Hello everyone, thank you for joining us and welcome to CapsoVision 3rd Quarter 2026 Earnings Conference Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Lee Salvo, Investor Relations. Please go ahead.

Thank you, Operator. Good afternoon, everyone, and thank you for joining us for Capital Vision's Third Quarter 2026 Earnings Call. Joining me today are Johnny Wong, President and Chief Executive Officer, and Senior Vice President of Finance, David Garcia, as well as Doug Atkinson, Senior Vice President of Sales. Before we begin, please remember that today's remarks include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events or results could differ materially due to a number of risks and uncertainties included those mentioned in the most recent Form 10-Q filed by us with the SEC. These forward-looking statements speak only as to the date of this call, and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based. Thank you, Dee. And good afternoon, everyone.

The third quarter was an important period for CapsuleVision. We achieved a major regulatory milestone with FDA clearance of AI highlights for CapsuleCAM+. Completed enrollment for the clinical study supporting our planned CapsuleCAM colon submission and strengthened our balance sheet within $18 million reaches the direct offering. Together, these accomplishments position us to advance our near-term commercial priorities while continuing to invest in the broader potential for our capsule endoscopy platform. Our progress underscores the strength of our team, our technology, and the opportunity ahead. With AI highlights cleared in the U.S., our second-generation colon capsule is advancing toward FDA submission. and continued progress in our pancreatic cancer trial. We are expanding what our platform can deliver to physicians and patients, bringing us closer to our long-term vision of identifying disease at its earliest, often pre-cancerous, stages, when intervention has the greatest potential to prevent cancer from developing. Let me start with AI highlights which received FDA clearance on September 25th and officially launched in the US on November 2nd. This is a major achievement for CapsuleVision and the one that we believe meaningfully strengthens our position in small bowel capsule endoscopy. Our CapsuleCan Plus capsule already offers a distinctive foundation for cameras providing a 360-degree panoramic view of the small bowel. This view allows physicians to see areas, including the inner curves, at every turning point of the small bowel. That may be missed by traditional forward-facing capsule technology. We believe combining this imaging capability with our proprietary AI creates an especially compelling solution. AI Highlights builds on that advantage by helping physicians quickly identify images with suspected abnormalities. Importantly, our testing has shown that AI-assisted review can significantly reduce reading time and improve detection accuracy compared with manual review. For physicians, that means a more efficient review process More accurate review and additional label of diagnostic confidence We are also focused on making the rating and the reporting process as simple and intuitive as possible We believe this combination sets our platform apart from competitive solutions No other mobile capsule on the market offers a comparable full camera 360-degree panoramic view together with FDA-cleared AI-assisted review. CapsuleCam Plus is also the only mobile capsule with AI-cleared for pediatric patients as young as two years old. These advantages give physicians a differentiated imaging and review platform and expense the patients who can benefit from our technology. Our priority now is ongoing physician education, custom onboarding, and helping practices evaluate AI highlights in their workflows. Our team also recently attended the American College of Gastroenterology's annual meeting in Nashville, where we had an excellent opportunity to showcase AI highlights to the GI community. The response from physicians was extremely encouraging, with many expressing enthusiasm about the faster, more accurate review, and an eagerness to begin using the technology in their practices. In short, our approach brings together the panoramic imaging of CapsuleCam+, AI highlights within CapsuleView, and the flexibility of CapsuleCloud. Together, these technologies provide more complete visualization of the small ball, faster and more accurate video review, and the ability for physicians to review study anytime, anywhere. And because our platform is fully cloud-based, there is no need for providers to install or maintain on-site servers or IT infrastructure. We believe these advantages set CapsuleVision apart from competitive solutions and can support broader adoption over time. Turning to CapsuleCanColon, we completed enrollment and data collection, including physician reading of capsule videos with and without AI assistance for the clinical study supporting our planned FDA submission. This is a significant milestone and the culmination of extensive clinical engineering and regulatory work. I want to make a moment to recognize the tremendous dedication and hard work of our team, whose commitment and perseverance have been instrumental in getting us to this point. I am proud of what we have accomplished together. We remain on track for submitting before year-end 2026. Our second-generation colon platform is designed to bring the advantages of panoramic imaging and AI-assisted review to a much larger market. Based on our estimates, the initial U.S. annual addressable market for patients at higher risk from colonoscopy, all those with an incomplete procedure is approximately $1 billion. And longer term, the scale of the colon opportunity has the potential to address a market estimated to be over $10 billion, which is spending with the recommendation for routine colon cancer screening dropping from 50 to 45 years old. We continue to expand the clinical footprint of the Capsule Can UGI Study for Pancreatic Cancer Detection. Building on the current two active community-based clinical sites, site activation is advancing over a dozen large volume centers with pancreatic cancer expertise, establishing a foundation to accelerate clinical enrollment. This remains an early-stage program, but we believe it illustrates the breadth of potential applications for our imaging platform. Finally, in mid-September, we completed an $18 million registered direct offering with several existing shareholders. We appreciate their continued support and commitment to our strategy. This financing provides additional resources to support the AI rollout plan the colon submission and ongoing clinical development. Dave will provide more detail on our cash position shortly. Our focus is clear, execute the AI launch, convert the customer interest into adoption, complete the colon regulatory submission, and continue advancing our broader pipeline. We start. I will turn the call over to Dave.

Thank you, Johnny. Starting with our commercial performance, the third quarter reflected a competitive pricing environment in the U.S. for small bowel capsule endoscopy, even as we continued to make progress in expanding our customer base. During the third quarter, we shipped 8,464 CapsoCam Plus capsules compared to 8,336 in Q3 of 2025. Today, our technology is protected by 85 issued U.S. patents reinforcing our strong foundation in IP and clinical innovation. We added several new accounts with particularly encouraging activity in pediatric practices and larger gastroenterology and hospital networks such as Carilion Health Systems, Methodist Hospital Systems, and additional locations within GastroHealth and Kaiser Permanente. In total, we closed 34 new accounts, including 9 hospital systems, 4 pediatric hospital clinics, and 21 adult GI clinics. We view new account additions and physician engagement as being important leading indicators as commercial gains ultimately signal stronger revenue performance. As of September 30th, 2026, CapsoCam Plus for small bowel screening has been used by more than 184,000 patients compared to 151,000 a year ago across the U.S. and internationally. AI highlights for small bowel officially launched in the U.S. on November 2nd. We believe it gives our sales team a powerful new way to demonstrate the clinical and workflow value of CapsoCam Plus. including reading efficiency, accuracy, and additional diagnostic confidence. We are prioritizing physician education, customer onboarding, and opportunities for customers to evaluate our solution against competitive alternatives. Turning to our financial results, third quarter revenue was $3.6 million. compared with $3.5 million in the third quarter of 2025. A change of 1% and average selling price was stable year over year. Gross profit was $1.8 million compared with $1.9 million in the prior year quarter. Gross margin was 49% compared with 54% last year. Gross margin in the quarter was impacted by higher material costs due to increasing prices of flash memory a one-time charge for inventory obsolescence and higher stock-based compensation expense. Operating expenses were $9.1 million compared with $9.9 million in the third quarter of 2025, reflecting continued expense management while supporting our clinical and development programs, including the CapsuCam colon pivotal study. With the study now complete, we expect our associated clinical expenses to decrease providing an opportunity for a further operating expense decline as we continue advancing our broader product pipeline. Net loss was $7.3 million, or $0.15 a share, compared with a net loss of $7.9 million, or $0.17 per share, in the prior year period. We ended September 30th with $21.8 million in cash and cash equivalents. which included proceeds from a registered direct offering with existing shareholders that closed on September 18th and generated net proceeds of approximately $17.8 million. This capital strengthens our balance sheet and extends our expected cash runway. We also utilized our ATM facility established earlier this year during Q3. We sold 276,446 shares under the ATM for net proceeds of $1.7 million. The ATM provides additional financing flexibility, although any use will depend on market conditions and the needs of the business. As we approach year-end, Our commercial priorities center on supporting the November 2nd U.S. launch of AI Highlights, expanding adoption across new and existing accounts, and building on the customer relationships established during the year. We believe our combination of panoramic imaging integrated AI and cloud-connected workflow can strengthen our competitive position over time. At the same time, we remain focused on disciplined deployment of capital to support our planned CAPSO-CAM colon FDA submission and continued development of our product pipeline. Consistent with our expectations from last quarter, we believe revenue in the second half of 2026 will be higher than the first half as adoption of our CAPSO-CAM plus solution expands. With the AI highlights launched earlier this month, we expect sales of CapsuleCam Plus to accelerate with the full impact realized in 2027. With that, I'll turn the call back to Johnny for closing remarks.

Thanks, Dave. I want to close by emphasizing what these milestones mean for CapsuleVision. We now have FDA-cleared AI highlights to complement our full-camera, 360-degree small-ball imaging platform. We have completed the clinical study data collection for Capsule CanColon, including physician reading of the capsule videos, both with and without AI assistance, and are preparing for its FDA submission. In addition, we continue to advance our longer-term pancreatic cancer program, as well as plan to commence our Dysophageal Viruses trial in the second half of next year. Each of these initiatives builds on the same core imaging and software capabilities and can be sold through the same sales infrastructure. With AI highlights now launched in the U.S., we believe we can offer physicians faster, more accurate review and an additional level of diagnostic confidence. While our calling program represents an opportunity to expand into a substantially larger market over time, the $18 million financing and use of our ATM facility also provide additional resources to pursue these priorities. Our focus now is on driving adoption of AI highlights, delivering a strong calling submission, and building the foundation for durable growth. We remain committed to building an integrated AI-enabled capsule platform that can help physicians address a broader range of gastrointestinal diseases through more accessible patient-friendly diagnostics. With that, Dave, Doug, and I would be happy to take your questions. Operator, please open the line.

Thank you. We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from Kyle Bowser with Titan Partners. Please go ahead.

Hi, everyone. Congrats on all the recent updates here. Maybe I'll start on the AI highlights, obviously in the EU and now US. I know it's early in the US, but any early feedback from providers that It's a learning curve for AI highlights, pretty straightforward. I guess just any thoughts that you're getting from the field would be great.

Yeah, thanks, Kyle. This is Doug Atkinson. So far, internationally, we have received very positive feedback from our customer base. We are actively working on with two of our gastroenterologists to show the effects AI highlights has on Read Times, and that is something we look at presenting at UEG in 2027. You're right, in the U.S., we just launched on November 2nd, but with that being said, we made it immediately available to every single physician, and we have received feedback from those physicians on the benefits of AI highlights, not only in the reading time, but also the accuracy of AI highlights. And Just to share one example I've received from one of our doctors was he read both. He was notified of the AI highlights on Capsule Cloud. He then went in to read the video, read it without AI highlights, and then read it with AI highlights. And when he read the study without the AI-assisted software, He missed two AVMs, two critical areas of pathology that he thought it was a normal study. And then when he read it with AI, it did capture two AVMs, which are arterial venous malformations. So it's very positive so far. A little early to tell, but the feedback received from our customer base has been very positive.

Really interesting call there. Thanks, Doug. and then maybe I'll switch over to the colon application and OpEx. Can you talk a little bit about what the remaining steps are before you submit that application and then now that that study is completed, OpEx came down nicely in the quarter, how should we think about R&D in particular moving forward?

Collins, we have collected all the data for colonoscopy and capsule video reading with and without AI. So all the data has been collected and frozen. Data has been frozen and the statistician has been working on those data to get the top line data, which is the most important are our primary endpoints, showcasing how good our colon capsule is. So that is a very exciting moment. And then after statisticians get all these numbers, primary endpoint, secondary endpoint, and exploratory endpoint, we are ready to draft the submission, to submit. It's a very exciting moment. Thank you.

Our next question comes from Kevin Holder with Roth Capital Partners. Please go ahead.

Hi, good afternoon, everyone, and congrats on all the updates here. Maybe just to start off, congrats on some of these bigger contract renewals with pediatric health systems and some of these larger hospital systems. I'm just curious, what is the mix of your revenue now in terms of these larger hospital health systems versus the traditional GI clinics? And once you win a contract, how long does it typically take for a hospital or a health system and the GI clinic to fully ramp?

Great question, Kevin. Right now, our mix is probably around 65, 35, 65% being the GI clinic-based, 35% being the hospital system. However, we see the hospital system continue to grow very rapidly in 2026 over a prior year. With the GPO contracts in place, we have a number of contracts – already CapsaVision signed with some of the largest purchasing groups. But when a new contract is signed and we just recently signed one, the way that operates is usually we have a date identified when we would begin selling within that institution. And then we would go in and train the customer base. They would purchase product. and we would actively then start doing procedures. In some cases, it may be delayed where we will allow a customer to use up any competitive inventory that they may have on hand to use that up before implementing the CapsoCam Plus small valve system in their facility. So, you know, it moves fairly quickly and then you really start realizing revenue with many of the institutions on the day that you had the contract when the contract goes into full effect. So yeah, it's an ongoing process and as accounts join, one by one, it accumulates the overall profitability and revenue for the company.

That's very helpful, Doug. Thank you for that. Then second one for me, maybe just kind of going back to AI highlights. I know you said that you'll really see the impact in 2027. How should we be thinking about the cadence of capsule camo plus adoption throughout 2027? I know it's a little early, but any early indications you have there?

Yeah, and as we said during our last earnings call, we have many large customers and health systems that have been waiting for AI highlights to be approved by the FDA and available for their use, rather than evaluating the CapsuleCam Plus versus a competitive system. They didn't want to have to do it twice. With AI highlights now available, we are seeing that invitation or door open to go into these competitive facilities and have them utilize our system. Again, it's early to realize that, but I can say from November 2nd, when we did go live with the product, the feedback has been extremely positive. And Just to reiterate, the benefits of the AI highlights are the three key areas are the reading time significantly decreased compared to reading without any type of AI physician-assisted software. The number two is it builds accuracy, diagnostic accuracy, to ensure the physician's going to capture that pathology that he may have missed without the AI software. And most importantly, it's going to build that confidence. that true confidence. And that's what you want with a product. And we believe we hit all three key points that you need to have a successful product and a successful launch with this new software.

Your next question comes from Bruce Jackson with StoneX. Please go ahead.

Hi, good afternoon. Thanks for taking my questions. Just wanted to ask a couple of questions about the second-gen colon cam. So you're assembling the data right now for the FDA submission. What is your thinking in terms of when that data might be available to look at publicly, and is it going to be maybe in conjunction with a medical meeting?

So we are confident that the data will be available next month. But whether to share it publicly, we would like to have an internal meeting with Doug and Dave, as well as we also want to touch base with our legal counsel. But all I can say is it's an exciting moment. Thank you.

Okay. Fair enough. And then the other question about the second-gen platform, Is the AI component going to have the same interface as the current AI Highlights product? Is it going to have a unified user interface? Will it be easy for doctors to pick up on using the second-gen colon cam with the AI Highlights?

That's a good question. You are right. They are based on the same platform, just transparent. and it's also patent protected as you asked the last time. Thank you.

Okay. Thank you. That's it for me.

Again, if you would like to ask a question, please press star 1. There are no further questions at this time, and this concludes today's call. Thank you for attending. You may now disconnect.