Photocure Asa

All right, well, welcome to PhotoCure's third quarter 2025 results. I'm Dan Schneider, President and CEO, and with me today is Eric Dahl, our CFO. A reminder, the usual disclaimers are in effect for today's presentation. So I'd like to start with this slide, the strategic priorities and initiatives. It's our guide to how we execute and allocate resources across the company. At a high level, our strategy is centered around three key pillars, strengthening the core HEXFIX SysView business, advancing blue light cystoscopy as a definitive standard of care in bladder cancer, and expanding our reach into the broader uro-oncology and precision diagnostic space. The first pillar, accelerate and expand, is about delivering on our financial guidance for disciplined growth in revenue and EBITDA in our core business and to continue generating operating leverage, which we continue to do so. It's also about driving the blue light cystoscopy mobile strategy for tech in the U.S. and increasing penetration in the EU, particularly in the priority growth markets, France, Italy, U.K., through blue light expansion and the image upgrades, most recently Viscera 3 by Olympus. And thirdly, expanding a geographic footprint and leveraging our distribution partnerships across the globe. In the second pillar, positioning and access, we're building on the foundations of BLC as a primary precision diagnostic. And you watch throughout today's presentation, I talk often about precision diagnostics in this space that's exploding. As a tool to facilitate early and appropriate use of non-muscle invasive bladder cancer, the detection, the surveillance, and the therapeutic monitoring. Inclusives of life cycle management is demonstrated by our recent strategic collaboration to develop the world's first and only blue light AI system, which we'll discuss more later today. We also want to support high-def blue light cystoscopy technologies entering the market. Upgrades of the three big OEMs, so the big OEMs, Wolf, Olympus, Karl Storrs, support the efforts of other manufacturers who want to enter into the U.S. market via the reclass process that's still ongoing or other methods. And also the partnership with Richard Wolf on building an adoption in Europe for the flexible blue light cystoscopy interim solution while we continue to advance the development of the high-definition 4K state-of-the-art and world's only blue light flexible system for global use. These efforts will not only drive near-term growth, but will also solidify our long-term competitive positioning. And finally, third pillar, acquire and transform. We're looking ahead and actively assessing opportunities within non-muscle invasive bladder cancer and the uro-oncology indications, which focus on rapidly growing interest in precision diagnostic indications, biomarkers, artificial intelligence, new technologies, digital pathologies, and all about diversifying our portfolio and building on a commercial footprint and bladder cancer expertise. The real-time examples would be Richard Wolff collaboration on the blue light flexible high-def system and the Fortec mobile strategy employed in the U.S., both leveraging our existing commercial infrastructure in the broader uro-oncology segment. M&A is a focus this year in an effort to expand our footprint, grow faster, increase our ability to generate a strong cash flow into the future. So I'm pleased with third quarter results, and the highlights are very evident. Overall, we had 12% product growth. That's 14% minus FX impacts. In North America, we delivered 14% unit growth and 12% product revenue growth. That would have been 19% without foreign exchange impacts, all setting the continued flex decline, which was measured at about minus 52% versus third quarter last year. I would remind everyone that flex now has – reached a level below 5% of our total sales. There are several accounts that still use Flex sparingly, and we intend to keep them alive as long as we can to continue to generate data in anticipation of our future launch of the Richard Wolff collaboration. The installed base of Sapphira blue light equipment continued to increase with seven tower placements and seven upgrades in the U.S. In July, Carl Storrs implemented a promotional program that does take time to take hold, so we expect this development and momentum to continue to build into Q4. We had fantastic 20% unit growth in the rigid surgical market, inclusive of Vortec medical mobile solution. And actually, excitingly, Fortech added six more rigid Sapphire systems to their national fleet of rentals and began deploying them in September, underscoring the growing demand for blue light cystoscopy in the U.S. The number of active accounts increased by 23% year over year to 373 accounts, and this sets the stage for continued momentum into the future. In Europe, revenue was up 11% and units up 4%. We continue to execute in Europe with strong growth in the Nordics and DAC, driven by Olympus upgrades of the Viscera III, and that continues to be a focus throughout Europe. Approximately 30% to 40% of the accounts in Europe use Olympus equipment, and particularly strong, as we've talked in the past, in the Nordics, Germany, and France. The launch early this year of the Olympus Viscera 3 BLC equipped system continues to gain momentum with 49 Viscera installs in the field. The funnel is very strong. Our strongest country to date with conversions is actually Austria. So we're looking forward to the future of these continued upgrades and their impact because every upgrade has an impact of double digit growth. We generated positive EBITDA, 10.2 million NOC, XBD expenses of 14.1 million. So when we look at our EBITDA, we look at an adjusted EBITDA, and that growth was to 14.1 positive NOC. It's the 10th quarter in a row of positive EBITDA, continued building operation leverage throughout 2025, strong balance sheet of 247.8 million NOC in cash and no term debt. and we completed the 500,000 share buyback program. On the news flow, on September 22nd, a new publication from the Italian Society of Urology, the first national recommendations on blue light cystoscopy. Blue light is recommended for the first TRBT, the second resection, and the recurrence of non-muscle invasive bladder cancer in populations of high risk. Very strong recommendation in the Italian Society of Urology, and we expect that will start impacting the Italian market. On September 16th, a publication came out that was derived from the EU Roundtable on Bladder Cancer. The recommendations published were based on an important meeting of experts in April of 2025 by the International Center for Parliamentary Studies, ICPS, that organized a senior-level roundtable on bladder cancer with leading clinicians, industry experts, the EAU, and the World Bladder Cancer Patient Coalitions. The objective of the collaboration was to establish a set of recommendations for the EU and member state policymakers to enhance awareness, prevention, and optimizing early diagnosis and treatment of bladder cancer in Europe. The resulting recommendations were published, and it basically talked about equal access to advanced technologies, identifying tumors in bladder cancer that reduces the the burden on patients and healthcare systems. Bladder cancer is one of the most costliest cancers to treat and precision medicine and precision diagnostics are exactly the future. And that's exact positioning for blue light cystoscopy. On partner news, and we'll talk a little bit about this as well, I know many are questioning what's going on. Osiris announced that Sabir had advanced to the second round of technical review, anticipating an approval that would trigger an $11 million milestone. They are in active conversation with the NMPA, and there has been no pause in the process. They're moving forward. On October 15th, we announced our strategic partnership with Intelligent Scopes Corporation, agreeing to develop the first and only blue light cystoscopy artificial intelligence, and more about that on my next slide. So, Intelligent Scopes Corporation, the U.S. subsidiary of Claritas Health Tech, is set up to develop an AI software for real-time tumor detection using blue light cystoscopy. The overview through this collaboration, PhotoCure and ISC are combining complementary strengths. PhotoCure's leadership in bladder cancer detection and ISC's deep AI expertise to build an intelligent diagnostic platform designed to improve accuracy and consistency in tumor detection. The pilot program analyzed over 200 cystoscopy procedures with over 80,000 images. It demonstrated extremely strong early performance in detecting high-risk and early-stage lesions. Its joint development work is underway, and the ENABLE clinical study is initiated in both U.S. and Europe. Following the development phase, we plan to pursue FDA and CE submissions, with PhotoCure holding exclusive perpetual global commercialization rights once the software receives its clearance. The rationale of the value creation we see in this, the partnership is strategically important for several reasons. It strengthens our position as a reference company for next-generation cystoscopy, integrating artificial intelligence and blue light cystoscopy. It leverages the synergy of AI and BLC to enhance the detection, accuracy, and completeness of tumor resection, which directly translates to better patient outcomes and stronger clinical adoption. It extends our technology moat around the data-driven precision care. paving the way for future AI-enabled diagnostics in uro-oncology. Importantly, it adds a high-margin, scalable software component to our business model, creating durable value beyond our current consumable base. Moving to segment trends. So looking at North America and Europe, both delivered continued growth. In North America, the business has significantly overcome the continued decline of flex surveillance market, which in the first half overall was minus 60%. It was minus 71% in Q1, minus 46% in Q2, while rigid surgical market delivered a 20% unit growth in Q3. In Europe, the Q3 unit surpassed previous Q3 high watermarks as momentum continues to build throughout the region through upgrades. Europe is beginning to see the impact of the Viscer3 upgrades roll out, particularly in dock, and I called out specifically Germany and Austria, France and the Nordics with 49 through Q3 with more in the pipeline, particularly in the Nordics and dock region. Upgrades deliver positive double-digit impact. And a reminder on the impact of these upgrades, 40% of Europe is dominated by Olympus. So we see that this is a significant development and opportunity for the European continent. Turning to North America and trends in North America, sales still impacted by the downturn of Flex. But despite this, we see adjusted rigid unit growth increasing 20% with the addition of the Fortec mobile solution. 14 new Sapphira were installed, that's seven upgrades, seven new, adding to the active BLC account growth of roughly 23% year over year. And this bodes well for quarters ahead. The Fortech mobile solution now reaching 121 accounts, As of the start of service, that's plus 19 from Q2, and over 185 different physicians have now had access to blue light cystoscopy that otherwise would not have had access to it. This is up 19 accounts from Q2, demonstrating growing momentum and demand. And as I mentioned in the kickoff, Fortec has added six more Sapphira systems to the fleet, bringing their total to 24. And it remains bringing access of blue lysis in the U.S. remains a top priority as demonstrated by our efforts with the FDA and reclassification and reimbursement. Europe growth has also remained strong with solid growth in the dock and Nordics, which make up a majority of the revenue and the priority markets of France, UK and Italy seeing double digit growth. As I mentioned, 49 so far Viscera III Olympus systems have been installed, and that's a very strong, healthy pipeline behind that as we move through Q4 and into 2026. The picture at the bottom is just a picture of our presence at DGU. It's the German Urology Conference held in Hamburg, Germany. Bladder cancer was one of the headline areas at ESMO 2025, which took place in Berlin just a couple weeks ago, with significant momentum around earlier intervention. I'm excited to say that blue light cystoscopy was frequently mentioned as a key to finding the right patients who can benefit from these precision medicines that are coming on the market, thus reinforcing the growing strategic and scientific interest in this space. Looking specifically at the U.S. and growth, significant growth in accounts of 23% of active accounts who have ordered at least once in the last 12 months. The Fortec accounts continue to be a significant portion of our business, reaching over 11% or 12% of our total, spiking up as high as 15%. We believe this is a strong business opportunity for PhotoCare. We'll continue to support the Fortec initiative with the mobile solution. This slide is illustrative representation. I think it's good to just sort of step back for a moment and look at where we're at and what we see as inflection points that can bring us significant growth potential. Despite the progress we are making, we are still in the early stages of the U.S. market and remains a single most important opportunity for photo cure and is significantly underpenetrated with less than 10% market share today. We have a long runway for growth as awareness, access, and equipment availability expand. Bladder cancer represents a major unmet need in the U.S. There are approximately 85,000 new cases every year and three-quarters of a million patients living with the disease. Across the US and Europe, there are over 700,000 TRBT procedures and 1.6 million surveillance cystoscopies annually. The total addressable market for flexible cystoscopy exceeds 1.3 billion US dollars globally. And we believe blue light cystoscopy, in particular, the one we're developing with Richard Wolff, is uniquely positioned to capture a meaningful portion of this opportunity. We expect several catalysts to help drive the next wave of growth in U.S. market. First, improved CMS reimbursement, which we are pursuing through direct conversations with CMS and through legislative efforts in Washington, D.C., both with further support adoption for BLC across academic and community settings. The return of the BLC Flex system to the market with the proprietary development work with Richard Wolff will enable broader access for outpatient and office-based procedures, In particular, in light of the many therapeutics that are being used, the therapeutic monitoring aspects will be increasingly important. Entry of additional Blue light OEM partners would expand the installed base and provide more choice to urologists in all types of institutions. And finally, the FDA reclassification of blue light cystoscopy equipment for which there is an ongoing citizen's petition. This could be a potential milestone that would significantly lower barriers and accelerate nationwide uptake. And overall, the momentum. The momentum in the macro environment, as reinforced in ESMO, the expensive precision therapeutics are turning to precision diagnostics like blue light cystoscopy as necessary to find the right patients who can benefit from their therapeutic. Taking together these drivers support the long-term growth trajectory for the U.S. business that is both scalable and sustainable. The bottom line is we have a proven product. with growing clinical endorsement, an enormous under-penetrated market, giving us a potential exponential upside as these catalysts materialize in the coming year. Our growth initiatives. Judy just really briefly hit on a couple of them. Two key updates. We now have 121 Fortech accounts actively using, 185 different users gaining experience to patients who would otherwise not have had access to blue light cystoscopy. The Richard Wolff interim solution for Flex is on track. When I announced that a year ago, we said it's a 30-month development that is totally on track. And this would open up the market for $1.3 billion total addressable market in the US and EU5. Super excited about it. The final comment in the third box, as mentioned earlier, AUA, EAU, the trends are clearly blowing in favor of blue light cystoscopy. The momentum and pressure continues to build behind the notion of accurate diagnosis and complete resections in line with the precision pathway for bladder cancer patient care. We believe blue light cystoscopy can play a central part in determining that precision pathway, and that is being echoed at every conference we attend currently. The precision pathway starts with a precision diagnostic like blue light cystoscopy that leads to the right precision therapeutics that are bombarding the market. And most recently, there's been five most recent FDA approvals, two in the last several months. There are over 26 unique therapy-focused, non-Muslim-based bladder cancer trials going on. Billions are pouring in, and they're looking for solutions in the diagnostic place. And we believe blue light cystoscopy plays a central role going forward. In two value-generating Osiris programs, the partnership continues to progress favorably. We have taken over $18 million in milestones across both programs, with the potential for significant cash in the future to help fuel our corporate ambitions. Here are the highlights of the two deals, which are very different. On the Savira Outlicense Program to Osiris, The Sevira NDA remains under regulatory review for potential approval in China later this year into early next year. This will be one of the first Chinese-approved drugs before the rest of the world. In other words, they're getting the product approved in China first, and then they're going for the rest of the world. Typically, it's the other way around. What we can say is only what Osiris has publicly disclosed. They are a public company in their annual report. They remain under review with the NMPA. If it approved, it would be the first product approved in China before rest of the world. They've had pre-setting meetings with the EU and U.S. regulators to determine a way forward in both these large markets in U.S. and EU. And Aceris also disclosed interest in pursuing a secondary indication, which brings additional milestones to PhotoCare upon approval. On the HEXFIX commercial partnerships, we're still awaiting the approval of the Richard Wolff Blue Light System that could come at the end of this year, early 2026, with a 2026 commercial launch of HEXFIX in China. And with that, I'd like to turn it over to Eric to review the financials.

Thank you, Dan. So, I will give an overview of the third quarter financials, including the consolidated income statement. We're looking at the segment report for our two main segments. And finally, we'll be looking at the headlines for the cash flow, as well as the balance sheet. A couple of words about foreign exchange first. Year over year and measured by unweighted monthly averages, the Norwegian kroner in Q3 appreciated 5.7% against dollars and depreciated 0.3% against euro. If you measure this in kroner, the year over year FX impact for Q3 revenue was negative approximately 3.4 million. And for OPEX, positive, approximately 2.9 million. And the consolidated impact of foreign exchange on EBITDA was negative, approximately 0.5 million. Final remark, as always, all financials in these presentations are in Norwegian kroner, unless other currency is specified. Now we go looking at the consolidated income statement. HexFixSysView revenues in the third quarter increased year-over-year 12% to 134 million NOC, which follows the trend from the record second quarter. The revenue increase was mainly driven by a combination of volume increase of 6% and higher average pricing in both regions. Partially offsetting this was the expected decline in the flexible kit sales in the US and the impact of foreign exchange. Total revenues in the third quarter increased 12% to 135 million NOC. No milestone payments have been received in the third quarter for either year. Year-to-date total revenue increased 3%, impacted by milestone payments received from Osiris in Q2 last year, related to the development of Savira. Q3 total operating expenses, excluding depreciation and amortization, but including business development, were 112.8 million compared to 107.3 million Q3 last year. The increase is mainly driven by business development expenses, merit and inflation. Foreign exchange had a positive impact on operating expenses of approximately 2.9 million. Operating expenses, excluding business development expenses, were 109 million compared to 106 million in Q3 last year, an increase of 3%, reflecting merit and inflation. As previous quarters, personnel expenses were relatively stable year over year, except for the merit increase. However, project-driven expenses, particularly within business development, may vary significantly year over year, as well as sequentially between quarters. Business development expenses in Q3 were 3.9 million compared to 1.2 million Q3 last year. The expenses relates mainly to advisory services, market research activities, and legal fees related to partnership contract support. EBITDA in Q3, including business development expenses, was 10.2 million compared to last year of 5 million. The company did not receive milestones in Q3 this year and last year. EBITDA, excluding business development expenses, was for Q3 14.1 million compared to Q3 last year of 6.3 million, an improvement of 7.8 million from Q3 last year, reflecting improved operating leverage for our core business. Depreciation and amortization was 7.3 million in Q3. Main cost item was the amortization of the intangible assets related to the return of the European business from it. Net financial items in Q3 were a cost of 3.3 million compared to a net cost of 2.8 million Q3 last year. And net financial costs were driven by foreign exchange losses, as well as accrued interest costs included for deferred earn-out liability due to Ipsen, offset by gains on foreign exchange and incurred interest income. Net profit after tax was 4 million for the third quarter compared to a loss of 3.5 million Q3 last year. Now let's look at the segment performance. Next slide, please. In the segment reporting, we will focus on the two main segments, North America and Europe. And I'm starting with North America segment, which includes US and Canada. Revenue for North America increased 12% in Q3 to 54.8 million. The increase was driven by volume growth of 14% and higher average pricing. However, the growth was partially offset by 3.4 million and for unfavorable impact from foreign exchange. The volume growth was driven by increased volume for the rigid market, including Fortech Mobile. This was partly offset by the impact of the face-down of system usage in the flex segment. However, the impact from the flex decline gets less and less over time. Q3 direct cost, 42.1 million below Q3 last year. Cost containment and revenue growth has resulted in significant improvements in financial results for the North America region. The contribution has more than doubled to 9.9 million and have secured an EBITDA close to break even for the quarter. Also, our European business has had positive development in the third quarter with year-over-year revenue growth of 11%, mainly driven by DAH and Nordic. We also experienced strong growth in priority growth markets such as UK and Italy. Q3 direct costs decreased 9% year-over-year driven by headcount adjustment. We ended Q3 with a contribution of 38.2 million, which is 48% of revenue. EBITDA was 19.7 million, driving an EBITDA margin of 25%. Now, let's look at the cash flow and balance sheet. Next slide, please. I'm looking at cash flow first. As usual, I'm focusing on year-to-date cash flow and ending balance. Year-to-date cash flow from operations was positive 26.4 million compared to positive 61.1 million last year, year-to-date. The difference is mainly due to the milestone of 21.6 million received from Osiris Q2 last year, as well as the development in working capital driven by increased product revenue year-over-year. Cash flow from investments was 7.2 million year-to-date, and includes interest received and paid and investments in intangible and tangible assets, including partnerships with ISG and Richard Wolff. Cash flow from financing year-to-date was negative 65.3 million compared to negative 32.8 million year-to-date last year. And the amount is driven by the Ipsen earn-out payment for both years, as well as the share buyback programs current year. In total, we paid 29.6 million for the 500,000 shares we acquired this year. Year-to-date, the net cash flow was negative 46.1 million compared to positive 31.5 million year-to-date last year. The two main drivers for the decline are, first of all, the Osiris milestone last year, but also the share buyback program this year. Excluding the share buyback program, we had year-to-date a positive net cash flow of 16.5 million NOK, of which 8.7 million in the third quarter. So I believe we have reached a turning point in cash flow positive. We see it now. Looking at the balance sheet, we ended the quarter with total assets of 696 million NOK. Non-current assets were 322 million at the end of Q3, and this included customer relationship with 83 million. Customer relationship is the intangible assets identified with the purchase price allocation for the Ipsen transaction. Non-current assets also include goodwill from the Ipsen transaction of 144 million, a tax asset of 53.7 million, and intangible and fixed assets totaling 41 million. Inventory and receivables for 122 million at the end of Q3 compared to 131.8 million at the end of Q2 this year. Long-term liabilities of 122 million include the earn-out liability related to the Ipsen transaction totaling 104 million at the end of the quarter. And finally, equity at the end of the quarter. was 486 million, which is 70% of total asset. And this concludes the financial section. Thank you. Dan, it's back to you.

All right. Well, thank you, Eric. Thank you very much. So as you can tell by Eric and I's tone, we're very excited about not only the quarter, but where PhotoCure is and how we're positioned going forward. We had 12% global product revenue year over year, and we continue to execute on the key initiatives. We had positive EBITDA of 10.2, and I think adjusted EBITDA of 14, over 14 million NOC, and that's 10 quarters in a row of positive EBITDA. And as Eric said, it's starting to translate down into the cash flow with positive cash flow. XBD and milestones, it's 14.1 million, but we continue to invest in key growth initiatives that we believe will make a difference. One, positioning ourselves for long-term success. Two, generate future revenue growth opportunities. And three, increasing our operating leverage. In the flex and surveillance market, it's now and in the future, Richard Wolff and PhotoCure's joint development's on track. And we expect another 15 or so more months of development with market readiness in 2027. In the interim, we are beginning reintroducing the interim flex by Richard Wolff. The first cases took place in the UK in July. They've gone quite well. The idea of this is to keep the interest and generate the data in anticipation of our launch of the high-def 4K system. In North America, the account growth was substantial with installs, upgrades, and mobile. Product revenue grew at 12%, unit sales plus 14%. We grew our active accounts by over 23%. We had 24% growth in Q2, 17% growth Q1, 11% in Q4. So you can see the momentum continuing to build behind it. And as I mentioned earlier, our greatest opportunity is the underpenetrated U.S. market with less than 10% share. There is such an opportunity there. And there are a lot of really good initiatives and inflection points we anticipate as we move through 2026. We continue to work with Carl Storrs to grow the installed base of blue light scopes in the U.S., and it's a key initiative for Carl Storrs as well. They have approximately 130 to 150 standard definition machines in the U.S. still deployed. They're looking to upgrade them, and with all our upgrades completed, regardless of who the OEM is, they bring usually double-digit, on average, double-digit growth in those accounts once they convert to the high-def systems. The Fortech National Mobile rollout continues to gain traction. They added six more towers. Those will start having their impact in Q4 going forward. You know, they'll continue to add more over time as demand grows, but we're really excited that they now have a fleet of 24 deployed nationally in the U.S., And there's over 120 accounts and nearly 200 users now utilizing blue light cystoscopy who otherwise would not have had access to it. In Europe, the revenue grew 11% with 4% unit growth. DOC and the Nordics and the priority growth markets kicking in. We continue to facilitate the quality image upgrades with our nearly 600 target accounts. And we believe that the Olympus blue light upgrade will help strengthen this initiative. There's been 49 upgrades since January. And Germany, France, and Nordics are now kicking in with strong pipelines and aligned interest with Olympus. Strong cash balance at $247.8 million NOC. And as Eric mentioned, we've added cash to the balance sheet. We continue to advance several business development initiatives in next-generation precision diagnostics, inclusive of our partnership with Intelligent Scope Corporation, or Claritas, as known as a subsidiary, to develop AI software for real-time support during blue light cystoscopy procedures. And let's look forward to anticipate milestones and corporate objectives. So we've narrowed the guidance 8% to 10% from the original 7% to 11% guidance. We expect year-over-year EBITDA improvement and increased operating leverage flow through. We also see increased SysView and HexVix account utilization through upgrades and installs and the increase in development of the mobile solution in the U.S., We're going to advance the development of the next-gen, state-of-the-art 4K high-def flex systems to access and unlock the potential within the 1.2 million surveillance procedures done in the U.S. and EU5. We continue to also to expedite the strategic partnership with ICS Claritas to develop BLC artificial intelligence, which is what we believe will be a game changer in bladder cancer precision diagnostic care. We continue to date it. generate data and have presentations in particular with health economics and positioning blue light cystoscopy as a go-to precision diagnostic in bladder care. We want to increase BLC in the U.S. vis-a-vis the citizens petition or other alternate pathways to U.S. approvals. So we're supporting the capital equipment guys coming into the U.S. And, of course, supporting OSIRIS progress across both HEXFIX and SAVIRA with potential to receive significant milestones in the future. And with that, I think we can go to Q&A.

Thank you. Thank you, Dan. There are usually a number of questions regarding Survivor. So we will take them bundling into one. So could you put some more flavor about this Survivor approval process?

I mean, it's a typical process in China. There's nothing unusual that's taken place to date. We cannot say any more than OSIRIS has said publicly. I know many of the listeners are monitoring the OSIRIS public airways and the NMPA. We do the same. We get our information the same way. So at this point, they still remain very positive and they remain very optimistic on an approval. I think they're just working through, you know, like we do in the U.S. or any other country, working through the conversation with the authorities to get themselves to where they can get their approval.

So more to come. The two new scope manufacturers looking to enter the U.S. market filed their FDA submissions yet. If not, when do you expect this to happen?

They have not. And of course, no one can file anything in the U.S. right now because our government is shut down. So they're not accepting. There's always something, right? So as soon as the government reopens, I think both manufacturers probably in early 2026 is my anticipation, if not sooner.

The updated revenue growth guidance indicates a slower growth rate in Q4 compared to Q3. Could you elaborate on the drivers?

I think the way to approach to have a look at the last year, the 2024 fourth quarter revenue, it was the record year up to that time. And I want to be careful in terms of prognosis or estimating a revenue which is above or significantly above what we had before. So it's core.

What was the growth impact of shipments to the wholesale market in Europe and was there any stocking of kits from Fortec?

I think we're talking about somewhere, top of my head, somewhere between 150 and 200,000 pounds.

Yeah, and I can ask, I can, at Fortech, so Fortech does not buy the kits, the accounts buy the kits. The way the process goes is Fortech engages the account with us. We work through the formulary approval needed to get our product shipped in. We set up the account and Fortec sets up the procedural day, and then we ship the product directly to the account, and then the procedure goes off. So the account is the one. They do not, generally, they don't stock a bunch of inventory. It's usually just in time or near time for procedure.

How are Olympus new placements in Europe tracking with the targets for the year? Very good.

Actually, extremely good. Like I said, we have 49 viscera already upgraded. A very healthy pipeline, double that size. I don't know that we'll get the other half of that pushed through this year, but we still see significant upgrades coming through Q4. And if you think about it, and this is just more high level, of the 600 or 700 accounts, if 30 or 40% of those are Olympus accounts. That's roughly 200, 240 accounts. And we've got 50 of them already upgraded and maybe another 40 to 50 coming in the near term. That's a healthy upgrade. And as I mentioned, every upgrade on average is bringing a double digit growth to that account. So We're really excited about the development here. And, you know, again, it's all about positioning as well because the folks at Olympus have white light, they've got NBI, and they have blue light. And all three are important through the diagnosis of a patient. So we're getting a really nice positioning of blue light, particularly for high-risk patients.

What is your view on the timeline of a potential down class? Yeah. I don't know.

And the government shut down. Honestly, we created optionality. And I think that's the thing everyone should focus on. The citizen petition and going through governments, everyone's part of a government that's on this call. I think we all have sort of the general opinion that it's often difficult and bureaucratic. That hasn't stopped us. We put a tremendous amount of pressure. It's been all of PhotoCure's work, getting the KOLs, the capital equipment manufacturers, patients, therapeutic companies, all to write into that citizen petition urging the FDA for this reclass. The FDA closed the citizen petitions public portal last December, I believe it, somewhere around then. So we know it's under consideration, but it's about initiating it and picking it up. In the meantime, I think more importantly, what we should focus on is the ultimate goal. And the ultimate goal is to get multiple capital manufacturers into the US market. And as I mentioned in the question earlier, there are a couple of manufacturers and we're working with all of them of finding a pathway into the US market because it is a tremendous opportunity. And we believe having more manufacturers in this marketplace, especially with hospitals who have preferred vendor relationships, will open this market up drastically.

There are several questions about Fortec, so we'll cluster them into one. What does Fortec say about utilization of the towers currently?

They are excited. This has exceeded their expectations. The way they look at it, you got to remember their towers are moving from one location to the next every day of the week. So what they try to do, and they encourage it financially as well in terms of case costs, is they try to stack cases at hospitals. So if you're a hospital and you want to try blue light cystoscopy, they encourage the physician, we support it as well, to not just do one case because, you know, you basically bring a tower in for just one case. They want to stack several cases. But that's always patient-dependent. You know, not every patient come in on a Tuesday and have a blue light procedure. So, but they do the best they can. They want to continue to consolidate procedures into one day and get the most out of every tower. But their number one objective is to treat every patient that wants blue light cystoscopy and every physician that wants to use it.

The wind down of remedy from Plex is almost complete. Crow threat in the region segment is strong in the U.S., You expect a strong growth rate from regions in the U.S. to continue beyond 2025. I do.

And I think the way to look at this is at one time, Flex was nearly 20% of our business. This is less than two years ago. 20% of our business. And we've turned it around, gobbled all that up, and now we're growing at 20% in the region market. It's quite astounding. And I don't see any reason for it to slow down. I think the mobile solution has really added some jet fuel to our efforts. I think... Carl Storrs has a renewed focus in this area. I think the overall macro environment with these expensive therapeutics coming out has also added to the interest in blue light cystoscopy. So I don't see any slowdown here. It might fluctuate around those growth rates. Maybe it's High teens, you know, maybe it's 20%, but I don't see a slowdown to this, and I see more and more opportunity in the U.S., especially as more OEMs come into the marketplace in hopefully 2026 sometime.

Long-term growth margin level, do you currently expect?

I expect to see better than what we see in the P&L right now, because we've had some adjustments in this year. So I expect the margin, gross margin, to go down to approximately the level that we've seen before.

And we have a couple of questions regarding AI. So can you elaborate on the preliminary study in the AI BLC study?

Yeah, I think the way to look is if you layer AI onto a white light, you get one level of artificial intelligence support. And it's really a decision, it's a physician support system. But what ICS slash Claritas is super excited about is when you look at SysView and HexFix, It isn't instilled into the bladder. It is a metabolic, biologic effect. What it does is it produces texture patterns and color changes that aren't visible and aren't accessible on white light. And that leads them to believe that this could go much further than typically identification. In addition, You've got white light, and if there's AI white light, it's only going to learn off of what white light sees. And we all know, everybody on this call knows that white light misses 30%, 40% of the tumors, especially CIS, flat lesions, right? Blue light is going to see more than white light AI. And AI blue light, we believe, could lead to better segmentation, stratification, and decision-making by physicians. We think it's a game changer. And that's the way ICS is seeing it. They're super excited about this. When I say super excited, like they really couldn't wait to partner on this project. So we're really excited about this.

We have one more question here. Could you give us a quick recap of your tax position carry forward loss in the US, both on and off balance sheet?

I guess you're talking about the tariffs.

Your tax position. I think the loss carry forward. Yeah.

Yeah. Well, we obviously there has been interest among the auditors about our tax loss carry forward and in terms of the debt that US has. We have We're evaluating what's going to happen with that right now, but it's too early to say what the consequence will be.

Thank you so much. That concludes the questions we have received online. So back to you, Dan.

All right. Well, great. Well, thank you all for joining. I'm super happy where the organization is. I think we've had a lot of challenges in the past years, but the agility and resilience has come through. Strong balance sheets, strong company, poised to really make a difference in bladder care when this macro environment is really emerging. We got an opportunity to be a major player. And I think mostly if you look at the U.S., the opportunity is immense. And we got some inflections coming in as we turn the corner into 2026. So thank you for joining us. I think we'll see you February 18th for Q4. Until then, have a great week and great holidays.