Q3 2025 Spectral AI Inc Earnings Call

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Speaker #3: I am quite pleased to discuss with you our results of operations through the third quarter of 2025. As I've mentioned on previous earnings calls, the mantra here at Spectral AI, Inc. is: focus and finish.

John DiMaio: In summary, yes, we do plan to expand into the UK and parts of Europe, and maybe even beyond that. Our primary focus for right now, of course, is the US. Yes, the secondary and tertiary focus will be outside the US.

Please note this event is being recorded.

I would now like to turn the conference over to Sarah Prendergast Assistant General Counsel. Please go ahead ma'am.

Speaker #3: I believe we are moving forward in all three phases as we complete our 2025 calendar year, following our FDA submission in the second quarter of 2025.

Thank you Nick good afternoon, everyone and thank you for joining US Chris back to early 2025 third quarter financial results Conference call.

John Vandermosten: Got it. Last question for me is on the Spectral IP transaction. I know that had been announced, and I hadn't seen anything and wanted to know if that was or what the status of that was.

Speaker #3: We continue to work on developments in our view deep AI-like address system. Additional developments in the third quarter of 2025 are as following.

Our speakers for today will be Dr. <unk>, the company's chairman of the Board and then St Capone, the Companys Chief Financial Officer.

John DiMaio: Vince.

Vincent Capone: Thank you, Dr. DiMaio. Yeah, I'll take this one. John, good to hear from you. Thanks for participation today. Yeah, the Spectral IP and the SIM IP transaction that is currently working through the SEC, I would anticipate that those filings will be reviewed with an eye towards my understanding as of today. I would expect that transaction to close probably in the first quarter of 2026. I would expect that you'll see something in our financials, probably in the first quarter of 2026, reflecting that transaction.

Before we begin I'd like to remind everyone that during this call certain statements made are forward looking statements within the meaning of the safe Harbor provisions of the United States Private Securities Litigation Reform Act of 1095, including statements regarding the company's strategy plans objectives initiatives and financial.

Speaker #3: Number one, finance cash our balance has stayed flat at $10.5 million from the second quarter of 2025. We continue to monitor our operating efficiencies and had a number of stock option and warrant exercises that contributed to the continued high level of cash reserves at our company.

Look.

When used in this call. The words estimates project that expects anticipates forecasts plans and tens believes seeks may will should future propose and variations of these words or similar expressions or the negative versions of such words or expressions are intended to identify forward.

Speaker #3: On top of that , as announced in October , we completed an additional registered direct offering of our common stock , adding $7.6 million of additional cash reserves to the company's balance sheet , with total cash on hand at the end of September 2025 of over $10 million .

John Vandermosten: Great. All right. Thank you, Vince. Thank you, Dr. DiMaio.

<unk> looking statements.

Speaker #3: A closely managed spending rate and the additional funding from our Registered Direct offering position Spectral AI with significant financial resources in hand for the foreseeable future. This enables us to continue our work on our product commercialization efforts, including the planned launch of our US View system next year.

John DiMaio: Thank you, John, so much.

These forward looking statements are not guarantees of future performance conditions or results and involve a number of known and unknown risks uncertainties assumptions and other important factors many of which are outside company's control that could cause actual results or outcomes to differ materially from those discussed in the forward looking statements.

Vincent Capone: Thanks, John.

Operator: That concludes our question and answer session. I would like to turn the conference back over to Dr. DiMaio for any closing remarks.

John DiMaio: Thank you again for your participation and continued interest in Spectral AI. We are very pleased with the progress, as I described, with the three Fs, and we continue to make and remain optimistic about our prospects for growth. We continue to work hard on the three principles that I outlined, and we look to have further announcements on our progress of these goals in the very near term. I thank everyone on the call and wish you a very good evening.

As such listeners are cautioned not to place undue reliance on any forward looking statements.

Speaker #3: Number two , focus , which is the FDA's submission , our FDA submission , which was submitted in June of this year , was a very big company's milestone in our development .

Investors should carefully consider the foregoing factors and other risks and uncertainties described in the risk factors section of the Companys filings with the SEC, including the registration statement and other documents filed by the company.

Speaker #3: I am proud of our team for their hard work and dedication in meeting that very important timeline . The submission is obviously a key driver in the evolution of our business .

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward looking statements.

Speaker #3: We continue to have further interactions with the on our de novo FDA application , albeit somewhat slowed with the current US development . US government shutdown that we're all experiencing .

With that I would like to turn the call over to Dr. <unk> <unk> chairman of the board.

Yeah.

Sure. Thank you very much and good afternoon to everyone.

We appreciate you joining us today for our third quarter financial results Conference call I.

I am quite pleased to discuss with you our results of operations through the third quarter of 2025.

As I've mentioned on previous earnings calls I follow a mantra here at spectral AI of finance <unk>.

<unk> and finish.

I believe we are moving forward in all three phases as we complete our 2025 calendar year.

Following our FDA submission in the second quarter of 2025, we continue to work on developments and our deep UV system.

I'd like to address additional developments in the third quarter of 2025 as following.

Number one finance.

Our cash balance has stayed flat at $10 $5 million from the second quarter of 2025.

We continue to monitor our operating efficiencies and had a number of stock option and warrant exercises that contributed to the continued high level of cash reserves at our company.

On top of that as announced in October we completed an additional registered direct offering of our common stock, adding $7 $6 million of additional cash reserves to the company's balance sheet.

With total cash on hand at the end of September 2025 over $10 million, a closely managed spending rate and the additional funding from a registered direct offering.

Spectral AI has a significant financially financing in hand for the foreseeable future that enables us to continue our work on our product commercialization efforts, including the planned U S launch of our <unk> system next year.

Number two focus.

Which is the FDA submission.

Our FDA submission, which was submitted in June of this year was a very big milestone in our company's development.

I am proud of our team for their hard work and dedication and meeting that very.

Important timeline.

The submission is obviously a key driver in the evolution of our business.

We continue to have further interactions with the FDA on our de Novo application.

Somewhat slowed with the current U S development U S government shutdown that we're all experiencing.

We continue to move forward with a de Novo application full speed ahead.

As we have stated.

Number three Finnish lastly finish is what we continue to focus on as we look towards our BARDA partners to bring the deep UV system.

And the device to the commercial marketplace.

We continue to focus on releasing next year and preparing to launch a commercialization strategy that we've discussed and we'll continue to refine as we move to that milestone.

We continue to have a very broad application and indications that we seek in addition to burns, which for which we have a CPT three code and additional indications that will broaden the marketplace.

We have had outstanding support from the burn community and at burn conferences with our with our abstracts being presented at National forums and publications and international publications.

This further solidifies what's happening with our system. In addition to the support that is receiving from the burn in the wound community at large.

I. Thank you again for your attention to our company and with that I will turn things over to our Chief Financial Officer, Vince Capone.

Vince.

Thank you Dr. <unk>. Thank you all for joining us this afternoon.

We continue to move forward with a de Novo application full speed ahead.

We issued our earnings release this afternoon, which contains additional details of our operating results and we will be filing our Form 10-Q with the SEC later this week as well.

As we have stated.

Number three Finnish lastly finish is what we continue to focus on as we looked with our BARDA partners to bring the deep UV system.

And the device to the commercial marketplace.

With that in mind I will focus my remarks on select highlights and key items.

We continue to focus on releasing next year and preparing to launch a commercialization strategy that we've discussed and we'll continue to refine as we move to that milestone.

Our research and development revenue in the third quarter of 2025 was reduced to $3 8 million from $8 2 million in the third quarter of last year.

We continue to have a very broad application of indications that we seek in addition to burns, which would for which we have a CPT three code and additional indications that will broaden the marketplace.

This reduction reflects our anticipated reduced reimbursements under the BARDA project Bioshield contract, which was awarded to the company in September of 2023.

We've had outstanding support from the burn community and that burn conferences.

In the third quarter of 2025, following our FDA de Novo submission, we have incurred less direct labor clinical trial and other reimbursed costs from the prior year's quarter.

With our debt with our abstracts being presented at National forums, and publications and international publications.

Gross margin decreased to 42, 7% from 44, 8% in the third quarter of last year due to a lower percentage of direct labor as a percentage of our total reimbursed costs under the BARDA project Bioshield contract from the prior year's quarter.

This further solidifies what's happening with our system. In addition to the support that is receiving from the burn in the wound community at large.

I. Thank you again for your attention to our company and with that I will turn things over to our Chief Financial Officer, Vince Capone.

Vince.

Thank you Doctor Tomorrow.

General and administrative expenses for the third quarter of 2025 were $5 million as compared to $4 6 million in the third quarter of 2024.

Thank you all for joining us this afternoon.

We issued our earnings release this afternoon, which contains additional details of our operating results and we will be filing our Form 10-Q with the SEC later this week as well.

This increase reflects increased third party adviser and consulting costs and an increased in non billable work that is not related to the BARDA project Bioshield contract.

With that in mind I will focus my remarks on select highlights and key items.

Our research and development revenue in the third quarter of 2025 was reduced $3 8 million from $8 2 million in the third quarter of last year. This.

The company reported a net loss in the third quarter of 2025 of $3 6 million as compared to a net loss of $1 5 million in the prior year's third quarter again, reflecting the reduced research and development revenue and the higher general and administrative expenses from the prior year third quarter.

This reduction reflects our anticipated reduced reimbursements under the BARDA project Bioshield contract, which was awarded to the company in September of 2023.

Even with the $2 $1 million increase in the net loss for the third quarter of 2025 as compared to the third quarter of 2020 for.

In the third quarter of 2025, following our FDA de Novo submission, we've incurred less direct labor clinical trial and other reimbursed costs from the prior year's quarter.

The company's reporting a net loss of $8 6 million for the first nine months of 2025.

Gross margin decreased to 42, 7% from 44, 8% in the third quarter of last year due to a lower percentage of direct labor as a percentage of our total reimbursed costs under the BARDA project Bioshield contract from the prior year's quarter.

As compared to a net loss of $7 4 million for the first nine months of 2024, reflecting our focus on managing our overall cost structure.

At September 2025, we had $27 million 251034 shares outstanding.

General and administrative expenses for the third quarter of 2025 were $5 million as compared to $4 $6 million in the third quarter of 2024.

Moving to our balance sheet as Dr. <unk> has previously noted as of September 32025, cash and cash equivalents totaled $10 5 million up from $5 2 million on December 31 2024.

This increase reflects increased third party adviser and consulting costs and an increase in non billable work that is not related to the BARDA project Bioshield contract.

Our cash balance has remained consistent since June 32025. This.

The company reported a net loss in the third quarter of 2025 up $3 6 million as compared to a net loss of $1 5 million in the prior year's third quarter again, reflecting the reduced research and development revenue.

This is primarily due to the exercise of stock options and warrants in the third quarter of 2025, and our continued management of our operating expenses.

Through the third quarter of 2025.

The higher general and administrative expenses from the prior year third quarter.

Please note that this cash balance does not include the gross proceeds of $7 6 million of.

Even with the $2 $1 million increase in the net loss for the third quarter of 2025 as compared to the third quarter of 2020 for.

<unk> funding the company received in connection with our registered direct offering.

In October 2025, with our large cash reserves.

The company is reporting a net loss of $8 6 million for the first nine months of 2025.

Our focused approach on managing our operational costs and expenses, we believe this level of funding.

As compared to a net loss of $7 4 million for the first nine months of 2024, reflecting our focus on managing our overall cost structure.

Is sufficient to provide the company with the necessary capital for the foreseeable future.

For 2025, we are reducing our revenue guidance from 21 5 million to $18 $5 million. The reduced revenue guidance reflects the anticipated reduced work on our BARDA project Bioshield contract since the submission to the FDA.

At September 2025, we had 27 million 251034 shares outstanding.

Moving to our balance sheet as Dr. <unk> has previously noted as of September 32025, cash and cash equivalents totaled $10 5 million up from $5 2 million on December 31 2024.

And some timing effect from the U S government shutdown, which we believe will be largely made up within the first half of 2026.

Also note that our guidance does not include the contribution of any sales of the <unk> system for the burn indication in the United Kingdom or in Australia.

Our cash balance has remained consistent since June 32025. This is primarily due to the exercise of stock options and warrants in the third quarter of 2025, and our continued management of our operating expenses.

Thank you for your time and attention today and with that operator, let's open up the call for questions from our analysts.

Through the third quarter of 2025.

Thank you.

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Please note that this cash balance does not include the gross proceeds of $7 6 million of additional funding the company received in connection with our registered direct offering.

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In October 2025, with our large cash reserves.

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Our focused approach on managing our operational costs and expenses, we believe this level of funding.

At this time, we will pause momentarily to assemble our roster.

Is sufficient to provide the company with the necessary capital for the foreseeable future.

And your first question today will come from Ryan Zimmerman with BTG. Please go ahead.

For 2025, we are reducing our revenue guidance for 'twenty, one and a half million to 18 and a half million dollars.

Hi, everyone. This is <unk> on for Ryan. Thank you for taking the questions.

So I heard your commentary about the impact of the government shutdown and how that played into the timing, but I was hoping you could provide a little bit more color around exactly what has been impacted and just confirm that.

The reduced revenue guidance reflects the anticipated reduced work on our BARDA project Bioshield contract since the submission to the FDA and some timing effect from the U S government shutdown, which we believe will be largely made up within the first half of 2026.

Everything is still on track for that expected first half 'twenty six approval.

Also note that our guidance does not include the contribution of any sales of the <unk> system for the burn indication in the United Kingdom or in Australia.

Sure. Thanks.

Thanks for participating on the call.

Yes, we continue to see our FDA submission, we don't see any any hold ups in our FDA submission into 2026.

Thank you for your time and attention today and with that operator, let's open up the call for questions from our analysts.

Actually excited this week, if we can get the government to lift the shutdown, but some of our conversations with BARDA. Some of the conversations we have with their teams and.

Thank you.

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And the team involved with the continued development of our <unk> system. Some of that has been delayed.

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If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two at.

And ultimately.

We just see it as a timing issue for the most part.

Understanding that nothing has changed with the delivery of.

At this time, we will pause momentarily to assemble our roster.

Of when we hope and anticipate that we will get FDA clearance of our device.

Yeah.

And your first question today will come from Ryan Zimmerman with BTG. Please go ahead.

In the first half of 2026.

And also the continued work through the BARDA contract, which Im sure Youre aware that runs through the end of the first quarter of 2026 at least the base fees. So no other than that I mean, it's just really a general slowdown in work with with our BARDA partners I.

Hi, everyone. This is <unk> on for Ryan. Thank you for taking the questions.

So I heard your commentary about the impact of the government shutdown and how that played into the timing, but I was hoping you could provide a little bit more color around exactly what has been impacted and just confirm that.

I hope that answered your question.

Yes. It does thank you it's helpful and I know, it's early to think about guidance for 2020, but you did mentioned the expectation that some of this revenue will be made up next year. So I was curious if you could provide even some qualitative commentary about the cadence or pacing of that for next year.

Everything is still on track for that expected first half twenty-six approval.

Sure is he thanks for participating on the call.

Yes, we continue to see our FDA submission, we don't see any any hold ups in our FDA submission into 2026 I'm actually excited this week, if we can get the government to to lift the shutdown, but some of our conversations with BARDA and some of the conversations we have.

Sure.

Will is ultimately we've always projected that 2026 will be in general are down year on revenue from where we were in 2024 and in 2025.

With their teams and it's and the team involved with the continued development of our deep UV system. Some of that has been delayed.

Our current forecast shows.

Relatively flat between 2025 and 2026, there might be a small reduction in overall revenue still working through that.

And ultimately.

We just see it as a timing issue for the most part our.

And obviously there is a number of assumptions built in there, but I would anticipate 2026 to look.

Understanding that nothing has changed with the delivery of of when we hope and anticipate that we will get FDA clearance of our device in.

From a revenue standpoint, probably.

Somewhat lower than it is in 2025, but I don't know that materially it will be much different but.

In the first half of 2026 and also the continued work through the BARDA contract, which I'm sure you're aware that runs through the end of the first quarter of 2026 at least the base fees. So no other than that I mean, it's just really a general shift slowdown in work with with our BARDA partners I.

Thats, a turn year for us as we look to commercialize the device and then we see 2007, and obviously 2008 to be.

Significant years for the Companys growth.

I hope that answered your question.

That's helpful. And then last one from me I know there are several units that are placed in international markets I'm. Just curious what some of the feedback has been from those sites and how you're using that to inform your preparations for the U S launch thanks for taking the question.

Yeah. It does thank you it's helpful and I know, it's early to think about guidance for 2020 six but you did mentioned the expectation that some of this revenue will be made up next year. So I was curious if you could provide even some qualitative commentary about the cadence or pacing of that for next year.

Yes.

I'll take that question. Thanks for that question, which of course for me as a clinician is terribly important the answer is the feedback we've gotten from the units and the outside the U S have been overwhelmingly positive.

Sure as well is he ultimately we've always projected that 2026 will be in general are down year on revenue from where we were in 2024 and in 2025 or our current forecast shows a relatively far.

Our comments include that it's easy to use very helpful and even a number of papers and abstracts have been in.

Publication or a published to document. This is in addition to the verbal feedback that we've gotten as well. So the answer is <unk> also use some of that feedback in terms of certain changes or minor adjustments in the device that we plan to incorporate with an acceleration in our Phoenix device.

Flat between 2025, and 2026, there might be a small reduction in overall revenue still working through that.

And obviously theres a number of assumptions built in there, but I would anticipate 2026 to look from a revenue standpoint, probably are somewhat lower than it is in 2025, but I don't know that materially it'll be much different but that's.

So in summary, we have been.

Devices has been very positively received it's been easy to use with both physicians and non physician health care providers and has really facilitated the care burn patients outside the United States.

And that's you know a turn year for us as we look to commercialize the device and then we see 27, and obviously 28 to be significant.

Thank you for the question.

Significant years for our for the Companys growth.

And the next question today will come from Carl Byrnes with Northland Capital markets. Please go ahead.

That's helpful. And then last one for me I know there are several units that are placed in international markets I'm. Just curious what some of the feedback has been from those sites and how you're using that to inform your preparation for the U S launch thanks for taking the question.

Congratulations and thanks for the question.

I'm just wondering how your communications with the FDA have been progressing and has there been any additional requests are outstanding items with respect to the filing or has it been a relatively clean and clear.

Yeah, if you mind I'll take that question. Thanks for that question, which of course for me as a clinician is terribly important the answer is the feedback we've gotten from the units and the outside the U S has been overwhelmingly positive.

Exchange and then I have one quick follow on thanks.

Yes. Thank you this Dr Romano and thanks for that question because as you say this is the second part that I mentioned the focus <unk> and the answer is we've had very very frequent and good communications with the FDA.

The comments include that it's easy to use very helpful and even a number of papers and abstracts have been and publication or a published to document. This is in addition to the verbal feedback that we've gotten as well. So the answer is you've also use some of that feedback in terms of certain changes or minor adjustments in the device.

There are obviously certain adjustments and questions that they have for us in additional matters I would be.

Couldn't or shouldn't discuss those publicly that would probably violate some of the fda's requirements.

Suffice it to say we've had very good communications.

One of the most important aspects of the statistical analysis plan or the SAP.

That would be planning to incorporate with the next iteration of our Phoenix device.

Which of course is the guts of the artificial intelligence algorithm and Thats been very favorably received and so.

So in summary, we have been the device has been very positively received it's been easy to use with both physicians and non physician health care providers and has really facilitated the care of burn patients outside the United States.

That was what I was proceeds most concerned about and that seems to have gone very very well our data science team has done an outstanding job. There is some other testing we'll be looking at whether it's additional human factors.

Thank you for the question.

And the next question today will come from Carl Byrnes with Northland Capital markets. Please go ahead.

Studies or additional power reliability testing that we're discussing with the FDA right now and we're getting clearance and clarity on that and once we complete that we anticipate.

Congratulations and thanks for the question.

I'm just wondering have your communications with the FDA had been progressing and has there been any additional requests are outstanding items with respect to the filing or has it been a relatively clean and clear.

We'll move ahead forward, but in summary, we've got good interaction we provided additional information and we literally have calls scheduled the next couple of weeks with the FTA for further clarification.

Exchange and then I have one quick follow on thanks.

Yes. Thank you this doctor to why on thanks for that question because as you say this is the second part that I mentioned the focus FTA and the answer is we've had very very frequent and good communications with the F. D. A.

Thank you.

Great perfect excellent.

And just one quick follow up with respect to the STAM shot is there any update on the developments of the handheld module.

There are obviously certain adjustments and questions that they have for us in additional matters I would be I, probably couldn't or shouldn't discuss those publicly that would probably violate some of the fda's requirements, but suffice it to say we've had very good communications.

Good question. So thank you for that question as well the handheld and the answer is a big yes. Additional development is going on that as you know that's primarily a military project sponsored by the military and we have got good feedback.

The most important aspects is the statistical analysis plan or the S. A P which of course is the guts of the artificial intelligence algorithm and that's been very favorable received.

They have like the preliminary design of the handheld device and is currently going through testing and environments that the military requires us to perform including high temperatures and low temperatures.

And so.

As well and so we have gotten and we are seeking additional support which is we plan to be forthcoming from U S. Military to continue to develop that device for military use.

That was what I I was personally most concerned about and that seems to have gone very very well our data science teams has done an outstanding job. There is some other testing we'll be looking at whether it's additional human factors.

In a parallel fashion, we're having discussions to have the same form factor are assembled or form factor for the military for civilian use and thats active as well.

Studies or additional reliability testing that we're discussing with the FDA right now and we're getting clearance and clarity on that and once we complete that we anticipate will move ahead forward, but in summary, we've got good interaction we provided additional information and we literally have call.

So the answer is that we're moving forward with the military as the background of the basis to be able to develop a civilian application with a very similar device.

But I want to emphasize to.

It was scheduled the next couple of weeks with the FTA for further clarification.

You as well as anybody else that we do anticipate at least in the short or mid term to have the card based device because of course, that's what BARDA has paid us to do it very easily used in the burn units.

Thank you.

Great perfect excellent.

And just one quick follow up with respect to the STAM shot is there any update on the developments of the handheld a module. Thanks.

It's larger and it's in the operating room, the <unk> room and so forth.

Good question. So thank you for that question as well the handheld and the answer is it a big yes. Additional development is going on that as you know that's primarily a military project sponsored by the military and we have got good feedback.

And we see the handheld unit as complementary or additive and not necessarily replacing the cart based device.

As well please know that we plan for the cart based device to be the basis for a five 10-K application for the handheld device.

That they have like the preliminary design of the handheld device and is currently going through testing and environments that the military requires us to perform including high temperatures and low temperatures.

There are similar technologies similar camera et cetera. So it will simplify the progression of our technology from cart based to hand based.

As well and so we have gotten and we are seeking additional support which is we plan to be forthcoming from U S. Military to continue to develop that device for military use.

Okay, great. Thanks.

Helpful and again, the handheld is funded through <unk> and DHA correct Thats correct, yes, Sir.

Right.

Yes, I've been deemphasizing that not to emphasize it because the military per se, but also emphasize that we are looking at the civilian market as well, but yes. The current diversion is funded by <unk>.

In a parallel fashion, we're having discussions to have the same form factor are assembled or form factor for the military for civilian use and that's active as well.

So the answer is that we're moving forward with the military as the background of the basis to be able to develop a civilian application with a very similar device.

Divisions, the department of defense called Amtech, and DHA that is correct.

Excellent. Thanks, so much.

Thank you.

The next question will come from Jon Vander, mostly with Zacks SCR. Please go ahead.

But I want to emphasize to you as well as anybody else that we do anticipate at least in the short or midterm to have the cart based device because of course, that's what BARDA has paid us to do it's very easily used in the burn units yeah.

Great. Thank you and good evening I'd like to start out with just getting a sense of your commercialization preparation activities.

And ask if you are planning to hire perhaps a chief commercial officer or Chief operations Officer.

It's larger than is in the operating room, and the burnish room, and so forth and we see the handheld unit as complementary or attitude and not necessarily replacing the cart based device as well. Please know that we plan for the cart based device to be the basis for a five 10-K application for the handheld.

And then also along that same line.

What efforts are being made I guess in terms of market access distribution marketing and longs execution.

Over the next few months.

Coming up on the on the target.

Target action dates.

John That's a great question and I appreciate it and of course, that's third F. Which is finished so in no particular order we already have a person who is a.

Rice.

So there are similar technologies similar camera et cetera. So it will simplify the progression of our technology from cart based to hand based.

Commercialization person right now on board and.

Okay. Great. Thanks, that's very helpful. And then again the handheld is funded through amtech and DHA correct. That's correct, yes, Sir.

He is working to process all of this as well we have in the budget for 2026 for more people for more ftes that were talking about bringing onboard shortly to be able to have sales force and other.

Yes, I I've been deemphasizing that not to emphasize it because the military per se, but also to emphasize that we're looking at the civilian market as well, but yes. The current diversion is funded by a division of the department of defense called Amtech and DHA that is correct.

Parts of professional education as.

As well please note as well that the BARDA budget includes some of those costs, which helps us.

Defray some of the costs and the initial stages of commercialization.

Excellent. Thanks, so much.

Thank you.

The next part of that of course is that we're talking about the burn community, which as you know from our research studies. There is a 137 burn units the United States. There's a large number that are participated in our research trials.

The next question will come from Jon Vander, mostly <unk> with Zacks SCR. Please go ahead.

Great. Thank you and good evening I'd like to start out with just getting a sense of your commercialization preparation activities and ask if you're planning to hire perhaps a chief commercial officer or Chief operations Officer.

I would think or argue that we have got a very good leg up on the community for which we intend to do the first sales are quite well aware of the technology and are quite excited about getting it in their hands as soon as it's federally.

And then also along that same line.

What efforts are being made I guess in terms of market access distribution marketing and long as execution.

Cleared from the FDA.

Over the next few months.

And lastly, as maybe as importantly is that the BARDA contract. Once we get FDA clearance includes clauses to help began the placement of these devices and the burn centers and beyond so.

Coming up on the on the target action dates.

John That's a great question and I appreciate it and of course, that's third F. Which is finished so in no particular order we already have a person who is a.

So an answer I think we have a very good foundation with people funding in place to start the commercialization rollout and we will be ramping up as well to make that happen.

Commercialization person right now on board and he's working to process all of this as well we have in our budget for 2026 for more people for more ftes that were talking about bringing on board shortly to be able to have sales force.

Okay Thats, good and you had several presentations at the European Burn Association.

I was wondering how they are received by the audience and who the audience was I know it was in Europe.

In other parts.

Parts of it will be called professional education.

I think it was Germany.

As well please note as well that the BARDA budget includes some of those costs, which helps us defray some of the costs and the initial stages of commercialization.

Does this allowing you to push further east I guess from the U K to get more.

Health.

Health groups interested in using the device.

The next part of that of course is that we're talking about the burn community, which as you know from our research studies. There is a 137 berm units the United States. There's a large number that are participating in our research trials.

Yes, Sir John get another great question, Thanks for that and so the answer is that there were burned meetings, both in the UK and in Germany of which members of the burn communities in there as well as members in the U S. Burn community participated we had presentations at all of those meetings.

I would think or argue that we have got a very good leg up on the community for which we intend to do the first sales are quite well aware of the technology and are quite excited about getting it in their hands as soon as it's federally.

And again, not because I'm prejudiced, but had outstanding reception from those.

Presentations.

And a big Big request, how soon will they be in those in those areas again, we already have units placed in the U K and literally today, we had discussions about expanding into the European market, both western and eastern and those discussions are forthcoming we plan to progress further with getting clearance from UK CA.

Cleared from the F D a.

And lastly, as maybe as importantly is that the BARDA contract. Once we get FDA clearance includes clauses to help began the placement of these devices and the burn centers and beyond so an answer I think we have a very good foundation with people funding in place to start the commercialization rollout and we will be wrap.

And CE CE, Mark as well the.

The current device in the U K is going to be upgraded and based upon what we've learned in the U S market and from the FDA. So in summary, yes, we do plan to expand into the U K and parts of Europe, and maybe even beyond that.

Being up as well to make that happen.

Okay. That's good and you had several presentations at the European Burn Association and I was wondering how they are received by the audience and who the audience was I know it was in Europe I think it was in Germany.

But our primary focus for right now of course as the U S, but yes, a secondary and tertiary focus will be outside the U S.

Is this allowing you to push further east I guess from the U K to get more.

Okay got it.

Last question for me is on the special IP transaction, I know that had been announced and I haven't seen anything and wanted to know if that was or what the status of that was.

<unk> Health health.

Health groups interested in using the device.

Yes, Sir John I get another great question, Thanks for that and so the answer is there were there were a bird meetings, both in the U K and in Germany of which members of the burn communities in there as well as members in the U S. Burn community participated we had presentations at all of those meetings.

Vince.

Thank you Dr. Maya I'll take this one.

John Good to hear from you and thanks for participation today.

The spectral IP and the semi transaction.

And again, not because I'm prejudiced, we had outstanding reception from those.

That is currently working through the SEC.

I would anticipate.

Presentations.

And a big Big requests how soon will they be in those in those areas again, we already have units placed in the U K and literally today, we had discussions about expanding into the European market, both western and eastern and dose discussions are forthcoming we plan to progress further with getting clearance from UK C E.

Those filings will be.

Reviewed with an eye towards my understanding as of today is that I would expect that transaction to close.

Probably in the first quarter of 2026.

And I would expect that Youll see something.

<unk>.

In our financials, probably in the first quarter of 2026, reflecting that transaction.

A N C a CE mark as well.

The current device in the U K is going to be upgraded and based upon what we've learned in the U S market and from the F. D. A so in summary, yes, we do plan to expand into the U K and parts of Europe, and maybe even beyond that.

Great Alright. Thank you Beth. Thank you that's a mile. Thank you John so much thanks John.

This concludes our question and answer session I would like to turn the conference back over to Dr. Romano for any closing remarks.

But our primary focus for right now of course as the U S, but yes, a secondary and tertiary focus will be outside the U S.

Thank you again for your participation and continued interest in spectral AI. We are very pleased with the progress as I described with the three fs.

Okay got it and last question.

And we continue to make remain optimistic about our prospects for growth.

<unk> for me is on the special IP transaction, I know that had been announced and I haven't seen anything and wanted to know if that was or what the status of that was.

We continue to work hard on the three principles that I outlined and we look to have a further announcements on our progress with these goals in the very near term.

Vince.

Thank you Dr Tomorrow, Yeah, I'll take this one.

Thank everyone on the call and wish you a very good evening.

John Good to hear from you and thanks for participation today.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Yeah. This the spectral IP and the semi P transaction.

That is currently working through the SEC and I would anticipate that.

Those filings will be reviewed.

<unk> reviewed.

With an eye towards my understanding as of today is that I would expect that transaction to close.

Probably in the first quarter of 2026, and I would expect that Youll see something up.

In our financials, probably in the first quarter of 2026, reflecting that transaction.

Great Alright. Thank you Beth. Thank you that's a mile. Thank you John so much thanks John.

This concludes our question and answer session I would like to turn the conference back over to Dr. <unk> for any closing remarks.

Thank you again for your participation and continued interest in spectral AI. We are very pleased with the progress as I described with the three fs.

And we continue to make remain optimistic about our prospects for growth.

We can continue to work hard on the three principles that I outlined and we look to have a further announcements and our progress with these goals in the very near term.

Thank everyone on the call and wish you a very good evening.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.