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Hello, and thank you so much for standing by. Ladies and gentlemen, welcome to CapsoVision Q1 2026 earnings conference call. Please note that this call is being recorded. At this time, all participants are in listen-mode only. There will be some opening remarks followed by question and answer session. If you wish to ask a question please press star one on your telephone keypad. Thank you.

Thank you, operator. Good afternoon, everyone, and thank you for joining us for CapsoVision's first quarter 2026 earnings call. Joining me today are Johnny Wang, President and Chief Executive Officer, and Senior Vice President of Finance, David Garcia, as well as Doug Atkinson, Senior Vice President of Sales. Before we begin, please remember that today's remarks, including forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in the most recent Form 10-Q filed by us with the SEC.

These forward-looking statements speak only as of the date of this call, and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based. Our call today will cover the following agenda. Johnny will begin with an update on CapsoVision's business, target markets, and recent highlights from our pipeline development. David will walk through a commercial update and recent financial results. After our prepared remarks, we'll open the call for Johnny, David, and Doug to take your questions. With that, I'll turn the call over to Johnny Wang. Johnny?

Thank you, Leigh, and good afternoon, everyone. CapsoVision remains focused on advancing earlier, more accurate, and more accessible detection of gastrointestinal disease for patients worldwide. We are working toward a unified ingestible capsule platform capable of screening for multiple cancers, including esophageal, gastric, pancreatic, liver, and colorectal through a single non-invasive procedure enabled by advanced imaging and AI. With that as our foundation, we continued to see consistent solid underlying performance in the first quarter. While revenue and the new account additions remained stable year-over-year, we saw further expansion of CapsoCam used to detect a widening range of small bowel diseases. In the first quarter, underlying procedural volume reflecting end user consumption continued to expand, demonstrating deeper engagement with existing accounts and increasing reliance on CapsoCam Plus in routine clinical practice.

We believe this trend reinforces the strength of our installed base and highlights the growing role our platform is playing in supporting physician workflow and patient care. During the quarter, we also secured key renewals for large GI networks, including Indiana University Health, Providence Health & Services, and Gastro Health, which we believe reinforces the value of our platform and the strength of our long-term customer relationships. Turning to our technology platform, we are entering an important phase in our AI strategy. As you know, we previously submitted our 510(k) application for our AI-assisted reading capability for CapsoCam Plus. We continue to expect the clearance around mid-year, and we are preparing for a commercial launch shortly thereafter. We have been actively demonstrating this capability, which we have branded AI Highlights, at the recent industry meetings, and the feedback from gastroenterologists has been very encouraging.

Physicians are particularly focused on the potential to streamline review time while maintaining clinical rigor, which we believe will be an important driver of adoption. AI Highlights is designed to identify frames with suspected pathology and present them within a structured review workflow, fully integrated within our cloud-native CapsoCloud platform. We believe this capability has the potential to reduce the physician reading time while enhancing workflow efficiency and represents a meaningful step forward in advancing a fully integrated AI-enabled diagnostic system. Building on that momentum, we continue to make steady progress across our pipeline. For CapsoCam Colon, our development program remains on track with submission of our second-generation capsule and its AI module expected in the third quarter of 2026.

We continue to believe that our decision to prioritize gen two positions us to enter the market with a more competitive and clinically differentiated product. Turning to our CapsoCam UGI Program and the pancreatic cancer initiative. We are pleased to report that enrollment began this week in our clinical study. This represents an important milestone as we work to establish diagnostic criteria and build the clinical foundation for what we believe could be a first of its kind, non-invasive screening approach for pancreatic disease. While this remains a longer-term opportunity, we continue to believe the potential impact in this area is significant given the lack of effective early detection tools today. Overall, we believe the business is progressing as expected. We are seeing continued strength in utilization, advancing key pipeline programs, and are moving closer to what we expect will be an important inflection point with the introduction of AI-enabled capabilities.

More broadly, we remain focused on redefining how gastrointestinal diseases are detected, leveraging our platform to make diagnosis earlier, more accessible, and more efficient for both patients and providers. With that, I will turn the call over to Dave to walk through our commercial and financial results.

Thank you, Johnny. Turning to our commercial performance. As of March 31st, 2026, more than 167,000 patients have been imaged with CapsoCam Plus for small bowel screening across the U.S. and international markets. During the first quarter, we shipped 6,229 CapsoCam Plus capsules compared to 6,447 in the prior year period, representing a year-over-year decrease of 3%, reflecting the timing of shipments that have now been placed in the second quarter. Our technology continues to be supported by a strong intellectual property portfolio, currently with 85 issued U.S. patents, reinforcing our position in capsule endoscopy innovation. In addition, reimbursement under CPT Code 91110 continues to support adoption across a broad range of care settings, including both private practices and hospital systems.

From a commercial strategy perspective, one of our key advantages is the ability to leverage our existing sales infrastructure as we expand into new indications. We expect that the same physician call point driving adoption of CapsoCam Plus today will serve as a natural entry point for CapsoCam Colon following regulatory clearance, creating a meaningful cross-selling opportunity without requiring significant incremental headcount. We continue to see encouraging engagement across larger gastroenterology networks, including GI clinics and multi-site group practices, where we are expanding our presence within existing accounts and continuing to deepen utilization across larger networks. We are seeing ongoing traction within hospital systems and group purchasing organizations, particularly as contracts come up for renewal and providers evaluate alternative solutions.

As Johnny noted, we are also pleased to secure renewals with several large GI networks during the quarter, including Indiana University Health, Providence Health & Services, and Gastro Health, supporting continued engagement across our installed base. As of quarter end, our U.S. direct sales organization remained consistent at 26 representatives, supported by seven regional sales managers and trainers. Internationally, we continue to build momentum, including a dedicated team of four representatives in Germany, while expanding our global footprint through distributor partnerships in high-potential markets. Turning to our financial performance. For the first quarter of 2026, total revenue was $2.8 million, consistent with prior year period. While the number of capsules sold was modestly lower year-over-year, this was offset by a slight increase in ASP.

As Johnny noted earlier, we continue to see strong underlying patient volume and utilization expansion trends across our installed base. Gross profit for the quarter was $1.3 million with a gross margin of 48%, compared to 54% in the first quarter of 2025. The change in gross margin was primarily due to tariffs impacting our cost of goods sold. Operating expenses were $8.4 million, an increase of $1.5 million compared to the prior year period. This increase was driven primarily by continued investment in our pipeline, including development work related to the next-generation imaging sensor under our agreement with Canon, as well as clinical trial activities supporting the CapsoCam Colon Gen Two program. We ended the quarter with $17.9 million in cash and cash equivalents.

As a reminder, in March, we strengthened our balance sheet with the closing of a $14 million private placement with participation from both new and existing investors. We believe this financing reflects continued confidence in our strategy and provides additional flexibility to support our key priorities, including product innovation, clinical development, and commercial expansion. Overall, we remain focused on disciplined investment to support long-term growth. Before I turn the call back to Johnny, I'd like to provide some perspective on how we're thinking about the remainder of the year.

We expect second quarter revenue to be higher than the first quarter, and we also expect revenue in the second half of the year to be higher than in the first half as we continue to build on the momentum we're seeing in our pipeline and customer engagement, as well as the anticipated launch of the AI module for CapsoCam Plus. Now, I'd like to turn the call back to Johnny for some closing remarks.

Thanks, Dave. To close, we believe the business is progressing as expected. We are seeing continued strength in utilization across our installed base, reinforcing the growing role CapsoCam Plus is playing in routine clinical practice. At the same time, we are approaching an important inflection point with the anticipated introduction of our AI-assisted capabilities, which we believe will further enhance workflow efficiency and strengthen the value of our platform for physicians. Across the pipeline, we continue to execute with discipline with CapsoCam Colon on track and early progress underway in our pancreatic cancer program following the initiation of our clinical study. More broadly, we remain focused on advancing a differentiated AI-enabled platform designed to improve how gastrointestinal diseases are detected through panoramic imaging, cloud-native workflow capabilities, and AI-assisted diagnostics that make review more accessible and efficient for physicians.

Our platform enables physicians to securely review cases anytime and anywhere without the need for on-site servers or a dedicated IT infrastructure. We're also creating a growing cloud-based data depository that we believe will serve as an important foundation for continued AI development and training over time. At this time, Dave, Doug, and I would be happy to take your questions. Operator, can you please open the line?

Thank you. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Kyle Bauser with Titan Partners. Please go ahead.

Great. Thanks. Hi, Johnny, David, and Doug. I appreciate all of the updates and for taking my questions. Maybe I will just start out regarding the application for the AI-assisted reading feature. Johnny, I guess any sort of remaining items that need to be addressed with the FDA or are responses in and you're now just waiting for a response? I guess any color on the update there.

Yes. FDA and CapsoVision had a few interactions during these months. Right now, we have reacted on their request during these previous interactions. We are waiting for a meeting in the next few weeks. That's its current status. We have no showstoppers to my knowledge.

Great. Appreciate that. Can you remind me, so for the pancreatic cancer clinical study, which you just started enrolling, which is great, can you remind me the size of this trial, how many patients and kind of the expected timeline for enrollment?

For this study, we plan to enroll 120 patient with high-grade dysplasia or cancer, pancreatic cancer, confirmed HGD or cancer. We account for possible dropout, patient dropout, we plan to enroll 140 to make sure we have 120 to make statistics more powerful. Also, we will have 120 subjects as a reference, healthy patients reference. This 120 patients imagery will be extracted, pulled out from our cloud storage.

As we just mentioned, we have enormous data repository in our cloud storage due to our workflow. We can pull out this reference, healthy reference images. Total is 240. Yes. Enrollment, we cannot speculate at this time. I would see this as a much shorter study than colon. Yeah. Yeah. That's what I can say at this point without, you know, saying too much as a public company. Thank you.

No, yep. Makes sense. That's helpful. Appreciate all that color. Then, maybe lastly, David, I guess appreciate the thoughts on the cadence of revenue, you know, on Q2 and the back half of this year. Any sort of thoughts you can call out on OpEx? Just kinda wondering how this line item should kinda trend throughout the year. Thank you.

Yeah. Thanks, Kyle. I think that the next couple of quarters, you're gonna see continued investment in the colon study, as we, you know, continue to progress on that. That'll continue through Q3. Only until we get to Q4 will be the time when that'll start to trail off a bit when as we will have completed the colon study at that point in time. All the remaining items, you know, should be fairly stable, nominal growth to support the business.

Okay, great. thanks so much for all the updates.

Thank you. Your next question comes from the line of Bruce Jackson of StoneX. Please go ahead.

Hi, good afternoon. I'd like to kind of take a closer look at the first quarter revenue number. You mentioned that the ASPs were higher. I was wondering if you potentially have put in a price increase and if there was any forward buying behavior. You also said that some of the sales may have moved into the second quarter. I'm kind of curious about that. Of course, you often get deductible resets and everything like that out in the market. If you could kind of put those pieces together for us and tell us how that impacted the first quarter revenue number, that'd be very helpful.

Sure. I'll take that one. Thank you. In terms of the capsule volume, it was really just the impact of timing. We saw some of the orders, some of our bigger orders actually fall into April, as opposed to March. In terms of the ASP, there was no price increase. The only thing that happened there was we just saw a little bit of a shift in our mix, to some of the higher priced regions in the world. That's really the only thing impacting ASP there and the volume. Other than that, the underlying business remains strong, and there's nothing, you know, that, you know, that would have changed that.

Okay, great. Just a quick question on the research and development spending. How do you expect that level for the full year to look in comparison to 2025?

Yeah. It will be pretty similar to 2025. You know, we did spend quite heavily in 2025 on the colon study, and that continues through, it continued through Q1, and it will continue through Q3, as I just mentioned. You know, when it's all said and done, the full year R&D spending will be pretty similar to 2025.

All right. great. That's it for me. Thank you.

Bruce, this is Johnny. Please allow me to add. During our workflow, our capsule is shipped to the downloading center to retrieve data for the Cloud review by the doctor. We can measure the end user consumption very easily. That's another benefit of Cloud. We know what features Cloud doctor are using. We can monitor that through Cloud. During monitoring of this end user consumption, we can tell you the end user consumption growing growth is healthy. Okay. Is growing and very healthy. Yeah.

Okay.

That's my opinion. Thank you.

Thank you.

Thank you. Again, if you would like to ask a question, please press star followed by the number one on your telephone keypad. There are no further questions from the analyst. That concludes our question and answer session. That concludes our today's call as well. Thank you all for joining. You may now disconnect.

Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the CapsoVision Fourth Quarter 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question again, press the star one. I would now like to turn the conference over to Leigh Salvo, Investor Relations. You may begin.

Thank you, operator. Good afternoon, everyone, and thank you for joining us for CapsoVision's Fourth Quarter and Full Year 2025 Earnings Call. Joining me today are Johnny Wang, President and Chief Executive Officer, and David Garcia, Senior Vice President of Finance, as well as Doug Atkinson, Senior Vice President of Sales, who will be joining us for the Q&A session. Before we begin, please remember that today's remarks include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in the Form 10-K filed today with the SEC.

These forward-looking statements speak only as of the date of this call, and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based. Our call today will cover the following agenda. Johnny will begin with an update on CapsoVision's business, target markets, and recent highlights from our pipeline development. Then David will walk through a commercial update and recent financial results. After our prepared remarks, we'll open the call up for Johnny, David, and Doug to take your questions. With that, I'd like to turn the call over to Johnny.

Thank you, Leigh, and good afternoon, everyone. CapsoVision's mission remains clear: to make early, accurate, and accessible GI disease detection available to patients everywhere. Our long-term vision is to deliver an ingestible capsule capable of screening for multiple cancers, including esophageal, gastric, pancreatic, liver, and colorectal in a single non-invasive procedure powered by advanced imaging and AI. With that as our foundation, we closed 2025 with increased commercial momentum for CapsoCam Plus, a small-bowel capsule endoscopy solution. For the full year, we delivered approximately 15% year-over-year revenue growth and a 21% in new account generation, reflecting continued adoption of CapsoCam Plus across both new and existing customers. As of December 31st, 2025, more than 161,000 patients have been imaged with CapsoCam Plus.

We believe this growing installed base, combined with strong physician engagement, reinforces the value of our differentiated platform. A wire-free capsule with unparalleled features, including 360-degree panoramic imaging, onboard storage, and a fully cloud-based workflow that eliminates the need for external hardware worn on patient's body or on-site computing infrastructure. Importantly, cloud-based architecture is not just a workflow advantage, it also serves as the foundation of our AI strategy. Our expanding image repository in the cloud storage continues to strengthen our ability to develop and deploy AI models that improve diagnostic accuracy, reducing reading time, and enhance clinical efficiency. On the pipeline development front, we have continued to make exciting advances that I'd like to share. Starting with CapsoCam Plus, we are advancing our AI-enabled roadmap.

At the end of last year, we submitted our 510(k) application for our AI-assisted reading module, which is designed to enhance lesion detection and streamline physician review. We believe this represents an important step in further differentiating our core platform and expanding its clinical and economic value. Building on that momentum, we continue to advance our CapsoCam Colon program. Following constructive engagement with the FDA, we have refined our development strategy to prioritize our second-generation capsule. The Gen 1 submission and the subsequent FDA interactions provided valuable insights into both the regulatory pathway and the evolving product expectations. Based on that feedback, we see a clear opportunity to advance directly to a more capable system that incorporates improved imaging performance, expanded field of view, and enhanced AI functionality.

As a result, we are focusing our resources on accelerating the development of CapsoCam Colon Gen 2, which we believe will deliver a more competitive and clinically differentiated solution at launch. We view this as a disciplined and value-driven approach, enabling us to bring a stronger product to market from the outset rather than iterating post-clearance. We have already enrolled over 400 patients in our pivotal study and are starting enrollment across the U.S. sites. We now expect to submit our 510(k) application for CapsoCam Colon Gen 2 and its AI module in the third quarter of 2026. Turning next to our CapsoCam UGI program and the pancreatic cancer initiative. We continue to see significant long-term potential for a non-invasive screening approach in one of the most challenging areas in medicine.

We believe we are pioneering a novel visual assessment method for the detection of pancreatic cancer, building on our platform's ability to evaluate abnormalities of the duodenal wall and to clearly identify key anatomical landmarks such as the papilla of Vater. This approach is grounded in both our prior clinical work and established scientific literature, and it represents a potential paradigm shift in how pancreatic disease could be detected at an earlier, more treatable stage.

Following our initial breakthrough device designation submission, we engaged with the FDA and received constructive feedback which confirmed the system's ability to visualize the papilla and associated abnormalities. The feedback also outlined the need to further define diagnostic criteria, which we view as a natural next step in developing a first-of-its-kind screening modality. To address this, we are initiating a clinical study expected to begin in the second quarter of 2026.

This study will enroll approximately 60-90 patients, and it's designed to establish diagnostic criteria for malignancy using the CapsoCam UGI system. We are conducting this work in collaboration with clinical experts, key opinion leaders, including leadership of the top professional societies in the pancreatobiliary field. We believe this study will be an important step in generating the data needed to support both regulatory advancement and a future breakthrough designation resubmission while continuing to build the clinical foundation for a non-invasive approach to early pancreatic cancer detection. Importantly, our regulatory pathway for CapsoCam UGI is independent of the breakthrough program and will remain on track in advancing this initiative. Finally, in supporting all these efforts, we recently strengthened our balance sheet with the completion of a $14 million private placement with participation from both new and existing investors.

We believe this reflects continued confidence in our strategy and provides additional flexibility to invest in product innovation, clinical development, and commercial expansion. Overall, we believe we are well-positioned heading into 2026 with a growing commercial base, a differentiated AI-enabled platform, and a disciplined approach to advancing our pipeline. We remain focused on executing our strategy and delivering long-term value for patients, physicians, and shareholders. I will now turn the call to David to cover current commercial and operational highlights as well as our financial results for the fourth quarter. Dave?

Thank you, Johnny. Turning to our commercial performance. As Johnny highlighted earlier, adoption of CapsoCam Plus continues to expand across both U.S. and international markets. As of December 31, 2025, more than 161,000 patients have been imaged using our system for small bowel screening. In the fourth quarter alone, approximately 9,400 patients utilized CapsoCam Plus, compared to approximately 8,374 in the prior year period, representing year-over-year growth of 12%. This continued growth reflects increasing physician awareness, strong clinical utility, and the ease of integration into existing practice workflows. Our platform is supported by a robust intellectual property portfolio, currently with 83 issued U.S. patents, reinforcing our position as a leader in capsule endoscopy innovation. In addition, reimbursement continues to support adoption across a broad range of care settings, including both private practices and hospital systems.

From a commercial strategy perspective, one of our key advantages is the ability to leverage our existing sales infrastructure as we expand into new indications. We expect that same physician call point driving adoption of CapsoCam Plus today will serve as a natural entry point for CapsoCam Colon when it is FDA-approved, creating a meaningful cross-selling opportunity without the need for significant incremental investment. As of year-end, our U.S. direct sales organization consisted of 26 representatives supported by seven regional sales managers and trainers. Internationally, we are continuing to build momentum, including a dedicated team of four representatives in Germany, while also expanding our global footprint through distributor partnerships in high potential markets. New account growth remained solid in the fourth quarter, increasing 16% year-over-year, reflecting continued physician adoption of CapsoCam Plus for small bowel screening.

This momentum has been further supported by recent approvals, including use in pediatric patients over the age of two and the ability for remote capsule ingestion, both of which expand access and align well with the growing adoption of telemedicine. We are also encouraged by continued expansion within larger gastroenterology networks. During the quarter, we saw increased penetration in GI clinics and mega GI groups compared to the prior year period. In addition, while our historical focus has been on private gastroenterology practices, we are now seeing meaningful traction within hospital systems and group purchasing organizations.

As existing contracts come up for renewal, we are increasingly being evaluated alongside incumbent solutions and in many cases selected as a preferred alternative. This is reflected in our hospital channel performance, where the number of hospital system customers increased 87% in the fourth quarter compared to the same period last year.

Turning to our financial performance. For the fourth quarter of 2025, total revenue was $3.9 million, reflecting 13% growth compared to the fourth quarter of 2024. This was driven by an increase in the number of CapsoCam Plus capsules sold. Gross profit was $2 million, an increase of $200,000 or 13% compared to the fourth quarter of 2024. Gross margin was 50% for the quarter, consistent with our expectations as we scale. Operating expenses were $9.4 million, a $3.1 million increase from the fourth quarter of 2024, driven primarily by an increase in expenses associated with the development of the new CMOS image sensors under the agreement with Canon, continued investment in the colon clinical study, and an increase in public company expenses as we now operate as a public company.

We ended the year with $10.1 million in cash and equivalents. Subsequent to year-end, we strengthened our balance sheet with the closing of a $14 million private placement of equity, with participation from both new and existing investors. The financing was completed at a price of $4.88 per share, which represents a 5% discount to our March 16 closing price as per the terms of the agreement. This equity investment reflects continued investor confidence in our strategy and long-term growth opportunity. We intend to use the net proceeds to support our key priorities across the business, including commercial expansion, continued investment in R&D, and the advancement of our pipeline programs, particularly CapsoCam Colon and our AI-enabled platform. Now, I'd like to turn the call back to Johnny for some closing remarks.

Thanks, David. As we look ahead, we believe we are entering a highly competitive phase of execution for CapsoVision. We are building from a position of strength with continued commercial momentum in CapsoCam Plus, expanding adoption across both existing and new customer segments, and increasing traction in larger GI networks and hospital systems. At the same time, we are advancing a focused and disciplined pipeline strategy. Our recent 510(k) submission for the AI-assisted reading module represents an important step in enhancing the clinical and economical value of our core platform. In parallel, we are progressing CapsoCam Colon with a clear path toward the next-generation product designed to meet physician expectations at launch.

In our pancreatic cancer initiative, we are continuing to advance what we believe could become a first of its kind non-invasive screening approach, supported by growing body of clinical work and ongoing engagement with the FDA. Underlying all of this is our differentiated platform, combining wire-free capsule technology, a scalable cloud-based infrastructure, and in-house AI capabilities, which we believe positions us uniquely to expand across the GI tract and address some of the most significant unmet needs in gastrointestinal care. Finally, with the additional capital raised during the quarter, we are well-positioned to continue investing in innovation while maintaining a disciplined approach to execution.

Taken together, we believe CapsoVision is well-positioned to drive sustained growth, deliver meaningful innovation, and create long-term value for patients, physicians, and shareholders. I want to thank our employees for their dedication and creativity. Our clinical partners for their collaboration and our investors for their continued support. Together, we are redefining what's possible in GI screening, making early, accurate, and patient-friendly diagnosis a reality. We look forward to updating you on our continued progress next quarter. At this time, Dave, Doug, and I would be happy to take your questions. Operator, can you please open the line?

Yes. Thank you. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset to ensure that your phone is not on mute when asking your question. We do request for today's session that you please limit to one question and one follow-up question. Our first question comes from Kyle Bowser from ROTH Capital Partners. Please go ahead.

Great. Thanks, thank you, Johnny and David, for the prepared remarks and taking my questions here. Maybe, I'll just have some follow-ups on the Gen 2 CapsoCam Colon efforts. Any sort of feedback you've received to date? I know you've already enrolled, I think you said over 500 patients of the up to 800. So any feedback there and would we anticipate seeing results of this study later this year as well, in conjunction with the submission, or would we see those later?

Yes. Thanks, Kyle. So our colon Gen 2 have a higher resolution, a higher image quality and a larger field of view for better detection. We also have better software and working with our AI module. So far, the enrollment goes well. So far so good. Our clinical director, Carrie Jorgensen, is a very capable person and a good manager. All this clinical study enrollment is in good hands. We still on track to file the submission to FDA for Gen 2 by the end of Q3. There is no delays so far. Thank you.

Got it. I appreciate that. My follow-up. Regarding the breakthrough designation application for pancreatic cancer detection, good to know that you're kind of working with the societies and KOLs, and I believe you wanna kind of understand the ideal diagnostic criteria. What sort of criteria are you contemplating? Would this 90-patient study, would the results, would you be able to use those results for the actual FDA application?

In terms of this score system is required for diagnostic purpose because it tell you yes or no. The score system we rate several important features we think linked meaningfully to the pancreatic cancer, including the papilla abnormality and due to some lesion some tumor growth in the pancreatic head. They will compress the neighboring anatomy or even invade the neighboring anatomy. You can see that on the duodenal wall next to the papilla. For each of these abnormality, the doctor grading is yes or no, and if yes, the severity is mild or severe, then they give a grading score for that feature.

The entire score is composed of all these abnormalities or the disease probability related multivariate variable like gender, like age. We build the score system based on the study results based on the multivariate analysis. That's how things will be implemented and executed. Such a system is based on a methodological mathematical model. We expect that this one will be very important step in the development of this non-invasive diagnostic system. In terms of FDA, I think this one will be very important for FDA to grant, for us to apply for the breakthrough designation.

The purpose of breakthrough designation is to establish a priority in FDA's work, because FDA have lot of cases, and this one give us the higher priority over other cases. It can also invoke the attention of the top FDA officials to make a direct decision. For clearance, it's possible after establishing the scoring system, they need some validation because the population you use for validation for establishing the model cannot be used for validation. It has to be another population. There might be a study following this to prove it can be used in the external population outside of the study population. At that point, we already have built a greater milestone. This is not evolutionary. This is revolutionary. Thank you.

Okay, excellent. That makes sense. Sounds great. Well, congrats on all the progress, and thanks for taking my questions. I'll jump back in queue.

Thank you.

Our next question comes from Bruce Jackson from The Benchmark Company. Please go ahead.

Hi, good afternoon, and thanks for taking my questions.

Thank you.

The small bowel business looks like it's tracking very nicely. I think the thing I'd like to get a better handle on is the CapsoCam development timeline. I apologize in advance for asking fairly detailed questions here, but how many patients had you recruited at January 1? It's how many sites, and where are we today at how many sites? Then give us a sense of, like, how the patient accrual is gonna go from here and how many sites you have to add in order to, like, get to the target by a certain date.

Yeah. For Gen 1, we enrolled more than 1,000 subjects. In Gen 2, we target to enroll 800 patient. But we will have more reading so that to create a more statistical power for the calculation of sensitivity, accuracy and the specificity. So far, in this Gen 2, we are 11 sites across covering the entire U.S. So far, we are close to 600, okay? Over 500, but close to 600. The enrollment is going well. So far, we have a capable clinical director with a very good team, effective team. So far, is going so well. I have to be honest, during summertime, doctor might take a vacation, so doctor's time we have no control, so that is a factor, X factor. In general, we are in good hand. So far, everything goes according to the plan. Thank you.

Okay. My follow-up would be, once we get this 510(k) submitted, what do you anticipate that the review time would be like? Can you perhaps give us a rough indication of when the CapsoCam Colon Gen 2 capsule might be commercially available?

Yes. In this one, we expect the FDA takes six months to get to clear the device. From end of Q3, we expect Q1 2027, we get a clearance and starting launching it in the marketplace the beginning of second half, 2027.

Okay. Okay, great. Thank you very much.

Thank you.

Again, if you would like to ask a question, please press star one on your telephone keypad. There are no further questions at this time. That concludes the question and answer session. This concludes today's conference call. Thank you for joining. You may now [audio distortion].