Mr. Arun Menawat reports

PROFOUND MEDICAL ANNOUNCES THIRD QUARTER 2023 FINANCIAL RESULTS

Profound Medical Corp. has released its financial results for the third quarter ended Sept. 30, 2023. Unless specified otherwise, all amounts in this news release are expressed in U.S. dollars and are presented in accordance with international financial reporting standards (IFRS) as issued by the International Accounting Standards Board applicable to the preparation of interim condensed consolidated financial statements, including International Accounting Standards 34, Interim Financial Reporting.

"As we have continued to prioritize our Tulsa-Pro commercial activities in the United States over sales of capital equipment in international markets the resulting strong recurring revenue trend, which correlates directly with the number of patients treated with Tulsa, continued with a 40-per-cent increase compared to Q3 2022, marking the sixth consecutive quarter of recurring revenue growth," said Arun Menawat, Profound's chief executive officer and chairman. "Receiving the U.S. Food and Drug Administration's 510 (k) clearance of our Tulsa AI thermal boost module was another key highlight of the quarter. This software module, which enables surgeons to temporarily increase the ablation target temperature to increase the likelihood of ablating aggressive cancer cells, has already been used by several Tulsa-Pro sites and the feedback has been very positive."

Summary third quarter 2023 results

For the quarter ended Sept. 30, 2023, the company recorded revenue of approximately $1.7-million, with the full amount coming from recurring revenue, which consists of the sale of Tulsa-Pro consumables, lease of medical devices, procedures and services associated with extended warranties. This compares with revenue of approximately $2.0-million in the same three-month period a year ago, which included $1.2-million in recurring revenue and $800,000 from the one-time sale of capital equipment in international markets.

Total operating expenses, which consist of research and development (R&D), general and administrative (G&A), and selling and distribution (S&D) expenses, were approximately $7.6-million in the third quarter of 2023, an 18-per-cent decrease from approximately $9.3-million in the third quarter of 2022.

Expenditures for R&D for the three months ended Sept. 30, 2023, were approximately $3.4-million, a decrease of 28 per cent compared with approximately $4.7-million in the three months ended Sept. 30, 2022, primarily due to: lower head count and reimbursement of work force costs associated with a research project; a decrease in share-based compensation due to fewer awards granted for employees; decreases in materials costs due the conclusion of engineering expenses; lower other expenses because of lower office supplies purchased; lower travel expenses as less time was required on site for maintenance and repairs; and a decrease in amortization expense due to intangible assets associated with the Sonalleve brand and technology being fully amortized. Partially offsetting these amounts was an increase in clinical trial costs associated with the Captain trial treatments and recruitment efforts; an increase in consulting fees due to regulatory consultants being utilized to assist with regulatory approvals in various countries.

G&A expenses for the 2023 third quarter decreased by 15 per cent to approximately $2.0-million, compared with approximately $2.4-million in the same period in 2022, due primarily to lower share-based compensation, software and other expenses due to fewer awards granted for employees, decreased licence costs for the enterprise resource planning and customer relationship management software, and lower office supplies purchased. These were partially offset by an increase in consulting fees due to additional legal costs.

Third quarter 2023 S&D expenses were approximately $2.2-million, down less than 1 per cent from the third quarter of 2022.

Net finance income for the three months ended Sept. 30, 2023, was approximately $1.0-million, compared with approximately $3.3-million in the three months ended Sept. 30, 2022.

Third quarter 2023 net loss was approximately $5.6-million, or 26 cents per common share, compared with approximately $5.0-million, or 24 cents per common share, in the three months ended Sept. 30, 2022.

Liquidity and outstanding share capital

As at Sept. 30, 2023, Profound had cash of approximately $33.6-million.

As at Nov. 2, 2023, Profound had 21,365,733 common shares issued and outstanding.

For complete financial results, please see Profound's filings on SEDAR+, on EDGAR and on the company's website under financial in the investors section.

Conference call details

Profound Medical is pleased to invite all interested parties to participate in a conference call today at 4:30 p.m. ET, during which time the results will be discussed.

To participate in the conference call by telephone, please preregister on-line to receive the dial-in number and your unique PIN (personal identification number). The call will also be broadcast live and archived on the company's website under webcasts in the Investors section.

About Profound Medical Corp.

Profound is a commercial-stage medical device company that develops and markets customizable, incision-free therapies for the ablation of diseased tissue.

Profound is commercializing Tulsa-Pro, a technology that combines real-time MRI, robotically driven transurethral ultrasound and closed-loop temperature feedback control. Tulsa-Pro is designed to provide customizable and predictable radiation-free ablation of a surgeon-defined prostate volume while actively protecting the urethra and rectum to help preserve the patient's natural functional abilities. Tulsa-Pro has the potential to be a flexible technology in customizable prostate ablation, including intermediate stage cancer, localized radio-recurrent cancer, retention and hematuria palliation in locally advanced prostate cancer, and the transition zone in large volume benign prostatic hyperplasia (BPH). Tulsa-Pro is CE marked, Health Canada approved, and 510(k) cleared by the U.S. Food and Drug Administration (FDA).

Profound is also commercializing Sonalleve, an innovative therapeutic platform that is CE marked for the treatment of uterine fibroids and palliative pain treatment of bone metastases. Sonalleve has also been approved by the China National Medical Products Administration for the non-invasive treatment of uterine fibroids and has FDA approval under a humanitarian device exemption for the treatment of osteoid osteoma. The company is in the early stages of exploring additional potential treatment markets for Sonalleve, where the technology has been shown to have clinical application, such as non-invasive ablation of abdominal cancers and hyperthermia for cancer therapy.

We seek Safe Harbor.