CapsoVision, Inc. Common Stock LD Micro 20th Annual Main Event Conference

Thank you. Thank you, guys.

Thank you. I love this. Thanks. Thank you. Never seen it, believe me. Yeah. Good to go. Okay, so first, just to say that a lot of this presentation has forward-looking statements, and actual results may differ due to risks and uncertainties in our SEC filings. Now that that's out of the way, I'd like to introduce the team up here. Myself, I'm David Garcia, the Senior VP of Finance. Johnny Wang, our CEO and Co-Founder of the company, and Doug Atkinson, Senior Vice President of Sales. Our mission is simple, yet powerful, and that is to have a single capsule that you swallow and ingest and can screen for five of the 10 deadliest cancers in the world. This capsule would screen for esophageal, gastric, pancreatic, liver, and colon cancer, all in one capsule.

Through using the AI on the images that it takes, it could detect precancerous lesions before they become deadly cancers. So a little about the company. We are a commercially medical stage company. We have revenue of $3.6 million in Q2. We have 85 U.S.-issued patents, and we were just cleared for small bowel AI last month. Before that, we were FDA cleared for use of small bowel indication for the capsule. In the future, we have a robust pipeline that includes colon, pancreatic, and esophageal. So that's a summary. With that, I'll go ahead and just turn it over to Doug.

Thank you, David. David, if you wouldn't mind, if you could just hand the capsule to Lee, and she'll give everyone an opportunity to look at this very unique technology. What you'll notice first about the capsule is that it has four cameras. We're very unique compared to our competitors, and truly compared to a flex scope, an optical scope that a gastroenterologist or a general surgeon may use. We have four cameras inside our capsule, but they're placed laterally, one looking north, south, east, and west to capture a 360-degree view. It's not that we're just like a scope, but we're mimicking a scope, because a scope, a gastroenterologist or general surgeon can articulate.

When they take that scope and they insert it through the rectum to look at the colon, or they go ahead and insert it down the patient's esophagus into the gastric area and then through the pylorus into the duodenum, they will flex that scope and turn it at a 90 degree. We are mimicking that same approach. Why is that? Because you can't control a capsule like you can control a scope. That is what we're trying to identify here, and I want to make sure everyone captures that during this session, because it's very important as we explain our technology. We clearly have a better visualization than our competition, that we compete against companies like Medtronic, and we are fighting with them primarily in the small bowel market, where we have a true revenue stream.

The capsule's clearly shown, since we've been on the market, to have a superiority. With the battery life, clearly in today's age with GLP-1s, you have the ability to have successful diagnostic screening rates. Our capsule has a 98% success rate in reaching the cecum right now with our small bowel capsule versus our competition, which is 84%. With the incorporation of AI, which we'll talk about as well, is just improving the overall sensitivity and specificity of the product as well. The capsule itself is also all the technologies built inside the capsule. There's no external equipment on the patient. There's no data recorders, there's no sensor arrays. It's just the patient swallows the capsule. This is very unique, and we'll explore it some more. The image quality is different.

This is an image of what our competition looks like, or what we call a lumen view. The top image is what the CapsoCam brings to the clinician, and it's a panoramic view. So we're taking that 360 and then laying it out in a panoramic image. As we move left to right, would be all four cameras stitched and blended together to create a video. This is very important and seeing everything within the small bowel, because AI doesn't work with what you can't see, right? That's the ampulla. We see that. Not that it's clinically important to a clinician, but everyone has one. It's what we call a landmark. So we see that ampulla 80% of the time versus the lower image, which sees it 10% of the time.

It goes back to, again, what I stated, AI only works with what you can see. David talked about the revenue stream. We do have a strong revenue stream right now and a proven technology within the U.S. and international markets. The capsule itself is for small bowel that we're selling right now. We currently just finished up with a very big pivotal study with our colon capsule, which just closed out in August, and we'll be submitting that data in November. The small bowel capsule is an incredible market. The upper GI market by 2030 is going to be about $335 million in total. It's growing, which is positive.

Currently, the product is being used for looking for bleeds in the small bowel or gastric area, Crohn's disease, celiac disease, tumor masses, diverticula, or anything else that might be obscure within the small bowel that's causing issues for the patient. It's a growing market and one that we're selling in right now. We incorporate our sales force into it and how we sell the product. We currently have a direct sales force in the United States and a direct sales force in Germany. Outside of that, we use a best-in-class team of distributors throughout the world selling into 69 countries. What I want you to take away from this, too, is the additional technologies we bring to market. It's the same call point. We don't need, when we have our colon capsule, we don't need to hire a brand new sales force to sell that product.

It's going to be the same sales team. We will grow that sales team where needed. I'll work with David on that. We have an established sales force to sell right now. We have contracts with many of the largest group purchasing organizations around the country, groups like Premier, Vizient. We also work very closely with the largest HMO providers such as Kaiser Permanente, which we are their primary modality used for small bowel diagnostic. It's great to see the growth and acceptance of our product so early. Detecting and screening the colon market is a huge opportunity for us. As I mentioned, we're selling at about a $335 million market by 2030. The colon screening market is $17.8 billion.

It's a huge leapfrog from where we are now into this market and what's, I think, and what many of our investors believe is so attractive about CapsoVision. The colon market is huge, and we see an opportunity there with a colon capsule because what we've incorporated into our capsule with additional technology is the ability to measure polyps with a 3D sensor, identify where those adenomas are, flat lesions, spiral lesions. Where are they in the colon? Your colon is broken into three areas, an ascending colon, which comes back up through your heart, a transverse colon moving from right to left, and then the descending colon moving out through the rectum for discharge. Looking at that with a capsule is extremely important.

We believe we have the same type of opportunity within the colon space, not only as a screening device, but also as a diagnostic tool for surveillance. A healthy patient that doesn't have polyps but needs to come back five years later, why do an optical colonoscopy? Because the cost of a colonoscopy may be in the neighborhood of around $3,500 to $5,000. They could take a colon capsule, which would be about $600, and then reimbursement is equal to what that GI physician would be receiving from the colonoscopy procedure. Let me break that down, what I mean by that. A colonoscopy, let's say, is $3,500. $1,200 of that colonoscopy cost is paying for the physician. There's other costs associated with that. Anesthesia. There's also the facility fees. There's also other costs that they can capture.