Good afternoon, and welcome to the Daxor Corporation First Half 2022 Financial Results and Corporate Update Conference Call. At this time, all participants are in listen-only mode. [Operator Instructions] Participants of this call are advised that the audio of this conference is being broadcast live over the internet and is also being recorded for playback purposes. A webcast replay of the call will be available approximately one hour after the end of the call through November 25, 2022. I would now like to turn the call over to Scott Gordon, President of Core IR the company's investor relations firm. Please go ahead, sir.

Thank you, Gary. Good afternoon, everyone, and thank you for participating in today's conference call. Joining me from Daxor's leadership team are Michael Feldschuh, Chief Financial Officer and Robert Michel, Chief Financial Officer. During this call management will be making forward-looking statements, including statements that addressed Daxor's expectations for future performance or operational results. Forward-looking statements include risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in Daxor's most recently filed annual report on Form N-CSR and subsequent periodic reports filed with the SEC, and Daxor's press release that accompanies this call, particularly precautionary statements in it. The content of this call contains time sensitive information that is accurate only as of today, August 25, 2022. Except as required by law Daxor disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It is now my pleasure to turn the call over to CEO, Michael Feldschuh. Michael, please go ahead.

Thank you very much, Scott. Good afternoon, everyone. Thank you for joining us. It's my pleasure to report on Daxor's first six months results for the period ended June 30, 2022. I've written to shareholders in the past that for the company to realize the tremendous potential of our paradigm shifting medical technology, we need to execute well in several key areas. We have strong clinical results, but they have to be accompanied by commensurate health economic outcomes. Our new research milestones showing value have to be paired with our next generation diagnostic systems offering the ability to easily adopt our technology into the clinical workflow. The promise of our systems must be supported by engagement with our customers through clinical support, topside medical education, and a very well run sales support team. I'm pleased to announce that in the last six months, we've made important breakthroughs building on our focus in each of these key areas, balancing our growth and commercialization with strategic investment, fueling our next generation systems, which are the most important technology launch for the company in 20 years. Our opening slide is from January of this year, as we listed on the NASDAQ Stock Exchange. Proud to show us joined by some of our Board members and our key executives at the NASDAQ since our listing. A quick reminder for those of you who are new to the Daxor story. Daxor is the global leader in blood volume measurement technology, focused on blood volume testing innovation. We are headquartered and operate out of a 20,000 square foot state-of-the-art production and research and development facility located in Oak Ridge, Tennessee. So what is blood volume about? What does it serve, and what markets does it address? Blood volume management is central to a number of very…

Thank you, Michel, and good afternoon everyone. Here is the summary of our first half 2022 financial results. The period as of June 30, 2022 Daxor's net assets increased 35.3% to $19,615,712 or $4.85 per share, as compared to $14,493,285 or $3.59 per share at June 30, 2021. Daxor's net assets decreased 7.3% to $19,615,712 or $4.85 per share as compared to $21,152,719 or $5.24 per share at December 31 2021. However the June 30, 2022 results do not reflect any change in the valuation of the operating division. The valuation of the operating division remained at $16,500,000 at June 30, 2022, the same value as December 31, 2021, as the valuation of the operating division is traditionally performed on an annual basis at the conclusion of the fiscal year. For the six month period ended June 30, 2022 Daxor had net dividend income of $130,943 and net unrealized gains on investment activity of $1,370,610. There was a net decrease in the unrealized depreciation on investments options and securities borrowed of $1,367,276 as we sold positions during the second quarter of 2022. The prior years' significant unrealized gains unwound into the realized gains for the period. Included in the net decrease in net assets resulting from operations of $1,812,497 is noncash stock-based compensation expense of $275,490. In an effort to provide incentive to employees, officers, agents and consultants to the company, we utilize stock-based incentive awards. There was a net realized loss of $1,535,071 from the operating division relating to investments in research and development, sales and overhead, as the company continues to invest judiciously in research and development, for our 2022-2023 product launch, ramping the commercial sales teams, as well as production facilities for our next generation blood volume analyzers. That concludes my comments. And with that, I'd like to turn the call back over to Michael. Michael?

Thank you, Rob. Included in this slide are some statistics around our stock and stock performance. We have a float of approximately 4.04 million shares that is owned 68.02% by insiders. So we are a company that is very heavily owned by insiders. You can see that over a one year period, the total return on our stock has been 50.8%. Our shares have risen from $9.33 to $14.07, as of yesterday's close. Also benchmarked against peers such as the Dow Jones Healthcare Index, Daxor has substantially outperformed not only the broad market, but the relevant healthcare indices that it might be compared against. The stock has shown a low to zero beta, and some substantial alpha, and idiosyncratic return, which is commensurate with our development and progress really being independent of some of the larger stock market forces and reflects we feel a strong shareholder support for the trajectory of the company. This slide is a brief overview of our senior leadership, which remains unchanged. Daxor continues to be very focused on executing successfully. And we remain gratified that our sales and marketing and business development team has been doing such a fine job. Here are key contacts that we have, investor relations, our auditors, corporate counsel and transfer agents. With that being said, I thank you, and I would like to open up the floor for questions.

[Operator Instructions]. The first question is from Anthony Vendetti with Maxim Group. Please go ahead.

Thank you. Thanks, Michael. I just wanted to talk a little bit about the new BVA. What makes it different from your original device? I know it's portable, and maybe talk about the weight of it, how easy you can move it now from room to room? And just to confirm, you're planning on submitting for 510(k) clearance before the end of this year, and expectation is in the beginning -- sometime in the beginning of '23 to receive received clearance because you're probably using the original BVA predicate device. And then I have a follow up. Thank you.

Great, thank you. Yes, I think it's very important to speak to why the company feels that this product launch is one of the most important things that the company has undertaken in the past 20 years. Our new next generation systems are designed to be portable, rapid and available at the point-of-care. So our current system involves the injection of a tracer at the bedside of the patient, the drawing of blood samples, and then those blood samples being taken somewhere else to a lab to be processed and then results to be put in to the electronic medical record system for clinicians to use. That process can take anywhere from 60 to 90 minutes under the best circumstances. Our new system in contrast, is designed to be deployed directly at the bedside and to allow for blood samples to be drawn directly from the patient, and to provide a result within 15 minutes. So the new system is more than three times faster than our current unit, is capable of giving the full results at the bedside without the need for lab services. It's also about the size of a tissue box, while weighing about the same as a laptop computer. So we anticipate that there will be substantial demand for our faster, easier, simpler version of our test from many different stakeholders within the hospital system, everybody from the current lab customers, who will be able to recapture a substantial amount of their space in order to justify the new system, as well as our ability to see improvements from utilization in the fields of critical care. Because critical care, there's typically a turnaround time of 15 minutes or less to make tool based decisions. And so we think that, that opens up a whole new set…

Yeah, no. That sounds like it's a significant leap forward, not just an incremental iteration. Just maybe in terms of that as customers understand there's a significantly improved device coming out, do you expect that to hold sales down in the back half of the year -- of the year that we're in right now? Or, at least for the equipment that's out there, can you can you talk about, in general terms, the usage stats, because there's a consumable piece to this? Have you seen a pickup, at least in devices that are currently in the field? Has there been an increased usage in the first half of 2022?

So that's really a two part question. I'll answer the second part first, which is, we have seen a growth in the utilization at existing accounts. And that's really been a function of our ramping up our clinical and sales team, led by our Senior Vice President, Jean Oertel. She has been doing a really superb job of engaging with the key opinion leaders at hospitals and managing and growing the sales and clinical support team to be very focused on supporting new users. We have been making investments in things such as Grand Round, a new electronic learning management system for remote training of our clinical teams, at different customer sites, a new CRM system to be able to manage our sales team more effectively. Kathy Kornafel, our VP of Marketing has been very focused as well on growing that collateral and she's been doing a terrific job of that. So we're seeing sales at existing accounts growing, which is very nice because it also means that the new accounts that are coming online are also coming online at a higher utilization rate. So that's what we're seeing from the existing site. Now as far as the question about whether the impending new device is suppressing the sales or leasing of the current devices, it's very important to know that our sales model that we anticipate for our next generation devices will be substantially different than our current sales model. We anticipate to moving towards a SaaS model for our equipment, meaning the software service model, where we will be primarily leasing or renting our next generation analyzers but not selling the capital equipment. We feel that, that is going to allay customers' current fears. If they have existing devices, we will seek to rapidly swap them out or trade them with some kind of credit, to try to get everybody onto the new system. There's just so many advantages for every stakeholder to having it. But also moving towards a SaaS model will provide an additional recurring revenue stream of our devices. We've had some devices at hospitals for 10 years, where they're still using the same device, and they've used it on thousands of patients. And frankly, we haven't been getting anything like the kind of return on that capital equipment piece that we could, if we were renting it on a monthly basis. There's a lot of advantages towards moving towards that model. And that's what we anticipate doing. And that's how we're going to deal with this issue of suppression of new orders in the second half, is by reassuring everybody that they're going to be moved to the new systems as soon as are available.

Okay, great. Do you have at this point, a pipeline of customers that have indicated interest, or is it is it too early for that at this point?

Well, we have to be very careful, because FDA does not like for companies to market to customers on approved devices. So we've done focus group sessions and R&D, in conjunction with KOLs. But at this point, until we have our clearance, we're really not allowed on a commercial side to be able to go out and start to get pre-orders lined up for the device. That being said, all of our focus group work, and all of the research that we've done, has shown substantial enthusiasm for the increased capabilities of the next generation systems. People are pretty excited about what it means to be able to go from 60 to 90 minutes to get one of these results to 15 minutes. Everybody from the techs that would do the test to the people that want to see these results faster, everybody's really excited to see that workflow happen.

Just two quick questions, then I'll jump back in the queue. So the timing, I just wanted to confirm, you expect to submit the clearance application by the end of this year, and then sometime by the first half, you're hoping to have clearance? That's the first question. And then the second is, in terms of the new system is it more user friendly? Is the GUI interface easier? And if so, how quickly can a healthcare professional learn how to how to use the new BVA?

Great questions. So just to be clear, actually, we've already begun submitting data to the FDA for our 510(k) approval. We've already collected and been in communication with FDA. And we anticipate having a preliminary meeting with them in early October. That's been confirmed. So following that meeting, and some questions that we wanted answered, we anticipate submitting our 510(k) package within about a month after that meeting. So we anticipate sometime in the middle of Q4 to have it. And that's then subject to usually the 60 day to 90 day review timeframe. Importantly, the predicate device for the 510(k) process is our own current FDA-cleared device. So one of the exciting things is that we have successfully completed the army contract. That means that we have our working prototypes, we have done validation studies and presented data to the U.S. Army, that we have been able to successfully replicate all the speed and accuracy of our current system in a footprint that is about one-tenth the size and perhaps one-fiftieth of the weight. So we have a tremendous amount of confidence in the new technology that we've developed, that it fulfills the aim of what the 510(k) process is meant to have, which is to show equivalency to an existing clear device. As far as usability goes, the new system is better and easier in every single way. It benefits from the latest touchscreen technology. You're sort of thinking about a device with a six by eight inch touchscreen tablet. We've done a lot of work. And we've incorporated all of the learnings from the many thousands of tests that have been performed already with our current system to think about how to do this. We want to make a system that is intuitive and easy to follow. I would say that if you can check your own luggage in to get on to a commercial airplane flight, you should be able to work our analyzer.

Great, that's a lot of helpful color. Thanks so much. I'll jump back in the queue.

Thank you. Again, if you have a question, please press star, then one. The next question is from Ed Wu with Ascendiant Capital. Please go ahead.

Yes, thank you for taking my question. My question is, as we have some of these macro challenges, does that affect your sales cycle and business development in terms of getting your device placed with new customers?

I'm sorry. I don't think I completely understand the question. Are you saying does the new device hurt our current efforts to place existing devices?

No, I actually met as people are a little bit concerned about the economy. Growth is slowing, GDP is slow. Is there any concerns that people are going to slow down capital on any type of investment on new medical equipment?

Yes, thank you. I apologize. I didn't understand the question at first. So here's what we've been seeing, which is really quite important. First of all, the company was able to push through a 9.1% increase in volume x this year. And we really saw no pushback or drop in utilization at all from customers. One of the exciting things about this kind of economy is that if you have a very strong value proposition, people are actually more eager and not less eager to hear about your pitch. So in a similar way to the idea that -- I don't know -- Costco or Dollar General Stores benefit from this kind of inflationary, cost sensitive environment, as people are more value focused. In a similar way, what we're seeing is that hospital systems are incredibly sensitive right now to health economics. So they're challenging us when we go to them with our systems. And they say, show us how utilizing your system on an outpatient basis with the reimbursement that we're going to get makes great financial sense. And we have a super strong story around outpatient reimbursement for our test. It's really, really been refined, and it's in a very strong place. On the inpatient side, one of the really important things to see has been how blood volume analysis shortens the total length of stay for patients within the hospital system. And if you shorten the length of stay that means the hospital spends less resources. They still get a block payment under what's called the DRG system. But if you can show that you shorten the total length of stay and the total resources used, and hospitals are actually very keenly interested in that. So our partnership with MedAxiom is a great platform from which --…

Great, then one last question is, have you had any issues with supply chain in terms of getting parts as well as any inflation cost issues?

Fortunately, we manufacture and distribute all of our products from our own U.S. based Oak Ridge, Tennessee facility. So we've been lucky that we haven't had any chip shortages or component problems right now. We've been able to ride the difficulty there. I will say, though, that we like every other company has been buffeted by inflationary forces related to staffing costs. So the cost of our technical teams has risen. Our software developers are in a -- now in a global marketplace for that kind of talent, for example. So we've had to raise salaries and benefits to be competitive with the general inflationary environment. But as far as supply chain goes, we've been fortunate to avoid any real significant problems.

Great, well, thank you. And I wish you guys good luck. Thank you.

Thank you, sir.

The next question is from Michael Samuels with Berthel Fisher. Please go ahead.

Hey, Mike, how you doing? Great presentation. Just had two quick questions. Is there a way you can give us the -- I know, you said we increased 12 machines. Is there a way we can get the actual number of machines that we have out at present? And also the kits sales. Approximately how many kits do we sell? That was question one. And the second question is, do we have any international sales right now? And do you think once we get the new machine, that'll be the catalyst for it?

Great, thank you. I'll start with the second part first. So one of the key things that the company announced last year was that we achieved ISO 13485 certification. That is an international standard of manufacturing. And it's something that is a certification that is required for things like for example, a CE mark. That's the clearance that allows you to sell devices in Europe or Canada. So it's very important to harmonize your regulatory strategy across the different markets. The company historically has really been focused on the United States. But we have been aligning the manufacturing and the strategy of the company to allow us towards to have a global footprint for our products going forward. Right now, we're really focused on getting the U.S. going, and making sure that we have everything lined up and firing there, because there's such a massive market potential here in the U.S. But we're not leaving out Europe or Canada, or the Commonwealth in general. There's a lot of interest overseas in our product. We get invest -- we get researchers often reaching out when they see our data published in scientific journals, asking how they too, can participate in those types of studies. So it is going to be a priority for the company. As soon as we get our regulatory approvals here in the United States, to pivot and to see that we get global approvals for our next generation product. I don't anticipate that for our current generation product, frankly. It's not really worth it. But for our next generation products. Absolutely. Now going towards the first part of your question, we've announced in the past a mixture of both sales and leases. And some of our customers actually use what we call reference lab services. That means…

Right. Okay, that's great. I think maybe the question would be, then, what kind of sales? Do we have more than how many machines in that? What are sales for the first six months versus the first six months last year? What kind of percentage increases and stuff like, I guess that we know, along the line?

So in terms of percentage increase what we announced in this presentation is there, we saw a 91, over 91% increase in the revenue at the operating company, not the parent company 91%. That was a mixture between all of the things that I just said. But if you break out the Volumex sales, so that number was 92.6%. If you look at the sales Volumex not by value, but by the number of kits sold, right, because remember at a 9.2% increase, what you see is that the number of kits also rose by 49.4% in the first half of 2022, compared to the first half of 2021. We had announced prior to this as well, that Q2 of this year versus Q1 saw an additional, I believe, 10.1% rise in sales, compared to Q1. So not only are hard sales growing, but we're seeing year-over-year and quarter-over-quarter growth in sales of Volumex kits. And this is obviously without having the next generation systems launched yet.

Right. Okay, well, thanks just keep doing a good job. You guys are doing a great job. Keep up the good work. Thanks.

Thank you, sir. We appreciate your support. I've also received some questions from by email from shareholders. I would like to read one or two of them as we still have some time here. One of the questions that's here, I'm going through them because some of them have already been addressed. So let's see. You have over 100 published peer reviewed studies across many medical conditions approved. Your BVA 100 test provides unique accuracy, efficacy and value. My question is, can you give examples of hospitals that have some of the best utilization? What conditions are they using it for? How many doctors are using it? Are nurses providing the test? Any other color would be helpful? So this is a great question. I want people to kind of understand where the company has been and what the company's strategy has been pivoting towards. When our diagnostics was first deployed for a lot of these hospitals, usually the person who brings in the diagnostic to the hospital, we refer to them as the clinical champion. And that person might be an early adopter, heart failure coordinator, Chief of Cardiology, etc. Usually those people bring in the device. And they champion that through the process of bringing it into the hospital system and they become users. Our company right now is really focused and that's part of what our partnership with MedAxiom is about. What we're really focused on is moving from the initial clinical champions into the standard pathway of care at our different hospital systems. So what does that mean? It means that we want to help hospitals have standing orders and protocols so that every time a heart failure patient presents to the hospital, they know to run the test. And that the test can be ordered…

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