Good day, ladies and gentlemen and welcome to the Pulse Biosciences First Quarter 2019 Investor and Analyst Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Brian Dow, Pulse Biosciences’ Senior Vice President and Chief Financial Officer. Sir, you may begin.

Great. Thank you very much. Good afternoon, everyone, and welcome to Pulse Biosciences first quarter 2019 investor and analyst update call. Joining me on the call today are Darrin Uecker, our President and Chief Executive Officer; and Ed Ebbers, our Vice President and General Manager of Dermatology. Our comments and responses to your questions during today’s call reflect management’s views as of today, April 30, 2019 only. It will include forward-looking statements. These include statements regarding our plans and expectations relating to our commercial, operational, scientific, clinical and financial projections, regulatory matters, products including the uses and applications of such products and other future events. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are described in detail in our most recent Form 10-K filed on March 14, 2019. Our SEC filings can be found through our website or at the SEC’s website. Investors are cautioned not to place undue reliance on such forward- looking statements. Please note that this conference call will be available for audio replay on our website at pulsebiosciences.com on the News and Events section under our Investor Relations page. In addition, today’s press release has been posted to our website. Today’s format will consist of providing you with highlights of our first quarter of 2019 as described in our press release announced earlier today followed by a question-and-answer session. I would now like to turn the call over to our President and Chief Executive Officer, Darrin Uecker.

Thanks, Brian. Good afternoon, everyone, and thank you for taking time to join us on today’s call. Our driving focus at Pulse Biosciences is the commercialization of our proprietary CellFX System in aesthetic dermatology in pursuit of our mission to build a viable company that makes a meaningful difference for the betterment of patients and clinicians in the field of dermatology using our proprietary and patent-friendly – or in patient-friendly cell pulsing technology. The decision to launch pending FDA clearance of CellFX System in aesthetic dermatology is based on a strong clinical data generated from a series of successful clinical studies in difficult-to-treat skin conditions and the exciting potential of the aesthetic dermatology market. Our initial histologic skin studies demonstrated the safety and unique mechanism of our CellFX System to impact cellular structures while sparing surrounding noncellular structures such as the skin’s dermis. Based on the histologic findings and in consultation with our key opinion leaders, we successfully executed studies that demonstrated outstanding safety and efficacy in our first two targeted commercial applications, sebaceous hyperplasia, or SH, a small raised lesion caused by overactive sebaceous glands typically on the face; and seborrheic keratosis, or SK, a common benign pigmented lesion of the skin that resides in the epidermis. These represent difficult- to-treat benign skin lesions that largely go untreated due to the lack of acceptable treatment options for patients and highlight the unique capabilities of the CellFX System to target cellular lesions while sparing the surrounding noncellular structures. Our results in SH and SK provide empirical evidence that our tunable CellFX System is safe and based on its unique mechanism, has the potential to treat a large number of high-value and difficult-to-treat skin conditions. Over time, we will deliver a growing array of valuable applications that patients will desire and…

Thanks, Darrin, and good afternoon, everyone. The planned commercial launch of our CellFX System into the rapidly growing aesthetic procedure market is an important and exciting milestone for Pulse Biosciences. This major commercial opportunity begins with our first two clinical applications and is expected to grow as we continue to demonstrate that the NPS nonthermal cell-centric mechanism of action is a significant differentiator from all other energy- based devices. Our skin specialists have told us that this unique mechanism suggests utility for a broad spectrum of difficult-to-treat skin conditions, including skin applications for the large markets that we have already identified and studied in our clinical program. As Darrin mentioned, we are progressing towards our aim of commercially introducing the CellFX System to the market based on impressive clinical data from our first two high-value clinical applications that we’ve already discussed: sebaceous hyperplasia and seborrheic keratosis. These two high-value markets are just the beginning of our expanding commercial value. Since the unique CellFX mechanism of action demonstrated in our clinical studies extends beyond these two initial applications, our plan is to continue expanding our commercial value of the CellFX System by investing in a growing pipeline of future skin applications for which we have already commenced feasibility studies, and we’ll expand this investment further based on our feasibility results. Our marketing research with clinicians and patients has demonstrated that the sebaceous hyperplasia market represents a large cash-paying market with unsatisfactory current solutions. This is because SH is a particularly difficult facial lesion to treat because the underlying cause is from enlarged sebaceous or oil glands that reside deep in the skin. Current modalities, which are primarily heat- based, create significant collateral damage to surrounding tissues when attempting to reach these deep treatment targets in the skin. This results in poor…

Thanks, Ed. I’d now like to provide an update on our clinical application pipeline, in particular our ongoing feasibility studies. As we have reported previously, we have ongoing feasibility studies in warts, acne and basal cell carcinoma. As one might expect, our early feasibility studies are intended to provide data and insights to guide follow-on studies and if appropriate, to drive multicenter studies that when successful, lead to commercial applications. When we undertake feasibility studies, we set out to explore different treatment levels of our tunable CellFX System, treatment timing strategies and in some cases different forms of the lesions being treated. We expect to have several ongoing feasibility studies at any particular time to keep a robust pipeline of applications for our CellFX System in development. NPS is a very unique energy modality, and exploring its capabilities across a variety of applications will be an ongoing priority for Pulse Biosciences. First, I’d like to discuss our ongoing warts feasibility study. Similar to SKs, warts reside largely in the epidermis, the outermost layer of the skin, and the current treatment modalities have limited efficacy. Warts are consistently one of the top identified problems for patients seeking treatment from dermatologists. Our feasibility study is being led by Dr. Vic Ross at the prestigious Scripps Clinic in San Diego, and we have currently enrolled 19 patients with 33 warts. In late March, at the American Society for Laser Medicine and Surgery, Dr. Ross presented some of his early data from the podium in a talk titled High Amplitude, Nanosecond Electrical Pulsing for Warts. In his feasibility study, Dr. Ross and Dr. Gilly Munavalli treated common warts on the feet, toes, fingers and hands. We are continuing to follow patients in this study and at this point are very pleased with what we…

Great. Thanks, Darrin. Shortly before today’s call, we announced our financial results for the first quarter ended March 31, 2019. Our financial results for the quarter reflect the progress achieved in our development and clinical programs, accompanied by the requisite support infrastructure of those endeavors and operating as a public company. Cash and investments at the end of the first quarter totaled $52.8 million compared to $59.6 million at the end of 2018, reflecting first quarter cash use of $6.8 million, slightly above our fourth quarter 2018 cash use of $6.4 million. Net loss for the quarter totaled $10.1 million, reflecting a $1.6 million or 16% increase compared to a net loss of $8.7 million for the first quarter of 2018. Net loss for the quarters reported include charges for stock-based compensation totaling $2.4 million and $3.4 million for 2019 and 2018 respectively. The theme underlying the increases in both cash use and net loss is the continued growth of our company, reflecting the progress towards the commercial introduction of our CellFX System planned for later this year and the associated growth in sales, marketing and manufacturing-related costs; expansion of our clinical study programs, reflecting the initiation and execution of several feasibility and pre-commercial clinical studies; and the growth and support of functions for those areas. This is exemplified by the growth in our head count, which has increased to 70 at March 31, 2019 from 37 a year earlier. Headcount currently stands at 77. Research and development expenses increased to $5.8 million for the first quarter of 2019, an increase of $2.7 million or 84% compared to $3.2 million for the first quarter of 2018. As you can distill from my earlier comments, a significant portion of the increase reported reflects the increase in R&D personnel. R&D head count…

Thanks, Brian. We made great progress in Q1 towards our goal of commercializing our CellFX System in aesthetic dermatology. We filed a 510(k) with the FDA for use of the CellFX System in dermatology, and this afternoon, we received an additional information request coming from the FDA. And based on our review before this call, we believe responding to this letter will add to our regulatory time line and may potentially change the regulatory process we take. We will update on this important matter at the Annual Shareholder Meeting in May. We continue to build out our commercial team, adding to the sales, sales operations, customer service and marketing functions. We remain on track with building a world-class commercial team with deep experience in the aesthetic dermatology space and importantly, stronger relationships with KOLs in the field. As mentioned, we also added to our Board of Directors, bringing on Mitch Levinson, a successful veteran in the aesthetic dermatology field. The CellFX System is a platform, and we are committed to delivering a portfolio of valuable applications to our physician partners over time. We continue to make progress in developing our pipeline of applications, and we discussed our progress in warts, acne and BCC on this call. We anticipate moving our warts and BCC programs forward in Q2, with follow-on studies based on the learnings to date In warts, we anticipate the follow-on study to generate sufficient data to drive a commercial application, which would likely be introduced in late 2019 or early 2020. We will provide further details as the follow-on study is initiated. BCC will likely have a longer time line given that it is skin cancer. As we reported previously, we expect the back acne feasibility study to take into Q3 before we will have sufficient data. Again, as the data is available, we will communicate plans for future studies. In addition to these, we expect to initiate studies in new applications. We plan to announce new applications and studies in the coming quarters that continue to take advantage of the unique mechanism of the CellFX System in difficult-to-treat skin conditions. We believe our CellFX System will offer unique treatment capabilities to our aesthetic dermatology partners, and through the delivery of needed and wanted applications that enable physicians to provide safe and effective treatments to patients, we believe we’ll achieve our mission of building a viable company. With that, I’d now like to turn back to the operator for questions.

Thank you. [Operator Instructions] And our first question comes from RK with H.C. Wainwright. Please proceed.

Thank you. Good afternoon. I just have a couple of quick questions. So regarding the additional information request coming from the FDA. So how – I’m just trying to understand your decision-making process, because it looks like these are if you continue with the current application or if you go using the de novo application, you still have to produce some clinical data. So I’m just trying to understand what sort of clinical data do you think you need to provide? And what sort of studies do you need to do? And is this going to change the time line between now and commercialization? From the folks who are on the call, I understand you’re working on all directions, but at the same time, I’m just trying to understand how much work needs to be done between here and the state of commercialization. This is on the 510(k) front. And then on the CE front, I’d like to hear what has been the dialogue between you and the European authorities. Since at least – since I’ve been on the call, I did not catch anything in terms of comments from you.

Yes. Hey, thanks, RK. I appreciate the question and for joining the call. And so, yes, let me talk about the FDA first. So we just received this additional information letter a couple of hours ago, so this is a very sort of typical step in the process where you submit your 510(k), it goes through the substantive review process, and then you receive a letter requesting additional information from FDA. And so from that perspective, this is just another step in the process. Now that being said, we got a letter. We have taken a quick look at it. Our read on the letter from just a couple of hours that we’ve had to review is that it is going to take us some time to respond to the number of questions that FDA has and to prepare any kind of data, whether it’s bench testing, preclinical testing or clinical testing. And so we obviously don’t have clear time lines around being able to do that as I sit here today. But I think that what I would say is in the 510(k) process, when you get an additional information request, you’re allotted 180 calendar days to respond to that request. And I think my early read on the letter from FDA is that it’s likely that it would take us a good amount of that time, if not that total time to put a response together. And so if that’s the case, I think that from a 510(k) process perspective, that would push us out till later this year. Earlier, we had suggested potentially a quarter 3 FDA clearance. I think that our timeline is pushed out based on again, our early read of this information. And how long that is, it’s difficult to handicap, but again, I…

Thanks for that. So, if you go the de novo route, so does that mean based on the letter that you brought today, it’s pretty much the same process in the sense you still have to do those additional – those preclinical, clinical studies, so that you put a package together except that you don’t have to deal with the question of the predicate? So is that the reason why you’re saying even on the de novo process, you still have to do some clinical studies?

Yes. So, I think that either process – based on the letter, I think either process is going to require us to submit additional data to the FDA. And so I think it’s just a matter of us going through and reviewing the letter in detail, having discussions with the FDA, collaborative discussions where we can understand the trade-offs between the time lines and the data that we would need for each process. And then I think we’ll make a decision based on all that information on what we think the best path is for Pulse Biosciences. But I think in each case, we’re going to have to provide additional data.

Okay. All right. Thank you. Thanks for that.

Thanks, RK.

Thank you. [Operator Instructions] Okay. And our next question comes from Tony Kevin [ph] with Pulse Biosciences. Please proceed.

Hi, my concern is the FDA is, trying hard though this and in the meantime, we’ve increased our burn rate on a quarterly basis to a significant number. And these long delays are just going to increase the situation where we run out of cash. And if you have any other alternatives to get into the market faster, I’d advise it even if it’s overseas. The last thing we want to do is run out of money. That’s the end of my question.

Yes. Thank you, Tony. I completely understand and appreciate the comments. We are very confident in our ability to get through this process. All the work that we are doing today is to build the internal infrastructure such that we can enter the aesthetic dermatology market. We’ll continue with that work as we think it’s important to entering the market, and we continue to do the clinical work that’s necessary to do that. So we’re very comfortable with our plan, and we think we’re on the right track with everything. So appreciate it.

Thank you. And with that, this concludes our Q&A session for today. I’d like to turn the call back over to Darrin Uecker for closing remarks.

Thank you, operator. Thank you everybody for joining us on today’s call. We look forward to our upcoming Annual Shareholder Meeting in May 16 at Pulse Biosciences headquarters. So thank you very much. Have a great day.

Ladies and gentlemen, thank you for participation in today’s conference. This concludes the program. You may now disconnect. Everyone, have a great day.