to see if the data gathered during the Phase 2 studies are enough to get into a regulatory discussion or shall we need to get started on Phase 3, which will start in any case, just like you said, to get some clinical data. So this is a little bit the program and the different milestones in front of us.

Got it. That makes sense. And then last one for me. Given the higher mix of distribution in the quarter and the expectation of HIFU trending back up through the end of the year, is it safe to assume we should expect gross margins to trend upward through the end of fiscal year '21?

It's -- yes, it's a good assumption looking at it this way. And as you know, HIFU contributes very positively to increasing the gross margin. So that's what we see.

Okay, thanks for taking all my questions.

Thanks, Frank.

Swayampakula Ramakanth, H.C. Wainwright.

Thank you. This is RK. Good afternoon, Marc.

Hello, RK.

Ablatherm and Focal One have been with some of the Tier-1 organizations for quite a long time. Some of them probably starting from when you had the clinical program going on with some of these folks. At this point, do you think that you have exhausted all the leads within the Tier-1 institutions?

And what learnings have you gotten from these -- from the experience from these folks that you can take to the next level. Now that you have the CPT code, probably, the discussions are a little bit easier to get to the Tier-2 institutions.

Well, thank you, RK, for the question. The -- no, we have not yet covered all the Tier-1 institutions. As we discussed several times, there are 5,000 hospitals in the US, and about 1,500 to 1,700 of them are having a urology department dealing with prostate.

The Tier-1 hospitals are about 10% of those. So it's about 150 to 170 hospitals in the country that are considered academic centers or reference centers for the management of prostate cancer. As you know, we have about 15 Focal One, and we had a few additional Ablatherms.

So we're far from saturating the Tier 1, and we have a lot of potential in front of us. And most of our current leads in the pipeline that, as I said, is continuing to increase, are within that category of Tier-1 hospitals. So we still have a lot to extend in there.

And again, the more covered lives will have, the easier it will be to convert those leads into sales. And as you say, ultimately, when we expand further the coverage and the adoption of the technology, then we start including Tier-2 hospitals. So we still have a long way and great potential in front of us.

Great. And as you stated, it looks like the coverage is becoming the key now in terms of trying to increase adoption. So towards that end, obviously, you have picked up -- you have been working with these consultancies for a while now. So in this -- in the road to getting complete reimbursement or more of the reimbursement wins, what are the potential next steps now that you have the CPT code?

And also, just trying to figure out, does that help you to help some of these centers to increase the procedure rate? Because last time, we were talking there were -- some of these folks were still trying to figure out how to use the code and how to get through the paperwork. How far are they into that? And just highlight to us a little bit about what are the ways that you, as an organization, are trying to help these folks increase their procedure volume now?

So basically, that's a little bit what I said before today. First, we need to -- the next steps are getting more covered lives, and that's -- we're getting LCDs from the MACs on CMS Medicare patient side, and that's by getting more and more private insurance including HIFU in their policies as a treatment in their policies. So these are the next milestones, to recruit these payers and have them covering the technology on another intermediary basis.

What we are doing, and like we said, it's -- when you have a new technology, when you have a new code, it's always a challenge, and it always needs help to support the medication even on big reference centers to have them claiming properly. And that's what I just explained a few minutes ago in explaining some of the actions that we are now putting on place and increasing in terms of support. And best part of it is the hotline that we've created to support all of our users in getting their claims done the proper way and the fast way so that they can get coverage, they can get reimbursement.

So these are all the initiatives. And again, that's part of what I said before.

Now that we have concluded that financing, we will increase further the clinical marketing and self-initiative, so that we will generate more leads, more sales. But we will also help our users and -- current and future, to increase the number of treatment, the number of procedures performed on our equipment. It's all about volume here.

Thanks for taking all my questions.

Thank you, RK.

Thank you. At this time, I would like to turn the floor back over to management for any additional or closing comments.

Thank you, operator, and thank you, everyone, for joining us today. We will update you on all of our programs and initiatives as we move forward, and we'll be happy to have you on the call for the second-quarter earnings call in summer. Thank you very much. You all have a good day.

Ladies and gentlemen, thank you for your participation. You may disconnect your lines at this time and have a wonderful day.