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

Good afternoon, everyone, and thank you for joining the third 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. Management will also be joined by Krishna Gupta, a current Director of Vyome Therapeutics who will be appointed Chairman of the combined company upon the completion of the previously announced merger agreement between the two companies. As we do each quarter, Paul will provide an overview and update on the company's activities, and Tom will review the financial results for the period, after which, Paul will introduce Krishna for his remarks. 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's stock is listed on NASDAQ trading under the ticker symbol RSLS. I'll 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. As Mike noted, after I provide an overview and update on ReShape's activities and Tom reviews our financial performance Krishna Gupta will take a few moments to share some background on the exciting vision of Vyome Holdings. Let's begin with an overview of our activities during the third quarter and subsequent period. During the quarter, our revenue continues to rebound, increasing 16.6% in the third quarter over the second quarter, the third sequential quarter of revenue growth, and 6.4% over the third quarter of last year. While we remain highly focused on maintaining our disciplined approach to continually leveraging resources in order to execute on our 2024 cost reduction plan which has led to over 40% lower operating expenses for the first nine months of the year compared to last year. As a result, our gross profit margin increased to 62.8% for the quarter and 60.3% for the first nine months. Tom will detail these cost reductions later in this call. In addition to the cost reductions, 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. We completed our early launch phase and our analyzing data and metrics that will be used to support our widespread commercial launch. Additionally, as announced this week, we received approval for the Lap-Band 2.0 FLEX from Health Canada, which represents yet another important growth catalyst for the Lap-Band franchise as we look to gain regulatory approvals worldwide. Also announced this week, we were awarded approximately $241,000 supplementary grant from NIH with the University of Southern California's Center for Autonomic Nerve Recording and Stimulation Systems. This nondilutive supplemental grant awarded over the course of one…

Thanks, Paul. And once again, thank you all for joining our webcast this afternoon. As Paul mentioned earlier, during the third quarter, our revenues continue to stabilize and grow and has increased for the third quarter -- third sequential quarter this year. Additionally, and in response to the short-term impact and adoption of GLP-1s, we have reorganized the company and maintained our disciplined approach to executing our cost reduction plan for 2024. With various cost reductions, we have achieved a 41% reduction in overall operating costs for the first nine months of 2024 compared to the same period last year. All expense items within our operating expenses are the same or lower than the comparable period in the prior year. And as a result, we also saw increases in our gross profit margin. A full discussion of our actual financials is in our press release and 10-Q. So I will just take a moment to review key financial metrics for the third quarter and nine months ended September 30, 2024. Our revenue totaled $2.3 million for the three months ended September 30, 2024, an increase of 6% or $100,000 compared to the same period in 2023. This primarily resulted from an increase in sales volume, offset by continued pressure primarily due to GLP-1 pharmaceutical weight loss alternatives. Quarterly revenue was 17% higher or $300,000 compared to the second quarter of 2024. Revenue totaled $6.2 million for the nine months ended September 30, 2024, a contraction of 7% or $500,000 compared to the same period in 2023. This primarily resulted from a decrease in sales volume, primarily due to GLP-1 pharmaceutical weight loss alternatives. Gross profit for the three months ended September 30, 2024, was $1.4 million, which was slightly above $1.3 million for the same period in 2023. Gross profit…

Thanks, Tom. While I'm happy to be joined once again by Krishna Gupta, who will be the Chairman of the combined company post-merger to further outline Vyome strategy and vision for the future. Now over the last year, I've had the pleasure of working with Krishna, and I am truthfully very excited about the opportunity for our ReShape shareholders and new shareholders alike to become part of Vyome that stands apart from any other investment opportunity. Krishna?

Thanks, Paul and Tom. I'd like to take this opportunity to kick off a more meaningful dialogue with ReShape's shareholders. I'm looking forward to having you along on the Vyome journey, which also revolves around innovation in healthcare, much as ReShape has done. We'll be putting out a deck on the Vyome vision shortly, but in the interim, I encourage you all to read through the S-4, which is publicly filed and available. We note in the S-4 that both sides have valued the go-forward entity at about $130 million for the purposes of allocating the ownership of the combined company between ReShape and Vyome current shareholders, underpinned by our existing assets. We view this transaction as a massively positive one for ReShape shareholders and believe there is significant upside beyond this valuation as well if the Vyome team executes well in 2025. So what does Vyome do? As a reminder, Cambridge, Massachusetts-based Vyome is an innovation-driven healthcare platform centered around the U.S. India corridor and the increasingly special relationship between the two countries. In particular, we are building a healthcare platform that we anticipate having three core pillars underpinning the bridge between U.S. and India. Number one, biopharma, where we already have developed valuable assets; number two, medical devices; and number three, AI. The latter 2, we are in the process of building the foundations for. We intend to be very active deal makers as a core competency in order to potentially further our platform and shareholder value. As an example of this, we have struck multiple deals with Sun Pharma, the fourth largest global specialty generic pharma company to commercialize some of Vyome technology in India. We'll be sharing more information and upcoming milestones about our core assets and how we think about value in our investor presentation…

Thanks, Krishna. You just shared a very compelling and believable opportunity that shareholders can be a part of with their approval of the proposed merger and asset purchase agreement. To remind shareholders, the details shared by Krishna are outlined in the S-4 registration statement which includes the proxy statement. When the SEC declares the S-4 effective, we will plan and hold a shareholder meeting to approve the transactions. Krishna's message should excite you, and it is part of the reason our Board unanimously recommended the merger with Vyome and the concurrent set sale to Biorad. Thank you again, Krishna. I'm grateful for you joining today's call to discuss what future shareholders can anticipate with Vyome Therapeutics. They'll be in great hands. Additionally, I want to express my sincere appreciation to our employees, Board members, customers, consultant advisers, suppliers and existing and new shareholders for your unwavering support of ReShape and support for our future as Vyome Therapeutics. Thank you all.

Before we conclude, we have one question from Jason McCarthy from Maxim Group. Mr. McCarthy, your line is open.

Hi guys. Hello. I'm sorry. Can you guys -- as we start to think about Vyome, a bit more from a pharmaceutical biotech company. Can you just talk at a high level about the 1953 gel kind of what it does and your plans to target malignant fungating wounds, something I think a lot of people don't really know too much about and it would be a good opportunity maybe to inform some of the investors here.

That is definitely in Krishna's warehouse. Krishna?

Yes. The malignant fungating wounds is an example of a rare unmet disease. I'm going to defer on talking about the science until we put out our investor deck. But what I can point you to is that, it's an example of an immuno inflammation therapy. So if you look at the world today, it's beset by many problems that are frankly niche untreated and often caused by an underlying immuno inflammation response. It's a category that's hot. And Vyome's scientific journey has always been focused on identifying the root cause and treating them from the lens of how do we interact with the immune system of the body. So malignant fungating wounds is one of these examples where patients that suffer from this, have quite acute symptoms that are multisensory. Obviously, it's painful, but then there's a very strong smell and it is a very, very disturbing site to look at as well. And that can cause significant damage to people's quality of life. And we believe we are working on, the only sort of solution and sort of product that can treat this in a systemic way. And we believe that can create a lot of value for shareholders to come. And that's just one example of where we can use this sort of development philosophy of, hey, how can we use existing molecules, target them towards rare unmet needs and do so in spaces where the underlying causes are immuno inflammatory. I'd love to share more, but I want to wait until we put out our investor presentation.

Okay. Well, that presentation have, I guess, a high-level outline of the strategy in terms of what programs to take forward, whether it's the 1953, or the 1908 and the uveitis indication, which a lot of the ophthalmology space has been very, very busy over the last 12 to 24 months. Is that a fair assessment of what we could expect?

Yes. Yes, you will have -- we will sort of share a bit about the three different molecules that we have, the catalysts that we are intending to pursue in the near term and the value unlocks would follow.

Okay. And just a quick one back to the ReShape Group. You had mentioned that the GLP-1 agonist and dual agonists that are out there pressured your platform. Do you think that there's going to be more gravitation just in general, over time towards Lap-Band, things like that as opposed to GLP-1s as people kind of break that stigma of obesity, as you mentioned, do you think there's an opportunity after that market will expand or rebound, I guess, maybe be the right way to phrase it.

Yes. I do. It's a great question. I was just at ASMBS weekend conference in Atlanta last weekend. and sort of talked about the market overall and adoption of GLP-1s and what the impact has been on bariatric surgeries done in the U.S. and clearly, there's been an impact. And so again, our gains this quarter and through the year have sort of been -- and to me signaling their sort of market gains, based on the fact that we've got more people that are getting into these obesity discussions kind of petering out or tapering on the weight loss they get with GLP-1s or other means and looking for the least invasive option. Now it's interesting that the obesity market overall is clearly untapped. Even with GLP-1s, I think they showed data, whether it's accurate or not to be -- not more than roughly about 10% adoption of that 100% of the pie that is obese -- clinically obese and needs to get medical attention. So it's still primarily an underserved market, and that's where it's going to take time for sort of societal influence as well as big pharma to help give people off the sidelines and then to physicians to start talking about improving their quality of life.

Got it. Thanks guys for taking the questions.

Thank you. Ladies and gentlemen, this does conclude the conference. The conference has now concluded. Thank you for attending today's call. You may now disconnect.