Perimeter Medical Imaging AI, Inc.

Greetings. Welcome to the Perimeter Medical Imaging AI second quarter 2022 conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Mark Kaminosky, Investor Relations. Thank you. You may begin.

Good afternoon. Thank you for joining us on this call and webcast today to provide the second quarter 2022 update for Perimeter Medical Imaging AI or Perimeter. We will open the call with a business update from Jeremy Sabota, Perimeter's Chief Executive Officer, and then Chris Scott, Perimeter's Chief Financial Officer, will provide a financial summary. Following Chris' prepared remarks, we will open up the call for your questions. Please be advised that during this call, we will make a number of statements that are forward-looking, including statements regarding the future financial position, business strategy and strategic goals, commercial activities and timing, competitive conditions, research and development activities, projected costs and capital expenditures, research and clinical testing outcomes, the potential benefit of our products, including Perimeter S Series OCT, perimeter B series OCT, and perimeter image assist. The efficacy of our clinical trial designs, the timing and anticipated enrollment in our clinical trials, and the timing of potential publication or presentation of future clinical data. Forward-looking statements are subject to numerous risks and uncertainties, and many of which are beyond our control, including the risk and uncertainties described from time to time in our CDAR filings. Our results may differ materially from those projected on today's call. We undertake no obligation to publicly update any forward-looking statements. For additional information about the risk and uncertainties facing our business, management encourages you to review the company's public filings and press releases, which are posted at CDAR at www.cdar.com. The press release summarizing this business update was released today, August 24, 2022, will be made available under the investor section of our website at www.perimetermed.com and filed with CDAR. Now I'd like to turn the call over to Jeremy Sabota.

Good afternoon, and thank you, everyone, for joining us today. I'll begin today's call by commenting on our commercialization progress and updating you on our outlook for the rest of the year, followed by an update on our Atlas AI project. Then I will cover general operation updates before turning the call over to Chris for a review of the second quarter financial results. On our previous calls, we have spoken about our commercial rollout strategy for our flagship S-series technology. Namely, we are focused on early adopters who can develop a broad-based expertise with the technology and form our long-term bench of reference sites, and we're seeing great progress in the execution of this strategy. From a macro perspective, the commercial team is seeing increased access to customers, which is critical as we educate this user community on our novel technology. However, our customers are continuing to react to uncertainties in their operations and supply chains around things like staffing shortages and other pressures that are challenging value analysis committees across the country, And this is impacting decisions from site of care for procedures to capital budgets and long-term procurement contracting decisions. That said, interest from our end-user surgeon community is strong and growing. Just a few weeks ago, we announced the first commercial placement of our Perimeter S-Series OCT system in the state of California at Pavilion Surgery Center, an affiliate of St. Joseph Hospital in Orange, California. The new medical imaging technology will be used under the direction of Michelle Carpenter, MD, a breast surgeon who performs breast conservation and other surgeries at Pavilion Surgery Center. This is a major milestone for Perimeter as not only are we thrilled to partner with such an esteemed physician as Dr. Carpenter, but also we are excited to have one of our early installations in the ambulatory setting, a site of care we believe will continue to form a greater proportion of procedures going forward and a shift that is only accelerating given the staffing challenges facing providers today. We now have systems placed at multiple sites and are actively working on growing this footprint. And it's worth noting that some of these institutions are some of the most advanced in medical care and want to stay on the forefront of medical technologies. Our pursuit of these types of institutions stems from our strategy to connect with leading healthcare institutions and to train and support innovative physicians who see the true benefits of using our technology in their surgical practices, And these leaders can then in turn train others as we look to expand our commercial footprint. Additionally, current proposals may start with a single system interest, but then have a rollout of multiple units. And while we are excited about the response of our customers wanting to make our technology the standard of care across our institution, it does introduce additional procurement steps for our customers and a higher level of volatility introduced by any one individual deal. With that, we have revised our full year outlook on commercial installations to increase the range to 10 to 20 units. We have assembled an experienced commercial team that is executing on our strategy and do foresee our rollout gaining momentum to close out the year and beyond. And I also do not want to overlook the performance of our early customers. Our sample size of procedures continues to grow across placements and evaluations over an increasing number of surgeon users. and we continue to see that results are outperforming our anti-expectations. Whether users are starting from national average type re-operation rates of 20% to 25% or as low as 10%, they are achieving early single-digit results utilizing our technology to minimize their margins intraoperatively, and this is the ultimate value creation for their practice. In terms of our Atlas AI project, which includes the clinical pivotal trial of the B series with ImageAssist AI, it is progressing with seven out of eight sites up and running. However, despite great engagement from our investigator partners, the staffing issues plaguing providers more generally are also impacting the enrollment rates within our study. That said, we are actively pursuing strategies to mitigate the risks imposed by shortages of staff, ranging from research support to pathology staff, but if the current environment persists, we do not see enrollment completing until early 2023. And just as a refresher, the goal of the study is assessing unaddressed positive margin rates of surgeries utilizing perimeters technology compared to the standard of care. We believe that this further enhancement of our technology using AI is going to empower surgeons with a supercharged toolset to improve healthcare outcomes. We couldn't be more pleased by the engagement of our physician investigators in this study and their feedback about what participation in it means for them. Finally, from an operational perspective, we previously announced the addition of Chris Scott to the team, and his appointment was a vital step to filling out the management team. Chris brings a wealth of experience directly relevant to Perimeter, and as in his previous role, he helped lead another medical device company through from IPO and scale-up to achieving revenue CAGR over 20%, five times headcount growth, and growing market capitalization from a pre-IPO value of approximately $10 million to a peak of over $600 million at the end of 2021. We're grateful to have Chris on our team and look forward to his contributions. The other addition we announced this last quarter, the appointment of Ananta Kanchola to our Board of Directors. from the nomination of social capital. We're thrilled to have Anantha on our board, and having someone with his AI expertise on our team really gives us an asset. Anantha is currently engineering director at Meta, where he is head of its AI platform. And additionally, he has a background of applying artificial intelligence and machine learning software solutions at companies such as Microsoft, Facebook, and Lyft, and will be invaluable as we advance our next-gen image assist AI technology. We are very excited about the product pipeline in this part of our business, and we look forward to his insight and his ability to leverage his AI experience and knowledge as we execute on our new product development strategy. With that, I'll turn the call over to Chris for a review of our Q2 financial results.