Pulse Biosciences, Inc (PLSE) Q4 2024 Earnings Conference Call March 27, 2025 04:30 PM ET Company Participants Luella - Conference OperatorNot Provided - Conference Call Moderator (Operator Instructions)Tripp Taylor - Investor RelationsNot Provided - Legal/Compliance Disclaimer RepresentativePaul LaViolette - Co‐Chair of the Board and Chief Executive OfficerJohn Skinner - Chief Financial OfficerPaula Violet - Closing Remarks Luella Thank you for standing by. My name is Luella, and I will be your conference ...

Financial Data and Key Metrics Changes - In Q3 2024, total GAAP costs and expenses increased by $2.4 million to $13.7 million compared to $11.3 million in the prior year period [50] - GAAP net loss in Q3 2024 was $12.7 million compared to $10.6 million in the prior year period [52] - Cash and cash equivalents totaled $79 million as of September 30, 2024, compared to $44.4 million as of December 31, 2023 [53] Business Line Data and Key Metrics Changes - The company treated the first patients with Atrial Fibrillation (AF) using its nano-PFA Cardiac Surgical System in Europe [13] - The CellFX Percutaneous Electrode System received FDA 510(k) clearance for soft tissue ablation [21] - The initial clinical experiences with the nano-PFA needle ablation device in benign thyroid nodules have been positive, with patients experiencing symptomatic relief [31] Market Data and Key Metrics Changes - The incidence of palpable benign thyroid nodules in the U.S. is about 0.1% per year, with an estimated 250,000 patients diagnosed annually [24] - The treatment of benign thyroid nodules represents a potential market in excess of $1 billion per year for the company [30] Company Strategy and Development Direction - The company is focused on producing compelling clinical data to demonstrate the safety and effectiveness of its applications [19] - Plans to initiate pivotal clinical studies for its three products in mid-2025 [40][45] - The strategy includes seeking specific indications for the use of devices to drive faster clinician adoption and market penetration [20] Management's Comments on Operating Environment and Future Outlook - Management expressed excitement about continuing clinical experiences with three products throughout 2024 and into 2025 [55] - The company is building its team and infrastructure to support anticipated growth and conduct pivotal clinical studies [56] Other Important Information - The company completed a rights offering, raising $60 million in gross proceeds with the potential to raise an additional $66 million through the exercise of warrants [14] - The differentiated mechanism of action of nano-PFA technology has the potential to destroy cells more effectively than traditional methods [17] Q&A Session Summary Question: Are there any questions from participants? - There were no questions during the Q&A session [57]

Clinical Trials and Product Development - The company initiated a first-in-human study for its nsPFA-enabled percutaneous electrode in June 2023, treating thirty subjects with no serious side effects reported[102]. - The company received FDA 510(k) clearance for the CellFX nsPFA Percutaneous Electrode System in March 2024, allowing commercialization for soft tissue ablation[103]. - The company has placed the CellFX System in seven sites in the U.S., with over twenty-five patient procedures completed under short-term evaluation agreements[104]. - The company plans to begin pivotal clinical trials for its cardiac surgical clamp and catheter in mid-2025, with a multi-site study already initiated in the Netherlands[110][114]. - The company received Breakthrough Device Designation from the FDA for its CellFX nsPFA Cardiac Surgery System for AF treatment in July 2024[111]. - The company expects to complete the ongoing study of the nsPFA-enabled percutaneous electrode by 2025, with promising ultrasound results showing resorption of treated thyroid nodules[102]. - The company has expanded its clinical study for the CellFX nsPFA 360° Cardiac Catheter to enroll up to 60 patients due to encouraging preliminary results[114]. - The company aims to explore additional applications for nano-PFA technology across various medical disciplines through potential partnerships[116]. Financial Performance and Funding - The company raised $15 million through a common stock rights offering in June 2022, with Robert Duggan purchasing approximately 56% of the shares offered[117]. - In September 2022, the company entered into a loan agreement with Robert Duggan for $65 million to fund product development, which was later terminated in April 2023[117]. - A rights offering in June 2024 raised $60 million, with Robert Duggan purchasing approximately 88% of the shares offered[117]. - The company reported no revenues for the three-month periods ended September 30, 2024, and 2023[128]. - Research and development expenses increased by $0.2 million to $7.7 million for the three-month period ended September 30, 2024, compared to $7.5 million in 2023[129]. - General and administrative expenses rose by $2.2 million to $6.0 million for the three-month period ended September 30, 2024, compared to $3.8 million in 2023[131]. - For the nine-month period ended September 30, 2024, research and development expenses increased by $1.7 million to $21.7 million compared to $20.0 million in 2023[135]. - General and administrative expenses for the nine-month period ended September 30, 2024, increased by $3.3 million to $14.3 million compared to $11.0 million in 2023[137]. - Interest income, net, increased by $1.0 million to $1.8 million for the nine-month period ended September 30, 2024, compared to $0.8 million in 2023[138]. - The company has not generated significant revenues from product sales since inception and plans to invest in research and development for future products[139]. - The company completed a private placement on May 9, 2023, issuing 10,022,937 shares at $6.51 per share, which settled the $65.0 million loan and approximately $0.2 million in accrued interest[141]. - The 2024 Rights Offering resulted in the sale of six million units at $10.00 per unit, generating gross proceeds of $60 million, with potential additional proceeds of up to $66 million from warrant exercises[142]. - As of September 30, 2024, the company had cash and cash equivalents of $79.0 million, which is expected to fund projected operating requirements for at least the next twelve months[143]. - During the nine months ended September 30, 2024, the company used $27.2 million in operating activities, compared to $26.3 million for the same period in 2023[146][147]. - Cash provided by financing activities for the nine months ended September 30, 2024, was $61.9 million, significantly higher than $15.6 million for the same period in 2023[149][150]. - The company has incurred significant operating losses since inception and may continue to do so for the next several years[143]. - The company plans to raise additional capital in the future, but there is no assurance that such financing will be available on acceptable terms[144]. - Research and development of new technologies are unpredictable, and the company may need to consider alternative financing options if sufficient funds are not available[155][156]. Market and Operational Risks - The company is exposed to market risks primarily due to fluctuations in interest rates, with no material changes in market risk reported since the last annual report[158].

Financial Performance - Total GAAP costs and expenses for Q3 2024 were $13.7 million, an increase of 21.2% from $11.3 million in Q3 2023[6]. - GAAP net loss for Q3 2024 was ($12.7) million, compared to ($10.6) million in Q3 2023, reflecting a 19.8% increase in losses[7]. - Total revenues for the quarter were $0, with no product revenues reported[18]. - The net loss for the quarter was $12,680,000, compared to a net loss of $10,566,000 in the prior year, indicating a 20% increase in losses[18]. - Basic and diluted net loss per share was $(0.21), compared to $(0.19) in the same quarter last year[18]. - Non-GAAP net loss for the quarter was $(9,405,000), compared to $(8,471,000) in the same quarter last year, reflecting an increase of 11%[21]. Cash and Assets - Cash and cash equivalents totaled $79.0 million as of September 30, 2024, including $60 million from a rights offering[8]. - Cash used in Q3 2024 was $8.5 million, a slight decrease from $8.7 million used in Q2 2024 and Q3 2023[9]. - Total assets increased to $93.0 million as of September 30, 2024, up from $59.2 million at the end of 2023[17]. - The company has the potential to raise an additional up to $66 million through the exercise of warrants from the rights offering[8]. Expenses - Research and development expenses increased to $7,703,000 from $7,472,000, representing a 3% increase year-over-year[18]. - General and administrative expenses rose significantly to $5,952,000, up from $3,780,000, marking a 57% increase compared to the previous year[18]. - Total cost and expenses for the quarter were $13,655,000, compared to $11,252,000 in the same quarter last year, reflecting a 21% increase[18]. - Stock-based compensation expense totaled $2,982,000, up from $1,798,000, representing a 66% increase year-over-year[19]. - Non-GAAP research and development expenses were $6,548,000, slightly up from $6,435,000, a 2% increase year-over-year[20]. - Non-GAAP general and administrative expenses increased to $3,832,000 from $2,722,000, a significant rise of 41% compared to the previous year[20]. Clinical Developments - The company placed nsPFA Percutaneous Electrode Systems with seven sites in the U.S. for clinical assessment, with commercial use expected to begin soon[2]. - The company expects to commence pivotal clinical trials in mid-2025 for the Percutaneous Electrode System and the nano-PFA Cardiac Surgical System[3][4]. - Over 50 patients have been treated with the nano-PFA 360° Cardiac Catheter in a feasibility study for AF[4]. - The company appointed Dr. David Kenigsberg as Chief Medical Officer for Electrophysiology, enhancing its leadership team[4].

Core Insights - Pulse Biosciences reported a loss of earnings per share amounting to -20 cents for the second quarter of 2024 [1] - The company did not generate any revenue during the quarter [1] Financial Performance - Earnings per share: -20 cents [1] - Revenue: $0 for the quarter [1]

Clinical Development - The company has initiated a first-in-human study for the CellFX nsPFA Percutaneous Electrode System, treating over 20 subjects with no serious side effects reported[82]. - In November 2023, the company filed a premarket notification 510(k) with the FDA for the CellFX nsPFA Percutaneous Electrode System, receiving clearance in March 2024 for soft tissue ablation[83]. - The company expects to commence a pivotal clinical trial in 2025 to support the commercialization of the Percutaneous Electrode System for benign thyroid nodules[84]. - Atrial fibrillation (AF) affects an estimated 43 million people worldwide, and the company believes its nsPFA technology is uniquely suited for safe and effective ablation of cardiac tissue[85]. - The nsPFA Cardiac Surgical System received Breakthrough Device Designation from the FDA in July 2024, expediting its development for AF treatment[89]. - The company has expanded its clinical study for the CellFX nsPFA 360° Cardiac Catheter from 30 to 60 patients due to promising early data[92]. - The company plans to pursue a PMA application for the cardiac ablation clamp, expecting to begin pivotal clinical trials in 2025[88]. - The CellFX Console is designed to accommodate various clinical applications and has been cleared for use in dermatology, now being repurposed for cardiology[93]. - The company continues to explore partnership opportunities to develop additional applications for nsPFA technology across various medical disciplines[94]. Financial Performance - The company reported no revenues for the three-month periods ended June 30, 2024, and 2023[105]. - Research and development expenses increased by $0.5 million to $7.2 million for the three-month period ended June 30, 2024, compared to $6.7 million in the same period in 2023[106]. - General and administrative expenses rose by $1.0 million to $4.5 million for the three-month period ended June 30, 2024, compared to $3.5 million in the same period in 2023[108]. - For the six-month period ended June 30, 2024, research and development expenses increased by $1.5 million to $14.0 million compared to $12.5 million in the same period in 2023[110]. - General and administrative expenses for the six-month period ended June 30, 2024, increased by $1.1 million to $8.4 million compared to $7.3 million in the same period in 2023[115]. - Interest income for the six-month period ended June 30, 2024, decreased by $0.4 million to $0.8 million compared to $1.2 million in the same period in 2023[116]. - The company has not generated significant revenues from product sales since inception and plans to invest in research and development for future products[117]. - The company used $18.2 million in operating activities during the six months ended June 30, 2024, compared to $15.8 million for the same period in 2023[123]. - Cash provided by financing activities was $40,000 for the six months ended June 30, 2024, a significant decrease from $13.4 million in the same period in 2023[125]. - As of June 30, 2024, the company had cash and cash equivalents of $26.2 million and raised approximately $60 million from a rights offering in July 2024[120]. Funding and Financing - The company raised $15 million through a common stock rights offering in June 2022, with Robert Duggan purchasing approximately 56% of the shares offered[95]. - In September 2022, the company entered into a loan agreement with Robert Duggan for $65 million to fund product development, which was later converted into equity[95]. - A rights offering in June 2024 raised $60 million, with Mr. Duggan purchasing approximately 88% of the shares offered[95]. - The company expects to finance future cash needs through public or private equity offerings, debt financings, and potential collaborations, but there is no assurance that such funds will be available[121]. - The company incurred significant operating losses since inception and may continue to do so for the next several years[120]. - The company may need to curtail operations or seek unattractive financing terms if adequate funds are not available[121]. - The company entered into a 2022 Loan Agreement with Robert W. Duggan for a principal sum of $65.0 million, with an interest rate of 5.0%[119]. Market and Risk Factors - Research and development of new technologies are unpredictable, and there is no assurance that the company will achieve sustainable revenues[129]. - The company has no off-balance sheet arrangements as of June 30, 2024[127]. - There have been no material changes in market risk, primarily related to fluctuations in interest rates, since the last annual report[131].

Financial Data and Key Metrics Changes - Cash and cash equivalents totaled $26.2 million as of June 30, 2024, compared to $58.7 million as of June 30, 2023, not including the $60 million from the rights offering closed in July 2024 [24] - Cash used in Q2 2024 was $8.7 million, down from $10 million in the same period last year and $9.5 million in Q1 2024 [25] - Total GAAP costs and expenses increased by $1.5 million to $11.7 million compared to $10.2 million in the prior year period, primarily due to an increase in non-cash stock-based compensation [25] Business Line Data and Key Metrics Changes - The company is focused on three product lines: soft tissue ablation, epicardial surgical ablation, and endocardial catheter ablation, with significant progress reported in each area [11][22] - Initial clinical results for soft tissue ablation of benign thyroid nodules have been promising, with the first U.S. procedures completed following FDA clearance [13][14] - The cardiac surgical system for atrial fibrillation has received breakthrough device designation from the FDA, emphasizing its potential benefits [18] Market Data and Key Metrics Changes - The benign thyroid nodule market is estimated to have as many as 1.3 million people worldwide, representing a significant opportunity for the company's nano-PFA technology [33] - The company plans to expand its clinical studies in Europe, adding two prestigious clinical sites to gather additional user experiences and clinical outcomes [21] Company Strategy and Development Direction - The company aims to commercialize devices for soft tissue ablation, epicardial surgical ablation, and endocardial catheter ablation, focusing on compelling clinical data to support regulatory pathways [8][10] - The strategy includes pursuing specific labeled indications for regulatory approval, which will enhance marketing and clinician adoption [10][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the potential of nano-PFA technology to transform treatment options across various medical applications, highlighting the importance of rigorous clinical and regulatory pathways [5][22] - The company anticipates that the cash on hand will support operations into 2026, even without exercising warrants from the rights offering [34] Other Important Information - The company completed a rights offering fundraising in July, which was oversubscribed and provided gross proceeds of $60 million [22] - Paul LaViolette has been appointed Co-Chairman of the Board, bringing extensive experience in scaling cardiology medtech franchises [23] Q&A Session Summary Question: Feedback on initial cardiac surgical cases and regulatory pathway - Management noted that initial procedures were efficient, and the device performed well, with excitement from clinicians involved [29] - The regulatory pathway will focus on a PMA application for atrial fibrillation treatment rather than a 510(k) submission [30][31] Question: Market opportunity for benign thyroid nodules - Management highlighted the significant number of patients with benign thyroid nodules and the advantages of nano-PFA in providing a non-invasive treatment option [32][33] Question: Capitalization for concurrent studies in 2025 - Management indicated that while cash burn will increase with the active phases of studies, current cash reserves are expected to last into 2026 without warrant exercises [34]

Financial Performance - Pulse Biosciences, Inc. reported financial results for the fiscal quarter ended June 30, 2024, with a focus on operational performance[4]. - The financial report and operational results are intended to provide insights into the company's performance and future outlook[4]. Board of Directors and Governance - The company appointed Paul A. LaViolette to its Board of Directors, who brings 40 years of experience in global medical technology[5]. - The Board established a new Strategic Advisory Committee to oversee corporate initiatives, including financing and licensing opportunities[5]. - Non-employee directors will receive an annual retainer of $55,000, with additional compensation for committee service, totaling up to $80,000 for the Lead Independent Director[8]. - The company amended its Non-Employee Director Compensation Policy to increase cash compensation for board service[8]. Stock Options and Compensation - Mr. LaViolette received an initial stock option grant to purchase 50,000 shares at a strike price of $15.65, vesting over three years[7]. - Newly appointed members of the Strategic Advisory Committee received 200,000 shares each, vesting over four years[10]. Strategic Initiatives - The company is focused on evaluating financing, partnering, and licensing opportunities as part of its strategic initiatives[5]. - The press release dated August 12, 2024, includes a business update and quarterly results[12].

Core Viewpoint - Purcell & Lefkowitz LLP is investigating Pulse Biosciences, Inc. to determine if the company's directors breached their fiduciary duties related to recent corporate actions [1]. Group 1 - The investigation is on behalf of Pulse Biosciences' shareholders [1]. - The law firm specializes in representing shareholders affected by securities fraud and breaches of fiduciary duty [3]. - Shareholders can obtain additional information regarding their rights and options at no cost [2].

Financial Data and Key Metrics Changes - In Q1 2024, total GAAP costs and expenses increased by $1 million to $10.6 million compared to $9.6 million in the prior year period, primarily due to an increase in non-cash stock-based compensation expense, which rose to $1.8 million from $0.9 million [23][47] - Cash and cash equivalents totaled $34.9 million as of March 31, 2024, down from $44.4 million as of December 31, 2023, with cash used in Q1 2024 amounting to $9.5 million compared to $7.2 million in the same period last year [24] Business Line Data and Key Metrics Changes - The company has treated 30 patients for soft tissue ablation for thyroid disease using the CellFX nsPFA system, with no serious adverse events reported [16][17] - For cardiac indications, 24 out of 30 patients have been successfully treated with the CellFX nsPFA 360-degree Cardiac Catheter, with the remaining six expected to be treated within the next 45 days [19] Market Data and Key Metrics Changes - The company received FDA 510(k) clearance for its non-cardiac CellFX nsPFA percutaneous system in March 2024, which is used for soft tissue ablation across various procedures [40] - The company plans to have a strong presence at the upcoming Heart Rhythm Society meeting, featuring six poster presentations and a live case presentation [43][62] Company Strategy and Development Direction - The company is committed to advancing its proprietary CellFX nsPFA energy delivery system and plans to conduct multiple clinical trials across different indications [15] - A rights offering of up to $60 million is planned to secure necessary capital for advancing its devices towards market entrance [44][45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth and the potential of its technology to improve treatment outcomes, emphasizing the importance of building strong clinical support for physicians [15][27] - Ongoing discussions with the FDA regarding the clinical pathway for the CellFX nsPFA Surgical Clamp indicate a collaborative approach to regulatory requirements [30][60] Other Important Information - The company has submitted an application to the Ethics Committee in the Netherlands for a first-in-human feasibility study with the CellFX nsPFA Surgical Clamp, expecting a response soon [42] - The rights offering is expected to provide funding for the company's growth plans into the first quarter of 2026 [45] Q&A Session Summary Question: How is the pilot launch going in the U.S. with the percutaneous electrode now that it's approved? - The interest level has been high among physicians at major institutions, and the company expects the CellFX percutaneous system to be used in several prominent hospitals by the end of the year [26][27] Question: Can you provide details on the FDA dialogue and the pivotal program? - The company has had productive discussions with the FDA and is working on the clinical program requirements for the 510(k) process [29][30] Question: What are the expectations for the upcoming Heart Rhythm Society meeting? - The company is looking forward to presenting both preclinical and clinical data at HRS, highlighting the advantages of nanosecond PFA technology [34][62]