My name is Kyle Bauser, and I'm a Senior Research Analyst with Roth covering the medical device sector. Today we have CapsoVision here for a fireside chat. We are joined by Johnny Wang, Co-founder, President, and CEO, David Garcia, Senior Vice President of Finance, and Doug Atkinson, Senior Vice President of Global Sales. We're excited to have you here. Thank you for joining us. For anyone listening in that's new to the CapsoVision story, Johnny, can you please walk through the history of the company and how it came to be publicly traded as CV? Yes. Thank you for the opportunity. My background is in semiconductor, including IC design. The last company I founded was a chip company, designing and marketing image and video processing integrated circuits, which was acquired in 2003. I left the company near the end of 2004. At the time, I was planning my next move in earnest. Since Taiwan and China are catching up to the U.S. in IC design, I saw the region to leverage my strengths to create the most value and the contributions to the market, especially at the intersection of high tech and healthcare. Now, the U.S. has a FDA infrastructure for me to go into the business. Capsule endoscopy was relatively new at the time, presenting an opportunity for innovation to provide a differentiated value. With my co-founders, Gordon Wilson and David Lee, and a few engineers, we developed pre-processor integrated circuits, a CMOS image sensor, panorama optics, entire electronic system with onboard storage, lighting system, magnetic power system, and all elements, and the wiring had to fit together like a tiny 3D jigsaw puzzle and operate for 15 hours with two watch batteries, complete with application software. Later, with customers' best interest in mind, we developed a cloud-based system to enable doctors to read the video anytime, anywhere, not limited to the workstation at the provider's site during office hours, make it ubiquitous, anytime. Around 2018, when semiconductor technology process evolved to a point to enable deep convolutional neural network learning, training and learning, we started to develop in-house AI models. The cloud storage system allows us to have the largest image data trove in capsule industry for AI training, validation, and testing, which is an enormous advantage. We have a healthy organic growth in our current small bowel business. Our IPO was predicated on the accelerated small bowel growth powered by AI and the exponential growth trajectories of colon and pancreas cancer detections. We envision this system would ultimately provide panenteric imaging of the entire gut, enabling the detection and screening of multiple cancers, including esophagus, liver, stomach, pancreas, colon, with the assistance of AI in one single non-invasive procedure. Thank you. Appreciate that. Can you or Doug describe the flagship CapsoCam Plus technology and its indication for small bowel visualization? Sure. I'll take that one, Johnny. Thank you. Thank you, Kyle. Really, when you look at the CapsoCam Plus product, it's a brilliantly designed diagnostic tool. The capsule is about the size of a fish oil capsule to put it in retrospect so everyone understands the size of it, with four cameras inside, looking north, south, east, and west. What that does is it captures a 360-degree view of the inner mucosal lining of the GI tract from the esophagus all the way down through the colon. The capsule itself, having those four cameras, also has onboard storage, so there's no need, like our competitors on the market right now that have all this external equipment, sensor array, a sensor belt with a data recorder, everything's built inside the capsule. It can store all those images, and then once the capsule is captured, it can then be sent to our download center in San José. The benefit to that is it's a single patient visit. When they're going to either the hospital or to the GI or general surgeon's office to have the procedure done or even at home, because we are approved for telehealth, they then capture it, send it to the download center, but it's a single patient visit versus our competitors twice. The capsule itself is very well-received by the patients, very easy for them to follow the procedure. It most importantly, from a clinical, operational, financial perspective, this, the triple-aim approach, this is a product that really addresses superiority clinically to anything else out there operationally, saving the patient, the staff time, the patient time, and also financially, there's no external equipment that they need to pay for or take care of. It's really very simple. Like I said, it's brilliantly designed. What about the target patient populations for CapsoCam Plus? Yeah. Capsule endoscopy, before they had capsule endoscopy on the market, it used to be a very invasive approach. You either had a CT enterography or a flat panel X-ray, so what we call a small bowel follow-through, which had a very low sensitivity rate. Capsule endoscopy came on the market back in the early 2000s. The primary focus of capsule endoscopy being used is for those patients that are bleeding in the stool, they have abdominal pain, diarrhea, extensive diarrhea. We're focusing on blood in the stool to define where that bleeding source is occurring. Crohn's patients, right? Crohn's can either be in the colon, the small bowel, or just in the GI esophageal area if you divide it into three different areas. Cancer and celiac disease. That's the primary patient population we're now going after and diagnosing. If you were to break it down, though, probably 55%-60% is bleeding, some obscure bleeding going on within the GI tract. Got it. I appreciate that. How much does the capsule cost, and what's the total addressable market? Yeah. Within the small bowel market as a whole, the upper GI, so this would also include esophageal, gastric, pancreatic, and small bowel, it's projected to be a $300 million market by 2030. Within the colon, now we're looking just at the colon market, where we're developing a colon capsule for this, is a $17.8 billion market. Our goal is to go after the contraindicated market, additionally, building a registry as well, which we believe will continue to gain access to the screening market too. $300 million for the upper GI, almost $18 billion for the colonoscopy market. About 20 million Americans a year are having a colonoscopy. Okay. You talked a little bit about it, but how does the technology compare to the competition out there? Yeah. When you look at the way the capsule was designed, and I go back to our CEO, Johnny and Dr. Gordon Wilson, who designed the capsule, having those four cameras. For example, with a colonoscopy, the gold standard right now is an optical colonoscopy, where they will insert a scope, an optical scope in the rectum up through the colon of the patient. When a gastroenterologist or general surgeon is doing that, they're actually moving that scope at a 90-degree angle, so they have control over that scope. With our capsule having the four cameras placed laterally, looking at that 360-degree view, we're basically mimicking that same control of a scope. The reason for that is you can't control a capsule. Once that patient swallows the capsule that's going down the GI tract, you'll have tumbling, you'll have all kinds of things going on. We believe our capsule mimics that scope just like a scope in a gastroenterologist's hands, and that's a huge benefit. Also, not having that external equipment, we're not contraindicated for a patient that may have a defibrillator, some type of implantable medical device. Also, some of the patients with a BMI higher than 40 are contraindicated for capsule endoscopy in some occurrences because the signal cannot reach the data for those competitors that utilize a data recorder. We encompass and cover the entire patient population. Lastly, I think, when you look at our cloud-based system, where the benefit is the physician doesn't have to go to his office, or he doesn't have to go to the hospital to read the study. Having this download center and a cloud-based software solution gives the gastroenterologist the ability to read the study from anywhere in the world, provided they have internet access. Great. You submitted your application in December for the addition of an AI-assisted reading module in CapsoCam Plus. Maybe you could talk about the enhancements that this will provide and timing on expected FDA decision? Yes. Thank you, Kyle. Thank you, Doug. I will take this one. AI, of course, they save time, okay? We target to save most of the reading time, which is about 20 or 30 minutes for small bowel. Doctor is motivated by procedure volume because that's how they are paid. This will have the substantial economic benefit to the customers. Also, doctors have to concentrate in reading, concentrate on every pixel on the imaging when reading this medium. They have good intention, but the continuous concentration is difficult. During the reading of 20-30 minutes, they enter into an area where they have awareness fatigue. Their reading sensitivity continue to drop during the reading and after first reading. The second reading will be about 40% lower, which is very significant. Using AI, you can avoid this kind of observer fatigue. Not only more efficient, the most captivating part of the AI is its accuracy, which makes it even more accurate. Thank you. Great. The sales are currently on a call it $14 million annual run rate. Maybe you can talk a little bit about the commercial organization, how this looks, and any anticipated changes to headcount. What we have right now is, we have a direct sales force here in the U.S. 26 direct sales reps, so we are expanding within the U.S., adding territories where it makes sense, from a geographical standpoint. We are direct as well outside the United States and Germany. Outside of Germany and the U.S., we are direct or distributors using a distributorship model in 69 countries. We will add territories in the United States, as I mentioned, where it makes sense. We believe with colon coming to market. Once colon is approved, we won't need to add another sales force to the company. It will be the same existing sales force selling the product so that, you know, the cost in hiring a sales force, it's almost like hiring an army, right? Mm-hmm. Very expensive. Having that sales force already in hand and in place, and then this huge opportunity coming on board with CapsoCam Colon is just gonna add additional revenue without adding additional operational costs. Great. That flows nicely into the next question. Talking about your pipeline, very robust, and it is addressing kinda your vision to deliver endoscopy solutions for imaging the esophagus all the way to the colon. Can you walk through the other capsule technologies that you're working on and timelines associated with those? Okay. Thank you for the opportunity. Our plan is to have colon submission in third quarter of 2026. Pancreas study started in first half this year. That's the second quarter this year. Good news is KOL including leadership in leading societies in pancreas field are joining. This is multiple of them. The leadership in leading society in pancreas. This is a huge endorsement. Following that, esophagus will start after colon submission. Regarding the esophagus various will start after colon submission. Early esophagus for esophageal adenocarcinoma, because it need a lot of biopsy and pathological analysis and AI analysis, which will be done in 2027, 2028. In parallel, the stomach will be done in the similar timeframe. Because stomach cancer is more prevalent in Taiwan, Japan. We will enroll a lot of patient also from those two area. Including colon. We have a device which can screen multiple cancers. That's about our timeframe. Great. Thank you. Great. Thank you. Can you talk a bit about the partnership with Canon and how this fits into the pipeline? I think you just updated that agreement to include an additional $1 million for the increased features in the specification, additional costs associated by Canon to develop that sensor technology. Any update there? Yeah. This is a very exciting partnership because Canon is a number one professional camera company in the world. One of their key technologies, their top-tier sensor technology, number one tier. Their sensor we can imagine much higher frame rate. Not only that, higher dynamic range and higher resolution. About this $1 million, actually, this is increase the feature to implement some of our patent, CapsoVision patented technology. That give us substantial advantage in our technology. Thank you. Great. You just announced preliminary results for the last quarter and did a $14 million PIPE. Maybe you can talk a little bit about kind of the burn rate, cash position, and run rate, et cetera. Yeah. Thanks, Kyle. As of December 31, we had $10.1 million of cash and equivalents. As you mentioned, we just closed a $14 million placement of equity, private placement of equity. That gives us strong runway for 2026. You know, we are making investments in the colon study. That's a key study for us that we're investing in in 2026, and in other R&D projects like Canon that Johnny Wang just mentioned. You know, with these investments that we are gonna continue to make, you know, we're always evaluating financing options and making sure that our balance sheet is nice and strong as we, you know, go into 2026 and throughout the year. Okay. Well, great. I think we're at time here. Really appreciate you all taking the time to walk through the CapsoVision story. Thank you. Thank you. Thank you very much. Okay.