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Thank you. And thank you, everybody, for taking the time for attending to this conference call. I will start our conference call going through the key elements of our previous quarterly report.Essentially, our company has been growing in a significant manner, and we achieved an annual revenue of $7.7 million up to -- up 33% over 2018. We have been focused on recurring revenue yields, and given that our recurring revenue for the 2019 year, was $6.6 million, representing 133% increase compared to the previous year. Our annualized recurring revenue is now $8.5 million, up 94% over 2018 when it was $4.4 million.We successfully completed our $10 million capital raise, and we did our debut of exhibitors at RSNA, the main radiology meeting in the world. And this is allowing ImExHS to increase and raise the profile, the company profile on an international stage.We completed our entry into the Australian market, signing a 10-year SaaS contract with CMU Holdings, a company radiology -- a radiology practice in Newcastle and New South Wales.We also did our first European deal. We signed a contract with Tecnicas Medicas Milenium which is part of the largest group of radiology practices in the south of Spain, Health Time.Our cash flow from operating activities was not as strong as expected, and we have taken already remedial actions.Please allow me to take also opportunity for addressing the issues related to our previous CFO report. And I would like to start saying that fundamentally, the cash in the company is under control. We have been focusing on building the business objectives, particularly through research and development and new territories expansion. We have been successfully locking in future revenues with our 5- to 7-year contracts, which has built up our annualized contract revenue to now over $8.5 million.As we planned, we have been investing in the future of the company, and its future revenues, research and development and territory expansion. This means that we will not be profitable or cash flow positive in this phase of the company's life, but was always anticipating.For the next few quarters, we expect the net of operation cash flows, outflows to reduce consistently. In next quarter, we forecast it to be an outflow of approximately $0.5 million. We have also been focusing on locking in financing against our capital-intensive contracts, so that we can continue to conserve our cash.We know the investors have been disappointed with the errors in the forecasting. And we have already started to iron this. The CFO will be heading to Colombia for an extended period of time to spend time with the accounts team and to work to recruit more resources into the team and to work on a restructure now that the company is growing. As I mentioned, our operating cash outflow is expected to be around $0.5 million. And along with the investing cash outflows, we expect the cash balance at the end of the next quarter to be $6.5 million.We are now looking forward to complete -- to completing our U.S. launch strategy. It will be on by the next month. It is important to note that this is not borrowing cash. Actually, ImExHS has been investing cash in winning new recurring revenue contracts that will deliver long-term cash flow and profitability to revenues.Consolidated ImExHS with recurring revenue in -- is a service model. Take the case of a simple 5-year of service contract. In that case, in the year ImExHS wins and signs the contract, we're incurring 100% of the cost of winning and rolling out that contract.Just in that the same first year, assuming we start invoicing the contract halfway through the year, we only receive 10% of the revenue and cash from that contract. So the result of wins and as a service contract, however, is that the cash continues to flow for many years to come. ImExHS has been successfully -- sorry, has been successful in growing the recurring revenue business. So while recurring revenue was $8.5 million at the year-end, up 94% from the year earlier.This pipeline of future-looking cash flow is why we will not expect the business to run out of cash going forward. Also it's important to say that the Board's current focus is therefore on growth and locking in long-term, high-margin future cash flows, not on current year profitability. Please remember, our business model where we typically incur 100% of the cost upfront and only recognize a fraction of the [indiscernible]. We are very conscious of our cash usage and are taking measures to secure external financing for the hardware component of future PaaS contracts.The company takes a very prudent approach to research and development expenditure, expending 100% in the first year, it is incurred. Again, like our book of locked-in future cash flows contracts this augurs well for the future profitability of the business.The reason ImExHS raised money and listed in 2018 and went to a market for further reforms in 2019 is to fund growth and future cash flows for the business. In this regard, the business has been very successful.And now after this intro, we are happy to take any questions. Please.
[Operator Instructions] Your first question today comes from the line of [indiscernible] from Canaccord.
There's a few of us here actually, it's not just [ Chas ]. But we're just wanting to talk about some of these outflows that the company noted on the second page there. So you had operating outflows $4.2 million versus $2.6 million. And just to break down what some of these admin and corporate expenses of $650,000. There were previous quarter sales of $577,000. And also, just some color on why things like payroll and social security payments were missed? And what that means? Is this $424,000, is that the aggregate of catch-up payments for all of the social security payments that were met? Or expecting that to happen every 6 months? It's just a little bit unclear from the way that the announcements alluded.
I will allow, Tony Thomas, our CFO, to answer this. Please, Tony.
Right. Thank you. Thanks. The -- firstly, there was an error in the missing of the payments and inventory and some past due trade debtors in the forecasting. And it was a basic error, and it won't be repeated. And we're doing some remedial action on the processes and the resources, as we talked about earlier. But I have to take full responsibility. I'm the one who is responsible for the numbers. The -- in terms of the staff costs, what's happened is that with the signing of the Colsubsidio contract, we've brought on a lot of radiologists and transcription staff onto the payroll, such that radiologists and transcription specialists now comprise about 53% of the staff costs now. And our next biggest area is research and development, which we've always called out as being a big component of the business. And the remainder is made up of the executive and finance administration at about 13% and 12% in sales and marketing, and the remainder is in the system support and the project areas.In terms of the administration costs, the administration costs, it's important to note that 3/4 of those costs are made up from essentially 2 items. About 1/4 of the costs come from essentially the Australian costs associated with being a listed entity with the directors' fees, ASX fees, company secretarial order and insurance. The -- also, there's a large component of the administration expenses, which actually relate to the payment of profit shares from old-style PaaS agreements that were entered into before the company was listed as this was the way that they're able to fund PaaS contracts in the early stages of the company. And these contracts will actually start to run down this year. The payments in this quarter will half to the next quarter. And then one of the contracts will run off later in the year. And then the other couple will go for a couple more years. But the -- those admin expenses will actually drop quite sharply this year. The remainder of the expenses are normal expenses that you would expect of the business, which is office costs and travel, consumable and things like audit and government charges in Colombia.The level of expenses in terms of those payments, the catch-up payments, as I said, they are related to past due items in the inventory and trade debtors, which really should have been picked up. But as I said, there was an error and the review didn't pick it up. And we're working to make sure that, that doesn't happen again.Does that answer your question, [ Chas ]?
Kind of. Can we just -- just to give us some clarity around the social security payments because it says the $424,000 which are only paid 6-monthly. So a way to expect that the company is now going to be paying $424,000 every 6 months? Or is this a one-off payment that's now sorted?
No, it does actually recur. It is a little bit more in December than in June. But no, that will -- those expenses will recur.
Right. So when we're looking at this, there's now an extra $950,000 of cost in the business each year?
Well, they're not extra. They're always there.
Yes, but they weren't detected before. So when we've looked at previous cash flows and stuff, they are not there, right?
Oh, they were in the second quarter numbers, they just weren't forecast into the fourth quarter by mistake.
And also, just can you give us some clarity around -- just -- the company says it signed formal loan documents and -- just the level of cash that's still being used to fund PaaS contracts versus these -- the loans and just give us some color around that?
So we have entered into an arrangement with one of the financiers. And the loan documentation was -- is essentially all but final. And it was really anticipated that it would be -- would have been finalized in the previous quarter. There's one item outstanding on the documentation, which we fully expect to complete in February.We also have other -- with the contracts that we have, and we forecast in the financing outflows in the next quarter of $860,000, that relate to the AI-RAD contract, which was announced in November. And again, the financing for that should land in the following -- in this coming quarter, at the same time as the payment.
Sorry. Tony, just to be clear, the financing facility that you guys announced you had a while ago, is that the one that you're talking about that's not being -- that's not complete? And we've got this one outstanding item. Or is it a different financing facilities?
So in terms of the one that was announced, that had 2 tranches, and this is -- the one we're talking about is the -- relating to the second tranche on that. That's the first one for the outflows in the fourth quarter. And then we're looking at new facilities for outflows related to contracts in the current quarter or Q1. So the answer is there's actually 2. One is the previous one announced and the next one is a new one.
[Operator Instructions] Your next question comes from the line of George Garnett from Canaccord.
German, you talked about growth into the U.S. Could you just talk through how that's going? What time you expect around it? And what you're doing in country right now to try and win as many contracts as possible?
Sure. Hello, George. So in terms of the U.S. strategy, I think, in the previous year, we started the soft launch. And we started the preparation for the company for going into this very important market. So the last year, we received the FDA approval as we promised. We won the first deal in the U.S. territory, which is a scalable business in Puerto Rico as we announced it. And we also appointed our first distributor in that territory. After doing this, and also after receiving the money from the capital raise, one of the promises was to go formally for this market and be very focused on that. Given that we decided to hire a third-party company, to help us to create the ideal business plan for that territory. So we found some specialists in that country. And we have been working with them since the capital raise was done, building the business plan. And currently, we are completing the planning stage, is already hard work that we have been doing starting from the research and the diagnostic of the current conditions of the market in order to be as accurate as possible in the delivery. The implementation of this plan will start by the end of February when we are finishing the planning stage. But the fact is that having been already at the RSNA, we have some leads from this market that in parallel we are working on. So we'll have a formal strategy by the end of February.In the meantime, we are working on some leads. And -- well, we will start the formal delivery with update, what we think is a very accurate strategy in March. This is the update on the status of this process.
[Operator Instructions] Your next question comes from the line of [indiscernible] from Canaccord.
Just generally, you guys have signed a lot of distributorship agreements throughout South America. Can you just give us -- not just -- could you just give us an overall view of how those things are going? Because most of the contracts still seem to be coming from Colombia. So are the guys that you've appointed these distributorship roles, they're gaining traction with those guys? Is it all going well? Or what sort of color can you give us?
Yes. [ Chas ], the previous year was a year for completing the recruitment of the distributors. So we invest most of the time finding what we think is the ideal profile of the distributors, which means that has to be a distributor that has been selling similar products from our competitors. This has been done successfully. We have found in every single year, high-quality distributors. And after the appointment, we start receiving from them a new funnel and pipeline of sales. By the end of the year, we were working -- the previous year, we were working together with them in reviewing this pipeline and doing all the training and the -- all the training for the salespeople they have. And now we are exploring particular deals with them. There is a low activity period at the end of the year. And in most of the condition, Latin America, there is -- there are carnivals at the beginning of the year. So we are currently just reactivating all those sales negotiations and activity. And we think that -- well, we have a very strong funnel, and in the near term, we will start delivering deals from countries outside Colombia.We have -- well, you know -- or you may be aware that we have been trying to exclusively size deals outside Colombia. So those deals we charge in U.S. dollars are already in exchange rate risks. And also, our -- given our exclusively size, the margins are much better compared to deals -- to the PaaS deals we have been doing also in Colombia. And so -- well, I cannot give guidance on this, but we expect to start receiving soon the traction we have been gathering during the last half of the previous year, working together with distributors.
[Operator Instructions] Ladies and gentlemen, there are no further questions at this time. I would now like to hand the conference back to today's presenters. Please continue.
Thank you, everyone, for taking the time to join in to the call. We do -- we are very mindful of the errors in the report in the previous forecast, and we just really want to encourage you to pay attention to the next quarter and the announcements that we look to be able to bring to you this quarter. Thank you.
Yes. I would also like to -- just to highlight that in the near term, we have -- well, we already took several decisions to improve our finance team. And we expect this will cause an immediate improvement in the process and procedures and also on organizational structure. Thank you all for taking the time for listening to this conference and attending, and have a good day.