Good afternoon, thank you for joining the ViewRay first quarter earnings call. My name is Kate, and I will be the moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to pass the call over to our host, Matt Harrison, Director of Investor Relations. You may proceed. Thank you, Kate, and welcome to ViewRay's 1st quarter conference call. Joining me today are Scott Drake, our President and Chief Executive Officer, and Jake Signoriello, our Interim Chief Financial Officer. Earlier today, ViewRay issued a press release for today's call, which is available on our website. Today's call is being broadcast and webcast live, and a replay will be available on our website for 14 days. Before we begin, I would like to remind you that the discussion during this conference call will include forward-looking statements. Factors that could cause actual results to differ materially are discussed in the company's most recent filings with the SEC. The discussion may include certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measure can be found in our appendix and exhibit of our current report on Form 8-K filed today with the SEC. With that, I will turn the call over to Scott Drake. Thanks, Matt. Good afternoon, everyone, and thank you for joining our call. Given that we pre-announced our results last month, we are going to focus our remarks today around three areas. First, our strategic process. Second, provide color around the steps we have taken to enact cost savings and cash preservation. Third, provide an update on our views on guidance. Regarding our strategic process, we are working diligently with the Goldman team and potentially interested parties. Understandably, investors inquire about specifics relating to who and how many have engaged, expected timing, and the like. As we said in April, we will not disclose specific developments unless and until our board approves a transaction or action. We will communicate with investors when we have definitive news as we seek the path that is best for shareholders. As I mentioned on prior calls, our distributors have elongated their payment cycle to preserve cash on their balance sheets until they have received all payments from the end users. In addition, rising construction costs have delayed installation cycles for certain customers. The net effect has been delayed revenue and increased working capital demands for the company. Our cost-saving efforts to date are designed to address these cash flow shortfalls while preserving and prioritizing our R&D pipeline, clinical pipeline, and customer service efforts. On the OpEx and cash preservation fronts, we have taken several important steps to reduce costs while maintaining key research and clinical programs, as well as preserving strong customer service levels. We are enacting reductions of $19 million-$23 million, including travel, back office, commercial, and other G&A expenses. We believe these actions are consistent with our strategic alternatives review process, but also maintain flexibility for the wide range of outcomes our process may yield. We want investors to know that we are clear-eyed about our need to preserve cash, yet mindful that different suitors and paths have different requirements and needs. These cost savings actions taken to date allow us to maintain that flexibility while reducing cash burn in 2023 and beyond. As part of our announced reductions, we had to make the difficult decision to ask Bill Burt to step down as CFO. Bill joined ViewRay because of the profound patient impact of MRIdian. In unison with our capable team, Bill has led extensive planning to prepare us for the potential pathways that lie ahead. I am grateful for his efforts and wish him well as he returns to retirement. Jake Signoriello, who has served as our VP of Finance and Investor Relations, has agreed to serve as CFO in an interim capacity as we go forward. Given the range of outcomes related to our strategic review, we believe it's appropriate to suspend our guidance for the remainder of the year. We have not had any customer orders canceled at the current time, and we continue to advance discussions with both prospective and current customers for additional systems, we are aware that our customers may be focused on the outcome of our strategic review and may delay installations until there is greater clarity. We feel it is prudent to cancel guidance until we have determined the next steps for the company. We look forward to sharing this with investors and customers at that time. Let me leave you with a couple thoughts. Our innovation and clinical pipelines have never been stronger. Our customers are treating patients every day that have no other therapeutic option. MRIdian has treated over 30,000 patients, thousands of them with reported clinical outcomes that, according to key opinion leaders, are unmatched in the industry. Patients and customers deserve and demand proven, highly effective, short course treatment. This is exactly what we deliver. We currently have a sizable backlog and an increasing number of customers that desire incremental MRIdian systems. Our board is focused on the importance of bringing clarity to the market, and we are acting with all due speed to optimize value for our investors and provide this leading product to a growing list of customers. This challenging macro environment is a reality, but one that will improve over time. What won't change is the life-enhancing patient impact of our technology. Thank you for joining us today. With that, operator, please open the line for questions. Absolutely. We will now begin the question and answer session. If you would like to ask a question, please press star followed by A one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by A two. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. Our first question will be from the line of Rick Wise with Stifel. Your line is now open. Good afternoon, Scott. A couple of questions for me. Just along with your cash conservation initiatives, I wanted to be clear in your mind, given your success in reducing G&A, et cetera, as you mentioned, what kind of cash burn do you think you're expecting, and what kind of timeline does that give you extending into next year to work out some of the strategic review and come to some conclusion there? Maybe just as part of that, just on this financial part, remind us, you did mention your SVB line of credit. I think if I recall correctly, there was $45 million available, which was tied to the company achieving certain milestones. Are you still able to draw against that credit agreement? Where does all that stand now? That'd be great to get some color. Thank you. Thank you, Rick. A couple of things I would share, and I'll invite Jake to come in over top if I go astray here at all. Rick, we ended the quarter at somewhere between $85 million and $86 million at the end of Q1. We are being incredibly careful about our cash utilization. As you mentioned, we have taken actions today to preserve expenses and elongate our cash runway. Our focus is on this strategic process that we're partnering with Goldman on. Most importantly to us, we have the capital to get through this process, whatever it may yield. Many different potential outcomes there, from sale of company to capitalization of the company and everything in between. This is taking 100% of our time, and we have the runway, to get through that. Okay. The line of credit? Rick, I'm gonna stop there. We have suspended guidance, we don't guide to cash. I'm gonna leave commentary there that we have the runway to get through this process, which is critically important and what we're focused on at the moment. Okay. Just as a follow-up question, Scott, I know over the last several years, you've been emphatic about the quality of your backlog and removing orders that seemed uncertain. So I'm intrigued that you're emphasizing that no customer orders have been canceled. You're still working on new orders. Actually, I think I'm right in saying the backlog went up a little bit. Can you give us more color on customer reactions? Do you feel like your prior install rate in rough terms is still going to happen this year? What are customers saying to you? How concerned are you about, you know, sustaining the backlog at current levels and expanding it? I'll stop there. Thanks so much. No, thank you, Rick. I appreciate that. Just to be clear, we have not lost any orders at this point out of our backlog. Rick, to your point, we have had some success on the order and commercial front, pushing things forward. I do wanna say I think it's fair, you know, right down the middle here to share that some customers are pausing to see how this plays out over the next 60, 90 days. We had a conversation with a customer last week, I think, Zig, that is looking to buy their second system. They're, you know, somewhat conditioned, I think might be the right word. They've seen ViewRay go through difficult times during our partnership over the past several years, and they seem to be moving forward with their process of ordering an incremental system. Other customers, frankly, are taking a different approach, and they are waiting to see what happens here, understandably. We're in very close communication with those customers and happy to have dialogue on any front, whether it's clinical data, how is the process going, how is the company doing, and the like. I would say various customers are reacting in various ways, but I am pleased, cautiously so, that we're still able to move things forward even in the midst of a challenging time Okay. Thank you, Scott. Thanks, ViewRay. Thank you. The next question will be from the line of Chris Pasquale with Nephron. Your line is now open. Thanks for taking the questions. Scott, how do you think about the timeline for the headwinds you're facing to normalize? In other words, if to the extent that there isn't a change of control event at the conclusion of the review and it's something more akin to a recapitalization, how do you think about the time gap that you're attempting to bridge before you're back on solid ground again? Yeah, Chris, you know, as I said, answering the prior questions, this is 100% of our focus, literally. We are, you know, pedaled down on every facet and form of our strategic review process. We are keenly aware that time is not our friend. Very difficult to project precise timing, but I can tell you it is, again, 100% of our focus, and we're looking to resolve this situation quickly. Okay. You characterized the cost-cutting measures as coming primarily from G&A. Given some of the comments about customers perhaps being hesitant to pull the trigger given the uncertainty of the moment, is the sales organization still resourced to play offense and pursue new business, is that the right level of resourcing to have for the sales piece of the business at the current moment? Yeah, Chris, I would share that there is some impact there. I think I mentioned commercial in my prepared remarks. We think it's right-sized for where we are today organizationally. We feel as though we've made prudent decisions there that are consistent with this strategic process that we're in the midst of, but also very cognizant of our need to manage expenses very carefully and preserve cash. Thanks. Thank you, Chris. The next question will be from the line of Suraj Kalia with Oppenheimer. Your line is now open. Scott, can you hear me all right? I can, Suraj. Thank you. Perfect. Hey, Scott. Let me go back to the basics, and you and I have talked offline at least a couple of times, and, you know, you've been kind enough to try to answer at least our questions. Scott, let me just, in this forum, just ask this question. Since the time of your pre-announcement and this public disclosure of this process, your stock has lost more than 70, almost 70% of its value. Scott, help us understand what was necessary to actually disclose this process going on? 'Cause now you're less, you know, presumably it is on a weaker foundation than any potential suitor is gonna look at. I haven't still connected the dots, Scott, as to what was the legal requirement for disclosing to everyone, "Hey, we are doing this process. Yeah, Suraj. You know, we were confronted with a situation that changed pretty rapidly. We thought it was the right thing for investors to do the pre-announcement. You know, we debated whether it would be correct to share that we were engaged with Goldman or have investors ask questions about, "Hey, do you understand where you're at, and you're doing nothing about it." We made the choice to be forthcoming and open with investors. We're very pleased with our partners at Goldman. I would say, Suraj, we just chose the path of transparency, had the debate, understand your question, and that's where we landed. Scott, when do you expect this process to end? 'Cause in your prepared remarks, I'm paraphrasing, you said at the end of the process, we will at least be capitalized. Forgive me if I got that wrong. I guess I'm trying to understand what do you envision is the duration of this process? How do you define being capitalized at the end of the process at a bare minimum? Thank you for taking my questions. Yeah. Of course. Thank you, Suraj. You know, look, I think most everybody on this call has probably been around strategic processes enough to know that they're very difficult to project from a timing perspective. Things ebb and flow, M&A is a very binary game. Something either happens or it does not. I don't think it's prudent for me to try to project a specific timeframe, but part of the overall work that we are doing is to consider capitalizing the company should that be the best path for shareholders. We have the runway, and it has 100% of our focus, and that's what we are doing. Thank you. The next question will be from the line of Marie Thibault with BTIG. Your line is now open. Hi, Scott. Appreciate you hosting the call and taking questions. Wanted to ask a quick follow-up to Rick's question on cash runway. In April, you told us that, you know, the cash balance should get you to first quarter of next year. Are you able to confirm or reiterate that timeline? Not exactly sure how the expense reduction that you mentioned here, impacts that cash runway. Yeah. Thank you, Marie. You know, I would just kind of reiterate that we have the cash on hand to get through this process. That's what we're focused on. Given that we have taken the decision to suspend guidance, I don't think it's appropriate for us to put down new markers, other than to say what we're focused on, and we have the runway to get through it. Hopefully you can appreciate that, and that's where I'd like to leave the commentary for now. Certainly. Okay. Understand. then, a quick clarification on the cost reduction that was mentioned, $19 million-$23 million, on an annual basis. Is that all coming out of OpEx, or does that also include some efficiencies on working capital and things? just wanna sort of right-size that number. Is it also a comparison to the 2022 OpEx number or prior numbers that you've given us? I just wanted to make sure what that, $19 million-$23 million is coming off of. Yeah. Great question, Marie. Let me frame it up, I'll turn it over to Jake as well. Again, I would just state we believe the cost cuts are complementary to the process that we're in the midst of. We are preserving to the maximum possible degree our R&D pipeline, our clinical pipeline, and customer service efforts. We are cutting more deeply in G&A, travel, some impact to commercial, as we mentioned just a little bit ago. And we debated that look forward to 2024 because we will be largely through the NRE or non-recurring engineering work of cost down, which would make the cut look about $10 million larger if we were to compare to 2024, if that's part of your question. Jake, how about if you help Marie tie out the other bits of her question there? Sure, Scott. Thanks. Marie, the $19 million-$23 million does not include the impact for working capital. I believe that was the first part of your question. It is reductions- Yeah ... in operating expenses. The way to think about the $19 million-$23 million is that's a reduction of the run rate that we were entering into this year, and will be reflected throughout the year. In the note, we said that we'll realize about 65% of that savings in the current fiscal year, and that the $19 million-$23 million is a run rate on a full year basis exiting it. All right. That's very helpful. Thank you, Scott and Jake, and best of luck with what's ahead. Thank you. Thanks, Marie. The next question is from the line of Jason Bednar with Piper Sandler. Your line is now open. Hey, good afternoon. I wanted to start with maybe a follow-up on a prior question. I guess just with what's unfolded here over the past month since you pre-announced and indicated, hired a strategic advisor in Goldman, you said prospective orders, at least earlier in this call, prospective orders are in some cases being paused. Would you say that current customers that have systems in backlog, are they also pausing their process on planning or site prep, that would put backlog conversion at risk? Finally, can you speak to just maybe what the sentiment is like in the walls of ViewRay right now? I know not an easy conversation, but these topics are important here with the state of the business going forward. Yeah. Happy to. Why don't I flip the order and invite Zig to chime in on the customer part. It's difficult, Jason Bednar, to be candid with you. We are very transparent as an organization. We care deeply about our mission and about our team. It is a challenging environment. At the same time, I would tell you our team believes so fervently on the patient impact that we're having on cancer patients every day. They are inspired by the clinical data that our customers generate. There's a whole bunch of positive things to look forward to in the midst of a difficult time of taking the cost-cutting actions that we have taken. From a customer perspective, I would just say broadly, our customers generally take years to make a decision to buy a MRIdian system. There are exceptions to that. It has gone faster. Generally speaking, our customers are looking at and doing diligence over a couple year period of time. It is, even though you might say, "Gee, what do customers think at this moment?" They don't take the decision likely, and they have done very deep research and compared MRIdian to virtually every other technology out there. They're not, you know, in the instances that we have seen and that we're talking about here, it doesn't appear that they're very quickly turning tail on that decision, and we're in very close contact with our customer base. Let me pause and see if Zig wants to come over top. No. Scott, I agree with that. You know, Jason, again, we haven't lost any, or had no cancellations within our backlog. We're certainly aware of the realities facing our customers right now, working closely with them on their installation timelines. In some instances, the timing of shipment is a bit difficult for us to forecast, and I think that's in line with us suspending guidance. All right. That's helpful. Maybe just picking up on that point, with the complete pulling of guidance, I missed it and it's totally possible, but I'd just like to understand, what's changed in just the last few weeks that caused us to go from revised guidance on revenue and EBITDA to no guidance whatsoever? I mean, why not just pull the guidance entirely to begin with? It doesn't sound like, you know, anything today is a indication of further deterioration in revenue recognition process or the backlog. I guess if you could do it over, would you have pulled guidance to begin with rather than going through this, like, stage process of guiding down and then pulling it entirely? Yeah. You know, Jason, I totally get the spirit of your question. I would just share that things have changed pretty rapidly, right? If you look at the end of last year, we saw a signal of how our distributors' behavior was changing, how customarily prior to that, we would ship a system to them and they would send cash quickly, relieving the working capital requirements on the business. We saw these inflated construction costs that really happened very quickly early in this year, which is what led to our pre-announcement. Monday morning quarterback, you know, could have we done some things different? I'm certain of that. We made a very measured decision at the time with the facts that we had in hand, and we have had, I can't tell you how many conversations with customers in the intervening period, and very thoughtfully again contemplated whether this was the right move here in light of the fact that we have not lost any orders. We think with the facts and circumstances, it is appropriate today, and the prudent move to suspend guidance. Okay. I'm gonna squeeze one more in here, just interested in asking one more. Sorry. Just, I know the receivables here, since you were talking about those there, they've been a challenge. Revenue cycle management's been a challenge. Can you talk about the risk level around collections from customers and your distributors here going forward? I guess the real question is, do you anticipate bad debts or write-offs here rising going forward? Thank you. Yeah. You know, to that last question, Jake, I'll give you a shot here after I answer if you wanna add anything. Jason, our track record from a bad debt perspective, I think you and others probably know it well. I don't see a change in the current environment relative to that. We have always been able to gain payment from our customers. It doesn't always come as timely as we would like it to, this is a pretty lumpy business, as you're well aware, at this current phase of our company. I don't see any change on that front as we see things here today. Okay. Yes, Scott, I think you said that well. We've had minimal bad debt in our past, and I would agree, we do believe that all of our receivables are collectible going forward. Thanks, Jason. The next question will be from the line of Neil Chatterjee with B. Riley. Your line is now open. Hi, this is Brandon on for Neil. Thanks for taking our question. Hey, Brandon. I understand the focus on the strategic alternatives with Goldman, but just wanted to maybe ask some questions on the headwinds and if any efforts are still being put towards trying to address those headwinds. Like for instance, I think you mentioned, you know, on financing, that customers are having trouble getting those financing, and I'm wondering if you're helping find alternative options for the financing. For instance, or if there's any other efforts being directed towards those customer-related headwinds. Yeah, Brandon, I would share that we have worked with our customers to identify third-party financing partners. We have looked to monetize our backlog. We have worked in any variety of ways to reduce the working capital needs of the business. I would say we have had very modest success on that front, candidly, over the past many months of efforts there. We have put forward significant effort. It has not provided significant relief at this point. Right. Right. Yeah, I understand it hasn't provided... I'm just still wondering if it's if these efforts are still ongoing even with the focus on the strategic alternatives. Like, for instance, I also can ask about the construction cost, if there's any particular aspect with construction. Obviously, labor is gonna be a significant factor there, but if there's any, you know, particular materials that have outsized effects or if there's any steps that ViewRay can take to try to mitigate some of those factors. Yeah. It's a great question and a big part of the future of the company, and I know we've talked about this both publicly and with you, Brandon, on our follow-up calls. The cost down project that we are pursuing, it is one of the highest priority things that we are doing as a company. The intent of that project is to take about $1 million out of our cost of goods and concurrently make the speed and cost of installation of MRIdian commensurate with other conventional, high-end LINACs out there. That is one of the challenges that we face commercially is the time and expense that it currently takes to put a MRIdian system in the ground, and we think we expand the opportunity meaningfully with the cost down project. That project has been underway for some time, and we think that is a project that we will be ready to launch somewhere in the early 2026 timeframe is our best estimate. It is a very big project, so timing is difficult to estimate, but that's how we're thinking about it. I think it's also important for investors to know some of what we do is incredibly difficult from a software perspective. James Dempsey and his team are just a marvel from where I sit. This work that we're doing is component-based, and it's time and engineering work. I don't mean to trivialize the difficulty in any way, but it is very straightforward engineering work, and we think the impact that that's gonna have on our ability to compete in the market, adding all of the clinical data, all of the capability that we have, and taking those barriers down, we think that changes things materially for the company. Okay. Thanks. Maybe just one more on the cash conservation side. I'm wondering if the levers that you pulled, the $19 million-$23 million, are all of the levers that can be immediately implemented or if there's any further levers that can be pulled in the coming quarters? Yeah. There certainly are other levers that can be pulled. Brandon, I would say here, and forgive the redundancy, the actions that we have taken, we believe are complementary to the strategic process that we're in the midst of. We think it strikes the right balance between acknowledging the need for the company to be very focused on cash preservation and expense management and at the same time recognize that various suitors and interested parties have different needs and different requirements. We are striking a balance there. We believe we have struck it. If facts and circumstances change, there are always other actions that we can take. We have done that scenario planning, and I feel as though we're poised to make those decisions again, if facts and circumstances warrant. Okay. Thanks for taking our questions. Thanks, Brandon. That is all the questions that are in the queue. I will pass the call back over to Scott Drake for closing remarks. Thank you, operator, and thanks everybody for joining us. We look forward to talking to you again on our Q2 call. Have a good evening. That concludes today's call. Thank you for your participation. You may now disconnect your line.