EDAP TMS S.A.

Greetings. Welcome to the EDAP TMS second quarter 2022 earnings conference call. At this time, all participants are in listen-only mode. In question and answer session, we'll follow the formal presentation. If anyone today should require operator assistance during the conference, please press star zero from your telephone keypad. Please note, this conference is being recorded. At this time, I'll turn the conference over to John Francis, Managing Director of LifeSide Advisors. John, you may now begin.

Good morning, and thank you for joining us for EDAP TMS's second quarter 2022 financial and operating results conference call. On today's call, we will hear from Mark Oksakowski, Chief Executive Officer and Chairman of the Board, Ryan Rhodes, Chief Executive Officer of EDAP U.S., and Francois Dietsch, Chief Financial Officer. Before we begin, I would like to remind everyone that management's remarks today may contain forward-looking statements, which include statements regarding the company's growth and expansion plans. Such statements are based on management's current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in such forward-looking statements. Factors that may cause such a difference include, but are not limited to, those described in the company's filings with the Securities and Exchange Commission. I would now like to turn the call over to EDAP's Chairman and Chief Executive Officer, Mark Oksakowski. Mark?

Thank you, John, and good morning, everyone. As is our custom, I will start by providing a brief operational update before turning the call over to Ryan Rhodes, our EDAP U.S. Chief Executive Officer, for a review of the U.S. business and strategy. And then, Francois Ditch, our CFO, will present our financial performance. Let me begin by recapping a few of the highlights. For the quarter, we generated total revenue of 14.2 million euros, or $15 million. representing an increase of 36.7% over the second quarter of 2021. The increase was driven by contributions from all of our business segments, HIFU, lithotripsy, and distribution. Notably, and for the first half of 2022, our HIFU revenue increased nearly 80% over the prior year period, reflecting a combination of a higher average selling price and growth in treatment volumes. We sold one focal one machine during the quarter, which is equal to what we sold in the second quarter of last year. We sold eight lithotripsy units compared to three in the year-ago period, and 15 exact-year units compared to nine in the year-ago period. Ryan will cover this in more detail in a moment. We recently learned that the Centers for Medicare and Medicaid Services, which sets reimbursement rates for medical procedures performed on Medicare beneficiaries, released its preliminary outpatient prospective payment system rule for calendar year 2023, with the proposition of upgrading from level 5 to level 6 the payment of the HIFU procedure for malignant prostate tissue ablation. This is great news for HIFU technology, and if maintained in the final rule, would be a positive catalyst for our business. Our second quarter and year-to-date results together with this proposed increase in reimbursement, gives us a high degree of confidence that our growth will continue as our HIFU technology is increasingly recognized as an essential offering in all urology practices which treat prostate cancer patients. At this point, I would like to provide an update on our clinical extension activities where we believe HIFU can have added clinical utility in indications outside of prostate cancer. As a reminder, we are running a Phase II study evaluating HIFU using the FOCAL-1 robotic platform for the treatment of deep infiltrating endometriosis. We previously announced that we completed enrollment and patient treatments, so we remain in the six-month follow-up period that will likely conclude at the end of September of this year. Investigators are evaluating the safety and efficacy of HIFU for this pathology. The current standard of care treatment of deep infiltrating endometriosis involves surgical resection of the bowel and or rectum, which is a highly invasive procedure that presents both risk to the patient along with a significant recovery time. We believe the use of HIFU technology could greatly improve the treatment of complex endometriosis by offering patients a less invasive treatment option without the morbidity and possible side effects associated with surgery. I'm also pleased to note that our HIFU program in pancreatic cancer also continues to move ahead. Earlier in the year, we noted that results from a preclinical study using intraoperative HIFU ablation of the pancreas were published in the Journal of Cancers. Pancreatic adenocarcinoma is among the most aggressive of all cancers, with an overall five-year survival rate of less than 5% for patients. with locally advanced pancreatic adenocarcinoma. This continues to drive the urgent need for new, more effective treatment options. These areas of development and with critical data further demonstrate the potential effectiveness of HIFU beyond the management of prostate cancer. Further exploration of HIFU in these and other indications remain part of our longer-term R&D plans. With over $48 million, of cash, we are well-financed to continue executing on our current U.S. growth initiatives while in parallel exploring these indications and other clinical expansion opportunities. At this point, I would like to turn the call over to Ryan Rhodes, CEO of EDAP-US, for an update on our U.S. operations.