Q2 2021 Acutus Medical Inc Earnings Call

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Good day, and thank you for standing by and welcome to the Actavis Medical incorporated second quarter 2021 earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question during the session you will need the.

Press Star one on your telephone if you require any further assistance. Please press star Zero I would now like to hand, the conference over to your speaker today Caroline corner Investor Relations. Please go ahead.

Thank you operator, welcome direct you to the second quarter of 2021 earnings call. Joining me on today's call Urban Spirit's, President and Chief Executive Officer, and David Rowland Chief Financial Officer.

Al will include forward looking statements within the meaning of the private Securities Litigation Reform Act of 1095.

Statements made on this call that do not relate to matters of historical fact should be considered forward looking statements factors that may cause results to differ from these forward looking statements are discussed under the forward looking statements section in the press release attached as an exhibit to acute as a form 8-K filed with the SEC today and are also discussed in more detail under the risk factors section in the Q2.

Most recent filings with the SEC, including the risk factors described in <unk> Form 10-K any forward looking statements provided during this call including projections for future performance are based on management's expectations as of today.

You just undertakes no obligation to update these statements except as required by applicable law.

It gives us a press release with second quarter 2021 results is also available on <unk> website, Www Dot kudos medical Dot com under the investors section and includes additional details about <unk> financial results.

<unk> also has the cutest SEC filings, which you are encouraged to review a recording of today's call will be available on the website by five P. M Pacific time, now I'd like to turn the call over to Vince for his comments and second quarter of 2021 business highlights.

Thank you Carolyn and good afternoon to everyone joining us today.

During today's call I will provide an update on our key strategic priorities as well as some recent clinical commercial and market developments I will also comment on our second quarter results and provide some thoughts on external market dynamics, David will follow up with details on our financial and.

<unk> results as well as our outlook for the rest of the year.

Our team remains steadfast in its commitment to reshape the field of electrophysiology. There is nothing more important to us and improving clinical outcomes and changing the treatment paradigm for the patients and health care professionals, we serve.

We recently completed and $83 million capital raise net of fees and expenses and with improved momentum in our business. We are charging forward on all fronts and realizing our strategy to become the partner of choice to electrophysiologist through our broad and differentiated portfolio.

Oh of access.

Agnostic imaging and therapy products.

We are executing on our commitments and we are building this company for long term success.

As we look further as we look to further bolster our commercial strategy. We are pleased to welcome Neve Pellegrini to our board of directors.

Currently serves as Chief commercial officer at net ROE and has over 20 years of experience in the medical device industry.

<unk> has held commercial leadership roles at several companies, where she has a track record of driving strong growth and consistent performance. We are very excited to benefit from neves guidance as she joined the company's board this month.

I also want to thank <unk> for his extended service as we announced today that he will step down from our board of directors.

<unk> and his team at advent life Sciences were among the first to invest in acute us during our series a round in 2011.

<unk> has been a trusted adviser and friend over the past decade, and we greatly appreciate his contributions and support.

Over the past several months, we have seen ongoing improvements across our three strategic pillars technology and innovation leadership commercial execution and operational excellence.

These improvements are reflected in our second quarter financial results as well as in recent product approvals and clearances R&D program development and physician engagement.

All of these initiatives were clearly on display at the 2021 Heart Rhythm Society meeting.

That was just wrapped up in Boston in late July.

As a reminder, this was the first in person HRS since 2019, and our first opportunity to be in front of a large group of physicians since our full market launch in February of 2020.

In our booth, we showcase our complete and highly differentiated product portfolio as well as unveil details of major development programs.

We featured our broad offering from access with our Accu Cross Transcept a line of products to diagnostics and mapping with our <unk> system to therapy, with our <unk> ablation catheter and system as well as our pulsed field ablation program.

We were thrilled and humbled by the strong attendance at our booth and a relevant scientific sessions and a large number of walk in customers eager to learn more about who we are and what we offer.

Many of our conversations during the meeting.

A common theme of acknowledgment from the clinical community that acute is positioned not only as a participant in EP, but poised to be a leader in the field.

Our sales team left the meeting with over 150 high potential leads and we are already capitalizing on these incremental commercial opportunities.

Our rhythm theatres session at HRS included nine of the industry's most well known and accomplished EPS.

Here, we highlighted the core two boundary individual ablation strategy that is uniquely enabled by our <unk> system.

In addition, we introduced our development plans for pulsed field ablation or PFA program, which we believe provides a differentiated paradigm and ablation therapy.

We had not previously discussed our PMA program in detail with the broader clinical community and we were very encouraged by the response from HRS attendees.

A full replay of this session is available on our website and Youtube channel.

Just to drill a bit deeper here. Unlike the vast majority of PFA programs under development, we are using our accu blade for sensing ablation ablation catheter as the therapeutic workhorse delivery device for our PMA program <unk>.

Physicians will have the opportunity to adopt PFA with a familiar platform as well as have the option to use our catheter for either RF or PFA procedures.

In addition, our catheter will enable focal point ablation with PMA facility, facilitating more targeted delivery of therapy and flexibility to reach any anatomy during treatment.

Having a point ablation system will allow us to treat patients suffering from all cardiac arrhythmias, including atrial fibrillation and disease in the ventricle and right atrium.

Combined with our Accu map mapping system, our PSA program will have the potential to enable patient specific ablation therapy, especially among more complex patients.

As a deliberate choice to enable a fast therapy platform on a fast imaging platform to guide therapy in line with our mission to treat AF with a personalized approach to improved outcomes.

In recent months animal studies have shown increasingly promising results and we continue to expect first in human for a PMA program later this year and will provide updates accordingly.

In addition to PMA, we continue to make progress in our efforts to bring a therapeutic catheter to the U S enrollment in our U S. E trial for right atrial flutter is progressing well and we continue to expect to complete enrollment towards the end of this year with approval for the cap.

<unk> and system in late 2022 or early 2023.

In may the FDA approved our IDE application to evaluate the <unk> ablation catheter and system and both paroxysmal and persistent atrial fibrillation patients.

We are in the process of recruiting sites and expect to treat the first patient in this trial during the third quarter.

As we continue to advance our clinical development pipeline, we have achieved several important regulatory clearances and approvals that are critical elements of our product portfolio.

These include our accu bleed for sensing ablation catheter and system in Europe.

Our complete line of Accu Cross Transcept will devices.

And our next generation delivery sheets and access devices are transcept will and access product lines are allowing us to increase our revenue per procedure.

Enter accounts, where we do not currently have an <unk> system and generate revenue in both EP and structural heart procedures.

Earlier this week, we announced the receipt of CE Mark approval.

And five 10-K clearance for our acumen <unk> software package.

<unk> eight is a significant update to our mapping software that will continue to set the standard on fast mapping and diagnosis of <unk>.

Complex arrhythmias.

<unk> eight will greatly improve physician's ability to visualize and identify regions of interest for the treatment of complex rhythms, helping our customers further improved patient outcomes.

Through an even more streamlined procedure.

We expect this software upgrade to be a key factor supporting increased mapping procedural utilization here in the second half of the year.

Over the past year and a half we have significantly expanded our product portfolio from about 15 Skus in January of 2020 to just over 100 Skus as of the end of July.

This equips our commercial teams with the critical foundation of acute as products needed to build scale and we will continue to expand our product offering in the coming months and years with both incremental launches as well as new platforms.

Now turning to our results during the second quarter, we generated revenue of $4.7 million compared to $1.1 million in Q2 of 2020 and compared to $3.6 million in Q1 of 2021.

Year over year growth was driven by higher procedure volumes globally and increased capital equipment revenue, while procedure volumes in disposable revenues accounted for sequential growth in the quarter.

We increased the worldwide installed base of second generation <unk> consoles $2.68 at the end of Q2 up from 57 at the end of Q1, bringing the total installed base of <unk> consoles to 70 as of June 32021 versus <unk> 62 at the end of last quarter.

We exited the quarter with a strong funnel and expect to see continued growth in our installed base through the rest of the year.

As discussed previously we can.

Continue to focus not only on growing our installed base, but also targeting the right accounts for sustainable utilization.

During the second quarter. We saw these efforts take hold with several new customers now performing procedure volumes within the top quartile of utilization.

At these same accounts, we saw active reorder rates during.

Both exiting Q2 as well as here early in Q3.

Moving to procedures, we registered volume growth on both a year over year and sequential basis in our Europe and U S direct business.

This growth came from both new account openings and associated uptake as well as underlying growth in existing centers.

In addition, our expanded product line is driving disposable revenues outside of vacuum App cases, and we expect this to be a key driver on a go forward basis.

In the U S. We saw general stability in market dynamics during the second quarter with limited restrictions on elective procedure volumes.

As you are aware, however, COVID-19 infection rates have been rising across the U S.

This is an extremely fluid situation and we are actively monitoring hospital and government actions in response to higher Covid cases, COVID-19 related hospital admissions and staffing shortages.

As any regional Covid restrictions in the U S. Emerge we are prepared to actively reallocate our field team's resources elsewhere.

In the UK and Europe, Covid continued to affect our business throughout the second quarter.

One of our largest centers in Europe. For example was shut for nearly two weeks due to a shortage of anesthesiologists and nurses.

We continue to see some intermittent COVID-19 related headwinds in Europe, and the U K, but not materially different from what we've seen in the last few months.

Through these challenges our team continued to execute extremely well and drove increased procedural volumes new account openings and overall revenue growth.

Lastly, our partnership with <unk> continues to deliver strong results during the quarter, we were able to fill almost all the back orders for our ablation catheter to support a full launch in <unk> territories, and we expect to see broader adoption of our products through <unk> in the coming quarters.

Procedure volumes were negatively impacted by hospital closures in Germany, and our ramp in new markets like Malaysia has been delayed both due to COVID-19.

In the face of these external factors the <unk> commercial team remains heavily engaged on training and implementation and we expect this collaboration to be a critical driver over the short medium and long term.

Overall I am extremely proud of the progress our teams are making to execute our strategy and bring innovative solutions to this large and growing market.

Through the rest of 2021, we expect to have several clinical data regulatory and product milestones that will further illustrate our long term value proposition.

We look forward to providing those updates throughout the year.

With that I'll now turn it over to David for our financial results David.

Thank you Vince and good afternoon, everyone.

My remarks today I will provide details on second quarter of 2021 operating results as well as our outlook for the rest of the year.

As Vince mentioned, our revenues for the second quarter of 2021 were $4.7 million up from $1.1 million in Q2 of 2020.

The Q2 year over year revenue increase was driven by procedural adoption for our broad range of EP products and Trans septal access devices direct capital sales of our <unk> console and our distribution agreement with <unk>.

Sales in our direct businesses of $3.5 million increase from 900000 in the second quarter of 2020 on a sequential basis sales in our direct business advanced 45% led by higher procedure volumes and associated disposables as well as increased contribution from new product launches.

Revenue through distribution agreements of approximately $1.2 million compared with 223000 in the prior year second quarter.

Driven by both procedure volume growth capital sales and new market access through our partner <unk>.

Non-GAAP gross margin was negative 54% for the second quarter of 2021, compared with negative 130% in the second quarter of 2020 and negative 89% last quarter.

The sequential and year over year improvement in our non-GAAP gross margin largely relates to higher production volumes and increased disposables mix.

As we have discussed previously we have made and continue to make significant investments in our manufacturing footprint to support long term growth.

With ongoing growth in our business, we expect to see our gross margin continued to improve as we scale revenue.

Non-GAAP R&D expenses were approximately $8.5 million in the second quarter compared with $8.1 million for the same period of 2020.

The increase in R&D expenses was primarily related to investments in the <unk> ablation catheter, our pulsed field ablation program software development and upgrades to our accu, Matt mapping catheter.

Non-GAAP SG&A expenses were $12.5 million in the second quarter of 2021, compared with $8 million in the year ago quarter.

The increase was primarily due to the expansion of our commercial team in conjunction with our full global launch and an increase in G&A for public company related costs.

Excluding specified items, our non-GAAP net loss for the second quarter of 2021 was $25 million or 89 per share compared to a non-GAAP net loss of $18.8 million for the second quarter of 2020 or $1 eight per share after giving effect to the pro forma conversion of our <unk>.

Vertical preferred stock.

Our total cash balance at the end of the second quarter of 2021 was $81.2 million.

In early July we completed a secondary equity offering, including the green shoe over allotment, which resulted in gross proceeds of $88.6 million and the issuance of 632.5 million shares of common stock.

Net of fees and expenses the offering yielded proceeds of approximately $83 million, which will be utilized to fund commercial expansion accelerate key R&D programs and invest in infrastructure to support future growth.

Looking to the remainder of 2021 I would like to provide some further details regarding our outlook for the rest of the year.

For the full year, we are maintaining our guidance range and expect revenue to be in a range of 22% to $30 million.

We recognize the wide range in this outlet for the second half of the year. This largely relates to the variables in the external environment as well as the extent to which our business is influenced by capital orders and conversions.

The lower end of our guidance range requires a similar improvement in the second half of the year as to what we have seen on a year to date basis.

The Q4 to Q1 and Q1 to Q2 improvements in our business primarily came from new account openings incur.

Increased same store utilization higher new product contributions and moderating, but still present COVID-19 headwinds.

At the mid to high end of our guidance range, we would need to see an acceleration in these key drivers.

Normalization of end market conditions related to Covid and higher capital equipment conversions.

As it relates to the phasing of sales to the back half of the year, we would expect a disproportionate weighting to the fourth quarter. This is largely tied to the potential for short term COVID-19 disruptions some enhanced seasonality due to extended vacations and time away from the hospital and several key centers in geographies.

And the resulting impact on timing of reorder rates and new system installations.

Based on the electric procedure volume patterns observed in 2020, we think it is very reasonable to expect any procedure volume disruption to prove transient.

We will provide further updates during investor conferences in our third quarter earnings call in November.

I will now turn the call back to Vince for closing remarks and to facilitate the Q&A.

Thank you David.

As I reflect on the cadence of our performance in the first half of the year I am pleased with the trajectory of our business. Our commercial execution globally is strengthening and I am confident we have the right team in place in.

In addition, we continue to advance several key products through our pipeline and expect 2021, and 2022 to be very active years for product approvals regulatory clearances and clinical milestones.

We are rigorously focused on our own execution to maximize performance and drive our business forward.

We appreciate your continued interest and support and we'll now open the call to your questions operator.

As a reminder, if you wish to ask a question. Please press star followed by one on your thoughts on telephone is your question has been answered or you wish to retain all your question.

Please standby, while we compile the Q&A roster.

Your first question comes from the line of Robbie Marcus from Jpmorgan. Your line is open.

Hey, guys. This is Sarah on for now these team.

Thanks for taking the question and for the color on the guidance there.

So I just kind of wanted to dig into that a little bit.

Look at the midpoint.

$6 million in sales for the full year.

It's about.

Just over $8 million in the first half.

What are you seeing right now in the quarter that kind of gives you the confidence that.

Either utilization or.

New placements can kind of get you to.

The lower end of the midpoint of that guidance. What are you seeing so far that gives you that confidence.

Sure. So let me just frame that a little bit so if I look at kind of the year to date drivers and the way I think about that is the improvement in our revenue from the fourth quarter to the first quarter and the first quarter to the second quarter.

The drivers of that were as I said new account placements.

New product adoption and increased utilization as I look at each of those let me start with new account openings. We opened a number of accounts very late in the second quarter, what I would describe as really the last week of the second quarter and those accounts, where we opened.

We are seeing very strong uptake in utilization one of those accounts is already in our top quartile of utilization as we referenced on the call.

I also say that a couple of the other accounts we opened in the second quarter earlier on also saw a significant ramp in utilization during the second quarter on the new product front most of that many of those new products were really launched during the second quarter and that second quarter launch cadence, we saw a very strong uptake in.

Products like our non stress, our trans septal crossing devices as well as our accu blade ablation catheter.

That trend on new products is continuing here into the third quarter and we would expect those products to contribute incrementally on a sequential basis.

At the same token those new accounts that we opened at the end of the second quarter really had no contribution to second quarter revenue and we should see that contribution of those sequentially start to increase in Q3 versus Q2 as well.

And then the last piece of the puzzle here and this is a very important variable both.

In Q2 and for the rest of the year is how we execute against capital conversions and just to remind you and everybody on the call while the increase in our installed base is not necessarily reflective of a capital sale remember we play systems under evaluation and later aim to convert those to a capital sale.

So we have a number of systems coming up for evaluation.

In that evaluation has completed where we expect to convert those to capital we already have converted.

We already have seen conversions here in the third quarter.

Yeah.

Got it that's really helpful. Thanks for all the detail.

I mean I'd also I'd also comment that our.

Our commercial team is in the U S. In particular in Europe is really coming together.

We added a new chief commercial officer, Duane, while they're not thinking like that North star.

And I think March one of this year and the team is really gelling as we sit here today and if you look at our direct revenues in Q4 of last year.

Set against our direct revenues in Q1 of this year and then Q1 is set against Q2.

The team.

Is kind of figure it out the formula here.

For driving installs driving utilization driving engagement with our docs.

Thanks.

Looking below that top line.

I think spend actually came in a little lighter than we were expecting in the quarter.

As you have this revenue ramps.

Especially weighted to <unk>, where should I think.

Think about operating expenses coming in at relative to what we saw in the quarter.

Yes so.

We have.

<unk> quite a lot of time in the past several months really trying to fine tune, our operating expenses and prioritize our investments in R&D I know your team in specific teams specifically is focused a lot on R&D youll, probably notice that R&D was down sequentially from Q1 to Q2 on a non-GAAP basis now, reflecting our lack of.

Investment in R&D, but more reflecting our effort to very clearly prioritize our investments and to ensure that we are utilizing our precious resources in a way that is most productive. So if you look at our operating expense.

Flat ish on a non-GAAP basis from Q4 through Q2, despite despite the revenue ramp or cash burn did moderate significantly from Q1 to Q2 as well I would not expect a $7 million a quarter improvement in our cash burn going forward, but on the operating expense side I actually would not expect significant growth in opex.

In the back half of the year contrasted against.

And improving gross margin, which you saw here.

We will we will grow operating expenses on a go forward basis, it particularly to support the commercial expansion but.

I would expect us to be in this sort of 23% to $25 million.

Range.

On just pure.

Operating expenses, and then that being started that starts and it should start to get funded a little bit by a turn in the gross profit line because as we said previously to be at a positive gross margin, we need to be at about a $3 million.

Monthly.

Run rate to get to a gross margin breakeven depending on some mix factors obviously so.

We are very.

We are very focused on managing our expenses in a disciplined way not not foregoing opportunities to invest at this stage in our development, but ensuring that we're prioritizing those investments and effectively managing our cash.

Thanks for taking the questions.

Next question comes from the line of Bob Hopkins from Bank of America. Your line is open.

Hi.

<unk> on for Bob today, Thanks for taking our questions.

So we understand.

Cardiac procedures this year kind of hold on better than some of the others, but with Covid cases rising I was just wondering if you are.

So the nervous or if youre seeing any signs at your access to the hospitals.

Might be going down again, or it kind of worked out some new arrangements and what your competencies that youre going to be able to get your sales force and to talk to EPS going forward.

Yes, I'll take that.

The large majority of our hospital customers.

We've talked with have made.

<unk> invested a lot of time and energy to figure out how to discharge patients following inflation on a same day basis. So that they can get patients in a hospital that has to have.

Spent an overnight family away from the patient overnight all that sort of thing.

Having said that there is there's only so much so much you can do and certainly we are seeing regional hotspots.

Crop up and impact.

The hospital business, the EP business and our business.

I appointed during the prepared comments to some hospitals in central Europe.

This last quarter, where they didn't have enough anesthesiologist or nurses to staff.

Because of some of the influx of patients that we're seeing in the shutdown typically for two to four two to three weeks and then gradually find a way to come back up.

The U S right now.

As I commented earlier is very fluid and very regional and we're watching it like a hawk if you remember.

Our U S installations are highly concentrated.

Very much so in the southwest and the southeast.

The southwest we're.

We're not seeing much impact.

Any impact as we sit here today I was on the phone with one of our top customers just before this call.

And he said that they're.

In patient.

Our inpatient Covid population is something like a 10th that it was at the peak.

Last one if it was spring.

And they are unaffected by Covid at this time.

Talk to her.

Our regional business director and the southwest heard the same thing.

Also spoke with one of our top salespeople in Florida today.

And it's a different story over there we've got some historically very productive installs in Florida and the majority of those as we sit here today.

Have curtailed or stopped elective procedures over the last.

10 to 14 days.

We're hearing that they hope to couple of them hope to come back online here within a week or so.

But I'll tell you, it's a little bit of a white knuckle situation out there.

And we don't have a crystal ball on this.

Sure.

Moving resources around the hospital shutdown and we repurposed our team and their off selling or central crossing devices into other accounts that are still up and running.

Or we have our mappers.

Fly and cover cases elsewhere, where we can but it's a very fluid situation in the United States right now.

To be perfectly candid with you.

Got it totally understand the fluidity and difficulties. So I appreciate the color that you were able to give us. So thank you for that and then if I can just on one follow up here.

Just wanted to understand the amount of runway that the recent capital raise gives you and how much.

Revenue growth versus cost cutting wood would kind of help out on the cash burn there going forward. So I appreciate you taking my questions.

Yeah.

So so we think this would get it to kind of mid 2023.

Assuming no drastic actions on expenses or sort of abnormal cost management initiatives that we'd have to undertake so that contemplates continued hiring within our sales force continued investment in R&D programs advancing our clinical programs.

Et cetera.

So we think this does provide us with a with a good runway to that time point.

Yeah.

As we think about the cash management or kind of the model here.

How are you really quick on the cost side, we're not necessarily looking to cut expenses, we're looking to put our resources in the most productive places possible and each each dollar. We have we know is a dollar that could be spent spent elsewhere. So we're going to continue to invest very actively in our business to make sure we.

Do that prudently.

As you well know revenue growth and gross profit pays a lot of bills. So as we look forward turning that gross margin positive.

Should have a pretty pronounced impact on cash burn and we're not necessarily looking to.

Not necessarily looking to increased expenses on the heels of a.

Turning to our gross.

And our gross profit that would simply improve our overall financial position.

Understood. Thank you.

Next question will comes from the line of Margaret Kaczor from William Blair. Your line is open.

Hey, good afternoon, guys. Thanks for taking my question.

Maybe to start off with just wanted to follow up on HRS. It sounds like you had some strong feedback there the 150 high potential needs, which seemed like a pretty nice number versus the 70 installed base you have now so I was just curious how do you qualify high potential lead how as they historically trying to in the past in terms of closure rates.

Over what time period should we potentially look for something like that.

Yeah, Great Great question, and I will tell you we spend a lot of time pre gaming for HRS. This year, we were on the phone with the organizers of HRS on almost a weekly basis trying to figure out who the heck was coming.

For people coming from overseas, where people coming in all of our fellows coming and whatnot.

Titrated our spend in.

Staffing.

To the very last moment so.

We felt like there was a there was a pretty good group of folks that we're going to go ahead and come to Boston.

And we staffed kind of kind of mid range.

When when pretty all out in terms of physician engagement and some after.

After exhibit hours.

Social events and that sort of thing.

I'll just tell you it really paid off.

Tendons I don't have the actual numbers, but.

What was interesting was we were able to generate interest and booth traffic and true high quality leads.

That.

Would have been happy with that lead number in a normal year. This year I only talked to two or three physicians from O U S.

The whole show.

It was virtually no one came from Europe, and very few physicians from Asia.

And.

I would also point out that the.

The attendance from the west.

As we looked at our leads the vast majority of our leads were from mid country to the east and the leads from the West we're actually down significantly and disproportionately lower which I think reflected some of the hesitancy to travel.

Either due to COVID-19 or just fatigue and wanting to spend time with family, but in spite of all of that.

Generated over 150 high quality leads we did something I've never done before.

In my career on the Monday, following we had.

Four of our Booth participants sit and go line by line look at lead by lead and connect the dots with each and every lead assessed the quality of each fleet and assign those.

24, after 24 hours after getting home assign those to our account managers and Mappers vps.

And we had really really good engagement not just with our mapping.

System leads but with our central crossing.

<unk> and our.

Our left heart sheath.

We just launched a couple of months ago, which by the way every single left heart procedure needs. A left heart sheath is just a rock star new product I think we're going to really do some great things with them so great lead.

It leaves there and those are also kind of door openers.

For mapping systems as well.

So.

Super excited about how it went as usual.

He might have been at.

Our HRS in San Francisco, a couple of years ago, we always come with a little bit of a different look a little bit of a swagger, we don't wear suits and ties and.

I think people appreciate.

The way, we come out or rather unconventional approach and the way we passionately.

Come out this business.

Okay.

Okay.

Just to follow up so that 115 could be physicians of all sorts are going for various types of products and ultimately may start as you know.

Try and capital crossing.

But ultimately hopefully can grow that pie so maybe.

Correct me, if I'm wrong on that and then second of all if you look at kind of the procedure ASP or kind of your revenue per account.

I'm just trying to figure out a way of trying to bring in some of those other products that you guys have how is that trending and is that a good number for us.

Take a look at it as we go towards future quarters. Thanks.

Yes, I think on the.

On the first part of that question Margaret.

That's a fair assessment each physician coming into the Booth may have had a different interest clearly we're trying to steer people to the <unk> system as kind of the anchor tenant of our of our portfolio, but certainly as physicians look to get to know our company.

Some of the access devices, which are universally.

Yeah.

Available for their existing procedures is a good way to.

Introduce us to the account and we have seen in one account in Arizona. For example is actually be having the transcept foot product that got us the system into the into banner health and.

In Scottsdale late in the second quarter.

The other on the second part of your question was how to model the impact of some <unk> and some of these new products I think the ASP is probably the most efficient way to talk about it we did see the ASP.

In our direct businesses.

Rise modestly Q1 to Q2.

That should Brian probably more.

You need to rise on a sequential basis, because remember the timing of some of these product launches was really within the second quarter.

And will it.

It takes it.

It takes some process to get through that committee and get on contract and the other things like that but we would expect to see a progressive improvement in our revenue per.

Per procedure on a go forward basis, then obviously in the U S. Specifically.

We would expect a step function of that once we have an ablation catheter available in that area were leaving to the tune of.

$2000.

Of the total procedure opportunity on the table right now.

Got it thanks guys.

Again as a reminder to ask a question you will need to press star one on your telephone.

To your question press the pound key.

Your next question comes from the line of Neal Levine from Canaccord. Your line is open.

Great. Thanks, Good evening and thanks for taking my questions.

I'd like to focus on the system placement pipeline.

First just.

With the new.

CLO coming on and kind of getting the CRM going in and you've made some commentary regarding focusing on the right counts.

I want to make sure that we don't get lost in concerned if maybe the the installed base numbers are different in the next couple of quarters, because youre shifting systems around in the field and I wanted to ask that question and how should we think about that and then from unproductive accounts to potentially productive accounts and then secondly.

As you talk about that new.

Install pipeline.

<unk> you have a lot of systems out there that are getting ready are kind of hitting that six to 12 month timeframe, where there is some decisions to be made and how should we really think about the kind of capital as we exit this year and into next year, especially.

When you think about kind of the lease versus the sales programs. Thanks.

Sure. So I'll take the second part of the question.

You can expand on this on the strategy with respect to our account placements.

<unk>.

The capital contribution to our business Bill will become more significant.

Here in the second half of the year and on a go forward basis in that and that is true both in across all three of our operating segments Europe U S and our.

Our distribution partners and the reason for that is exactly what what you pointed out which is we have a number of evaluations that are coming to exploration.

And we will be in a position to convert those to.

Catheter commitment deals or cash sales the benefit of the catheter commitment deals for US is it gives us a nice stream of long term predictable revenue. It does result in slightly lower upfront revenue that we're able to recognize but as we've started to.

Come to completion on evaluations, we are having pretty good success actually on the capital conversion side, and we would expect that percentage of revenue.

Two to.

To rise here I think we referenced in the script that capital sales were roughly flattish Q1 to Q2 as we also have systems out there for greater than a year on permanent commitments or.

Capital purchases, we will start to recognize service associated with with that which is about $25000 a year.

Service and $5000 in software that are that.

As a standard is included in the first year of the installation.

On your first question about <unk>.

The pace of installs in the strategy around identifying productive accounts moving systems around we are actively doing that there is very little value to us and actually anyone in the ecosystem physician patient or us having a system in a site that doesn't make sense and that can be the result of the physician champion is left.

It can be the result of the fact that we quite frankly in our early commercial launch did not pick the right accounts into which to install these.

These systems.

Or there can be a variety of other factors at play. So we will look to move systems around bring them back here upgrade them and redeploy them.

And into the field in the second quarter.

We added eight eight.

<unk> net installations to.

To the installed base.

We will probably have some removals here in the back half of the year, so that could impact the pace of the increase in the installed base I would I would certainly expect to see the installed base higher on December 31, and where it was on.

On June 30th but are.

Our focus is really on finding the absolute right accounts and without I don't want to go into the revenue numbers that one account in particular has ordered here in in July but it is really a reflection of <unk>.

Getting accounts to a point, where they're doing multiple procedures, a week and driving consistent utilization and reorder rates. We opened a center in April in the Czech Republic that was doing yes.

Five procedures, a week some months and year to the tune of 10 to 15, a month very consistently and that was not a multi month ramp up that was almost immediately subsequent to installation and we have it.

We have a couple we probably now three or four of those accounts. As an example is that we've been able to open here recently in the U S.

The installed base will continue to grow I think there has there I know, there's a tremendous amount of focus on the growth in the installed base. Our focus is on trying to both grow the installed base, but at a pace that allows us to.

Meaningfully ramp utilization and disposable revenue and reorder rates.

Yes.

The other thing I'd add is.

We're not resting.

In terms of.

Refinements that we can and need to make to our console and software.

To increase and improve the hit rate and uptake rate.

Every install we do.

I can't even fathom that.

<unk> the number of the thousands of man hours are software algorithm and marketing team.

Spent figuring out the workflow figuring out the additional tools that we needed to add to that to that console.

To address situations, where we didn't have that.

Snap uptake.

And that resulted that effort and that focus resulted in the launch of <unk> eight, which we just got approval on and announced.

Whatever it was yesterday.

This is a major.

Please for us this software.

<unk> suite of software products, not only integrates ablation now fully into our system in Europe in CE Mark countries fully integrates with our RF generator or a pump or cubic force unit, our mapping system in a way that puts us absolutely.

In a position, where we're we're going toe to toe with with the competition with a complete mapping and ablation system.

I think even more importantly.

We have now added and we have CE and FDA clearance on our whole suite of algorithms, which automatically.

Interpret our maps for our Mapper and for the physician.

And zero their eyes and on a whole chamber view of the or the lessor at atrium, and we automatically highlight and show regions of interest that those mappers and physicians should focus there is in on.

And I will tell you that was probably the biggest single impediment to rapid uptake.

For our physicians really around the world.

So the folks that got the system it was the maps.

Afib and other complex a rhythm rhythm is our.

Or just that they're complex or somewhat chaotic.

And to the human eye to look at a whole chamber.

To try and visualize in to your therapy planning around fairly chaotic rhythm, we now have algorithms that will actually.

Crank through and churn through all of that data and call people's attention to specific areas.

And I think thats going to have.

Has the potential to dramatically increase our uptake rates at our utilization rates as we go forward and thats launching we're launching that across our entire fleet over the next couple of weeks.

We don't hold up the process by trying to sell software upgrades and monetize the software upgrades for any significant.

Revenue, because we want the best possible product in front of every single customer every day.

Great.

I can follow up with a question Vince we've talked about this.

And youre launching a new product, it's it's getting that reproducibility repeatability of the process you've talked in the past about onboarding and account and kind of the things you've learned overtime I'm curious how much has that changed over the past 90 to 100 days since you last kind of revisit.

That at least with the investment community and how should we think about that in terms of the <unk>.

I think over the last.

3354 months, we've gotten a lot better on boarding accounts.

Not to get too into the weeds here, but.

One of the things that we've learned is that when you have a brand new physician users looking at these the mapping system in the results and the images that come out of the mapping system. There's a temptation to go right into the most complex nastiest multiple redo case possible. So that we can show the clinical <unk>.

Utility of our product out of the gate.

<unk>.

Kind of makes sense, but it's also pretty risky because of the doctor doesn't.

Art I am interpreting what he is looking at and planning is therapy strategy and maybe even believing what he is looking at.

That can be an uphill battle, what we do know typically is we actually.

As close as we can to mandate our physicians use our mapping system in simple cases in the first couple of cases, where we we know what that rhythm is going to look like for them or typical flood or something like that and the doctor has it in his or her mind what that map should.

Show.

If it has the fidelity and the reproducibility want.

And the the visceral effect that we have when we actually go in there with our catheter and show the physician exactly what are you expecting to see Hershey.

That builds credibility and confidence much more quickly.

And it sounds like kind of a nuance, but that approach has had.

<unk>.

Very significant effect on the uptake on a physician by physician basis.

Excellent thanks for taking my questions.

Thanks, Bert Thanks for coming to Europe for.

For them theatre, as well built and we hope you enjoyed that.

Sure.

Thank you.

Next question comes from the line of Marie Thibault from <unk>. Your line is open.

Hi, Good evening. Thank you for taking the questions I want to start here with maybe a two part question on utilization.

You referred to some users in the top quartile and a new user who is really kind of hit the ground running and is already in that top quartile for utilization. So I'm wondering if you'd be able to give us any metrics on what top quartile means is that one or two procedures per week with what's kind of a metric we could use to think about that.

And then also on utilization curious to hear how accu blade users over in Europe, and perhaps the <unk>.

Trial participants in the U S. How their utilization perhaps differ if at all.

And any trends you've seen along those lines.

The impact of having that force sensing catheter.

Sure so.

Thanks, Larry I'll start with the.

The first question around the top quartile of utilization.

That is between one five and two a week.

In that in that top quartile of utilization, it's still a pretty wide range as I said, we still have some that are in the two to four to five week range, but that's but that's a rough average for you to use.

The second question.

I don't have that breakout in front of me, but we do have.

Our utilization rates in Europe are not are not fully correlated with accu blade I remember that we really just launched accu blade exiting the first quarter our revenue.

Revenue for active late in the first quarter for example is like $3500.

So basically one catheter custom I'll, probably three catheters in Europe and then we've got that number is at 94000 in the second quarter.

But it's still at a concentrated number of accounts and the example, I gave you on the account in Europe doing 10, a week that we opened in April they were doing that level without accumulate they've added accu blade 222 that accounted actually they they will that will happen here in.

In the third quarter. So so it is definitely helpful and it does speed workflow a little bit.

Not yet at a point right now are the accu blades to accu map ratio is one to one.

Yes.

In Europe, though.

Okay.

And I don't think there is.

I don't think Theres, a single account over there yet, but it has <unk> eight which integrates the catheter ablation catheter with the mapping system on the screen.

<unk>.

Seamless way that.

Is every bit as if not.

Sort of.

More seamless than our competitors of J&J and Abbott.

We will start installing those software modules and those accounts in Europe over the next couple of weeks.

And I think the experience that physicians are going to have is.

It's going to be absolutely next level when you have that mapping system tied to that ablation catheter.

Seamlessly with that software integration.

Okay that makes sense, all very helpful and certainly the Yankee map Ain't good look very usable very user friendly and helpful. In finding the floor conduction zones and regions of interest.

I guess a follow up here on PFA, certainly a hot topic at HRS in Boston last month.

So look with a number of companies there everyone seems to have something they're working on maybe you could go into little more detail about why you think focal point catheter.

The ability to have PSA an RF on the same catheter why these things matter and.

If anything you know why you think your technology could have an advantage over the rest of the field.

Yes so.

If you think about the.

<unk>.

Total number of ablation is done.

Any chamber of the heart globally, it's about 1 million procedures a year today.

75 ish percent of those are done with a focal point ablation catheter.

Not with the cryo balloon not where the lasso catheter that's enabled with PFS.

Purpose built to ablate, a circle around the pulmonary veins.

Virtually everybody else in PSA right now is focused on that circular lesion.

Quickly take out the pulmonary vein big market attractive.

It's.

I get it.

But in.

As we really went deep with Doctor Michelson, who is driving our program here and.

Understood how large a lesion, we could make with our focal point ablation catheter as we understood. The pulmonary vein stenosis does not appear to be an issue with PFA. We came to the conclusion that yes, the 75% of ablation Cape Cab cases, where you pretty much have to have.

Focal point ablation catheter.

That's where we should go but we can also we think we can also go after those circular pulmonary vein isolation cases with a point ablation catheter.

And drop those lesion sets.

Very fast and as Doug Gibson said.

Our rhythm theater. He is really he has been.

Our number one collaborator and contributor over the last year positioned from Scripps here in La Jolla.

Been with us shoulder to shoulder the whole year.

As we've evolved our wave forms in our energy delivery.

He said at the rhythm theater easing I'm not sure how I see circular PFA catheter is going to be any faster.

And even doing the pulmonary vein isolation that a point ablation catheter if tuned properly.

So if we can go after the 75% of ablation cases that aren't going to be dealt with by a circular catheter circular lesion.

Plus be competitive in the pulmonary veins alone.

Like our chances.

I think we've got a absolutely fantastic point ablation catheter with <unk> sensing on it.

Which by the way people are increasingly think thinking for sensing is going to matter with PMA versus the out of the gate view was that maybe it wouldn't.

When you tie that together with the mapping system.

Which again, we think youre going to want to have if you're doing anything outside of the pulmonary veins particular mapping system that maps the whole chamber in a minute or two and finds you helps you find targets to abate.

I think we've got a competitive program here.

Well understood. Thank you.

This concludes all of the questions Nikki. Thank you all for participating in today's call and have a PD one.

Okay.

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Good day, and thank you for standing by and welcome to the Actavis Medical incorporated second quarter 2021 earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question Jamie.

You will need to pass star one on your telephone.

You require any further assistance. Please press star zero I would now like to hand, the conference over to your speaker today.

Your line corner Investor Relations. Please go ahead.

Thank you operator welcome to our Q2, the second quarter of 2021 earnings call. Joining me on today's call are inspired us President and Chief Executive Officer, and David Rowland Chief Financial Officer.

Call will include forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995, all statements made on this call that do not relate to matters of historical fact should be considered forward looking statements factors that may cause results to differ from these forward looking statements are discussed under the forward looking statements section in the press release attached as an exhibit to our Q4.

8-K filed with the SEC today and are also discussed in more detail under the risk factors section and most recent filings with the SEC, including the risk factors described in the Q does this Form 10-K any forward looking statements provided during this call including projections for future performance are based on management's expectations as of today.

<unk> undertakes no obligation to update these statements except as required by applicable law.

I can just press release, the second quarter of 2021 results is also available on <unk> website, Www Dot kudos medical Dot com under the investors section and includes additional details about our financial results.

Web site also has the cutest is F T SEC filings, which you are encouraged to review a recording of today's call will be available on the website by five P. M Pacific time.

I'd like to turn the call over to Vince for his comments and second quarter 2021 business highlights.

Thank you Carolyn and good afternoon to everyone joining us today.

During today's call I will provide an update on our key strategic priorities as well as some recent clinical commercial and market developments.

I'll also comment on our second quarter results and provide some thoughts on external market dynamics, David will follow up with details on our financial and operational results as well as our outlook for the rest of the year.

Our team remains steadfast in its commitment to reshape the field of electrophysiology. There is nothing more important to us that improving clinical outcomes and changing the treatment paradigm for the patients and health care professionals, we serve.

We recently completed and $83 million capital raise net of fees and expenses and with improved momentum in our business.

We're charging forward on all fronts and realizing our strategy to become the partner of choice to Electrophysiologist through our broad and differentiated portfolio of access diagnostic imaging and therapy products.

We are executing on our commitments and we are building this company for long term success.

As we look further as we look to further bolster our commercial strategy. We are pleased to welcome Neve Pellegrini to our board of directors.

Currently serves as Chief commercial officer at net ROE and has over 20 years of experience in the medical device industry.

<unk> has held commercial leadership roles at several companies, where she has a track record of driving strong growth and consistent performance. We are very excited to benefit from nice guidance as she joined the company's board this month.

I also want to thank <unk> for his extended service as we announced today that he will step down from our board of directors.

Sean and his team at advent life Sciences were among the first to invest in acute us during our series a round in 2011.

<unk> has been a trusted adviser and friend over the past decade, and we greatly appreciate his contributions and support.

Over the past several months, we have seen ongoing improvements across our three strategic pillars technology and innovation leadership commercial execution and operational excellence.

These improvements are reflected in our second quarter financial results as well as in our recent product approvals and clearances.

Andy program development and physician engagement.

All of these initiatives were clearly on display at the 2021 Heart Rhythm Society meeting.

That was just wrapped up in Boston in late July.

As a reminder, this was the first in person HRS since 2019, and our first opportunity to be in front of a large group of physicians since our full market launch in February of 2020.

In our booth, we showcased our complete and highly differentiated product portfolio as well as unveil details of major development programs.

We featured our broad offering from access with our Accu Cross Transcept a line of products to diagnostics and mapping with our <unk> system to therapy, with our <unk> ablation catheter and system as well as our pulsed field ablation program.

We were thrilled and humbled by the strong attendance at our booth and a relevant scientific sessions and a large number of walk in customers eager to learn more about who we are and what we offer.

Many of our conversations during the meeting carried a common theme of acknowledgment from the clinical community that acute is positioned not only as a participant in EP, but poised to be a leader in the field.

Our sales team left the meeting with over 150 high potential leads and we are already capitalizing on these incremental commercial opportunities.

Our rhythm theatres session at HRS included nine of the industry's most well known and accomplished EPS.

Here, we highlighted the core two boundary individual ablation strategy that is uniquely enabled by our <unk> system.

In addition, we introduced our development plans for our pulsed field ablation or PFA program, which we believe provides a differentiated paradigm and ablation therapy.

We had not previously discussed our PSA program in detail with the broader clinical community and we were very encouraged by the response from HRS attendees.

A full replay of this session is available on our website and Youtube channel.

Okay.

Just to drill a bit deeper here. Unlike the vast majority of PFA programs under development, we are using our accu blade for sensing ablation ablation catheter as the therapeutic workhorse delivery device for our PSA program <unk>.

Physicians will have the opportunity to adopt PFA with a familiar platform as well as have the option to use our catheter for either RF or PFA procedures.

In addition, our catheter will enable focal point ablation with PFA facility, facilitating more targeted delivery of therapy and flexibility to reach any anatomy during treatment.

Having a point ablation system will allow us to treat patients suffering from all cardiac arrhythmias, including atrial fibrillation and disease in the ventricle and right atrium.

Combined with our Accu, Matt mapping system, our PFA program will have the potential to enable patient specific ablation therapy, especially among more complex patients.

As a deliberate choice to enable a fast therapy platform on a fast imaging platform to guide therapy in line with our mission to treat AF with a personalized approach to improve outcomes.

In recent months animal studies have shown increasingly promising results and we continue to expect first in human for a PMA program later this year and will provide updates accordingly.

In addition to PMA, we continue to make progress in our efforts to bring a therapeutic catheter to the U S enrollment in our U S. E trial for right atrial flutter is progressing well and we continue to expect to complete enrollment towards the end of this year with approval for the cap.

<unk> and system in late 2022 or early 2023.

In may the FDA approved our IDE application to evaluate the <unk> ablation catheter and system and both paroxysmal and persistent atrial fibrillation patients.

We are in the process of recruiting sites and expect to treat the first patient in this trial during the third quarter.

As we continue to advance our clinical development pipeline, we have achieved several important regulatory clearances and approvals that are critical elements of our product portfolio.

These include our accu blade for sensing ablation catheter and system in Europe.

Our complete line of Accu Cross Transcept will devices.

And our next generation delivery sheets and access devices are transcept Tau and access product lines are allowing us to increase our revenue per procedure.

Enter accounts, where we do not currently have an <unk> system and generate revenue in both EP and structural heart procedures.

Earlier this week, we announced the receipt of CE Mark approval.

And five 10-K clearance for our Accu map eight software package.

<unk> eight is a significant update to our mapping software that will continue to set the standard on fast mapping and diagnose complex arrhythmias.

<unk> eight will greatly improve physician's ability to visualize and identify regions of interest for the treatment of complex rhythms, helping our customers further improved patient outcomes through.

Through an even more streamlined procedure.

We expect this software upgrade to be a key factor supporting increased mapping procedural utilization here in the second half of the year.

Over the past year and a half we have significantly expanded our product portfolio from about 15 Skus in January of 2020 to just over 100 Skus as of the end of July.

This equips our commercial teams with the critical foundation of acute as products needed to build scale and AEP. We will continue to expand our product offering in the coming months and years with both incremental launches as well as new platforms.

Now turning to our results during the second quarter, we generated revenue of $4.7 million compared to $1.1 million in Q2 of 2020 and compared to $3.6 million in Q1 of 2021.

Year over year growth was driven by higher procedure volumes globally and increased capital equipment revenue, while procedure volumes and disposable revenues accounted for sequential growth in the quarter.

We increased the worldwide installed base of second generation <unk> consoles $2.68 at the end of Q2 up from 57% at the end of Q1, bringing the total installed base of <unk> consoles to 70 as of June 32021 versus <unk> 62 at the end of last quarter.

We exited the quarter with a strong funnel and expect to see continued growth in our installed base through the rest of the year.

As discussed previously.

We continue to focus not only on growing our installed base, but also targeting the right accounts for sustainable utilization.

During the second quarter. We saw these efforts take hold with several new customers now performing procedure volumes within the top quartile of utilization.

At these same accounts, we saw active reorder rates during.

Both exiting Q2 as well as here early in Q3.

Moving to procedures, we registered volume growth on both a year over year and sequential basis in our Europe and U S direct business.

This growth came from both new account openings and associated uptake as well as underlying growth in existing centers.

In addition, our expanded product line is driving disposable revenues outside of vacuum App cases, and we expect this to be a key driver on a go forward basis.

In the U S. We saw general stability and market dynamics during the second quarter with limited restrictions on elective procedure volumes.

As you are aware, however, COVID-19 infection rates have been rising across the U S.

This is an extremely fluid situation and we are actively monitoring hospital and government actions in response to higher Covid cases, COVID-19 related hospital admissions and staffing shortages.

As any regional Covid restrictions in the U S. Emerge we are prepared to actively reallocate our field team's resources elsewhere.

In the U K and Europe, Covid continued to affect our business throughout the second quarter.

One of our largest centers in Europe. For example was shut for nearly two weeks due to a shortage of anesthesiologists and nurses.

We continue to see some intermittent COVID-19 related headwinds in Europe, and the U K, but not materially different from what we've seen in the last few months.

Through these challenges our team continued to execute extremely well and drove increased procedural volumes new account openings and overall revenue growth.

Lastly, our partnership with <unk> continues to deliver strong results during the quarter, we were able to fill almost all the back orders for our ablation catheter to support a full launch in <unk> territories, and we expect to see broader adoption of our products through <unk> in the coming quarters.

Procedure volumes were negatively impacted by hospital closures in Germany, and our ramp in new markets like Malaysia has been delayed both due to COVID-19.

In the face of these external factors the <unk> commercial team remains heavily engaged on training and implementation and we expect this collaboration to be a critical driver over the short medium and long term.

Overall I am extremely proud of the progress our teams are making to execute our strategy and bring innovative solutions to this large and growing market.

Through the rest of 2021, we expect to have several clinical data regulatory and product milestones that will further illustrate our long term value proposition.

We look forward to providing those updates throughout the year.

With that I'll now turn it over to David for our financial results David Thank.

Thank you Vince and good afternoon, everyone.

My remarks today I will provide details on second quarter 2021 operating results as well as our outlook for the rest of the year.

Our revenue as Vince mentioned, our revenues for the second quarter of 2021 were $4.7 million up from $1.1 million in Q2 of 2020.

The Q2 year over year revenue increase was driven by procedural adoption for our broad range of EP products and transcends all access devices direct capital sales of our <unk> console and our distribution agreement with <unk>.

Sales in our direct businesses of $3.5 million increase from 900000 in the second quarter of 2020 on a sequential basis sales in our direct business advanced 45% led by higher procedure volumes and associated disposables as well as increased contribution from new product launches.

Revenue through distribution agreements of approximately $1.2 million compared with 223000 in the prior year second quarter.

Driven by both procedure volume growth capital sales and new market access through our partner <unk>.

Non-GAAP gross margin was negative 54% for the second quarter of 2021, compared with negative 130% in the second quarter of 2020 and negative 89% last quarter.

The sequential and year over year improvement in our non-GAAP gross margin largely relates to higher production volumes and increased disposables mix.

As we have discussed previously we have made and continue to make significant investments in our manufacturing footprint to support long term growth.

With ongoing growth in our business, we expect to see our gross margin continued to improve as we scale revenue.

Non-GAAP R&D expenses were approximately $8.5 million in the second quarter compared with $8.1 million for the same period of 2020.

The increase in R&D expenses was primarily related to investments in the accolade <unk> ablation catheter, our pulsed field ablation program software development and upgrades to our accu mapping catheter.

Non-GAAP SG&A expenses were $12.5 million in the second quarter of 2021, compared with $8 million in the year ago quarter.

The increase was primarily due to the expansion of our commercial team in conjunction with our full global launch and an increase in G&A for public company related costs.

Excluding specified items, our non-GAAP net loss for the second quarter of 2021 was $25 million for 89 per share compared to a non-GAAP net loss of $18.8 million for the second quarter of 2020 or a $1 eight per share after giving effect to the pro forma conversion of our convertible.

Preferred stock.

Our total cash balance at the end of the second quarter of 2021 was $81.2 million.

In early July we completed a secondary equity offering, including the green shoe over allotment, which resulted in gross proceeds of $88.6 million and the issuance of 632.5 million shares of common stock.

Net of fees and expenses the offering yielded proceeds of approximately $83 million, which we'll utilize to fund commercial expansion accelerate key R&D programs and invest in infrastructure to support future growth.

Looking to the remainder of 2021 I would like to provide some further detail regarding our outlook for the rest of the year.

For the full year, we are maintaining our guidance range and expect revenue to be in a range of 22% to $30 million.

We recognize the wide range in this outlet for the second half of the year. This largely relates to the variables in the external environment as well as the extent to which our business is influenced by capital orders and conversions.

The lower end of our guidance range requires a similar improvement in the second half of the year as to what we have seen on a year to date basis.

The Q4 to Q1 and Q1 to Q2 improvements in our business primarily came from new account openings.

Increased same store utilization higher new product contributions and moderating, but still present COVID-19 headwinds.

At the mid to high end of our guidance range, we would need to see an acceleration in these key drivers.

Normalization of end market conditions related to Covid and higher capital equipment conversions.

As it relates to the phasing of sales through the back half of the year, we would expect a disproportionate weighting to the fourth quarter. This is largely tied to the potential for short term COVID-19 disruptions some enhanced seasonality due to extended vacations and time away from the hospital and several key centers in geographies.

And the resulting impact on timing of reorder rates and new system installations.

Based on the elective procedure volume patterns observed in 2020, we think it is very reasonable to expect any procedure volume disruption to prove transient.

We will provide further updates during investor conferences, and our third quarter earnings call in November.

I will now turn the call back to Vince for closing remarks and to facilitate the Q&A.

Thank you David.

As I reflect on the cadence of our performance in the first half of the year I am pleased with the trajectory of our business. Our commercial execution globally is strengthening and I am confident we have the right team in place in.

In addition, we continue to advance several key products through our pipeline and expect 2021, and 2022 to be very active years for product approvals regulatory clearances and clinical milestones.

We are rigorously focused on our own execution to maximize performance and drive our business forward.

We appreciate your continued interest and support and we'll now open the call to your questions operator.

As a reminder, if you wish to ask a question. Please press star followed by one on your thoughts on telephone is your question has been answered or you wish to reach all your question.

Please standby, while we compile the Q&A roster.

Your first question comes from the line of Robbie Marcus from Jpmorgan. Your line is open.

Hey, guys. This is Sarah on for Bob These team.

Thanks for taking the question and for the color on the guidance there.

So I, just kind of want to dig into that a little bit.

Look at the midpoint.

$6 million in sales for the full year.

Versus about a just.

Just over $8 million in the first half.

What are you seeing right now in the quarter that kind of gives you the confidence that.

Either utilization or are.

New placements can kind of get you to.

The lower end than the midpoint of that guidance and what are you seeing so far that gives you that confidence.

Sure. So let me just frame that a little bit so if I look at kind of the year to date drivers and the way I think about that is the improvement in our revenue from the fourth quarter to the first quarter and the first quarter to the second quarter.

The drivers of that were as I said new account placements.

New product adoption and increased utilization as I look at each of those let me start with new account openings. We opened a number of accounts very late in the second quarter, what I would describe as really the last week of the second quarter and those accounts, where we opened.

We are seeing very strong uptake in utilization one of those accounts is already in our top quartile of utilization as we referenced on the call.

I also say that a couple of the other accounts we opened in the second quarter earlier on also saw a significant ramp in utilization during the second quarter on the new product front most of that many of those new products were really launched during the second quarter and that second quarter launch cadence, we saw a very strong uptake in.

Products like our non stress, our trans Hudson crossing devices as well as our accu blade ablation catheter.

That trend on new products is continuing here into the third quarter and we would expect those products to contribute incrementally on a sequential basis.

At the same token those new accounts that we opened at the end of the second quarter really had no contribution to second quarter revenue and we should see that contribution of those sequentially start to increase in Q3 versus Q2 as well.

And then the last piece of the puzzle here and this is a very important variable both.

In Q2 and for the rest of the year is how we execute against capital conversion and just to remind you and everybody on the call while the increase in our installed base is not necessarily reflective of a capital sale remember we play systems under evaluation and later aimed to convert those to a capital sale.

So we have a number of systems coming up for evaluation.

In there where that evaluation has completed where we expect to convert those to capital we already have converted.

We already have seen conversions here in the third quarter.

Got it that's really helpful. Thanks for all the detail.

I would also I would also comment that our.

Our commercial team is in the U S. In particular in Europe is really coming together.

We added a new chief commercial officer, Duane while they're linked.

I think that noise at all.

And I think March one of this year and the team is really gelling as we sit here today and if you look at our direct revenues in Q4 of last year.

Against our direct revenues in Q1 this year and then Q1 set against Q2.

The team is kind of figure it out the formula here.

For driving installs driving utilization driving engagement with our docs.

Got it thanks.

And looking below that top line.

Spend actually came in a little lighter than we were expecting in the quarter.

As you have this revenue ramp and especially weighted to <unk> where today.

Think about operating expenses coming in at relative to what we saw in the quarter.

Yes so.

We have.

And quite a lot of time in the past several months really trying to fine tune, our operating expenses and prioritize our investments in R&D I know your team in specific teams specifically is focused a lot on R&D youll, probably notice that R&D was down sequentially from Q1 to Q2 on a non-GAAP basis, now, reflecting our lack of <unk>.

Investment in R&D, but more reflecting our effort to very clearly prioritize.

Our investments and to ensure that we are utilizing our precious resources in a way that is most productive. So if you look at our operating expense.

Flat ish on a non-GAAP basis from Q4 through Q2, despite despite the revenue ramp.

Cash burn did moderate significantly from Q1 to Q2 as well I would not expect a $7 million a quarter improvement in our cash burn going forward, but on the operating expense side I actually would not expect significant growth in opex in the back half of the year contrasted against.

And improving gross margin, which you saw here.

We will we will grow operating expenses on a go forward basis, it particularly to support the commercial expansion but.

I would expect us to be in this sort of 23% to $25 million.

<unk> range.

Just pure.

Operating expenses and then that being started that starts that should start to get funded a little bit by a turn in the gross profit line because as we said previously to be at a positive gross margin, we need to be at about a $3 million.

Monthly.

Run rate to get to gross margin breakeven depending on some mixed factors obviously so.

We are very.

We are very focused on managing our expenses in a disciplined way not not foregoing opportunities to invest at this stage in our development, but ensuring that we're prioritizing those investments and effectively managing our cash.

Thanks for taking the questions.

The next question comes from the line of Bob Hopkins from Bank of America. Your line is open.

Hi, there you have you've got Bowers on for Bob today, Thanks for taking our questions.

We understand.

Cardiac procedures this year kind of held on better than some of the others, but with Covid cases, rising I was just wondering if you're.

So the nervous or if youre seeing any signs at your access to the hospitals.

B going down again or it teams kind of worked out some new arrangements and what youre competencies that youre going to be able to get your salesforce into talk to EPS going forward.

Yes, I'll take that.

I think the large majority of our hospital customers. We've we've talked with have made.

Invested a lot of time and energy and figure out how to discharge patients following inflation on a same day basis. So that they can get patients in a hospital that has to have.

<unk> spent an overnight family away from the patient overnight all that sort of thing.

Having said that there is there's only so much so much you can do and certainly we are seeing regional hotspots.

Crop up and impact.

The hospital business, the EP business and our business.

I appointed during the prepared comments to some hospitals in central Europe.

This last quarter, where they didn't have enough anesthesiologists or nurses to staff.

Because of some of the influx of patients that we're seeing and they shutdown typically for two to four two to three weeks and then they gradually find a way to come back up.

The U S right now.

As I commented earlier is very fluid and very regional and we're watching it like a hawk now if you remember.

Our U S installations are highly concentrated.

Very much so in the southwest and the southeast.

The southwest.

We're not seeing much impact if any impact as we sit here today I was on the phone with one of our top customers just before this call.

And he said that they're.

In patient.

And patient Covid population is something like a 10th that it was at the peak.

The last whatever it was spring.

And they are unaffected by Covid at this time.

<unk> talked to our.

Our regional business director and the southwest heard the same thing.

Also spoke with one of our top salespeople in Florida today.

And it's a different story over there we've got some historically very productive installs in Florida and the majority of those as we sit here today.

Have curtailed or stopped electric procedures over the last.

10 to 14 days.

We're hearing that they hope to couple of them hope to come back online here within a week or so.

But I'll tell you, it's a little bit of a white knuckle situation out there.

And we don't have a crystal ball on this.

Sure.

Moving resources around the hospital shutdown or we repurposed our team and their off selling or central crossing devices into other accounts that are still up and running.

Fly and cover cases elsewhere, where we can but it's a very fluid situation in the United States right now.

To be perfectly candid with you.

Got it totally understand the fluidity and difficulties. So I appreciate the color that you were able to give us. So thank you for that and then if I can just on one follow up here.

Just wanted to understand the amount of runway that the recent capital raise gives you and how much.

Revenue growth versus cost cutting wood would kind of help out on the cash burn there going forward. So I appreciate you taking our questions.

Yes.

So we think this would get it to kind of mid 2023.

Assuming no drastic actions on expenses or sort of abnormal cost management initiatives that we'd have to undertake so that contemplates continued hiring within our sales force continued investment in R&D programs advancing our clinical programs.

Et cetera.

So we think this does provide us with a.

With a good runway to that time point.

So.

As we think about the cash management or kind of the model here.

How are you really on the cost side, we're not necessarily looking to cut expenses, we're looking to put our resources in the most productive places possible and each each dollar. We have we know is a dollar that could be spent spent elsewhere. So we're going to continue to invest very actively in our business and make sure we.

Do that prudently as you well know revenue growth and gross profit pays a lot of bills. So as we look forward turning that gross margin positive.

Have a pretty pronounced impact on cash burn and we're not necessarily looking to.

Not necessarily looking to increased expenses on the heels of a turn in our gross and our gross profit that would simply improve our overall financial position.

Understood. Thank you.

Next question will comes from the line of Margaret Kaczor from William Blair. Your line is open.

Hey, good afternoon, guys. Thanks for taking my question.

And maybe to start off with just wanted to follow up on HRS. It sounds like you had some strong feedback there the 150 high potential leads which seemed like a pretty nice number 70 installed base you have now.

I was just curious how do you qualify high potential lead how as they historically trying to in the past in terms of closure rates and over what time period should we potentially look for something like that.

Yes, great Great question and I will tell you. We spent a lot of time pre gaming for HRS. This year, we were on the phone with the organizers of HRS.

A weekly basis trying to figure out who the heck was coming.

For people coming from overseas, where people coming in all of our fellows coming in what kind.

Titrated, our spend and our staffing.

To the very last moment so.

We felt like there was a there was a pretty good group of folks that we're going to go ahead and come to Boston.

And we staffed kind of kind of mid range and.

When when pretty all out in terms of physician engagement and some after after exhibit hours.

Social events and that sort of thing.

I'll just tell you it really paid off.

The attendance I don't have the actual numbers, but.

What was interesting was we were able to generate interest and booth traffic and true high quality leads.

That.

I would have been happy with that lead number in a normal year. This year I only talked to two or three physicians from O U S.

The whole show.

It was virtually no one came from Europe, and very few physicians from Asia.

And.

I would also point out that the.

The attendance from the west.

As we looked at our leads the vast majority of our leads were from mid country to the east and the leads from the West we're actually down significantly and disproportionately lower which I think reflected some of the hesitancy to travel.

Either due to COVID-19 or just fatigue and wanting to spend time with family, but in spite of all of that.

Generated over 150 high quality leads we did something I've never done before.

In my career on the Monday, following we had.

Four of our Booth participants sit and go line by line look at lead by lead and connect the dots with each and every lead assessed the quality of each fleet and assign those.

24, after 24 hours after getting home assign those to our account managers and Mappers vps.

And we had really really good engagement not just with our mapping.

Our system leads but with our central crossing.

<unk> and our.

Our left heart sheath.

We just launched a couple of months ago, which by the way every single left heart procedure needs. A left heart sheath is just a rock star new product I think we're going to really do some great things with them so great lead.

It leaves there and those are also kind of door openers.

<unk> mapping systems as well.

So.

Super excited about how it went as usual.

Thank you might've been at.

Our HRS in San Francisco, a couple of years ago, we always come with a little bit of a different look a little bit of a swagger, we don't wear suits and ties and.

I think people appreciate.

The way, we come out or rather unconventional approach and the way we passionately.

Come out this business.

Okay.

Just to follow up so that 150 could be physician does all sorts theyre going for various types of products and ultimately may start as you know.

Capital crossing.

But ultimately hopefully can grow that pie so maybe.

Correct me, if I'm wrong on that and then second of all if you look at kind of the procedure ASP or kind of your revenue per account.

I'm just trying to figure out a good way of trying to bring in some of those other products that you guys have how is that trending and is that a good number for us.

Take a look at it as we go towards future quarters. Thanks.

Yes, I think on the.

On the first part of that question Margaret.

That's a fair assessment each physician coming through the Booth may have had a different interests clearly we're trying to steer people to the accu match system as kind of the anchor tenant of our of our portfolio, but certainly as physicians look to get to know our company.

Some of the access devices, which are universally.

E.

Available for their existing procedures is a good way to.

Introduce us to the account and we have seen in.

One account in Arizona for example.

Actually the having the transcept foot product that got us assistant into into banner health.

And.

In Scottsdale late in the second quarter on the other on the second part of your question was how to model the impact of some <unk> and some of these new products I think the ASP is probably the most efficient way to talk about it we did see the ASP.

In our direct businesses.

Rise modestly Q1 to Q2.

With that should right probably more.

He has continued to rise on a sequential basis, because remember the timing of some of these product launches.

It was really within the second quarter.

And well take it.

It takes some process to get through that committee and get on contract and the other things like that but we would expect to see a progressive improvement in our revenue per.

Per procedure on a go forward basis that obviously in the U S. Specifically.

We would expect a step function of that once we have an ablation catheter available in that area were leaving to the tune of.

$2000.

Of the total procedure opportunity on the table right now.

Got it thanks, Mike.

Again as a reminder to ask a question you will need to press star one on your telephone.

To your question press the pound key.

Your next question comes from the line of Bill Slavonic from Canaccord. Your line is open.

Great. Thanks, Good evening and thanks for taking my questions.

I'd like to focus on the system placement pipeline.

First just.

With the new.

CLO coming on and kind of getting the CRM going in that you've made some commentary regarding focusing on the right counts.

I want to make sure that we don't get lost in concern if maybe the the installed base numbers are different in the next couple of quarters, because youre shifting systems around in the field and I wanted to ask that question and how should we think about that and then from unproductive accounts to potentially productive accounts and then secondly.

As you talk about that new.

Install pipeline.

<unk> you have a lot of systems out there that are getting ready are kind of hitting that six to 12 month timeframe, where there is some decisions to be made and how should we really think about the kind of capital as we exit this year and into next year, especially.

When you think about kind of the lease versus the sales programs. Thanks.

Sure. So I'll take the second part of the question.

You can expand on this on the strategy with respect to our account placements.

<unk>.

The capital contribution to our business Bill will become more significant.

Here in the second half of the year and on a go forward basis in that and that is true both in.

Across all three of our operating segments, Europe, U S and and and.

Distribution partners and the reason for that is exactly what what you pointed out which is we have a number of evaluations that are coming to exploration.

And we will be in a position to convert those to.

Catheter commitment deals or cash sales the benefit of the catheter commitment deals for US is it gives us a nice stream of long term predictable revenue it does <unk>.

Results in slightly lower upfront revenue that we're able to recognize but as we've started to.

Come to completion on evaluations, we are having pretty good success actually on the capital conversion side, and we would expect that percentage of revenue to.

To rise here I think we referenced in the script that capital sales were roughly flattish Q1 to Q2 as we also have systems out there for greater than a year on permanent commitments or.

Capital purchases, we will start to recognize service associated with with that which is about $25000 a year.

Service and $5000 in software.

As a standard is included in the first year of the installation.

On your first question about <unk>.

The pace of installs in the strategy around identifying productive accounts moving systems around we are actively doing that there is very little value to us and actually anyone in the ecosystem physician patient or us having a system in a site that doesn't make sense and that can be the result of the physician champion is less.

It can be the result of the fact that we quite frankly in our early commercial launch did not pick the right accounts intuition to install these.

These systems.

Or there can be a variety of other factors at play. So we will look to move systems around bring them back here upgrade them and redeploy then.

Into the field in the second quarter.

So we added eight eight.

<unk> net installations to.

To the installed base.

We will probably have some removals here in the back half of the year, so that could impact the pace of the increase in the installed base.

Certainly expect to see the installed base higher on December 31, and where it was on.

On June 30, but are.

Our focus is really on finding the absolute right accounts and without I don't want to go into the revenue numbers that one account in particular has ordered here in in July but it is really a reflection of that.

Getting accounts to a point, where they're doing multiple procedures, a week and driving consistent utilization and reorder rates. We opened a center in April in the Czech Republic that was doing yes.

Five procedures, a week some months and year to the tune of 10 to 15, a month very consistently and that was not a multi month ramp up that was almost immediately subsequent to installation and we have it.

We have a couple we probably now three or four of those accounts as an examples that we've been able to open here recently in the U S.

The installed base will continue to grow I think there has there I know, there's a tremendous amount of focus on the growth in the installed base. Our focus is on trying to both grow the installed base, but at a pace that allows us to.

Meaningfully ramp utilization and disposable revenue and reorder rates.

Yes.

The other thing I'd add is.

We're not resting.

In terms of.

Refinements that we can and need to make to our console and software.

To increase and improve the hit rate uptake rate.

At every install we do.

I can't even fathom that.

<unk> the number of thousands of man hours are software algorithm and marketing team.

But figuring out the workflow figuring out the additional tools that we needed to add to that to that console.

To address situations, where we didn't have that.

Snap uptake.

And that resulted that effort and that focus resulted in the launch of <unk> eight which we just we got approval on and announced.

It was yesterday.

This is a major release for us this software.

Suite of software products, not only integrates ablation.

Early into our system in Europe in CE Mark countries.

Fully integrates with our RF generator or a pump or cubic force unit, our mapping system in a way that puts us absolutely.

In a position, where we're we're going toe to toe with the competition with a complete mapping and ablation system.

I think even more importantly.

We have now added and we have CE and FDA clearance on our whole suite of algorithms, which automatically interpret our maps for our mapper and for the physician.

Zero their eyes and on a whole chamber view of the or the lessor at atrium, and we automatically highlight and show regions of interest that those mappers and physicians should focus there is in on.

And I will tell you that was probably the biggest single impediment to rapid uptake.

For our physicians really around the world for the folks that got the system. It was the maps.

Afib and other complex a rhythm rhythm is or are just that they are complex they are somewhat chaotic.

To the human eye to look at a whole chamber.

To try and visualize in to your therapy planning around fairly chaotic rhythm. We now have algorithms that will actually crank through and churn through all that data and call people's attention to specific areas and I think thats going to.

Has the potential to dramatically increase our uptake rates at our utilization rates as we go forward and thats launching we're launching that across our entire fleet over the next couple of weeks. We don't we don't hold up the process by trying to sell software upgrades and monetize the software upgrades for any.

Significant.

Revenue, because we want the best possible product in front of every single customer every day.

Great and if I could follow up with a question Vince we've talked about this when you are launching a new product, it's it's getting that reproducibility.

Repeatability of the process you've talked in the past about Onboarding and account and kind of the things you've learned overtime I'm curious how much has that changed over the past 90 to 100 days.

Since you asked kind of revisit that at least with the investment community and how should we think about that in terms of the <unk>.

I think over the last.

Three three and a half four months, we've gotten a lot better on boarding accounts.

Not to get too into the weeds here, but.

I think one of the things that we've learned.

Is that when you have a brand new physician users are looking at these the mapping system in the results and the images that come out of the mapping system. There's a temptation to go right into the most complex nastiest multiple redo case possible. So that we can show the clinical utility of our product out of the gate.

Pat.

Kind of makes sense, but it's also pretty risky because of the doctor doesn't.

As art I'm interpreting what he is looking at and planning is therapy strategy and maybe even believing what he is looking at.

That can be an uphill battle, what we do know typically is we actually.

That's as close as we can to mandate our physicians use our mapping system in simple cases in the first couple of cases, where we we know what that rhythm is going to look like for them or typical flood or something like that and the doctor has it in his or her mind what that map should.

Show.

If it has the fidelity and the reproducibility want.

And the the visceral effect that we have when we actually go in there with our catheter and show the physician exactly what are you expecting to see our sheet.

That builds credibility and confidence much more quickly.

And it sounds like kind of a nuance, but it.

That approach has had.

<unk>.

Very significant effect on the uptake on a physician by physician basis.

Excellent thanks for taking my questions.

Thanks for thanks for coming to Europe for.

Within theatre as well built and we hope you enjoyed that.

Sure.

Thank you.

Next question comes from the line of Marie Thibault from <unk>. Your line is open.

Hi, Good evening. Thank you for taking the questions I'll I'll start here with maybe a two part question on utilization.

You referred to some users in the top quartile and a new user who is really kind of hit the ground running and is already in that top quartile for utilization. So I wonder if you'd be able to give us any metrics on what top quartile means is that one or two procedures per week with what's kind of a metric we could use to think about that.

And then also on utilization curious to hear how accurately users over in Europe, and perhaps the <unk>.

Trial participants in the U S. How their utilization perhaps differ if at all.

And any trends you've seen along those lines.

The impact of having that force sensing catheter.

Sure.

Thanks, Larry I'll start with the.

The first question around the top quartile of utilization.

That is between one five and two a week.

In that in that top quartile.

Utilization, it's still a pretty wide range as I said, we still have some that are in the two to four to five week range, but that's so that's a rough average for you to use.

And the second question I don't have that breakout in front of me, but we do have.

Our utilization rates in Europe are not are not fully correlated with accu blade I remember that we really just launched accu blade exiting the first quarter.

Revenue for active late in the first quarter for example is like $3500.

So basically one catheter.

Probably three catheters in Europe, and then we've got that number about 94000 in the second quarter.

But it's still at a concentrated number of accounts and the example, I gave you on the account in Europe doing 10, a week that we opened in April they were doing that level without accumulate they've added accurately 222 that accounted actually they they will that will happen here in.

In the third quarter. So so it is definitely helpful and it does speed workflow a little bit.

Not yet at a point right now where the accu blades to accu map ratio is one to one.

Yes.

In Europe, though.

Okay, that's very helpful.

And I don't think there is.

I don't think Theres, a single account over there yet that has <unk> eight which integrates the catheter ablation catheter with mapping system on the screen.

And a C.

Seamless way that.

Is every bit as if not.

Sort of.

More seamless than our competitors at J&J and Abbott, we will start installing those software modules in those accounts in Europe over the next couple of weeks.

And I think the experience that physicians are going to have it.

Just going to be absolutely next level.

When you have that mapping system tied to that ablation catheter.

Seamlessly with that software integration.

Okay that makes sense, all very helpful and certainly the <unk> map did look very usable very user friendly and helpful. In finding the floor conduction zones and regions of interest.

I guess a follow up here on PFA, certainly a hot topic at HRS in Boston last month.

With a number of companies there everyone seems to have something they're working on maybe you could go into little more detail about why you think focal point catheter.

The ability to have PSA and RF on the same catheter why these things matter and.

If anything you know why you think your technology could have an advantage over the rest of the field.

Yes so.

If you think about the.

Total number of ablation is done.

Any chamber of the heart globally, it's about 1 million procedures a year today.

75 ish percent of those are done with a focal point ablation catheter.

Not with the cryo balloon now.

Over the last so catheter that's enabled with PFS. That's purpose built to ablate the circle around the pulmonary veins.

Virtually everybody else in PSA right now is focused on that circular lesion.

Quickly take out the pulmonary vein big market attractive.

I get it.

But in.

As we really went deep with Doctor Michelson, who is driving our program here.

And understood how large a lesion, we could make with our focal point ablation catheter as we understood. The pulmonary vein stenosis does not appear to be an issue with PSA. We came to the conclusion that yes, those 75% of ablation Cape Tab cases, where you pretty much have to have.

A focal point ablation catheter.

That's where we should go but we can also we think we can also go after those circular pulmonary vein isolation cases with a point ablation catheter.

And dropped those lesion sets.

Very fast and as Doug Gibson said in a rhythm theater. He is really he has been.

Our number one collaborator and contributor over the last year positioned from Scripps here in La Jolla.

Been with us shoulder to shoulder the whole year.

As we've evolved our wave forms in our energy delivery.

He said that the rhythm theater easier I'm not sure how I see circular TFA catheter is going to be any faster.

And even doing the pulmonary vein isolation that point ablation catheter if tuned properly.

So if we can go after the 75% of ablation cases that aren't going to be dealt with by a circular catheter circular lesion.

Plus be competitive in the pulmonary veins alone.

Like our chances.

I think we've got a absolutely fantastic point ablation catheter with <unk> sensing on it.

Which by the way people are increasingly think thinking for sensing is going to matter with PSA versus the out of the gate view was that maybe it wouldn't.

But when you tie that together with the mapping system.

Which again, we think youre going to want to have if youre doing anything outside of the pulmonary veins particular mapping system that maps the whole chamber in a minute or two and finds you helps you find targets to abate.

I think we've got a.

Competitive program here.

Well understood. Thank you.

This concludes all of the questions Kim. Thank you. Thank you all for participating in today's call.

Everyone.