Good morning, all, or good evening. Just letting you know that we've had a few technical issues this morning, unfortunately, with the early start. So we're currently forecasting that we'll be commencing at 8:10 A.M., so in six minutes time. So I apologize for any inconvenience and disruption, but we'll be back on in five minutes. So just to repeat, if you are just joining, we're just pushing the webinar back to 8:10 A.M. in five minutes, just due to some technical difficulties. Apologies again for the inconvenience. Morning again. Just letting you know that, if you have just joined, we'll be starting in approximately three to four minutes. Just had a few technical issues. Thanks for your patience. Steve, just checking that you're there and can hear us.
I am, and I can. Thanks.
Great. Perfect. Sorry again for the disruption, guys, but, good morning and welcome to Imricor's first half investor presentation, which will be released on the ASX imminently. From the company, we have the CEO and president, and founder, Steve Wedan; the company's CFO, Jonathon Gut; and the company's chief strategy officer, Nick Corkill. Steve, I might just hand it over to you shortly, but just a reminder that you can submit questions through the Q&A button in the Zoom, down the bottom of your screen, and we'll get to those towards the end of the presentation. Thanks, everyone, again, for your patience. Steve, I'll hand it over to you.
Thanks, Simon, and good morning, everyone. Welcome to Imricor's first half FY 2024 fiscal financial results briefing. I'm more excited, I gotta say today, about the next 12 months at Imricor than I have been at any point since I started this company. And the very reason I started Imricor was to do complex ablations like VT and the iCMR lab, and also to launch this technology across the U.S. And now, we're entering this exciting chapter with the strongest balance sheet in our company's history, and I'm grateful for the support of our new and existing shareholders, helping us deliver this important technology to the world.
Some of our institutional shareholders will have seen some of the slides I'm going, gonna show during the July capital raise meetings, but seeing as we also have some new investors on the line, please bear with me as I provide a quick summary of the problem Imricor's solving and how we're solving it, before we head into some of the highlights of the first half. Jon will then walk us through the financials, and we'll provide some comments on the near-term outlook, and the milestones ahead, and we'll allow plenty of time at the end for Q&A. So the heart is controlled by electrical signals, and when certain cells in the heart disturb these electrical signals, a person can develop what's called an arrhythmia or irregular heartbeat.
This has become a major problem globally, with over fifty million people estimated to have arrhythmias today, and the incidence is expected to double between 2019 and 2030. And there are a few ways to treat arrhythmias, and one that has continued to evolve and now has become first-line therapy is cardiac catheter ablation, which, if done correctly, can be curative. And this is the business that Imricor is in. With catheter ablation, a thin straw-like wire, called an ablation catheter, is guided into the heart, and once inside the heart, the physician will use the catheter to try to locate the area responsible for causing the irregular heartbeats, and then use the catheter to deliver ablative energy to the problem cells and destroy them, and thereby restoring normal heart rhythm for the patient.
These are minimally invasive procedures, meaning doctors can't directly see with their eyes what they are doing, like they can when they're performing, for instance, open heart surgery. So to try to help them understand where in the body the catheters are located, they traditionally have had to rely on X-ray guidance. As we all know, X-rays are great for imaging hard structures like bones, but when it comes to soft tissue like the heart, what you're trying to see is practically invisible. Nonetheless, this is how cardiac ablations have always been performed. Here's a picture of a cardiac ablation procedure in a conventional lab. You see a doctor standing next to a patient. The patient is lying on this table, and catheters are inserted in the patient's groin and fed up into the patient's heart.
The catheter or the doctor, I should say, is wearing lead garments to protect himself from X-rays. He's also standing behind a shield that protects himself from X-ray radiation. The X-ray tube, which is right here, is pointing at the patient's heart, and all of this is not great from a radiation standpoint, but that's not really the problem. The problem is what the doctor can see on the screens across is only X-ray imaging of the actual patient's heart, and this contributes to the low first-time success rates that occur for cardiac ablations. Now, on the other hand, MRI is the gold standard for soft tissue imaging, and MRI can offer exquisite detail in two or three dimensions of the heart.
So the thought is, if MRI can image the heart and X-rays can't, why not use MRI to guide cardiac ablations instead of X-ray? And the reality is that the desire was there, but it was an enormously challenging technical problem to make interventional devices for cardiac ablations that were safe to use with MRI. And that's where Imricor comes in. We have pioneered the development of all the tools doctors need to perform cardiac ablations guided by real-time MRI, and our devices all share the unique characteristic that they can be used in the MRI environment. So in a nutshell, we are combining our unique MRI-compatible cardiac ablation devices with the power of MRI imaging to deliver an entirely new experience for doctors who perform these ablations.
We're seeing what we always expected to see: higher first-time success rates, faster procedures, and lower cost to hospitals and insurers, all in an environment that is free of dangerous ionizing radiation exposure for the patients, the physicians, and the entire medical staff. This, in comparison to the other picture I showed you, is what a modern iCMR lab or interventional cardiac magnetic resonance lab looks like. You'll notice that from a doctor's perspective, it's very similar. This is by design, because humans don't really like change, and doctors, of course, are no different. We have made all the tools look, feel, and function just like the ones they're used to using in the X-ray lab.
The only difference is they don't need to wear the lead aprons that can weigh up to 12 kilograms, and now, instead of looking at X-ray images across from them, they're looking at MRI images in real time that clearly show the heart and the chambers and the catheter's location within the heart. It has taken many years of research, development, and partnership with some of the biggest players in the MRI space, including Siemens, Philips, and GE, and we are very fortunate to have a presence in some of the key cardiac hospitals in the world. The feedback from these opinion leaders that are using our technology has been very positive, but we're just getting started, and the most exciting chapter is right ahead.
Looking back now on the first half of 2024, we have several key achievements to highlight, all in line with our goals for the year. We sought for and received Saudi FDA approval for our capital equipment and consumables. We received CE Mark approval for our diagnostic catheter, our Vision-MR Diagnostic Catheter, and this, importantly, is the first catheter that went through the new European Union's medical device regulation process, which is a more stringent regulatory process. Amsterdam University Medical Centers recommenced their cases in April. The Dubrava University Hospital performed their first procedures and have started. That's our first site in Croatia. Meanwhile, the Cardiovascular Institute of South Paris, they commenced their first cases for our FDA trial. Lausanne University Hospital, or the CHUV, they completed their iCMR construction and installation.
Now, after the half year, after June thirtieth, Semmelweis University completed their installation of the iCMR equipment, and they'll be our first Hungarian site. Johns Hopkins in Baltimore performed their first iCMR guided procedures ever done here in the United States as part of our FDA trial. These are all significant milestones that fulfill our goals for the first half of the year and set ourselves up for an extraordinary second half and beyond. Now, before I go into what's ahead, I'll hand it over to Jon, who will run through the financials. Jon?
Thank you, Steve, and hello, everyone. As a reminder, all numbers are unaudited and in US dollars. As set out on slide nine, we generated total revenues of $408,000 for the half year, which is up 105% compared to the prior corresponding period. Much of the increase was attributable to equipment revenues, which were comprised of monthly rental fees and one third-party equipment sale in the first half of the year, while the prior corresponding period was comprised solely of monthly rental fees. For consumable product sales, revenue of approximately $154,000 was broadly in line with the prior corresponding period, but Q2 was up over 350% sequentially compared to Q1 of this year. Costs and non-R&D expenses decreased by $740,000 during the first half in comparison to the prior corresponding period.
This reduction was primarily due to a decrease in staffing costs, along with decreases in D&O insurance premiums and charges for new inventory reserves. R&D spend decreased by $126,000 during the first half in comparison to the prior corresponding period, primarily due to reductions in regulatory spending and staffing costs. These reductions in regulatory and staffing were partially offset by increases in product development costs. The fair value change recognized in the current period is primarily related to the convertible notes and warrants issued in 2022 and 2023. The net loss for the period was $6.9 million, a decrease of 26% from the prior corresponding period, which was driven by the fair value change recognized in the first half.
Adjusted for this item, our net loss for the period would have been $7.9 million, a decrease of 14% compared to the prior corresponding period's adjusted net loss of $9.1 million. Our balance sheet is provided on slide 18. Regarding significant changes in the balance sheet, the decrease in accounts payable reflects the payment of non-recurring invoices for third-party equipment inventory and regulatory compliance costs that were received in Q4 2023. The decrease in other current assets is primarily due to the monthly expense associated with our D&O insurance policy. This policy was prepaid in the previous year using funds obtained from a financing obligation, and the remaining balance was settled during this period. Contract liabilities represent deferred revenue, where Imricor has at least one future obligation to be met before the revenue can be recognized.
Most of the current portion relates to the sale of equipment that is pending final installation at the customer sites, and our teams are working closely with the hospitals to complete that work in 2024. The outstanding convertible notes at the end of the period are recorded at their estimated fair value of approximately $7.8 million, with the outstanding principal and accrued interest at June 30 totaling $5.7 million. The option warrant liabilities relate to securities issued as part of the financing activities completed in the second half of 2023, and are also recorded at their estimated fair value in accordance with US GAAP. Moving to cash flow on slide 19. Our operating cash outflow for the half year amounted to approximately $8 million, showing an increase of $1.8 million compared to the prior corresponding period.
This increase is primarily driven by the decrease in accounts payable balance at June thirty, which increased our cash outflows during the period. During the half year, we completed two equity placements and a rights offering, which resulted in gross proceeds of approximately $9.8 million. At the conclusion of the period, our cash balance stood at $1.5 million. However, it's important to highlight that subsequent to period end, we launched a capital raising initiative comprising a two tranche placement, which is further detailed on slide 20. On July eighteenth, we announced that we received firm commitments for a two tranche placement to raise AUD 35 million. The first tranche was completed on July 26 and resulted in gross proceeds of approximately $17 million.
The second tranche is subject to shareholder approval, which is being sought at a special meeting of stockholders scheduled for tomorrow, August 28, Minneapolis time. If tranche two is approved, it is expected to result in gross proceeds of approximately $6.3 million. That would bring the total gross proceeds from the raise to $23.3 million, and that, combined with our existing cash balance, is expected to fund our operations into 2026. I'll hand back to Steve now for the rest of the presentation.
Thanks, John. So let's look ahead at what's coming up. Our key priorities listed here have not changed. We are progressing our FDA trial, called the VISABL- AFL Trial. We are on the cusp of doing the world's first MRI-guided VT ablation as part of our VISABL- VT trial, and we're continuing to work with our European customers to get them started and increase procedure volumes, even as we add new customers and open new markets. Looking more closely at the FDA process, there are a lot of things that go into a clinical trial, even just to enroll the first patient. And the good news is that most of these activities and approvals have taken place across the four hospitals participating in the VISABL- AFL trial. ICPS, that's that Interventional...
Or I should say, Cardiovascular Institute of South Paris, and Johns Hopkins have already treated patients, and we have recently completed the installation at the CHUV in Lausanne, Switzerland. We're now on track to complete the trial, and pending review, receive FDA approval around mid-next year, even while the trial is enrolling. The FDA is already reviewing the devices used in the trial as part of a modular review process that minimizes the overall approval timeline. This slide highlights the clinical trial requirements from the FDA, and what's important to keep in mind is that we've already done a trial just like this for our European approvals, and the outcome showed 100% chronic success at three months. On top of that, these are the kinds of procedures that our European customers do regularly as part of their normal clinical practices.
Of course, we are excited to launch in the United States next year, not only because the market is so large, but also because reimbursement is up to four times higher than in some European countries, for instance, like Germany. Plus, we're launching in the U.S. with our NorthStar 3D Mapping System, as well as a price advantage over our competitors in X-ray based cath labs. This is a much better situation than our first launch into Europe back in late 2019, without Northstar and into a pandemic. Another huge priority for us, as I mentioned, is to demonstrate the world's first ventricular tachycardia, or VT, ablation, guided by real-time MRI with our technology. This will include groundbreaking maneuvers, such as the first transseptal puncture under MRI guidance, and the first use of real-time MRI to help doctors identify specifically where to ablate.
It's the kind of procedure that doctors had in mind for MRI guidance in the very beginning, and this is why we started the company. It'll not only be an enormous milestone for Imricor, but a huge step forward for the medical field. We've spent almost two decades inventing technology, designing devices and systems, and building partnerships with third parties, like MRI manufacturers and a company making MRI-compatible twelve-lead ECG system, and another company developing an MRI-compatible defibrillator, as well as many other companies, all so that everything, that everything would perform, everything needed to perform a complex ablation like VT would work together seamlessly, and it does. Following all of that, we have gained the approvals necessary to start a VT clinical trial, and we are preparing with the team at Amsterdam University Medical Center to commence the trial.
Right now, we're targeting early Q4, whereas before, we were targeting Q3, and the reason for the shift is that we decided during the European summer holiday break to submit to the ethics committee at Amsterdam some NorthStar updates that we think will be very useful for the VT procedures, as well as useful updates to the third-party defibrillator system I mentioned a second ago from our partner, MIPM, all for inclusion in the trial, and of course, any changes like these need to be re-reviewed by the ethics committee, and while that review will put off the first case a month or so, we think it's a good call in the overall context of the trial. Looking more closely at VT, these ablations are some of the most difficult ablations to do.
A VT ablation can take up to eight or nine hours and have really disappointing first-time success rates. However, with Imricor devices guided by MRI, we expect significant time savings and most importantly, higher first-time success rates, because MRI allows doctors to see where they need to ablate and then check their work once they do. In addition, MRI offers the ability to eliminate several devices from the procedure, saving the hospital significant money for each procedure. Now, it's only been a few weeks since we last updated this slide, so not much has changed. It is, however, great to report that both Lausanne University Hospital, CHUV, and Semmelweis University, Heart Center, have both recently completed installation and will be getting started doing procedures very shortly.
We're also actively recruiting additional sales staff to help mobilize the pipeline and to prepare the demand uplift that we expect following the first VT cases. I like this slide because it's a snapshot of the entire ecosystem that had to be developed from scratch just to bring this new field into existence. It's something I'm incredibly proud of, and now, as we start to add more hospitals and then have more indications approved, noting that all of the consumable revenue flows back to Imricor, well, this is what makes the eighteen-year journey worth the effort. In the meantime, we have several important milestones to deliver in the short, medium, and long term, and I look forward to announcing progress on each of these as we move forward through the rest of the year. With that, I'd like to open it up to questions.
Great. Thanks, Steve. The first question is from Sarah Mann at Moelis Australia. Sarah, please go ahead.
Morning, Steve. Hope you can hear me okay?
I sure can.
Thank you. So I just wanted to ask about the U.S. flutter trial. So you've clearly got a couple of sites that are now doing procedures. Johns Hopkins in the U.S. as well has commenced. How many patients have been treated so far?
So I can't actually talk about the trial progress, Sarah. It's a good question, and I appreciate why you'd ask it. But the FDA doesn't like us talking about the trial, so if we do, they can actually shut the trial down. So you won't hear from-
Sure.
Oh, I'm sorry?
Yep. No worries. Understood.
Okay.
Yeah.
Okay. Okay.
Got it.
But I will let you know as sites start, but unfortunately, we can't talk about anything else.
Sure. That makes sense. All right. And then I guess the other piece is, you know, clearly starting the U.S. trial is an important milestone. Like, how has that flowed through to some of your current sites, I guess getting increasingly interested in starting to perform more cases? Like, clearly, you've added a few more sites, you know, over the last few months. Just wondering if you could give us a rough feel for kind of how pace, volumes are tracking so far this year, and how we should think about, I guess, ramp up as, you know, the VT trial commences and the U.S. trial, you know, also progresses.
Yeah, the U.S. trial actually is having exactly the effect that we would hope it would have. And that is that we're getting interest now from U.S. hospitals for planning and preparing to establish their own iCMR labs ahead of even approval. And that's exactly what happened in Europe, and we're seeing the same thing happen now. So that's the big effect that the FDA trial is having. In a broader context, the VT trial, well, that signals to everybody across the entire planet that this is not a technology that's stopping at atrial flutter, but it is doing... It's fulfilling its promise of complex ablations like ventricular tachycardia and atrial fibrillation. And that's an important message that will bolster every doctor who wants to do these procedures.
It bolsters their argument or their presentation to their hospital for why they need to adopt this technology. It is, we believe, going to change the standard of care. It'll be the best way to do ventricular tachycardia ablations, and we believe also it'll be the best way to do atrial fibrillation ablations with RF ablation or PFA or anything that doctors wanna do. What we are doing here is not about how we deliver the therapy, it's about being able to deliver that therapy in the context of a lab that lets you see what you're actually doing, and as we move forward with the VT trial, that's gonna let everybody know that we're back on track following the pandemic, and everything is moving forward to fulfill the promise that MRI guidance has always presented.
Got it. So it's more about, I guess, bringing in new potential sites, like that's where the interest is coming from, rather than kind of deriving case volumes at existing hospitals as physicians kind of prepare for eventually moving to VT. Is that fair?
I would say that the, you know, the hospitals that we are doing procedures at, where they're active, they're doing about as many procedures as they possibly can in the context of their hospital. So, having atrial flutter patients and having access to their MRI. So, it's all that is happening the way we want it. What we were saying we wanted to do this year was get consistent procedure volume, not the starts and stops that we had through COVID and even in the couple of years following COVID, but consistent procedure volume at each of our sites, and then growing the number of sites that are active so that we see that consistent growth as we move forward. That's exactly what's happening.
Makes sense. Excellent. Thank you very much. Appreciate your time.
You bet. Thank you.
Thank you, Sarah. Our next question is from Scott Power at Morgans. Hi, Steve. Can you expand on the sales progress in the Middle East?
Yeah. So I just talked with Greg Engelhardt, our Vice President of Global Sales, this morning about how the Middle East process is going, and it's going according to plan. So everything's right on track. It's... Yeah, I don't know what else to say, except that it's happening just the way we thought it would, and the way that we talked about earlier in the year.
Perfect. Thanks, Steve. That concludes the Q&A segment. I might just hand it back to you for closing remarks.
All right. Well, thanks, and thank you to everyone for joining us today. You know, we're making rapid progress towards FDA approval. We're on the verge of doing this first VT case, which we expect, like I mentioned a second ago, will accelerate the adoption of new hospitals and drive increased revenue. We have so much to look forward to in 2024, and we're off to a fantastic start. So I'm really excited to share these updates with you as the year progresses, and for now, I'd wish you a good day. Thank you.
Thanks, Steve. Thanks all for attending and sorry for the delay.
Goodbye.