Picard Medical, Inc.

Good afternoon. Welcome to Picard Medical's first annual business update, featuring key opinion leaders and a patient testimonial. Before we begin, I'd like to remind you that management will be making projections and forward-looking statements on the call today regarding future events. Any statements that are not historical facts are forward-looking statements. These statements are made pursuant to and within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995. We encourage you to review Picard Medical's SEC filings, which identify risks and uncertainties that may cause future actual results or events to differ materially. These filings can be found on the company's website within the investor relations section, as well as the SEC's website at www.sec.gov. Please note that the forward-looking statements made during today's call speak only to the date they were made, and Picard Medical undertakes no obligation to update them. Also, please see this slide with additional disclaimers related to the content within today's talk. And note that a question and answer session will follow the formal presentations. If you'd like to submit a question, you may do so by using the Q&A text box at the bottom of this webcast player or by emailing your questions to questions at LifeSiteAdvisors.com. As a reminder, this call is being recorded and a replay will be made available on the Picard website following the conclusion of the event. And with that, I'd like to now turn the call over to Patrick Schneckelsberg, Chief Executive Officer of Picard Medical. Patrick.

Thank you, Dori. Really appreciate the intro. If we can go to the next slide. Thank you. At Picard Medical, our mission is to pioneer the future of heart replacement. We are pursuing that mission in two ways. First, through the commercialization of the Syncardia total artificial heart, which today remains the only total artificial heart approved by both the FDA and Health Canada. Second, through the development of next generation artificial heart technologies designed to expand the role of artificial heart therapy and potentially serve as an alternative to heart transplantation. So our strategy is to build on established clinical platform while advancing technologies that can expand access to heart replacement therapy. Next slide. Today's program is designed to provide several perspectives on artificial heart therapy. I will begin with a strategic overview of the company and market opportunity. Our chief operating officer, Matt Schuster, will then review our technology platform, development pipeline, and operational initiatives. Our chief financial officer, Bernard Skaggs, will review the company's financial results. We will then hear from Dr. Amy Fiedler, who will provide the clinical perspective on the use of total artificial heart therapy at UCSF, one of our centers of excellence. We're also honored to have Marcella, a former Syncardia patient, joining us today. And finally, Zane Calpe from Honor Health in Phoenix will discuss the future of total artificial heart and auto-mechanical circulatory support technologies. Next slide, please. So before I continue, I would like to briefly introduce Dr. Fiedler. Dr. Fiedler is an associate professor of surgery and surgical director of heart transplantation and mechanical circulatory support at UCSF. She leads one of the leading advanced heart failure programs in the United States and has extensive therapy with heart transplantation and mechanical circulatory support. Later in the program, Dr. Feeler will share her perspective on patient selection, implantation experience, and on the clinical impact of total artificial heart therapy. Next slide, please. We're also pleased to have Dr. Calpe joining us here today. Dr. Calpe is Chief Medical Artificial Intelligence Officer and Network Director of the Artificial Heart Program at Honor Health in Phoenix. He's a cardiothoracic surgeon specializing in advanced heart failure and mechanical circulatory support. Dr. Calpe will later discuss how artificial heart technologies may evolve over the coming decade. Next slide, please. We're also honored to have a former Syncardia patient joining us today. Marcella was diagnosed with postpartum cardiomyopathy and received the Syncardia total artificial heart as a bridge to transplant. She was supported on the device for approximately nine months before receiving a successful heart transplant. Marcella's story highlights the real world impact artificial heart technology can have in keeping patients alive while they await the donor heart. Next slide. Advanced heart failure represents a major medical need here in the United States and also globally. Approximately 6.8 million people in the United States live with heart failure and more than 50 million globally. Within that population, roughly 300,000 patients in the United States suffer from advanced heart failure. However, while there are only 7,000 patients on the waiting list for heart transplant, only about 4,000 transplants are performed annually in the United States due to limited supply of donor hearts. Artificial heart therapy exists to address the structural gap between the number of patients who require heart replacement and the number of donor hearts available. Syncardia is the only FDA and Health Canada approved total artificial heart with more than 2,100 implants worldwide. Next slide, please. Most mechanical circulatory support technologies treat only one side of the heart. Left ventricular assist devices or LVAD systems support the left ventricle, while ECMO provides temporary circulatory support. The Syncardia Total Artificial Heart replaces both ventricles and all four heart valves and provides complete circulatory support. This platform has decades of clinical experience. The first implants occurred in the 80s. The FDA approved the first version of the Syncardia total artificial heart in 2004. And since then, we have treated over 2,100 patients worldwide. This extensive clinical experience provides a strong foundation for continued innovation across the platform, including a fully implantable Emperor total artificial heart and next generation driver technology. Next slide, please. Another important aspect of the Syncardia platform is that it extends beyond the implant itself. The system includes hospital driver systems, portable drivers that allow patients to leave the hospital, physician training programs, and a clinical support infrastructure. Together, these elements form a complete artificial heart therapy ecosystem. This infrastructure has been developed over decades and also represents a meaningful barrier to entry from competitors. Next slide, please. During 2025, the company has achieved several important milestones, and we'll go through these in more detail during this presentation. Number one, we successfully completed our initial public offering and raised approximately $35 million in capital. Revenue increased approximately 12% year over year, driven primarily by growth in the United States, which represents our highest margin geography. Operationally, we continue to develop the development of the fully implantable Emperor total artificial heart program and next generation driver technologies. We have also initiated key manufacturing initiatives, including bringing the valve assembly in-house and advancing driver manufacturing technology transfer. In addition, we made progress towards regulatory preparations for potential NMPA submission in China and other markets. Importantly, the existing Syncardia platform provides a real clinical and commercial foundation as we continue developing the next generation artificial heart technologies. Next slide, please. Our strategy for growth focuses on four areas. First, expanding clinical adaptation by increasing implanting centers and strengthening physician training. Second, advancing next generation artificial heart technologies, including the fully implantable Emperor system. Third, improving operational efficiency through manufacturing optimization and supply chain initiatives. And fourth, expanding global access through additional regulatory pathways and international partnerships. Together, these efforts are designed to expand access to the artificial heart therapy while improving the scalability of our business. Next slide. So with this overview, I will now turn over the presentation to our Chief Operating Officer, Matt Schuster, who will discuss the technology platform and development pipeline in more detail. Matt.

Thank you, Patrick. Next slide. So we've been a technological leader in artificial hearts for over two decades. In 2004, we received our PMA approval, the first and only ever FDA approval for a total artificial heart. 2012 and 2014, we received approvals for our two different drivers. In 2012, it was for the hospital companion two driver system. And in 2014, we received approval for our portable freedom driver system, which for the first time in history allowed patients to go home on an artificial heart. In 2020, we received approval of our smaller 50cc total artificial heart, which has now been implanted in patients as young as nine years old. And now brings us to 2024, where we are developing our next generation technology to be a fully implantable platform, and we call it the Emperor. We've received multiple US patents up to this point, and we have multiple filings in progress. Next slide, please. The Emperor Total Artificial Heart is designed to stand on the shoulders of the technology that we have, particularly our implant for which we have over 2,100 implants worth of experience. And the idea is we are removing the pneumatic external driver system and actuating our heart ventricles mechanically. We are preserving the surgical placement and connections that we currently use and that are proven for the total artificial heart. We instead now are incorporating an internal power system as well as mechanical pusher system to actuate the heart. Ultimately, this will improve long-term mobility and ultimately patient quality of life. And as mentioned, we have multiple patents, particularly three issued US patents and one issued Chinese patent for this technology. Next slide, please. With respect to the mechanism of action, the top two components that you see are for the syncardia total artificial heart pneumatic as it stands. The bottom two images are for the emperor total artificial heart system. They're both volume displacement pumps and therefore both have great afterload independence. As you can see for the Syncardia current version, in diastole, blood enters the inflow valve and fills the blood chamber. And then in systole, we provide a blue pulse of air, which are in those blue arrows. That pulse of air ejects the blood out the outflow valve. You'll see the images below that the emperor total artificial heart uses the same ventricle, the same diaphragm, and blood fills the ventricle just as it does with the currents in cardio heart. But in systole, the difference is instead of air pressure, we're mechanically pushing the diaphragm forward to eject the blood out of the outflow valve. This provides automatic adjustment of cardiac output in response to changes in preload and afterload. And that's done through what we call partial fill, full eject system. By replacing or by moving volumes, we're actually mimicking the physiological pumping mechanism that the human heart itself has. Next slide, please. We've done quite a bit of in vitro and in vivo testing so far. This graph represents some benchtop testing that we have done. And you'll notice on the X axis, this is right atrial pressure. As you move to the right, it increases. And on the Y axis is a cardiac output in liters per minute. And what you'll see is that as the right atrial pressure increases, we get a nice increase in cardiac output. And this is an example of the Frank Starling auto-regulation response. We're not changing, as I said, the blood side of this pump, which is proven and has been implanted over 2,100 times. We'll have an equivalent stroke volume, cardiac output, and wash characteristics. And this last bullet, I want to reemphasize it maintains stable output across a range of physiological conditions. So for example, in a patient that is hypertensive or has high pressure through the lungs, we are able to push through that because we are mimicking the human heart and literally moving a volume of blood on each beat. Next slide. This graph represents in vivo testing that we have done. We have successfully now implanted in multiple porcine models. Every implant that we have now done on porcine model has been successful, meaning we were able to separate the animal from bypass and move the animal to full support on the new emperor system without complications. In all cases, the device provided stable circulatory support during our observation periods and hemodynamic performance was consistent with design objectives and therefore consistent also with the current syncardia total artificial heart system. This plot represents as the one before as an increase in atrial pressure happens, we get a nice increase in Frank Starling auto response in liters per minute. Next slide. Our development roadmap consists of the following. This year, we're continuing our acute animal studies and we're continuing to iterate the design. We will also start reliability testing for a potential submission for an FDA breakthrough device designation. In 2027, we'll be working on completing their design freeze and our initiation of GLP animal studies. And finally, in 2028, we'll be finalizing V&V testing, that's verification and validation testing, with potential initiation of a U.S. clinical study. Note that the Emperor Generation One concept does still contain an external battery component. This component is extremely small, slightly larger than a cell phone. But key point here is that the Emperor system is so energy efficient that it will enable implantation of batteries and therefore be fully implantable in following generations. Next slide. We're also advancing our pneumatic driver technologies. You'll note in this picture, this is a Freedom Driver next to our new portable system that we're codenamed the Unicorn. The Unicorn is significantly smaller, as you can see, and significantly lighter. The efficiency has also been increased to improve battery life. And it also is simpler and uses more modern components. So ultimately we'll have a manufacturing cost advantage through this simplified architecture. Next slide. So in summary, we commercially have the FDA approved Syncardia Total Artificial Heart in both 70 CC volume and 50 CC volume sizes. In development and on bench tests now, we have the unicorn portable driver system. It's our next generation pneumatic system. And we are now at preclinical testing in animals on our emperor total artificial heart system, which is fully implantable and headed for long-term support. Next slide. All right, now we'll talk about operational strategy and our manufacturing initiatives. Next slide. So we start with manufacturing optimization, and that consists specifically now of manufacturing of our current driver systems to China. This allows our U.S. team to focus on implant innovation, particularly the Emperor system. It supports a lower manufacturing cost and reduces our component obsolescence risks. Next, we shoot for vertical integration. We will be doing valve assembly of our artificial heart valve in-house at Syncardia. This eliminates our reliance on an external supplier. It improves our precision control over valve tolerances, which are critical, and it reduces our manufacturing lead time. So we can make our valves to order, so to speak. Supply chain resilience is also important. We are qualifying second sources for critical implant components. This ensures the continuity of implant component supply, of course, and also enables supplier cost benchmarking. Ultimately, we have the ability to price compare and get the best deal possible. Next slide. Now I'm introducing Bernard Skaggs, our Chief Financial Officer. Thank you, Matt.