Vicarious Surgical Inc.

Good afternoon and welcome to Vicarious Surgical's fourth quarter 2021 earnings conference call. My name is Elliot and I'll be your operator for today's call. At this time, all participants are in listen-only mode. We will be facilitating a question and answer session towards the end of today's call. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Marissa Beisch with Gilmartin Group for a few introductory comments.

Thank you and thank you all for participating in today's call. Earlier today, Vicarious Surgical released preliminary, unaudited financial results for the three and 12 months ended December 31, 2021. A copy of the press release is available on the company's website. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results, or performance are forward-looking statements. All forward-looking statements, including without limitation those relating to our operating trends and future financial performance, expense management, market opportunity, and commercialization are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events, to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the risk factor section of our last quarterly report on Form 10-Q filed with the Securities and Exchange Commission on November 8, 2021. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, March 3rd, 2022. Vicarious Surgical disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. And with that, I will turn the call over to Adam Sachs, Chief Executive Officer.

Thank you, Marissa. Good afternoon, everybody. and thank you for joining our first quarter 2021 earnings call. Joining me on today's call is Bill Kelly, Vicarious Surgical's Chief Financial Officer. On our call today, we look forward to reviewing our 2021 achievements, discussing our results of operations, and providing an important update regarding our recent conversations with the FDA. First of all, 2021 was an incredible year at Vicarious Surgical. And I want to congratulate our teams and thank our investors, advisors, and partners for contributing to our company's achievements throughout the year. We have a tremendous opportunity and an exciting journey ahead of us. And looking back at 2021, we have accomplished several meaningful objectives to position our company for success on that journey and change the future of surgical robotics. For example, we meaningfully expanded our team began beta unit testing with surgeons, and engaged in a series of productive communications with the FDA, including the completion of a pre-submission plan late in the year. We also, of course, successfully closed our business combination to become a publicly trading company, resulting in over 190 million net proceeds to our balance sheet. Before I dive deeper into our 2021 achievements and anticipated 2022 milestones, Let me remind you of our overarching mission and vision. At Vicarious Surgical, we are committed to leveraging next generation robotics technology to improve the standard of care for patients across a variety of surgical procedures while minimizing associated costs to the health care system. Despite advancements to minimally invasive surgery over the last 40 years, it is estimated that more than 50% Of the 39 million annual procedures addressable by legacy surgical robots are currently performed with no minimally invasive technology at all. They are still being performed using open surgical techniques. The large incisions required for open surgery create significant trauma to the patient, resulting in long hospitalization and recovery time, high long-term cost of care, and significant pain and suffering. Due to the patient trauma associated with open surgery, 15 to 20% of such surgeries result in incisional hernias requiring additional complex surgery to correct. While current minimally invasive techniques seek to address this substantial unmet need, these technologies fall short. Laparoscopic instruments are difficult to manipulate, have limited degrees of freedom, limited reach, and reduced depth perception and visibility. requiring significant coordination among the surgical team to perform the procedure. Multi-port robotic systems have overcome some of the challenges of rigid instrumentation associated with laparoscopy, but they have a large footprint and limited portability, require extensive setup and procedural time, and use multiple incisions and multiple systems. Fundamentally, these systems still require surgeons to choose incision site locations based on the robotic motion that they are looking for, and to design the kinematic profile of their robotic tool for every procedure. Economically, these systems are expensive, and surgeons encounter cumbersome and costly learning curves. The more recent development of single-port surgical robots does not comprehensively address these fundamental issues, still relying on legacy robotic architecture. These systems require a much larger trocar incision than multi-port systems and are associated with complication rates akin to legacy open techniques. Additional challenges include limited motion, strength, and visualization, and these systems can only operate in a small procedural area. For these reasons, non-robotic techniques continue to be used in the vast majority of cases. At Vicarious Surgical, we intend to deliver the next generation in robotic-assisted surgery to solve the shortcomings of open surgery and the shortcomings of current laparoscopic and robotically-assisted minimally invasive surgery. The Vicarious system combines advanced miniaturized robotics, computer science, and 3D visualization to build an intelligent single-incision surgical robot that virtually transports surgeons inside the patient's to perform minimally invasive surgical procedures. Our proprietary decoupled actuators enable human equivalent motion with a full nine degrees of freedom per robotic arm, providing an experience that is more natural and more akin to the surgeon's own upper body movement. In surgical procedures conducted on cadavers, The system allows surgeons to enter the abdomen and work from nearly any angle and work in nearly any direction without multiple incisions and without the need to manually reposition the system. A stereoscopic camera that rotates in three degrees of freedom provides the surgeon with imaging of nearly every surface in the abdomen. The Vicarious system also contains 28 sensors per instrument arm designed to enable real-time feedback to the surgeon on forced motion, and other key data intended to enhance surgical procedures and patient outcomes. Due to its technical advantages, the system's value proposition to hospitals and ambulatory surgical centers is clear. With a technology designed to enable so much capability within the abdominal cavity, we intend for our products to be much more efficient to learn, set up, and use during a procedure. Unlike legacy robotic systems, our system is much smaller, easily moving to any operating room throughout a medical facility. Its size and design will allow cost-effective price points in comparison to existing robotic systems. Hospitals and ambulatory surgical centers would not be required to dedicate permanent space, reducing expenses related to operating room turnover. The Vicarious system is designed to provide excellent dexterity with flexible setup to enable many procedures to be performed faster and more effectively with less injury and risk to the patient, significantly reducing overall healthcare costs. Our thoughtful design was created and adapted specifically to address current barriers to physician training and adoption. Surgeon feedback toward our prototype validates the system's ease of setup and use, natural human motion, and the value of system mobility from location to location. With all of these advantages, we are incredibly excited about the unique opportunity for our system to impact patients, surgeons, hospitals, and payers. Now, let me turn to our regulatory strategy and recent development. As we have commented in the past, we are targeting the ventral hernia indication for our first clinical application. Beyond ventral hernia, we are excited by the potential to target an array of soft tissue abdominal and pelvic procedures, including other types of hernia, hysterectomy, cholecystectomy, and certain gastrointestinal procedures. Our original regulatory strategy had assumed that most of these later indications would require premarket clinical trials. However, we had planned to pursue our initial indication of ventral hernia without premarket in human data. We've recently engaged in a series of communications with the FDA, culminating in a collaborative discussion around the potential of our system and an ongoing mutual desire to bring our robot to the market safely. As a result of these conversations, we will also pursue a pre-market clinical trial in support of our initial intended indication of ventral hernia repair. As a reminder, our system is designed to offer revolutionary advantages relative to existing robotic surgery devices, from fundamentally different robotic architecture to actuation. Due to the substantial differences between our technology and approved devices, we've reached an understanding with the FDA that a clinical trial is the best path to demonstrate the safety, effectiveness, and competitive advantages of our system. We anticipate that conducting this premarket clinical trial will cause a nine to 12 month shift in our FDA submission timing relative to the expectations that we have provided in the past. We had previously communicated our intent to file a 510K application for the vicarious system for eventual hernia procedures by late 2023. We now expect to file a de novo classification request by late 2024. While this development delays our initial submission timeline, We expect a more muted impact on the long-term roadmap, considering our original timeline to market assumed a post-approval clinical trial process prior to broad commercialization. Overall, we are encouraged by the transparent communications with the FDA, and we continue to hold immense confidence in the advantages embedded in our systems design and our ability to help health systems in the U.S. and globally realize greater adoption of surgical robots for the benefit of patients. We have always been prepared for the possibility of a pre-market clinical trial for our first indication, and we look forward to continuing our work with the FDA and sharing greater details with the public as we progress. I will now shift to the milestones that we aim to achieve in 2022. On the product development side, we are focused on the progression of testing on our beta system. On our last earnings call in November 2021, we announced that we are well on our way to successful beta unit testing with surgeons and hospitals, following the integration of our first beta 1 unit last summer. We have since collected considerable surgeon and hospital feedback across attributes of the system, such as clinical value from our visualization and surgical site access, workflow, ease of use, and surgeon ergonomics, all supporting the significant potential of the vicarious system, even in its beta-1 form, to benefit patients, surgeons, hospitals, and payers. As part of this process, we have also had the pleasure of hosting many of the world's leading hernia surgeons in our facility to incorporate valuable test experiences, responses, and insights. We are continuing cadaveric testing of beta-1 units this year, and incorporating the valuable feedback from Beta-1 into our design of Beta-2. We look forward to exploring opportunities later this year for Beta-2 evaluation in a hospital setting, leveraging the experience from Beta-1 testing and our many hospital partnerships. In addition to advancing the development of the vicarious system through beta testing, we plan to continue extensive testing with key opinion leaders, in preparation for launching a surgical simulator later this year. We are also in the process of identifying a center of excellence within an external health system. We plan to partner with that facility this year to further our development and training pathway, strengthening our position for future commercialization. Lastly, we are continuing to leverage our differentiated technologies and enhanced sensing to build up significant data and artificial intelligence capabilities. We see this as a unique opportunity for Vicarious Surgical to employ both data and AI to assist with all aspects of the procedure from preoperative planning through postoperative care. We remain measured and focused in our desire to advance these exciting initiatives while taking the time to listen, encourage and prioritize feedback and incorporate the advice of our surgeons, clinical and regulatory advisors, and broader stakeholders to ensure that our system will be positioned for long-term success. Thank you, and I will now turn the call over to Bill Kelly, our Chief Financial Officer, for a discussion of our fourth quarter and full-year financial results.