Profound Medical Corp. Q3 FY2024 Earnings Call

Thank you. Good afternoon, everyone. Let me start by pointing out that this conference call will include forward-looking statements within the meaning of applicable securities laws in the United States and Canada. All forward-looking statements are based on Profound's current beliefs, assumptions, and expectations and relate to, among other things, any expressed or implied statements or guidance regarding current or future financial performance and position, including the company's year 2024 financial outlook and related assumptions, the expectations regarding the efficacy of Profound's technology in the treatment of prostate cancer, BPH, uterine fibroids, palliative pain, and osteoid osteoma and its future revenues and financial results. Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements to be materially different from those implied by such statements. No forward-looking statement can be guaranteed. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this conference call. Profound undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law. Representing the company today are Dr. Arun Menawat, Profound's Chief Executive Officer; Rashed Dewan, the company's Chief Financial Officer; and Dr. Mathieu Burtnyk, Profound's President. With that said, I'll now turn the call over to Rashed.

Good afternoon, everyone, and welcome to our third quarter 2024 conference call. On behalf of the management team and everyone at Profound, I would like to thank you for your ongoing interest in our company. For those of you who are shareholders, we appreciate your continued interest and support. I will turn the call over to Mathieu in a moment to provide updates on TULSA utilization trends, the CAPTAIN clinical trial, and reimbursement. However, before I do, I would like to provide a brief summary of our third quarter 2024 financial results. To streamline things, all of the numbers I will refer to have been rounded, so they are approximate. For the 3-month period ended September 30, 2024, the company recorded revenue of $2.83 million, with $2.65 million from recurring revenue and $179,000 from a one-time sale of capital equipment. Third quarter 2024 revenue increased 64% from $1.73 million in the same period in 2023. Looking forward, for the full year 2024, based on the company's current business planning and budgeting activities, we continue to anticipate revenue to be in the range of $11 million to $12 million. Gross margin in Q3 2024 was 64% compared to 61% in Q3 2023. As we mentioned on previous calls, we expect gross margin to vary some quarter-over-quarter. But just as we delivered about a 60% margin in the full year 2023, we continue to expect to deliver that or better in 2024. Total operating expenses in the 2024 third quarter, which consists of R&D, G&A, and sales and distribution expenses were $10.8 million, an increase of 42% compared to $7.6 million in the third quarter of 2023. Breaking that down further, expenditures for R&D increased 22% on a year-over-year basis to $4.2 million. G&A expenses increased by 84% to $3.7 million, and sales and distribution expenses increased by 34% to $2.9 million. Net finance expense for the 2024 third quarter was $199,000 compared to net finance income of $1 million for the same 3-month period in 2023. Overall, the company recorded a third quarter 2024 net loss of $9.4 million or $0.38 per common share, compared to a net loss of $5.6 million or $0.26 per common share for the same 3-month period in 2023. As of September 30, 2024, Profound had cash of $27.1 million. With that, I will now turn the call over to Mathieu.

Thank you, Rashed. In the third quarter, Profound held its PRO-TALK Live event in Las Vegas, a peer-to-peer education platform for physicians by physicians. The event was sold out with 70 physicians in attendance to hear from opinion-leading surgeons from the top hospitals in the United States. The message was clear. The TULSA procedure is uniquely positioned to become a mainstream treatment option for men with prostate disease, and the shift to an MRI-centric modern treatment pathway for prostate management is happening right now. Physicians describe the TULSA-PRO as the only device that can safely deliver whole gland ablation for diffuse disease and targeted ablation for discrete disease, with its ability to treat any region of the prostate, whether posterior or anterior at the apex, mid-gland, or base, all within any size volume and shape of prostate. Physicians even detailed their streamlined workflow and how they use the precision of intraoperative MRI together with the TULSA AI contouring assistant to efficiently delineate the prostate and then apply thermal boost dynamically during treatment to customize the dose delivered to specific areas of the prostate. And this is all with an inside-out energy source, which gently heats the prostate tissue to kill temperature without boiling or disrupting surrounding tissue, with no risk of bleeding and as a result, no overnight stay in the hospital or clinic. Multiple physician presentations highlighted the flexibility of the TULSA-PRO in both prostate cancer and BPH. Its applicability in broad patient groups was reviewed, for example, in intermediate risk prostate cancer regardless of tumor burden or prostate size, as well as for salvage treatment of recurrent prostate cancer. Presenters also discussed the advantages of the TULSA-PRO for more specific areas of prostate disease, like patients with tumors near the prostate apex who are likely to suffer from urinary incontinence with other modalities or patients with low-risk prostate cancer that refuse active surveillance or are at a high likelihood of failing active surveillance or those with concurrent symptomatic BPH requiring surgical intervention. One presentation dedicated to BPH described how TULSA has already proven effective for prostate volume reduction within the TACT pivotal trial and that European Phase II studies and personal user experiences have solidified the clinical value for patients with large and extra-large prostate volumes as well as those on anticoagulant therapy. The peer-to-peer educational event was fruitful as we have already seen attending TULSA surgeons adopt some of the learnings to their practice. I will briefly summarize two example cases performed since the event. The first is a 60-year-old patient with a history of prior UroLift clips and eventual TERP procedure for relief of BPH symptoms. This patient was already on active surveillance, and a recent diagnostic MRI revealed a significant prostate cancer in the right posterolateral apex. A near whole gland but highly customized TULSA treatment was planned for his 55-cc prostate, taking into account the remaining UroLift clips. Post-treatment imaging demonstrated an effective non-perfused volume, and the treating physician expects this will alleviate both the entire cancer's tumor and the patient's BPH symptoms without impacting his vital functions. Except for TULSA, there is no other function-preserving viable treatment option for such patients. The second is a patient with a prostate volume of 283 cc who was catheterized for 6 weeks due to acute urinary retention caused by severe BPH. He was treated to relieve his symptoms while setting a record for the largest prostate we have ever treated so far. In the third quarter, real-world usage of TULSA mirrored the customizability and clinical flexibility emphasized at the PRO-TALK Live event. With respect to indications, approximately 64% were treated for primary prostate cancer, increasing from the previous quarter; 28% were hybrid patients suffering from both cancer and BPH; the remaining 6% were salvage treatments, and 2% were men with BPH only. Commercial use of the TULSA procedure continues to grow. Eighty-two percent of the patients treated had intermediate risk prostate cancer, and about 11% of the patients treated were deemed high-risk patients. The vast majority of TULSA treatments remain whole gland, but 22% of the patients were treated utilizing a focal therapy protocol ablating less than half of the prostate volume. One additional topic I would like to cover this afternoon relates to reimbursement for the TULSA procedure. Late last week, Friday, CMS published a set of final rules, including the new CPT Category 1 codes for TULSA coming into effect on January 1, 2025. I won't rehash the details of the press release, but I did want to emphasize two points. First, CMS has elevated the TULSA facility payment to urology APC Level 7, which is higher than any other prostate treatment procedure. In a hospital outpatient setting, the Medicare national average facility payment will be $12,992, which is 25% higher than that for robotic radical prostatectomy despite the requirement of an expensive robotic surgical suite and at least one overnight stay in the hospital, if not longer. In addition to the clinical value of the TULSA procedure compared to invasive surgery, we believe these reimbursement rates will motivate hospitals to shift some of their prostate cancer procedures away from the surgical suite, where physicians are often competing for block time, to their outpatient MRI suites, where they will be able to capture larger revenue with interventions, rather than diagnostics only. The second point is that we believe an even larger impact will be seen in the ASC setting. Note that robotic prostatectomy is not on the CMS ASC covered procedure list. So, while a few ASCs may have the robot, they are only used to treat commercially covered patients, while all Medicare patients are funneled to hospitals. With TULSA, the Medicare national average ASC facility payment of $10,728 is not only higher than any other prostate procedure performed in an ASC, but it is even higher than the hospital payment for robotic radical prostatectomy. Let me repeat that. An ASC will receive a higher facility payment for the TULSA procedure than a hospital will receive for robotic prostatectomy. With large urology group practices owning their own ASCs, this creates a favorable opportunity to offer incision-free, blood-free outpatient prostate treatment, which is good for the patient, all within the confines and economics of an ASC, which is good for the physician and physician group. Even if surgeons may continue to operate with a robot in an ASC on their commercially covered patients, we anticipate a shift of their Medicare patients away from the hospital and into their ASCs. Additionally, when we consider that the MRI-centric modern treatment pathway for prostate management is becoming more established, together with two leading global medical technology companies, Siemens and Cook, commercializing interventional MRI solutions, we believe this will catalyze the adoption of MRI and TULSA by urology across multiple locations of service, specifically in their physician-owned ASCs. Finally, the CAPTAIN study is continuing to recruit at an increasing pace and remains on target with two sites joining the study in the third quarter, including the Cleveland Clinic. With strong facility and physician reimbursements coming into effect on January 1 and the CAPTAIN study starting to read out in the first half of next year, we believe TULSA will be well positioned in 2025 to increase procedural adoption as well as the rate of new installations across all locations of service. I will now turn the call over to Arun.

Thanks, Mathieu, and good afternoon, everyone. As you heard from Mathieu, the first major PRO-TALK Live event was not only well attended but also highlighted the capabilities of the TULSA procedure to enable urologists to perform a wide variety of whole gland or partial gland treatments. Of the 70 physician attendees, about 40 were prospective users. Following up with them after the conference, they have now been successfully added to a continuously growing pipeline for the adoption of TULSA in various types of institutions in the United States. As you can tell, we're also delighted to see that CMS recognized the value proposition of the TULSA procedure and placed it in urology APC Level 7. The codes will be applicable in the widest possible range of treatment settings, including hospitals, ASCs, imaging centers, and office settings such as large urology practices. In comparison, radical prostatectomy reimbursement codes can only be used in hospitals. Some ASCs may have the robot, though they cannot bill Medicare in that setting. In addition, we believe that the economic model of the TULSA procedure will be superior to that of any other prostate disease management procedure. After the publication of the final rule on reimbursement and listening to TULSA urologists at the PRO-TALK Live conference, we are now even more confident about driving the adoption of TULSA to mainstream. I would like to share with you a few strategies that we are planning to use to achieve that goal. First, our introduction of TULSA AI modules has been well received. Thermal Boost is being used routinely in over 50% of TULSA cases, and the automated contouring assistant has not only increased urologist confidence in treatment planning but also reduced the procedure time by several minutes to enable them to do an extra procedure in a day. We are now using the same base technology to develop a BPH TULSA AI module that will allow for customized treatment comparable in terms of speed to other modalities like Aqua ablation. TULSA will thereby be the only technology that will enable urologists to effectively, safely, and efficiently treat the widest possible variety of prostate disease patients. We remain on track to complete product development of the module by this year-end and plan to soft-launch the TULSA module for BPH in the second half of 2025. Second, we plan to continue to support the first Level 1 trial in prostate cancer, CAPTAIN. As we have discussed before, we expect that perioperative data from the trial is very likely to become available by AUA 2025. We plan to use the results of this trial to support additional acceptance for reimbursement by private insurance companies and seek the addition of the TULSA procedure as a treatment modality in cancer society guidelines. We're also pleased that Siemens and Cook Medical presented at our PRO-TALK Live conference. Going forward, we continue to expect to provide TULSA programs to urologists where MRI already exists. Still, we will add TULSA Plus programs, which stands for selling both TULSA and Siemens Interventional MR, the FREMAX, as a combined total prostate solution. Given the reimbursement ruling, the TULSA Plus solution not only has the potential to provide flexible access to the technology, even in a doctor's office, but we believe will also provide significant economic justification. It is our strategy to soft-launch the TULSA Plus solution within the next 9 months. As we move from the patient pay business model to the reimbursement-based business model, we are also transitioning from a recurring revenue-only model that we deployed historically to a more traditional medical device business model, which will comprise selling the device upfront as a capital sale, selling the disposables at a slightly lower price, and adding service agreements to the sales. We anticipate that the upfront capital ASP is likely to be in the range of $350,000 and the price of the disposable ASP will be in the range of $5,000 to $6,000. Net-net, this model will still deliver Profound with high margin, greater than 70% business, while at the same time, it will be economically attractive to TULSA users. Finally, as you know, Tom Tamberrino has joined us now to manage the sales and marketing business. Tom is already recruiting to add to our team of sales professionals, but also bolstering the sales management organization to prepare for the growth that we anticipate later this year and next year. We also plan to continue to increase our patient education programs to further build awareness of the TULSA procedure among men. At the end of the day, it's all about the patients, and we already know from the feedback that we have received that when provided with information about their options, patients pick TULSA every time as their first treatment of choice. To summarize, we continue to believe TULSA has the potential to become a mainstream treatment modality across the entire prostate disease spectrum. Patients enrolled in the CAPTAIN post-market study comparing TULSA to radical prostatectomy is progressing as planned. We are delighted to be transitioning from the cash pay phase to the reimbursement phase, and we're building a world-class sales team to grow the business. Starting in January, TULSA will stand above all other covered prostate disease treatment modalities at urology Level 7 reimbursement. And finally, I'm pleased that Tom Tamberrino has joined Profound to lead and build a world-class sales team. This ends our prepared remarks for today. With that, we are happy to take any questions you might have.

Our first question comes from Benjamin Haynor with Lake Street Capital Markets.

I apologize if I missed this or overlooked it, but just real quickly on the goal that you guys have of getting to 75 installs by year-end. Any update on that goal?

Yes, Ben, we have reaffirmed the revenue guidance for the year on the basis that the pipeline is very strong. In the last quarter, we also began to transition from the cash pay model to the financial justification model based on reimbursement. So that did raise the question of waiting for the final rule publication at many of our sites. And now that the final rule is even better than the proposed rule, we actually don't see any issue with increasing the installed base. However, because of this sort of gap in this time, I think getting to 75 is a little bit optimistic for the end of this year, but we will get there pretty soon after the year is over. So, I don't see any issue getting to the 75. I just think that this is a transition year for us. And so, there is a little bit of give and take that I anticipated at the beginning of this year, and it's sort of playing out a little bit. But as I said in the prepared remarks, the pipeline is strong. The financial model is even stronger than we anticipated during the early phase when the proposed rule came out. And I think many of these hospitals are very engaged with us.

Okay. That's fair enough, and that's helpful. Following up on the pipeline, the PRO TALK Live event was a fantastic occasion. What was the response from participants after the event? Since you've had a chance to connect with some of those individuals over the past few days after being elevated to APC7, how has that impacted things? I think I’ll stop there for now and may have a follow-up.

Yes. Ben, I think that, as you might expect, the reaction really was very strong from the conference because of the number of users who presented in the caliber of the users that presented. In fact, I've personally had a chance to visit a couple of the people who came to the conference who were prospects, and we're moving forward with installs in a number of sites as a result of that. And I think during that time, most of the conversation was related to financial justification at APC Level 7, and even that looked pretty good. But I think now that we're at 7, we have actually sent out the updated models to a number of sites already within a week. And I think the best I can tell you so far is certainly the reaction is positive. I would say the key thing is that many, many are ready to talk about the fact that there have been a number of technologies that have kind of come and gone, and they tend to be more in the focal therapy space or partial ablation space. But given that this is a whole gland treatment with the option that they can also do focal, I think the general feedback that we're getting is certainly this is one of the few technologies that indeed has the opportunity to grow to become mainstream. So, this is why I sort of laid out some of our plans because I think certainly that is what we're shooting for at this point.

Our next question comes from Rick Wise with Stifle. Your line is now open.

Hi everyone and Dean, good afternoon. This is John on for Rick today. Congratulations on the upgraded coding versus the initial expectation. I just wanted to maybe put a finer point on your comments earlier, just in terms of the implication for physician uptake, revenue, and procedure growth. You sort of set out a 75-system goal, maybe we'll call it sort of early next year, you were saying. And you've also talked about utilization goals in terms of sort of growing utilization maybe in the mid-teens levels once the installed base starts to ramp. With this higher reimbursement in place, does that impact any of those assumptions in a more positive way at all? And is there any way to sort of think about how it could impact commercial inflection?

I think so, John. Overall, I feel that everything is coming together for our technology. We have support from leading physicians, our existing sites are satisfied users, and we've received excellent feedback from patients. We're pleased with how CMS assessed the reimbursement situation. The clinical data remains positive, and we'll have CAPTAIN trial data released next year. Therefore, I do believe that things are aligning well. If you examine the recurring revenue from this past quarter, you'll notice it's the highest we've achieved so far, indicating potential for continued growth. As I mentioned, all the indicators point in the right direction. We are actively working to expand our sales and marketing team right now, and I'm excited that Tom has joined us, as we have collaborated in our previous company. I'm optimistic that we can grow at a substantial pace in 2025. Additionally, we have reaffirmed our guidance for this year. Considering the numbers, Q4 must be a strong quarter for us to uphold that. So, even in the current quarter, we are feeling confident that these results will positively impact our revenue.

That's interesting, Arun. Maybe I’ll follow up on the point you made about reiterating the guidance. In terms of the mix between recurring revenue and capital, how much do you anticipate for the fourth quarter? Additionally, could you share your expectations regarding utilization? I noticed it increased by 13% this quarter. How should we approach this now?

Yes, John, I believe that utilization will continue to rise. Earlier in the year, I mentioned that there would likely be a larger share of capital in the early stages as our installed base expands and we transition to a more standard medical device model. Several sites that currently use TULSA with the recurring revenue model have shown interest in switching to the new model. Consequently, some of these sites will transition to the new model, and some of the systems on our balance sheet will also switch over, contributing to our revenue. Overall, I see this transition positively, and there is little doubt that utilization is on the rise and will keep increasing. However, predicting the ratio in the short term for the next 3 to 4 quarters is a bit more challenging. Nevertheless, I anticipate that in the long term, we will likely see a revenue mix of about 30% capital and 70% recurring.

Our next question comes from the line of Michael Freeman with Raymond James. The line is now open.

Hey Arun, Matthew, and Rashad, congratulations on the positive news regarding reimbursement and strong revenue results this quarter. I would like to ask if you could provide some insights into the sales and installation dynamics that may be occurring behind the scenes. Do you feel that potential customers for the TULSA have been waiting to understand the final rule and the specific reimbursement rate before committing to a contract and proceeding with the installation? Additionally, it would be helpful if you could share some details about your backlog or contract pipeline to help us better understand the installation pipeline.

Yes, that's a great question. At the beginning of the year, we anticipated a unique dynamic in the second half, and that has indeed occurred. Some investors expressed a desire to wait for the final rule, and internally, the data available to us suggested we would likely receive upgrades. In Q3, the addition of new sites was a significant factor, and we were also adapting our model and discussing capital. We had already begun generating some capital revenues in the first two quarters, so that dynamic was in play beforehand. To your first question, we are at an inflection point, and while there's some uncertainty, we feel confident reaffirming our revenue guidance for the year after reviewing our forecast with Rashed, Mathieu, and Tom. Now that we've cleared this tentative period, we believe we'll be able to finalize deals this year, which enhances our confidence. Regarding the pipeline, we had a strong pipeline leading up to the Pro Talk conference. The attendees were typically on the fence but became more urgent after learning about the technology. I believe our pipeline is substantial, though we're limited by the size of the sales team, which is why Tom is actively hiring. As new team members join, I am confident they will have plenty of leads to pursue. It's difficult to provide a specific number, but there were at least 40 attendees at the conference, and we had a solid pipeline even prior to that event.

Okay. And this leads perfectly into my next question about the sales team. Have you hired any individual sales team members during the quarter? How many do you anticipate hiring before the end of the year? Additionally, what would be the ideal size of the sales team for the initial launch and active reimbursement of TULSA?

Yes. So, we're taking a short-term look and a strategic look at how we want to organize for growth and what we need immediately from that organization. And so, the senior team has spent quite a bit of time to figure out what will the design look like to go forward. We have about 13 to 15 salespeople at the moment. We want to get to about 40 as soon as we can. Obviously, we want to hire the top quality team, so it's not an easy process. But I would like to add at least five more this year, if possible, we can get that done quickly. But we will continue to recruit until we get to at least 40. In addition to the sales professionals, we are adding some sales management also. And part of the reason for adding the sales management is to prepare for even longer-term to be able to continue to add people as the company and the revenues grow. So, a good bit of our effort is going into that at the moment.

Our next question comes from the line of Scott McAuley with Paradigm Capital. Your line is now open.

Thanks everyone. Congrats on the quarter. I think many of my questions have already been answered, but I wanted to ask about the commercial model and emphasize that there seems to be increased interest in the traditional model compared to the pay-per-use model, particularly with the new reimbursement updates. Initially, it was believed that the pay-per-use model attracted interest due to its lower upfront cost, making it appealing for some organizations that don't require initial capital. So, in discussions with potential users, what is prompting this shift to focus more on the traditional model moving forward?

Yes, that's a very good question. When we started, the technology was entirely new, and almost all patients were paying out of pocket. For a site considering a brand-new technology with cash payments, it was challenging to predict the usage. This is why the recurring revenue-only model was the most logical choice at the time; they could charge patients what they needed for the procedure, and we received what we required in return. This model has worked well for us. I'm also encouraged by the future potential, especially since some sites charging between $30,000 and $35,000 were successfully attracting patients for the TULSA procedure. Some of these sites currently relying on the recurring revenue-only model have expressed interest in purchasing the system outright. They now have a clearer expectation of how many patients they can treat, making it easier to justify the financial investment, especially with the data we can provide. For urology practices, presenting their usage and potential reimbursement to their financial departments helps in justifying the purchase. That's why I believe we should transition to the traditional model, which could potentially increase profitability on a per-patient basis. While we are still in the early stages and aligning our goals, we want to reach a point where sites can easily justify the investment and see profitability for every procedure. However, we're not ruling out the current model; if some sites prefer to budget for capital later and opt for a higher price per procedure initially, they can still remain profitable. Our ultimate goal is to increase usage and treat more patients. This is why I’m sharing as much information as possible to help you model this situation, but discussing how much will be capital versus recurring revenue will be a bit challenging over the next few quarters.

No, that's great. I appreciate that. And that definitely makes sense with the kind of utilization as the goal and wanting to give clinics the highest profit margins themselves. And I guess just second, in terms of commercial reimbursement from commercial insurance plans, obviously, the Medicare is very important and getting that as a key milestone. How are you thinking going forward in terms of getting added to commercial plan lists and being able to tap into that market as well?

Yes, this is a major priority for us. The outcomes of the CAPTAIN trial will be beneficial, and we will share that information in a few months. During this time, although the model was cash pay, many patients were able to use their cost data to seek reimbursement from their private insurance companies. We have collaborated with numerous patients to ensure their insurance companies had all the necessary information for decision-making. Regarding visibility, we are making progress and are fully aware of its importance. One reason we elevated Mathieu to the role of President is that he has led reimbursement efforts with CMS and associated committees, and his focus will now shift to achieving similar outcomes with insurance companies. In summary, I believe we possess the clinical and cost data required to engage with insurance companies, and Mathieu is well-equipped to handle that as he did with the CMS process. Additionally, we have been working alongside insurance companies and with other ablation technologies that have received reimbursement, which should lead to a more favorable reception than introducing something entirely new.

Our next question comes from Benjamin Haynor with Lake Street Capital Markets.

Just wanted to touch on TULSA Plus. Is that something that is kind of a straightaway pipeline expander? Or is it something where some folks might want to wait to choose to go down that route once it becomes available, I think you said 9 months out?

I think the way we're managing this is by making TULSA available for existing sites today. If a hospital has a compatible MRI, we are implementing TULSA and will start working with them. Beginning next year, we will also offer the TULSA Plus option. Our strategy is to install TULSA at their current site so their team can start treating patients. When the new MRI is installed, which may take six to nine months, we will transfer TULSA to the new MRI at that time. While it may take a bit to launch the TULSA Plus model, I don't foresee it becoming a bottleneck for hospitals to get started with our current approach. Some sites might prefer to wait for the MRI since it’s already FDA cleared. A few sites in the U.S. have it and we're generally receiving positive feedback. It’s possible that some may choose to acquire both options. Historically, we’ve had scenarios where sites had a Siemens MRI and planned to switch to a GE MRI. We provided TULSA for their Siemens machine and later switched the software when they transitioned to a GE machine. This flexibility is something we intend to continue.

Do you think that under TULSA Plus, they will pay the over $1 million required to obtain access to the Magneton Femap in your device? Or will Siemens or a third party finance the equipment and charge them $200,000 or $300,000 a month?

Yes, that's exactly how we're approaching it. If you check the Siemens Femap website, they indicate they are ready to lease it for about $14,000 a month, which is quite reasonable. Many of these sites will ultimately need to determine how many patients they can treat each month. This, based on their reimbursement, will establish their revenue, and they will understand their costs, as well as ours. They will be able to easily calculate how many procedures they need to perform each month to break even and cover the monthly lease fee. Additionally, there are third parties willing to bundle everything and transform it into lease payments. We're working on the finer details, but I believe this is all definitely achievable.

Congrats on the leveling up with the APC.

Thank you so much, and we look forward to communicating with you for the Q4 and year-end call in 2025. Thank you.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.