Good day, and welcome to the Surmodics second quarter fiscal 2022 conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Tim Arens, Senior Vice President of Finance and Chief Financial Officer. Please go ahead, sir. Thank you, Jazz. Good morning, and welcome to Surmodics fiscal 2022 second-quarter earnings call. Before we begin, I would like to remind you that during this call, we will make forward-looking statements. These forward-looking statements are covered under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and include statements regarding Surmodics' future financial and operating results or other statements that are not historical facts. Please be advised that actual results could differ materially from those stated or implied by our forward-looking statements, resulting from certain risks and uncertainties, including those described in our SEC filings. Surmodics disclaims any duty to update or revise our forward-looking statements as a result of new information, future events, developments, or otherwise. We'll also refer to non-GAAP measures because we believe they provide useful information for our investors. Today's news release contains reconciliation tables to GAAP results. This conference call is being webcast and is accessible through the investor relations section of the Surmodics website, where the audio recording of the webcast will also be archived for future reference. A press release disclosing our quarterly results was issued this morning and is available on our website at surmodics.com. I will now turn the call over to Gary Maharaj. Gary? Thank you, Tim. Good morning, and thank you for joining us on our second-quarter earnings call. We are pleased with both our financial performance and the progress we've made in executing our strategic priorities during the quarter. Starting with our second- quarter financial performance, which delivered above expectations. We achieved revenue of $26.1 million in the second quarter compared to $35 million in the prior- year quarter, which included $10.8 million in revenue recognized on the $15 million Abbott milestone payment associated with successful completion of the TRANSCEND clinical trial. Normalizing for this milestone payment, we grew revenue by $1.5 million or 6% year-over-year, driven by solid performance from both our medical device and IVD businesses. We reported GAAP diluted loss per share of $0.29 and non-GAAP diluted loss per share of $0.22. We are updating our financial guidance for the full year to reflect the strength of our year-to-date financial performance. Tim will provide additional detail on our quarterly results as well as our updated guidance later in today's call. During our second quarter, we continued to make progress on our strategic objectives for the fiscal year. As a reminder, these are, first, to achieve the PMA for SurVeil and support Abbott's commercialization efforts. Second, to build a commercial pipeline for our Sublime Radial and Pounce arterial and venous thrombectomy platforms. Third, to drive top-line revenue growth and optimize cash flow from our IVD and medical device coatings offerings. Starting with SurVeil, we have made important progress to support SurVeil's premarket approval. Since we last spoke in February, we have completed and have shared with the agency our responses that address their main questions related to preclinical data, including the impact of different sterilization doses on materials used in the final product. In addition, the FDA has confirmed a date for our request for the Submission Issue Meeting on May 4th to drive towards alignment on our responses. While we asked for earlier meeting dates, May 4th was the earliest date that the agency was able to provide. Following this May 4th meeting, we'll have a clearer view of the path and timing to the PMA, including any further preclinical studies as needed. We are confident we have compelling data to secure the PMA approval. We now have substantial two- and three-year clinical data that demonstrate a continued excellent safety and efficacy profile for the first SurVeil drug-coated balloon. While our goal remains to secure the PMA in fiscal 2022, the agency will still have 90 days to respond after we have completed our final submission. With that in mind, we continue to exercise a conservative view of the approval timing and believe FDA approval will likely occur before the end of the current calendar year. Our recent discussions with our partner, Abbott, have been encouraging. We are anticipating that the 24-month TRANSCEND clinical data will be presented at an upcoming conference later this fall. The expectation continues to be that the U.S. launch of SurVeil will follow the receipt of the premarket approval. Moving to Sundance, our below-the-knee sirolimus drug-coated balloon. During last quarter's call, I shared that the Physician Steering Committee for our SWING first-in-human clinical trial had advised us to conduct additional analyses of the clinical data. We have completed these analyses, and the physicians on the Steering Committee are pleased with both the analysis and the clinical results. We're looking forward to submitting these data to a late-breaking clinical trial presentation at a conference in the coming months. In addition, we have just recently shared the SWING clinical study report with Abbott, which has the option to negotiate a commercialization agreement for Sundance. Our second strategic objective is to demonstrate the commercial viability of our Sublime Radial platform and our Pounce arterial and Pounce Venous thrombectomy platforms. As I mentioned in our last call, fiscal 2022 is in a large part about building this commercial pipeline. That is the activities that lead to customer purchase, an essential catalyst to driving our value- creating goal and delivering consistent double-digit revenue growth. We are seeing the early fruits of our efforts as our team has established an initial and growing base of customers. Importantly, the team is currently engaged with nearly 100 prospective customers that are in various stages of evaluation, purchase or reordering of our Sublime and/or Pounce products. Much of the credit for our progress lies with our commercial team, which has grown to a total of 19 sales professionals at the end of second quarter. First, I'll briefly comment on our Sublime Radial Access, which consists of the Sublime Radial Access guide sheath, the.014 and.018 PTA balloon catheters. I'm pleased to report that we have several dozen accounts that have placed initial orders for one or more of these devices. Next is our Pounce arterial thrombectomy platform. The Pounce arterial device is an intuitive, easy-to-use device that enables physicians to treat a wide variety of arterial clot extraction without the need for aspiration or additional capital equipment. We now have a dozen accounts that have placed initial orders of the Pounce arterial thrombectomy device. In addition, our team is managing a commercialization pipeline consisting of more than 50 prospective customers, primarily hospitals, which are in various stages of their account process. Yesterday, Dr. Gary Ansel presented the first- in- human data on the Pounce thrombectomy system at the Charing Cross International Symposium in London. These data included outcomes from the first 20 thrombectomy procedures that were performed at six U.S. medical centers during our market evaluation. These were not easy layup cases. Rather, the Pounce was challenged by a broad spectrum of clot complexity, occlusion lengths, vessel tortuosity, and calcification. Specifically, within these 20 patients, 55% of the treatments were both for chronic or acute on chronic clot. 15% had moderate to severe vessel tortuosity. 57% of them had underlying atheroma in addition to clot, and the average lesion length treated was approximately 11 cm, with a max of up to 30 cm. While cases with acute clot represented 25% of procedures, it is fair to say that these physicians took an all-comers approach in terms of case complexity and clearly did not save their easiest cases to evaluate Pounce. The Pounce thrombectomy system achieved 100% technical process success in this first-in-man series, meaning that in a single treatment session, the device successfully removed clot from the target lesion and restored blood flow to the patient's limb in each of the 20 cases. Additionally, the data show that no adjunctive thrombectomy devices were required to remove clot, and 95% of these procedures were able to avoid the use of thrombolytics within the target lesion. We are extremely excited by these results, which provide validation to our mission of providing interventionalists with an efficient and effective thrombectomy device that is capable of treating a wide range of clot, including emboli, without aspiration nor capital equipment. I'd like to take a quick moment to share with you two physician stories that demonstrate the powerful impact of our products on the patient's life. In a recent case, a physician in Baton Rouge, Louisiana, used our Pounce thrombectomy system to treat a 46-year-old patient suffering from acute limb ischemia. This patient had experienced a rapid onset of cold and numbness in her right leg that caused her to fall to the ground, and diagnostic imaging showed significant emboli occlusion of three of her major leg arteries. At the time, the physician was not familiar with the Pounce device, so he first attempted treatment with two cycles of ultrasonic catheter-directed thrombolysis for 48 hours, which showed minimal angiographic improvement. He then used an aspiration thrombectomy device to clear out as much of the acute thrombus but was unable to clear the more challenging clot. The Surmodics territory manager happened to be in the cath lab during this procedure, and the physician decided to try the Pounce thrombectomy system for the first time. Following an on-the-spot service, the physician was able to quickly clear the three vessels with three separate deployments of the Pounce device. After exhausting other non-surgical options, Pounce helped the physician successfully treat the patient and likely saved her leg without having to resort to further TPA administration or refer her to open surgical embolectomy. The physician, as you can imagine, was quite impressed, even as a first time user. In another case, this time involving our Sublime Radial products, a patient was recently brought to the cath lab with a non-healing wound and contractures in the right lower extremity and an occlusion of her right iliac artery. Diagnostic angiography showed substantial occlusion in the arteries of both the right and left legs. Now, because of these multiple conditions, neither femoral arteries were accessible, so the only viable site for the physician to treat the patient's left leg was the right radial artery, which was also occluded by significant disease. Using our low-profile five French Sublime Radial guide sheath, the physician was able to navigate through the occluded radial artery, gain access to treatment, and then using the Sublime Radial PTA catheter, which is 2.5 meters long, he was able to successfully cross and treat both above and below the knee arteries. Angiography showed significant lesion reduction and excellent flow to the foot. Now, I know all this sounds very technical, but what is not captured was the audible emotion that was exhibited by the cath lab staff following this case. Because of multiple comorbidities, this was a patient who, without excellent skills of the physician, and specifically the long working lengths of our Sublime Radial devices, could have likely lost their leg. If you can't tell, I'll just say it. A better future for patients and their healthcare providers has already been created by these devices. It's just now our job to evenly distribute the success. Moving on to Pounce Venous thrombectomy, which enables physicians to safely separate large and mixed morphology clots from the vein wall and rapidly extract it without removing the device from the patient. Our process and manufacturing validation efforts are on track and nearing completion, and we are in the process of building product for use in clinical product evaluations in the fourth quarter. Our team has already initiated early commercialization activities for our Pounce Venous thrombectomy device, which is already in front of the value analysis committee process in several hospitals. This is a very encouraging sign that physicians believe in the potential merits of the device even before using it and are eager to use it. While not material to our second quarter revenue, I'm excited to see our customers and their patients benefit from our products. While still early in our commercialization efforts, these first few months support our expectation that we will generate modest but meaningful and growing revenue associated with the adoption, utilization, and sales of Sublime and Pounce products through the remainder of this fiscal year. In the coming quarters, I look forward to sharing more about our learnings and expectations on these devices. Turning to our third strategic objectives, to drive top-line revenue growth and optimize cash flow from our IVD and medical device coatings offerings. Both our IVD businesses and our medical device coatings offerings delivered 8% year-over-year growth. It should signal to you our discipline and continued commitment to delivering strong operating results from our core businesses. I remain confident in the ability to continue to generate meaningful cash flow contributing to our growth initiatives. Our team has delivered solid first- half results, and we have similar expectations for the remainder of this year. Delivering on our long-term goal of consistent and robust revenue growth starts with executing our fiscal 2022 strategic objectives. We're pleased with the progress we've made during the second quarter and look forward to sharing more during the second half of our fiscal year. I'll now turn the call over to Tim to provide the details on our second- quarter fiscal 2022 results and full- year guidance. Tim? Thank you, Gary. During today's call, I will provide an overview of our second- quarter operating performance, as well as an update on our fiscal 2022 financial guidance and liquidity position. Revenue for the second quarter of fiscal 2022 declined 25% to $26.1 million, which was favorable to our expectations. As Gary mentioned, the prior- year period benefited from $10.8 million of revenue recognized from the $15 million clinical report milestone payment achieved under our SurVeil distribution and development agreement with Abbott. Excluding the impact of this milestone payment, revenue grew 6% year-over-year. Medical device revenue declined 34% to $18.5 million and exceeded our expectations due to the strength of our product and royalty revenue performance. As I noted, the prior- year period included $10.8 million in clinical report milestone revenue, and excluding revenue related to this milestone, our medical device business revenue grew 6% year-over-year. Our in vitro diagnostics business grew 8% to a record $7.7 million. IVD performance was driven by broad-based year-over-year growth across the entire portfolio of product offerings. Our second- quarter royalty and license fee revenue totaled $9.8 million, down $10.2 million from the same prior- year period, primarily as a result of that prior year $10.8 million impact on license fee revenue from the clinical report milestone. License fee revenue under the Abbott agreement totaled $1.4 million in the second quarter of fiscal 2022, compared to $12.5 million in the prior- year quarter. Royalty revenue increased 12% to $8.4 million in the second quarter, compared to $7.5 million in the prior- year quarter. Driving the second- quarter royalty revenue performance was stronger than expected customer-reported royalties relative to our last- quarter estimate. Benefiting our performance was strong growth from our Serene coating, which again grew in the double digits from the prior- year period. Looking forward to the full year, we expect royalty revenue growth in the low to mid-single digits. Product revenue increased 19% to a record $14 million in the second quarter, compared to $11.8 million in the prior- year quarter. In our medical device business, product revenue grew 19% from $1 million to $6.4 million on broad-based growth across our medical device products and coating reagents. While early and not material to our results, we are pleased to see increasing product revenue from our Pounce and Sublime commercialization efforts. In fact, our product sales in medical devices grew 47% from the year- ago period, which includes contract manufactured balloon catheters, specialty catheters that we partner with Cook Medical, and our Pounce arterial thrombectomy and Sublime Radial device products. We continue to expect to deliver double-digit medical device product revenue growth through the remainder of the year, driven by our Pounce and Sublime commercialization efforts. In our in vitro diagnostics business, product revenue grew 18% or $1.2 million to $7.5 million in the second quarter. We saw another quarter of broad-based year-over-year growth in the second quarter, including 85% growth in our distributed antigen products using autoimmune disease testing, in part due to order timing. We continue to expect IVD revenue growth in the low- to mid-single digits for the full year. R&D services revenue of $2.3 million in the second quarter was down 27% or $860,000 compared to the same prior- year period, as we faced a headwind associated with the completion of a customer development program in our IVD business. In addition, R&D revenue was impacted by lower customer demand for our medical device coating services, due in part to continued supply chain challenges related to certain customer-supplied products. Product gross margin in the second quarter of fiscal 2022 was 63% compared to 65% in the prior- year quarter. Favorable impacts from leverage on volume were offset by unfavorable impacts as our product mix weighed more toward lower- margin product lines. R&D expense, including cost of clinical and regulatory activities, was $13.7 million in the second quarter or 53% of revenue, compared to $12.9 million in the year- ago period. We continue to invest in our Pounce and Sublime platforms, including commercial readiness activities for our Pounce Venous thrombectomy device. For the remainder of the year, quarterly R&D spend is expected to be slightly above Q2 levels. SG&A expense in the second quarter of fiscal 2022 was $11.1 million or 43% of revenue, compared to $7.9 million in the year- ago period. The increase in SG&A expense is related to sales and marketing activities, including new hires to support the commercialization of our Sublime and Pounce products. For the full year, we anticipate SG&A expense to range in the mid-40s% of revenue. Our medical device business reported an operating loss of $5.6 million in the second quarter, compared to operating income of $8.6 million in the year-ago period, which includes the impact of the clinical report milestone payment. In addition to sales and marketing investments, our second- quarter performance included the addition of $1 million in expenses, of which $540,000 is related to intangible asset amortization related to our fiscal 2021 fourth- quarter Vetex acquisition. Our IVD business reported operating income of $3.7 million in the second quarter of fiscal 2022 and was consistent with the prior- year quarter. IVD operating income for Q2 was 49% of revenue, compared to 54% in the prior year, which is a reflection of the unfavorable product mix impact on the product gross margin during the quarter. Now turning to income taxes. We recorded an income tax benefit of $920,000 in the second quarter of fiscal 2022, compared to income tax expense of $1.4 million in the year ago period. The current quarter's tax benefit is a result of the pre-tax loss for the second quarter. The prior quarter's tax expense reflects pre-tax income with the receipt of the Abbott milestone payment. On a GAAP basis, we reported a loss per share of $0.29 in the second quarter of fiscal 2022, compared to income per share of $0.58 in the prior- year quarter. On a non-GAAP basis, we reported a loss per share of $0.22 in the second quarter versus earnings per share of $0.62 in the prior- year quarter. Moving to the balance sheet. In the second quarter, we began with $32 million of cash and investments. During the second quarter, cash used by operations was $4.2 million, and capital expenditures totaled $1.2 million. As of March 31, 2022, we had cash and investments totaling $27 million, and the balance in our line of credit remained unchanged at $10 million. We continue to anticipate that we will finish the year with approximately $20 million of cash, which does not include the potential receipt of the $30 million SurVeil PMA milestone payment. Turning now to our outlook for 2022. We expect fiscal year 2022 revenue to range from $98 million-$101 million. This outlook includes between $4.5 million and $5 million of license fee revenue associated with the Abbott SurVeil agreement. With respect to income taxes, we expect the full- year impact of income taxes to range from a tax benefit of $6 million at the low end of the guidance range to a $4.5 million benefit at the high end of the guidance range. As a result of our first half financial performance, we now expect fiscal 2022 diluted GAAP EPS in the range of a loss per share of $1.70 to a loss of $1.35. We now expect our non-GAAP diluted earnings per share in the range of a loss per share of $1.42 to a loss of $1.07. Operator, this concludes our prepared remarks. We would now like to open the call to questions. Thank you. If you would like to ask a question, please press star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, star one to ask a question. We'll take our first question from David Saxon with Needham. David, your line is open. Please go ahead. Yeah, thanks. Good morning, Gary and Tim. Maybe just to start, probably for Tim, just on guidance. I mean, you beat by about $2 million, but only raised the lower end of the revenue guide by $1 million. I mean, from your comments this morning, it sounds like some of these early launches are going really well. Just would love to hear, you know, what you're seeing in the marketplace. If you know, any themes coming up that makes you any more or less concerned, or if the updated guidance just reflects some conservatism. David, thanks for the question. I really do think it reflects a fair level of conservatism. You know, there are still uncertainties that exist in the marketplace. I think another 13 weeks, Gary and I will have a better view or a more complete view of how the year will shape up. We feel highly confident with the guidance range that we're providing with regard to revenue as well as EPS. Okay, that's helpful. Then just a couple on SurVeil. So following the May 4th meeting, I think I heard you say you'd get a little more clarity on whether or not you'd need a potential additional trial. Did I hear that right? If so, maybe talk about your expectations there. You know, how much time would that potentially add on to the approval timeline? Then kind of related to that, there's some comments in the press release about if the approval falls into, I guess, after 2022 calendar year, the milestone would be reduced to $25 million. Is that a one-to-one on what you'd recognize for revenue? So it'd go from $25 million to $22 million, or is that different? Okay. I'll take the first part, and Tim will take the second part. Yes. No, we don't anticipate any clinical data being needed. Our clinical data, we believe, is quite impeccable. In my personal opinion is probably the best trial that's been run in this space. The real issue with the agency. Let me just step back a bit so we get the process right. The agency, you know, came up with, let's say, a number of questions, all of them related to preclinical, not clinical data. They had a couple questions in the clinical data which we successfully responded to. There's a subset of their questions that they recommended. Instead of us just responding, they highly recommended that we set up something called a Submission Issue Meeting, which is let us tell them how we are going to respond, then we meet about it, and then we get alignment, or we seek to get alignment, versus just sending it in and hoping for the best on these particular responses. That's the meeting. Unfortunately, you know, I think I said in the last call, it's a 10-week statutory thing, and we were trying to see if we could collapse it. In multiple discussions with the agency and communications, they weren't able to get us much better than the 10-week response. I think we're right at about the nine-week time with this May 4th meeting. At that meeting, we hope to iron out any differences on these responses that in question. Based on that, we'll be able to tell if the agency wants us to do additional preclinical testing or if they want us to actually generate more preclinical data. We'll have an idea of how much and what that is after this meeting. But no, we don't anticipate anything with our clinical data set. As I said, we have substantial. I don't wanna guess here, but we almost 90% have the two-year primary endpoint data. And I can just tell you, we're terribly excited to have that presented. And that would be, of course, with Medtronic as the control device, the IN.PACT Admiral device. We also have, I believe the full cohort of two-year mortality data and over 100 patients in the three-year cohort, which is more than sufficient from what I understand from the FDA for the mortality analysis given the paclitaxel ongoing debate. Quite confident in the clinical data. These are all preclinical issues at this point. David, I'll take the second part of your question. First, let me just echo a few things that Gary remarked on. You know, we are highly confident with regard to the data, both the safety and the efficacy data. The May 4th meeting with the agency is really intended to get alignment in terms of any outstanding questions that need to be addressed with our submission. As Gary mentioned in the prepared remarks, we are highly confident, and somewhat conservative, that we will be seeing the FDA PMA approval sometime before the end of the calendar year. Now that relates back to how we recognize revenue on the SurVeil milestone payment. As you noted in the press release, we did call out that if the milestone is achieved, meaning the PMA is achieved after December 31, 2022, the payment drops to $27 million. If you think about the payment, whether it's $30 million or $27 million, both will be recognized as a percentage of completion, meaning the expenses to complete the TRANSCEND clinical study, which we estimate to be about 82%-84% complete by the end of the fiscal year. In either case, you'd be looking at recognizing revenue somewhere either in the low 80s% to mid-80s%, whether it's the $30 million or the $27 million. Hopefully that answers your question. If there's another question, please let us know. No, that's all super helpful. I'll leave it there, and thanks for taking the questions and congrats on the quarter. Thank you, David. We'll move next to Brooks O'Neil with Lake Street Capital Markets. Your line is open. Please go ahead. Thank you very much. Good morning. I have a few questions. I guess I'd like to start off on SurVeil. Given the discussion you guys just had about the quality of the clinical data, I have some recollection that there was some hope that rather than being just non-inferior, that the SurVeil clinical data might show superiority. The question I think was whether you had enough data, enough patient follow-up data to make those claims. I'm just curious if there's been any change in that now. Thanks for the question, Brooks O'Neil. No, you know, there is a secondary test for superiority. At the six-week, you have to test the non-inferiority first. The trial was clearly not powered for superiority given the differences in the performance of these devices. Both safety and efficacy, I would say. Now I haven't seen the full two-year cohort superiority and non-inferiority test. We wanna wait till all the patients have been followed up. I would say though, and I highly doubt that the power for a superiority test would be there in these data sets. On the other hand, keep in mind, we are the only drug-coated balloon that has a worldwide pivotal study head-to-head with the market leader. No one else has that. You'll hear a lot of marketing claims, about this, but it's the only level one RCT pivotal trial, with the FDA on a head-to-head trial. To us, superiority means, again, if you have a lower dose of a known cytotoxic drug like paclitaxel, it gives you non-inferior clinical results. That in itself, I believe, is a superior device because you can treat a patient with a lower dose of paclitaxel, it's a cytotoxic drug, and achieve the same results in the real world. That, to me, is a superior device any day of the week. From a statistical superiority test, the short answer is no. I'll leave that open until we see the stats plan run for two years. Sure. That's very helpful. Secondly, you made a couple comments I found provocative. First was, I think you said that you think Abbott is preparing for a U.S. launch, and I was just wanting to check and see, if I recall correctly, you have approval for SurVeil in the EU, and I'm curious if they have any plans to launch there anytime soon. Brooks, thank you for the question. I think we've talked about this in the past, and you're absolutely correct. There is a CE mark in Europe. Abbott has over the last year-plus communicated, and I think we've reflected this in previous prepared remarks, that their launch, they will initially focus on launching commercially in any geography based upon the PMA approval. So I wouldn't read anything into it. You know, our focus has been speaking more recently about the U.S. I would suspect that Abbott will launch in the U.S. followed by a European launch. Let's get the PMA first, and let's get Right Let's get moving here on supporting their commercialization efforts both in the U.S. and globally. Absolutely. That's great. Gary mentioned, I think I heard him say the first SurVeil device in his prepared remarks, and I was curious. I guess that implies to me that there might be a second SurVeil device, and I don't think I've heard you guys comment anything about the possibility of additional products in that line. What are you thinking? You know, I think this is Tim, Brooks, and I picked up on that as well. Really, I think it's just a. It relates back to the DCB platform. It's not the first SurVeil, it's the first of our drug-coated balloon platform. I saw that in the script as well. We're all set. We have one and only one SurVeil. All right. Thank you. I'm curious, you guys know I'm not a medical device expert, and I'm totally confused about the regulatory pathway for Sublime and Pounce. It seems pretty clear you're moving down the path of commercialization. You're selling products to live users in hospitals around the United States. Is there any further regulatory approval pathway that you need to traverse to have full commercialization of those products? Or- No Just help me to think about what you're gonna do. we have for Sublime and Pounce arterial, we have U.S. FDA clearance, so there is nothing. Okay. In fact, on Pounce, we have received two additional 510(k)s in terms of being able to claim expansion to treat smaller vessels, which would include tibial artery vessels of the required size. Just recently, we got another 510(k) clearance for a variant of the Pounce device that uses very ergonomic, intuitive handle design for physicians in a mass market. No, on Pounce Venous, we have both U.S. FDA clearance and the European CE mark. Yeah, no further. Clearly, as we advance these devices, there may be follow-on additions to the line, but yeah, we have a straight shot at this right now. Great. Then my last question, and I appreciate all your color, is can you just give us your current feeling? It sounds like you're advancing pretty successfully and aggressively with regard to direct commercialization of these two lines, Sublime and Pounce. I just would love to get your perspective on whether you think you're gonna go it alone, if you will, with those products or whether you're going to seek a partner as you have with some of the other pipeline products. Thanks for taking my questions. Sure. I'll tell you the sales and internal marketing team and the commercial operations infrastructure we have built. We may not be the biggest, but these. We're building the best commercialization team in the industry right now. I'm very satisfied with size versus the current size versus the scale versus anybody else. We're still in learning mode with these devices. The way I'll line up fiscal 2022 is, you know, a baby cow is called a calf, and I'm not looking for milk production as the key performance indicator from the calf. I wanna make sure the calf is growing, developing, and someday being able to produce a heck of a lot of milk. We have scaled appropriately with our commercial team to do that. I am confident just. I probably didn't share this. There's a huge sense of excitement internally that doesn't come across in the earnings call when we see these devices. We don't wanna be competitive in an earnings call and call out competitors, but when we see our lineup versus the competitors, there's a huge sense of excitement of what we have here. That's what we're focused on at the moment and building that, what I call a right-sized commercial team. There's been a lot of interest, I would say, from potential partners, but we have the blinders on right now and doing what we're doing to build our team. Great. Thank you very much. Once again, it was star one if you had a question. We will move next to Jim Sidoti with Sidoti & Company. Your line is open, sir. Please go ahead. Hi. Good morning. Thanks for taking the questions. The first one for me was there any one-time contributors to revenue in the second quarter? There were not, Jim. Is there any reason to think that Q3 and Q4 would be down sequentially from Q2? You know, it was a really strong quarter, and I think in my remarks, you heard me talk about the performance from the royalty line. You know, there was a benefit. We have to estimate, I think as we've covered previously with you all that, we have to make an estimate on the royalty revenue each quarter. We were off, and it was favorable to us. I wouldn't consider that to be a one-timer. We're never precisely right. In some quarters, we can be up. In this case, I think we were able to book a true up of about $600,000 since the royalty reports and payments that came in were significantly higher than what we had estimated. I suspect that we'll probably be a little bit more in line, maybe $200,000 off. I would say given that as a headwind, it will probably be a bit more challenging. We also saw some really nice growth here in the product revenue for the quarter as well. You know, I'll just remind you that if you go back and take a look at last year, Q4 and Q3, we had some really nice product revenue in Q4 and Q3 of last year compared to probably the last six quarters prior to that. We got a little bit tougher comp that we're gonna be facing. You've heard me say in my remarks that I expect that the product revenue should be growing double digits for the remainder of Q3 and Q4. Hopefully, that gives you a little bit of context and color and, you know, Gary and I try to be a bit more on the conservative side and, you know, the teams do the work and execute and sometimes we're able to deliver good news like we were able to do that this quarter. We feel, again, confident in the guidance range that we're providing at 98-101. Okay. You know, a lot of companies continue to report supply chain issues with turnover. Has that been a factor for you at all? Well, you know, it's interesting. Take a look at the product revenue. It's a great place to start, right? You can probably infer that we really haven't had to deal with supply chain issues in terms of our ability to generate revenue. That being said, we're not immune. If you take a look at the balance sheet, you'll have seen that the balance sheet continues to grow in inventories. There's a reason for that. Obviously, we're trying to make sure that we're prepared for commercialization of Pounce and Sublime. At the same time, Jim, we recognized early that there could be some supply chain challenges, and we've done a pretty good job of trying to maintain safety stock. I'm hopeful that we won't incur or encounter any supply chain challenges that could impact revenue. You just don't know about the uncertainty. It is a global economy, and some of the suppliers that we're engaged with are located in geographies where there could be challenges. That being said, our guidance reflects our view that there really is muted or minimal impact on the supply chain. Yeah Issue. I wouldn't take what Tim said there to say that we don't have supply chain issues. We swarm on it, and it's one of the top three risk factors we deal with every day. So far, our team has been managing that quite successfully. That was my next question, was gonna be the increase in inventory. Is that primarily raw material, or is that finished goods that you've added to inventory in the? Yeah in the last quarter? Great. It's actually both, Jim. Obviously, raw materials do end up at some point turning into finished goods inventory. Although we don't break it out, you know, it's fair to say that the increase is driven both by having more components and raw materials, but also producing finished goods. Gary, I think, referenced that we're starting to produce products for Pounce Venous. So you'll see some of that reflected in our inventory as well. Yeah. Even things like paclitaxel, we are making sure we're buying from the right suppliers, just to be sure. Paclitaxel is $800 a gram. We have to protect those raw materials with that inventory buildup. The last one for me is on cash and cash burn. You ended the quarter with about $27 million in cash. You know, you burned through, I think you said $4 million or $5 million of operating cash in the second quarter. You know, where do you think you'll end up for the year in terms of cash on hand and cash burn for the year? Yeah. Great question. You know, we did highlight here that we expect that we'll finish the year with approximately $20 million in cash. You know, Jim, I'll just say, if we finish on the high end of the guidance range, and with some of the tax receivables that are out there, we could be as high as $27 million. We could finish the year flat. You know, I think we all know that there are challenges with the tax receivables being paid in a timely fashion by the IRS. That's not necessarily reflected in the $20 million. Yeah, we'll be talking about it, I'm sure, next quarter. Gary and I are highly confident that the cash that we have on the balance sheet, the access to our credit line give us ample capital to support our growth initiatives going forward. Obviously, that number would go up pretty significantly if you do receive the milestone payment in fiscal 2022. Yeah. It certainly would. Yeah. All right. Thank you. Thank you, Jim. We'll go next to Michael Petusky at Barrington Research. Your line is open, sir. Please go ahead. Hey. Good morning, guys. I was hoping to drill down a little bit on the early success you guys have had on Sublime and Pounce. I can combine my two favorite things, stocks and baseball. Obviously, you know, on Pounce, a dozen accounts have placed an order. On radial access, several dozen accounts have placed an order. You know, in baseball, you know, a batter gets a dozen hits. If he's batted, you know, 20 or 30 times, that's fantastic. If he's batted 200 times, not so great. I'm just curious sort of about the hit rate. When accounts do say not interested, what's? You know, I'm curious about the feedback and when they say, "Yeah, we're interested," the feedback. Like, I was wondering if you guys could give any color in terms of what the sales force is actually encountering out there as you know, try to. Yeah Help these accounts understand the value of these products. Thanks. It's a great question. It's something we think exactly the same way, right? You wanna make sure that it's as consistent as the scale goes up, the hit rate goes up. Now, keep in mind, very early on, it can be. Yeah We're cognizant of this. It can look like an amazing hit rate because you're going to accounts that you know are hungry for adoption. I'll say that so that you understand how we discount our hit rate. The very first ones are a very nice batting average there. However, as we are getting more and more members of our field sales team, and they are getting into the field, we look at the number of rep weeks that we have available of sales force. The hit rate continues to surpass my expectations. I'll just say it like that. I've been through enough of these to not be seduced by early hit rates. As we go to now not just the early adopters, but what we call the mainstream accounts, a lot of these are hospitals for Pounce, as you know, and OBLs for Sublime. The hit rate is impressive to me. I don't wanna competitively give out an actual stat. So the back end of the market is usually the laggards, as you know, right? Your hit rate goes down with the laggards because they've used this thing for 20 years, and they're not gonna change now. What we are finding are accounts that are not necessarily only big institutions, but accounts that are in smaller cities that love the simplicity of our products to use for things like Pounce thrombectomy. Hit rate there is surprising to me that we're getting better uptake in even smaller accounts. Everyone chases the very big academic institutions, and we'll get our fair share of those as well. The real legs of these products is that you don't have to be at the Mayo Clinic or Cleveland Clinic to use these devices. You could be in Sioux Falls, South Dakota, and the device has equal playability. I know it's not an actual direct mathematical answer to your questions, but the hit rate is above my expectations, and I discount a lot. Mike, I'll just add a little color here. You know, it is very early, and I like Gary's analogy of the calf, right? This calf is only starting to stand on its own. We did highlight that there's about 100 prospective accounts that are in various phases of our pipeline of becoming an account. We haven't disclosed the exact number of customers that we have who have ordered and are reordering. You know, we're only a few months into this, but it's a sizable number relative to that overall 100 number. Things are coming through the pipeline. We have had the discussion around the leakage, those that are falling out that aren't converting. It's pretty modest at this point, but the reality is you need more time. It can take months to a quarter or longer to get through value analysis committees. We've all had to deal with kind of the December and January issues with the VAC committees really being on hiatus or being on hold. Those are back, but they're working through backlogs. We really like what we're seeing. I'll just give you one other stat. It's pretty modest, but, you know, the number of customers that we finished with, at March, over 90% are ordering product or are reordering product out of the total. So we like that, and we expect that is gonna be an important measure going forward. You know, as we go through the next 13 weeks and visit with you again here later in summer, we'll have more to say on this. Clearly, when we get into the November call, we'll even have more. We are learning, and we're liking what we're learning so far. Yeah. Mike, I just had one other piece of color for that so that you know we're not sort of going crazy eyes over the waterfall here. The other thing that has an impact on hit rate is competitive response. Right now, I'd like to think we're somewhat below the radar, but I think we're on the fringe of getting on the radar. We're well prepared for that in our modeling. Can I ask a question along the lines of just the sales cycle? From the first contact with a potential account, can you give some sense of what the conversion is for those who've said yes, both on the radial and on the Pounce side? In the office-based labs, I would say it's dramatically faster. These are physician-owned facilities. If they like it, there's not really VAC committees to go through, probably a couple partners in that OBL. Those can be easily less than 30 days. You know, I don't wanna guess at what the weighted average is, but they can be less than 30 days. In the hospital where the Pounce arterial thrombectomy system has much more playability for arterial thrombectomy procedures in hospitals, you more often have to go through the VAC committees. As you know, with COVID and such, VAC committees have not been meeting as frequently. I think everybody sees these VAC committees as trying to make sure they appropriately delay new products, especially high- ASP products coming into the institution. Those, there's two things there. It's timing of when the next VAC committee meeting, a physician internal advocate, which is quite important. But these can be three months and up to, in some cases, six-month cycles. But what I thought was quite interesting on Pounce Venous, I mean, we don't even have the product released for clinical use yet, but on the pre-launch on the devices, our commercial team has seen physician interest. I think physicians are hungry for what I'll call an alternative to venous thrombectomy. In some of these cases, I've been surprised that we've gotten into the VAC committee process earlier. Typically, you would have to say the salesperson has to have the product in hand, then engage the physician, and then get them behind the VAC committee or get two or three of them. Just to give you an idea, I would say it's about a 4x. As soon as I finish this call, our commercial team is gonna tell me the right number, and I was wrong. It's about a 4x difference in timescales. Less than 30 days for an OBL can happen, and up to four to six months even on a hospital can happen. Okay. You actually led me into my last question on this subject, I promise. I was under the impression that you were only out there getting orders on arterial. Have you actually gotten orders on Venous or no? No, no. It's not released yet. Okay. At least if the VAC committee is gonna take three months to get in queue, I think our commercial team was like, well, I mean, with products not clinically available yet, it's clearly FDA cleared. Right. Let's see what the interest level is out there, and some of those VAC committee processes have started. Trying to skate where the puck is, where by the time we have clinical availability, we can have evaluations in hospitals with an open VAC committee ability to use the product, yeah. It's another way of saying we've been opportunistic and, people at the hospital levels have been receptive. Right. Remember our sense of when we have these things, the first 30-40, sometimes 50 or more cases, we're not interested in the sale. We're also interested in seeing how this product performs in a wide range of clinical conditions with different operators, much like what Gary Ansel presented yesterday in Pounce arterial. I mean, they wrung that device out. The first physician I wanted to be a chip shot, and he pulled a 30-cm clot out, which is great. It worked well. You know, the devices are gonna get pressure tested in the clinic before we feel ready for the hard commercial drive for Pounce Venous. Sublime and arterial are through that window already. Okay. All right. Then just as sort of a related question, and this will be the last one from me. Just in terms of sort of the strategy that you guys have taken and, you know, getting a sales force out there yourselves. I mean, based on the early learnings, is there any change in thought of, hey, maybe we ought, you know, we're seeing some real early success. Maybe we ought to muscle up and invest a little bit more in on the sales side, get out there faster. You know, any change in sort of the initial thought based on what you've learned so far? Tim and I have been very disciplined in our approach to this. You know, when you look at it, I mean, our sales team really got out there. The first few were trained in November. As our head of sales says, they were released into the wild really January. You know, we have 12 to probably 16 weeks of learning right now. We're looking at that carefully. I'll say we're happy with the way this is going. That's right. You know, Mike, I'll just add a little bit of context and color for you. You know, Gary described appropriately that we are learning, and you can see that I think it was at the end of December or at the February call. I think we highlighted that we had about 14-16 sales professionals, and that was up from about eight, and here we are at 19. You can see that we continue to add a few. You know, we're not, as Gary likes to say, we're being measured in our approach here in capturing the learnings. We haven't moved off of what we committed to when we communicated the strategy and the transformation to a commercialization approach here in November, that we'd be looking to invest $10 million, and we're on track for that. Really no changes at this point, and we'll look forward to sharing more about the success as we go through the next couple of quarters. It's pretty exciting here. We've got a lot of excitement not only within our team, but also out with physicians, and you heard a few of the stories today. It's making a difference. Our products are making a difference. All right. Very good. Thanks, guys. Congratulations on the progress. Thanks. Thank you. Thank you, Mike. Thanks. With no additional questions holding, I'll turn the conference back to Mr. Maharaj for any additional or closing comments. Well, listen. Thank you, everyone, and thanks for your time on the call today, and look forward to catching up in our third quarter conference call next time. Ladies and gentlemen, that will conclude today's call. We thank you for your participation. You may disconnect at this time.