IceCure Medical Ltd.

Welcome to IceCure's conference call on the financial results for the first half of 2022. Management will provide an overview of IceCure's financial results as well as clinical, commercial, and operational highlights. Participating on the call today are IceCure's CEO, Eyal Shamir, and CFO, Ronen Zimmerman. They are joined by Dr. Kenneth Tomkovic, the co-primary investigator for IceCure's ICE3 ProSense clinical trial on cryovolation of small low-risk breast cancers. Following the presentation, IceCure's management and Dr. Tomkovic will be available for a question and answer session. Before we begin, I will now take a moment to read a statement about forward-looking statements. This call and the question and answer session that follows it contain forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Words such as expects, anticipates, intends, plans, believes, seeks, estimates, and similar expressions or variations of such words are intended to identify forward-looking statements. For example, ISECURE is using forward-looking statements in this presentation when it discusses pursuit of regulatory approval in various jurisdictions strategic plans, commercial growth, expansion of clinical applications, and potential market adoption of its minimally invasive cryo-relation technology, advancing regulatory and commercial strategies, and expected quarter-over-quarter revenue variations and other key business highlights for future periods. Because such statements deal with future events and are based on IceCure's current expectations, they are subject to various risks and uncertainties, and actual results, performance, or achievements of ice cure differ materially from those described in or implied by the statements in this presentation. The forward-looking statements contained or implied in this presentation are subject to other risks and uncertainties, many of which are beyond control of the company, including those set forth in the risk factors section of the company's annual report on Form 20-S, for the year ended December 31, 2021, filed with the SEC on April 1, 2022, which is available on the SEC's website, www.sec.gov. The company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law. I will now turn the call over to IceCure CEO Eyal Shamir.

Hello, everyone, and thanks for joining us today. We'll start with a review of our significant business development for the first half of 2022, followed by an overview of the financial results. We'll then hear from Dr. Tomkovic, who will share his thoughts on breast cancer cryoablation from the radiologist's perspective before opening the call for Q&A. During the first half of 2022, through our only own subsidiary, SQ Shanghai, we signed an exclusive distribution agreement in mainland China for iSensory, which is ProSense's brand name in China. We signed this agreement with Shanghai Medtronic Zicang Medical Devices Company, NTD, an affiliate of Medtronic PLC. and Beijing Turing Medical Technology Company, MTD. This high-value commercial agreement with the division of Medtronic, the world's largest medical devices company, is a key strategic milestone for IT in one of the most important healthcare markets in the world. Tanhai Medtronic Zicang Medical Devices Company, NTD, has expertise in market power to facilitate rapid market penetration for ISIN3 in China. We believe China is a market in which cryoablation technology Currently, as minimal market penetration, an immense potential driven by the country accelerated adoption of a new technology that improved outcomes. The government of China is investing heavily in healthcare infrastructure. By 2030, the size of the healthcare market in China is expected to reach $2.3 trillion. According to McKinsey report, This is more than double its size in 2020, according to statistics. Shanghai Medtronic Zicang Medical Devices Company, LTD, will be the exclusive distributor for the ISOM-3 system and its disposable crops in mainland China and for an initial period of three years. Minimum purchase target for the first three years of the agreement is $3.5 million. We expect to deliver and book revenues for the first ISM-3 systems under this agreement in the second half of 2022. ISM-3 has already been approved by the China Health Regulatory Body National Medical Product Administration. We have submitted an amendment application to the registration certificate for approval of the disposable probe, which, if approved, will allow us to sell disposable ISM3 cryoprops for commercial use. We expect to receive such approval for the props by the end of 2022. In addition to this major deal with Shanghai Medtronic Zicang Medical Devices Company in China, in the second quarter of 2022, we sold and installed our POSON system in several clinics worldwide. This includes clinics in the U.S., the Manna Breast Center in Arkansas, and Georgia Breast Care in Georgia. ProSense was also installed at other healthcare facilities in Turkey and Poland, where the first breast fibroadenoma treatment was conducted with the ProSense in those countries. We have also sold and installed our ProSense system in France. The Nate Zeon Medical Center in Israel conducted its first breast cancer treatment with ProSense. Based on the level of commercial interest during and after the second quarter, we expect the number of these kinds of installations and cells may potentially increase. We continue to expand our regulatory landscape During the second quarter, regulatory applications were signed in Brazil and Canada. In addition, the one signed in China for the ISIN3 disposable probes at the end of 2021. In Brazil, regulatory applications were signed for the crossing system for indications including breast, and other cancers, benign tumors, and palliative intervention. We have been approached by a number of Canadian healthcare providers interested in ProSense as a key seek to offer minimally invasive treatment for breast and other tumors. Regulatory application was filed in Canada for the process system for numerous indications, including the ablation of benign and malignant breast tumors. We are very active presenting, demonstrating, and training physicians in the use of process, which is consistently very well received. During the second quarter of 2022, we participated in 10 conferences and events. We presented the course of a cryoablation breast cancer tumor at the Society of Interventional Radiology annual meeting in Boston. At the 23rd annual meeting of the American Society of Breast Surgeons, our publication regarding our I3 breast cancer cryoablation study internal results was chosen as one of the best papers of 2021 from thousands of breast cancer articles published annually. We did hands-on demos of process at the European Conference of Interventional Oncology, moreover at the Society of Breast Imaging, American College of Radiology Conference, First tumor ablation course was presented by two ProSense users. Clearly, ProSense is gaining traction in the U.S. and with the global medical community, including breast surgeons, interventional radiologists, and interventional oncologists. As we work to expand our regulatory landscape and commercial reach, we believe that this activity will be reflected in our revenue in the future. I will now turn the call over to Raman for financials.

Thank you, Eyal. For the six months ended June 30, 2022, revenue decreased by 27% to $1.5 million and compared to $2.1 million in the first half of last year. The decrease is due to decreased revenue recognition of approximately $400,000 from distribution agreements with the rumor for the commercialization of procents to treat malignant breast tumors in Japan, Singapore, and Thailand, and a decrease in sales in Asia which continued to be impacted by COVID surges and associated restrictions on commercial activity. These decreases were partially offset by an increase in sales in the U.S. and Europe. Gross profit was approximately $800,000 from the six months end of June 30, 2022, compared to approximately $1.2 million for the same period in 2021. Gross margin was approximately 54% for the six months period end of June 30, 2022, compared to approximately 58% for the first six months of 2021. The slight decrease in gross margin is mostly attributable to the decrease in sales and in revenue recognition from the Terumo distribution agreements. Research and development expenses for the six months and the June 30, 2022 were $4.6 million, compared to $2.7 million for the same period last year. The increase is attributed to the acceleration in development of iSQ's next-generation single-probe system and clinical and regulatory activities, mostly in the U.S., China, Brazil, and Canada. Selling, marketing, general and administrative expenses in aggregate for the six months and the June 30, 2022 were $4.9 million compared to approximately $2.2 million for the first six months of 2021. The increase is attributed to the company's expanding commercialization efforts, increasing our participation in conventions and conferences, and to increase NASDAQ listing-related expenses. Total operating expenses for the six months ended June 30, 2022 were approximately $9.5 million compared to $4.9 million for the same period last year. The increase in operating expenses is attributable to increased development, commercialization, and NASDAQ listing-related activities. As a result of lower revenue and increased operation activities, net loss reported for the six-month period ended June 30, 2022, increased to approximately $9 million, or $0.24 per share, compared with a net loss of approximately $3.8 million, or $0.16 per share, for the same period last year. As of June 30, 2022, the company had cash and cash equivalents of approximately $17.7 million, compared with approximately $25.6 million as of December 31, 2021. I will now turn the call over to Dr. Kenneth Tomkovic. Dr. Tomkovic is a co-primary investigator for our I3 clinical trial on cryoablation of small, low-risk breast cancer. Dr. Tomkovic is a diagnostic and interventional radiologist with Princeton Radiology and director of breast imaging and interventions at Center State Medical Center, New Jersey. A prolific researcher, Dr. Tomkovic has authored or co-authored articles in several medical journals, including Respiratory, Medicine Academic Radiology, Emergency Radiology, and the American Journal of Archaeology.