Profound Medical Corp.

Thank you for standing by and welcome to Profile Medical first quarter 2021 conference call. At this time, all participants are now listening on the note. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please see advice that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Stephen Kilmer with Investor Relations.

Thank you. Good afternoon, everyone. Let me start by pointing out that this conference call will include forward-looking statements regarding Profound and its business, which may include, but is not limited to, expectations regarding the efficacy of Profound's technologies, in the treatment of prostate cancer, BPH, uterine fibroids, palliative pain, and osteoid osteoma. Often, but not always, forward-looking statements can be identified by the use of words such as plans, is expected, expects, scheduled, intends, contemplates, anticipates, believes, proposes, or variations, including negative variations of such words and phrases, or state that certain actions, events, or results may, could, would, might, or will be taken, occur, or be achieved. Such statements are based on the current expectations of management. The forward-looking events and circumstances discussed in this conference call may not occur by certain specified dates or at all and could differ materially as a result of known and unknown risk factors and uncertainties affecting the company, including risks regarding the medical device industry, economic factors, the equity markets generally, and risks associated with growth and competition. Although profound is attempted to identify important factors that could cause actual actions, events, or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events, or results to differ from those anticipated, estimated, or intended. No forward-looking statement can be guaranteed, except as required by applicable securities laws. Forward-looking statements speak only as of the date on which they are made, and profound undertakes no obligation to publicly update or revise any forward-looking statement. whether as a result of new information, future events, or otherwise, other than as required by law. For the benefit of those who are new to the Profound story, I would like to take a moment to summarize our business. Profound develops and markets customizable, incision-free therapies for the ablation of diseased tissue. We are currently commercializing Tulsa Pro, a technology that combines real-time MRI, robotically-driven transurethral ultrasound, and closed-loop temperature feedback control. The technology is designed to provide customizable and predictable radiation-free ablation of a surgeon-defined prostate volume while actively protecting the urethra and rectum to help preserve the patient's natural functional abilities. Tulsa Pro is CE-marked, Health Canada approved, and 510K cleared by the FDA. We are also commercializing Sonolive, an innovative therapeutic platform that is CE-marked for the treatment of uterine fibroids and palliative pain treatment of bone metastases. Tonaleaf has also been approved by the China National Medical Products Administration for the non-invasive treatment of uterine fibroids and has recently obtained FDA approval under a humanitarian device exemption for the treatment of osteoid osteoma. While we do not expect this FDA HDE approval to have a material impact on revenues in the near term, it is a significant milestone for our company, and we are making preparations for its U.S. commercial launch later in 2021. On the call today representing the company are Dr. Arun Manawat, Profound's Chief Executive Officer, and Aaron Davidson, the company's Chief Financial Officer and Senior Vice President of Corporate Development. With that said, I'll now turn the call over to Aaron.

Good afternoon, everyone, and welcome to our first quarter 2021 conference call. On behalf of the management team and everyone at Profound, I would like to thank you for your ongoing interest in our company. For those of you who are shareholders, we appreciate your continued interest and support. I will turn the call over to Arun in a moment for an update on our commercial activities. However, before I do, I'd like to provide a brief update on our first quarter 2021 financial results. A quick reminder that we've changed our presentation currency from the Canadian dollar to the U.S. dollar. To streamline things, all of the numbers we will refer to have been rounded so are approximate. Our first quarter 2021 sales performance was significantly negatively affected by COVID-19 impacts, particularly in the months of January and February, resulting in our first revenue decline since Q1 2018. For the three-month period ended March 31, 2021, the company recorded revenue of $711,000, down 41% from $1.2 million. in the first quarter of 2020. As we mentioned in today's press release, business began to rebound in March. So far that positive momentum has continued into the current quarter. While we do not provide formal quarterly or annual financial guidance, and we continue to be cautious about the scope and pace of U.S. Tulsa Pro commercial adoption in the near term due to the pandemic, factoring in the recent uptick in procedures at existing sites and what we already have in our Tulsa Systems Agreement pipeline, we believe that we have the potential to make up for the Q1 revenue shortfall during the remainder of 2021. Total operating expenses in the 2021 first quarter, which consists of R&D, G&A, and selling and distribution expenses, were $6.8 million, an increase of 47% compared with approximately $2.1 million in the first quarter of 2020. Breaking that down further, on a year-over-year basis, expenditures for R&D increased 47% to $3.1 million. This was primarily driven by higher spending for R&D initiatives and projects, options awarded to employees, additional headcount, and an overall increase to general expenses, partially offset by decreased travel expenses due to COVID-19 restrictions. G&A expenses decreased by 6% to $2.1 million due to lower salaries and benefits as the result of bonuses earned by management in the prior year and timing differences associated with the accruals. Partially offset by increases to consulting fees and share-based compensation. Finally, selling and distribution expenses increased by 70% to approximately $1.6 million. Overall, the company recorded a first quarter 2021 net loss of $7.5 million, or 37 cents per common share, compared with a net loss of $2.6 million, or 21 cents per common share, for the same three-month period in 2020. As at December 31st, 2021, Profound had cash of $78.5 million. With that, I'll now turn the call over to Arun. Thanks, Aaron.