Motus GI Holdings, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Motus GI Holdings Inc. Third Quarter 2022 Financial and Operational Update. At this time, all participants are in a listen-only mode. There will be a presentation by Motus management team, followed by a question and answer session. I must advise you that all the conference today is being recorded. I'd like to turn the call over to Garth Russell of LifeSciAdvisors. Please go ahead, sir.

Thank you, operator, and thank you, everyone, for joining us for the Modus GI third quarter 2022 update call today. Representing the company are Tim Moran, Chief Executive Officer, Andrew Taylor, Chief Financial Officer, Mark Pomerantz, President and Chief Operating Officer of Modus GI. Before we turn the call over to management for their opening remarks, I would like to take a minute to remind you that this conference call and webcast will contain forward-looking statements about the company. These statements are subject to certain risks and uncertainties that could cause actual results to differ. Please note that these forward-looking statements reflect our opinions only as of the date of this call. We will not undertake any obligation to revise or publicly release the results of any revisions to these forward-looking statements in light of new information or future events, factors that could cause actual Results or outcomes that differ materially from those expressed or implied by a such full written statement are discussed in greater detail in our most recent findings on Form 10-K and our other periodic reports on Form 10-Q and 8-K filed with the SEC. I would now like to turn the call over to Tim Moran, CEO of Motus GI. Tim, the floor is yours.

Thanks, Garth, and good afternoon, everyone. Thank you for joining our call today. I'm pleased to share an update on our progress through the third quarter of 2022 as well as provide early insights of what we're seeing in the fourth quarter. Following my updates, Andrew will provide an overview of our financial performance for the third quarter, and then we will open the call to take your questions. Let's get started. We reported revenue in the third quarter of $278,000, which represents an approximate 50% increase compared with the second quarter of 2022 and our highest quarterly revenue to date. We continue to drive steady quarterly growth since the launch of our PureView EVS six months ago. With that as an overarching view, let me take a step back and offer some additional color behind the key drivers of our performance in the third quarter. Our success is being primarily enabled by the improvements we've made to our technology with the launch of PureView EVS, as well as the expansion of our commercial reach. Physicians continue to comment on PureView's efficacy and have been specifically complimentary of the rapid setup, enhanced cleansing capabilities, and the flexibility to use at the bedside on a dirty scope. All of these improvements were based upon direct feedback from our customers over the last three years. This brings me to the number of placements for the PureView EVS. Through the end of Q3, we now have PureView in use at 25 hospitals. As expected, Most new placements are coming from customers with no prior experience and are comprised of a balanced mix between academic, community, and VA hospitals. While we believe Q3 represented a solid performance, we did see a handful of accounts delay their purchasing decisions to Q4, primarily driven by capital budget constraints and hospitals continuing to manage through staffing shortages. This leads me to our growth strategy and pipeline. Now that we've established a solid base of hospitals with Peerview EVS in use, we are incentivizing our sales team to increase same-store sales, meaning going deeper in existing accounts to drive higher quarter-on-quarter utilization within each site. Driving consistent repeat utilization is key to our long-term success, as it will provide predictable recurring revenue. It's important that we have a thoughtful approach in each metro market to go deeper while also strategically expanding to new hospitals. Two metrics we continue to track are procedures by month at each facility and the number of physician users. Expanding our base of physician users is important as it speaks to our ability to extend adoption beyond the initial physician champions that we worked with during the evaluation period. Let me provide an example of the progress we're seeing in this area. As a proxy for what we are expecting to see across our growing base of hospital accounts, one of our VA hospitals in the Midwest has increased their monthly procedure volume by approximately 40% from Q2 to Q3. This is a result of both expanding the number of physician users and our sales team staying front of mind to be sure the doctors are thinking about the various opportunities where Pureview EVS can benefit customers. Turning now to our pipeline, we have outlined our land and expand approach for targeting of additional hospitals within a health system following approval at the flagship center for the use of Pureview EVS. In fact, we have already had success at several hospital networks in getting introductions to associated hospitals and centers. As an example, we recently received system-wide VAC approval at Texas Health Resources Group, a large system comprised of 24 affiliated hospitals, as well as the Methodist Health System in Houston, comprised of eight affiliated sites. During Q3, we also announced that the VA system has recognized Modus GI as a sole source provider and a small business. These special designations provide us direct access to the VA's procurement arm, thereby streamlining and shortening purchase decisions in sites that express interest in deploying peer-reviewed EVS. The VA's population often experience higher rates of inadequate bowel preparation, travel longer distances for care, and can experience longer average wait times. Additionally, the VA medical centers have a strong desire to provide improved care for their patients and are penalized for referring procedures outside of the VA system. Ensuring a high-quality procedure the first time is a top priority. Finally, the VA healthcare system is not beholden to the reimbursement policies of third party payers. As a result, physicians can use our peer review EVF system for both inpatient and outpatient procedures. In terms of sizing this opportunity, the Veterans Health Administration is the largest integrated healthcare system in the United States with approximately 170 hospitals performing approximately 645,000 colonoscopies over the last three years. We now have PureView EVS in use at five different VA medical centers, including two new agreements that closed in the third quarter. We are also actively pursuing new VA evaluations across the U.S., which we expect will result in new commercial agreements in the coming quarters. Now let's discuss our progress on other key upcoming catalysts. First, let me provide an update on our outpatient reimbursement study, a large outpatient focused clinical study evaluating the use of the PureView EVS system. The study will enroll approximately 1,000 patients with the primary endpoint designed to show a significant reduction in the number of aborted or poor quality exams that lead to an early repeat procedure as defined by the GI Tri-Society Guidelines. This study will be conducted at a mix of academic and community hospitals, as well as ambulatory surgery centers, including NYU Langone Health. We anticipate initiating this study in the near term with completion expected before the end of 2023. The study's aim is to generate data quantifying the percentage of patients with inadequate PrEP and showing the peer view system's ability to achieve a substantial clinical improvement in those patients compared to the standard of care in a large multicenter trial. The results from this study are expected to support applications seeking reimbursement of the peer review system when used in certain outpatient colonoscopies. We see a tremendous need in the outpatient market. However, without reimbursement for the peer review system, it is difficult for us to reach many of these patients. How big is the problem, you may ask? The answer is that of the more than 18 million outpatient procedures conducted in the U.S. each year, approximately one in four or almost 4.7 million patients struggle to get a high-quality prep prior to their procedure. This can lead to delayed, aborted, and repeat procedures, which puts a burden on the healthcare system and the patient, both from a clinical and economic perspective. However, early repeat exams only occur between 10 and 20% of the time, as many patients do not come back as prescribed, leaving them at a higher risk for interval cancer. Another pending catalyst that we expect can drive additional growth for our business is the PureView EVS upper GI device. We continue to make progress advancing the development of the PureView EVS gastro, which is designed to add upper GI capabilities to the existing PureView EVS workstation platform. Some of the key enhancements in the EVS system, such as a much larger suction channel, more efficient irrigation jets, a smaller profile, and improved flexibility will be further optimized to allow the system to provide broad utility in an upper GI procedure. This device has the potential to address a significant unmet need by providing improved visualization during challenging upper GI bleed cases. These procedures can be complex and challenging, with a reported mortality rate of approximately 13%. We believe the addition of an upper GI solution enhances the overall value proposition of our PureView EVS platform. In early Q4, we completed an animal and cadaver lab, which provided solid initial feedback on the eventual design of the new device. The product development project is on track with an anticipated launch in 2023. Finally, turning to potential strategic partnerships and collaborations. We continue to pursue various opportunities with strategic partners both in and outside of the U.S. We believe success with our commercial program can provide us with potential opportunities in the future. Our focus in evaluating these opportunities is centered upon accelerating our commercial progress and potentially strengthening our balance sheet. With that, I'll now turn the call over to Andrew to provide detail on our Q3 2022 financials. Andrew?