Perimeter Medical Imaging AI, Inc.

Welcome to the Perimeter Medical First Quarter 2023 conference call. At this time, all participants are in a listen-only mode. A brief 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. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jody Rates. Thank you, Jody. You may begin. Thank you. Good afternoon.

Thanks for joining us on this call and webcast to provide the first quarter 2023 results for Perimeter Medical Imaging AI, or Perimeter. Joining me on today's call is Jeremy Sabota, Perimeter's Chief Executive Officer, who will provide an overview of Perimeter's progress, and we will then open 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 benefits 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, many of which are beyond our control, including the risks 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 statement. For additional information about the risks and uncertainties facing our business, Management encourages you to review the company's public filings and press releases, which are posted on CDAR at www.cdar.com. The news release summarizing this business update that was released today will be available under the Investors section of our website at www.perimetermed.com and filed with CDAR. Now, I would like to turn the call over to Perimeter CEO, Jeremy Sabota.

Thank you, Jody. Good afternoon, and thank you, everyone, for joining us today. I'll provide a brief review of the quarter, including commentary on our commercialization activities related to our S-series flagship technology, as well as the clinical development of our next-gen investigational B-series technology augmented with our ImageAssist artificial intelligence software that is currently being evaluated in a clinical trial under our Atlas AI project. I'll then provide a brief overview of our quarterly financial results before opening up the call for your questions. Beginning first with the commercial front, a key part of our go-to-market strategy is to successfully target early adopters of Perimeter's transformative technology. The highly engaged champions of our technology at these newest accounts continue to build upon our foundation of reference sites, and our team is focused on training and supporting these surgeons as we drive towards future iterations or AI-enabled technology that has the real potential to democratize it for more widespread adoption. As we continue to reach out to leading surgeons across the U.S. to educate about the benefits of our flagship perimeter S-series OCT, we're pleased to report the first commercial placement in the state of Utah. The momentum continues to build in our sales pipeline, resulting in increased leads and demonstrations with key opinion leaders like Dr. Tittensoer, who represent the champions and initial adopters of our groundbreaking technology, and we look forward to updating you on additional deals nearing completion. As noted on our last call, although we continue to add to our funnel and build upon the momentum that was kick-started in the fourth quarter, our discussions with both customers and clinical investigators, you know, we're discussing some of the headwinds facing their adoption of new technologies more broadly and the broader medtech industry. Of note, Staffing shortages and ongoing global inflationary pressures on the labor market continue to raise concerns, I'd say particularly for the research staff and those in specialty medicine applications. But despite these macroeconomic pressures, we're encouraged by the caliber of surgeons and institutions adopting our flagship technology and believe the key opinion leaders at these reference sites are providing a strong foundation that validates our commercialization strategy and and as we strive to build a base of strong early adopters in advance of the expanded market opportunities when we launch our AI-enabled technology. As the overall sample size of S-series-enabled procedures continues to grow, we continue to see positive results from our early adopter user base. With a backdrop of national average re-operation rates in the 20% to 25% range, Initial reports from our customers are reporting single-digit results when utilizing our technology to visualize our margins intraoperatively. We're also encouraged and excited by additional support of clinical evidence published this quarter in a white paper that featured case studies from the commercial use of perimeters S-series OCT. Dr. Amelia Tower, a board-certified general surgeon with advanced training in breast surgical oncology, authored the paper and describes how she integrated our S-series OCT system into her breast oncology practice. She concludes that when assisted by perimeter S-series OCT in these particular three cases, she was able to make intraoperative clinical decisions to excise additional tissue during the primary surgery, sparing those three patients the need for a second surgery and relieving the associated burden on the clinical, economic, and psychosocial resources. It is these kinds of results that are driving excitement around perimeters technology, both from our existing user base and newly targeted surgeons who are learning more about our margin visualization technology and requesting evaluations in their own ORs. Further, it is this high level of engagement that continues to reinforce our belief that the next gen B series OCT with image assist AI has the potential to be a transformative technology that could democratize a new standard of care that would easily be adopted at a mass market scale. We have also made significant progress within our Atlas AI project, as a reminder that it is a multicenter randomized two-arm pivotal clinical trial evaluating the Perimeter B Series OCT combined with its proprietary image assist AI software in approximately 333 patients with study completion anticipated at the end of this year. It's led by our principal investigator, Dr. Alistair Thompson, at the Baylor College of Medicine in Houston. And the aim of the study is to assess unaddressed positive margin rates of surgeries utilizing perimeters technology compared to the standard of care. We believe that this further enhancement of using AI alongside our proprietary OCT imaging technology is going to empower surgeons with a tool set to improve healthcare outcomes. By the end of last year, we had activated all the initially planned clinical sites and received FDA approval to expand the number of institutions involved in our trial. I'm pleased to report that we have now initiated an additional clinical trial site at Baptist MD Anderson Cancer Center in Jacksonville, Florida, and continue to engage with other potential investigators to further accelerate study completion. We continue to hear from the investigators involved that the clinical trial is investigators involved in clinical trial that suggest combining OCT with deep learning algorithms could assist surgeons to better identify regions of interest, supporting real-time decisions on margin status and EOR, potentially setting a new standard for specimen imaging technology during breast conservation surgery. With the number of users growing across both our commercial and clinical initiatives, we continue to have a strong presence at key medical conferences including the International Conference on Surgical Cancer Care, hosted by the Society of Surgical Oncology, or SSO, in late March, and more recently at the annual meeting of the American Society of Breast Surgeons in Boston. At our booth and perimeter-led educational symposiums, we see many physicians across different surgical oncology specialties want to evaluate our technology and see the advantages of using S-series for their margin visualization in the OR. At the American Society of Breast Surgeons this year, we had a full room listening to a session moderated by Dr. Beth Dupree, as Drs. Beth Anglin and Michelle Carpenter shared their experiences using the S-series OCT in their operating rooms to help personalize clinical decisions for each patient at the point of care. And their excitement is inspiring. We're committed as a team to educating about the benefits of perimeters technology and surgical practices with the aim of improving patient outcomes and reducing healthcare costs. I would now like to turn my attention to a brief overview of our first quarter financial results. For more details, please refer to the press release issued earlier today. As noted in our year-end results, the company changed its presentation currency from Canadian dollars to United States dollars. The change in presentation currency was made to improve investors' ability to compare the company's financial results with other publicly traded businesses in the industry. And then making the change to U.S. dollar presentation currency, the company followed the guidance in IAS 21 and has applied the change retrospectively to all prior periods as if the new presentation currency had always been the company's presentation currency. Operating expenses for the three months ended March 31st, 2023 were $3.8 million compared to just over $3.8 million during the same period in 2022. For the three months ended March 31st, 2023, the net loss was $3,259,459 compared to $5,087,044 during the same period in 2022. And from a cash flow perspective, for the three months ended March 31st, 2023, cash used in operating activities was just over $4.5 million dollars. As of March 31st, 2023, cash and cash equivalents were $23.6 million. With our strong cash position and prudent fiscal management, we're confident that we will be able to support our clinical development activities and fund the continued commercial rollout of our products. And finally, before concluding the call, I would also like to reiterate our gratitude to Dr. Tony Holler for his many contributions to Perimeter over the years during his tenure on the board. including his service as chair from 2019 to 2022 and building a world-class group of directors. The entire Perimeter team wishes him well. Suzanne Foster, our current chair, supported by a board of globally recognized experts, including our AI thought leader, Anantha Kancherla from Meta, will continue to provide strategic guidance as we strive to transform cancer surgery. Finally, on behalf of the Perimeter team, we firmly believe in the opportunity to deliver a transformative technology to improve patient outcomes, lower healthcare costs through our innovative medical imaging and AI platform, and we look forward to providing progress updates on future calls. I'll now turn the call over to the operator and open the line for questions. Operator?