Avinger, Inc.

Good day, ladies and gentlemen, and welcome to the Avenger first quarter 2022 results call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Matt Krautz. Sir, the floor is yours.

Thank you. Thank you. Thank you. Thank you, and thank you everyone for participating in today's call. I would like to welcome you to Avenger's first quarter 2022 conference call. Joining us today are Avenger's CEO, Jeff Zielinski, and Chief Financial Officer, Mark Weinshut. Earlier today, Avenger released financial results for the quarter ended March 31, 2022. The copy of the release is posted on the Avenger website under investor relations. Before we begin, I'd like to remind you that management will make statements during this call They include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that are not statements of historical fact should be deemed to be forward-looking statements. All forward-looking statements, including without limitation our future financial expectations, are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please see our Form 10-K and 10-Q filings with the Securities and Exchange Commission. Avenger disclaims any intention or obligation except as required by law to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. And with that, I'd like to now turn the call over to Jeff.

Thank you, Matt. Good afternoon, and thank you all for joining us. As discussed on our March call, we experienced a challenging hospital environment that affected many medical device and procedure-focused healthcare companies in the first quarter of 2022. The surge in COVID-19 infections from the Omicron variant and hospital staffing shortages limited facility access and reduced procedural volume. As a result of the surge during what is typically a lower volume seasonal period, first quarter revenue decreased compared to the year ago and prior quarters. We've seen improvement in procedural volume and revenue trends starting from March and are happy to report that these trends continue to improve in the second quarter. We've also seen an increase in customer activity associated with our new Lightbox 3 imaging console, which we recently launched into full commercial availability in April. Our proprietary lumavascular system supports best-in-class patient outcomes by combining real-time OCT intravascular imaging with highly effective therapeutic catheters for the treatment of peripheral artery disease, or PAD. We primarily focus on the hospital market where PAD cases can be more challenging, including the treatment of chronic total occlusions, instant restenosis, and critical limb ischemia, the most severe form of PAD. With Avenger's proprietary image-guided system, physicians are empowered to safely and effectively treat these challenging cases in order to preserve the limbs and lives of their patients. As we focus on expanding market penetration of our platforms, and increasing case volume through the remainder of this year, we've identified three key growth drivers for our business. First, after receiving FDA clearance in January and completing a successful limited launch in the first quarter, we expanded availability of our LightBox 3 Next Generation Imaging Console with a full commercial launch in April. The response to this new system is exciting, receiving highly positive reviews from existing users and already helping our field team open new accounts and expand our user base without permanent installation of a console. We believe the Lightbox 3 has the potential to transform our business model by expanding our ability to effectively support hospitals with customized strategies. The Lightbox 3 is a compact, portable imaging console designed for easy setup and connection with existing monitors in the cath lab. The Lightbox 3 incorporates an advanced solid-state laser for high-definition OCT imaging, a more powerful computing platform, and redesigned software system with an intuitive user interface designed for procedural efficiency and ease of use. During the limited launch phase, physicians used the new Lightbox 3 with Avenger's TigerEye CTO crossing and Pantheris atherectomy catheters at 12 clinical sites throughout the U.S. Users were extremely impressed by the enhanced high-definition imaging, which facilitates the identification of disease morphology in arterial wall structures, allowing physicians to effectively target the disease and avoid injury to the vessel wall during treatment. The limited launch also validated a new mobile strategy option in which a single highly portable Lightbox 3 can be efficiently deployed across multiple hospital sites. The new Lightbox 3 weighs less than 20 pounds and fits into a hard-sided roller case the size of a carry-on suitcase. It can be easily wheeled into a facility and set up on a portable stand by our clinical support team in minutes. We believe this portable strategy will enable us to increase the productivity of our sales team and accelerate the pace of new account acquisition. We've rolled out 10 portable configurations to our sales territories to support catheter utilization in new sites and for on-site demonstrations and evaluations of this exciting new platform. The Lightbox 3 is available for permanent sale to new accounts and as an upgrade option to existing accounts. The second exciting growth initiative is the development of two new catheter line extensions for our peripheral product portfolio. In combination with our new Lightbox 3, These new products are designed to broaden the appeal of our technology, expand our user base, and drive growth. The first new catheter product in development is an extension of our TigerEye CTO crossing platform. This new image-guided CTO crossing catheter has an integrated spinning outer tip for tough plaque caps and calcium, an advanced shaft design for pushability and torque response in a challenging environment, and a three-marker imaging system to facilitate consistent image interpretation across our platform. We expect to submit a 510K application mid-year with anticipated FDA clearance and commercial availability in the second half of this year. By adding advanced capabilities to the platform, this new device is expected to expand the utility and addressable market for our CPO products in a challenging patient population. The second new PAD catheter in development is an extension of our Pantheris family of image-guided atherectomy devices. This new device emphasizes a streamlined approach for physicians and expands our capabilities for the treatment of larger vessels, including the FFA and popliteal arteries, where the majority of procedures are performed today. We are calling this new catheter Pantheris LV for large vessel as a complement to our successful Pantheris SV catheter, which is designed for the treatment of small vessels, especially those below the knee. Pantheris LV utilizes a proprietary design for plaque apposition in larger vessels without the need for a balloon and is designed to operate at higher rotational speeds and challenging plaque. Pantheris LV also adds rotational control for efficient guide wire management and a modified plaque management system for tissue packing, as well as several other enhancements. We expect to file a 510K application for this new device in the second half of 2022, with anticipated commercial availability in the first half of 2023. We believe Pantheris LV will expand market penetration by bringing significant advancements to our atherectomy product portfolio and supporting a more streamlined procedure with an easier-to-use device in the largest atherectomy segment. The third growth initiative is the opportunity to leverage our proprietary image-guided platform to address the unique challenges and vast potential in the coronary artery disease market. We believe expansion into the coronary market provides a transformational value opportunity for Avenger due to its large addressable market existing reimbursement profile, and the compelling clinical advantages of our lumavascular approach. Our first foray into this market is the development of an OCT-guided catheter for the percutaneous crossing of chronic total occlusions, or CTOs, in the coronary arteries. By leveraging advances we've made across the platform, including our new Lightbox 3 imaging console, we have the opportunity to deliver a safe, reliable, patient-oriented solution to what is today a complex, expensive, and uncertain procedure. We believe a coronary CTO crossing device that incorporates our OCT-guided system can transform Avenger by expanding our proprietary solutions into a new large addressable market. Approximately 50,000 CTO PCI procedures are performed in the U.S. each year, with an increasing number of hospital centers interested in treating these patients. Existing CTO PCI crossing procedures are highly complex, require specialized and demanding technique with a steep learning curve, and the use of multiple devices. These procedures also require extended time under fluoroscopy, which results in high X-ray radiation exposure and contrast media burden, creating health risks for both the medical team and patient. In addition, it's estimated that more than 200,000 highly invasive coronary artery bypass grafting or CABG procedures are performed in the U.S. annually, with estimates of up to 30% of these procedures related to the treatment of coronary CTOs. This market provides an exciting target for our image-guided system, which would make a percutaneous approach accessible to more physicians and reduce X-ray radiation exposure and contrast burden during the procedure. An image-guided coronary CTO crossing device with diagnostic capabilities would also access highly attractive reimbursement immediately upon FDA clearance. Percutaneous CTO crossing in the US currently has reimbursement of $10,000 to $16,000 per procedure. In addition, we anticipate that high-resolution OCT-guided catheters with diagnostic and measurement capabilities will qualify for existing OCT diagnostic imaging reimbursement in the coronary arteries. We believe that an image-guided catheter designed for crossing efficiency with the need for fewer support devices combined with an attractive reimbursement scenario provides the opportunity for a very compelling economic value proposition. Our coronary CTO development efforts are focused on low-profile catheter designs that combine real-time OCT guidance with precise control and steerability to facilitate an integrated approach and allow physicians to safely and efficiently cross coronary CTOs while avoiding injury to the vessel wall. Similar to Avenger's peripheral catheters, our first coronary device will incorporate a precise measurement capability ideally suited for physicians to properly sized balloons or stents prior to placement, which is critical for optical outcomes. We anticipate the US regulatory pathway for this new device to be a 510 submission supported by data from an IDE clinical trial. Our goal is to be in a position to initiate this study by the end of 2023. In addition to our product development efforts, we continue to build the clinical body of evidence to support the benefits of our lumavascular approach for the treatment of PAD. Clinical data from our INSIGHT trial evaluating Pantheris for the treatment of instant restenosis, or ISR, was presented at the BIVA clinical conference in the fourth quarter of 2021. The highly positive data from this IDE study provided the basis for our successful 510 submission to expand the Pantheris clinical indication to include the treatment of ISR. We anticipate that physician investigators in the study will submit the full data set from INSIGHT for publication this year. In addition, clinical data from the study are anticipated to be presented by leading physicians at important clinical conferences in the U.S. and Europe this year, continuing to spread the word about the unique benefits and outstanding patient outcomes achieved with Pantheris for the treatment of ISR. Our primary new clinical data program for 2022 is the IMAGE-BTK post-market study, which evaluates Pantheris SV for the treatment of below-the-knee lesions in a real-world clinical setting. We expect to enroll up to 60 patients in the study, with patients evaluated at intervals up to one year post-procedure. We are currently enrolling patients at two key opinion leader sites in the U.S. and expect to begin enrolling patients at two leading clinical centers in Germany this quarter. Most patients enrolled to date suffer from critical limb ischemia, or CLI, the most severe form of PAD, and physician investigators are excited about the early clinical results they are seeing in this challenging patient population. We expect to complete enrollment by the end of 2022 with interim data available for presentation at clinical conferences this year. As we look forward in 2022, we're encouraged by the increasing case volume we're seeing in the second quarter as market conditions improve. We're excited about the recent commercial launch of our new Lightbox 3 and the potential for this new console to expand market penetration and accelerate our pace of new account acquisition. We are on pace to file five 10K submissions for two new innovative products in our PAD product portfolio, which we believe will broaden the appeal of our platform and create new usage occasions. We continue to document outstanding patient outcomes and build the clinical body of evidence in support of our products through our clinical study programs. And we're preparing for entry into the coronary markets through a highly focused R&D effort, to deliver the first-ever image-guided CTO crossing device for the treatment of CAD, all of which we believe will be important growth drivers for the company and build value for our stockholders. Before I turn the call over to Mark, I'd like to comment on a change to our management team. We recently announced that Mark Weinsweg has resigned as Chief Financial Officer, effective the end of this week, to pursue an opportunity outside the medical industry. We appreciate Mark's many contributions to our company since joining us in 2018, helping us transform the business through the development and launch of our next generation PAD catheters and the introduction of our new Lightbox 3 platform. And we wish him well as he moves to the next phase of his career. We've initiated a search process to fill the CFO position and look forward to providing you with an update in the future. At this point, I'd like to ask Mark to cover our financials and then I'll return for Q&A. Mark?