Hi, everyone. Thanks for joining us for our preliminary Q3 results, and I want to introduce the folks that are here representing EBR.

I'm John McCutcheon, President and CEO. We're joined by Dr.

Robert Canby. Dr.

Canby has done the most commercial cases since we've launched, and he's also one of our advisors. We thought he'd be great to add color to some of the questions that we might get.

We've got Gary Dougherty, our CFO; Andrew Shute, our Chief Business Development Officer; Justin Crockett, our Global VP of Marketing and Market Access; and Michael Sot, our Director of US Sales. With that, we'll get started with the presentation, and we will be entertaining questions.

I believe there's an opportunity to type in your questions, and we'll do our best to get to all of them or most of them, and what we'll probably do if there's similar questions, we'll just group them into one rather than trying to go through each one individually. It looks like we're also joined by Allan Will now, our Executive Chairman.

Allan, great to have you with us. We're just kicking it off, and we'll go through the presentation now.

As everybody's probably seen our results, and this will be a reflection of what we've already presented publicly, but in the third quarter we completed 40 WiSE procedures, and that means that we're now up to 157 implants since we went commercial. These implants this quarter were below our expectations, so that's disappointing, and we'll talk about why we think that happened and what we're doing to remediate that.

The contributing factors are some of the commercial leadership transitions that we made, and those were intentional and we'll talk about what led to that, the implementation of a more focused strategy. The original strategy was to be focused, and we drifted from that.

We'll talk about what led to that drift. We want to get back to our original strategy.

It's not a new strategy, it's one of going deep and being concentrated and not going too far abroad too quickly. Then the additional field training requirements, or essentially we want every field person to be trained on all elements of the procedure.

What's also not said on this slide is we want to accelerate that training program, we're working on several pathways to get training through more quickly. We think that'll really bode well for future growth.

Then, as we announced in the ASX release, we did a realignment. I am now running the commercial team.

That consists of Justin Crockett, who's here, I introduced, and Michael Sot. Justin's marketing, Michael Sot sales.

We also have Megan Farrer, who's not on the call here, and she's our training, Director of Training. All three will report to me while we conduct a search for a replacement Chief Commercial Officer.

In my new role in that, I've been out in the field meeting with physicians and with our sales people, and that's been very rewarding. I might speak to that as we go through the Q&A, talk about my experiences being out in the field and sort of the good feelings that we have from our clinicians, and the opportunities that are there, and what we're hearing from the positive news we're hearing from clinicians and what they see with their patient results.

All a lot of positive things there, but we don't want to shy away from the bad news that we had. We didn't have sequential quarter-over-quarter growth, and we want to own that and address that.

will talk more about the commercial growth, but also some of the other milestones that we achieved were the FDA completed its pre-approval inspection, and we had two observations. Having done a lot of these in my past, getting two observations is like an A grade.

It's a good sign. If you have a lot of observations, there's some tipping point, 5 to 10, it doesn't look good.

These were observations. The other good news about them, they are addressable through basically they're administrative fixes, not facility fixes or things that take a long time to qualify.

We're very optimistic about getting through that process. That's very good news for us.

We also had our ISO certification, which goes part and parcel with the FDA inspection. It says we're running a tight ship in our operations, and the regulatory agencies are recognizing that and are giving us these good results during these inspections.

The expanded facility, I think we've said this before, once we're in it, and we're starting to ramp, we can do almost 10,000 systems per year. That's a substantial amount of capacity to get into our TAM.

We won't be limited on manufacturing capacity. I've also said this in the past, it's not just the capacity, but it's the capabilities.

Our cost of goods are still high. We want to continue to drive margin improvement, and the new facility will give us the capability, the ability to do that.

We've got a lot of new manufacturing equipment and things that will help drive down cost of goods, bring in some of the or maybe most of the operations that are done through contract manufacturers, we'll be able to bring them in-house, and that'll really significantly help us drive our margins in a positive direction. Going into some of the details, you've seen these charts before, this is our sort of quarterly KPIs that we present.

A lot of it looks good, we continue to grow quarter-over-quarter, but you can see physicians trained dropped off significantly in the third quarter. That was deliberate, and that's back to going into this focused strategy that we've talked about, going deep in the current sites.

If you think about, everything needs to be balanced. We have a finite number of trained salespeople, and the salespeople need to proctor each case.

If you have too many trained physicians and too few trained proctors, you start to get a bottleneck and you're not able to service your customers. We've deliberately said, let's slow that down and let our training catch up, and go deeper in the physicians that we've trained.

What's probably hard to understand for a lot of folks that aren't really close to MedTech and how the devices are rolled out is that you don't just start a physician, train them, get the site going, and then leave. You need a constant contact, because you're helping, you're partnering with the physician to identify patients, and so the best salespeople develop deep relationships and spend a lot of time in their accounts.

You don't want a salesperson going to 10 or more accounts, you want them in 3 to 5 and spending a lot of time there, and you certainly don't want them going to other territories where we're starting centers and physicians that don't have support, and so then we start to send people to other states. Imagine you've got a territory manager, a salesperson who started a great KOL, a great physician, and they want to do lots of cases, but you show up for the first two cases and then you're flying to another state or another part of the country to support other cases in other territories where we don't have that support, you're not driving that revenue.

That starts creating this situation where you're getting new revenue by starts, but you're not getting sustainable business, and at some point we have to break that cycle, and that's what we've done this quarter. It's painful, and I recognize how that's come across to our investors, but we felt it's still the right thing to do to build the business in the long term versus just driving short-term revenue.

Then, again, there's sites contracted, still really proud of it and happy with the number of sites that are contracted, but we have enough now. We don't need to keep leaning into that.

I think the story early on or the signal early on was that this was a great win for us. A lot of new technologies struggle with getting site contracted and getting through the VAT committees and getting on the shelf.

We've had a not an easy time, but a relatively easy time, and we've really overachieved there. Now it's time to throttle back.

I think we proved we can do that. Now we need to slow that down and then come back and do that in earnest when we've got more capacity to support them and move it forward.

Activated hospitals are contracted hospitals that have done at least one case, and so you see we're trying to slow that down. We don't want to pull the plug or stop any physicians that we've already started.

It would be, not very good politically and we don't want to leave any patients hanging. Once somebody's in the pipeline, we're going to go ahead and move them forward.

We want to slow that down as well as we get our sales capacity up and making sure that our sales team are focused in their specific territories. Again, right now, we've got a lot of people traveling to a lot of different places versus being very focused on their specific territories.

Then at the end of that, you drive cases. We've been driving cases by a combination of getting great depth.

Dr. Canby is, like I said, the highest treating physician so far, but we need more of that.

We've got other high-volume doctors that have been doing it, but we've also been getting to the number by driving new sites, and we want to shift that balance to we add new sites as we get capacity, but we're driving higher growth by penetrating the sites that we're already in. That's the goal, and that's what we're striving to achieve.

That's the presentation. I think we've got a number of questions that came in advance, and there may be questions that are coming in as we speak, if you have any, you can be typing them in.

I think Andrew's going to collate them and then let us know what the inbound questions are. Andrew, are you still there?

You're on mute if you're there.

I think he just dropped off, John.

Okay. I think I can read the questions, let me see if I can find the feed.

One question is, if the previous strategy of expanding the sites resulted in revenue growth, why are you changing this? I essentially just addressed that, but let me start again.

The site expansion without consistent, sustained presence in accounts, it drives temporary revenue, and we really want sustainable growth for the business, for you, and for our customers. If it's not truly sustained, then what we might get is an initial case or two, but that's not consistent, it's not a consistent flow from the physician.

Starting too many accounts, it just takes us too broad, it doesn't enable this consistent presence. Someone asked me recently, "Well, once you sell the physician, don't they just start doing it?"

It just doesn't work that way. They're very, very busy and they've got lots of things going on, and not every patient that's eligible in the hospital will come across their desk or across their purview.

You need to work the network. The salesperson's working the network within the hospital.

Dr. Canby, maybe it's a good time to bring you in on, you might have one method in your hospital that maybe you could also opine on how you think it works or how you know it works in other organizations to get patients to your desk so that you can evaluate them for WiSE?

For sure. Whenever we're dealing with new technology or new studies from our standpoint, it becomes very important, I think, when we're looking at enrollment and in this case, identifying patients for the new technology that WiSE brings, it's important that each facility actually has an advocate for that technology.

That doesn't necessarily mean the implanting physician, in fact, many times it can be a research coordinator if there's an associated research trial, there can be an APP or a physician's assistance that helps in the clinic. What you want ultimately is to identify an advocate at each facility so that when the pacing clinic, for example, identifies a patient that has too much extra cardiac stimulation and then they're going to have to turn off the resynchronization, that they know they can contact that advocate and say there's another option available.

Or if you have a patient that's infected that's going to have to have a device removed that had successful CRT therapy, they know to call that advocacy that ultimately that patient needs to be seen for this technology. That works in clinical trials, I think that's also a winning strategy here.

The important thing is the technology works. We're seeing great results.

Today I followed up three patients I implanted in the last 6 months, and we're just seeing great results with the technology. Continuing to find that advocacy in each of the programs, I think will suit us well.

Other therapies that have been successful, other novel technologies that have been, breakthrough type devices and so on, they follow the same pattern, which is, if you look at TVR and stents, Shockwave, WATCHMAN, all these things, they had to go deep and establish beachheads before they went too broad. We made kind of the classic mistake, which is you go too broad in advance of that, and again we own that, but that's something that we're set to remedy here.

I think, Allan, if you don't mind me asking you to opine, I know, I feel like I've launched quite a few products, but I think you far exceed me in that, and this is the formula that works that we've both done before and ended up with huge successes if we follow that right strategy.

Sure, John. This really is the strategy, our intended strategy from the start, but unfortunately we strayed from that strategy.

The field team strayed from that strategy starting new accounts, too many new accounts, and as John said, when you start too many new accounts, you may get one case, you may get two cases there, but unless you're present and working with the physicians to talk about cases, to discuss whether or not which cases might be good cases, and indeed which cases might be bad cases, you don't end up expanding the use within a particular account. An example of that is often physicians might choose a particularly difficult case or a particularly difficult type of patient that they want to try this on, and they may try it on that patient.

They may not be thinking of the six other types of patients that we could also be applicable for. It's important for the territory managers to be in the hospitals, to be talking with not only the implanting physician, but as Dr.

Canby said, referring physicians, maybe PAs, etc., who end up influencing the decision of, "Oh, this patient might be a good one." Without If you're not in and out of account, and you're not there consistently, you don't develop deep penetration and sustained use within the accounts.

That's the critical factor for building a good foundation for a long-standing business. It's been true with transcatheter valve repair and transcatheter valve replacement, that's the way stents were developed, that's the way Shockwave built their business, WATCHMAN left atrial appendage, countless other businesses.

This has been proven as a strategy, and this is what we intend to do. Prior growth here in our situation unfortunately relied more on new account startups than the original strategy, and we're correcting that.

That's really what this disruption over the past month has been, is correcting that strategy, slowing down the increase in new accounts, and working to develop more patients being treated, more types of patients being treated in each of the existing accounts. This truly will influence the business for the long term, and it's really the only proper way to build a MedTech business, innovative MedTech business these days.

Did we just lose Allan? Okay.

Thanks, Allan. I don't know if you dropped off, but but I we got your message there.

Thank thank you for that. Then the got another question here: can we provide can management provide monthly implant updates to give the market confidence?

will we'll continue to report commercial metrics quarterly because that's been our disclosure practice and we want to maintain that cadence. The other But the main reason is that monthly numbers are volatile, you can have an an up month because there's more days in the month, and then you can have a a month with holidays and there's future few fewer, or it could be a month where there's physician con- symposia or like an HRS or something that might distract more physicians.

I think it's just too volatile to share those numbers month to month, and the quarter quarter smooths it out. That's why we're going to maintain that quarterly cadence.

I think most companies do that, and I know people are anxious to get real-time data, but it's just I I don't think it would add value. It would add more confusion than be helpful.

Another question: Justin, this this is in your domain, let me see if I can answer it, but I might ask you to jump in here. What changed with Medicare inpatient reimbursement, and does a higher reimbursement mean EBR will immediately see a step-up in revenue?

They increased the payment for inpatient procedures, so that's a good thing. Reimbursement varies by hospital to hospital, by by area to area, it's a very complex formula.

It doesn't accrue The benefits don't accrue equally to each site. The sites have to then each do their own economics and see, does this increase their margins, and by how much?

I'd say in general, this is just good news. It It means one less headwind and more tailwind for us.

I don't think we can quantify the benefit. It's good news, but we don't know how much.

I wouldn't expect an immediate step-up. I think it's over time it's a cumulative benefit would be how I would interpret it.

Justin, if you've got a counter view or more color that you wanted to add, that would be great. Hey

John, no, you nailed it. I would just reiterate that it was a position that EBR took proactively with CMS to get those rate increases for our customers.

As you said, we're not able to quantify that yet, but it is a cumulative effect that we should see.

John, just as a point to be made is that increased reimbursement doesn't accrue directly to the company. It goes to the hospitals,

and

that's why it will hopefully be less headwinds and more tailwinds by virtue of the hospital believing that this can be a more profitable procedure for them.

It'll

build over time.

Again, we're excited about this. We still believe that most of these will be outpatient procedures, but we'll report that as it changes.

Far, it's been predominantly outpatient. Still it's a different reimbursement system, but only good stuff, because when they do an inpatient, if they require doing an inpatient, then they'll have a better margin and be able to do that.

Somebody asked, how many cases that physicians wanted to perform were delayed because EBR lacked trained field support? I don't think we've canceled any cases because of that.

What I would say is the lack of trained field support kept us from focusing on going deeper into sites and it was more of a running around trying to cover those. There's a real opportunity cost to that.

Imagine you're hypothetically, you're a rep that lives in Ohio, middle of the country, upper Midwest, and you need to go support a case in California. That's most of the day flight there, time in the hospital could be all day, might be a two-day procedure, and then you're flying back another day.

That's a minimum 2 to 3 days out of your territory, you've covered that case, but you're not building that long-term sustainable funnel that we talked about of being in your territory, and that's the opportunity cost of doing that. If there's a case, I think, and Michael Sot, you might tell me, I don't believe we've canceled a case, we've just, again, been I think less efficient with our resources because of the way we've been approaching it.

Is that fair?

We have not had to cancel a single case. Yeah.

We work really hard to cover them, but then it's then we're saying, "Well, don't spend time in your current account," and then that has that kind of downward spiral effect. Let's see.

Can you be more explicit how you'll remedy the scale-up? I might've already covered this, but some of it's we're still working on accelerating the field training.

We do have a number of open positions and we are hiring and filling and trying to get some redundancies in the field so that we've got people in the funnel to keep driving growth. We're accelerating field training.

Like I said, increasing utilization by staying local, focusing on a few core accounts, really qualifying the physicians and making sure that they're going to be early product champions, and that's an important part of kind of a new technology development. Then again, we're moderating new site activations, but we're not stopping them.

We just want to be more selective and less kind of run-and-gun after these new sites. Again, I'm not sure how you'll see these KPIs develop, but I hope you see softened growth and acceleration or deceleration maybe in new sites, new contracts, and more acceleration on cases done per quarter.

John, if I may?

Please. See,

on that point, as we develop fully trained territories over time, then you'll see those territories starting new accounts and because they're capable of servicing those accounts. As we build the field training and further develop complete territories, then you'll see more and more accounts starting up over time, but only as we have the capability to service those hospitals properly.

Yeah. Agreed.

This next one, this is kind of my responsibility. We said, "Your 21 August announcement said you did not expect any negative impact on US commercial adoption from the CCO change, and what happened?"

Again, we clearly didn't meet that expectation. That's what I was hoping and what I thought, but as I jumped into that role, and again, this is 100% my responsibility, I saw that we needed to make more dramatic changes and abrupt changes.

When you're in a leadership position and you see something not working, you can try to fix it incrementally or you can try to go faster. Incremental often feels better and it's less scary because you can maybe not see the immediate effect of it, but I felt strongly that we needed to make an abrupt change and really course-correct, and that's why you saw the drop-off in September.

I think long term, that's the right thing to do. We did say that and I was wrong, and I own that, but I stand behind that decision.

I think it was the right thing. It's painful right now, it's painful for our shareholders to go through this, and I apologize for that, but really it's looking at the long term best interest of the company, of our patients, our clinical customers, and ultimately that benefit should accrue to all of us.

It's not been pleasant, and it's been really disruptive for our investor base, I apologize for that. Someone asks, "What are the next milestones?"

We've talked about that extra stimulation or the echo-induced arrhythmias, and we're going to be submitting a PMA labeling supplement for that in the very near future, and then we'll get a very definitive read from FDA. It's still very positive, they're collaborative.

In fact, they're going to let us submit it for review and then give us comments before it goes official. That's still in front of us.

We're waiting for the FDA's determination on the site facility. I think we responded to the observations of the 483s this week, and so then that'll be under review.

We expect that to have a great outcome, but we should know shortly and still expect to have the new facility activated by the end of the year. We do have some backup plans.

We might keep the old facility active, but we really still expect to be cutting over by year end. We've got the 10-Q, which is the official numbers that'll have our full financials from our Q3 results, and that'll come out around the 10th of November, on or about.

I think 10 November, Australian AEDT. Then we've got the CMS National Coverage Decision still pending.

The decision's due in early December. Again, we don't control that, that's up to CMS, but that's our expectation.

If that goes well, then we expect to have the NCD enacted effective April the 1st, the National Coverage Decision. Again, for those that aren't tracking that, the National Coverage Decision, it forces the Medicare Advantage side of the Medicare program to cover all of the cases.

They don't have any discretion. Now some of our patients come in, if they have Medicare Advantage and not standard Medicare, they get rejected for coverage the first time.

Justin's team then provides support to do an appeal, and classically if you appeal one or two times, eventually it gets approved, but sometimes the patients go on to something else, and so it does lead to some lost cases, but it certainly leads to delayed cases, and so that NCD, that National Coverage Decision, would avoid that from happening. That, I think our best case, Justin, is April of 20, April 1 to '27.

Am I correct in that?

Correct.

Great. Then we've got the TGA application that should go in shortly for our Australian market, so that's still pending.

I think we're out of time. I really thank everybody for joining us.

I apologize if we didn't get to all your questions, but we tried to cover the ones that seemed the most common. Again, please hang in there with us.

We really apologize for the bad news, the impact it had on the market, the impact it has on all of you as investors, and we feel that pain deeply. I think we're still doing the right things, and as Dr.

Canby said, we're still seeing great outcomes from patients. It all starts with patients.

If we're not getting good results, then there's not a business. If we're seeing good results from patients and there's a lot of patients out there, we're going to build a business around that, and that's what we're seeing, and that is not in question from what we see.

Thanks everybody for joining us. Really appreciate it, and look forward to speaking to everybody again soon.

Thank you.

We've captured all these questions that we didn't get a chance to address, and we'll look to follow up either individually or through a separate release. Thank you.

Thanks, Andrew.