Good day, and welcome to the OpSens Reports Second Quarter of Fiscal Year 2022 Financial Results. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero. During today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Robert Blum with Lytham Partners. All right. Good morning. Thank you, Scott. Good morning, everyone, and thank you all for joining us today for the OpSens Second Quarter Fiscal Year 2022 Conference Call for the period ending February 28th, 2022. With us on the call representing the company today are Louis Laflamme, OpSens President and Chief Executive Officer, and Robin Villeneuve, OpSens Chief Financial Officer. At the conclusion of today's prepared remarks, we will open the call for a question and answer session. Before we begin with prepared remarks, just a couple of comments. Today's call will contain forward-looking statements that are based on current assumptions and subject to risks and uncertainties that could cause actual results to differ materially from those projected, and the company undertakes no obligation to update these statements except as required by law. Information about these risks and uncertainties are included in the company's filings as well as periodic filings with regulators in Canada and the United States, which you can find on SEDAR and the OpSens website. Today's discussion will include adjusted financial measures, which are non-IFRS measures. These should be considered as a supplement to and not a substitute for IFRS financial measures. Finally, today's event is being recorded and will be available for replay through both the webcast and conference call dial-in information provided in the press release. With that said, let me turn the call over to Louis Laflamme, President and Chief Executive Officer for OpSens Inc. Louis, please proceed. Thank you, Robert, and good morning to all of you. We are excited to speak with you today again to discuss the developments within the business. Let me also take a minute to greet the French-speaking audience. [Foreign Language] Similar to last quarter, the challenges brought on by the Omicron variant continued to impact sales in the second quarter as procedure volumes decreased, and we encountered supply chain disruptions that limited our ability to ship certain orders. Fortunately, with the Omicron variant subsiding in North America, we have seen an increase in activity recently and are expecting an increase in revenue in the third quarter compared to the most recent second quarter. This is consistent with what I mentioned last quarter, as we remain very optimistic that the second half of fiscal year 2022 will show resumption in revenue growth. I will expand more upon the growth trends we are seeing as we now sit about halfway through the third quarter, as well as the initiatives we are taking to further expand and enhance our sales organization to now take advantage of these new trends in the market. Bottom line, we see continued commercial adoption for our products despite the slowdown in overall hospital-related procedures and supply chain challenges the last few quarters. On the development side of our business, we remain equally optimistic to the prospects we communicated last quarter as we remain on track for an anticipated approval in mid-2022 for Canada and the second half of 2022 in the U.S. for our next generation medical guidewire, which we are calling SavvyWire. As a reminder, in November last year, we completed the 20-patient first-in-man clinical safety and efficacy study utilizing the SavvyWire, with all patients successfully treated without any adverse effects related to the product. We then submitted a clinical package for 510(k) clearance to the U.S. FDA, approval with Health Canada, and submitted more recently for CE mark as well. We are responding to what we believe are normal courses of questions at this time and do not foresee any change to our estimated timeline for approval. These submissions were clearly significant milestones for the team here at OpSens, but the ultimate goal is clearance and commercialization. I will expand a bit more on this in a moment as we feel we are now closer than ever to entering the massive and rapidly growing TAVR market with what we believe is a key innovative product for TAVR procedure evolution, which will drive future revenue and strategic value for OpSens. Another key development was the signing of a four-year extension of the supply agreement we have with Abiomed to continue supplying OpSens sensor technology for Abiomed's Impella heart pump through April 2028. We are extremely pleased by this development. As it validates our fiber optic sensor technology and continues to provide us with a strong and predictable base of revenue and growth. With those three high-level points, let's jump into a few more specifics. Starting with the OptoWire. As you saw in the press release, sales within our coronary artery disease business, or what we refer to as FFR and dPR, were CAD 4.6 million during the second quarter, compared to CAD 6.1 million in the year ago quarter. The results were impacted by supply chain disruption and by the lower number of procedures in the hospitals due to the Omicron variant wave, which hit hard in December and ran through mid-February. However, as I mentioned a moment ago, the tide appears to have turned, and we have seen an increase in activity recently, which should bode well for the current third quarter and the second half of the year. As we look at the sales around the world, there were certainly bright spots as we were able to mitigate the impact in a few key areas. In particular, EMEA was up 9% compared to the second quarter of a year ago and up 13% sequentially. As you recall, the variant rolled through this region earlier than in others, which helped. More importantly, the team has done a tremendous job of improving the performance of distributors in the region through enhanced educational activities. I believe the work that has been accomplished in the last few months should bode well for continued improvement in this region. In Canada, similar to what I mentioned last quarter, while the variant impacted procedure volumes, those impacts were offset by a multiyear contract we received where we were selected as the main coronary pressure guide wire for the eastern part of the province of Quebec. This has been a nice growth driver for us, and with the hopeful return of normalized procedure volume, should only elevate our performance in Canada. The impact was most felt in the U.S. and Japan. In Japan, the impact was primarily due to supply chain disruption that prohibited our ability to obtain certain components for deliveries in Japan. However, we expect reversals of this trend into Q3 and into Q4 to finish the year on a strong note. Taking a step back, as you may recall, when the pandemic first hit, we reduced the number of employees dedicated to business development in the field, particularly in the United States, as access to cath labs and hospitals were restricted by sanitary measures. We have remained cautious since that time and have managed our business prudently. While we could have ramped up the hiring of additional salespeople earlier, we wanted to try and see the proverbial light at the end of the tunnel before jumping all the way in. Well, we feel the time is right now to launch a more aggressive expansion of our sales organization. As such, we have started accelerating hiring for these positions in the past few weeks to intensify our sales force in North America. Additionally, we brought on board a new Chief Commercial Officer, Brad Davis, to lead our global commercialization strategy and more specifically expand our US commercial operations. Brad was formerly Vice President, global marketing and healthcare economics and reimbursement at Cardiovascular Systems, or CSI. During his nearly seven-year tenure at CSI, the company tripled coronary atherectomy revenue and grew peripheral atherectomy revenue faster than the market to achieve U.S. atherectomy market share leadership while expanding into new product categories. Prior to CSI, Brad held numerous commercial roles of increasing responsibility at Guidant and Boston Scientific. I believe Brad's 21 years of sales, marketing, and strategy experience will prove to be instrumental in growing our commercial OptoWire operation, and even more so as we look to commercialize our SavvyWire later this year. With Brad's enhanced leadership of our sales team, the hiring of a new sales professional in the U.S., and with the hopeful return of more normalized procedure volumes, I believe we are well-positioned to have a strong second half of fiscal 2022. One final point I will make on our commercialization efforts is that we continue to make progress with our GPO relationships. We are making good progress with the two current GPOs we have signed thus far and believe we are making strong progress in adding to this going forward. I hope to have more news for you on this shortly. Transitioning to our business partnerships for a moment, where several companies are integrating OpSens sensors into their products used in medical application. As I mentioned at the beginning, I am excited to have signed a four-year extension of our agreement with Abiomed. Overall, sales to OEMs were CAD 2.4 million in Q2 2022 compared to CAD 1.8 million in Q2 2021, with the vast majority of those sales going to Abiomed. We are pleased to continue this long-term mutually beneficial relationship and look forward to many successful years of working together. Let us now transition to our industrial segment, which leverage our fiber optic sensing technology and knowledge by offering key solutions in optical temperature, pressure, strain, and other critical parameters for various industries, including aerospace, nuclear, and power electronics. For the quarter, revenue was approximately CAD 1 million, compared to CAD 979,000 in the year-ago quarter. Looking forward, the long-term opportunity in this segment continues to get more attractive as we are working on an increasing number of potentially significant projects where OpSens proprietary fiber optic sensing components could be integrated into these critical projects, including the Eureka Network project, the International Thermonuclear Experimental Reactor, or ITER project, fuel monitoring for aerospace, and many others. The team at OpSens Solutions continues to do a great job, and I look forward to the continued success in leveraging our fiber optic sensing technology to a wide variety of commercial applications. With that overview on our commercial base operation, let's jump into our lead development program for TAVR. During the second quarter, we made substantial progress, completing the 20-patient first-in-man clinical study utilizing the SavvyWire in November, and soon after submitting our package for U.S., Canada, and EMEA clearances. Our team is diligently addressing this round of typical questions from the regulatory authorities. We believe we remain on track for approval later this year. To those newer to the company, the SavvyWire is our new intelligent pre-shaped structural guide wire with integrated pressure monitoring aimed at improving procedural efficiency and clinical outcomes by allowing multiple steps over the same device without exchange. The device has been designed to support the minimalist TAVR approach, which has been growing among structural heart physicians. With the SavvyWire, physicians can expect to diagnose and implant the valve over the same device while getting continuous and accurate hemodynamic measurements. The introduction of this novel and advanced guide wire that has the ability to both deliver a valve while allowing continuous hemodynamic pressure measurement during the procedure is considered to be a significant benefit to the medical community, especially given the rapid growth in TAVR procedures. The press and medical buzz around the guide wire have been tremendous, which we believe augurs well for our commercialization efforts. As a reminder, recently at a few high-profile industry events, positive data was presented at TCT 2021 in November, where SavvyWire was featured in four presentations by leading medical specialists, including Dr. Généreux. Who presented for the first time clinical data validating the robustness of the OpSens pressure measurement in assessing pressure gradient before and after TAVR procedure, compared to the different diagnostic modalities. Additionally, world-renowned cardiologists, including Dr. Josep Rodés-Cabau at the Quebec Heart and Lung Institute, Dr. Thomas Modine from CHU de Bordeaux from France, Dr. Hemal Gada from UPMC Pinnacle, and Dr. Reda Ibrahim from Montreal Heart Institute, all discussed the benefits of the SavvyWire. While we await the agency's clearance, we are advancing commercial preparations to ensure a successful product launch. This includes ramping up our manufacturing capabilities and developing a strong sales and marketing strategy. Brad Davis' experience here has been tremendous. We look forward to communicating more with you in the future on the status of the FDA, Health Canada, and EMA clearances for the SavvyWire. Before I turn it over to Robin for a more detailed review of the financials, let me quickly summarize. While the pandemic has had many turns and bumps along the way, which have impacted our business, we are seeing increased volumes over the past month or so, which we believe bodes well for the back half of the year. The supply chain disruption we encountered, which impacted our sales primarily to Japan, appear to be resolved, and we are expecting normalized shipments in the upcoming quarters. As a result, we have ramped up our sales and marketing activities and brought on board key individuals to help lead the commercialization, not just of OptoWire, but SavvyWire as well. Again, we think Q3 is setting up to find growth again. Our industrials team continues to do a great job as we gear up for some exciting projects in the coming years. With the signing of a four-year extension with Abiomed, the stability of that base of business remains in place for many more years. With TAVR study completed, our 510(k) submission with the FDA and the filing with Health Canada, we are closer than ever to commercializing our disruptive new SavvyWire technology later this year. We feel confident to sign at least one additional GPO contract in the coming weeks. Finally, what I think is always something important to point out, our balance sheet remains strong, allowing us to execute on our strategies to drive value creation going forward. As always, I want to thank all of our employees for their hard work and dedication. We have accomplished several important milestones and developments, and we see many more opportunities ahead. Let me now turn the call over to Robin for a further review of the financial results. Robin? Thank you, Louis, and thanks to everyone joining us on the call. As we hit on a few of these items, I will try to add additional details where I can. The company reported sales of CAD 8.1 million during the second quarter. This was broken down as CAD 4.6 million in our coronary artery disease lines of business, CAD 2.4 million in our optical medical systems, which is mainly our agreement with Abiomed for integration of our pressure sensor into their Impella pump, and CAD 1 million in our industrial segment. When you look at gross margins were stable at 51.5% in Q2-2022, compared to 51.7% last year. We continue to believe we will see year-over-year increase in gross margin percentage due to higher sales volume and the realized economies of scale combined with enhanced productivity. From an operating expenses standpoint, as planned, overall operating expenses increased by CAD 2.1 million during the second quarter of fiscal 2022 compared to the second quarter of fiscal 2021. The increase is largely explained by our investments in sales and marketing as we are ramping up our sales efforts to continue growing market shares in the U.S., along with increases in our R&D and general and administrative costs pertaining to higher non-cash stock option expenses and professional fees. We explained we are making additional investments in sales and marketing and research and development over the coming quarters to capitalize on the opportunities to accelerate growth of our OptoWire and to prepare the commercialization of our SavvyWire. EBITDA, which we define as net income loss plus tax, financial expenses, depreciation of PP&E and right-of-use assets, amortization of intangible assets, and stock-based compensation costs, was -CAD 1.4 million in the second quarter of 2022, compared to CAD 0.9 million in the second quarter of 2021. The decrease is mainly due to higher operating expenses of CAD 2.1 million, as previously explained. Looking at net income, we are reporting a net loss of CAD 2.4 million in the second quarter of 2022, compared with a net income of CAD 41,000 in the year-ago second quarter. The net loss is due to our investments to capitalize on business opportunities with additional spending in sales and marketing, R&D, and others for operating expenses increasing CAD 2.1 million, as I mentioned earlier. Finally, on the balance sheet, we ended February 28, 2022, with CAD 30.9 million in cash and cash equivalents. The company prepaid the entire balance of the term loan in the amount of $5.8 million in September 2021. With that, I will turn the call over to Louis. Thank you, Robin. Thank you to all our investors for their continued interest and support of OpSens. We are working hard every day to capitalize on the opportunities ahead of us to position OpSens for long-term success. Operator, let me now turn the call over to any questions. We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Rahul Sarugaser from Raymond James. Please go ahead. Thank you, operator. Good morning, Louis and Robin. Thanks for taking my questions as always. My first question is, of course we recognize that this quarter was squarely set during the Omicron spike, so we've seen the softness across the sector. I guess my question really is, as you are now ramping your sales and marketing organization for TAVR, which we estimate conservatively with, you know, assuming its approvals would be launched in early next year, given that we have the remainder of 2022, how do you see the strengthened sales and marketing team affecting your legacy sales of OptoWire for the remainder of the year? First, thanks for the question, Rahul. Again, I mean, we see a lot of potential with the OptoWire. Of course, as you know, SavvyWire is important for our strategy to be more relevant for doctors, hospital, and GPOs in having a second product in our portfolio. Today, we feel that with the volumes that are coming back to a more normal situation in hospitals, there is a lot of opportunities for us to grow in all of our markets with additional resources. In particular in U.S., we see potential. I mean, new hirings are having right now, I would say, quicker impact than what we had in the past. We are confident that the... Already we saw this in Q3. We can show better performance in U.S. Obviously, you know, for EMEA and Canada remains strong. We are expecting a rebound in Japan, where, as you saw, it was from a revenue standpoint a difficult second quarter. Overall, to your question, we think that, I mean, the investment we are doing today is really strategic because there is opportunities to capture much more market share in U.S. and all over the world. Perfect. Thanks, Louis. My second question is now focusing specifically on the clinical timelines associated with the TAVR application. You had said that, you know, you don't expect any changes. What we had originally anticipated based on your previous comments is that Health Canada late Q, late calendar Q2, FDA late calendar Q3. Are these timelines in fact what you're looking at? Is there possibility for that to be flipped given sort of, you know, the way the FDA has been moving recently with medical devices? I would say it's always you know a challenge to speculate on this. What we can see that is really factual is that communications have been really positive, really fair, you know, quite practical from all those agencies. We feel that we have been making good progress in doing the demonstration that Our next question comes from Justin Keywood from Stifel GMP. Please go ahead. I was not finished with the answer. Oh, okay. From a Health Canada standpoint, they have done a lot of work when we did the request to perform the first-in-man. Because of that, we think they are already well advanced in validating the safety of the SavvyWire. Back end of first half of calendar year 2022 makes sense. In U.S., you know, there was a good interactions. You know, we don't change our timeline, where we've been talking about, you know, September, October timeframe. We are still going after this. I'm now ready to receive the question from Justin, assuming that Rahul has completed his question. Okay. The next question is from Justin Keywood from Stifel GMP. Please go ahead. Hey, good morning. Thanks for taking my call. On the comments of the Omicron variant impacting procedures, but also the comment on supply chain disruptions leading to some softer sales, how would you bucketize those two headwinds as far as the impact? Are they equally impactive or is one more than the other? You know, I would think that they were both, you know, equally. In terms of dollar value, the impact was probably similar for both. You know, we had customers in North America where their monthly volume went from, let's say something like 60 or 70 units a month to 20 during this period of Omicron spike. And not because patients were not willing to get to the hospital. It was more because the staff of the hospital were sick. There was—it was not obviously in all hospitals like this, but there was a good amount of volume that has been impacted because of this. In Japan, obviously the supply disruption had an impact that was more than CAD 1.3 million. In a normal situation, we think we would have achieved similar growth than what we had in the past. You know, we are looking forward to find the growth again in Q3 and Q4. That's helpful. I think it's well understood the impact from the variant, and we've heard this from a number of customers selling or companies selling into the hospital. On the supply chain impact, what gives you confidence that this will normalize as you know, we're hearing that there could be some constraints you know, going through for the rest of the year? Well, it has been from our standpoint, you know, everything was much closer to normal in March. April is going fine. I don't expect, I don't foresee any additional, you know, significant issues like we had. There is still different normal things that we have to work out, but you know similar to what we had in usual operations. We think there was a you know a specific situation that happened during Q2. We are confident that you know the supply chain that we have is really strong to meet the customers' demand. Okay. Understood. Then on the OpEx, understood that there's, you know, increased sales hires ahead of the potential SavvyWire approval. Is this level of OpEx what we should expect in the near term, or is there additional investments to be made? You know, when we look at the third quarter, you can expect to see administration expenses being down, just because, you know, there was a certain stock option, which is a non-cash expense, impact in Q2, which we won't have in Q3. For sales and marketing, you can expect to see an increase by between CAD 500,000-CAD 750,000. This is a combination of hiring of new human resources and also, I mean, we will have the EuroPCR event, which is the biggest cardiovascular conference in Europe. So we'll have this during the month of May. OpSens is going to invest good amount of resources, because, I mean, there is some you will have some presentation about the SavvyWire concept. You will also have some, you know, the OptoWire will be well displayed there. We feel it's a good investment to do because even if we have been doing great in Europe there is opportunities to do much better since we think the OptoWire is clearly the best pressure guide wire for coronary artery disease. You can expect to see a certain increase in sales and marketing. From R&D standpoint, it will be similar. We have a great team in place that is going after short-term innovations that are well-received by the market, but also working on some long-term project that will be, we think, disruptive and highly value creators for the company. Okay. Thank you for taking my questions. Real pleasure. Our next question comes from Scott McAuley from Paradigm Capital. Please go ahead. Morning, gentlemen. Thanks for taking the questions. Just to briefly kind of circle back on the supply chain, just in terms of your, you know, availability of materials and also impact on inflation, either on kind of your costs of goods and/or, you know, shipping, things like that, are you seeing any impact from these? Are you expecting any kind of on the balance of the year, or are you pretty confident in the process moving forward and your costs moving forward? I would say the inflation did not have an impact, you know, substantially on our costs. We have seen okay different, you know, small increases. I would say that the biggest driver that we have for the cost of goods sold in our case is the yield that we get into production. We are working on this doing multiple actions to improve our performance. On the inflation I would say it seems to be under control. We have good, you know, partnership with our suppliers, it is going well on that side. The availability of raw material is the element that has been impacting the Q2 results. Again, we feel that there was a punctual event, and so far, Q3 has been going well. That's great. Thanks for that detail. Switching over to the SavvyWire, obviously kind of working to lay the groundwork for that commercialization, hopefully upon approval. Kind of how are you expecting those sales to ramp? Like, are you thinking, you know, day one on FDA approval, you're hoping to have some customers who will be purchasing and using the new product? Are you kind of expecting that to take kind of a few quarters to materially impact kind of your revenues? I would say I'm sure we already have, I mean, interest from people that would like to use the SavvyWire. We have to go in a very systematic manner there. From a regulatory standpoint, it's important to do a limited market release. We also think that it's really useful to fine-tune all the marketing strategy, everything, in the cath lab to make sure that it's going well. You can expect that it will take, you know, few quarters before having really massive revenues coming from the SavvyWire. This being said, you know, we want to go as fast as we can. To respond to your question is that, of course, we are not going to sell to all hospitals that are making the requests on day one. We'll go gradually with few centers. But the plan is still to be fairly aggressive. I mean, we are putting in place right now a team to capitalize on this very significant commercial opportunities in front of us. We'll try to go as fast as possible, but you need to plan for, you know, a certain number of months before getting, you know, substantial revenues. Absolutely. That's great. Just lastly for me, I think you'd mentioned briefly on the previous call around publication of the SavvyWire data that you have to date. Is that still something you're planning for in kind of the near term, or is that something you're hoping, you know, if and when it's approved, to have it published around then to kind of bolster that sales and marketing effort? Yeah. We are confident that before the next earnings call, we should have a couple of papers that could be published on the SavvyWire. Again, the interest from the community around this concept is really good. That's great. That's all my questions for now. Thanks a lot, guys. Thank you. Again, if you have a question, please press star then one. Our next question comes from Nicholas Cortellucci from Atrium Research. Please go ahead. Hey, Louis, Robin. How's it going? Good morning, Nick. It's going well. You? Great. My first question was that I think the last normalized environment we kind of saw was Q3 of last year, where you guys posted some really solid growth, CAD 9.2 million revenue, 59% gross margin. Do you think that quarter was a good analogy for what we're gonna see through the second half of this year? With the current demand that we get from our customers, if we wouldn't not have had the supply disruption in Q2, would have done better than Q3. I think Q3 is an indication where I mean Q3 of last year is an indication where there is good demand for the OptoWire. We think we have further developed our sales channels and the install base of the monitor. Certainly we'll trend towards that direction. Perfect. Okay. My other question was about the GPO contracts. When do you think we're gonna start to see the impact of those on the top line? Yeah. Well, again, you know, the volume of procedures were down in U.S. during the Q2 2022, so obviously you don't perceive necessarily the impact of GPOs. But we think they will have an impact in Q3, and we are really positive about the relationships we are developing with those organizations. Perfect. That makes sense. Thanks for answering my questions, guys. Thank you, Nick. Our next question comes from Sahil Dhingra from RBC Capital Markets. Please go ahead. Hi, this is Sahil for Douglas Miehm. Yeah. Thank you for taking my questions. My first one is on Japan. You have said that supply chain disruption is normalized now, but the COVID cases there are, although down from the peak, still elevated versus last year. Do you still think the revenues would bounce back to normal levels? Yeah. We are confident that, I mean, the OptoWire usage continued in Japan, even if we don't see this in our revenues. The partner there used some of the inventory they had to make sure that the customers were not impacted by this situation. You know, in Japan, that's a country where there is a lot of interest around FFR, and we are confident that, you know, the demand will be there for the next quarters and the future years. Okay. Thank you. That is helpful. In terms of the recovery and procedure volumes in the month of March, can you quantify that? Is it back to pre-pandemic levels? I think it's not back at 100%, but we certainly saw, you know, in different customers, a rebound for at least 20% of procedures if you compare that with the Q2 marks. Okay. Thank you. My last question is on the approval timeline in Europe for SavvyWire. By when can we expect that? You know, on that, I would prefer to respond, maybe in the next conference call. Right now, I would say that we think it's 2023 terms, but we are ready to give a more precise. Okay. Thank you. This concludes our question and answer session. I would now like to turn the conference back over to management for any closing remarks. Many thanks to everyone for participating on today's call. We look forward to hopefully speaking with all of you again shortly. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.