Thank you for standing by. This is the conference operator. Welcome to the Pulse Biosciences Second Quarter 2020 Earnings Conference Call. As a reminder, all participants are in a listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. [Operator Instructions] I would now like to turn the conference over to Philip Taylor, Investor Relations. Please go ahead.

Thank you, operator. Before we begin, I'd like to inform you that comments and responses to your questions during today's call reflect management's views as of today, August 10, 2020 only and will include forward looking statements and opinions statements. These include statements regarding our plans and expectations relating to regulatory clearance, including the process timelines and expected outcomes, for commercial, operational, scientific, clinical and financial projection, products including the uses, benefits and applications of such products, our commercial and regulatory strategies, the impact of the Covid-19 pandemic 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-Q filed May 11, 2020 with the SEC. Our SEC filings can be found through our website or at the SEC's website. Investors are cautioned not to place undue reliance on 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 of our Investor Relations page. With that, I would now like to turn the call over to President and Chief Executive Officer, Darrin Uecker.

Good afternoon. Thank you everyone for joining us today. This afternoon we look forward to providing you with an update on all the recent progress made by our team at Pulse Biosciences. But before we begin, and it is important for me to recognize the ongoing impacts of the Covid-19 pandemic outside our business. First, I'd like to thank all the frontline healthcare workers for their continued bravery and unwavering commitment to patient care. Our thoughts are with everyone who has been affected by this virus. It is clear at this point that the pandemic will persist in our communities for some time, and we all must continue to be vigilant in our efforts to protect those around us. The health and safety of our employees remains our top priority, and we are taking every precaution to ensure we create the safest workplace possible while observing all local and state health department regulations and guidelines. With that, as so many have experienced disruption in their day to day lives the pandemic has had an impact in our business as well. However, we are fortunate that today these issues have not been significant. And we have maintained our full workforce as we work through these challenging times. From the onset of these uncertain times, internally, we have relied on clear and concise communication of our objectives to maximize our productivity. The responsible attitude of our company, our single location and our current state of internal focus have been beneficial as we navigate the current landscape with the intention of bringing about improved conditions. Amid these unique circumstances, we remain excited about the opportunity ahead and confident, we can execute our growth strategy over our next phase of growth. We remain focused on achieving regulatory clearances and continued progress towards commercialization of…

Thanks Darrin. I will begin by sharing new marketing research on the continued business recovery in aesthetic dermatology practices on our target customer. As I resume, there are elective procedures who are navigating COVID-19 patients and staff safety measures. Next, I will highlight recent additions to our ever-expanding foundation of clinical events presented and published regarding the successful use of NCS technology on various difficult to clear skin issues. And describe our continued engagement with the scientific community as this important new research is being published in peer to peer science. Starting with our new marketing research regarding the continued recovery aesthetic procedure market as patients continue to demand these services. Compared to the same marketing research fielded in May, our newest market research shows clear trends of both increases in current procedure volumes compared to last May and more bullish projections of a continued recovery over the next six months. Back in May, survey aesthetic procedure offices were operating at less than 50% of capacity including almost complete elimination of elective aesthetic procedures due to COVID concerns and constraints. In the most recent July survey, the majority of dermatologists reported that patient procedure volumes have been restored to 50% or more of normal levels and the majority of practices have now opened our office to elective procedures. Regarding expectations for the future of patient volumes, the majority of physicians continue to predict, will take about six more months to return to normal procedure volumes. Taken as a whole, this new marketing research represents encouraging signs of the aesthetic specialty position is properly implementing prudent COVID safety guidelines and that patient confidence in those safety measures is being reflected with a growing backlog of future appointments for aesthetic procedures. Again, these new marketing research findings all point to growing on…

Thank you, Ed. For the second quarter of 2020, operating expenses were $11.4 million, compared to $11.6 million for the prior year period. Decreases in research and development costs were partially offset by increases in general and administrative costs. Operating expenses for the three months ended June 30, 2020, included $2.4 million of non-cash stock-based compensation versus $2.7 million in the year ago period. General and administrative expenses consist of salaries and related employee expenses for executives, sales and marketing, finance, legal, human resources, information technology and administrative personnel, as well as professional fees, patent fees and costs, insurance costs and other general corporate expenses. General and administrative expenses increased by approximately $200,000 to $5.3 million for the three months period ended June 30, 2020, from $5.1 million during the same period in 2019 primarily related to increase personnel from a year ago, offset by a reduction in marketing related outside service costs. Research and Development expenses consists of salaries and related expenses for manufacturing, research and development personnel, as well as clinical trials and consulting costs related to the design, development and enhancement of our potential future product. Research and development expenses decreased by $0.4 million to $5.9 million for the three-month period ended June 30, 2020, from $6.3 million during the same period in 2019, primarily due to reduced clinical trial expenses and development costs associated with the CellFX System. Net loss for the second quarter ended June 30, 2020, was $11.3 million, compared to $11.4 million for the second quarter ended June 30, 2019. Excluding the net proceeds of the rights offering received in the three months ended June 30th. Cash used in the second quarter totaled $7.9 million. Cash, cash equivalents and investments totaled $37.8 million as of June 30, 2020, compared to $15.9 million as…

Thank you, Sandy. To conclude, amid the challenging circumstances created by COVID-19, we persisted and had a very productive quarter at Pulse Biosciences. We have adapted our operations to prioritize the safety of our employees while maintaining our driven and collaborative culture. We are progressing in the CellFX System along multiple regulatory paths for multiple indications with FDA, the CE Mark and Canadian approval. To reiterate our upcoming milestones, we expect to submit our 510(k) for a general dermatologic indication within the next 60 to 90 day. Starting our SH comparative study to support a specific indication in the U.S., which we expect to begin in early Q4. Working with our notified body towards completion of the review process for the CE Mark, which we expect to occur in quarter one 2021. And a Health Canada approval expected in the first half of 2021. At the same time, engagement with the scientific community albeit through new mediums like digital platforms and virtual events remains high. Recent programs have featured many positive investigational studies regarding our Nano-Pulse Stimulation technology. We and key opinion leaders in the space continue to support our technology and educate other dermatologists on its variety of benefits. Again, I would like to thank our employees for their dedication and commitment to our progress over these trying past few months. All of your efforts are appreciated. Through a continued strong collaborative effort, we are confident we will be able to execute our strategy throughout the coming months and achieve approval for our CellFX System. We are excited about the potential benefits NPS will provide to patients and clinicians across various unmet needs. We look forward to providing you updates in the future. Before we move into Q&A, I would like to welcome Richard van den Broek to our Board of Directors. We are very excited about the experience and leadership he brings to the company. Joining me for Q&A is at Ed Ebbers, Executive Vice President and General Manager of Dermatology; and Sandy Gardiner, Executive Vice President and Chief Financial Officer. Operator, let's open the call for question.

Thank you. We will now begin the question-and-answer session. [Operator instructions] The first question today will come from Sean Kang with H.C. Wainwright. Please go ahead.

Hi. This is Sean Kang of HC. First of all, congrats on your progress you made in this quarter. Did I hear correctly did you say you are expecting single U.S. regulatory approval in late '20 or early 1Q '21, is that correct?

Yeah. That's correct. Yeah. For the general dermatological indication, so we've made very good progress throughout the last quarter on our GLP study. And as we mentioned, completing all treatments, we expect to submit the 510(k) in the next 60 to 90 days. At that point, it is on FDA's review cycle. And as I'm sure FDA operates on a basically a 90-day review period. And so, we're optimistic that because FDA is very familiar with the CellFX System, and very familiar with the GLP study based on our pre-submission or cu-sub meeting that we had. The review will go very efficiently. So, that will put us we think, end of year, December 2020, or just into the first quarter of 2021.

I see. Thank you. So, I have a follow up question regarding your commercialization plan. Since, due to the pandemic - considering the pandemic impact on volume right now. Would you be waiting for the additional indication to get approved than you start commercializing your product? Or would you do the product launch right away?

Yeah. That's a good question, Sean. So, I think we're very optimistic about being able to launch commercially as soon as we get an FDA clearance. And as you kind of heard, as speak about in its prepared comments. We're in very close contact with many of the KOLs in the systematic derm space. We've done a number of surveys of their practices to kind of understand where they're at today, and where they think they're going to be at in the coming months given COVID-19. So our current plan is to launch as soon as we are able, meaning as soon as we get a clearance from FDA. Now, that being said things can certainly change in the environment. But I think our physicians are optimistic that their practices are going to continue to go strong in the back half of the year and early into next year. And we're going to be prepared to deliver the CellFX at that time.

I see. Thank you very much. It's very helpful. Just last question, could you just provide general commentary on operating expenses for the second half and then maybe on cash run rate?

Sure. So our cash utilization for the quarter was just under $8 million - $7.9 million. The expenses that you see for the both the three months ended and actually the first half of the year, we do expect to stay at that run rate for the balance of the year. There are some reductions that we were able to see in this in this specific quarter, largely due to COVID-19, for instance, travel related expenses were slightly down. But these weren't material types of expenses. So if we look forward, in terms of the first of all, the first half year, cash utilization was $17.4 million. And just looking at the back half of the year, we expect it to be as I said on the same run rate, so really ending the year with total cash utilization in the $34 million to $35 million range.

Thank you very much. That's all I have for now. Thank you.

Thanks, Sean.

[Operator Instructions] The next question will come from Mike [Indiscernible], private investor. Please go ahead.

Hi, congrats on what seemed to be a productive quarter during challenging times. First question strategically, is seems like you have pretty robust data on SK. So, assuming you get the general 510(k) approval, what's the logic on doing a comparative study on your most robust indication as oppose to something hasn't not been explored as much.

Yeah, that's a good question Mike. So I think we may be touched on this a little bit on our last call. But the strategy of basically to first - and this is something that we have been in close communication with FDA. So, its first, like the general indication like you suggested and then pursue specific indications. And so the reason to pursue specific indication in SH is, we think two things, one is, very high clinical unmet need for SH in the markets today and so therefore something that we're going want to be able to market to directly and allow physicians to market to their patients. And so, in order to do that the best way to do that is to have a specific indication for it which will do two things, one it will enable us to generate additional very good data. But also then provide that data and various marketing materials to physicians so they can market directly to their patients. And so, we feel that that is - that will be an important contributor to us being able to expand the market in something like SH. And so, our first efforts really to talk FDA about what that comparative trial would look like based on feedback that we've gotten from them previously on doing a comparative trial. And so now we think based on the formal meeting we had, we have really good guidance along those or along the lines of that study design that will lead to a specific indication and we think that it is a framework for indications to follow. So as much as we're leading with SH, our plan is to go very quick after another - a number of other indications now that we sort of have good, I think a good framework with FDA on how these studies need to be executed.

Okay, thank you. And just to clarify, you upon the general formulae, you could be treating SK and SH or just via the doctor's discussion with less clinical data?

Yes. That's exactly right, so it will be a general dermatologic indication for which physicians have the ability to treat various things of their choosing. It doesn't give us the flexibility or ability to market directly to those indications and so doing that additional clinical work and through the FDA will give us that ability.

Thank you. And my last question is…

No way it's [Indiscernible].

Got it.

Sorry. Go ahead.

On the IDE, is there any other regulatory requirement so these sites have been able to use the device there in itself before an approval?

I am sorry maybe I - I am not sure I understood the question. The IDE is for the purposes of executing the SH study. And so once FDA gives us approval for that that gives us the go ahead to execute that study in the U.S.

Okay, so there is no another exemption from regulatory requirement other than just allowing you to do that, potentially? A - Darrin Uecker Yeah, that's correct.

Thank you very much.

All right. Thank you.

At this time, there are no further questions in the queue and this will conclude today's question-answer session. I would now like to turn the conference back over to management for any closing remarks.

Thank you everybody for joining us on our second quarter 2020 call. We look forward to updating you in the future.

The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.