icad inc.

Good afternoon, ladies and gentlemen, and welcome to the ICAD Inc. First Quarter 2022 Earnings Call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Tony Takazawa, Director, Investor Relations. Sir, the floor is yours.

Thank you, Matthew. Good afternoon, everyone. Thank you for joining us today for ICAD's First Quarter 2022 Earnings Conference Call. On the call today, we have Stacy Stevens, our President and Chief Executive Officer, and Charlie Carter, our Chief Financial Officer. Before turning the call over to Stacy, I would like to remind everyone that we will be making forward-looking statements on the call today. These forward-looking statements are based on ICAD's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations. For a list of factors that could cause actual results to differ, please see today's press release and our filings with the US Securities and Exchange Commission. ICAD undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call. I would also note that management may refer to certain non-GAAP financial measures. Management believes that these measures provide meaningful information for investors and reflect the way they view the operating performance of the company. You can find a reconciliation of our gap to non-gap measures at the end of the earnings release. With that, I'll turn the call over to Stacey.

Thank you, Tony, and good afternoon, everyone. I will begin with some high-level comments on our first quarter results and then provide additional granularity around the current business environment and key areas of focus for the company for the rest of 2022. As we indicated in our pre-release on April 21st, Q1 has been a period of rapid change for our company. As we announced the appointment of Timothy Norris Irish as Chairman of the Board of Directors, he will succeed Michael Klein who will remain as the Director of the Board. On behalf of the Board of Directors and our entire management team, I would like to thank Mike for his contributions as Chairman of the Board over the past three years. And we are excited to welcome Tim as he offers tremendous insight and decades of relevant experience in corporate leadership and health technologies, along with a proven track record of leading innovation and strategic change. We also recently announced that our Chief Financial Officer, Charles Carter, will be leaving the company for personal reasons. Charlie will continue to serve as CFO to assist with the transition of his responsibilities until his successor is in place. I would also like to thank Charlie on behalf of the Board of Directors and the entire ICAD team for his work as CFO over the past year. He has played an important role during a period of transition for the company, and we appreciate the contributions that support our company's future success. We have previously shared that we believe we are currently at an important inflection point that offers significant potential across both sides of our business. With a robust portfolio of world-leading, differentiated solutions in large, underpenetrated markets in the detection segment, and the expansion of ZOFT in promising applications such as the treatment of brain tumors in the cancer therapy segment, our team has been laying the foundation for a path to continued success this year. We plan to continue to leverage the strength of our robust portfolio of powerful solutions in 2022 and beyond by expanding access to the technologies in our existing portfolio. aggressively targeting broader market opportunities and offering more flexible ways for our technologies to meet customer needs. Based on what the team accomplished in Q1, I believe that we have the right plans and the right team in place to successfully execute our strategic vision and elevate the company and our technologies to new heights. Although the global pandemic continued to present challenges in the earlier part of Q1, We are thankfully beginning to return to a more normal environment as COVID-related restrictions are beginning to loosen in many areas around the globe. This has, in many cases, resulted in a more positive customer environment and better access to decision makers. We saw particularly positive progress in the EU as COVID restrictions began to ease and traditional business activities such as cross-border travel began to open up once again. From a supply side perspective, we proactively took a number of steps starting last year and continuing into Q1 to reduce the potential for supply chain disruption. While this resulted in higher than anticipated cash burn, we believe it was prudent to establish an inventory cushion to protect against component shortages and inflationary price increases, and we believe we are now well positioned to weather any potential short-term disruption that may come the rest of the year. Moving forward in 2022, we plan to burn substantially less cash in the subsequent quarters, and we have developed plans for a range of scenarios that should allow us to conserve and ultimately generate cash in 2023. Taking a closer look at Q1, ICAD's total revenue was $7.52 million. This is on track with the expected trajectory we previously laid out and is a particularly encouraging result given continued COVID headwinds early in the quarter and the fact that we were simultaneously overhauling our commercial infrastructure to position the company for long-term success. Overall, our Q1 results provide a solid foundation to build on for 2022, and I would like to express my sincere gratitude to our hardworking and dedicated teams for their laser focus and execution in achieving these results. Looking at the detection business, the key aspects of our plan are to increase our penetration of the broader available market and to better address the needs of the emerging enterprise level customers. However, both initiatives require different sales approaches and skills than what we have emphasized in the past. And it became clear that the skills enabling our early success were not the same skills that we needed to be successful moving forward. As a result, we have worked diligently to adjust our sales motion and have made great progress in enhancing our commercial infrastructure with new and highly successful sales personnel in key territories across the U.S. Although these changes are recent, they are already having a positive impact on our business. In Q1, we saw continued positive momentum in our goal to further penetrate the broader available market, and in parallel, we have implemented several initiatives continually drive our growing pipeline. We recently announced particularly positive momentum for Profound AI among customers equipped with the leading provider of 3D mammography systems, with customers continuing to report ongoing workflow advantages and clinical superiority with ICAD's suite of AI-powered breast health solutions compared to other breast AI solutions. Some of these customers have been and will share their experiences using Profound AI in our new Profound Insights, Profound Impact webinar series, which we recently launched and will run through the rest of the year. As expected, our Salesforce's skill sets and relationships are proving to be a key element that is enabling us to successfully reach new customers. For example, in Q1, our team solidified an enterprise deal with one of the largest world-renowned academic research institutions with multiple locations throughout the US. as well as several other key contracts with high profile facilities across the country and worldwide. We are pleased with the early success we are seeing and excited by what we can accomplish moving forward. Another key aspect of our plan is to better address the needs of enterprise level customers who are becoming a very important opportunity in the detection market. These customers are very attractive as they generally represent larger installations with longer term strategic partnership opportunities. We are seeing increased traction with these customers and we have evolved our sales approach and leveraged the skill sets of our enhanced commercial team. Our strategic plan also includes providing customers more flexible ways to procure our technology. These efforts include expanding our legacy partnerships to now include various PACS vendors and working with AI aggregators. We were pleased to see some of these partners contribute to our overall revenue in Q1. As mentioned on the last call, we began testing a subscription model in Q1 for some customers who prefer the operational expense approach due to budget constraints. Historically, the purchasing model in the detection business has been a capital investment decision and a perpetual software license purchase, but we have learned that some customers may prefer a more flexible payment plan. The subscription model allows a segment of our customers the ability to acquire our technology when capital budget is not available and also begins to build an installed base that we believe will generate long-term recurring revenue for the company. While there is growing customer interest for this model, we still expect it to be a small percentage of our overall revenue in 2022, and we continue to lead with a capital model. We are also making great strides as we continue to collect additional clinical data to support our leading-edge Profound AI RISC product. We believe that this first-in-kind technology not only has the potential to change the landscape of breast cancer screening, and also that short-term personalized risk assessment should become the standard of care for women. The portfolio of evidence supporting this technology continues to grow, with four studies currently underway. We look forward to seeing research presented from some of these studies at upcoming trade shows in Q2, including the International Workshop on Breast Imaging, which will take place in Belgium later this month, and the European Congress of Radiology, which will take place in Vienna this July. While we are proud to report that we have a growing number of early adopters of this technology, we expect that the additional clinical data will make the use of profound AI risk even more compelling for clinicians looking to improve breast cancer screening outcomes. In addition, we are exploring various product and pricing combinations that could help drive adoption of this capability moving forward including a bundled pricing model where all of our breast AI technologies can be adopted together as a premium package. Now turning to our therapy business. Revenue in the therapy segment fell short of our expectations due primarily to a restructuring of one of our dermatology partners who is presently positioning itself to go after the derm opportunity in a more accelerated fashion, including adding additional sales resources on their end. We fully expect this segment to rebound considerably in Q2 and expect our U.S. dermatology business to continue to be the primary growth driver for ZOFT in 2022. We are currently installing our first ZOFT system for skin in Florida in Q2 with our partner Dermatherapies and expect to convert several more new customers in this key market in the months ahead. We also have successfully onboarded our West Coast partner, Dermacure RT, and expect to see several more key placements in Q2 as a result of this strategic relationship. With the COVID restrictions beginning to lift in many areas earlier this year, I'm happy to report that we were able to attend multiple in-person trade shows in Q1 that have stimulated our already growing pipeline of dermatology prospects. With more conferences and events planned in Q2 in various geographic locations, We look forward to continuing this momentum. Additionally, we continue to advance the GLIOCS trial, our multinational clinical study examining the use of interoperative radiation therapy with the ZOFT system for the treatment of recurrent glioblastoma. Researchers have now treated five patients under GLIOCS protocol to date at Providence St. John's, and we expect to have at least 10 patients treated with ZOFT brain IORT by the end of Q2, while concurrently adding multiple new sites in both the U.S. and global markets. For example, recently, doctors at Cesaris University in Cesaris, Spain, have successfully treated multiple cases of recurrent glioblastoma with the ZOFT system in preparation for beginning the GLIOCS trial. This facility has also used ZOFT EBX to treat patients with brain metastases, rectal cancers, and head and neck tumors. We are also encouraged to see more facilities adding new indications for the ZOFT system as it provides a practical solution that offers the potential to optimize treatment times and reduce side effects, which ultimately enhances patient care. For example, clinicians at the Miguel Cervet University Hospital in Zaragoza, Spain, have recently utilized ZOFT-IORT in their cancer treatment regimen for sarcomas and brain metastases. Notably, this facility has been using the ZOFT system for the treatment of breast and gynecological cancers for years, with now more than 700 breast cancers and 200 gynecological cancers treated to date. We are also continuing to see interest in forward momentum in ZOFT in other global markets, with a significant sale in Taiwan in Q1. Now looking at our international AI business, as noted earlier, we continue to see improvement in the selling environment, especially in the EU. This can be attributed in part to a reduction in COVID restrictions and the introduction of a subscription pricing alternative. We expect our European business to continue to contribute more revenue than has been the case in the past two years where this geography was hard hit by COVID constraints. We remain optimistic as we look ahead as we believe we now have a stronger commercial infrastructure in place and a solid and growing pipeline to ensure the trajectory we are on will continue to position the organization for success and bring our world-leaning portfolio of innovative solutions into the hands of more clinicians worldwide. We remain very confident in the unique value our portfolio of technologies offers and I believe we are successfully navigating the changes necessary to capture more of that opportunity and drive growth through 2022 and beyond. With that, I will now turn the call over to Charlie to walk you through the financial highlights from the quarter. Charlie?