Well.

I appreciate you being here this afternoon to learn a little bit about Cranial Devices. We're an early-stage neurosurgical device company that's dedicated to improving the lives of hydrocephalus patients. So hydrocephalus is a chronic neurological condition that is caused by an accumulation of cerebral spinal fluid within the ventricles of the brain. It's fundamentally a problem, an imbalance between the amount of CSF that's produced in the ventricles and the amount that gets absorbed back into the blood system via the cranial sinuses. So as this CSF accumulates in the ventricles, it puts pressure on the brain. There are a number of neurological symptoms that follow, and it is a deadly condition that must be treated; otherwise, the patient is going to be in real trouble. There are a lot of causes and underlying forms of the disease. It can be a congenital condition. It can be acquired through things like brain tumors or trauma. But by far, the largest population that exists is one that kind of develops with age, and that's this population of normal pressure hydrocephalus patients. So again, this is a lifelong condition. It impacts millions of lives across all ages, and unfortunately, there is no cure. The only treatment for the condition is the implantation of a surgical shunt. The most common shunt that is performed is what's called a ventricular peritoneal shunt, a VP shunt, and it consists of this ventricular catheter, which is placed into the ventricle to source the CSF. It's connected to this long catheter with a pressure valve on it that's tunneled all the way from the top of the head under the skin, all the way across the chest, all the way into the belly, and the CSF is deposited in the peritoneal cavity. That is a completely non-physiological way to handle CSF outflow. As a result, these devices are subject to a lot of failure mechanisms and have a really high reintervention, reoperation rate. They can get infected, they can break, they can clog, and they can migrate; the belly becomes hostile. It's really a bad deal. They have this pressure valve in there, and because of that, they sometimes under-drain the CSF when the pressure is not correct. A real big problem is over-drainage because this two-foot-long tube going down to the belly is essentially a siphon. When the patient stands or comes from laying down to standing up, it'll literally suck the CSF right out of their ventricle. As a result, these devices have some of the highest failure rates I've ever heard of in my 30-plus year career in medical devices. If you look at real-world evidence, the rate can be as high as 70% of these fail within one year. Twenty percent of patients will have 20 or more revisions in their lifetime, and you can imagine how much cost that adds to healthcare systems around the world. In the United States, we spend $1 billion annually just on readmissions for shunt failure, not counting any costs associated with managing symptoms along the way.

So what are we doing at Cranial Devices? We're developing the Hydro Fix system, which is the first dedicated shunt device to allow physiological return of the CSF to the venous system through the cranial sinuses. Instead of tunneling down to some distal location and putting CSF where it's not supposed to go, we're going to connect to a standard ventricular catheter, move a couple centimeters over to the midline of the skull, and we're going to return the CSF where it's supposed to go, which is into the superior sagittal sinus. You can see the device here; it consists of this guide plate and an implant assembly, which has a catheter, an implant housing, and the implant tip, which is this two millimeter by 0.4 millimeter needle, which is what is actually placed into the sinus. It's implanted with a very simple, straightforward technique. We start by burying a small channel above the sinus. We put our guide plate on, align it to the sinus, and attach that to the skull. We bring our implant assembly in, and that inserts the implant into the sinus. We can adhere that to the skull with screws and then connect the two catheters, the ventricular catheter and our catheter, to complete the shunt.

As you can see, our device eliminates the failure modes of these long catheters and pressure valves. Because we don't really have a valve in place, there's no need for repeat adjustments of the valve. Our device is actually a resistant element. What it is doing is it relies on the normal positive physiological pressure difference between the CSF in the ventricle and the venous pressure in the sinuses. We don't have as high a risk of this under-drainage and over-drainage problem. We certainly can't siphon because the source of CSF is vertically lower than where we're draining it, and so it's a much faster, safer, less invasive procedure. It obviously eliminates this tunneling that has to occur for the VP shunt. We can do it in about half the procedure time. We only need one surgeon to do it, and it's a standard technique that any neurosurgeon has the skills to do anywhere on the planet.

We're really excited about the first animal study that we were able to complete just recently. This was a 30-day normal sheep model, really trying to make sure that we understand the sheep model and get some early proof of concept of our device. We were able to demonstrate that we can quickly and safely access the sinus. We were able to successfully get our implant tip into the sinus. It remained there for 30 days, which was critical, and there were no adverse events associated with it being in the sinus, no signs of thrombosis, and the sheep survived, which was questionable with these animal models. So we're really excited. We think it provides some concept validation for our device and our technique, and it certainly de-risks the future animal work that we have planned.

When you look at the existing shunt market globally, it's probably around a $500 million mark, and that's distributed across all the various causes and forms of the disease. But notice that this NPH patient population only makes up about 28% of initial shunt placements in the United States, and that's surprising given the fact that normal pressure hydrocephalus is believed to impact about 1.5% of patients over the age of 70, or nearly 6 million people in the major world markets. These patients present with enlargement of their ventricles and a triad of symptoms. They have a gait disturbance, they have incontinence, and they have dementia, but they can be shunt responsive, and in fact, it's one of the only treatable forms of dementia that exists, but it is a highly underdiagnosed and undertreated patient population; probably less than 5% of patients that have the condition get a diagnosis, and even when they get a diagnosis, less than 25% of them make it to a shunt. We believe a big reason for that is because of all the complications associated with that procedure. We believe that Hydro Fix offers a lower risk, less invasive solution to enhance treatment rates and to begin to untap this untreated multi-billion dollar market opportunity.

Now, as you can imagine, an opportunity that large, we're not the only people thinking about solutions to the problem. Our main competitor in the space, who’s also doing a physiological shunt concept, is Saravak. They're developing an endovascular approach, and we're developing a minimally invasive surgical approach. In May of this year, Saravak announced its Series B round, a $70 million round, which now brings the total investments in that company to $120 million. They also announced their FDA approval for a randomized pivotal trial, specifically in the NPH patient population because that's the target market they're going after. We're really excited about the attention that Saravak is bringing to this unmet need, but we believe our surgical solution has some very meaningful market advantages. For one, it's applicable to the entire patient population. It's the fastest, simplest implantation technique. The necessary skills are possessed by any neurosurgeon on the planet, and we don't need advanced imaging to do this technique; it's easily accessible in case there's a complication. And that's important because the history of shunts says that there are some complications, and they're very difficult to avoid.

So what are you going to do with the implant that's deep inside the head if there's a complication? In our device, we believe we'll be able to follow existing reimbursement and referral pathways. We believe our technology, a surgical solution, will play a meaningful role in hydrocephalus, not only in the existing market but in this advancing NPH market opportunity. The company has developed a robust IP portfolio that covers devices and methods for shunting CSF into the cranial sinuses. It also has embodiments looking at sourcing CSF from different locations and using these in devices and methods in other applications, including drug delivery. The company has raised about $2 million to date to get us to this point, all in convertible debt. I am currently trying to close out a convertible round of another $2 million that will fund GLP animal studies that we want to do this year, help us to advance our clinical plans, and get ready for the clinical phase. We would anticipate raising a Series A that would hopefully fund the entire clinical phase with an international pilot study, a US pivotal trial, a de novo application in the United States, and an MDR application in Europe, with a follow-on round to fund the company through the regulatory approval timeline and prepare for a commercial launch, pilot launch in the United States and Europe.

The company has a small core team at this stage, as you might imagine, but a very experienced team with decades of experience running venture-backed early-stage companies with a long history of being able to take disruptive technologies from early concept through clinical development, through commercial launch, and to successful exits. We are backed by a world-renowned group of hydrocephalus researchers and surgeons that are dedicated to bringing this new technology to their patients.

With that, I would like to just make one plug that

And if you are not aware of the Hydrocephalus Association, please check out their content. They do a fantastic job of advocating on behalf of this important patient group.

So thank you very much. Applause.