Avinger, Inc.

Welcome to the Avenger's second quarter 2024 results call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. I'll now turn the call over to your host, Matt Kreitz, Investor Relations. You may begin.

Thank you, and thank you all for joining us on today's call. I would like to welcome you to Avenger's second quarter 2024 conference call. Joining us today are Avenger's CEO, Jeff Zawinski. and Principal Financial Officer Nabil Spinetti. Earlier today, we released financial results for the quarter ended June 30, 2024. A 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 that 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 or future financial expectations and expected timing for commercial launch of products and filings with the FDA, are based upon 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. Aventure 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. Also, today's presentation will include reference to non-GAAP financial measures, such as adjusted EBITDA. A reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures is available within the earnings release, which can be found on Avenger's website. 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. The second quarter marked significant progress for Avenger's therapeutic programs, as well as a meaningful shift in our operating structure as we move our company forward. Following the March announcement of our new strategic partnership with Xylox Tunbridge, which provided a substantial investment into Avenger and opens a pathway for the introduction of our image-guided devices to the greater China market, we further improved our balance sheet in the second quarter. In May, we announced the conversion of $11 million of debt held by CRG into shares of a new series of convertible preferred stock, which increased stockholders' equity by the same amount. In June, we announced a public offering providing up to $24 million in growth financing. The financing included $6 million upfront at closing, with up to an additional $18 million available based upon the exercise in full of coronary clinical milestone-linked warrants. In June, we also implemented an operating cost savings program that reduced our headcount by approximately 24%. This cost reduction program streamlines the operating costs of our peripheral business as we emphasize our field sales team support of existing peripheral device users and allows us to increase focus on our coronary product development program. We expect the full effect of the cost reductions to be seen in the second half of 2024, with both improved gross margin and reduced operating costs anticipated in the period. Turning to some of the key operating accomplishments in the quarter. We continued to make exciting progress on our first coronary product as we prepare for filing an IDE submission with the FDA. We are in the process of completing phase three verification and validation studies and initial clinical site selection for our proprietary CTO crossing device. Pending successful completion of the remaining testing, we anticipate filing an IDE application with the FDA by the end of the third quarter. This is a critical step for Avenger since FDA approval of our IDE submission would allow Avenger to initiate the first human clinical study for this groundbreaking new device and brings us one step closer to making our proprietary image-guided system available to physicians treating this challenging and complex condition in the coronary arteries. We believe our first coronary device provides the opportunity to redefine a large and underserved market. Crossing chronic total occlusions in the coronary arteries today is typically a complex, time-consuming, and expensive procedure with a clinically documented high failure rate. By leveraging our proprietary image-guided technology, we believe we can provide physicians with a superior, simplified, and more successful solution for crossing coronary CTOs. We have deployed our technologies into a low-profile, four French catheter design that combines real-time OCT guidance with the precise control and steerability needed to facilitate an anti-grade approach, which we expect to significantly reduce procedure times and improve crossing success rates. Like our peripheral catheters, our coronary device incorporates a precise measurement capability to help physicians properly size balloons or stents prior to placement, which is critical for optimal outcomes. We expect our unique image-guided system to allow physicians to cross coronary CTOs with less reliance on specialty wires, support catheters, and reentry devices, while also limiting X-ray radiation exposure and usage of iodine-containing contrast dye, which can pose significant health risks to physicians and patients. Based on multiple animal and cadaver heart studies completing during our development process and extensive experience with our OCT-guided therapy in the peripheral arteries, we are confident our combination of onboard image guidance and precise control within the vessel will support a robust safety profile during clinical practice. We expect adoption of our coronary CTO crossing system to benefit from existing reimbursement dynamics. Following FDA clearance, our coronary device would immediately access existing high-value reimbursement codes for CTO crossing in the coronary arteries. We also expect our image-guided system to access existing reimbursement codes for coronary OCT diagnostic imaging with the same device. This is a key differentiator from the peripheral markets where discrete reimbursement codes for CTO crossing and diagnostic OCT imaging are not currently available. In addition to attractive reimbursement dynamics, we expect our coronary CTO crossing system to allow for reduced crossing time, less contrast media usage, and require the use of fewer accessory devices, all of which would result in significant cost savings for the hospital system. We're excited to advance this revolutionary product through the clinical and regulatory process and look forward to providing further updates on our progress in the coming quarters. While we've reduced headcount and streamlined operations for our peripheral business, we have taken steps to ensure our image-guided catheters remain available to treat patients with clinically challenging peripheral artery disease. We've maintained a field presence in existing sales territories and are focusing our clinical specialists and sales reps on supporting current users while seeking growth opportunities within or in close proximity to existing accounts. Underscoring our commitment to the clinical importance of our image-guided approach, earlier this week we announced an important new addition to our leadership team. Dr. Tom Davis, a practicing interventional cardiologist and one of the preeminent leaders in the treatment of vascular disease, has joined Avenger as chief medical officer. Dr. Davis serves as director of cardiovascular research at St. John Hospital and Medical Center in Detroit, Michigan, and has served on several scientific advisory boards for interventional device development. Dr. Davis has authored numerous publications, presented extensively on the podium at clinical conferences, and participated as an investigator or principal investigator in multiple clinical trials for new endovascular technologies, including several of Avenger's clinical studies. We're excited to have Dr. Davis join the team and look forward to working closely with him on clinical strategy and medical affairs initiatives to advance our clinical and product development programs and drive awareness of Avenger's image-guided therapies in the broader medical community. We've also made important progress in the commercialization of our new peripheral products, along with the introduction of our new Tiger Eye ST crossing catheter in the second half of 2023. We've completed the limited launch phase of our new Pantheris LV peripheral atherectomy catheter and are building product inventory for full commercial launch in the coming week. Our new Pantheris LV image-guided atherectomy system is designed to streamline the atherectomy procedure and, in combination with our Lightbox 3 imaging console, expand the mainstream appeal of our image-guided platform. LV stands for large vessel, and consistent with its name, Pantheris LV is ideal for the treatment of the larger arteries above and behind the knee, where the majority of PAD procedures are performed today. Pantheris LV does not require a balloon for plaque opposition and operates at significantly higher rotational speeds than our current atherectomy offerings, with variable speeds up to 3,000 RPMs. Based on our learnings from limited launch and the clinical outcomes we see physicians delivering with this streamlined new device, we're excited to get Pantheris LV into the hands of more physicians through the commercial launch process. Before I close, I'd also like to provide a quick update on our strategic partnership with Xylox Tonbridge. As a reminder, Xylox is a fully integrated medical device company and a leader in the peripheral vascular and neurovascular markets in China. Xylox has developed and launched numerous products into the greater China market, operates an extensive sales and marketing network, and maintains a state-of-the-art manufacturing facility in Hangzhou, China. Since closing Xylox $7.5 million first tranche investment in March, we worked closely with Xilox operating teams to support their efforts in gaining regulatory approval to sell Avenger's peripheral products in the greater China region, as well as establishing their own manufacturing capability for our products. We could not be more impressed with the professionalism of the Xilox organization and are excited to support their goal of commercializing our image-guided catheters in the China market in 2025. As previously disclosed, sales of Avenger products in the Xilox territory will be royalty-bearing to Avenger and, following regulatory approval, Avenger will sell finished goods to Xilox until their self-manufactured products are available for sale in China. In addition, once Xilox has qualified their own manufacturing capability and been successfully registered as a manufacturer of Avenger's products with the US FDA, Avenger will have the option to source finished product from Xilox. We believe this could provide the opportunity for Avenger to reduce cost of goods sold, improve gross margin, and reduce facility and related overhead expense in the future. At this point, I'd like to turn the call over to Nabil Spinetti, our Principal Financial Officer and Accounting Officer, to take us through the financial results. I'll then return for Q&A. Nabil?