Good morning. My name is Seppo Orsila. I'm founder and CEO of Modulight. Here with me I have our CFO, Mrs. Anca Guina.
Good morning.
Today, we are presenting our first annual report as a public company. Since there are many new investors and it's the first time, we thought that we will first recap a little bit about what the company is about and what are the things we're known for. Then we will definitely address all the topics discussed in the morning's release. I would like to thank everyone for joining us for this discussion and we'll have plenty of time at the Q&A to answer all the questions and make any comments that you might be interested to talk about. Again, thanks for joining us and let me start briefly.
In today's agenda, as said, we'll recap first Modulight's strategy and targets, and then talk about the key takeaways from the 2020 report that we filed this morning. Talk a little bit also about the project pipeline and good progress there. Then we'll go to Q&A, and there we'll answer all the questions that people have. Thank you. Our strategy is to make lasers for personalized medicine. We focus on life science, making lasers for oncology, ophthalmology and genetics. We also provide lasers to high value add applications with operational and technology synergies, but are equally good businesses as the life science businesses. Our products are running on cloud.modulight.com platform that enables supporting multiple indications, i.e.
For example, different cancer types or their cure. To our knowledge, there is no competitor that has even network connectivity, let alone multi-indication, multi-drug products like we do. The core reason for the cloud connectivity is the ability to provide real-time analytics, targeting mainly improvement of efficacy, i.e. treatment result. The cloud connectivity also enables us to support new business models like pay-per-use, geographic price differentiation, as well as more day-to-day value add services like preemptive maintenance, remote support, supporting the pharmaceutical companies' rollout by facilitating doctor to doctor training, etc. We serve pharmaceuticals and other Fortune 500 companies with sales and marketing in U.S., but that translates to business worldwide.
Very importantly, we have 20+ years of know-how in combining medical and laser technology, and this is the one key reason many customers are telling us that's why they approached Modulight. More kind of from the science point of view, what we do. We do lasers and optics for better life. In this picture, you see a video from OR, from a glioblastoma brain surgery. There on the right is our laser, which is connected via fiber optics into the patient, and the light goes inside the tumor in the patient's brain.
This device is not only used to activate the drug precisely inside the tumor, but also gather signals from the brain during the surgery, which are then transmitted to our cloud running on amazon.com or AWS. There, certain analytics is happening, which will then help to guide the progress of the surgery and thereby aiming to improve the therapeutic result or so-called efficacy, as is said in the medical terms. The treatment overall, what we do, is called photoimmunotherapy. It has many benefits. It is non-invasive and non-burdening. We have earlier shared a video where a lung cancer patient was treated with this, the same technology. At the Q3 discussion, we for example mentioned that how that patient was too weak to withstand normal chemotherapy or radiotherapy.
This therapy is, as said, very non-invasive and non-burdening. Treatment can also be given a number of times, and thus is good for patients with weak condition or severe condition. It is cost-effective, especially compared to the new biological oncology drugs. We can sometimes access places which are very difficult with surgery or radiotherapy. It's a great tool for combining with other therapies. I'm not a medical doctor, so I have limited capability to talk about this, but several of the leading doctors we work with have told me that nowadays it's increasingly important to combine different therapeutic approaches so that we choose the best fit for each individual patient and for their condition.
Due to the aforementioned reasons, this tool or this method is quite nice for combining with other therapeutic methods. It's suitable for multiple indications and supporting other drugs. From the customer point of view, we are working with many customers utilizing the same platform in oncology, ophthalmology and diagnostics. For customers, the platform not only offers faster time to market, but also many benefits like real-time visibility to their clinical trials and drug consumption, as well as, for example, support geographic price differentiation, which is quite big, for example, between United States and Europe. Many customers praised us for acting as a solution partner versus competition providing just the laser, they said.
Our service team is installing the devices, training the doctors, does a lot of regulatory work with the aim of letting our customers, pharmaceutical companies focus on the drug molecules and patients. One of the key promising issues is the use of our product for treatment of glioblastoma, which you saw in the previous slide. The same system is also applied by world-leading endoscope provider for their next-generation endoscopes to better detect the cancer. This perhaps tells a little bit about the versatility and multi-use applicability of the product. In ophthalmology, we announced collaboration with Bausch + Lomb earlier, and with them, we are looking forward to populate major ophthalmic clinics later this year.
We were expecting to do that last year, but as we'll discuss later on, there have been some delays, but fundamentally, the project is progressing well. Regarding that case where we are primarily focused on treating of age-related macular degeneration, further to elaborate the versatility of the product, that same product is being used by another pharmaceutical company to treat uveal melanoma, another severe ophthalmic condition. Many lasers have also other uses, and we are applying these same lasers, for example used for glioblastoma treatment, and then applying that to digital press machines, as well as quantum computing and some other exciting applications.
Besides bringing synergies from the technology point of view, it allows us to faster develop the product for the benefit of both life science and other high-value-adding businesses. Little bit about the market and underlying facts. Unfortunately, as the population ages, the prevalence of cancer is increasing rapidly. The global cancer market is predicted to grow from about EUR 140 million two years ago to close to EUR 390 million by the end of this decade according to a wide study presented by McKinsey. We see the same fundamental development in ophthalmology as well as in diagnostics and genetics.
These markets are growing and the fundamental driver is the aging of the population, as well as the more and more personalized medicine that people are being used as a therapy. Here, we have some detail from the McKinsey study highlighting the significant potential in indications with high unmet need. How you should read this chart is that if there is a 90% figure, for example, for liver cancer, this means that after five years only 10% of the patients are alive. There is a big need to improve therapeutic capability and tools so that we can serve the more and more difficult patients with more and more difficult cancers.
As you can see, Modulight is working already in seven out of eight most unmet needs on the market. This is because I explained earlier that the technology is well suited for different types of indications or different types of cancers. We are extremely pleased that actually also last year several customers not only applied our technology for a specific cancer, for example, for esophagus or glioblastoma or uveal melanoma, but expanded the use of the technology to other indications, i.e. to other cancers, as well as customers who previously didn't apply our technology, for example, to esophagus, started applying it similarly to some other companies who were already applying our technology to esophagus.
Very briefly, as said, the same technology is used for other high-value-add applications. We talked about the digital press briefly during our IPO. We are very excited to work with Hewlett-Packard to provide for their digital press machines essentially the same laser technology as we're using for cancer therapies. As said, there are a couple of other high-value-add applications where our technology seems to find its place. I expect that, I mean, in the Q1 release we'll talk more about these other new exciting applications as well. In a nutshell, we aim to do three commercial rollouts by end of 2023.
This means that each of these commercial rollouts is a minimum of EUR 10 million annual business on top of our existing business. On top of that, we continue to run the existing business and growth and profitability and target that as our long-term goal. I see no reason to revise that at the moment. Even a single commercial rollout can take company to a new level, but there are multiple opportunities for that. This is why we have stressed this as very important that we have many seeds for commercial rollouts. This is why I'm particularly pleased for the long term point of view that we have continued to accrue more projects and all the projects have continued. No project has discontinued.
Obviously there is variance in fluctuation both time it takes from start to finish, as well as the size of the commercial rollouts. We have now many seeds growing and more than ever before. It will naturally not be 100% yield, but in our field of life science and high technology, it's clearly also there are many risks, and you would expect most of the projects not to complete. Due to the investor requests, we have also shared as a part of our annual report much more detailed information about the projects and their number, as well as the evolution. We continue to target reaching three projects in the state of commercial rollout by end of next year, as stated earlier.
Things like activity with Bausch + Lomb in North America ranging to Olympus, next generation endoscopes and Hewlett- Packard are good examples of potential rollouts. On longer term, we are perhaps even more excited about the things we expect from glioblastoma, uveal melanoma and quantum computing, plus some other cancer things. Looking at our past, we maintained growth and profitability, but obviously, last year was a disappointment. This is due to very short-term new information and we wanted to be extra careful. We can discuss this more at the end of the call with highlights of our release.
For 20 years we didn't pay any dividends and, as guided into IPO, our dividend policy is to expect little or no dividends in the coming years. The company expects to invest all its profits for acceleration and implementation of the strategy. About growth strategy, we obviously have been progressing on a number of areas here, starting from left and going to the right. We have been implementing our EUR 23 million investment program and are in good speed with that. Thanks also to the changing situation in the world.
There have been some opportunities to buy better machines at cheaper price than we originally planned, but then there has also been delays due to the component shortage. Overall, we see that increasing of the production capacity and introduction of new tools is heading well. Regarding geographical expansion, we're obviously delayed by what we expected during last year as we did not complete the Bausch + Lomb FDA approval. We have already scheduled the visit with FDA for next month and we already start with the CE audits actually last week. This should not mean that we have the FDA approval next month, but overall that track is progressing. No major hiccups besides the COVID-induced delay are in our knowledge.
The travel, especially the business travel has been, of course hindered, and probably continues to be hindered, but we are very pleased about the fact that at least in limited scale some of the exhibitions are already running. Last year, towards the end of last year, we also finally resumed work with at least some of the clinics and operating rooms. The video that you saw in the previous slide was from a brain cancer surgery done in Q4 and these things are continuing. Although due to the Omicron, actually some of the hospitals again reduced access to externals, which is a hindrance to biomedical research and oncology research. Overall the situation is much better than a year ago.
Clearly we were expecting that things would open up faster. I guess nobody anticipated this Omicron wave to be so strong earlier last year. Regarding perhaps the most important thing to our strategy is the expanding of our technology to other indications and other applications. As highlighted in our press this is something that progressed very well and provides a very good long-term opportunity. The fact that we have customers applying the same technology to different indications as well as to indications where some other customers already applying to that is probably the best thing that we saw last year.
For analytics, we have accelerated the development by recruiting a dedicated analytics team of half a dozen people. This is to support the earlier work done in the software team, but because of its strategic importance and what has been quite easy for us to recruit leading software and analytics people, we set up this additional team to fuel and catalyze that development. As said, investment into software and laser technology has progressed more or less according to plan. In some cases, of course, hiccups, as equipment suppliers have also suffered from component shortages.
On the other hand, there have been maybe some other companies canceling their orders and that has put us into a more strong position regarding negotiating the commercial terms and sometimes even reduction of delivery times. We expect to have all the major equipment at our factory by the end of this year. Some already went into useful production use last year, but it's good to remember that these machines are highly specialized and taking them into the process takes a fair amount of time. About our revenue model, I think it's important to highlight two things. First of all, most of our revenue is still coming from the early stage proof of concept and trials.
To reach these three commercial rollouts is obviously important to have many seeds. To maximize the speed of implementation means that our customers are accruing less cost, and we maximize the probability of success. This is why we, for example, have moved into three shifts mode during the Q4, and thereby to reduce the calendar time for our customers for their product development. The fact that projects are of varying size introduces seasonal variation from quarter to quarter performance. This is really the long-term key to our growth. Once we enter the commercialization phase, this variation is, of course, expected to lessen.
Now going into the highlights of 2021, we clearly have headwinds. It's a disappointment that we broke our record of more than 10 years of making operating profit and seven or eight years of consecutive growth. That is definitely a disappointment. Having said that, Modulight initiated a record number of new projects with significant customers. This is something that you will be able to see in more detail in the report. To me, what is quite important is that actually the accrual of new projects is accelerating and no project has been discontinued.
Despite all the hardships in the world economy and elsewhere, including the COVID, all the customers are continuing the work. We have been successfully recruiting new people in the laser family, and especially for R&D. We are very fortunate and thankful for the media, all the investors, and everyone for providing such positive spirits. This has definitely helped us to attract the best talent in all the areas of the business, and especially different sciences of R&D, whether it be software, semiconductor physics, optics, analytics or so forth. But also recruiting a great business team. Investment program is progressing according to the plan, and we have been expanding it with better capabilities and higher capacity machines than we originally expected.
As said, the commercial terms have been mostly favorable to us, and this has been a benefit on that area. Several improvements in our platform technology. We filed a record number of patents and got a very important U.S. patent last summer as announced during the autumn time. On-site audits for the ophthalmic AMD solution are scheduled for both FDA and CE. As said, this does not mean necessarily approvals, nor does this mean that there wouldn't be further information requests from the regulatory bodies. As far as we see today, it is looking good. COVID-19 clearly impacted our project schedules and revenue. This happens in many ways, ranging from our ability to visit customers, as well as very importantly, customers' ability to visit us.
I talked about the hospital collaboration, and we're extremely happy that has started properly, at least in some hospitals in United States and Europe during the Q4. There was little bit of backward progress then towards the end of the year due to the Omicron. Operational profitability remained high if we exclude the extraordinary one-time events. We have a 36% EBIT for last year, excluding the non-recurring items. The non-recurring item obviously is the write-off of EUR 4 million to accounts receivable made after the period end. This was also done very recently because of our desire to be prudent and cautious in the changing world situation.
The EUR 4.1 million cost related to the listing announced in the context of Q3 and the IPO. Our targeted extensive 2023 commercial rollouts still remain our targets. The current situation with both COVID and geopolitical environment cautions us of volatility, yet maintain positive on the mid- to long-term. Rapidly widening R&D portfolio should help us mitigate those risks in the long term. We have a table of key figures. Anca, do you wanna say a few words?
Yes, sure. As I've already mentioned, the sales progress was disappointing in Q4. We are really happy with the development of R&D pipeline. This is an internal indicator for us of the importance of our product platform from customers' point of view. Actually, it also decreases the risks, especially the projects we have in the medical applications. The operating result, well, was definitely affected by the EUR 4 million write-off of receivables. If we would exclude that transaction, we would have had, yeah, in the end of the year, around EUR 3 million or EUR 3.2 million result. Positive result, obviously. It was mentioned earlier that investments continued and actually accelerated last year.
Yes, indeed, we were lucky to be able to expand the scope and capability of the initial plan we had. We continued employment as we promised in the IPO, during the IPO. We were very pleased to notice that actually for us it was not difficult to find the right people to hire. This is a direct indication of Modulight reputation actually in our society.
Okay. Thanks, Anca Guina. Yeah. Here, we basically illustrate the widening R&D portfolio, and I think that maybe the key takeaway here is basically that same customers are applying to new indications or new cancer therapies. For example, previously ophthalmic and then now also in addition to that, continuing that to bladder cancer or one customer earlier applying to esophagus and then another customer now starting to apply to the same cancer as their competitors. All projects progressed in 2021. It is very important that we have wide portfolio of projects because in life science and pharmaceutical, some projects are progressing faster and sometimes they are progressing less.
This has been the kind of guiding principle since the current strategy, which we launched in 2014, that we try to widen the portfolio of projects so that at all times there would be something reasonable to do. This is of course something that we are trying continuously to work very hard to reduce the sequential variation as well. Here, before going into the Q&A shortly, I'm just having one example of a significant progress. We have successfully continued our efforts to provide new treatments and in the area of glioblastoma, eye cancer, uveal melanoma, lung cancer, bladder cancer.
This picture here is my friend Professor Brian Marr from Mount Sinai, and he kind of looking with his colleague Spencer about the new ophthalmic laser. As I explained earlier, actually the CE audits have now started last week, and the FDA audit is scheduled for next month. We look forward to making this progress and are very sorry about the fact that, against all our expectations, the Omicron delays caused us to miss that for last year. Of course, there is no guarantee that there wouldn't be further delays, but currently we are having an optimistic view on this.
As said, this therapy is used primarily for the treatment of age-related macular degeneration. There is another customer who is applying this to the eye cancer, as said. In our annual report, we're also talking about a couple of different other examples to give you further insight into what types of new projects we have started in 2021, and we thought that it might be relevant to highlight them briefly here. One customer has started applying our technology to bladder cancer besides earlier working with ophthalmic cancer and continuing also the earlier indication. Another customer, a new customer started with esophagus cancer, and that is something that another existing customer also did earlier.
A third example being quite interesting, cortical hemodynamics case where the same laser that we are using for cancer therapy can be used to monitor the brain activity patterns. Here is a quick glimpse of the kind of projects, not all, but a sample of what has been started. In a nutshell, we feel that we are at least not aware of a company with similar capabilities. There's 20 years of experience in medical laser technology and Modulight, scalable platform, which is cloud connected and quite unique in many senses versus the competition.
Have significant customers with well-known pharmaceutical and technology companies, and they pose significant business opportunities in life science and other high value adding applications. For a number of years a strong financial performance, obviously a big disappointment having to record this write-off at the end after the period. This was done really to be prudent and to be cautious. It was discussed by the board until the last minute to really make sure that we would provide the best possible reporting and clarity to the investors and make the right choice. We have been trying to make the best we can.
It is clear that both customers as well as our other collaborators, hospitals and doctors and research institutes are also in a quite unusual turmoil, and COVID and the current geopolitical environment affects them in many different ways. The situation is challenging especially on the short term, but it is extremely pleasing, at least to me, that there are no fundamental problems that we're aware of or there are no discontinuations of projects. That is not to say that such would not happen in the future, but at the moment we're not aware of such things. Of course, the widening portfolio is the best insurance we can see for us to mitigate that risk. Again, I thank everyone for all the patience, and I see that we have actually quite a few questions on the line, Ulla, did you have something?
We have our equity analysts from Danske Bank online, so welcome Lars Hevreng and Daniel Lepistö. I see that at least you, Lars, had your hands up, so please go ahead.
Great. Thanks. Do you hear me?
Yes.
Loud and clear.
Great. Yeah, can I just ask to start, I mean. Can you comment a bit more upon the size of the accounts receivables write-down of EUR 4 million? I mean, in the annual report, you state that, and now I'm just reading on page 13, that the pandemic has had significant impact on the financing of some customers, et cetera, but I thought, I mean, your client base is primarily bigger companies. And also how. That's one question. The other question is that why this time and not. I mean, we had the pandemic also in 2020, and then you managed the revenue recognition, et cetera, very well. If you comment. Could comment upon the size of the clients and also of course the difference between 2020 and 2021.
Yeah. Thanks. It's an excellent question and a very important one. There are obviously very large customers, as we have named, given by name, and some of them even made public releases, even in the New York Stock Exchange about their collaboration with us. There are also a smaller and private companies. The different customers have different risk profile, and especially the customers who are kind of far away from Europe may see, in some cases, the risks associated currently differently than we may, for example, see them here in Finland.
This has multiple implications about the probabilities to continue activities to finance their own activities, as well as likelihood of the continuation. As I said, nobody has discontinued their activities, but because some of the receivables were very old, we felt that in accordance to the prudence principle, this was the right thing to do now, and we have highlighted this also in our IPO material and in the Q3 reporting, but this was based on a comprehensive detailed analysis.
I say also the size of the write-down, EUR 4 million, that's almost half of a full year's revenues. It must be related to a number of different projects, not only a few.
As I said, we did a comprehensive analysis at the best of our ability to understand the potential risks. This does not mean necessarily that we would not eventually recover those funds, but we felt that this was the best and the right thing to do overall. We're trying to be cautious in order to provide best possible transparency to the investors.
Okay. The revenue recognition slowdown, I mean, which caused towards the end of 2021 full year sales to drop versus 2020. I mean, what's the difference this time compared to last year when you managed the various pandemic effects extremely well?
Thank you. Thank you, Lars. I mean, I don't certainly feel ourselves managing the COVID very well because we failed to see this early on. I mean, some customers told me that there has been an accumulated effect on some of their activities, probably also our activities, and this was just a sum of many events. As said, we continue to try to widen the portfolio and this hopefully reduces the individual impacts. There is no denying that the Q4 was a disappointment.
From the annual report, the amount of accounts receivable now, I mean, that was reduced from full year 2020 to 2021 and a similar effect on accrued income. I mean, you have also expressed the, you know, the remaining risks, so to say, in these balance sheet items. How would you describe that? I mean, 'cause there is a drop from, say, EUR 10 million - EUR 7.5 million roughly year-over-year on these short-term debtor assets.
Yeah. Basically EUR 5.6 million is related to the customers. The other debtors are, I mean, almost EUR 1.5 million recorded as other debtors. It's mainly coming from other income. This is kind of certain that we will receive.
Related to this topic of write-offs, I see that there's a question on the line about is the write-off of receivables related to default of one or more customers? No, we're not aware of a single customer defaulting. This is just in anticipation and in prudence, not due to anybody's default as far as we know.
Okay. As you stated in the presentation that, of course, prior to the significant effects from all of these commercial rollouts by your clients-
Mm-hmm
I mean, that you—this is of course something you referred to in many times before, but yeah, that you expect volatilities that you said, it remains to be significant. What—I mean, now you're expanding the client base a lot, I mean, from 16 - 24 on a full year basis, which is much more than you did in 2019 and 2020. What—how big do you—that—do—what kind of client base do you need to have to say that, you know, volatility, this—I mean, effects from single clients that are gonna be smaller so to say. What kind of client base expansion do you see?
As we are not giving any type of guidance, I'll try to answer this properly. That I can say that we were expecting a little bit less in terms of new projects started, so that is good. Of course, the amount of new projects will not kind of increase the sales tremendously in the short term typically. This can be derived by calculating backwards how many projects we have had ongoing and what has been the revenue.
Clearly this is what we try to emphasize, that we are very pleased about the overall increase of the portfolio in terms of number of projects and the fact that different people are applying the same technology to same things that some other customers were already doing. That definitely brings us synergies as well as, I mean, economically, but perhaps even more importantly allow us to offer the same solution for several different customers. That hopefully benefits both the company as well as the patients and the customers in a nice way. We're not expecting a huge surge in new projects.
Now it is it important and good for us to continue to increase the number of projects, but of course, even more important to continue with the existing ones so that they progress in the pipeline. Yeah. Just wanna take also one because people are asking a lot about this, the write-offs. Any chance of recovering even part of the EUR 4 million in the reversal of the write-off in the future, or is it money permanently lost? As I said a moment ago, it is possible to recover a part, but we felt that in accordance to the prudence principle, it was right to write it off at this time. Maybe there are a couple of other things related to this one.
Another person is asking, can you explain, since none of the projects have discontinued anyway, there is a write-off of EUR 4 million? I tried to answer that already. The answer is the same, that yes, nobody has defaulted or nothing has been discontinued, but sometimes in the business you have to be prudent and kind of weigh the odds of something really is recoverable or not, besides the fact that the receivables started to be quite old, more than a year old, so we felt that this is something that we just have to do even if it's never, of course, pleasant.
On the same note, someone else is continuing that, "Please advise if the ongoing Ukrainian war started by Russia is any risk to foreseen growth." I suppose that most people would agree that the Ukrainian war overall is bad news for the economy. It has many implications to different companies. Modulight does not have business in Ukraine or Russia, so in that sense, there are no direct implications. For example, someone was asking. Actually, several people are asking that if we are using neon, which I understand from the questions is very much dependent on Ukrainian supply worldwide. Modulight is not using neon. That's actually one of the few, let's say, rare materials that we don't use.
Modulight is using many rare materials which are difficult to source and have long lead times. We have been trying to build up our inventories over the last year in many of the critical components. We are impacted somewhat by the same problem of availability of some fairly basic microcontrollers and other chipsets, but these, for example, ultra-pure metals and gases, we have been trying to stock little bit in advance to mitigate those problems. The impact of the Ukrainian war is, I would say, limited, but there is definitely especially once you go outside of Europe, people are seeing these risks differently sometimes.
I'm assuming that if you look at overall country risks, that is something that people feel. I mean, nobody has kind of wanted to stop anything. I do expect, and at least seen from the news, that this is something that is worrying a lot of people. Maybe not a direct impact in most cases, but certainly we are extremely sorry for the human suffering as well as the overall impact to the economy. Lars or Daniel, do you have questions, or shall we continue with the list from the online?
I'm fine, thanks.
Okay. Let's see what.
Daniel, you have your hands up, so please go ahead.
Yeah, thanks. I have just one question. I mean, going back to the COVID effect, your and to your revenue recognition, you said that lack of customers having access to your premises mainly delayed these projects and of course burdened the top line. If we look forward and the kind of the situation right now, has this problem resolved or are these COVID-related risks still present and could we still have more delays in this sense? Thanks.
Yeah. Thanks, Daniel. Very important highlight. So, as I said, we have been able to resume partial business travel, as well as going to the exhibitions in a limited sense, particularly in North America. There are still companies who are having a fairly strict shutdown, and people are clearly traveling less. We have not had, for example, U.S. customers visit us after the pandemic. Many of them are saying that they now have reduced travel restrictions and meeting restrictions or are in the process of doing so. Definitely, the pandemic restrictions are not yet over.
On the kind of clinical side, which is also very important to us, from our perspective, the world opened maybe a little bit earlier, and this was very good because that is very important to our projects. We were, for example, able to implement a one-month long visit to be a bit more precise, 16 important ophthalmologists in late 2021, and got actually very nice feedback from all of them. There has been also pushback in these areas. For example, there was fairly good access to the brain surgeries during the late summer and the autumn.
Now, some of the important hospitals have actually rolled back their restrictions and, for example, denied access from externals, meaning pharmaceutical companies and us, into the surgeries, and this has at least a short-term small impact in that particular case that probably has limited financial impact to us. I just wanna give you the true picture as transparently as possible. Overall, on the kind of commercial side, the restrictions are still hindering business travel almost everywhere. There is some signs of relaxation of the restrictions, but we are far away from the pre-pandemic era. On the clinical side, some places are working almost same as before, whereas some are still having restrictions. From our point of view, the fact that customers would start resuming their own travel is something that we look forward to.
Thank you.
There's a question: How does the pipeline for the new projects look like? Would you expect some pent-up demand from customers in regards to new projects given the COVID impact during 2021? This is something that I believe everybody can have their own expectations. Generally, our marketing philosophy has been that we try to make people aware of Modulight's capabilities and what we can do, and then they will contact us the right time when it's right for them. To some degree, the question has actually some proof because when COVID started in 2020, one of our customer went, for example, to complete freeze.
I must say that this was early 2020, and we were wondering if they would ever resume activities and would go to a complete stop. Actually then, in the spring of 2021, they actually started again and started more forcefully than before. Now today they have even expanded their activity from the original one indication to another indication and are doing financially very well. Yes, there may be some built up demand, but as we are working with serious problems and life-saving technology, I would assume that the things continue as they have before in that sense that all the projects are very carefully considered and assessed.
In this business of developing new cancer therapies or building quantum computers, nothing is really happening usually overnight. Decisions that companies make are carefully considered moves that they plan in the long term. Could you please elaborate full list of development projects in next quarters? Of course, with info possible to disclose together with indicative time to schedule to the market. This is basically a good example of a question that we received particularly during the fourth quarter, and we are trying to respond to this need for information by publishing this curve that I presented in the presentation, which shows the quarterly evolution of the number of projects.
We are aiming and continuously harnessing our processes to develop further visibility and hopefully will expand the granularity of that information going forward. This is the information that we are able to provide at this time. We definitely have heard from the investors that this is an important piece of information and we are trying to make it available, but make also sure that it is properly kind of structured and validated. Of course, from time to time, there are indications that come up in the websites of various organizations. For example, FDA is publishing certain milestones in the PMA approval stages. Some hospitals are announcing their ethics board decisions, etc.
I know that they are very difficult to dig up from the internet, but these are some of the things that we are not recommending investors to use. Just kind of examples that it is not solely based on our ability always to kind of present what gets presented and shared, and not necessarily in the different cases the same procedures are applied. We are trying to build up and continuously increase the amount of systematic information that we feel would be relevant to the investors. Again, I apologize.
We are learning our journey as a public company and this is long-term development work, but I hope that at least the current list of projects and the number of evolution by quarter, as well as examples of what kind of new projects have started, is at least a little bit of help to this need asked. There is a question: Why didn't you issue a profit warning due to the EUR 4 million issue? I think it would have been prudent. This, as said, the board was—this was late, news information came very recently. The board was carefully considering what is the right decision here to do.
It was by no means kind of clear one choice, but it required systematic analysis in a very rapid sense. Of course, if we had known about this problem weeks before, we would have issued a profit warning, but this time that was not the case. There is a question in Finnish.
Loosely translated, the person is asking what is the business benefit of sponsoring local ice hockey teams Tappara and Ilves, and how much money is accrued to this on an annual level. We feel that as a company we are kind of carrying our responsibility widely as good corporate citizens. This involves a certain amount of sponsoring in this case ice hockey, but we're also sponsoring children's cancer hospital with substantial amounts. This has been in the ethos of the company for many years, and not just very recently.
The amount of money for this, I'm not ready to disclose at this time, but I'm assuming that they are typical for this type of visibilities. Besides the ESG angle and kind of trying to contribute in a wider sense to the society, we believe that this benefits also the company's recruiting, as well as public image in the eyes of potential recruits for the company, and thus supporting us in some different ways. Of course, these are something that can be argued that whether they are good or not, but we never know in advance whether there is. This is.
This has been the line, and as said, it's not a recent change. Another question regarding the medical side of your products. "An idea for future events, i.e. Capital Markets Day, please invite a doctor or MD to talk about your products, services and their benefits. It would greatly enhance your investor insight into the company." Thank you also for this excellent question and idea. As said earlier, we are planning to organize our first Capital Markets Day after the summer. We have also promised there to reiterate our financial targets, if there is a need, to iterate that. As said, currently, I see no need to reiterate those. This inviting a doctor there is a great idea.
We also to some degree been doing that, because, as we explained, many times, a core part of our operation is that our molecular biologists and engineers are working hand-in-hand with customer specialists and doctors. We are actually almost not weekly, but several times a month already conducting interviews with the key opinion leaders, being in their operating rooms. I believe actually all three of us, for example, here have been part of a treatment of a surgery. For example, the video from the glioblastoma treatment shown in an earlier slide was shot by Ulla in the brain surgery. This serves a couple of points.
It helps us to build a product that really meets the need of the patient, doctor and the hospital, and this is something that many customers are praising us, part of the unique recipe of Modulight. It also, of course, acts as a kind of marketing vehicle. In our cloud platform, we are currently building capabilities where the customers and the doctors can share with each other, for example, tips how to do some special therapy, etc. This is something that we are very passionate about and we're very happy to elaborate that further. The terminology might be somewhat confusing or I would say specific, not confusing, but specific.
We'll definitely try to take a heed on this and try to bring the material as much as possible also in our social media. I recommend following Modulight on Twitter and LinkedIn and Facebook and YouTube because especially these videos from the hospitals and some of the testimonials, I expect that we will be sharing more and more going forward, and we have those stories. We are now 10 minutes over time. I look at the number of open questions. You mentioned geopolitical situation as headwind. Can you explain how this is affecting Modulight or its customers? I think I touched upon this briefly already. Another one, could you open the risk profile of the remaining trade receivables?
This is also something that I tried to elaborate, and the current receivables have risk, but based on our best judgment, they are proportional. Then there's a longer question regarding the EUR 4 million write-off. You say that those customers have financing issues due to pandemic. Makes me wonder, I would expect your customers to be biggest wealthy companies as your products are not cheap, I think. It is difficult to understand why such companies have financing issues due to pandemic. Sounds a bit fluffy. Please elaborate and further explain how would you assess going forward similar risks related to your customers or projects. An excellent question also.
Clearly, in the case of receivables, I think I provided quite a lot of detail on that, but maybe one additional comment that, for the receivable to be relevant, it does not only to be applicable, but the customer needs to be, let's say, willing to pay. At least, my 20+ years in international business, ranging from 70 different countries, I have learned that, once we go outside the Nordic countries, and especially outside Europe, the receivable is you have to work on it sometimes, even if it's legally valid, in your opinion.
I think no reason to raise more drama here than ever, but I mean, we are definitely considering not just the kind of whether it's revenue recognizable or but also have to continuously consider that how likely it is that you are getting that. As said, this was a result of comprehensive analysis. We have only a couple of questions more open on the system. How much of your projects are with startups and how much with wealthy companies, little possibilities for write-off? I think we addressed that already. You have a lot of new projects, but this is not visible in sales. Previously, you have informed that you invoice partner from start of the development. That is still true.
We are invoicing all the customers at the beginning. The amounts vary, but we are adhering to this principle so far in all of our projects also today. Sorry, one more. Have you considered engaging with Finnvera Vientitakuu export guarantee to secure receivables in the future? We have investigated this in the past, but at least based on our past experience, which is, I must admit, several years old, it was the case that financing these kind of complex kind of high technology development projects, typically coming from outside Europe, at that time at least was not possible based on what we discussed with Finnvera.
In general, I wish to again remind everyone that Finnvera has been a long-standing great partner to Modulight over its 20 years of history, and we are extremely pleased for all the kinds of support that Finnvera has provided us over the years. We will investigate this newly again to see if that would be something that we could benefit in the future. Thanks. Thank you all for this comment or the recommendation. We're now about 15 minutes overdue. We have no open questions on the line. Again, wish to thank everyone for participating and listening to us. The recording will be available in our website in the usual manner, and for the presentation.
I encourage you to study the annual report and its appendices as well as the release. This is something that we strive to improve in the future. Again, we thank all the investors for the confidence that they have provided to us in the IPO and since then, several new investors also came on board. This is clearly something that puts a lot of pressure first of all on me, but also everybody in the laser family, because now we have been provided clearly the tools to catalyze and succeed in the strategy that we built in 2014. We humbly thank you for the support, and we continue the hard work also going forward.
I'm always happy to talk with the investors and try to improve our communication to provide further clarity. I also want to thank for all the tips that you gave us how to make this information more relevant to you. Thank you very much, and have a good day.
Thank you. Bye.
Thanks all.