EDAP TMS S.A.

Greetings and welcome to the EDAP TMS third quarter 2022 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keyboard. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, John Francis, Managing Director, LifeSci Advisors. Thank you. You may begin.

Good morning, and thank you for joining us for the EDAP TMS third quarter 2022 financial and operating results conference call. On today's call, we'll 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 Arkzakowski. Mark?

Thank you, John, and good morning, everyone. I will start by providing a brief operational update before turning the call over to Ryan Rhodes, our ADAPT U.S. Chief Executive Officer, for a review of the U.S. business and strategy. And then François Ditch of TFO will present our financial performance. Let me begin by recapping a few of the highlights. For the third quarter, we generated total revenue of 12.2 million euros, or $12.3 million. representing an increase of 29.7% over the third quarter of 2021. Through the nine months of 2022, we generated total revenue of Euro 39.4 million or $41.7 million, representing growth of nearly 31% over the comparable period in 2021. The increase in quarterly revenue was primarily driven by contribution from our HIFU segment in which we increased revenue nearly 81% over the third quarter of 2021. We sold three Focal One machines during the quarter as compared to one machine in the third quarter of last year. During the first nine months of 2022, we experienced the same high growth of nearly 80% in our global HIFU revenues driven by a strong triple-digit growth in our US HIFU revenues and a solid double-digit growth in our OUS HIFU revenues. We are very encouraged by this notable and global momentum of our HIFU technology. Our distribution segment also performed very well during the third quarter. We sold 12 exact units during the quarter as compared to five in the third quarter of 2021. This drove distribution segment revenue to increase 30.9% year-over-year. During the quarter, positive changes were finalized for reimbursement in the United States. This is great news for access to our leading high-food treatment, and we believe will be a very positive catalyst for our business. Ryan will speak in more detail on these changes in a few moments. Our third quarter and year-to-date results, together with this increase in reimbursement, give us a high degree of confidence that our growth will continue as our HIFU technology is increasingly recognized as an essential platform in urology practices. At this point, I would like to provide an update on our pipeline expansion activities where we believe HIFU can have clinical utility in indications outside of prostate cancer. As a reminder, we are running a phase two study evaluating HIFU using the FOCAL-1 robotic platform for the treatment of deep infiltrating endometriosis. All patient treatments for this study have been completed with the last patient follow-up visit finalized in October. We are now analyzing the database on safety, efficacy, and pathology outcomes with the planning of presenting at a major medical meeting in early 2023. The current standard of care treatment of deep infiltrating endometriosis typically involves surgical resection of the bowel or rectum, which is a highly invasive procedure that presents risk to the patient along a significant recovery time. We believe the use of our FOCAL-1 robotic HIFO 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. We look forward to the results from this important study. On another clinical front, we continue enrolling patients in our BPH, benign prosthetic hyperplasia, feasibility study using our FOCAL-1 robotic HIFU platform. We have so far treated about two-thirds of the number of patients. We will keep you posted as we move forward in this study. In other activities, we strengthened our financial position during the quarter by raising gross proceeds of approximately $23 million through a secondary offering of American depository shares. This financing not only enabled us to strengthen our operational initiatives and further diversify our shareholder base, but also added to our research coverage, which we think will further increase the wariness of EDAP going forward. With nearly $67 million of cash, we are well financed to further expand and continue executing on our U.S. Focal One growth strategy while, in parallel, exploring new indications and other development opportunities. At this point, I would like to turn the call over to Ryan Rhodes, CEO of EWS, for an update on our U.S.