Hello and welcome to Virtual Investor Conferences. On behalf of OTC Markets, we're very pleased you joined us for our Seventh Annual OTC QB Venture Conference. Our next live presentation is from Zomedica. Please note you may submit questions for the presenter in the box to the left of the slides, and you can also view a company's availability for one-on-one meetings by clicking "Book a Meeting" in the top toolbar. At this point, I'm very pleased to welcome Larry Heaton. He's the Chief Executive Officer of Zomedica, which trades in the OTC QB Venture Market under the symbol ZOMDF. Welcome, Larry.
Thank you. I'm Larry Heaton. I'm the Chief Executive Officer of Zomedica Corporation, where we are about the business of helping veterinarians take care of your pets and ours. I'd encourage you to take a look at the safe harbor statement at your convenience. At Zomedica, our mission is to bring innovative diagnostic and proprietary therapeutic technology to veterinarians to do five things: improve the quality of care for the pet and the satisfaction of the pet parent, the things they really love to do, and importantly, to help them do things that they need to do, which is to improve the workflow, cash flow, and profitability of their practices. From an overview standpoint, we have a very significant market opportunity. Our total addressable market on an annual basis is in excess of $2.7 billion.
Into that market, we present highly proprietary, highly innovative, very differentiated technology platforms, six of them at this point. We've developed a strong record of performance. In fact, just yesterday, we released earnings for the second quarter of this year. It was the 18th quarter in a row in which we had an increase in year-over-year revenues. We have plenty of capital on board, $59 million, to continue to fuel our growth to profitability. We do that through a very robust commercial channel that's not only here in the United States, but also outside the U.S. and many parts of the world. We have further opportunities to expand our portfolio both through internal R&D and additional acquisitions, and we manufacture essentially all of our products, save one, ourselves, generating very attractive margins. Our path to profitability is within our own control. A few words about the market.
The animal health market is huge. The veterinary services segment of that is over $62 billion and growing in the United States, and that's the segment that we participate in. The market has always been decent, large. During COVID, it got a lot larger as 23 million more cats and dogs were added to households, most of them, the majority, into the youngest among us, assuring another generation of pet parents. Today, it's pet parents. It's not someone that owns a dog that sleeps outside. It's a dog and a cat and maybe somebody else that are sleeping at the foot of the bed. With that pet parent sort of designation comes the fact that there's a whole lot of things, as it turns out, that people would give up before they would not take their sick or injured pet to the vet. That's where we come in.
All of our technologies are for pets when they're at their most vulnerable, sick or injured. Now, against that backdrop, veterinarians are faced with a couple of really big challenges. One is staffing. If you tried to get an appointment at the vet before, you realize, A, there's a lot of people working in that office, and B, it's hard to get an appointment because they just don't have the staffing that they need. Further, they need to develop revenue growth. They lost revenue to Chewy and pet.com and so on. Those are challenges that they need to face, and all of our products are geared to addressing those primary challenges. We do that through an innovative set of products on the diagnostic side as well as on the therapeutic side. The thing that they all have in common is that they meet what we call our five pillars.
They improve the quality of care of the pet and the satisfaction of the pet parent. They also significantly improve the workflow, cash flow, and profitability of the veterinarian's practice. We'll start with the PulseVet device. This generates the most amount of revenue for the company at the current time. The PulseVet system is a shockwave system, but there's no electric shock. It's a sound wave. The generator that you see on the left of the slide in the blue bag is the generator in the control unit. It produces the energy needed to develop in the hand piece, which you see, to develop the sound wave and channel it, focus it into the animal's body. This sound wave, when it hits the tissue, activates the body's own regenerative properties, speeding healing and facilitating bone growth, developing new blood vessels.
It's really activating the body's own regenerative properties to great effect. A lot of technologies lay claim to these kinds of effects. There are over 30 published in the animal health peer-reviewed literature studies, including at least three randomized control trials that demonstrate the overall efficacy of the technology. Better data on the efficacy of the technology and the attractiveness of the therapy is found in the consumable revenue that we generate. You see, we sell the system for $30,000, and each hand piece goes for $2,000. That hand piece is loaded with enough sound pulses to do 50- 60 treatments, depending upon exactly what they're treating. Once those 50 or 60 treatments are completed, then the trode is returned to us. That's what we call the hand piece, and a new one is sent back to them. It's actually a refurbished one for another $2,000.
As you can imagine, veterinarians that adopt the technology, we generate revenue through their usage of the technology, and they only use the technology if they get good results. Today, over 65%, nearly 70% of our revenue from this product line comes from the reordering of those trodes because veterinarians have found that they're very efficacious, and pet parents are more than happy to have this technology applied to their pet because it means the difference between getting two treatments with PulseVet or being on a drug for the entire year and forever to treat severe osteoarthritis. It can mean the difference for a pet with a partial cruciate tear having surgery or not having to have surgery. It's covered by almost all pet insurance companies for the same reasons that pet parents find it's an economic advantage. From an economic standpoint, it's great for everyone.
We generate high margins on our revenue. We get recurring revenue each time we sell a new system. We know that horse vets are going to buy about three of them a year, generating $6,000 in revenue. Some will go to four, and small animal vets will use two to three per year. For the company, it's an outstanding capital economic story. With respect to the vet, it's an even better story. You see, they charge $300 on average for each of those treatments. They just have five patients a month that need on average two treatments. They're going to generate in that first year about $36,000 in revenue. It only costs $32,000 for the system upfront and another $2,000 for that first trode reorder. They're in the black total, including the cost of capital after one year. We make it easy for them from a cash flow perspective.
The financing company that we've made arrangements with finances these purchases with no money down, no money for six months, and then only $100 a month for the next six months. In that first year, they're out $600 for those payments, $2,200 for that reorder trode, and yet they've generated $36,000 in revenue. It's an economic model that's great for the veterinarian, the pet parent, and for Zomedica. Shifting gears to the Assisi Loop. The Assisi Loop provides what's called targeted pulsed electromagnetic field therapy. This is an electromagnetic field that's projected on either side of the opening in the loop to help the patient that needs help with inflammation or pain. Specifically, this therapy increases endothelial nitric oxide, which in turn cascades to a result to decrease inflammation and decrease swelling and to alleviate pain.
Now, this is a product that's primarily targeted at the pet parent because pet parents want to be involved in caring for their pet. Once they're done in the clinic, the vet sells this to the pet parent for $300. They bought it from us for $200. They make a nice margin on it. The pet parent uses it, and after about 150 treatments, it needs to be replaced. This also is a consumable product, and about a third of our revenue today comes from reorders of these Assisi Loop products. It's not just a loop. We make a larger size and a smaller size. We make one specifically for dental applications, and we also make it in the form of a bed that goes in a cage and provides actually 6,000 treatments.
Overall, it's a great opportunity for the pet parent to get involved with the care of their pet. VETIGEL Hemostatic Gel is an agent. It's a gel that stops bleeding. This product, although there are others on the market, stops bleeding faster than anything else that's there. Literally, within five seconds when applied to the source of the bleeding, the bleeding stops. It decreases blood loss. It decreases operating time, and it actually just gives everyone a sense of comfort to know that they have a product that's going to stop that bleeding. We license this product for distribution in the United States in January of this year. It comes in the form of a prepackaged syringe. All they have to do is open it up and apply the gel, and at that point, the bleeding has stopped. We sell this to the veterinarian for around $40 per syringe.
They typically will charge $80, which is their typical markup on these types of products. Shifting gears now to diagnostics, our first product is the TRUVIEW microscope. It's a microscope, but it's also a digital microscopy and cytology platform, which basically means that not only does the veterinarian get to see the image on the screen, whether it's on the microscope itself or on their laptop later, because everything is cloud-based. Not only do they get that, but they also have an opportunity today for a pathologist to take a look at that image and provide an opinion as to what the diagnosis should be to the veterinarian. This is a tremendous boon for veterinarians who may not have the same sort of level of expertise as a board-certified pathologist would have.
In the very near term, this quarter, we're launching an enhancement to this technology, which will provide an AI-generated report on every slide that's entered. The economics today are a $500 a month subscription, a little bit more if they do more than 100 slides, and then each pathology report that's provided to them is $75. We'll be adding a $20 charge for AI reports once we launch this new product. Our TRUFORMA platform is truly unique in diagnostics in that it utilizes uniquely the bulk acoustic wave sensor that was developed and pioneered by a company called Qorvo. They're very big in the electronics space. What we discovered is that the use of this sensor in a diagnostic device can provide an extended dynamic range that will allow this technology to perform assays or tests that other point-of-care devices simply cannot perform because they lack the dynamic range.
We have now around 15 assays available. We provide the instrument to the clinic at no charge, helping with cash flow certainly, and they just buy the cartridges and pay for them as they buy them. This device provides significant growth opportunities. We've been up over 75% growth this year and for the past few years. Once we put a platform in, not only do they have the assays that are currently available, but they can seamlessly add new assays as time goes on. The VETGuardian pet monitoring device is absolutely alone in its category. There is no other monitoring device that does not require any attachments to the pet.
It's for when the pet is at their most vulnerable in the clinic, post-surgery, which is where over 60% of the time that a pet dies in the clinic, it's in the post-surgery period, or in the ICU, or when they're alone in the clinic overnight. What this does is it utilizes a radar board and the thermal imaging camera, a LiDAR camera, to be able to pick up the vital signs, the temperature, pulse, and respiration, and then it displays those on whatever device that they're connected to, whether it's a laptop or a large screen TV in the clinic itself, or maybe they're home checking on patient pets that are there overnight, and they're using an iPad or a laptop or a phone even. For this, we charge $4,500 to the clinic.
We charge another $240 on an annual basis for the cloud service, a little bit more for an extended warranty. The recurring revenue here is not just that revenue, but also the fact that clinics find after they acquire their first device that they could use a second device or a third device. They can display up to 12 devices on the large screen TV. Today, I think we have the largest facility we have has 11 that are going at all times. This is technology that really does improve the care or the quality of care for the pet. It also provides a new revenue stream for the veterinarian who typically will charge $50 for a surgery session, a post-surgery session, and $100 for overnight or all day in the form in the case of an ICU.
When you take all these products together and you look at the annual recurring revenue opportunity from the consumable part, it's about a $2.7 billion annual revenue opportunity for the company, and that would mean every clinic out there is using every one of our products. That's quite a big task. However, we're making some progress. In 2024, we had penetrated that overall potential market at about 1%. When we get to 2%, and we're on our way there, when we get to 2%, we'll be cash flow positive, and beyond that, we'll be GAAP profitable. The results that we've seen, I think we've been pretty pleased with. We've grown revenue year-over-year for 18 straight quarters. We started with no million in 2020 and rose to $4 million in 2021, rising to $19 million and then $25 million and $27 million.
This year, we're off to a good start. Typically, our business is a bit seasonal. Our fourth quarter is always the strongest because it's associated with most of our equine PulseVet sales, and the first quarter is always the least for a variety of reasons in the vet market. We're off to a good start this year with about 9% growth for the first half. I mentioned we released earnings yesterday. We released or announced 14% growth year-over-year for the second quarter as the economy seems to be doing a bit better, 67% gross margins, and as I mentioned, $59 million in liquidity.
As we look to the future in terms of growth, we're really focused on four things: leveraging the commercial infrastructure that we've built to provide, not just to drive adoption, but to provide additional operating leverage, expanding our product portfolio on an ongoing basis, either directly or through M&A opportunities, and continuing to drive high margins by manufacturing our products ourselves. We sell the products in the United States through a direct sales force. We have 36 sales territories supported by a management team, supported by professional services vets to provide clinical support to customers and to our sales team. We also have inside reps to leverage certain specific opportunities, and in some cases, we go through distribution as well. We're online with Chewy and Pet.com and Pet Wishes and many of the other online avenues directed to pet parents, primarily for the Assisi Loop.
Outside of the United States, we've established a presence in many countries around the world. About 20% of our revenue today comes from international. International growth was up 13% last quarter over the previous year, and we continue to add new distribution channels as we move forward. From a product portfolio standpoint, we got lots of opportunities ahead of us. With respect to the Assisi product, for example, we launched recently the EquiLOOP, a product that's specifically for a loop specifically for horse applications. We've expanded indications for PulseVet, recently sponsoring research that demonstrates that it is an effective treatment for equine asthma, something that affects 12% of horses over seven.
In addition, recent clinical articles have indicated that working dogs, German Shepherds that work for the TSA or the military that come down with fibrotic myopathy, use a PulseVet, is able to take this condition, which is nearly impossible to treat according to the authors of the study, and extend their working lives about 32 months on average. For dogs, their training costs about $100,000. It's a really good technology that provides significant value. We have additional opportunities moving forward with these two products. We also have opportunities, very many opportunities with the TRUFORMA platform, as we've launched a couple of new assays. We have a couple of new assays to launch during the current quarter and a couple more in the quarter to come. VETGuardian today is limited to small animals that are in a cage or a kennel.
We'll be expanding that to equine opportunities in the not-too-distant future. From an M&A standpoint, we grew to this point by acquiring different product platforms. We started with a little bit of one, and we've added those platforms, as you can see, sequentially as we've gone forward. Now, with respect to M&A as we move forward, we're looking for only those companies or products that have products that meet our five pillars: improving the quality of care for the pet, the satisfaction of the pet parent, and the cash flow, workflow, and profitability of the practice. In addition, as we look now, we've really raised the bar. We also would need them to be accretive to earnings as our primary goal at this point is to get the cash flow break even. From an operational standpoint, we manufacture all of our own products.
We have a facility in Plymouth, Minnesota that manufactures our biotech products and distributes from there. Our main manufacturing facility is just outside of Atlanta, Georgia, where we manufacture all of our electromechanical products. These two facilities are significant in that we're producing margins in that 67% -70% range. It varies a bit with the quarter and the product mix, but we're very pleased with the margins that we produce. We're also pleased with the infrastructure that we've developed. The Roswell facility down in Georgia can produce up to five times what we sold last year. No further investment is needed for us to generate significant additional revenue well beyond the path to profitability. We fully integrated the facility that we acquired up in Minnesota, and we also put in there a robotic automated assembly line.
It was a significant investment, but it can also produce millions of cartridges, and it will meet our needs for years to come. Both of these facilities are very scalable. Because we manufacture our own products, because they're all done in the United States, and the exception of that is VETIGEL , which we license, and that's produced also here in the U.S., we have a very stable supply chain that's essentially free from any kind of worry about incoming tariffs. In wrapping it up, we have a large market opportunity. We've got highly differentiated proprietary technology, in many cases competition-free. We've been raising revenue at high margins for now four years on, and we've got plenty of capital on board to continue to grow and not only meet our goal of attaining cash flow positive status as well as GAAP profitability, but to get well beyond that.
With that, I'd be happy to take any questions that you might have. I see that the questions are coming in, and I will address them. The first question is, how has Zomedica balancing continued R&D and portfolio expansion via M&A versus scaling commercial adoption of existing products? In the early years, we really were very much focused on acquiring new technologies. We're very focused on acquiring new technologies and product platforms, and we've done that. Not only did we acquire the technology, but we also acquired the infrastructure necessary to build the company out because when I joined as CEO in October of 2021, we really didn't have much in the way of that infrastructure. Having gone beyond that phase, our first two products were revenue-producing.
The next several products were products that needed development, and we took them on and performed the R&D and finalized the development of the products and then launched them. At this point, our major focus is on scaling commercial adoption as we've now developed the robust sales and marketing infrastructure necessary to introduce new technology to customers. We still have an eye towards potential M&A. With respect to R&D, we have a couple of product launches that are coming out this quarter, and those have consumed a significant amount of R&D expense. Those will be behind us. As we look into next year, our R&D project costs will be very much reduced. I think you can expect that the R&D section will go down and everything else will sort of go up.
All right, why not license or sell non-vet indications of the Qorvo TRUFORMA bulk acoustic wave technology if this could get you to break even sooner? Really good idea. When we acquired Qorvo Biotechnology, we acquired not only the animal rights, but also the human rights. We preserved, they had received FDA emergency use authorization to diagnose COVID. We have preserved all of that clinical data and all the regulatory data, and we would expect that as we demonstrate a good track record with TRUFORMA in the animal health space, that we'd have an opportunity to monetize that in the human space. Anything else I'd say would be very forward-looking, so I'll leave it at that. Gross margins are listed at 67%- 70%. Quarterly burn of $4 million- $5 million. One of the key levers to maintain or improve margins is as Zomedica scales.
The primary driver of improving margins beyond 67% would be revenue growth, right? As we built the infrastructure that's necessary, we built it before it was able to pay for itself. Getting operating leverage from our sales team has been happening now over the last several quarters, the last year or so. We expect that to continue. As volume goes up, our COGS, our cost of goods, will go down. We've seen some improvement in that. Basically, since we launched, we've been at around 70%. Only recently, as we've brought in a little bit of new technology, has that been at the 67% level. We expect that to hover between 67% and 80% as we move forward. From a burn standpoint, we expect that burn to be less than $4 million a quarter going forward. As I mentioned, a significant consumption of OpEx has been R&D on some major projects.
Those products are now ready to launch, and we expect continued improvement in both of those areas. If the market is not giving you credit for your business, would you consider putting the company up for sale? If the market is not giving us credit for our business and our business was mature and we weren't looking at substantial growth moving forward, then I suppose that would be something we should consider very sincerely. At this point, we don't feel like we're anywhere near valued appropriately. At this point, our strategy is to continue to grow the revenue, get to cash flow break even, GAAP profitability, and really get the product lines that we have in development out and running. At that point, then we'll consider all options. I will say that doesn't mean that if someone came calling that we would ignore them. Of course, we would respond.
We have a fiduciary responsibility to do that. I'm not sure our shareholders would be happy with the sale of the company at this price level. Next question. Thoughts on your valuation and catalyst for reevaluation of Zomedica? Frankly, I think that the valuation of the company is very, very low. We're very undervalued. We have negative enterprise value according to the price of the stock. When you look at it, I mean, we did $27 million in revenue last year. A decent multiple of revenue on a sale would be about four times revenue. That's over $100 million. We paid $71 million for PulseVet four years ago. Trailing 12 months revenue at the time was $12 million. Last year, we did something like $22 million in growing it in over three years. It just doesn't add up.
The value of the company, I think, is much higher than the stock price. There's a lot of reasons why we got to where we are. How we get from where we are now is we continue to grow organically. We get to cash flow break even. We get to GAAP profitable. We go back to our shareholders and encourage them to reconsider their prior negative vote on a reverse split. Can I speak on how Q3 is going so far? Do you expect Q3 to be along the same year-over-year growth as Q2 or higher than that? We've seen accelerating growth in the first half of the year from around, I want to say about 4% growth, I think, in the first quarter, which was pretty reflective of the entire market. 14% growth, which has outperformed the market. I'll tell you that July went very well, very well.
We expect to accelerate growth throughout the year. New product indications, our closest to commercialization, what hurdles remain before launch? Myopathy is being used. That paper's been published, and we do a lot of business with the military and with other working dog veterinarians. Bleeders is something that affects a small portion of horses. It's barrel racing horses. It's already being used for them because what they found was they could treat it with the PulseVet, and they go back to racing right away and winning if they were winning before. It doesn't make them faster, but it allows them to be as fast. Equine asthma, we actually have launched an equine asthma clinical registry, and we have clinics that are joining that weekly, which indicates that they're treating asthma with it. We do not provide guidance at this point.
The deck highlights expanded capabilities for the AI and diagnostics and monitoring. Can you share more development timeline and so on? Yeah. The TRUVIEW microscope, so the question is, what about AI, and can you share more info? The TRUVIEW microscope will be launched here in this quarter, and it will add an AI reporting function for every slide that's introduced into it. That's ready to go. We're just doing the finishing touches. It took a lot to get to this point in time and expense, but we're ready now to launch that. With VETGuardian, we incorporate AI into the technology itself. It's able to identify, you know, that there's an animal in the cage and so on. You describe significant manufacturing scale capability. What investments remain to drag down unit costs? Essentially none. We put a new facility into the Atlanta area.
We acquired a facility and then redid it up in Plymouth, Minnesota. We spent $6 million on that robotic automated assembly line. We are good to go in terms of that. We'll always be looking for reduced costs and things like that. As volume goes up, we'll see margins improve. With $59 million in liquidity as of the end of June, what is your expected runway? Years and years. Really, years and years in terms of that. We have plenty of capital on board, we think, to achieve our milestone of cash flow break even. That is the last question that I see. I also think that I am a little bit over time. I would thank you for joining today and for the questions. I would look forward to chatting with you at any time.
I think they told you earlier you can book a meeting by clicking a particular button on your screen. I'd be happy to talk to you further. If you ever wanted to contact me, you see my email address there on the screen. Thank you very much for your time, and I wish you a good afternoon.