Q3 2024 NeuroOne Medical Technologies Corp Earnings Call

Operator: Dr. John McClurg, Connor Stevenson, David Rosa, Ronald McClurg Dr. John McClurg, Connor Stevenson, David Rosa, Ronald McClurg, Connor Stevenson, David Rosa, Ronald McClurg, Connor Stevenson, David Rosa, Ronald McClurg, Today, ladies and gentlemen, welcome to the NeuroOne Medical Technologies Corporation third quarter of fiscal year 2024 financial results conference call. Today' Chris Volker, the company's Chief Operating Officer, will also be in attendance.

Operator: Today, ladies and gentlemen, welcome to the Neuroone Medical Technology Corporation, third quarter of fiscal year 2024 financial results conference call.

Speaker Change: Today, ladies and gentlemen, welcome to the NeuroOne Medical Technologies Corporation third quarter of fiscal year 2024 financial results conference call.

Operator: Today's call will be conducted by the company's Chief Executive Officer, Dave Rosa, and Ron McClurg, the company's Chief Financial Officer.

Speaker Change: Today's call will be conducted by the company's chief executive officer, Dave Rosa, and Ron McClurg, the company's chief financial officer. Chris Volker, the company's chief operating officer, will also be in attendance.

Operator: Chris Volker, the company's Chief Operating Officer, will also be in attendance.

Operator: Before I turn the call over to Mr. Rosa, I'd like to remind you that this conference call will include forward-looking statements within the meaning of U.S. federal security's laws, with respect to future operations, financial results, events, trends, and performance, which are all based on management's beliefs and assumptions as of today's call or other specified date. Forward-looking statements may involve known and unknown risks, uncertainties, and other factors, which may cause actual results to differ materially from those expressed or implied by such statements.

Operator: Before I turn the call over to Mr. Rosa, I'd like to remind you that this conference call will include forward-looking statements within the meaning of U.S. federal securities laws with respect to future operations, financial results, events, trends, and performance, which are all based on management's beliefs and assumptions as of today's call or other, Forward-looking statements may involve known and unknown risks, uncertainties, and other factors, which may cause actual results to differ materially from those expressed or implied by such statements, and C. Neuroone's financial results press release and SEC filings for information regarding specific risk and uncertainties that could cause actual results, accept as required by law, Neuroone undertakes no obligation to update such forward-looking, With that, I will turn the call over to Mr. Dave Rosa, CEO of Neuroone. Please go ahead.

Speaker Change: Before I turn the call over to Mr. Rosa, I'd like to remind you that this conference call will include forward-looking statements within the meaning of U.S. Federal Securities Laws with respect to future operations, financial results, events, trends, and policy.

Speaker Change: and Performance, which are all based on management's beliefs and assumptions as of today's call or other specified date.

Speaker Change: Forward-looking statements may involve known and unknown risks, uncertainties, and other factors, which may cause actual results to differ materially from those expressed or implied by such statements.

Operator: See Neuroone's financial results press release and SEC filings for information regarding specific risks and uncertainties that could cause actual results to differ. Except as required by law, NeuroOne undertakes no obligation to update such forward-looking statements.

Speaker Change: See NeuroOne's financial results press release and SEC filings for information regarding specific risk and uncertainties that could cause actual results to differ.

Speaker Change: accept as required by law, NRO1 undertakes no obligation to update such forward-looking statements. With that, I will turn the call over to Mr. Dave Rosa, CEO of NRO1. Please go ahead.

Operator: With that, I will turn the call over to Mr. Dave Rosa, CEO of NeuroOne. Please go ahead.

David Rosa: Thanks, operator. During the third quarter of fiscal 2024, we made significant progress on our commercialization, product development, and financial objectives.

Dave Rosa: Thanks, Operator. During the third quarter of fiscal 2024, we made significant progress on our commercialization, product development, and financial objectives. First, I would like to provide an update on our balance sheet with the recent capital raise and, most importantly, the limited commercial release of the 1RF ablation system. On August 2nd, we completed a $2.65 million private placement, and also entered into a $3 million secured credit facility agreement.

Dave Rosa: Thanks, operator. During the third quarter of fiscal 2024, we made significant progress on our commercialization, product development, and financial objectives.

David Rosa: First, I would like to provide an update on improvements to our balance sheet with the recent capital raise and, most importantly, the limited commercial release of the 1RF Ablation System. On August the 2nd, we completed a $2.65 million private placement and also entered into a $3 million secured credit facility agreement. This will allow the company to expand the 1RF limited commercial launch, complete product development intended for a new ablation indication, and complete the diligence process with a potential strategic distribution partner for the 1RF Ablation System. As a reminder, this technology is the first FDA-cleared system with an intended use for both recording electrical activity and ablation of nervous tissue utilizing the same device.

Dave Rosa: First, I would like to provide an update on improvements to our balance sheet with the recent capital raise and most importantly, the limited commercial release of the 1RF ablation system.

Dave Rosa: On August the 2nd, we completed a $2.65 million private placement and also entered into a $3 million secured credit facility agreement.

Dave Rosa: This will allow the company to expand the 1RF limited commercial launch, complete product development intended for a new ablation indication, and complete the diligence process with a potential strategic distribution partner for the 1RF ablation system. As a reminder, this technology is the first FDA-cleared system with an intended use for both recording electrical activity and ablation of nervous tissue using the same device. We continue to make progress with the 1RF limited product launch and have now implanted 16 patients across four centers and performed more than 50 RF ablations on three patients. We have also initiated the sales quotation process with an additional 12 centers.

Dave Rosa: This will allow the company to expand the 1RF limited commercial launch.

Dave Rosa: Complete product development intended for a new Ablation indication and complete the diligence process with a potential strategic distribution partner for the 1RF Ablation System.

Dave Rosa: As a reminder, this technology is the first FDA-cleared system with an intended use for both recording electrical activity and ablation of nervous tissue utilizing the same device.

David Rosa: We continue to make progress with the 1RF limited product launch and have now implanted 16 patients across four centers and performed more than 50 RF ablations on three patients. We have also initiated the sales quotation process with an additional 12 centers. The manufacturing transition of our product offering from EVO-SEG diagnostic electrodes to strictly 1RF electrodes has also been completed. In addition, the completion of the development of the RF generator and transition to 1RF electrodes are also expected to drive improvements in our product margins and monthly cash for in going forward.

Dave Rosa: We continue to make progress with the 1RF limited product launch and have now implanted 16 patients across 4 centers and performed more than 50 RF ablations on 3 patients.

Dave Rosa: We have also initiated the sales quotation process with an additional 12 centers.

Dave Rosa: The manufacturing transition of our product offering from EVO, SEG, and diagnostic electrodes to strictly one RF electrode has also been completed. In addition, the completion of the development of the RF generator and transition to one RF electrode are also expected to drive improvements in our product margins and monthly cash for the current year and going forward. Regarding device distribution for the 1-RF ablation system, we are currently distributing the product directly. But, as we recently announced, we have signed a term sheet with an undisclosed global medical technology company to distribute our 1-RF ablation system. The term sheet is non-binding, and the partnership is subject to the negotiation and execution of definitive documentation, due diligence, and other customary closing conditions.

Dave Rosa: The manufacturing transition of our product offering from EVO, SEG, diagnostic electrodes to strictly 1 RF electrodes has also been completed.

Dave Rosa: In addition, the completion of the development of the RF generator and transition to 1RF electrodes are also expected to drive improvements in our product margins and monthly cash burn going forward.

David Rosa: Director. Regarding device distribution for the 1RF Ablation System, we are currently distributing the product directly, but as we recently announced, we have signed a term sheet with an undisclosed global medical technology company to distribute our 1RF Ablation System. The term sheet is non-binding, and the partnership is subject to the negotiation and execution of definitive documentation, due diligence, and other customary closing conditions.

Dave Rosa: Regarding device distribution for the 1RF ablation system, we are currently distributing the product directly, but as we recently announced, we have signed a term sheet with an undisclosed global medical technology company to distribute our 1RF ablation system.

Dave Rosa: The term sheet is non-binding and the partnership is subject to the negotiation and execution of definitive documentation, due diligence, and other customary closing conditions.

David Rosa: We are also happy to report that the Centers for Medicare and Medicaid Services, otherwise known as CMS, approved and granted a new ICD-10-PCS code for the 1RF ablation procedure. The new code will be effective October 1st, 2024, and allows hospital reporting of inpatient procedures that are performed using the 1RF Ablation System to support accurate data collection and processing of reimbursement claims by hospitals for the procedure.

Dave Rosa: We are also happy to report that the Centers for Medicare and Medicaid Services, otherwise known as CMS, approved and granted a new ICD-10-PCS code for the 1-RF ablation procedure. The new code will be effective on October 1st, 2024, and allows hospitals to report inpatient procedures that are performed using the 1RF ablation system to support accurate data collection and processing of reimbursement claims by hospitals for the procedure. In addition to RF ablation in the brain, we are also planning to leverage our ablation generator for other indications to treat pain.

Dave Rosa: We are also happy to report that the Centers for Medicare and Medicaid Services, otherwise known as CMS, approved and granted a new ICD-10 PCS code for the 1-RF ablation procedure.

Dave Rosa: The new code will be effective October 1st, 2024.

Dave Rosa: and allows hospital reporting of inpatient procedures that are performed using the 1-RF ablation system to support accurate data collection and processing of reimbursement claims by hospitals for the procedure.

David Rosa: In addition to our defablation in the brain, we are also planning to leverage our Ablation Generator for other indications to treat pain. We are targeting our next application to the FDA in early calendar year 2025. We believe having multiple indications for our 1RF Ablation System will leverage our investment in developing the generator and provide added value to hospitals, which can be a critical consideration in hospital purchasing decisions.

Dave Rosa: In addition to RF ablation in the brain we are also planning to leverage our ablation generator for other indications to treat pain.

Dave Rosa: We are targeting our next application to the FDA in early calendar year 2025. We believe having multiple indications for our RF ablation system will leverage our investment in developing the generator and provide added value to hospitals, which can be a critical consideration in hospital purchasing decisions. We are also making great progress with our product development programs, leveraging our thin film electrode platform technology for drug delivery and spinal cord stimulation. We continue to be excited about the potential for our SEG-based drug delivery system, where we can leverage our existing SEG technology platform to deliver pharmacologic therapies to the brain with the capability of monitoring the therapy's impact.

Dave Rosa: We are targeting our next application to the FDA in early calendar year 2025.

Dave Rosa: We believe having multiple indications for our RF ablation system will leverage our investment in developing the generator and provide added value to hospitals which can be a critical consideration and hospital purchasing decisions.

David Rosa: We are also making great progress with our product development programs, leveraging our thin film electrode platform technology for drug delivery and spinal cord stimulation. We continue to be excited about the potential for our SEG-based drug delivery system, where we can leverage our existing SEG technology platform to deliver pharmacologic therapies to the brain with the capability of monitoring the therapy's impact. We believe SEG-based drug delivery could be helpful in accelerating timelines and reducing costs for drug development and clinical studies for a variety of neurological conditions being treated with a variety of therapeutic agents, including biopharmaceutical drugs as well as stem cell and gene therapies.

Dave Rosa: We are also making great progress with our product development programs, leveraging our thin film electrode platform technology for drug delivery and spinal cord stimulation.

Speaker Change: We continue to be excited about the potential for our SEEG-based drug delivery system, where we can leverage our existing SEEG technology platform to deliver pharmacologic therapies to the brain with the capability of monitoring the therapy's impact.

Dave Rosa: We believe SEG-based drug delivery could be helpful in accelerating timelines and reducing costs for drug development and clinical studies for a variety of neurological conditions being treated with a variety of therapeutic agents, including biopharmaceutical drugs as well as stem cell and gene therapy.

Speaker Change: We believe SEG-based drug delivery could be helpful in accelerating timelines

Speaker Change: and reducing cause for drug development and clinical studies for a variety of neurological conditions being treated with a variety of therapeutic agents including biopharmaceutical drugs as well as stem cell and gene therapies.

David Rosa: During the past quarter, we have been active in discussions with multiple strategic partners for our SEG-based drug delivery system.

Dave Rosa: During the past quarter, we have been active in discussions with multiple strategic partners for SEG-based drug delivery systems. We are also making substantial progress with our percutaneous paddle lead program for use and spinal cord stimulation designed to treat patients suffering from back and neck pain. We expect to freeze the product design by the end of the calendar year and are planning to initiate discussions with potential strategic partners that may be interested in funding further development and commercialization of this novel technology. I would now like to turn the call over to Ron McClurg to provide a review of our 3rd quarter fiscal year 2024 results. Ron?

Speaker Change: During the past quarter, we have been active in discussions with multiple strategic partners for our SEG-based drug delivery system.

David Rosa: We are also making substantial progress with our percutaneous paddle lead program for use in spinal cord stimulation designed to treat patients suffering from back and neck pain. We expect to freeze the product designed by the end of calendar year and are planning to initiate discussions with potential strategic partners that may be interested in funding further development and commercialization of this novel technology.

Speaker Change: We are also making substantial progress with our percutaneous paddle lead program for use in spinal cord stimulation designed to treat patient suffering from back and neck pain.

Speaker Change: We expect to freeze the product design by the end of calendar year and are planning to initiate discussions with potential strategic partners that may be interested in funding further development and commercialization of this novel technology.

Ronald McClurg: I would now like to turn the call over to Ron McClure to provide a review of our third quarter fiscal year 2024 results. Ron?

Ron McClurg: Thank you, Dave. For the third quarter of fiscal year 2024, product revenue was $826,000, compared to $630,000 in the third quarter of fiscal 2023. For the first nine months of fiscal 2024, product revenue was $3.2 million compared to $1.2 million for the same period in fiscal 2023. The company had no collaboration revenue in the first nine months of fiscal 2024, compared to collaboration revenue of $1.46 million in the first nine months of fiscal 23. Collaboration revenue in 2023 was derived from the Zimmer Development Agreement and represents the portion of the exclusivity and milestone fee payment that was eligible for revenue recognition during the period.

Ron McClurg: I would now like to turn the call over to Ron McClurg to provide a review of our 3rd quarter fiscal year 2024 results.

Ronald McClurg: Thank you, Dave. For the third quarter of fiscal year 2024, product revenue was 826,000 compared to product revenue was 630,000 in the third quarter of fiscal 2023. For the first nine months of fiscal 2024, product revenue was 3.2 million compared to 1.2 million for the same period in fiscal 2023.

Ron McClurg: Thank you, Dave.

Ron McClurg: For the third quarter of fiscal year 2024, product revenue was $826,000.

Ron McClurg: compared to product revenue of $630,000 in the third quarter of fiscal 2023. For the first nine months of fiscal 2024, product revenue was $3.2 million compared to $1.2 million for the same period in fiscal 2023.

Ronald McClurg: The company had no collaboration revenue in the first nine months of fiscal 2024 compared to collaboration revenue of $1.46 million in the first nine months of fiscal 23. Collaboration revenue in 2023 was derived from the Zimmer Development Agreement and represents the portion of the exclusivity and milestone repayment that were eligible for revenue recognition during the period. Our total operating expenses in the third quarter of fiscal 24 were $3.1 million compared to $3.8 million in the same period of the prior fiscal year. Research and development expenses in the third quarter of fiscal 24 were $1.2 million compared with $1.9 million in the third quarter of fiscal 2023.

Ron McClurg: The company had no collaboration revenue in the first nine months of fiscal 2024 compared to collaboration revenue of 1.46 million dollars in the first nine months of fiscal 23.

Ron McClurg: Collaboration revenue in 2023 was derived from the Zimmer development agreement and represents the portion of the exclusivity and milestone fee payment that were eligible for revenue recognition during the period.

Ron McClurg: Our total operating expenses in the third quarter of fiscal 24 were $3.1 million compared to $3.8 million in the same period of the prior fiscal year. Research and Development expenses in the 3rd quarter of fiscal 24 were 1.2 million compared with 1.9 million in the 3rd quarter of fiscal 2023. SG&A, or Selling General and Administrative Expense, in the third quarter of fiscal 24 was $1.9 million compared with the same number $1.9 million in the prior year period.

Ron McClurg: Our total operating expenses in the third quarter of fiscal 24 were 3.1 million compared to 3.8 million in the same period of the prior fiscal year.

Ron McClurg: Research and Development, expenses in the 3rd quarter of fiscal 24 were 1.2 million compared with 1.9 million in the 3rd quarter of fiscal 2023.

Ronald McClurg: SG&A or Selling, General and Administrative Expense in the third quarter of fiscal 24 was $1.9 million compared with the same number, $1.9 million, in the prior year period. For the first nine months of fiscal 2024, total operating expenses were $10 million compared with $10.5 million in the same period of fiscal 2023. Our Indian expense in the first nine months of fiscal 2024 was $4 million compared with $5.2 million in the same period of fiscal 23. SG&A expense in the first nine months of fiscal 24 was $6.1 million compared to $5.3 million in the prior year period.

Ron McClurg: SG&A, or Selling General and Administrative Expense, in the third quarter of fiscal 24 was $1.9 million, compared with the same number, $1.9 million, in the prior year period.

Ron McClurg: For the first nine months of fiscal 2024, total operating expenses were $10 million, compared with $10.5 million in the same period of fiscal 2020. Our R&D expense for the first nine months of fiscal 2024 was $4 million, compared with $5.2 million in the same period of fiscal 2020. SG&A expense in the first nine months of fiscal 24 was $6.1 million, compared to $5.3 million in the prior year period. Our net loss was $2.8 million for the third quarter of fiscal 2024, compared to a net loss of $3.5 million in the third quarter of fiscal 23. For the first nine months of fiscal 24, our net loss was $9 million, compared with $8.7 million in the same period of fiscal 23.

Ron McClurg: For the first nine months of fiscal 2024, total operating expenses were 10 million, compared to 10.5 million in the same period of fiscal 2023.

Ron McClurg: Our R&D expense in the first nine months of fiscal 2024 was four million dollars compared with 5.2 million dollars in the same period of fiscal 23.

Ron McClurg: SG&A expense in the first nine months of fiscal 24 was 6.1 million dollars compared to 5.3 million in the prior year period.

Ronald McClurg: Our net loss was $2.8 million for the third quarter of fiscal 2024 compared to a net loss of $3.5 million in the third quarter of fiscal 23. For the first nine months of fiscal 24, a net loss was $9 million compared with $8.7 million in the same period of fiscal 23. During the third quarter of fiscal 2024, the company sold common stock under the ATM program at an average price of $1.19 per share, from which we received net proceeds of $1.6 million. As of June 30th, the company had cash and cash equivalents of 1.6 million compared to 5.3 million as of September 30th, 2023, the end of our most recent fiscal year.

Ron McClurg: and that loss was $2.8 million for the third quarter of fiscal 2024 compared to a net loss of $3.5 million in the third quarter of fiscal 2023.

Speaker Change: for the nine months of first nine months of fiscal 24 and that loss was nine million dollars compared with 8.7 million dollars in the same period of fiscal 23.

Operator: During the third quarter of fiscal 2024, the company sold common stock under the ATM program at an average price of $1.19 per share, from which we received net proceeds of $1.6 million. As of June 30th, the company had cash and cash equivalents of 1.6 million compared to 5.3 million as of September 30th, 2023, the end of our most recent fiscal year. The company had working capital of 2.2 million as of June 30th, 2024, compared to working capital of 5.5 million as of September 30th, 2023.

Speaker Change: During the third quarter of fiscal 2024, the company sold common stock under the ATM program at an average price of $1.19 per share, from which we received net proceeds of $1.6 million.

Speaker Change: As of June 30, the company had cash and cash equivalents of $1.6 million, compared to $5.3 million as of September 30, 2023, the end of our most recent fiscal year.

Ronald McClurg: The company had working capital of 2.2 million as of June 30th, 2024, compared to working capital of 5.5 million as of September 30th, 2023. The company had no debt outstanding as of June 30th, 2024.

Speaker Change: The company had working capital of $2.2 million as of June 30, 2024, compared to working capital of $5.5 million as of September 30, 2023.

Operator: The company had no debt outstanding as of June 30, 2020. On August 2nd, 2024, as Dave mentioned, following the end of the quarter, the company completed a $2.65 million private placement, resulting in $2.5 million in net proceeds, and also entered into a $3 million secured credit facility. However, the company has not borrowed anything under the credit facility agreement at this time.

Speaker Change: Company had no death outstanding as of June 30, 2024.

Ronald McClurg: On August 2nd, 2024, as Dave mentioned, following the end of the quarter, the company completed a $2.65 million private placement, resulting in $2.5 million in net proceeds, and also entered into a $3 million secured credit facility agreement. The company has not borrowed anything under the credit facility agreement at this time.

Speaker Change: On August 2, 2024, as Dave mentioned, following the end of the quarter, the company completed a 2.65 million dollar private placement, resulting in 2.5 million dollars in their proceeds, and also entered into a $3 million secured credit facility agreement.

Dave Rosa: The company has not borrowed anything under the credit facility agreement at this time.

Operator: Operator, at this time I think we can open up for questions. Certainly, the floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time.

Operator: Operator, at this time, I think we can open up for questions. Certainly. The floor is now open for questions. If you have any questions or comments, please press star 1 on your phone at this time. We ask that while posting your question, you please pick up your handset if listening on a speakerphone to provide optimum sound quality. Please hold just a moment while we pull for you. There appear to be no questions in queue at this time.

Operator: Operator, at this time, I think we can open up for questions.

Speaker Change: Certainly, the floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on a speaker phone to provide optimum sound quality. Please hold just a moment while we pull for any questions.

Operator: We ask that while posing your question, you please pick up your handset if listening on a speaker phone to provide optimum sound quality. Please hold just a moment while we pull for any questions.

Operator: There appear to be no questions in queue at this time.

Dave Rosa: I would now like to turn the floor back over to Dave Rosa for any closing remarks. Thank you, operator. I would like to again thank everyone for attending the call. In closing, we are very pleased with our progress on commercial product development and financial objectives. We are very excited and optimistic about the strong customer interest in our 1RF ablation system, as well as interest from potential strategic partners for our products and development.

Speaker Change: i

David Rosa: I would now like to turn the floor back over to Dave Rosa for any closing remarks.

Speaker Change: There appear to be no questions in queue at this time. I would now like to turn the floor back over to Dave Rosa for any closing remarks.

David Rosa: Thank you, operator. I would like to again thank everyone for attending the call. In closing, we are very pleased with our progress on commercial product development and financial objectives. We are very excited and optimistic about the strong customer interest in our one-hour affabulation system as well as interest from potential strategic partners for our products and development. We are well positioned with both near-term and longer-term growth drivers, as well as improving margins and reduce cash burn.

Dave Rosa: We are well positioned with both near-term and longer-term growth drivers, as well as improving margins and reduced cash burn. Thank you again for attending the call, and we look forward to updating you on our progress next quarter. Thank you, everyone; this does conclude today's conference call.

Speaker Change: to

Dave Rosa: Thank you, operator. I would like to again, thank everyone for attending the call.

Dave Rosa: In closing, we are very pleased with our progress.

Speaker Change: like commercial product development and financial objectives. We are very excited and optimistic about the strong customer interest in our one-hour affublation system as well as interest from potential strategic partners for a products and development.

Speaker Change: We are well positioned with both near-term and longer-term growth drivers, as well as improving margins and reduce cash burn.

David Rosa: Thank you again for attending the call, and we look forward to updating you on our progress. Next quarter. Thank you, everyone.

Speaker Change: Thank you again for attending the call, and we look forward to updating you on our progress next quarter.

Operator: This does conclude today's conference call.

Operator: You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.

Operator: Today, ladies and gentlemen, welcome to the Neuroone Medical Technology Corporation, third quarter of fiscal year, 2024 Financial Results Conference Call.

Operator: Today's call will be conducted by the company's Chief Executive Officer, Dave Rosa, and Ron McClurg, the company's Chief Financial Officer. Chris Volker, the company's Chief Operating Officer, will also be in attendance.

Operator: Before I turn the call over to Mr. Rosa, I'd like to remind you that this conference call will include forward-looking statements within the meaning of U.S, federal security's laws, with respect to future operations, financial results, events, trends, and performance, which are all based on management's beliefs and assumptions as of today's call or other specified date. Forward-looking statements may involve known and unknown risks, uncertainties, and other factors, which may cause actual results to differ materially from those expressed or implied by such statements. See Neuroone's financial results press release and SEC filings for information regarding specific risk and uncertainties that could cause actual results to differ.

Operator: Except as required by law, Neuroone undertakes no obligation to update such forward-looking statements.

David Rosa: With that, I will turn the call over to Mr. Dave Rosa, CEO of Neuroone. Please go ahead. Thanks, Operator.

David Rosa: During the third quarter of fiscal 2024, we made significant progress on our commercialization, product development, and financial objectives. First, I would like to provide an update on improvements to our balance sheet with the recent capital raise and, most importantly, the limited commercial release of the 1RF Abolation System. On August the 2nd, we completed a $2.65 million private placement and also entered into a $3 million secured credit facility agreement. This will allow the company to expand the 1RF limited commercial launch, complete product development intended for a new ablation indication, and complete the diligence process with a potential strategic distribution partner for the 1RF Abolation System.

David Rosa: As a reminder, this technology is the first FDA-cleared system with an intended use for both recording electrical activity and ablation of nervous tissue utilizing the same device. We continue to make progress with the 1RF limited product launch and have now implanted 16 patients across four centers and performed more than 50 RF ablations on three patients. We have also initiated the sales quotation process with an additional 12 centers. The manufacturing transition of our product offering from EVO-SEG diagnostic electrodes to strictly 1RF electrodes has also been completed.

David Rosa: In addition, the completion of the development of the RF generator and transition to 1RF electrodes are also expected to drive improvements in our product margins and monthly cash for in going forward. Director. Regarding device distribution for the 1RF Ablation System, we are currently distributing the product directly, but as we recently announced, we have signed a term sheet with an undisclosed global medical technology company to distribute our 1RF Ablation System. The term sheet is non-binding and the partnership is subject to the negotiation and execution of definitive documentation due diligence and other customary closing conditions.

David Rosa: We are also happy to report that the Centers for Medicare and Medicaid Services, otherwise known as CMS, approved and granted a new ICD-10 PCS code for the 1RF Ablation Procedure. The new code will be effective October 1st, 2024, and allows hospital reporting of inpatient procedures that are performed using the 1RF Ablation System to support accurate data collection and processing of reimbursement claims by hospitals for the procedure. In addition to our defablation in the brain, we are also planning to leverage our Ablation Generator for other indications to treat pain.

David Rosa: We are targeting our next application to the FDA in early calendar year 2025. We believe having multiple indications for our 1RF Ablation System will leverage our investment in developing the generator and provide added value to hospitals which can be a critical consideration in hospital purchasing decisions.

David Rosa: We are also making great progress with our product development programs, leveraging our thin film electrode platform technology for drug delivery and spinal cord stimulation. We continue to be excited about the potential for our SEG-based drug delivery system where we can leverage our existing SEG technology platform to deliver pharmacologic therapies to the brain with the capability of monitoring the therapy's impact. We believe SEG-based drug delivery could be helpful in accelerating timelines and reducing costs for drug development and clinical studies for a variety of neurological conditions being treated with a variety of therapeutic agents including biopharmaceutical drugs as well as stem cell and gene therapies.

David Rosa: During the past quarter we have been active in discussions with multiple strategic partners for our SEG-based drug delivery system. We are also making substantial progress with our percutaneous paddle lead program for use in spinal cord stimulation designed to treat patient suffering from back and neck pain.

David Rosa: We expect to freeze the product designed by the end of calendar year and are planning to initiate discussions with potential strategic partners that may be interested in funding further development and commercialization of this novel technology.

Ronald McClurg: I would now like to turn the call over to Ron McClure to provide a review of our third quarter fiscal year 2024 results. Ron? Thank you Dave. For the third quarter of fiscal year 2024 product revenue was 826,000 compared to product revenue was 630,000 in the quarter third quarter of fiscal 2023. For the first nine months of fiscal 2024 product revenue was 3.2 million compared to 1.2 million for the same period in fiscal 2023.

Ronald McClurg: The company had no collaboration revenue in the first nine months of fiscal 2024 compared to collaboration revenue of $1.46 million in the first nine months of fiscal 23. Collaboration revenue in 2023 was derived from the Zimmer Development Agreement and represents the portion of the exclusivity and milestone repayment that were eligible for revenue revenue recognition during the period.

Ronald McClurg: Our total operating expenses in the third quarter of fiscal 24 were $3.1 million compared to $3.8 million in the same period of the prior fiscal year. Research and development expenses in the third quarter of fiscal 24 were $1.2 million compared with $1.9 million in the third quarter of fiscal 2023. SGNA or Selling General and Administrative Expense in the third quarter of fiscal 24 was $1.9 million compared with the same number $1.9 million in the prior year period.

Ronald McClurg: For the first nine months of fiscal 2024 total operating expenses were $10 million compared with $10.5 million in the same period of fiscal 2023. Our Indian expense in the first nine months of fiscal 2024 was $4 million compared with $5.2 million in the same period of fiscal 23. SGNA expense in the first nine months of fiscal 24 was $6.1 million compared to $5.3 million in the prior year period.

Ronald McClurg: Our net loss was $2.8 million for the third quarter of fiscal 2024 compared to a net loss of $3.5 million in the third quarter of fiscal 23. For the first nine months of fiscal 24 and net loss was $9 million compared with $8.7 million in the same period of fiscal 23.

Ronald McClurg: During the third quarter of fiscal 2024 the company sold common stock under the ATM program at an average price of $1.19 per share from which we received net proceeds of $1.6 million. As of June 30th the company had cash and cash equivalents of 1.6 million compared to 5.3 million as of September 30th 2023 the end of our most recent fiscal year. The company had working capital of 2.2 million as of June 30th 2024 compared to working capital of 5.5 million as of September 30th 2023. The company had no debt outstanding as of June 30th 2024.

Ronald McClurg: On August 2nd 2024 as Dave mentioned following the end of the quarter the company completed a $2.65 million private placement resulting in $2.5 million in net proceeds and also entered into a $3 million secured credit facility agreement. The company has not borrowed anything under the credit facility agreement at this time.

Operator: Operator at this time I think we can open up for questions. Certainly the floor is now open for questions. If you have any questions or comments please press star one on your phone at this time. We ask that while posing your question you please pick up your handset if listening on a speaker phone to provide optimum sound quality. Please hold just a moment while we pull for any Questions. There appear to be no questions in queue at this time.

David Rosa: I would now like to turn the floor back over to Dave Rosa for any closing remarks. Thank you operator. I would like to again thank everyone for attending the call.

David Rosa: In closing, we are very pleased with our progress on commercial product development and financial objectives. We are very excited and optimistic about the strong customer interest in our one-hour affabulation system as well as interest from potential strategic partners for our products and development. We are well positioned with both near-term and longer-term growth drivers as well as improving margins and reduce cash burn. Thank you again for attending the call and we look forward to updating you on our progress. Next quarter. Thank you everyone.

Operator: This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.