LENSAR, Inc.

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Lenser Third Quarter 2022 Earnings Conference Call. At this time, our participants are in a listen-only mode. Later, we'll conduct a question-and-answer session. As a reminder, this conference call is being recorded. I would now like to turn the conference call over to Lee Roth of Burns McLellan. Mr. Roth, you may begin.

Thanks, Julie. Thanks, Julie. Good morning, and once again, welcome to the Lenzar Third Quarter 2022 Financial Results Conference Call. Earlier this morning, the company issued a press release providing an overview of its financial results for the quarter ended September 30th, 2022. A copy of this release is available on the investor relations section of the company's website at www.lenzar.com. Joining me on the call today is Nick Curtis, Chief Executive Officer of Lenzar, who will review the company's recent business and operational progress. Following his comments, Tom Staub, Chief Financial Officer of Lenzar, will provide an overview of the company's financial highlights before turning the call over to the operator for the Q&A session. Before we begin, I'd like to remind you that today's conference call will contain forward-looking statements, including statements regarding future results, unaudited, and forward-looking financial information, as well as information on the company's future performance and or achievements. These statements are subject to known and unknown risks and uncertainties, which may cause the actual results, performance, or achievements to be materially different from any future results or performance expressed or implied on this conference call. You should not place any undue reliance on these forward-looking statements. For additional information, including a detailed discussion of the risk factors, please refer to the company's documents filed with the Securities and Exchange Commission, which can be accessed on our website. In addition, this conference call contains time-sensitive information, accurate only as of the date of this live broadcast, November 9th, 2022. LENZAR undertakes no obligation to revise or otherwise update any forward-looking statements to reflect events or circumstances after the date of this live call. With that said, it's now my pleasure to turn the call over to LENZAR's Chief Executive Officer, Nick Curtis. Nick?

Thank you, Lee, and good morning to everyone listening. Thank you for joining us on our third quarter 2022 conference call. When we spoke last quarter, I remarked on the progress that Lensar had made in the first half of 2022. And I'm pleased to say that we've continued to build on this progress by meeting several significant objectives during the third quarter. Consistent with the plan we disclosed on our second quarter conference call, we successfully launched the Ally Adaptive Cataract System in the U.S., placing the first systems the week of August 15th. Furthermore, we've installed multiple Ally systems in key sites over the balance of the quarter and are well on our way to meeting our previously stated objective of having approximately 10 systems placed by the end of this year. The US market is of the utmost importance for Lensar to establish acceptance of Ally and fundamental to our driving strategy for significant growth. The US represents the largest premium surgical procedure market in the world. and the only territory where we have a direct-to-market commercial presence. Our plans in the U.S. include continued market expansion and market share gains with Ally as our primary objective in the near to medium term, using its new technology with superior features compared to aging competitive devices to significantly expand our market presence. In the quarter, our U.S. procedure volumes were up approximately 9% over the third quarter of 2021. This increase was largely due to our existing Lensar laser systems without the benefit of ally units, which were only productive in the last month of the quarter and for which we are still in a controlled and limited launch. We were able to achieve this procedure and market growth through continued market share gains with our first-generation system. In addition, and importantly, this growth is a clear indication that demand for premium cataract surgeries remains strong in the U.S., despite the current uncertainty in the state of the economy. We expect our share of the procedure market to continue to grow as we further transition and broaden the install base of our ally systems. After the US and Europe, where we have also filed for clearance, we're prioritizing other markets based on the size of the premium procedure opportunity, regulatory clearance timelines, pricing, and margins, as well as the investment required to grow with our distributors. I'm pleased to report that interest in Ally among U.S. surgeons is significant. We expect this will continue to grow as they learn of other physicians' positive early experience with the technology. We've trained several surgeons at each of our active Ally sites, including some users of competitors' lasers, and are actively engaged, partnering with the surgeons and staff in all of the initial launch sites. Overall system performance and surgeon feedback has been extremely positive and consistent with our company's surgeon-centric values. We believe we've created a device platform in Ally that caters to improving efficiencies while moving toward improving outcomes and experience for both surgeons and patients in the cataract procedure. Discussions with the initial group of physicians, including those that have primarily utilized competitive systems, point to Ally's compact size, significantly decreased procedure times, ergonomic efficiencies, adaptability, and enhanced preoperative device connectivity as key advantages of the technology as compared to the first generation devices that currently comprise most of the market. This is the confirmation we hope to hear, and it's really gratifying that these experienced surgeons have had positive initial experiences with Ally. As part of Lensar's ongoing commitment to continuous improvement, we're working closely with the sites to optimize the treatment parameters and fine-tuning individual systems to the specific environment with the objective of delivering a superior user experience. You've seen remarks from Drs. Parkhurst and Slade in our press release, both high-volume and accomplished surgeons that are enthusiastic in their support of Ally. As we place more systems, Ally's praise continues and is consistent among these earlier users, whether they're familiar with LensArt's technology platform or whether they've historically used competitive femtosecond lasers for cataract surgery. In fact, our most recent feedback is from Dr. Denise Visco, MBA, incoming president of Cedars-Aspen Group, and a high-volume premium procedure cataract surgeon. Dr. Visco utilizes the Ally system in her operating room, performing a sterile femtosecond laser-assisted cataract surgical procedure and thus provides an interesting perspective. She referred to Ally as revolutionary. and stated that it makes surgery far less stressful for her and safer for her patients with the added benefit of less cost per minute in the OR for their ASC. In the post-COVID environment where ASCs are short staffed and costs continue to rise, Ally is a welcomed addition to overcome these conditions and concerns. Since receiving FDA clearance in June, our marketing team has been developing and executing targeted digital campaigns geared towards higher volume users committed to femtosecond laser-assisted cataract surgical technology, and early adopters aimed at building awareness of Ally. Ally represents a true generational change, and we will expand our efforts to get the message out to a broader surgeon audience. Additionally, we'll allow interested surgeons to observe femtosecond laser-assisted cataract surgery in one of our centers of excellence to experience the Ally difference. Our goal is to continue to educate the market on Ally's many benefits over previous generation femtosecond lasers and let them see it for themselves. In addition to our select and targeted marketing campaigns, we maintained an active presence at the major ophthalmic congresses. We had a very successful American Academy of Ophthalmology where we held 75 Ally demo sessions and at the European Society of Cataract and Refractive Surgery where Ally was presented and demonstrated for the first time to surgeons outside the US. I'm pleased to report the Ally system was received well at the European Congress, with comments very consistent with those reported by US surgeons. Surgeons are grateful to see a next generation platform that is specifically designed to address the limitations of first generation femtosecond laser cataract systems, as well as appreciative of our continued investment in advancing the technology with relevant substantive improvements. We received great feedback from our distributors and physicians and very much look forward to launching in the EU and other outside US markets. Looking at our business performance for the quarter, we achieved a 9% growth in US procedure volumes in Q3 over the third quarter of 2021. The strength in our key end market was offset by declines in the rest of the world. In particular, the decrease was driven by the South Korean market where challenges between ophthalmic surgical practices and third-party payers in cataract procedure reimbursement have significantly impacted procedure volume. We expect that this challenge will continue for the foreseeable future without a clear resolution timeframe I can identify at this time. The procedure decline in South Korea resulted in an approximate $725,000 decline in procedure revenue as compared to the third quarter of 2021. Overall, Our transition from the Gen 1 laser to the Ally adaptive cataract treatment system is continuing to progress as planned. Our plan of controlled expansion of our Ally installations throughout year end 2022 and our objective of making Ally more broadly available in 2023 is somewhat constrained by the current supply chain, but we look forward to it becoming less of a factor as we get into 2023. At this point, we don't have absolute clarity, but believe we should be in a much better position to supply allied demand in 2023. Over the last several months, we've achieved each of the milestones we've established. We received FDA clearance for Ally and quickly got it into the hands of key opinion leaders and early adopters in the cataract surgery space. In addition to our primary focus on expansion of our market share in the U.S., We submitted our European MDR application to receive CE Mark, which is the first step toward a potential commercial launch in the EU. I'm really proud of the entire Lensar team and what we have accomplished and very enthusiastic about the opportunities ahead. As always, I look forward to sharing details of our progress as we continue moving forward. Now let me turn the call over to Tom to cover our financial highlights for the quarter. Tom?