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Operator
Greetings and welcome to the HeartBeam Third Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. Before we begin the formal presentation, I would like to remind everyone that statements made on the call and webcast may include predictions, estimates, or other information that might be considered forward-looking. why these forward-looking statements represent our current judgment on what the future holds. They are subject to risk and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revisions to these forward-looking statements in light of new information or future events. Throughout today's discussion, we will attempt to present some important factors relating to our business that may affect our predictions. You should also review our most recent Form K-10 and Form 10-Q for more complete discussions of these factors and other risks, particularly under the heading Risk Factors. A press release detailing these results crossed the wires this afternoon at 4.01 p.m. Eastern Time and is available in the Investor Relations section of our company's website, heartbeam.com. Your host today, Branislaw Wydek, Chief Executive Officer and Founder, John Hunt, Chief Business Officer, and Rick Brownstein, Chief Financial Officer, will present results of operations for the third quarter ended September 30th, 2022. At this time, I will turn the call over to HeartBeam Chief Executive Officer Branislaw Wydek. Please go ahead.
Founder
Thank you, operator, and good afternoon, everyone. I'm pleased to welcome you to today's third quarter 2022 Financial Results Conference call. I could not be more enthusiastic about the future of HeartBeam, the rapid pace of our product timeline, and our team's ability to scale our commercialization path. For those of you joining us for the first time, I'd like to take a moment to introduce HeartBeam and our opportunity in a short video introduction. The video explores the Harveem Amigo technology, need, market opportunity, and use in heart attack detection. Amigo is the first and only credit card-sized 12 lead ECG device for remote heart attack detection with a 510 regulatory pathway. While we are playing the video for our dial-in participants, unfortunately, It will be about three minutes of silence, but I'd like to remind you that the video is available on our website, heartbeam.com.
spk01
Undiagnosed heart attacks can be lethal for individuals and costly to the healthcare system. Today, chest pain is the second most common reason for an ER visit in patients over 45. However, 82% of those visits are unnecessary and cost the healthcare system over $10 billion each year. Because of uncertainty, patients often delay seeking care for an average of three hours, causing a 40% increase in mortality rate. Currently available ECG monitoring solutions are indicated only for screening for arrhythmias, but not for heart attacks. HeartBeam's innovative technology, the HeartBeam AmyGo device, introduces a simple, patient-friendly solution designed specifically for heart attack detection. This credit card-sized device, paired with the smartphone application, puts patients in immediate contact with their care team. The patient places the wireless device on their chest for a 30-second signal recording. The patient's healthcare provider is then notified of the new ECG. To fully characterize the three dimensions of the heart, HeartBeam captures the heart's electrical activity in 3D by recording X, Y, and Z projections into a simple, user-friendly platform. The HeartBeam AMI system provides a comparison of the patient's baseline ECG along with the symptomatic ECG with a marker and a diagnostic suggestion indicating potential heart attack. The results are instantly shared with the patient's care team through the HeartBeam Amy proprietary cloud-based platform. Physicians are aided by a fully autonomous diagnostic system to view the ECG, review diagnostic suggestions, and direct the patient accordingly. Today, clinicians must rely on 12-lead ECG for heart attack detection, performed solely within a hospital or clinic. HeartBeam's Amy and AmyGo technology has the potential to become the standard of care for cardiac patients, with the potential to serve over 18 million patients in the U.S. alone. With a simplified 12-lead ECG process in a portable solution, HeartBeam is poised to revolutionize the healthcare industry by saving lives, reducing costs, improving the patient experience and provider outcomes, while advancing diagnoses with technology that can be used anytime, anywhere. HeartBeam. Putting tomorrow's technology in patients' hands today.
Founder
Today, there are many ECG technologies offered to consumers and patients outside of a medical facility. What they all have in common is that they do not offer a standard of care 12 lead ECG. That means that they are not capable of detecting a heart attack. In the great majority of cases, it is a single lead ECG that may be adequate for some arrhythmias, but is certainly not capable of detecting a heart attack. So, shown in this slide is the actual message from Apple Watch warning the user of its inability to detect a heart attack. Similarly, AliveCore with their cardiac products prominently feature on their website the same disclaimer about the inability to detect a heart attack. Our technology, we believe, has solved the problem of heart attack detection outside of a medical institution. The heartbeat technology is intended to quickly and accurately help clinicians identify a heart attack. This could reduce the critical time to intervention for heart attack patients, saving lives, and reducing healthcare costs by ruling out a heart attack and reducing the number of emergency room visits. Our third quarter was highlighted by progression on our commercialization pathway toward the series of important milestones, including the 510K application submitted for hard beam AMI product. As we look forward FDA clearance for hard beam AMI, we are also making significant progress with our core product, the AMI-GO 3D VECG collection device. as we prepare for FDA submission in late Q4 of this year. During this quarter, we broadened the product portfolio to enable smartwatch connectivity to heartbeats platform in future products as an optional monitoring solution for the clinician and their patient. We further advanced intellectual property protection during this quarter, with two new patents. A patent for a 12 lead ECG patch monitor intended for detection of heart attacks and complex cardiac arrhythmias opens a pathway to offering ischemia and arrhythmia detection via an ECG patch. This innovation builds on our growing intellectual property portfolio, enabling 12 lead ECG diagnostics outside of a medical setting. The technology offers the potential to bring a level of diagnostic accuracy consistent with the current value DCG standard of care and could have a disruptive effect on the established multi-billion dollar ECG patch market with its ischemia detection capability. A second patent that enabled the generation of a synthesized 12-lead ECG by our Amygo credit card size device opens a pathway for a patient to record a set of signals using Amygo outside of a medical setting with a diagnostic synthesized 12-lead ECG immediately transmitted to a clinician for review and diagnosis. This ECG format is one that clinicians are trained to interpret with the added benefit that by including a second recording of a patient's baseline ECG, it is personalized to that individual and we expect that we'll provide added data to assist a clinician in the diagnosis. We expanded the availability of patient population for our HeartBeam AMI software platform to include unstable angina as a diagnosis, actually, for analysis and provide access to a broader patient population for technology once cleared by the FDA. Most recently, we announced the appointment of Dr. Peter Fitzgerald as Chief Medical Officer. Peter is a renowned Stanford University cardiologist who brings deep clinical research and industry experience to our executive team and is one of the most preeminent opinion leaders in cardiology and digital health. We expect that he will play a major role in defining best paths to adoption, clinical strategies, and partnerships to advance our products and markets. We are also privileged to welcome Ken Pearson to the role of Chief Technology Officer to lead overall technology, strategy, and development of the Harvey & Amy and AmyGo platforms. Ken has over 25 years' experience in the digital healthcare and cardiac device industries. Most recently, he founded the digital health company, Livemore, where he served as Chief Technology Officer. I would now like to turn the call over to John Hunt, our Chief Business Officer, to further discuss our products and commercialization paths.
Peter Fitzgerald
John? Thank you, Branislav.
John
Turning to our product timelines and updates, we had several key developments related to our HeartBeam AMI and AMI-GO platforms. As Branislav mentioned, we announced the 510 submission of our HeartBeam AMI platform to the FDA. We received questions from the FDA within the statutory 30-day review deadline, discussed the questions via teleconference with the FDA review team, and provided written responses addressing the questions to the primary reviewer. The substantive review is in progress and we expect to receive FDA clearance in the fourth quarter, followed by a limited market release in Q1 of 2023 and full commercial rollout in Q2 of 2023. We expanded the addressable patient population for the HeartBeam AIME software platform to include unstable angina as a diagnosis for analysis and provide access to a broader patient population for technology once cleared by the FDA. It is important to include unstable angina as a diagnosis for analysis as it is a frequent occurrence in patients presenting with chest pain. Patients with unstable angina may have subtle electrical changes brought on by ischemia without definitive injury to the cardiac tissue. We engaged multiple partner health systems, and they provided the needed ECG data to complete our clinical trial that was part of the FDA submission of our HeartBeam AMI software product. After this, we have plans for additional pilot studies for our end-to-end prescription-only Amigo system for remote heart attack detection in at-risk patients, as well as other future scientific and commercial collaborations with these health systems. HeartBeam AMI is software as a medical device solution for use in acute care settings with market clearance via the 510 regulatory pathway. And our first target will be emergency departments, where this will be a software licensing business model on a subscription basis of an average cost of $100,000 per year per emergency department. In high volume emergency departments, we've discussed this with, this turns out to be about 85 patients per day that go through the emergency department requiring a 12 lead ECG. So it works out at an amortized cost of between $3 to $4 per use. There are 5,000 emergency departments in the U.S. with a total addressable market of about $500 million. The HeartBeam AMI solution is a web browser that slots into the existing workflow of an emergency department, leverages existing 12-lead ECG hardware, and provides the attending physician a diagnostic suggestion with an instant comparison of the patient's baseline and symptomatic ECGs for their consideration in the patient's diagnosis. Quickly determining if a patient needs intervention or needs to be held in the ER for further observation or can be discharged helps the EDs manage throughput. To date, HeartBeam has completed three key Harvard-designed studies in Europe. The study shown in this slide demonstrates the accuracy of the HeartBeam algorithm. It outperformed a panel of cardiologists in detecting a heart attack. The data showed the heart beam algorithm was agnostic to the physical location of the occluded vessel compared to cardiologists whose performance declined in occlusions in both lateral and posterior vessels. Briefly, the total addressable market for the AMI software solution, as I just said, is approximately $500 million. And compare that to the AMI-GO solution, technology platform, we anticipate this to be about a $10 billion market, and these are estimated numbers for the U.S.
Peter Fitzgerald
market alone.
John
Turning to our Amigo product, we expanded our product portfolio pipeline to serve the growing cardiac device wearable technology market by bringing clinically relevant diagnostic information to patients and clinicians with smartwatch connectivity enablement supporting a daily multi-hour heart monitoring solution. In September, we were granted a patent that provides additional intellectual property protection for our Amigo technology offering 12-lead ECG capability in the form of a credit card-sized device with the same footprint as the single-lead products currently in the market today. This was quickly followed by the granting of a patent for a 12-lead electrogram patch monitor intended for detection of heart attacks and complex cardiac arrhythmias, building upon HeartBeam's intellectual property portfolio, enabling 12-lead ECG diagnostics outside of a medical setting. We engage Silicon Valley-based Triple Ring Technologies, a co-development engineering company, to assist in the design and development of our Amigo Complete Solution 3D vector ECG collection device for remote heart attack monitoring. Triple Ring has a long history of successfully designing a wide variety of innovative medical devices and underlying technologies, and we're now working closely with its medical device team to rapidly build and test our 3D ECG device. This joint partnership is a five-phase expedited device development project scheduled to be completed in the fourth quarter of 2022 in time for our 510K submission to the FDA. The Amigo product incorporates the hardware design and development efforts of Triple Ring and our software, firmware, and remote patient monitoring platform development efforts. Engaging Triple Ring for the hardware development of the Amigo 3D ECG device to plug into our RPM platform allows the company to provide an end-to-end telehealth solution for patients and physicians. An added benefit of the partnership with Triple Ring is that they have an established relationship with an OEM manufacturer who is able to manufacture the Amigo 3D ECG device at scale. In addition, the OEM manufacturer is capable of handling logistics and distribution for their customers. By engaging experienced development partners like Triple Ring, Heartbeam Management is confident we'll meet our project timelines for a late Q4 2022 FDA submission. and are in active discussions with Triple Ring's manufacturing partner to support a limited market release of the Amigo product in Q2 of 2023. HeartBeam's Amigo product is a 510 regulatory pathway. We have already identified a predicate device to demonstrate substantial equivalence with a simple validation study. Importantly, the clearance of the Gen 1 device allows HeartBeam to collect 3D vector cardiogram data and use these data for developing advanced features for a Gen 2 product. HeartBeam Amigo has a clear reimbursement pathway with existing CPT codes, and these are highlighted on this slide. We're planning on using a subscription model where HeartBeam builds a practice on a per-patient, per-month basis. And the discussions my commercial team have had with the cardiology practices indicate this is an attractive business model because they can use existing codes and it provides an enhanced level of care for high-risk patients that they currently do not monitor. Looking at the average monthly reimbursement per practice per patient is approximately $1,300 per year per patient, or about $110 per month based on average reimbursement costs in the U.S. And HeartBeam will bill the practice a technical fee of $50 per month per patient, or $600 per year. Again, this is to monitor a currently underserved, high-risk patient population that until now were not able to be easily monitored outside of a medical facility. This is also expected to provide a new revenue stream for a cardiology practice. We estimate that our share of this revenue stream, i.e. the technical fee, is about 10 billion a year in the U.S. market alone. This slide shows several companies in the cardiac monitoring market that you are very familiar with. While each product offers some of the capabilities of the HeartBeam telehealth product, the 12 lead ECG capability, integration of patient history and symptoms, and the presentation of comparative ECGs providing a baseline and symptomatic ECG to the physician differentiate the Amygo device significantly from other products in the market. We believe HeartBeam Amy and HeartBeam Amygo, by leveraging our patented 3D vector ECG technology, offer substantial capabilities beyond existing offerings, and we continue to engage with potential customers and partners in anticipation of FDA clearance and commercial launch for our products. It is important to note, while a live course credit card size CardiaMobile product, recently introduced and shown on this slide, is only a single lead ECG recording and does not contain the vector information recorded by the Amigo device. I will now turn the call over to Rick Brownstein, Chief Financial Officer, to discuss operational updates and financials.
Amigo
Thank you, John. I would like to briefly discuss our sample financial model at scale for our HeartBeam Amy and our AmyGo solutions, which shows that capturing even a modest percent of our total addressable market results in a significant reoccurring revenue base. The existing insurance codes that John just reviewed previously are going to drive the Amigo revenue. This telehealth is a much larger market, probably about 20 times or so her market opportunity compared to this side of the ED market. And over time, we expect that it will be the primary source of revenue. I would also like to highlight that our solutions also generate high gross margins under either base case assumptions, with gross margins above 80%. And finally, as the company scales, operating margins can be in excess of 30%, even as we increase investments in R&D. This R&D opportunity is most evident by taking a look at our platform technology and what we're doing with it today. Turning to our financials, I will now give us a succinct review of our financial results. A full breakdown is available in our regulatory filings. We just issued the 10Q for the quarter and in the press release that just crossed the wire after market closed today. Our third quarter 2022 financials are the last comparing Heartbeam's results as a private company in 2021 to now a public company working on the commercialization of our first two products. Research and development expenses for the third quarter of 2022 were $1.6 million compared to $105,000 for the third quarter of 2021. Our focus on R&D consisted largely of product development costs for HeartBeam AMI, which is now essentially done, and also HeartBeam AMI-GO. This includes both software and hardware, the latter with our professional service agreement with Triple Ring Technologies to assist in the hardware for Amigo. Additionally, there are clinical costs in support of our FDA submissions for both our products this year, as well as research costs in support of future product pipeline coming from our patented Vector3D ECG platform technology. General administration expenses for the third quarter of 2022 were $2.0 million, so $2 million even, compared to $341,000 for the third quarter of 2021, reflecting the growth in our team and other costs in support of being a public company. Interest income during the three months ended September of 2022 of 28,000 is related to the cash balances from the last November IPO. In 2021, we had 608,000 of expense tied to the 2015 convertible notes. That converted into and added to the common stock as of December 31st of 2021. Net loss for the third quarter was $3.6 million compared to a net loss of $1.2 million for the third quarter of 2021. We ended the third quarter of 2022 with $6.5 million in cash and cash equivalents compared to $13.2 million as of the end of December 31st, 2021. We expect our cash position to provide a runway into 2023 and the expected FDA submission in Q4 of this year, as well as the clearance of Hart P. Mandigo next year. I'll now turn the call back over to Branislav for his closing thoughts.
Founder
Thank you, Rick. Indeed, our technology is a true platform technology. So far, we have developed two products that are going to the process of either already submitted to the FDA in the case of HeartBeam AIME or soon to be submitted to the FDA for the HeartBeam AIME Go product. During the third quarter, we continued to operate from a position of strength, equipped with strategic partnerships to advance product development, near-term milestones, and cash runway into 2023. Looking ahead, we are accelerating our commercialization path and remain confident in our anticipated upcoming product milestones. By the end of this year, we expect to receive FDA clearance for our Heartbeam AMI platform, and we expect to have our Heartbeam AMI GO solution submitted to the FDA for clearance. We approach these milestones from a position of strength with an experienced team, bolstered by recent appointment of Dr. Peter Fitzgerald as chief medical officer and Ken Pearson as our chief technology officer to support these goals. Beyond that, looking at the product pipeline, we think that the application of artificial intelligence will be of great value to us. We will have very unique data sets. of patients with actually have recorded ECG on a daily, weekly, or monthly basis. That longitudinal data for our patient population will be of tremendous value. Applying artificial intelligence to these data sets will be extremely valuable. It is an extremely data-rich set, much richer than the standard ECG. Additionally, insight that we will gain by applying artificial intelligence will help the cardiovascular population with predictive and preventive value, we believe. On the lower right portion of this slide, it shows the 12-lead patch. We have recently received a patent for that essential tool for the physicians. It is a unique patch in this category of a market that's growing and is projected to be at $4.8 billion by 2030. This is a disruptive technology that has the potential to have a significant influence on the patch industry as a whole.
Peter Fitzgerald
I'd like to share
Founder
One final thought. We are all very excited about the prospect of helping millions and millions of cardiovascular patients, initially heart attack patients, but we believe our technology will essentially address all cardiac patients and all disease, cardiac disease that are detectable by a 12-lead ECG. So that's very exciting prospect for all of us and a great motivator to be helping many, many millions of patients throughout the world. I look forward to providing our shareholders with further updates in the near term as we move forward towards commercialization. I thank you all for attending, and now the HeartBeam team would like to answer any questions. Operator.
Operator
Thank you. If you'd like to ask a question, please signal by pressing star 1 on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. A voice prompt on the line will indicate when your line is open. Once again, that's press star 1 to ask a question, and we'll pause for a moment to allow everyone an opportunity to signal. We'll take our first question from the line of Jason Colbert with Dolphin James. Please go ahead. Your line is now open.
Jason Colbert
Hi, guys. Congratulations on all the progress. I'd like to hear you talk a little bit more about the overall commercialization plans as approval becomes a reality and you start getting into raising physician awareness and really driving this product, both Amygo and the entire platform.
Peter Fitzgerald
Thanks. John, please. Hey, Jason. Yeah, thank you.
John
Well, obviously we're already in discussions now with some pilot sites for anticipating heartbeat aiming. One of the things the commercial team wants to do with a few pilot sites we've already identified is to evaluate the product in terms of how it slots into the the clinical workflow, and get some early feedback from those users. We've identified some very prominent physicians in the emergency medicine space to help us in that effort. And once we've characterized that, then we'll expand the commercial footprint. But as I've said previously, initially with a small commercial team, We're going to focus on accounts that are regionally based to where the folks are located in the HeartBeam team, and that's in these following metropolitan areas, Charlotte, North Carolina, Atlanta, Georgia, Minneapolis, St. Paul, Denver, Colorado, and Seattle, Washington. So it'll be a small footprint initially to gain traction, and then as we get traction with the product, will expand the commercial team footprint. With AmyGo, we've already got a lot of interest from some of those same centers because we're finding, in fact, I know one of my staff just had a discussion today with a major academic center in the Seattle region where we're bringing cardiology and emergency medicine together because we think Long-term, there's a possibility that Amigo will get prescribed not just by cardiologists who follow these high-risk patients, but also out of emergency departments by physicians that are often discharging up to 80% of patients that present with chest pain. They get diagnosed for a non-cardiac reason, and then they're cycled back into cardiology because obviously it was chest pain that brought them into the center. And a lot of emergency physicians we've spoken to like the idea of actually giving a device to a patient as they discharge them, because currently they just discharge them with the promise that they're going to get a cardiology follow-up call, which, as you know, based on scheduling, can take anywhere from, on average, six to eight weeks. So it doesn't necessarily make the patient feel well.
Peter Fitzgerald
Yeah, it makes sense.
Jason Colbert
It sounds like a very pragmatic launch, and a lot of planning sounds like it's gone into it. Can you also, Bronislav, talk a little bit about what the interaction was like with the FDA? You turned around the written response pretty quickly. Were there questions, kind of just questions? Were there any real big surprises there, or was it pretty routine? And what's your confidence level, you know, given that interaction on where you stand now? It sounds like it's pretty high.
Founder
Yes. Thank you, Jason, for the question. I will comment and also ask John, who has been very close to that process, to comment as well. So far, we have not seen any surprises. We have received a set of questions. We responded and actually spent half an hour with the FDA team, basically putting a little bit more detail around our response, and that went well as far as we can tell. At this point, we are waiting for the next step here. We really don't know what the next step will be, but at this point, we are... confident that the clearance will come this year. Exact timing is impossible to say, right? You know, and the FDA has been under a lot of stress, you know, in terms of, you know, tail end of COVID, et cetera. So we really don't know exact action, final action by the FDA, but we're optimistic and we believe that that's going to be possible. for sure this year. But, John, maybe additional light from you.
John
Yeah. Well, one, I think, Jason, was that we got questions back from the FDA. I think some of them, as is typically an experience I've had previously, is that sometimes it's just a misunderstanding on the reviewer's part or the review team's part, right? And I think we had a couple of those questions which we we dispositioned on the phone call, but then we wanted to provide written responses, which we turned around quickly because that's just my preference in dealing with the FDA. You never really show indifference to responding to their question. I think the promising thing from my standpoint was that they were very responsive in hosting a conference call with us and the reviewer pulled the entire team together. and we had an interactive dialogue with them, said we were going to provide both minutes to the meeting, which obviously FDA reviews, along with responses, and now it's under substantive review. I think, as you're all aware, FDA is still working remotely. It's post-COVID. They've been hammered during COVID, obviously. It's... you know, the fact that they've kept up with this and met their statutory timeline on the initial review was promising from my perspective. But as Bronisov said, very difficult to try and pin them down to when they'll get done with the substantive review. Although it's getting close to year end, and I know they have a tendency that they want to close out submissions that are already in the queue and under review, and I've experienced that previously as well. So, you know, very positive from my perspective.
Jason Colbert
Yeah, very helpful. I appreciate that color. And by the way, thank you for laying out the milestones so clearly as you did in the press release. It's refreshing to see that. Thank you so much.
Peter Fitzgerald
Thank you for your questions, Jason.
Operator
Once again, if you'd like to ask a question, that's press star one. We'll take our next question from Bill Sutherland from the Benchmark Company. Please go ahead. Your line is now open.
Bill Sutherland
Thank you. Hello, team. Great quarter. Branislav, I was curious on the intellectual property front. Are you anticipating any additional patents that you believe could be issued here in the relatively near future? And if so, would they, you know, maybe the
Founder
the type of area that they would cover yes apparently intellectual property is sort of foundation of this company very rarely do you find in in in this device space in this market cap if you want a range companies that have this strong of a ip portfolio and growing right you know so that in general I would say we're very proud of it and it's not very common at all. Secondly, we have a couple of significant patents that are being reviewed. Especially one of them, in my own mind, is extremely meaningful in terms of its commercial impact, potential commercial impact, and they are under review. The FDA and the patent office are hard to predict in terms of exactly when they will act. But certainly, a significant patent by the end of the year, approval of a significant patent by the end of the year is very much possible. Secondly, we continue to generate new intellectual property filings. One is going out within a few days. And then we have two more in preparation as well. So, you know, the cadence of IP continues at a very rapid pace.
Peter Fitzgerald
Great.
Bill Sutherland
And as you look at the commercialization process next year, have you – As you've expanded the two types of Amygos in terms of the 12 lead, do you expect to have that at all impact how you go to market, or will it really be just two sets of solutions with the same real market focus?
Peter Fitzgerald
John, please go ahead.
John
Yeah, I think initially it will stick to our knitting, as it were, and focus on the two products as we've described them in this presentation, HeartBeam Amy and AmyGo. I think one of the challenges always with commercial teams, especially salespeople, is keeping them focused. So I want to get the pilots established, get those running, see what the uptake is like, the value we create for the clinicians, getting early feedback from those early adopters, if you like, making any tweaks if we see them, getting input for the technical team, that sort of thing on the user interface and all those things. And I think if we get too scattered, you know, the message gets jumbled a little bit when you go to market if you have too many things in the hopper at once. So I want to get them established. And I think then when we get them established, also get some feedback from the market on what they think the key value points may be given, you know, I've got an inventor who's my boss and CEO that keeps coming up with more and more ideas of, how to leverage this platform. So I'm spelling for choice, but I want to keep the commercial team focused out of the gate for sure.
Bill Sutherland
Got it. Well, look forward to seeing you all at our Discovery Conference December 1.
Peter Fitzgerald
And great work. Thanks. Thank you, Bill.
Bill
Once again, if you'd like to ask a question, let's press star one. There are no further audio questions at this time. We'll move over to the webcast.
Bill Sutherland
Our first webcast question asks, have you had discussions with insurance companies and can you comment on how easy or difficult it will be to get insurance companies to cover these devices?
Peter Fitzgerald
John, please go ahead.
John
We haven't had specific discussions with insurance companies. We have had discussions with some people that are very well connected to the large payers. And large payers that have lots of covered lives under their span of control spend an awful lot of money on the care of cardiovascular patients. So I think once we get established in the market, having that discussion with large payers will be very attractive. I know of some technologies that that also manage high-risk patients like diabetic patients, for example, where the reimbursement for helping to manage those patients from payers is much higher than corresponding codes for managing those patients or reimbursement for those patients. So that's a discussion we're certainly going on the books to have. And I think in order to make a dent with an insurance company, One of my commercial team actually has been on the payer side and in a previous life has run the sorts of studies that we'll need to do a study to demonstrate to a payer the value that we provide in managing those patients. So that's definitely on our books and something we plan on doing because I think it actually, from a revenue standpoint, is a very attractive option for us and, you know, it It removes us from the standard CPT code sort of reimbursement mill. But, yes, it's definitely on our minds.
Peter Fitzgerald
So I want to get the products approved and then have those discussions.
Bill Sutherland
The next question asks, how many questions has the FDA asked regarding the current 510K submission, and are there any questions yet to be answered?
Peter Fitzgerald
Well, we are not going to go into detail how many questions.
Founder
But let's just say that, you know, going into detail how many questions were asked, you know, I'm not sure that we accurately remember the number of questions. They were all answered very thoroughly. And indeed, at this point, we are not aware of any questions that are not answered by us personally. So the answer is we have answered all questions and we are expecting action by the FDA by the end of the year.
Bill Sutherland
The next question asks, will you allow pharmacists in retail settings to use this technology to provide a life-saving diagnosis?
Peter Fitzgerald
John, maybe you should answer this one.
John
Well, I'm assuming retail setting, you're thinking of CVS and Walgreens and others, Walmart that have these minute clinics or minute clinic equivalents. And certainly in the Charlotte region, I know CVS is our staff by a lot of mid-levels as well as pharmacists in their clinics. So it's potential to have that discussion. And I think cardiologists may push back on if pharmacists are making a diagnosis regarding a cardiac condition. I'm not sure. I'd have to investigate that further. But clearly, one of the potential markets for us is interacting with the CBSs of the world because a lot of people in the country are closer to a CVS in many instances than they are to a hospital. So I could see that being something of tremendous value. It's a matter of how do we go about proving that that's providing value, one, to the patient and also to the clinical community at large. But it's a very interesting question. Again, something that I think a CVS or a Walmart or a Walgreens would want to conduct a study to show that value before that even got into the realm of allowing a pharmacist to make those diagnoses in the field.
Bill Sutherland
I think we have time for one more webcast question, and that question is, The first release of AMIGO version one next spring is a commercial release, and if not, why not?
Peter Fitzgerald
Again, I think John is the best equipped to answer that one.
John
So if you remember, we'd indicated previously that the version one of AMIGO is sort of the stripped-down version basic version of any goes recording a 3d orthogonal, uh, 3d vector ECG at the heart. Uh, so it provides the core information for us to create a synthesized 12 lead. But, um, version one has a very high cost structure at the moment. Um, and at the moment we're building a limited number and we're planning on, uh, Because the cost of goods for version one, it's not a scalable commercial product from our perspective, given the current reimbursement landscape. And so because we have V2 coming close behind, which is scalable, where we made a dramatic drop in the cost of goods for the entire packaged product, labeled and everything, and we've reduced it by some 80% from the version one. So we're going to use V1 at these centers that we've identified to integrate it into a clinical practice and gather valuable clinical information from patients, look at workflow, UI, UX, put BAAs in place with those health care systems, to facilitate the V2 launch, which will be a scalable product that we can then go after in a much more aggressive fashion. Version one out of the gate from our perspective at the moment is going to sort of fill that very valuable role for us as this regulatory clinical workhorse to set the stage for
Peter Fitzgerald
full-scale launch of the V2 product.
Operator
I would now like to turn the conference back over to Mr. Vidak for his closing remarks.
Founder
Thank you, operator. I would like to thank each one of you who joined us today for our earning conference call and look forward to continuing to update you on our ongoing progress and growth. If you were unable to answer any of your questions, please reach out to our IFRM MZ group, who will be more than happy to assist. Thank you again and have a good day.
Operator
This concludes today's call. Thank you for your participation. You may now disconnect.
Disclaimer