IceCure Medical Ltd.

Welcome to ISECURE's conference call on the financial results for the nine months ended September 30, 2022, and update on recent operational highlights. Management will provide an overview of ISECURE's financial results as well as clinical, commercial, and operational highlights. Participating on the call today are ISECURE's CEO, Eyal Shamir, and CFO, Ronen Simmerman. They are joined by Dr. Hania Bednarski, Oncoplastic Breast Surgeon and Cryobolation Specialist at Serenity Surgery and Wellness in Myrtle Beach, South Carolina. Currently, all participants are in a listen-only mode. Following the presentation, ice cures management and Dr. Bednarski will be available for the 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, we are using forward looking statement in this presentation when we discuss pursuit of regulatory approvals in various jurisdictions, strategic plans, commercial growth, expansion of clinical applications, release of results from our clinical trials, potential market adoption, and future sales of ice cures, minimally invasive cryobolation technology, advancing regulatory and commercial strategies, and expected quarter over quarter revenue variations, and other key business and operational 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 IceCure could 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 the control of the company, including those set forth in the Risk Factors section of the company's annual report on Form 20-F 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, or revisions or changes after the date of this release, except as required by law. I will now turn the call over to iSCURE CEO Eyal Shamir.

Hello, everyone, and thank you for joining us today. We will start this review of our significant business development for the third quarter of 2022, followed by an interview of the financial results of the nine months ended September 30, 2022. We will then hear from Dr. Badnarski, who will share her thoughts on breast tumors cryoablation from the breast surgeon's perspective before opening the call for Q&A. An already adopter of the technology, Dr. Badnarski has been performing cryoablation for benign and malignant breast tumors since 2014. During and immediately following the end of the third quarter, we made huge strides towards the commoditization of process for breast cancer in the U.S. on both the regulatory and reimbursement fronts. We believe women with a low risk early stage breast cancer need a better alternative to the current standard of care of lumpectomy. Minimally invasive cryoablation, which destroys tumors without open surgery, reduces recovery time and cost while improving cosmetic outcomes. Most importantly, our vast I3 clinical trial interim data for ProSense breast cancer treatment show a recurrence-free rate at approximately 97%. In October, we submitted a de novo classification request regulatory filing with the FDA for marketing authorization of ProSense for the indication of early stage low risk breast cancer in patients who are at risk to surgery and therefore are not suitable for surgical alternatives. These initial indications alone represent approximately 43,000 women in the U.S. annually. We were able to submit for marketing clearance based on our very strong results on our interim I3 clinical trials analysis. In the first half of 2024, we expect to release the final results from the I3 five-year follow-up. At that time, we plan to file for a broader indication with the FDA reflecting the entire study population of early-stage low-risk breast cancer for patients age 50 and over, representing approximately 65,000 women in the U.S. annually. In the future, we plan to explore more indications for additional subgroups that are part of the total group of Luminal A breast cancer. An estimated of 144,000 cases annually for women of all ages in the US. While we look forward to the FDA's response to our filing, we have concurrently achieved a significant milestone in the Medicare reimbursement in the US for prosence breast cancer treatments. In November, the Center of Medicare and Medicaid Services assigned prosence breast cancer cryoablation treatment, a specific CPT category three code, which will go into effect on January 1st, 2023. Under the CPT category three code, the prosence breast cancer treatment try for a coverage at approximately $3,400. This is for the facility fee alone. We expect additional coverage, including payments for the physician, upon establishment of the permanent CPT Category 1 code, which will condition on several factors, including our receipts of FDA marketing authorization of the FDA for breast cancer. To our knowledge, iStew is the first and the only company to file and receive a CPT code for cryoablation of breast cancer. We were able to achieve this based on our results of our i3 study, the largest controlled multicenter clinical trial ever performed in the U.S. for liquid nitrogen-based cryoablation of small, low-risk, early-stage malignant tumors as an alternative to surgery. We are proud of this achievement and our leadership position, which helps to pave the way for the wider use of minimally invasive cryoablation treatments that deliver better outcomes for patients. Globally, we made additional advances on our regulatory front. In Brazil, process cryoprops and introducers, which are essential single-use disposable components of our process system, received regulatory approval for indications including breast and other cancers, benign tumors, and palliative interventions. Applications for the process were also filed in Canada and Vietnam. I will turn the call over to Ronen now for the financial results. Before I do, I want to point out a very encouraging trend and that is the increase in sales of our single-use disposable props. This indicates that the increasing number of treatments are being conducted with the installed base of POSIM system across the world. While our quarterly revenue may continue to be variable in the near future, we see the prop sales as a positive indicator for market acceptance on our liquid nitrogen-based cryoablation therapy which we believe will translate into sales. Roland?

Thank you, Eyal. For the nine months ended September 30, 2022, revenue decreased by 22% to approximately $2.1 million, compared to approximately $2.8 million for the same period last year. The decrease is due to decreased revenue recognition of approximately $500,000 from the distribution agreements with the rumor corporation and a decrease in sales of new systems, which was partially offset by higher sales of disposable probes as previously sold and installed systems were utilized for procedures in clinical settings. For the nine months ended September 30th, 2022, sales in the US and Europe increased by 65% and 37% respectively. compared to the same period in 2021. The increase in sales in the US and Europe was offset by a decrease in sales in Asia and other territories. Gross profit was approximately $1 million for the nine months as of September 30, 2022, compared to approximately $1.6 million for the same period last year. Gross margin was approximately 46% from the nine months ended September 30, 2022, compared to approximately 56% for the same period in 2021. The decrease in gross margin compared to the same period last year was attributable mostly to the decrease in sales and in revenue recognition from the Terumo Distribution Agreement. Research and development expenses for the nine months ended September 30, 2022, were approximately $6.9 million compared to approximately $4.3 million for the same period last year. The increase was attributed to acceleration in development of iSCU's next-generation single-probe system and due to clinical and regulatory activities. Sales, marketing, and general administrative expenses for the nine months ended September 30, 2022, were approximately $6.9 million compared to approximately $3.9 million for the same period in 2021. The increase was attributed to the company's expanding commercialization efforts and to increased NASDAQ listing related expenses. Total operating expenses for the nine months ended September 30, 2022 were approximately $13.8 million compared to approximately $8.2 million for the same period last year. The increase in operating expenses was primarily 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 nine months ended September 30, 2022, was increased to approximately $13 million or $0.35 per share, compared with a net loss of approximately $6.7 million or $0.25 per share for the same period last year. As of September 30, 2022, iSCURE had cash and cash equivalents, including short-term deposits of approximately $14.2 million. I will now turn the call over to Dr. Hania Bednarski. Dr. Bednarski is an oncoplastic breast surgeon and specialist in breast tumor cryoablation. She is the owner and CEO of Serenity Surgery and Wellness in Myrtle Beach, South Carolina, where she is performing a wide array of breast procedures from biopsy through reconstruction of the breasts. She's also author of the book Freeze Breast Cancer, Your Guide to an Alternative Breast Cancer Treatment. Dr. Bednarski recently co-hosted an ISQ webinar titled Breast Tumor Cryoablation for Breast Surgeons that was well received by fellow breast surgeons and radiologists. We are very pleased to have her join us today.