Perimeter Medical Imaging AI, Inc.

Thank you. Thank you. We'll be right back. Thank you.

Good afternoon, ladies and gentlemen. Welcome to the Perimeter Medical fourth quarter 2025 conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Tuesday, March 31st of 2026. I would now like to turn the conference over to Stephen Kilmer, Investor Relations. Please go ahead.

Thank you. Good afternoon, everyone.

Let me start by pointing out that this conference call will include forward-looking statements within the meaning of applicable securities laws. These may include 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 and Clare OCT, formerly Perimeter B-Series OCT, Perimeter's ability to broaden its user base and system utilization, expectations regarding new products and the timing thereof, and expectations regarding opportunities for market expansion. 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 public filings and press releases, which are posted on cedarplus.ca. Our results may differ materially from those projected on today's call. No forward-looking statement can be guaranteed. Perimeter 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 those required by law. On the call representing the company are Adrian Mendez, Perimeter's chief executive officer, Andrew Berkley, Perimeter's chief innovation officer and co-founder, and Sarah Bryan, the company's chief financial officer.

With that said, I'll now turn the call over to Sarah.

Thanks, Steve. Good afternoon, everyone, and welcome to our fourth quarter and full year 2025 conference call. On behalf of the management team and everyone at Perimeter, 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'd like to provide a brief update on our preliminary and audited financial results. But before I do, I want to highlight a defining milestone for Perimeter and the recent FDA PMA approval of our next generation AI-enabled Clare OCT device. We believe that this achievement marks a true inflection point for the company, validates our AI-enabled technology, and positions us at the beginning of a new phase of growth. Over the past several years, we have been deliberately building towards this moment by seeding the market with our S series platform, expanding our proprietary image library, and developing critical clinical and commercial experience. But in many ways, we are only now just approaching that starting line. With Claire, we will be introducing a solution design for a broader adoption with the potential to significantly increase adoption, both in terms of installed base and existing system utilization. We believe this will position Perimeter to scale in a way that was not previously possible and to drive meaningful value creation in the periods ahead. Adrian will provide additional detail on the progress we've made, but I felt it was important to begin today's call by highlighting this exciting milestone for Perimeter and our shareholders. With that, let me turn to a brief review of our preliminary unaudited financial results for the quarter. To streamline things, all of the numbers I will refer to have been rounded, so they are approximate. And as a reminder, we also report in U.S. dollars. For the three-month period ended December 31, 2025, the company recorded record quarterly revenue of $711,000, which consisted of recurring sales of S-series consumables system leases, and the sale of ESP warranty programs. This represents 143% increase over Q4 2024. Operating expenses for the fourth quarter of 2025 were 2.5 million. Additional savings from the company's cost control efforts implemented in June 2025 resulted in this 46% year-over-year improvement from 4.7 million in the same period in 2024. Fourth quarter 2025 net loss is $2 million or $0.02 per common share and 42% improvement from $3.4 million or $0.06 per common share. And the three months ended December 31, 2024. As of December 31, 2025, cash and cash equivalents were approximately $2.5 million.

With that, I will now turn the call over to Adrienne. Thank you, Sarah.

And thanks again for everyone for your time and attention today. As you just heard from Sarah, we delivered another strong quarter, including record revenue reflecting continued execution across our expanding commercial strategy. I want to take just a quick moment here to focus on the rebranding of our new product from B-Series to Clare OCT. We named the platform Clare, not just because it sounds elegant, but because it captures exactly what we aim to deliver, clarity. The name comes from the French word for clear and illuminating. It reflects our mission to help surgeons better visualize margins during breast conserving surgery. It's also intentionally feminine, keeping our focus on the millions of women impacted by breast cancer. And embedded within the name, Claire, C-L-A-I-R-E, is a nod to the artificial intelligence that powers the additional insight we bring into the operating room. As Sarah mentioned, our primary goal last year was to seed the market with S-series OCT in order to create a strong foundation of early adopters and technology champions in preparation for a potential FDA approval and subsequent commercial rollout of Clare. We consistently executed toward achieving that objective since the start of 2025, and the fourth quarter is illustrative of that. Adoption of the S-series device accelerated even as we and our current customers waited for the requisite go-ahead from the FDA to introduce CLAIRE to the market. To put that into perspective, we were excited to see total revenues from the S-series more than double year-over-year in Q4, contrary to what one might expect with the pending FDA PMA approval of an AI-enabled, more user-friendly next-generation device. With respect to CLAIRE, as Sarah also mentioned, Our PMA application was approved by the FDA in line with our timing expectations at the beginning of March 2026. There are several advantages of PMA approval for Clare over the previous 510K clearance for our first generation S series device. The first is that PMA creates a higher barrier to entry for competitors. Secondly, the PMA pathway requires extensive clinical evidence to demonstrate safety and effectiveness of the device. In that regard, our PMA application was supported by the strong pivotal trial results for CLER, where the primary endpoint of a statistically significant reduction in patients with residual cancer during breast cancer surgery was met with a p-value of .005, and super superiority compared to standard of care alone was achieved. And third, a PMA approval signals to hospitals and surgeons a high level of FDA scrutiny and review. helping to build credibility and confidence in the product's safety and effectiveness. With all that being said, we've now added a third moat to our business. We believe our PMA approval establishes a high regulatory barrier to entry, while our patented OCT technology and proprietary imaging capabilities differentiate our platform at the point of care. In addition to both of those, the image library we've built over time serves as a critical foundation for our AI engine. creating a data advantage that we expect will continue to improve performance and clinical utility over time. We believe these three moats, regulatory, imaging system, and multimillion image data library, positions perimeter to sustain leadership as adoption of interoperative imaging and AI continues to grow. It's also important to note that Claire has also received FDA breakthrough device designation before our PMA application was submitted. That helped us while the FDA conducted its substantive review of the PMA application. And while I don't want to go into too much of its future potential implication at this stage, I will say that we believe it should help us with securing reimbursement for the technology as we move forward with our US commercialization strategy. Perimeter is clearly at an important inflection point as we look to leverage the clinical and commercial adoption of the FDA 510 cleared first-generation Series S OCT and prepare to soon begin bringing game-changing FDA PMA-approved AI innovation to operating rooms nationwide via the pending rollout of CLAIRE. And so, to summarize the incredible progress we're making, first, we delivered yet another quarter of positive commercial traction with our current S Series product, as demonstrated by our 143% revenue growth in the fourth quarter. Secondly, we were carefully managing our resources as we grow, and as a result of our cost control efforts, we were able to reduce operating expenses by 46% in the quarter. Third, we received FDA PMA approval for our next generation AI-enabled Clare device in early March, 2026. And finally, now that FDA approval for Clare has been achieved, we are making final preparations for a full and aggressive commercial launch, representing a major step in our go-to-market strategy for interoperative cancer margin assessment with OCT and an opportunity to significantly broaden our customer base across the US. As we move forward through 2026, our commercialization strategy will be focused on leveraging our existing installed base and expanding within leading healthcare institutions while also targeting new accounts through a combination of clinical validation, surgeon education, and direct sales efforts. We believe our early investments in building clinical champions and generating real-world data will enable a more efficient and scalable go-to-market approach for Clare. Based on the level of engagement we are seeing, we expect to close our first commercial sale or sales of Clare in the second quarter making an important initial step in what we believe will be a broader adoption cycle over time. Importantly, our model is designed to scale as adoption increases, with revenue driven not only by system placements, but also by growing consumable scan volumes. As we expand our install base and drive deeper usage within our existing accounts, we expect to see increased system utilization, which in turn supports a higher margin recurring revenue stream from the sale of per procedure consumables. Over time, we believe increased adoption of Clare will position Perimeter to deliver attractive revenue visibility and operating leverage. As excited as we are about the tremendous growth opportunity we see ahead in breast conserving surgery, we also believe the introduction of Clare represents the beginning of an even broader platform opportunity. As we continue to advance our clinical data, AI capabilities and product roadmap, we do see the potential to expand Perimeter's AI-enabled OCT technology beyond breast conserving surgery and into additional applications, further increasing our addressable market and reinforcing our long-term growth trajectory. As you can see, this is an exciting time for us, and we look forward to keeping you updated on our progress. And with that, I will now open up the call for your questions. Operator?

Thank you. Ladies and gentlemen, we will now begin the question and answer session.

Should you have a question, please press star 1 in your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star 2. If you're using a speakerphone, please lift the handset before pressing any keys.

One moment please for your first question. Your first question comes from Michael Freeman of Raymond James.

Your line is already open.

Hi there, Adrian, Andrew, Sarah. Congratulations on winning this approval. This is a big deal for the company, for patients, and I'm very happy for you. My first question for you is, I wonder if you could describe how you're communicating with your current customer base. um, about the Clare OCT, um, about, you know, about its capabilities, um, about the, you know, what's written in the label, um, about how, you know, how they might be able to adopt it. And then, uh, some of the feedback you might've been already receiving from them.

Yeah. Thanks, Michael. Thanks for the questions. A great one. Um, the nice thing about having been in market already with the S series is that we, And having run this trial and having the product going through, you know, Claire going through FDA, is that the surgeon community is well aware of what's coming down the line. They've been educated to some extent through different conferences and papers. So they have an idea of our existing customer base knows the benefits that the OCT portion of the technology can provide to them. And they understand what happens when you then add that AI assistant on top of that, because they've seen it in conferences, they've seen the data from the trial, et cetera, et cetera. And so that makes the conversation very easy. It's not like we're coming at them with a whole brand new concept. And it's very intuitive for them to sort of understand what it means to go from the product they're using today into the next generation product. So from an education standpoint, from how it improves usability, how it improves outcomes, I think Those conversations are very easy. We're not starting from scratch on that, so that's great. At this point in time, having gotten the approval just a few weeks ago, I think we're only up to like week three at this point, the conversations we've been having with all our customers is, okay, let's start to go through the contracting process, and we've already started, to get the Clare product into those customers. One thing we're being very careful to do is – is to ensure that we are communicating the value of the AI, of the Clare, to customers and not, quote, unquote, giving it away for free. So we're being quite disciplined in the way we're pricing the product. We're being quite disciplined in the way we're communicating those advantages to the purchasers. And we're working through that process now. So we expect over this quarter, this upcoming quarter, Q2, to be able to close on a handful of accounts. And we're looking forward to that. Excellent. Thank you very much.

And it leads into my next question nicely. I wonder if you could describe the way that your revenue model might be evolving as you introduced Claire. If you could speak to pricing, speak to perhaps new revenue lines related to the AI and updates, perhaps subscriptions, that'd be helpful.

Yeah, sure. So just a baseline. The revenue model that we'll have for Clare will look similar plus additional as for the S-series. So the S-series, we've got three revenue streams. The primary one is from the consumable sales of the consumable used one per patient, the immobilizer. We also sell the imaging system itself, the carts, in some cases. And in the case of where we don't sell them, we have a minimum volume guarantee that we ask our new customers to sign up for. And then we have service contracts, which brings us in revenue on a regular basis. So those are our three current revenue streams. Two of them are recurring, the consumable revenue and the service contract recurring. And one of them is not recurring, which is the device sales when we sell the device. way we're coming to market with the AI is to make that, there's really two different models we're looking at right now. One is to have a model where we sell a version of the AI upfront, which allows the customer access to that initial version. But as we do major upgrades to that version, there will be an upgrade fee attached to that. So that's one model. The other model we're looking at and working with customers on is on a per procedure model. We're really there to, so what's important for us is to make sure that we're able to monetize all of the advantages and value that the AI brings to the customer. And in terms of how we monetize it, we're fairly agnostic. And there's, I mean, it's kind of just math. So we can make the math work in either of those two different models. But what's important to us is to be able to monetize that in some sort of continuous revenue model um sorry recurring revenue model um and as we continue to go through this negotiation process we'll see which one ends up being more attractive to different customers

That's great. That's great. And if I could just squeeze in a few modeling questions. Could you share, if you're able, the total number of OCD devices that you've installed, I guess, by year end and if you're able to share up to today. And then if you could share your expectations for OpEx during 2026 relative to fourth quarter levels.

Yeah, maybe I'll hand that to Sarah to take.

The install base at the end of 2025 is 23 devices is there. With regards to OpEx, you know, we're anticipating a similar level of OpEx in the next few quarters.

Okay. And then do you have expectations to scale for it to ramp up in the second half of 2026? Yes, as we look to expand our commercial team and operations. Yeah, that's rational. Okay, thank you very much. Congrats again, and I'll pass the line.

There are no further questions at this time. I would hand over the call to Adrian Mendez for closing comments. Please go ahead.

Okay, thank you. And thanks to everyone for joining our call today. As you can see, Perimeter is stronger and more focused than we've ever been. We have optimized our commercial engine, and we've aligned our infrastructure with long-term scale. We ended the fourth quarter with a leaner and more efficient platform that's positioned to drive durable growth, and we expect that growth to start accelerating as a result of the launch of the next-gen AI-powered Clare OCD products. We believe there was a clear inflection in momentum in 2025, supported by higher utilization, stronger surgeon engagement, and expanding clinical adoption. This bodes incredibly well for what we see as a potential breakout in 2026 and beyond, as we deepen hospital penetration and scale procedure volumes via the commercial rollout of Clare. We're in very exciting times here at Perimeter, and we thank you for your interest and support.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation and you may now disconnect.