DXR - NASDAQ

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 widespread and costly conditions within our healthcare system. Blood volume derangement is a central feature, and something that has to be managed in such very costly areas, such as heart failure, which affects more than 6 million patients in the U.S. alone, for which the U.S. spends more than $30 billion a year managing areas such as hypertension, sepsis, critical care and syncope just to name a few areas. In total, these areas represent some of the costliest spends in our healthcare system and the chief focus of reimbursement and payers, such as CMS in seeking to improve outcomes for their patients and for the healthcare system overall. A quick background though, the need for optimal blood volume management is central to effective outcomes in a number of these conditions. But currently, the state of care is that care teams are relying upon a number of inaccurate, costly and invasive non-direct measurements of volume estimation. You can see from this slide, that they include things such as invasive measures, such as a right heart cath, non-sensitive or specific measures, such as Chest X-rays, or biomarkers, and include things such as clinical exam, which had been proven to be unreliable. They're all inaccurate, many are costly, and some are invasive, and they've all led to inferior outcomes compared to our single blood volume diagnostic metric. What are some of the benefits around blood volume analysis? And how does it mesh with the central aims of healthcare today? Healthcare is focused on what's called the Quadruple Aim. That means preventing hospital readmissions of patients that are discharged, individualizing and optimizing the treatment pathway to do things like shorten the length of stay, informing the management of patients so as to operationalize effectively, and to ultimately save hospital resources. All of these things lead to an improvement in both mortality, readmissions, patient satisfaction and resource use. Daxor's solution for these significant needs are our blood volume measurement systems. Our current system, which is FDA cleared, is a 98% accurate direct measurement of total blood volume plasma and red cell volume. It is unique in the marketplace. It allows for results within one hour, and is covered for both inpatient and outpatient care, and is reimbursed by both CMS system as well as private insurance. To-date, Daxor has had over 60,000 tests performed at leading medical centers across the country, and has been the subject of over 100 peer-reviewed studies confirming the value of blood volume management and its superior accuracy to the proxies that I just mentioned. So here is an updated executive summary of what has been going on at the company in the last six months. I'll start first at the operating division level. Going back, looking at a year-over-year 12 month comparison, we've seen pivotal growth in the company and its business prospects. We've seen a strong growth in sales, revenue and new customer acquisition, while our research and development efforts have been accelerating the development of our next generation blood volume analyzer systems. The company is pleased to report a 92.6% increase in the unaudited revenues of our blood volume diagnostic operating division for the year and for the period ended June 30, 2022, as compared to the same period in the prior year. Revenue growth was driven by a combination of the sales and leasing of our capital equipment to hospitals, orders for our single use disposable blood volume diagnostic kit, used in areas such as heart failure, critical care and other indications, along with a 9.2% increase, there was well received by the market. Additionally, revenue growth was driven by U.S. Department of Defense orders, as well as orders from third party companies contracted with Daxor to conduct blood volume analysis and research on their pharmaceutical products. The company has reported that the number of single use Volumex diagnostic kits rose by 49.4% in the first half of 2022, compared to the first half of 2021. Growth is being driven by a combination of an increase at existing accounts as well as the addition of new accounts coming online. The company feels that there is still substantial growth opportunities at existing accounts, as there is room for growth from winning a higher percentage of patients within existing departments as well as expanding to other departments within hospitals where blood volume analysis devices are present. As of this date, the company has sold, in the first half of 2022 leased or placed 12 new devices for use in either clinical management or research or a combination of the two. Many of these new accounts are just beginning to ramp up and come online. And as they integrate the diagnostic into their treatment protocols, we feel that their need for the product has never been greater. We see a strong long term market for the use of our product within the heart failure segment. The current population of heart failure patients is 6 million in the United States, 1 million of whom will be hospitalized it is anticipated over the next 12 months. The total number of heart failure patients is set to rise to more than 8 million over the course of the next six years as the baby boom generation continues to age, and hospitals are under increasing pressure to improve outcomes and contain costs. Other commercial highlights include expanding utilization at one of the largest healthcare organizations in South Carolina, and an industry partnership with MedAxiom, something that I'll go into more in a moment. Switching over to some of the clinical highlights blood volume analysis was selected by the National Institutes of Health as a key metric for their large COVID-19 Long Hauler study. In addition, new data from the Baptist Heart Health System has been -- has been presented at ISHLT validating the benefits of BVA in late stage heart failure patients who use left ventricular assist devices. We've also seen data coming out from Duke Heart, presented at the American College of Cardiology, revealing the unique accuracy and utility for blood volume analysis for improving worsening heart failure. We also anticipate new important research to be presented at the Heart Failure Society meeting in October. Shifting gears to a moment to one of our key priorities, our focus on our next generation of new products has been a key area of interest and energy for the company's management. We're pleased to announce that we successfully completed our Army Department of Defense contract to create a portable combat care device for both military and civilian use. In the first half of this year, we also successfully completed an NIH-funded I-Corps program for the commercialization of clinical decision support software. We were awarded a Phase II Cooperative Research Agreement for our non-nuclear tracer. And we have begun the process of submitting data to the FDA for the clearance of our next generation blood volume analyzer. We anticipate a full submission to be completed in Q4 and approval in early part of 2023. I will go into more details about that in subsequent slides. Our work for our next generation, non-isotopic fluorescent marker is also ongoing, also supported by a research contract from the U.S. Department of Defense. So focusing on the arc of our development with the U.S. DoD, we've been the recipient of over $2 million in military contracts. The military, going back to 2018 recognized that Daxor as the global leader in blood volume analysis technology was the natural commercial counterpart to award a contract to generate a portable ruggedized blood volume analyzer that would be suitable for both military and civilian use. This chart shows that we have successfully completed both Phase I and Phase II studies for the army. We have completed Phase I for the Air Force, and we are in the process of completing our Phase II contract for the Air Force, which is our fluorescent marker. We've also entered into Phase II of our CRADA agreements with the Uniformed Services University as well. We find that the enthusiasm amongst the counterparts at the military for overseeing this project has been very healthy and enthusiastic, and they've been gratified to see that we've been hitting our milestones in terms of creating a product that fits all of the specifications, on time and on budget as well. Switching gears back over onto the commercialization side. Daxor has been selected as an industry partner for MedAxiom. For those of you not familiar with MedAxiom, MedAxiom is the industry leader in consulting for cardiovascular care. It's a wholly-owned subsidiary of the American College of Cardiology, which is the leading cardiology association in the world. They have a select group of industry partners, and those partners are then connected to the hundreds of hospital systems and cardiology clinics and partners that MedAxiom consults with. They engage MedAxiom to recommend the latest of innovative technologies and best practices to improve outcomes within their systems. We are gratified to be working with them because their expertise, their enthusiasm for Daxor's product, and their desire to raise the profile of the company by featuring us at conferences, by creating webinars and other collateral to send out to all of their thousands of members is very gratifying. We look forward to this partnership to significantly raise the profile of the company and to further drive sales. MedAxiom sees the Quadruple Aim as a key focus, and that Daxor's blood volume technology fits every single part of the Quadruple aim, improving outcomes, lowering costs, improving the clinical experience, and the patient experience as well. Daxor continues to make progress in its ongoing clinical trials. We have received funding from not only the Department of Defense, but also the National Institutes of Health. We have two NIH multicenter prospective heart failure trials that are ongoing. We also have a prospective sepsis/ COVID study which is ongoing. That wasn't -- that was initiated by NYU, in conjunction with Oregon Health Sciences University and Wake Forest Baptist. And Duke University Medical Center has also completed its Phase I prospective study and you're awaiting them to publish results. The company has an active R&D and patent portfolio. We were awarded a patent in January of this year relating to our novel clinical decision support software. This was the same patented technology that was the basis for the NIH, rewarding us our I-Corps grant and support for future integration into our blood volume diagnostics. In addition, we anticipate that we have several patents that will be awarded sometime over the next 12 to 18 months. We have half a dozen pending, and we have a pipeline of more patents that we intend to file before the years out. So we have a very deep and growing moat of protection in terms of the IP, and we have a lot of work going towards our next generation systems as well. I would now like to switch over to Rob Michel, our CFO to talk about some of the unaudited flat financial outcomes to-date.

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 of customers for us within the same hospital setting. The fact that the test can be done so much faster also means that the hospital will be spending less resources in terms of tech time to do the test. That means that they will be able to increase the total number of tests per day that their department is able to perform. So we see this really as a revolutionary step in terms of speed, in terms of usability, in terms of workflow. And so we feel that will greatly speed the adoption of our systems. And we also see that there's an opportunity that some hospitals might want to have multiple systems within the hospital setting. So for example, we anticipate that a floor that is dealing with critical care patients might want to keep one of these systems right on their floor, another one in the heart failure clinic, another device, perhaps in the main ICU. So we can see a workflow where several of these units are stationed around the points of care where the patients are, to allow for rapid deployment of the tests as opposed to having a single device in the central lab, which is much slower, and is much more dependent upon other issues before they -- the test can be performed. So we see this next generation system as being incredibly important. Now the second part of what we're building into our next generation is a non-isotopic fluorescent marker. That is a system that is under development, also with the support of the United States Air Force. That we see opening up another additional area of care. That fluorescent marker would be suitable, we anticipate for deployment even to areas such as clinics and potentially doctor's offices as well. So our aim is to make blood volume analysis faster, easier, quicker, and available in all sorts of care areas to inform everything from hypertension management, heart failure, sepsis, syncope, and all the rest. So these product launches and the support that we're getting from both the NIH and the DoD, is really very powerful towards making that happen.

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 -- for us to be presented to hospital systems as a cost savings and an economic improvement, both in terms of workflow, and in terms of expenditure. There's a substitution effect with our tests. So for example, if a hospital was going to spend $1,100, or $1,200, or $1,300, to do a right heart cath on a patient, which is very invasive, by the way, running a blood volume test could be done at one-third the cost and one-third the time. That's with our current system by the way. With our new system, it would be done in one-ninth the time. But even with our current system, it presents substantial improvements, versus some of the other metrics that they're using. So we've been very keenly focused on creating value propositions to all of the different stakeholders in these hospital systems in order to gain adoption. The crucial focus of the company is to get blood volume analysis into the central care pathway for all of these patients. And in order to do that we have to be sensitive to the economic environment, as you rightly point out, and also sensitive to the workflow and the clinical and quality objectives of our hospital customers.

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 that they inject the patients and then send the samples to our central lab to be processed through FedEx. That's a 24 hour turnaround time, as opposed to the 60 to 90 minutes that they would get in the hospital, or the potentially the 15 minutes, if they had a next generation device at the bedside. So we've announced 12 of those new accounts up here. I believe in our last letter, we pointed out 11. And we've said in the past that we've had over 65 accounts at different hospitals across the United States. So I don't have the data right now. We haven't released it in the past a detailed list of where all of our accounts are. But that gives people kind of a sense of where things are going there. As far as those sales go as well. We haven't been computing those. We do sell doses for a variety of both clinical use, as well as commercial use and research as well. So we do periodically update the total number of tests that have been done. At this point I know that it's over 60,000. And obviously we're adding several 1000 per year. And so we're going to be growing that number I think quite substantially. So I don't have exact numbers for the shareholders. I know that people are eager to get a better sense of the cadence of the business. And we're trying to get a look into that as well. It's important to also understand that the revenue numbers and the sales numbers are really a mixture of several different things that are happening for the company. And I'm talking at the operating company level, not at the consolidated parent level for the company. We do see a substantial diversity of revenue sources, meaning Volumex sales, capital sales, capital leases, research agreements, grant money, Defense, Department of Defense contracts, and various maintenance agreements for our equipment with our current existing hospital accounts. So we have a lot of different sources of revenue. And all of that is supporting the ongoing development of the business. In addition, at the parent company level, we use our current investment portfolio with dividends and capital appreciation of the underlying securities also to fund the company's growth. So the company has a very tight cap, cap table, we have no warrants outstanding. And we've been very careful around the share float as well, because we run the company to maximize shareholder value. So we're going to continue to give people more insight into the business as things develop.

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 not only by the clinical champion, but it can be ordered by other physicians, hospitalists or the nursing staff as well. So those users are empowered to get the results of the test. And then to turn that into an optimal clinical decision. It's really important to understand that our diagnostic has been associated with tremendous improvements in outcomes. But that's predicated on having educated users use the test and know how to apply that to the right clinical pathway. That's why we've been very heavily investing in medical education, grand rounds, learning management system, continuing to provide research and doing what we call free [ph] services, where we educate clinical teams and how best to use the test. What I'm happy to say is that a lot of the increase in existing accounts is happening. So when we go there, and when we have our nurse practitioners do one-on-one coaching sessions with the nursing staff at a hospital. And then those nurses feel confident and empowered to order the test and to use it as part of their clinical practice. That drives utilization. So we're talking to the C-suite at these hospitals, to try to impress upon them the benefit of integrating this but the adoption also has to happen at the clinician level. And it has to happen at the lab services level. The lab has to be able to run the test, the clinicians have to want to order the test and know what to do with it. And the C suite has to be very satisfied with the results of what they're getting from, both from a reimbursement point of view, and from other health economic benefits. So I hope that gives some kind of color about what we're focused on. We see tremendous opportunity to improve the utilization of our technology at these different hospital systems, because we've been so focused on these issues. And as I said, we bought in a very powerful partner in the form of MedAxiom to help us to accelerate this process. So we're seeing some good results from there. Let's see. Another question we had was, are you seeing any success in larger IDM? So this is also a key strategy question for Daxor. Do we see integrated delivery networks? What about what we would call a payer based strategy? If you have something that's inexpensive, and it lowers the total cost of care for patients in the hospital. The hospitals are interested. But what about payers where you say, look, the total cost of care for these heart failure patients that you're responsible for over a 2, 3, 4, 5 year time period? What if you could make sure that those patients were much less likely to end up in the hospital in the first place? If they go to the hospital, they'll stay there for a shorter amount of time. And then they won't readmit as frequently as they did in the past. The people who would really be interested in that kind of value proposition are people like accountable care organizations, integrated delivery networks, where the total cost of care is something that they're responsible for. So we see tremendous opportunity in proving out that kind of healthcare balance and benefit. We've actually retained someone to be focused as a consultant almost exclusively on this avenue of development for the company. So as we make progress in that area, we'll be sharing more updates in future shareholder calls and communications. Any other questions here? One question is, do you see -- can you give us a high level overview of the support you're getting from the Army, the Air Force, NIH? How often are they engaged with us to see? What is the outlook for any more grant money from them, and for further military contracts? So now that we've completed our Phase II army contract successfully, and we submitted -- we're in the process of submitting our device for final FDA approval that then opens us up to what's called a Phase III allocation with the U.S. military. Phase III is where the military allocates larger sums of money to do further clinical validation or preparation for deployment of new systems that they're interested in. Yes, we are eligible for Phase III. We're going to have to work with them and the different partners within the Department of Defense to find the right area of funding to further support what we do. But there's no question that blood volume analysis has a tremendous amount of applicability to military casualty care. That's why the DoD gave us these contracts starting more than four years ago. So whether it's the management of patients with trauma, or burns, or who developed sepsis, etc., there's an important and significant role for BVA to improve outcomes in those areas. So we anticipate continuing to engage with them and continuing to get more contracts from them. In addition, Daxor has a very active grants team. We have a number of proposals before the NIH right now, and as well as a number of trials that are ongoing. And that's a very active part of our business strategy as we grow our business partners and add more non-dilutive funding to the company to accelerate our adoption and our clinical evidence. All right, I see that we are at the bottom of the hour here, and we're almost out of time. So I just want to say to all of our shareholders, thank you very much. Management and the entire team is gratified by your support. And we are excited about the work of the company and our mission to serve patients, and to make such a difference in terms of the outcomes in people's lives. We're happy to have you as our business partners in this endeavor. And we look forward to having all of us do well, by continuing to do good. Thank you very much.