Good afternoon, and thank you for joining the ReShape Lifesciences First Quarter 2024 Conference Call. I would like to turn the call over to Michael Miller from Rx Communications.

Good afternoon, and thank you for joining the First Quarter 2024 ReShape Lifesciences Earnings Call. I'm pleased to be joined today by Paul Hickey, President and Chief Executive Officer; and Tom Stankovich, Chief Financial Officer. Paul will provide an overview and update on the company's activities, and Tom will review the financial results for the period. We will then turn the call back over to Paul for some closing remarks, after which, we will open up the call to a question-and-answer session. As a reminder, this conference call as well as ReShape Lifesciences' SEC filings, and website including the investor information section of the website, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those discussed due to known and unknown risks, uncertainties and other factors. These and additional risks and uncertainties are described more fully in the company's filings with the Securities and Exchange Commission, including those factors identified as risk factors in the company's most recent annual report on Form 10-K. As an additional reminder, ReShape stock is listed on NASDAQ, trading under the symbol RSLS. I will now turn the call over to Paul Hickey, President and CEO of ReShape Lifesciences. Paul?

Thank you, Mike, and thanks to all of you for joining us this afternoon for our earnings call for the first quarter of 2024. During the first quarter and subsequently, we have remained focused on delivering shareholder value and have reshaped on a path to profitability and long-term sustainability. Key to our success include our efforts to stabilize revenues as well as our disciplined approach to continually leveraging resources and focus on reducing costs as we outlined in March. To that end, we continue to fine-tune our lead generation activities and invest in our growth drivers, including the commercial launch of our physician-led redesigned Lap-Band 2.0 FLEX. At the same time, we continue our high-priority search for strategic and synergistic M&A opportunities. As we have mentioned before, we have engaged the Maxim Group on an exclusive basis to assist in this process. As one can imagine, we've had a high level of activity, and we'll continue this effort to find the right partner to join us in our mission at ReShape to improve the quality-of-life for individuals fighting obesity worldwide. With the stigma around obesity and medical intervention being normalized by the surge of GLP-1 receptor agonist usage, we are steadfast in our confidence that the numbers of people seeking medical professionals, especially bariatric surgeons will continue to increase. The GLP-1's short-term impact on the market last year made it necessary for us to undertake additional strategic cost reductions, including a further reduction in staff, leading to a projected 55.4% decrease in operating expenses for 2024 as compared to last year. Tom and I will provide further details during this call. but this reorganization and decrease in expenses will allow us to focus on and optimize the commercialization of our Lap-Band 2.0 FLEX created to improve the patient experience while…

Thanks, Paul. And once again, thank you all for joining our webcast this afternoon. As Paul mentioned earlier, we provided an update in March that in response to the short-term impact and adoption of GLP-1s, we have reorganized the company and have identified cost reductions of approximately $8 million or 55% for 2024 alone. Specifically, a reduction in force of approximately $1.2 million, which began in November and December of 2023 and $900,000 of reductions in incentive compensation and other payroll-related amounts have been implemented across all expense categories. Other core operating costs in total have been reduced, which includes reductions in selling and marketing costs of $2.4 million without affecting our continued marketing spend optimization, costs related to the pause of our ReShape Care program totaling $800,000. Expenses related to G&A totaling $1.3 million, primarily in professional, consulting fees and insurance costs. And R&D expenses of approximately $900,000, would primarily include reduced patent fees and consulting costs. Taken together with actions thus far, we have made significant progress reducing our core operating expenses, cutting approximately $24 million or 75% between 2022 and 2024. In fact, during the first quarter of this year, we had a significant reduction in overall operating expenses of 51% compared to the first quarter of 2023. A full discussion of our actual financials is available in today's press release and 10-Q. I will just take a moment to review key financial metrics for the first quarter ended March 31, 2024. Our revenue totaled $1.9 million for the 3 months ended March 31, 2024, which represents a contraction of 15% or $300,000 compared to the same period in 2023. The primary reason is a decrease in sales volume, primarily due to GLP-1 drugs. We continue to focus our new marketing strategy through targeted and AI-supported digital…

Thanks, Tom. Before we open the call for Q&A, it is important to reiterate, as both Tom and I have detailed that we have and will continue to significantly reduce operating expenses across all categories so we can invest in our growth initiatives, including the full launch of our Lap-Band 2.0 FLEX. The swift and bold steps we have taken to restructure the company will help to ensure sustainability and scalability. We continue to prioritize investments, including marketing automation to support scalable lead acquisition, segmented consumer-centric messaging being an updated website for improved patient engagement and a frictionless appointment scheduling system with qualified providers while further reducing lead generation costs. Taken together, we expect to increase Lap-Band procedures and ultimately revenue. We will continue to work with the Maxim Group and aggressively search and evaluate our M&A opportunities with intentions of expanding our portfolio that is differentiated from the competition with transformative technologies. We provide a selection of safe, non-anatomy-changing lifestyle-enhancing products that are attractive alternative to pharmacological therapy or more invasive therapies. Lastly, we will continue to work with our world-class Scientific Advisory Board to continue to execute our plan for success in a global market that is changing in a historic fashion to normalize safe and effective treatments for obesity. This concludes our prepared remarks. So now we'd like to open the call to your questions. Operator?

[Operator Instructions] Seeing no questions, I would like to turn the conference back over to Paul Hickey for any closing remarks. Please go ahead.

Thank you. We are on a path to profitability, having restructuring the organization, focusing on increased shareholder value and establishing a sustainable and scalable business, and we'll continue our high-priority search for synergistic M&A opportunities while continuing the adoption of the Lap-Band 2.0 FLEX is project to be a growth catalyst for the company. As always, I want to thank our employees, Board members, customers, consultants, advisers, suppliers, existing and new shareholders for your continued support of ReShape as we progress on our mission to become the premier physician-led weight loss company. I look forward to continuing to engage with our stakeholders, health care partners, and shareholders. Thank you all.

This conference has now concluded. Thank you for attending today's call. You may now disconnect.