Perimeter Medical Imaging AI, Inc. ($PINK)

Good afternoon, ladies and gentlemen, and welcome to Perimeter Medical Q1 2026 Conference Call. [Operator Instructions] This call is being recorded on Thursday, May 28, 2026. I would now like to turn the conference over to Stephen Kilmer, Investor Relations. Please go ahead.

Thank you. Good afternoon, everyone. Let me start by pointing out that this conference call will include forward-looking statements within the meaning of applicable securities laws. These may include statements regarding the future financial position, business strategy and strategic goals, commercial activities and timing, competitive conditions, research and development activities, projected costs and capital expenditures, research and clinical testing outcomes, the potential benefits of our products, including Perimeter S-Series OCT, and Claire, formerly Perimeter B-Series OCT, Perimeter's ability to broaden its user base and system utilization, expectations regarding new products and the timing thereof and expectations regarding opportunities for market expansion. Forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described from time to time in our public filings and press releases, which are posted on SEDAR Plus. Our results may differ materially from those projected on today's call. No forward-looking statement can be guaranteed. Perimeter undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, other than as required by law. On the call representing the company are Adrian Mendes, Perimeter's Chief Executive Officer; Sara Brien, the company's Chief Financial Officer; Abbey Goodman, Perimeter's VP of Sales; and Andrew Berkeley, Perimeter's Chief Innovation Officer and Co-Founder. With that said, I'll now turn the call over to Sarah.

Thanks, Steve. Good afternoon, everyone, and welcome to our first quarter 2026 conference call. On behalf of the management team and everyone at Perimeter, I would like to thank you all for your ongoing interest in our company. For those of you who are our shareholders, we appreciate your continued interest and support. Before turning the call over to Abbey to provide a commercial update, I'd like to provide a brief update on our financial results. To streamline things, all the numbers I will refer to have been rounded, so they are approximate. Also, as a reminder, we report in U.S. dollars. For the 3-month period ending March 31, 2026, the company recorded revenue of $385,000, with a full amount coming from recurring revenue, which consisted of the sale of F-Series consumables and system leases as well as from the sale of ESP warranty programs. Recurring revenue grew 14% year-over-year compared to Q1 2025. As a reminder, in Q1 2025, we recognized $230,000 from onetime sale of F-Series capital equipment that was included in the total quarter revenue of $550,000. Operating expenses for the 3 months ended March 31, 2026, were down $3.2 million or were $3.2 million, down 30% from $4.6 million in the same period in 2025. First quarter 2026 net loss was $3 million or $0.02 per common share, a 31% improvement compared to $4.3 million or $0.05 per common share in the 3 months ended March 31, 2025. Cash used in operating activities in Q1 2026 was $2.2 million, a 41% decrease compared to Q1 2025. As of March 31, 2026, cash was approximately $421,000. This amount did not include any of the approximate $7.5 million in gross proceeds that the company raised from the April 2026 first tranche closing of the debenture offering, which is still to be completed nor from successfully completed May 2026 life offering. With that, I'll now turn over the call to Abbey. Abbey?

Thanks, Sara, and thanks again, everyone, for your time and attention today. As many of you know, this is my first time participating in a Perimeter investor call. But I know we have talked often in the past about how our goal in 2025 was to seed the market with our legacy S-Series OCT in order to create a strong network of early adopters and technology champions in preparation for potential FDA PMA approval and subsequent rollout of our next-generation Claire OCT+ AI device. Though our commercial team has been and remains relatively lean and mean, it did achieve that goal. And the positive momentum we built throughout 2025 translated into strong recurring revenues in the first quarter of 2026. This was despite our being in what can be best described as a transition period following the March 2026 FDA PMA approval of our next-generation Claire device. While I just described this as a typical transition phase between selling a legacy and a next-generation device, we are actually thinking about it more as an inflection point, one that marks entering into what we believe will be a phase of rapid growth, supported by potentially game-changing innovation. Since this is my inaugural Perimeter investor call, let me provide some color on our pipeline to help illustrate that. Today, at the top of our clear sales funnel, we are close to 50 qualified leads. Of those, more than a dozen are currently classified as being within one of the prospecting, developing, validating and contracting stages. There are 2 things I'd like to highlight here. First, our sales funnel consists of a mix of current legacy S-Series users looking to upgrade to Claire at a higher per procedure ASP due to the AI and brand-new users who are looking to use OCT in the operating room for the first time. Second, it's important to note that we couldn't even talk with any potential Claire customers before we receive FDA PMA approval for the technology at the beginning of March. We obviously can't guarantee all of the qualified leads, even those at the last contracting stage will result in final installs before the end of the year, if ever, but we believe reasonable assumptions and basic math drive our confidence that we will start to see commercial traction with Claire to grow in the second half of the year. We aren't relying on hope or probability models. We have taken the opportunity to plan out how to drive and support the next stages of our growth. Today, we've organized geographically around a small handful of regional sales hubs and our commercial team consists of 3 groups of sales professionals, market development folks who, as the title implies, are responsible for new capital sales and demand creation. Clinical sales specialists who own the account once Claire is installed and are primarily responsible for surgeon engagement and utilization ramp in their territory and clinical application specialists who have primary OR case coverage. Like, with many med tech companies, we aren't giving granular detail on the number of hubs nor on the team size and/or makeup that service them. But I can say that we expect to grow proactively and methodically expand our sales organization across the country as we grow. Thank you again for your time. I will now turn the call over to Adrian to wrap things up.

Thanks, Abbey. All right. It's an exciting quarter. So to summarize what you just heard, we saw yet another period of positive commercial traction driven by our legacy S-Series product as demonstrated by our 14% recurring revenue growth in the first quarter.\ At the same time, we continue to carefully manage our resources as we grow. As a result of our cost control efforts, we were able to reduce operating expenses by 30%, operating cash burn by 41% and the net loss by 31%, respectively, in the quarter. We received FDA PMA approval for our next-generation AI-enabled Claire device in early March. And since then, our sales team has already built a Claire sales funnel of close to 50 qualified leads with over a dozen of those classified being within the active management stages of the pipeline. We plan on methodically and opportunistically expanding our commercial team to drive growth without getting too far ahead of it. And finally, pulling all of this together, we believe we are at a pivotal inflection point in our business and on the cusp of entering into a stage of anticipated rapid growth. It's an exciting time for us, and we look forward to keeping updated on our progress. And with that, I'll now open up the call for your questions. Operator?

[Operator Instructions] And our first question comes from the line of Scott McAuley with Paradigm Capital.

Thanks for taking the questions and welcome to the call, Abbey. Great to hear from you. First of all, great to hear that there's 2 Claire systems already up and running in facilities in the States. A quick question, have they performed any procedures yet with the device? And maybe a bit of detail in terms of the process of getting them set up? Like were they -- have they already put up their hands before the approval? How long did it take to go through the procurement process? Any other of those kind of color would be interesting.

Scott, yes, thanks for the question. So it really has just happened. So there have been no procedures on it yet on those machines yet, but we'll keep you posted as that happens, which shouldn't be -- I mean, it shouldn't take too long now for that. These were existing customers. So it's quicker than as if it were a brand-new customer, of course. Obviously, all our existing customers were aware of what we are working on from an AI perspective ahead of the FDA approval, but we couldn't really actively engage with them in terms of getting those conversations started until that happened in March. So it was quicker than a brand-new customer, but really, we only could start engaging with them after the FDA approval. So that's kind of the time line from beginning of March till now for us to get this first one through. But there's a deep pipeline, as you heard about. And so we expect to be talking about more of those, hopefully, in the not-too-distant future.

Yes. That's great. And maybe on that pipeline, so good to hear about both kind of the top and at least midpoint of the funnels and kind of 2 months from engagement to installation. So maybe a bit more on kind of time lines, how you see things moving through that pipeline and maybe comparing getting a new site up and running versus converting old sites? And if there is any kind of quantification around are these majority transitioning existing sites or majority completely new sites? Kind of any other color on the makeup of that pipeline would be of interest.

Yes. No, it's probably -- it's a mix of both new and existing, and it's fairly balanced between the 2. The process -- maybe I'll just talk a little bit about the process of how -- the folks that are already customers have some experience with the way OCT and the S-Series works within their workflow. So from a clinical standpoint, the idea of having the image assistant helping with that, it fits very nicely into the workflow. So what that process ends up looking like is much more of a -- of working with the administration because the -- I mean, the pricing model is different. We're obviously charging more for Claire than we were for the S-Series -- to capture the value of what the AI system brings. So there's a renegotiation of -- or a negotiation, I should say, of the conversion over to the next -- on to Claire. So that's where the work is on that respect. But because the clinician is already used -- the physician is already used to using the basic technology, it reduces that portion of the sales cycle. Now, the other portion of the pipeline are those physicians, so surgeons that have been aware of our S-Series have been looking forward for us to release Claire and then now are engaging with us from that standpoint. Many of them have been through like I've seen our product in operation, either in the field or in or like conferences, ASBRS and others. So they have some feel for what it looks like. But if they're new, they haven't actually had it inside their workflow themselves personally. So for those sales, it's a little bit longer. Awareness is there, so we can kind of fast forward to the awareness stage and the understanding of what that means from an impact standpoint. But really, part of that process is also getting the surgeon comfortable, with the machine inside their operating room and fit into their workflow. So little bit longer on that standpoint. As so as we look at the entire opportunities moving to the pipeline from now through the rest of the year and beyond, I think what we'll see is a mixture of current conversions and new customers -- current customers converting and new customers intermixed going forward at different rates as we can move them through that pipe.

That's great. Any details on that economics? So how much more you are able to charge on a consumable basis for the AI and how that thinking is evolving?

Yes. So we're testing, and we've been able to sign, obviously, been quoting and getting business done at a price that is -- it is not going to be at the same rate. So it's going to be relatively higher, significantly higher, let's say, than the F-Series pricing. So we're not talking about specific pricing at this point as we are testing out the market. But I think you'll be able to see as the financials start to come through, you'll start to see a significant uplift in our revenue model and our margins based off the pricing on the new product.

That's great. Maybe in the number of procedures for Q1, growth year-over-year, but in the consumable revenue, but down quarter-over-quarter. Would you say that the actual number of procedures performed in Q1 was kind of equivalent or more than in Q4 and it's just a kind of timing of ordering or anything like that, that kind of drove that change in the consumable revenue?

Yes, it was down slightly from Q4 to Q1. There is some seasonality built into that, of course, with the way economics and people's health plan stuff coverage work. Q4 ends up being a very large quarter, both because of breast cancer awareness month and then people trying to get through the deductibles. So it was down quarter-on-quarter. But Q2 is looking to be right on track again. So we're seeing that bounce back now.

That's great. Maybe on expanding the team. I know that there was a number of positions posted and kind of how you're finding qualified people come in. You're happy with the quality of the candidates and excited to bring them on and let them on the pipeline?

Yes. So there's a couple of things in terms of team growth. One is we're being very cautious on the speed at which we grow the team. What we don't want to end up is in a failure mode where we hire too quickly, expand too quickly and end up having efficiency go down because we've got so many new folks on board, number one. And number two, we're a small company right now, and we've got a small sales team. But we do want to preserve the culture and make sure we're managing that culture appropriately. And so the best way to store culture is just hire way too quickly and get overwhelmed. So there's a pacing item from just a core building out the company strategy. And then in terms of -- but we have lots of candidates that are -- would love to work on this technology or work with us. And so that's been great. We've had those jobs out there, and we're getting a very strong sort of flow of candidates through. But the flip side is we're also being quite selective in who we want to bring on to the team. As a company at the stage we're at right now, which is early stage, -- we really need -- the people you bring up early in the company are the ones that sort of define your culture and the way your company is going to work going forward. So these early folks are so important for us. They have to be able to work in a start-up environment. They have to be able to be dynamic. They have to be willing to learn and develop sort of develop the playbook, so to speak, as we say internally, as we go expanding this product. We're also making a market. Margin assessment is -- for breast cancer is not a market that currently exists out there. So we're creating it something where there is nothing. So that takes a very unique sort of person. And so we're holding true to that, right, making sure we're getting the right people in. The inbounds have been great. We've got a lot of applicants, and we're being very selective of who we actually get into the company.

That's great. And finally, not holding the mic too much. Outside of just kind of progress on installations and utilization, kind of any kind of key things that you're looking at or working on kind of for the balance of the year that we should be looking out for, maybe reimbursement or anything else?

Yeah. Yeah. So obviously, just commercialization, getting customers, expanding our customer base and procedure counts, et cetera, has been -- is going to be the major focus for us. We are working on reimbursements. And so we're getting ready to launch an application with CMS here in the next few days with the hope that, that that gets into place by early next year. So we're feeling pretty good about that process. So that's another -- that will get launched. And then, of course, there's an interactive period with CMS over the next few months as that application goes through. We have breakthrough device designation, which helps our ability to get to a reimbursable state much quicker than if we did not have that. So that's a focus for us. And that's, again, in service of being able to accelerate revenue growth and commercial traction as we enter into 2027. So I think those are the 2 major things. Of course, we're always cognizant of capital. We're coming off a raise that we just completed a few weeks ago, which gives us that firepower to be able to expand. So that's great. But we're always managing that and have our eye on that ball as well. So I think those are the three major areas that we're focused on at this point.

That's great. Congrats on all the progress to date, that FDA approval. Great stuff.

[Operator Instructions] The next question comes from the line of Michael Freeman with Raymond James.

The first question is related to the financings you just mentioned. I wonder, should all the financings close as expected, what you -- what we should anticipate for total liquidity or I guess yes, total liquidity following the close of all those deals?

Sara, do you want to take that question?

Yeah sure. Yes, Micheal. Yeah, I mean, our expectation is that the capital raised and anticipated cash into the business this year from revenue will give us a 12-month runway. So hopefully, that answers your liquidity question.

Are you able to put a round number on that? Or is that all you can say?

We announced what, USD 7.5 million raised to date. We're expecting to close. We've already press released an announcement of another $2 million from Social Capital. We're just waiting to close out the debenture on that. So it will be north of the $9.5 million.

Okay. Now on the approval for Claire, there was room in the -- it left room for you guys to push AI model updates. I wonder if you could describe, I guess, how meaningful this is for you and plans for future model updates in the next little while and how they might expand the capabilities of the Claire today?

Yes. Thanks. That's a great question, Michael. Okay. So yes, you're correct. As a part of our FDA approval, we also had approved what's called predetermined change control plan, or PCCP. And what that allows us to do is get authorized from the FDA to make changes that they preapprove. And as long as we follow the bounds around what those changes can be, we can make those changes and deploy them without having to go through another review cycle. So we had that -- we got that applied to our AI algorithms. So what that -- what it doesn't mean is that we've got free rein to do whatever we want to with our AI models. But what it does mean, it still gives us a lot of room to maneuver in what we can do. So we can add more data to training. We can update our algorithms using the same basic architecture. And we can make those changes kind of as we go through our internal processes, we can release them and follow our normal release procedures for changes to the product. We got -- the version of the software that we ran the trial is what we call ImgAssist 2.0. That was developed some years ago before the trial started. And that's what we have been frozen to through the FDA approval cycle. But of course, our AI team has been working on next versions of that. So we got approval on early March. And by early late April, we had our next-generation version of that available and on the machine. In fact, that's what we demoed at the ASBRS conference a few months or a few weeks ago, which had significant improvements over what the first generation was, right? So the 2 key things are, are you able to -- is your algorithm able to find more of what it's looking for, in our case, suspicious areas within the images? And can it find less false positives, so like filter out more of the stuff that looks like it might be an issue, but it isn't. And we made great improvements, 20% to 25% improvements in both of those metrics as we went from the algorithm that was in the trial to what we now have on machine. We do see -- we do have a road map of continued improvement on where we are right now over the rest of the year as we gather more images, as the AI team improves the algorithm. So we still feel like there's still more, more juice squeeze from the lemon from the PCCP even without having to go through a whole another review cycle. And that's why we're super excited about that because the speed at which AI moves, we want to be kind of following that as closely as we can. So yes, it's a big part of our strategy of product improvements, definitely.

That's great. I mean 25% improvement on the algorithm, super meaningful. So thank you for sharing that. Okay. Those are all my questions, I'm excited for this company. I'm excited for patients. This is a big deal that's being on market. I'll leave it there.

And I'm showing no further questions at this time. I would like to turn it back to Adrian Mendes for closing remarks.

All right. Thank you. So the first quarter of 2026 marked a critical milestone for Perimeter that was highlighted by the FDA PMA approval in March, the approval of our next-generation Claire OCT+ AI platform. This achievement represents a major validation of our clinical, regulatory and technology development efforts and positions us to advance to the next phase of our commercialization strategy, which is focused on scaling adoption. During the first quarter, we continue to generate strong year-over-year growth in recurring consumable revenue from our legacy S-Series installed base, which we believe demonstrates the clinical utility and value of our technology provides to surgeons. Moving forward, with Claire now FDA PMA approved, we believe our next-gen AI-enabled platform can broaden adoption, strengthen our commercial opportunity and support rapid growth. We're in very exciting times here at Perimeter, and we thank you for your support and for your time.

Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.