ENDRA Life Sciences (NASDAQ:NDRA) Q3 2020 Earnings Call

0:00 Good day, ladies and gentlemen, and welcome to the InterLife Sciences Third Quarter 2020 Earnings Conference Call. All lines have been placed on a listen-only mode, and the floor will be open for your questions and comments following the presentation. At this time, it is my pleasure to turn the floor over to your host for today, Ms. Kim Galadetz. Ma'am, the floor is yours.

0:20 Thank you, Jess. This is Kim Galadetz with LHA, Andra's recently engaged investor relations firm. Good afternoon and welcome to NDRA's third quarter 2020 business update and financial results conference call. NDRA issued a press release on this topic earlier this afternoon. For those of you who don't have a copy of the release, you can access it in the investor section of NDRA's website at www.ndrainc.com. Before we begin, please note that today's presentation includes forward-looking statements, all statements other than statements of historical facts, including statements regarding Endra's strategies, financial condition, operations, costs, plans, and objectives, as well as anticipated results of Endra's development and commercialization efforts, the timing of clinical studies, potential partnership opportunities, and expectations regarding receipt of required regulatory clearances and product launches are forward-looking statements.

1:16 Except as otherwise required by federal securities laws, the company disclaims any obligations or undertaking to update or revise any forward-looking statements. Please refer to NDRA's Form 10-K for the 2019 fiscal year and subsequent Forms 10-Q files with the SEC to get a better understanding of risks and uncertainties related to forward-looking statements. I will now turn the call over to our Chairman and Chief Executive Officer, Francois Michelin. Francois?

1:45 Thank you, Kim. Good afternoon, everyone. Thank you for joining us today to review NDRA's third quarter 2020 performance and 2020 business updates. along with David and me on today's call are Renaud Malaberti, Andra's Chief Commercial Officer, Michael Thornton, Chief Technology Officer, and as I mentioned, David Wells, our CFO. Let me go through today's agenda. First, I'll highlight our recent achievements including major milestones achieved in the last week before handing it over to David to review the financials. Then, Renaud will provide details on commercial activities with an initial focus on Europe where we have our first regulatory approval. and finally we'll open the call for Q&A. For those of you who may be new to the Andra story, we're the pioneer of thermoacoustic enhanced ultrasound, also known as KS.

2:36 KS is a disruptive technology platform that allows clinicians to quickly visualize tissue in ways similar to an MRI, but at 50 times lower cost. KS is simple to use as it can complete scans within minutes at the point of patient care. It works with existing ultrasound systems, which are in widespread global use. We have a collaboration with GE Healthcare, which supports our commercialization plans, but TEAS is compatible with all major manufacturers of ultrasound. As we've shared before, there's an acute need for a practical tool like TEAS to assess and monitor liver fat to help the more than 1 billion people globally affected by non-alcoholic, Liver Disease, or NAFLD, and non-alcoholic steatohepatitis, also called NASH. Accordingly, the NAFLD-NASH diagnostic market is our primary initial focus, and I continue to be very encouraged by our progress this year.

3:40 As a reminder, in the first quarter of this year, we received CE mark approval for Arteus Fatty Liver Imaging Probe System. giving us regulatory green light to begin commercialization efforts in European countries that recognize the CE mark. The timing of this approval coincided with the outbreak of the global COVID-19 pandemic. However, we've continued to execute our business plan to capitalize on the CE mark in spite of the global slowdowns. I'll let Renaud get into the details of our progress in Europe in a moment. In June of this year, we submitted our 510 pre-market notification to the US Food and Drug Administration. The submission represented the culmination of years of scientific research, quality system implementation, safety and performance data collection.

4:28 And despite unprecedented global pandemic issues, the ENDRA team worked tirelessly to finalize the roughly 1,700-page submission on schedule during the second quarter. At this time, we remain in the customary review process with the FDA And while we can't control the timing of the approval cycle, we remain encouraged by the fact that the FDA has been engaging and collaborative with us. We'll continue to provide relevant updates to investors going forward regarding the process as they materialize. During the FDA's review process, the Endra team is actively executing the key components of our global commercialization plan, which centers on three key elements. establish clinical evaluation sites in target countries to build NDRA's base of clinical evidence and cultivate reference sites for local market commercial teams.

5:20 We currently have three global sites, three or four global sites, excuse me, three in the U.S. and one in Europe. Second element of our commercial plan is to build a small hybrid commercial NDRA team, one person in each target country in Europe, and then after we receive FDA clearance also in key U.S. regions. These salespeople will support the clinical evaluation sites, work with GE sales teams to drive TAIS sales and radiology, and independently pursue market development opportunities in hepatology and other clinical segments. The third element of our commercial plan is to build out our global e-marketing presence and clinical education tools to highlight TAIS's features and benefits as necessitated in a now much more online COVID world. With this plan in mind, I'm happy to report during the second quarter that we finalized our first clinical evaluation site in Germany and have advanced two more European sites at the final legal review, which we expect to execute before the end of the year.

6:24 We'll formally announce these European sites when they start scanning patients in the coming months, contingent on European business operations remaining operational with COVID. As far as our U.S. clinical evaluation sites are concerned, we announced last week that Rocky Vista University has installed its first TAIS system for the clinical study. The study is being conducted at Rocky Vista's Ivins, Utah location and will include the first real-world NAFLD-NASH cases to be scanned with TAIS in the U.S. COVID permitting, we expect our two other evaluation sites, University of Pittsburgh Medical Center and the Medical College of Wisconsin, to be in place by year-end. It's worth reemphasizing that clinical data from our three U.S. evaluation sites are not currently required for FDA clearance.

7:11 These evaluation and agreements were signed under the Institutional Review Board process, which allows research institutions to use technology that's deemed to be a low risk before FDA regulatory clearance. With Rocky Vista now active, we'll be ahead of the game in the U.S. before receiving the 510 clearance by collecting clinical data that can support our U.S. commercial launch. Following 510 clearance, we can look forward to these evaluation sites as great commercial reference sites for our U.S. commercial teams. Moving on to our collaboration agreement with GE Healthcare, the partnership remains strong. We continue to have regular commercial calls to coordinate plans, allocate resources, and share market feedback. GE continues to view liver diagnostics as a key strategic market opportunity and is introducing us to customers in Europe as we ramp up commercial efforts there and as COVID-19 conditions permit.

8:10 This agreement is up for renewal in January 2021. We remain confident it'll be renewed as it has been over the last four years. During the quarter, we've also made strong progress in building our intellectual property portfolio to defend our current and future technology applications. Our IP portfolio currently stands at 76 assets defined as filed, issued, licensed, and pending patent applications. That's up from 64 assets at the end of 2019. It's worth highlighting that several of our recent patent applications and grants continue to expand the potential clinical applications for TEIS beyond the liver and the NAFLD-NASH applications. For example, The newest European patent provides protection for point-of-care tools to visualize microvascular fluid flows in tissues damaged by cancer or trauma. This represents an additional clinical market opportunity beyond Andra's current $21 billion addressable market in the liver disease diagnostic space.

9:13 We have a full-time patent agent on staff and remain committed to growing this portfolio to bolster the IP protection of our core technology. as well as provide expansion opportunities into other compelling applications and markets. Speaking of expansion opportunities, we're seeing an uptick in interest from pharmaceutical companies and contract research organizations leading the development of therapies to treat NAFLD and NASH. There are around 50 NAFLD-NASH compounds in development, and the market is forecast to grow to over $20 billion in the coming years. Drug development companies face the same measurement challenges in clinical studies that use MRI and liver biopsy as end-user clinicians do.

9:59 Endres technology represents a potentially cost-effective and non-invasive way for pharmaceutical companies to deliver time and cost savings in their clinical studies through simpler, faster measurements of biomarkers such as liver fat. Specifically, the value proposition of Endres technology for pharmaceutical companies is lies in three areas. First, to help speed clinical trial patient recruitment, which currently depends on MRI or liver biopsy and historically have recruitment rejection rates that exceed 50%. Second, to provide easier interim measures of liver fat between MRI and biopsy measures during the study. Liver fat can change quickly during a study, and pharmaceutical companies want to pick up trends sooner.

10:50 While many of the NAFLD, NASH drugs in development target metabolic pathways that have a direct interest in liver fat, we're also learning that the pharmaceutical companies targeting other things directly, such as inflammation, have an interest in understanding a multitude of biomarkers, including liver fat, if the measurement tools are cost effective. Third, from a pharma perspective, After the drugs are approved, there's a natural synergy between pharmaceutical companies and Endra's point of care technology to identify patients suitable for the approved therapy and then monitor their treatment. On the other side, from Endra's perspective, the pharmaceutical sector offers three compelling opportunities. First, embedding Arteus technology in clinical trials could provide Endra with valuable clinical data that accelerates our volume of clinical evidence to support commercialization in the clinical market.

11:45 The bolus of data from the pharma sector could also potentially feed the artificial intelligence research we have ongoing at Western University in Canada. Second for Endra, there could be a substantial commercial opportunity to sell our technology to the pharmaceutical companies and CROs for deployment across the hundreds of sites enrolled in their clinical studies. And finally, after the NAFLD-NASH drugs are approved, we could envision commercial relationships with the pharmaceutical companies to leverage Endrest technology on the front lines of prescribing physicians. It's important to note that these deals, if and when they occur with pharmaceutical companies, would not conflict with our GE partnership on the ultracide equipment side. To the contrary, pharmaceutical partnerships would complement and dramatically expand The initial market opportunity for TEAS and NAFLD-NASH beyond the clinical end-user market of radiologists and gastrohepatologists.

12:43 So stay tuned here. Bottom line, I'm very pleased with the progress we've made during the challenging times to keep the company on track, deploying our first system at Rocky Vista, advancing our commercialization activities in Europe, and expanding our IP portfolio. I'd now like to turn the call over to David Wells to review the financial results for the third quarter ending September 30, 2020. David? Thank you, Francois.

13:14 Our third quarter 2020 financial results are as follows. Our operating expenses increased to $3.3 million for the quarter ended September 30, 2020, up from $2.6 million for the same period in 2019. This includes a total of $600,000 for non-cash charges, mainly equity compensation. Our research and development spending increased year over year by approximately $300,000 as we prepared our TEA system for commercial launch, including the necessary regulatory approvals. And our sales and marketing costs increased by a nominal $40,000, for the quarter as COVID-19 restrictions, limited travel, and in-person attendance at industry conferences.

14:10 Our general and administrative costs increased by approximately $275,000 due to employment-related expenses, which included non-cash charges for stock compensation, additional spending on costs associated with being a publicly traded company, including investor relations, and increased costs for insurance. Our net operating loss for the quarter ended September 30, 2020 was $3.3 million as compared to a net loss of $2.6 million for the quarter ended September 30, 2019. The portion of our net loss attributable to common shareholders, which includes funding related non-cash charges was $3.7 and $3.4 million for the quarters ended September 30, 2020 and 2019, respectively.

15:11 In Q3 2020, this amount is related to the exercise of certain outstanding warrants. Our operating net loss also includes non-cash charges, which totaled $1.9 million for Q3 2020. and are comprised primarily of charges for equity-based compensation and amortization of debt discount. Our net loss per share for the quarter ended September 30, 2020 was 15 cents per share. Our cash balance at September 30, 2020 was $3.8 million. This after raising approximately $5 million from the early exercise of warrants held by long-term shareholders during this quarter.

16:03 We remain diligent and vigilant in balancing our available cash and needs for cash against our outstanding equity and capitalization structure. We have and will continue to approach this balancing in several ways. First, by managing our burn rate through reductions where possible, as we did in April with wage and fee to stock conversions by our management and board of directors. We will spend only that which we feel is prudent and focused on the market success for chaos. Second, by not allowing our balance sheet to consume cash unnecessarily for fixed assets or poorly timed increases in inventory. This is what we mean when we have said in the past of our asset light operating model.

16:52 And third, by maintaining active communication with our longtime shareholders, building relationships with potential new investors and continuing to refine and retool the message of Endra's value to the market. This remains a critical path activity for Endra and will be for some time to come. We believe these actions continually applied to our daily regimen will continue to provide for us the capital we need to commercialize TEAS and still maintain an investable capital structure. We have actively cultivated choices, including the exercise of outstanding unregistered warrants, various market-based funding opportunities, strategic partnerships, and non-dilutive academic research grants.

17:44 I will now turn the call over to Renaud Malaberte. Renaud?

17:47 Renaud Malaberte Thank you, David. From a commercial perspective, following the receipt of the CE mark throughout the third quarter, we accelerated our efforts in seeding the market and building our brand to start the commercialization of Andrasteus technology in Europe. In the US, we continued building awareness in advance of FDA clearance. As Francois mentioned in his opening remarks, our commercial strategy centers on three key elements. The first commercial element is is to establish evaluation sites in key markets. Despite the month-long COVID-19 impact on normal operation for healthcare facilities, our team successfully secured our first European evaluation site at the Johannes Gutenberg University outside Frankfurt, Germany during the quarter. We are also in the final legal review with evaluation sites in France and Switzerland and expect to finalize this agreement before year-end.

18:49 will formally announce the site when they start scanning patients in the coming month and contingent on European business operations remaining open in light of COVID. Another good example of our progress on the ski commercial front is the news announced last week that our TAIS system is now installed at Rocky Vista University. This is our first installation in the US and it will be followed in the coming weeks with installations at the other evaluation sites. and the University of Pittsburgh Medical Center and the Medical College of Wisconsin. The data from these studies and evaluation sites will be used to bolster the clinical evidence and further establish the clinical utility of TEIS. Of the TEIS ultrasound device in patients with AFLD to help accelerate commercialization in Europe and eventually the U.S.

19:41 once the FDA clearance is secured. The second commercial element centers on building a small European sales team to work alongside GE sales teams. On our last quarterly call, we announced that we hired our first salesperson in the UK, and I'm happy to report that he's already making meaningful progress despite the challenges posed by COVID-19 travel restrictions. With this additional resource, we have been able to attend our first UK-focused liver conference, start the national health system enrollment process, and hold daily calls with UK clinicians that we believe will turn into customers. Given the pandemic, we've been careful not to hire people too early before the European market and healthcare systems open up. With that in mind, we now have also someone in the field in Germany who will support our evaluation site in Mainz and drive TS market adoption in this important European market. We also have a strong pipeline of candidates in other markets.

20:48 We expect our salespeople to be able to capitalize on the We expect the level of success to coincide with the rate at which hospitals return to more normal operation conditions in Europe. As discussed in previous calls, these commercial NRA resources will drive sales in the following way. The sales reps will support and assure success of our clinical evaluation partners in each country or region. Our salespeople will also work with GE salespeople in each country or U.S. region to introduce Andra technology to existing and new GE ultrasound customers in radiology. And finally, the Andra sales rep will drive awareness, interest, and trial for Andra's technology outside of GE's focus in radiology.

21:49 specifically targeting clinicians in hepatology, endocrinology, and primary care. The third key element of our commercial strategy is to increase NDRA's e-marketing and education efforts. In the most recent quarter, we've built upon our previous work here by releasing additional educational videos and white papers, and we also translated our website into additional languages. Andrainc.com is now available in German, French, Italian, Spanish, and Chinese, in addition to English. As a reminder, these efforts add to the library of tools and information now available to our sales team and potential clinical customers.

22:36 Since many trade shows and conferences have been moved to a virtual setting, you'll recall we built a digital trade show booth last quarter that allows us to attend global trade shows and conferences virtually and offer our potential customers a memorable virtual experience and the ability to learn and interact digitally with Tejas and the Indra team. The annual liver meeting organized by the American Association for the Study of Liver Diseases took place virtually this past weekend. And I am happy to report that this reaffirmed that the increasing need for a point of care noninvasive assessment tools for NAFLD, as well as for providing information on the progress of NAFLD NASH drugs. In addition, we connected with multiple potential customers who visited our booth and expressed interest in our solution.

23:29 We will leave Andra's virtual booth open year-round on our website so clinicians can learn about our innovative theus liver solution on their own time, independent of conference dates. In summary, we continue to make meaningful progress towards our first TAIS system sales. The global pandemic is not tempering the enthusiasm of the clinicians for our TAIS solution to the growing NAFLD NASH challenge. The future of TAIS and NANDRA looks bright, and I look forward to updating you on our progress in future calls. Now, I'll turn the call to Francois, who will make some final remarks.

24:09 Thanks very much, Renaud and David. I'll wrap up the call before Q&A by emphasizing we're happy to have deployed our first clinical system in the U.S. and remain focused on ramping up commercialization activities in Europe, supporting the FDA review of our 510K submission in the U.S., and exploring partnerships in the pharmaceutical sector. Look forward to providing investors with updates in the coming weeks and months as we make specific progress on all these fronts. With that, I'd like to open up the call for questions. Operator? Thank you. Ladies and gentlemen, the floor is now open for your questions. If you do have a question, please press star 1 on your telephone keypad at this time. If you're using a speakerphone, we ask that while posing your question, you pick up your handset to provide the best sound quality. Again, that is star 1 for any questions or comments.

24:57 We'll move first to Brooks O'Neill at Lake Street Capital Markets.

25:01 Brooks O' Good afternoon, everybody. I have a couple questions. Recognizing the obvious disruption of COVID both here in the U.S. and internationally, first, I guess, do you see, are you getting any indications from FDA that approval isn't likely on the normal timeframe? And if it is, roughly when might we see that approval? And then Just talk a little bit about Europe, Francois. I recognize, you know, based on my conversations with other companies that the COVID spikes have resulted in more aggressive shutdowns in many countries in Europe.

25:47 How do you think that's going to affect your efforts to commercialize the system in, say, the first half of 2021? Sure.

25:57 Sure, thanks. Thanks, Brooks. Yeah, so regarding FDA, as we pointed out on the call, we've not gotten any indication from the FDA that there are issues. They have engaged with us quite proactively on various normal questions. And beyond that, I couldn't say when Approval might come. I didn't want to speak to the approval cycles. All I know is clearly approval cycles typically turn around the six-month mark from filing. It's possible with the COVID-19 situation that the FDA is at times defocused, but we have not experienced that. So I remain very optimistic about receiving clearance and will certainly update investors on any material changes that occur going forward.

26:50 Second, regarding EU and COVID, I don't want to make excuses. No one can control COVID, and the reality for us is we need to do what we're able to do. And so that's involved recruiting good people, as we've done now in the UK and just recently in Germany, and building that pipeline of people so that we can actually have feet on the ground. The legal discussions on the evaluation sites in Europe continue also, and we don't need to be there in person. And as Renaud mentioned, we've been continuing to build on the momentum to raise awareness and interest since really starting this process and going to at least 14 clinical conferences globally since 2018. So it's important to remember that clinicians as well as administrators as well as companies like Andra and GE and others are, you know, hampered and the world has changed.

27:51 But in a sense, it's a great equalizer. These virtual booths that we are using, we're finding very cost effective to get the message out. We're getting a good deal of interaction. Clinicians are attending, participating, and we've got a good exchange and a good amount of lead collection. I don't want to minimize the impact of COVID. Clearly there's concern. I will say just from the one sample that we've had now for a couple of months with our UK sales rep, he's very active. He's engaging. Clinicians are now fully engaged on Zoom and other virtual conferences. He's making development calls, commercial development calls, and I think that that will bode well for commercial sales. We're not yet ready to signal when those sales will occur, but certainly we're in the process of making those sales calls.

28:44 and remain optimistic that 2021 will be a full commercial year for Andra. I don't know if that answers your question fully.

28:53 That's great. Yeah, that's great. So let me just shift gears a little bit and ask you a little bit about the capital position. Number one, great job on raising the $5 million through the warrants. I'm curious if you expect or think there's any more from that well, if you will. Number two, I'm curious what your expectation is with regard to your renegotiation with GE. A, could they be a capital partner? And B, are you pretty sure they'll sign up again in 2021? And then C, the comments you made about the drug partnerships and drug opportunities seem very encouraging and full of potential. And I'm curious if you Just obviously on a preliminary basis if you see the potential to have some kind of a financial partnership that would help on the capital side as well.

29:53 Sure, thanks. So, Brooke, let me tackle the GE and the pharma question and then I'll ask David Wells to speak a little bit more in detail to the capitalization specific question. What I can share with you about GE is, as you know, I and many people on the management team and the board are ex-employees of GE. We have strong relationships there, and our contacts at GE both remain stable and remain committed to helping Andra deliver space for all the reasons I've mentioned. is equally clearly an opportunity for GE and other players. They see the opportunity to improve tools to screen and monitor patients with liver disease. So GE's focus in liver remains strong. I don't want to signal more than simply I believe the contract will be renewed, but certainly as we advance both through the commercialization ramp, building clinical evidence, The relationship with GE certainly has potential to get deeper, and I believe in time it will. And I've publicly stated that our goal is not to be in the box and accessory business long term.

31:11 We have to prove our clinical and commercial uptake to start with the installed base of enhancing ultrasounds, but longer term, our goal is to be in the licensing of TAIS products. are two companies like GE and otherwise. So I believe that we remain on that track. Your second point about pharmaceutical companies, yeah, I remain really bullish about that opportunity. It seems to have really reopened in terms of since the beginning of the year, and pharmas and contract research organizations that run these clinical trials for NAFLD, NASH drugs are approaching us and saying, as I think I said on the last call, we're not looking to replace MRI yet, but a cheap, easy, safe tool could really be attractive for us. So I would say let's manage an initial collaboration with a goal of partnering, getting data, having the pharmaceutical companies prove that value in their clinical trials, and I could see that growing in 2021 to potentially a strategic investment and commercial relationship.

32:27 But let's go one step at a time and I'm excited about, I think, getting that first step started very soon. I hope that helps. David, if you could speak a little bit to Brooke's initial question, that would be super.

32:40 Sure, and actually I'll kind of pick up where you left off, which is The statement, one step at a time, and that's really what we're doing now. Establish choices, as I talked about earlier, whether it be unregistered warrants, which in direct answer to your question, are there additional warrants that are exercisable? And the answer is yes. and then add to it various market-based funding opportunities. Those are available to us. Some of the strategic partnerships and non-dilutive academic research grants. I think the trick here is to keep taking one step at a time, see how the company is being perceived in terms of overall value, see how the market is responding to some of the unique things of 2020, COVID and others, and continue to make our best decisions.

33:40 I'm very proud, and I think it's borne out in our capitalization structure, but I'm very proud of the decisions we as a company have made over the years. We've made good decisions about how we're going to capitalize ourselves, and we're going to continue to make those good decisions.

33:59 That's great, David, and thanks for all that color.

34:03 Thanks again, Brooks. Operator. Do we have any more questions? We do. And as a reminder, ladies and gentlemen, it is Star 1 if you had a question or comment. We will move next to Ed Wu at Ascendi Inc. Capital.

34:21 Hi, Ed. Thanks for taking my question. My question is on the reference sites, evaluation

34:26 sites. Do you have plans beyond the three initial in the U.S. and three that you guys targeted for Europe?

34:33 Yeah, thanks, Ed. Great question. So really our thinking in terms of how fast we scale that is How well can we support it, and what are we learning? So it's more a question of, I think, staging multiple sites over time. The answer is yes. We want to have a reference site in each target market, the UK, France, Germany, Italy, Switzerland, and others. But we also want to support them well, and we want to learn in the process. And so staggering them gradually over time is beneficial that way. In the U.S., we have three sites up at Mid-Atlantic University of Pittsburgh Medical Center, the Midwest Medical College of Wisconsin, and in the Southwest, the installation at Rocky Vista University.

35:21 That gives us a good geographic distribution, and if you remember, our criteria for selecting these sites was, one, geographic because clinicians in France or clinicians in The Northeast like to hear about data and potentially want to go and visit and kick the tires of the unit in clinical use at a site near them. So that's one reason. The other elements were we want these evaluators to clearly see the same potential for a tool like ours. And as I've mentioned, several of the evaluators, including the University of Pittsburgh, which is a liver center of excellence, approached us. at the American Association for Study of Liver Disease Conference. So we view them as real partners. Objective, they must be objective.

36:07 We don't run these studies, we don't control them, but they have the right interest and interest in making a successful case for their patients as well as for Endra and other clinicians. So yes, the answer is we'll continue to build out additional sites as we are able to support them. with a focus initially on Europe and in the U.S. I hope that answers your question, Ed.

36:33 Yes, it does. In terms of each evaluation site, how much involvement both in resources and money is involved for you guys to participate?

36:44 Yeah, great question. So I won't reveal how much we are paying per patient because that's obviously confidential, but I will say that GE has been very helpful in providing us as one example of how they're working with us with ultrasound systems that we don't have to buy. And so we are deploying turnkey systems to these sites, our own system plus a GE ultrasound system to enable a speedy and, as I mentioned, turnkey operation of these sites. And these sites, as I've also mentioned, will scan a number of patients ranging from 75 to up to 200 patients. Idan Steinberg, Scott Sober, Alexander Tokman, Richard Jacroux, Ziad Rouag, Idan Steinberg In the meantime, I also want to emphasize that commercially, we're not waiting for that data to come out.

38:00 Those are reference sites, evaluation sites, and our salespeople in each country are actively soliciting customers in our customer relationship management database and being introduced to customers by GE. So it's something that's happening in parallel to our commercial sales. Once those evaluation sites complete their We fully expect and will work very hard, obviously, to keep them happy and satisfied that they will become commercial sites for us and commercial customers. I want investors to think about revenue for us next year, not in terms of onesie-twosie type of sales associated with our sales reps, but really site-wide, healthcare system-wide type of sales. and without at all inferring that UPMC has made a commitment this way, it's public information that UPMC is a large healthcare system with at least 40 hospitals. So getting our foot in the door, generating goodwill, proving the case with our technology, I believe sets us up for a stronger potentially commercial relationship.

39:17 That's not the case today but I want investors to start thinking ahead and a good commercial relationship with a site like UPMC could turn into a very substantial bulk buy for NDRA. Okay? Hope that's helpful, Ed.

39:32 Yes, that was very helpful and I wish you guys good luck.

39:35 Thank you. Thank you again, Ed. With no other questions holding, Mr. Michelin, I'll turn the conference back to you for any additional or closing comments.

39:44 Yeah, thanks very much, Jess. Thank you, everyone, for joining us this evening. We're very excited about Endra's future, and we're pleased to have shared our plans with you this afternoon. I do want to mention that we do have an active investor relations program and are available for virtual meetings with the investment community. Please contact LHA, our IR partners, if you'd like to schedule a meeting. And also, I want to mention that we're participating in two investment community conferences this week. Tomorrow, November 17th, we'll be presenting at the Virtual Investor Summit at 1.30 Eastern Time. and on Thursday, November 19th, we'll be participating in AGP's virtual healthcare conference, which is a one-on-one format. Thank you again, everyone. I wish you well and good afternoon.

40:31 Ladies and gentlemen, that will conclude today's program. We thank you for your participation. You may disconnect at this time and have a great day.