Sess`ion at the back end of the presentation. If you do have any questions, please use the question and answer function at the bottom of the Zoom platform. We will be taking questions throughout and answering them throughout the presentation as they come. As a reminder, we will be engaging with additional brokers and one-on-one sessions, so if you do have any follow-up, please reach out to the investors at Pitcher Partners, @pitcher.com email address, to schedule any additional follow-up if you request. But right now, I'll pass over to Managing Director and CEO, Brent Owens, to have the presentation. Thank you.
Thank you, Tim. Welcome, everybody, and thank you for joining. Just moving across to the opening slide. So as Tim mentioned, joining me on the call today is Simon Martin, Chief Financial Officer, and I will say we have had quite a few engagements recently because of announcements in the quarterly. But beyond that, we've also taken on a lot of the feedback in one-on-one sessions and discussions with investors, and we've tried to incorporate that feedback into this presentation and moving forward to ensure that we're presenting the information that you're all after to. So we do appreciate and value the constructive feedback that gets sent across as well.
But just taking it back a step, if we look at, yeah, over the half, what we presented at the end of last year's results, there were two core areas that we really wanted to focus on for this financial year. First and foremost, market development, generating value and commercialization. We said that we're going to do that, and we have done that. We've captured a first commercial contract in the animal reproductive space with a global leader, which I'll expand on shortly. We've been progressing the human health market development, primarily in North America, but also completing the existing collaborations that we had on foot, being with the US Army Institute of Surgical Research, which again, I'll expand on shortly, and building the team, so aggressively scaling the US operation and the team development across customer facing, sales, and marketing.
So we're really happy with the progress in that space. We've had strong market validation with revenue-generating contracts. And then second to that was the technology development. In order to be able to execute on these contracts and to show the value, we need technology in market. During the term, we have completed the first release of our first—our second generation device, which we call the Guardian, as well as the software. We have commenced the medical device pathway for that device as well, which we're expecting in the second half, and we've started to build out our supply chain and manufacturing capability, which is very much on track. And just taking that down a level, I guess since the IPO, again, it was very similar categories, and we have delivered on what we said that we're going to do.
With that, the first commercial agreement in animal reproduction was executed recently with a global leader in the space, being IMV Technologies. That is exactly the strategy that we wanted to deploy, and we did share that that would be the first vertical that we would commercialize as part of the company's commercialization strategy, which gives us immediate revenue. So you'll start to see that flowing through the P&L moving forward as well. In the market development in the blood space in North America, you may recall that we did complete the phase I studies with the U.S. Army based in Texas last year with outstanding results. We have commenced phase II of that study, which is ongoing as we speak, which we're expecting early readouts in this quarter as well. So very immediate milestones coming on the back of that progress.
And since then, the results from phase I, we have seen strong commercial interest emerging in the space, both in the defense setting, but also across civilian as well, and I will expand on that in a moment. Further to that, building out the U.S. operation. Again, we have built our first generation technology for market, the RUO release of the Guardian device. We have sent one to North America, which is now on foot in the U.S.A., ready for sales and marketing purposes that have upcoming activities over the next couple of months. We've expanded the pipeline, so a lot of interest.
We've gone through the phases of brand awareness that, starting to create a presence in the United States, particularly in cell and gene therapy, and that pipeline is building strongly, and we're building out our capability in anticipation for that commercial demand as well. On the technology development, again, we have built the technology, the hardware and the software on time and on budget, with the first release now complete, with the second release coming, later in this calendar year, which is the FDA registration. What that does is that opens up a whole new market for us. A big market exists now, and then another market opens up upon that FDA registration. Building out U.S. manufacturing, obviously, that's an important piece for us.
We've got our great development partners in Planet Innovation, and now building out the manufacturing capability in North America is something that we're currently doing, which we think that that's gonna ramp up in the very near term as well. To support that, we do have a strong cash balance, close to AUD 23 million in the bank, and expecting revenue flows from both the IMV contract and grant funding to come through, which will equate to another couple of million dollars as well over the term. So in a very strong position from that perspective as well. And just a little bit further, there's more content to read, and I encourage you to do so, that flows after this slide. I won't go through each slide verbatim, but I do encourage you to read it.
But at a high level, the achievements over the half in line with the strategy that we outlined, again, executed the first commercial agreement with a global leader in animal reproduction, being IMV Technologies. They are a large global player, with close to 50% of the global reproduction market across different animal species. By way of, I guess, sizing, they process up to, say, 500 million units of straws per annum, and they have a presence in over a dozen countries as well. So a very large representation in that market, which is quite concentrated. The purpose of that agreement through the 12-month exclusive period is to come together to create a joint offering, to go to market together.
IMV are obviously very attracted to the way that we're using our technology and how we can see it shifting the market to develop new industry standards for the animal reproductive space, and we'll be working closely with them over the next 12 months to deliver on that. Further to that, we will see revenue flows immediately. So we're looking at up to about AUD 900,000 over the 12-month term, which is a combination of monthly fees and a couple of milestone payments, which are related to commercial readiness and commercial deployment. So that's a really great first agreement. That being said, that's the animal one, which we said would be first. Our focus is still on the human health space. We still see that as being the largest opportunity.
We're seeing strong interest and strong progress in that space, and now that we have got that agreement secured with IMV, we can double down our resources and our efforts into the human health market, and primarily in North America as well. Beyond that, again, we've got phase II of the studies underway with the U.S. Army Institute of Surgical Research, focused on blood platelets, which are a critical trauma response product, following the success of the phase I trials that we completed last year, which was a gating item to get to this point. I will say that those trials are underway at the moment. We are expecting readouts in this quarter, so very immediate term readouts to occur, which is really exciting for the company.
From that, I would say that we did get the opportunity during the term to present the phase I results at a conference called AABB, which is a big blood group in the United States, where a lot of the civilian and defense networks attend. That was very well received and strong commercial interest from those presentations. Excuse me. Following that, as a forward looking, we're actually presenting them in the next couple of weeks at a defense-related conference in Washington, D.C., which we were actually invited to. Vitrafy was invited to standalone to present those results. So there's a lot of interest in that space, a lot of progress in that space, and immediate term opportunities coming from that with the phase II trials underway in Texas at the moment. Beyond that, we need equipment in the market.
So, one of the big achievements for us, which was a big part of the IPO use of funds, was building the technology that is commercial ready and to deploy at scale. So that first unit and batch of units were built here in Australia, and one has now arrived in the United States. That product will now be used for sales and marketing purposes. So it's one thing to tell the story and for people to understand what we're trying to achieve, but to have a device on the ground for people to touch and feel and see and play with is the next level.
So that has now arrived in the U.S., and that will be used for demonstrations, sales, and marketing purposes, which we do have our first booth presentation with the device on foot in the U.S.A. next week, which is at a conference called Phacilitate, which is a cell and gene therapy conference as well. So we believe that that's going to really accelerate some of that commercial interest because people can see it and touch it and feel it. Beyond that, we want to make sure that we're set up to deliver and scale. So we need to make sure that the commercialization footprint is expanded, not just from a headcount, but opening an office, having a demonstration area, having manufacturing capability, which is really important.
So ensuring that we set that up, which is what we've been doing and have done, has been a really critical part to the first half of this financial year as well. We do have a U.S. office based in California now, which the team operate from. And that's also located within Planet Innovation, so we've got that manufacturing visibility and integration as well. So a lot achieved over the half. Further to that, as I was saying at the opening, there is more detail over the next few slides about that, and I do encourage you to read it because it will give you a much more granular understanding of all of those different components and how it relates to what we're trying to achieve and the size of some of that opportunity and the value proposition within it.
So, I do encourage you to read further on that, but I will move through some of those slides. A little bit about the technology, and just as by way of a recap, for those who are new, but also, for those that are existing as well. Vitrafy has very broad opportunities, each in their own right, are big and growing markets in themselves. We've identified three core areas, or three verticals, so to speak, to prioritize. First and foremost is animal reproduction, because it's a global scale, it's unregulated. We thought that we could crack that market first, and that's what we aimed to do. Second is blood and blood products.
There's a need for that, and a growing need, particularly for the cryopreservation of blood platelets, which only have a very short shelf life, always expire, always high wastage amounts, which impact the supply chain. Thirdly, is cell and gene therapies. Again, there's a rapid growth area in that space. It needs solutions. It's a global scale. It needs standardization, and personalization is just increasing and accelerating at a rapid pace. So we wanted to get in early before that market was established. That's why we focused on those areas. Again, we did, we did say that animal reproduction would be first cab off the ranks because of the unregulated nature of it. We didn't want to try and get small wins along the way.
We wanted to try and unlock the global scale as fast as possible, and that's where securing the agreement with IMV Technologies is exactly in line with the strategy that we outlined, and we can see our technology from a hardware/software perspective being placed, you know, in over 2,000 of those collection sites across aquaculture, bovine, and porcine as well. There's a really nice fit there and a big opportunity for us to execute on that. And similarly, with blood products and cell and gene therapies, there's thousands, you know, over 8,000 points of collection, manufacturing, storage, and points of care in that industry, just in North America, and we can see our technology, hardware, software, being included in those. And then you've obviously got consumables that you would charge on, on top of all of that.
So, next comes the U.S. human health market, now that we've executed on animal, which is now unlocked because we have the technology available to be able to do that. So big markets and growing. Then it's important to, I guess, talk a little bit about what we are selling. And this is a new slide for those that have sort of been following for some time, and it's a really important slide. We have to remember that the cryopreservation workflow supply chain outcomes hasn't seen innovation for decades. It's legacy, it's legacy, it's legacy. It's box selling, and that's part of the problem. The world has moved past that, and we're at the forefront of that change. We're selling an ecosystem of value. We're selling solutions.
It's an ecosystem strategy as a model, which combines both of our hardware and our software to get the outcome. What this does, it enables transparency and enables control. With the use of data, insights, and intel, we can adapt and continue to build on our competitive moat, which we already have, while delivering value across the way. This is what we've done with Huon Aquaculture, as an example, where we're selling the outcomes as an ecosystem. That's now what we're doing with IMV, and plan to do at scale moving forward as we convert that into longer term arrangements as well. So it's selling the ecosystem is what we want to do, and it's that combination of hardware and software that's gonna get us the data, the insights, the continuous improvement, and the opportunity.
Again, there's more slides and detail about this and, and the technology itself over the next few slides, so I do encourage you to read on, and learn a little bit more about this, as it does have a really big impact on how we go to market, but equally, how we're gonna charge for it, which I'll come back to in a moment. What I will say, though, is across the half, there was clear value creation and continued de-risking our pathway to market, now that we do have immediate revenue opportunities starting to flow through. Over the half, we did see, you know, proof of concept work morph into and evolve into the market willingness to pay. So we've gone and crossed that hurdle of validation studies, let's say, so to speak, in animal reproduction, into paying work as well. So strong validation there and de-risking.
What's exciting, though, for me and the company, all of us, I guess, is what's coming up. In parallel with all of that, we have been building the products and the capability to launch into the market, primarily in the U.S. We've been doing building brand awareness, doing business development, presenting at conferences, telling our story. We want to ramp that up now. We want to ramp that up fast, and because we have products available. So now, moving into what's upcoming, there's clear value creation catalysts ahead. The product's being launched, the device is in the U.S.A., and we have a long list of deliverables that we can see coming in the immediate term, from revenue to FDA registration and commercial scaling, that we see as strong catalysts for value creation for Vitrafy.
With that and the ecosystem in mind, we wanted to just touch on the revenue model again. Now, again, this, this, this industry hasn't seen change for decades. It's a legacy approach, and we don't want to go that pathway. We want to maximize value for everybody. We want to make the change that's needed in this market. We also want to be sticky with our customers. We want to aim for the highest margin recurring revenue model. So with that, we're targeting recurring revenue model under a managed service. I guess, IMV has somewhat validated this, because that's what we're doing with them, where as part of a package, let's say, you get the hardware, the software, service, and support for a set monthly fee, let's say $10,000 a month, and then you would charge the consumables on top.
So you get a very short payback, and then you get high margins into year two. With that, we also get that ecosystem data insights and intelligence as well, so that we can continuously get better and strengthen that competitive moat again. And then to deliver on that, that's, that's, that's the important piece. How do we execute this? And what we have done is build a few units and forecast to build a few more units to meet the demand, but we are ramping that up. Based on the pipeline that we're seeing building, primarily in the U.S.A. in human health, we're increasing our device manufacturing. We're ramping that up, and we're building more devices in anticipation for what demand is coming.
So that's a very exciting position for us, and with that, we have built that into the forecast, and we still have runway well into calendar year 2027 as well. And I'll let Simon expand on that now with the financials. But, again, there's more detail here if you would like to read a little bit more when you get access to the deck.
Thank you, Brent. So the first slide you'll see here is our profit and loss. You'll note that we've changed our approach to expense categories. So you can see really clearly here what we've spent on product management, sales and marketing, and operations. So that's a change that hopefully gives you a better feel for where our effort and funds are going. On the right, you can see some comments here. I'm not gonna read them, but the big, obviously, revenue line was other income, is the earned income on the Industry Growth Program grant. We received another 750 on top of the AUD 2.4 million we received at the start of the grant. And we earned $1.9 million , nearly $2 million .
We haven't, and probably won't lodge any R&D claims this year. We've moved away for the moment from testing. All of the work and effort is going into commercialization under the grant. But we will be revisiting that through the next half. As you can see, the large amount of our spend has gone on product management, and effectively, the build-out of VCU2, now called Guardian, and LifeChain, which are ready for market. And obviously, you can see there the increase in sales and marketing. That's principally been driven by the establishment in the U.S. operations, which is almost wholly focused on sales, marketing, and client delivery. Moving to our balance sheet, you can see we've got AUD 22.8 million at the end of the quar...
At the end of the half. That includes, obviously, AUD 10.1 million on term deposits. Very confident in our cash runway, based on the current forecast through to well into calendar year 2027, notwithstanding an increase in spend through this next half. As you're seeing, we're investing in that first fleet of units, and that will take a little bit of extra spend from us. And obviously, the movement in deferred income I've covered in the grant income. So strong balance sheet, and in terms of cash flow, you can see quite clearly there the payments, mostly driven around suppliers and the R&D tax incentive we received of AUD 1 million related to FY 2025.
Back to the outlook, I think I'll hand back to you, Brent.
Thanks, Simon. Yeah, thank you for that, and I guess for us, it's there is a lot of momentum building. We feel that we've been executing what we said we're going to do, and I think that the milestone, particularly with IMV and the product milestones on delivery, time, and budget, demonstrates that, and that's the first step. What we're really looking forward to is what's coming up. We do remain focused, and we do remain disciplined, and importantly, we remain excited. And this next half, there are specific things that we could see as real value drivers, and we're focused on delivering them, and that is really expanding the pipeline and converting new and existing opportunities, primarily in human health and in the U.S.A.
We've got the Phase II studies that are almost complete with the U.S. Army Institute of Surgical Research, as part of Department of Defense. So we're expecting a readout of those in the very near term. We've obviously got the agreement with IMV, so we're trying to accelerate that and get that underway as fast as possible, which we could see, upon success, converting into longer-term arrangements and agreements, from there. So that's a lot to look forward to as well, and then from a technology and unlocking new markets, securing our FDA registration, which does expand our addressable market in the U.S.A., and then increasing the supply. So building out our manufacturing capability in North America, building out the devices in anticipation for that demand, which we are very much looking forward to.
So a lot of value to unlock, immediate milestones ahead, and we thank you very much for your continued support, feedback, and questions as well. Thank you. Tim?
Thank you, Brent. Thank you, Simon. So just as a reminder for those on the call, if you do have any questions, please use the Q&A function that is located at the bottom of the Zoom platform. We do have a question here from Tom Godfrey: In terms of the step-up in Guardian build rate in Q4, what is underpinning this in terms of pipeline and expected demand?
Yeah, I think for me, it's. And Simon, you can elaborate this if you feel the need. I think with, for me, it's we've spoken, I guess, over the past couple of quarters about building the awareness, and that this evolution that's been occurring, which is an ongoing thing, and it can only strengthen if we get it right, from people understanding who we are, but then what we do, and then the interest in what we're doing, and then the inbound about inquiring what we're doing. And I'd say that in human health, primarily in North America, there is an increase in interest, which we're seeing progress from, I guess, inbound and outbound down the pipe, close to conversion. So in anticipation for that demand, we are building up that supply because it's coming.
Sorry, Simon, were you gonna go?
Yeah, just adding to that, I think you can take Tom from our investment in that fleet is we do have confidence. Clearly, we don't have anything to announce today, but there's been a huge amount of work going on in the human health. The first allocation of the first two units obviously head to France, to our friends over there. But we have significant demand in the U.S., and we'll be shipping units there for a range of activities. There will be some marketing activity, clearly. But across both cell and gene therapy and blood, there is significant interest to get units in hand.
The good news is, and I think we flagged this at the last quarter and the quarter before, it's not until you've actually got products you can put in people's hands that the pressure's on. And, you know, hopefully our challenge will be that we'll be outstripped in terms of that supply, and that's what we have to plan for.
Thank you, Simon. Thank you, Brent. And there's another question here from Martin Jacobs: What is a reasonable expectation on penetration into the IMV ecosystem and that commercial opportunity with them?
Again, I'll, I'll get Simon to elaborate where required, but I'll, I'll say that that's there's a big piece of work that has to be undertaken during this 12-month term, and what we didn't want to do was to jump straight into some type of long-term agreement where we may have left something on the table. So during this period, which is part of the work to be conducted, is to really size that up and shape that up, how we can maximize the, the value for both organizations and the market itself. And really shape and size it using the model that we described within this conversation, too, so that we can have a really accurate read of what that could be.
Now, beyond that, or I'd say in parallel to that, there is work that will be undertaken for how that integration can be, so that that joint offering to market is the easily adopted by their customers as well. So there's work to go into this first 12-month period to really shape that up, validate that, prepare for that. What the penetration is from there is what we're gonna work on at the moment. Simon?
Yeah, I think one of the reasons we're working with IMV is they are the leader in the space. They have access into the largest proportion of the customer base across or the user base market across bovine, porcine, and aqua, and that's why we're working with them. They are very excited about putting this in their array of service to those customers, and we've just got to work through how that works economically. The good news is, and as you've seen from the announcements, they are prepared to pay us because they know the technology works. They are buying time to establish, with us, the footprint and penetration into those various markets. But suffice to say, it's a very important part of their development program, and we've been working closely with them.
It's taken quite a bit of time over the last nine months, so we're very excited.
Thank you. There's another question here from Danny Shackford: What is the status of the thawing device, and what are the plans moving forward with that?
Yeah, it's a good question. I'd say with the thawing device, we are using the fleet that we've got in the animal reproductive space, so that's been used year on year with Huon, as an example, and with some of our human health collaborators. Now, when we tried to prioritize the freezing device or the Guardian as the first hardware product that's commercially used in market, along with the FDA registration and the software to go with it being LifeChain, and the thawing device would come thereafter from just a prioritization and capital allocation perspective. Now, that being said, we are looking at different ways to accelerate the commercial readiness at scale of the further product suite, which does include the thawing device and potentially consumables as well.
So we're looking at different ways to bring those products to market as fast as possible, without us having to do everything ourselves and build it from scratch again. So we are using it in the unregulated spaces, and we're looking at ways to fast-track how we could bring that to market from a, in a commercial setting in the U.S.A.
Thank you. There's another question here surrounding the Ecosystem offering. So in terms of having a end-to-end supply chain solution, how does that further our entrenchment with the customer and the potential com-- expansion of competitive advantage?
I'd say with that, an important piece is, and you'll see this in the branding moving forward as well, is around the outcomes and the value that's being created, and cryopreservation, let's say, has historically been looked at as a step in a process where it actually is a process end to end. So we are demonstrating value by getting those outcomes, which I think, if we get it right, which we have a high level of confidence that we will, that creates the stickiness. From being embedded, you get access to data, insights, intelligence, so we keep getting better. We keep strengthening our competitive moat all the time because we're using data to improve and to adapt and evolve, to keep adding further value as well.
So I think at the annual AGM, I made a comment, which is what I want to sort of make again here because it's relevant. The worst we will ever be is today, because we keep getting better, we keep learning, we keep getting insights, and we believe that the more data and insights that we get, the continuous improvement occurs. So that adds to adding and strengthening that competitive moat, because you're learning all the time, and you're gathering the information that gives you those insights, too.
Thank you, Brent. A question from Karen David. So as a new entrant to the market, how is Vitrafy approaching building a brand awareness, and what can we expect in terms of visibility over the coming quarters around business development and marketing activities?
It's a great question. I would say we're very fortunate to have a, an excellent team here at Vitrafy that are well experienced in the space, primarily in human health and the North American market, but also the capital markets that relate to that too. I would say that, we've really been diligent with our expense historically to not go too hard, too early on the branding if we didn't have products available to sell, let's say, at scale. So now that we do have physical units available, that we are ramping up the production of and the software that is ready to be deployed, along with that increases what we spend and put effort into on the brand and branding and marketing.
What you can expect, moving forward, is an increase of attendance at, say, conferences, but not just attending as, as a visitor, but actually having the device and presenting the technology in person. That's an important piece to the puzzle. While these are very large and growing markets, they are quite concentrated, and it's quite a network-based approach, so everybody does know everybody. So if you are there and you are presenting your offering in person with the hardware, then that's a really valuable thing to do, we believe, and that's one piece of it. We will be presenting the technology more in person at conferences, primarily in North America and cell and gene therapy blood. Beyond that, there's also an increase of awareness of some of the problems that exist within the market.
It is a legacy approach, as I said, so increasing what we shoot out, such as white papers, research papers, all of the likes through our website and making that really functional, we are going to increase that because we think that's an important piece of the puzzle to move it from what is currently a legacy-based step in a process to selling the ecosystem, which is the process and where we think it can go to maximize the value for everybody, including the outcomes for the customer and the patient.
Thank you, Brent. Another question here from Vince Rudich. So in terms of thinking about, human health space in North America, how do you rate the commercial opportunity between blood and cell and gene therapy?
Do you want me to go that one, that one, Simon, or do you want to go? Okay. It is a great question, and I, I would say weighting the opportunity, they're slightly different opportunities in themselves. And what I mean by that is, cell and gene therapy is young, it's immature, it's got a lot of different challenges, but we see the long term being extremely valuable. If, if you think about an analogy being a recipe, if, if a company is trying to write a recipe, once they've decided that is the recipe and that recipe gets approved by the FDA, then you must use that recipe for the term of that drug being manufactured, let's say. So if you're written into the recipe, then you force the use of our technology to use that, to make that drug.
So we believe that there's a really big opportunity for the company to be included in the thousands of trials that exist at the moment, but importantly, to get written into the recipe so that you're used for the term of that drug. Now, that is a great opportunity for us, but it is a little bit longer term where we'd see that recurring revenue continue on those approved products. So we have to put a lot of effort into that now to get into those early stage clinical trials whilst they're still writing the recipe, because we want to be part of that step. Equally to that is the blood space, where it's a very different offering because it is more of a legacy approach. It's quite a commoditized approach, but there are major problems.
The collection centers, in particular, have been using similar technologies that they used to for a long time, and the supply chains are quite established. That being said, all of those collection centers, most collection centers collect blood platelets. Blood platelets have a very short shelf life and expire a lot of the time, and current cryopreservation practices see a lot of it thrown out, which is extremely expensive and impacts patient outcomes. We believe that getting into those collection centers is a really valuable thing for the market, but also for Vitrafy. There's thousands of them, as we spoke about earlier.
Further to that, though, there's opportunities to be involved in the actual product itself, and we believe that over the medium to long term, that if we're successful in penetrating both of those markets, that further opportunities will present themselves that relate to the product and the consumable itself.
Yeah, I think just adding to that, what's become really clear in the early work with the U.S. Army has shown that there is a whole market that will open up as a result of some of the work we can do to reduce things like the use of cryopreservation, and the ability to freeze. That these things were just not even contemplated, really. I mean, they were contemplated, but not available, and we've opened that door. But that—my point about that is more that nexus between the really important early work with the Army that now flows into civilian and has opened up a whole range of different thinking and conversations that are very exciting, and that's what we've got to keep pushing down on.
And just sort of to elaborate even further with that, particularly on the defense side, with the activities around the world at the moment, particularly the political stuff, and that uncertainty that exists, not just from potential war, but there's also disaster events that keep occurring. I don't know if you've been following the news, but there is a fear that exists. What if there is a disaster event? What if there is a war? What do we have to respond? So there is a really big emphasis on readiness to respond, and the biological aspect of it means that they need blood, and particularly blood platelets for trauma, available to be able to respond. And if you can't cryopreserve the blood platelets, which is currently a limitation, then you may not have platelets to save someone's life from bleeding out.
We believe that we provide that opportunity, and I think that that's where a lot of that interest has been, increasing in the defense space as well.
Thank you. Just as a reminder, if you do have any final questions, please use the Q&A function at the bottom of the Zoom platform. One final one from Tom Godfrey: "What can we expect in terms of the level of detail in the initial phase II study readouts from the U.S. Army Institute of Surgical Research, and what will be the next steps for them in terms of commercial agreement progression?
We believe that this is a big milestone for the company. Sorry, let me take it back a step. We believe that the outcome from this study is a really critical step for the company, and if we get the success that we want, a big milestone. What it does is, it rounds out the volume, the statistical significance of the data, both from a volume of sample, but a replicate number of the sample that covers recovery and functionality. So does the car start, but does the car also drive and do what it's meant to do in high volumes? So there's patients donating at the moment to get that volume up and those replicates up. So that's super important, so it's statistically significant at commercial scale.
It also ties into we need the FDA registration of the equipment to deploy these commercially in this space, in particular, and that aligns with that registration. So this unlocks that commercial discussion in full, not notwithstanding that the interest that's been happening since phase I. So we believe that this would be a big step forward towards executing a commercial agreement with, with defense, and believe that that does unlock that opportunity in full.
Excellent. Thank you, Brent. All right, if there's no further questions, we will call time on today's first half investor webinar. Thank you very much for joining us today. As a reminder, the presentation will be available on the ASX website for those who want to catch up and go through the further detail that was outlined by Brent and Simon today. If you do have any follow-up questions or would like to schedule one-on-one, please reach out to investors@Vitrafy.com, and we will come back to you. And finally, just want to let you know the next point of engagement will be around the Q3, Q3 quarterly update, which will be released in April. Thank you very much for your time this morning, and have a great day.
Thank you.