Mr. Arun Menawat reports

ROFOUND MEDICAL ANNOUNCES FIRST QUARTER 2024 FINANCIAL RESULTS AND ISSUES FULL-YEAR 2024 REVENUE GUIDANCE

Profound Medical Corp. has released financial results for the first quarter ended March 31, 2024, and provided full-year 2024 revenue guidance. Unless specified otherwise, all amounts in this press release are expressed in U.S. dollars and are presented in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Business Highlights

• The Tulsa-Pro systems installed base grew from 47 at the end of 2023 to 53 as of the end of Q1-2024; Profound continues to expect that to grow to 75 Tulsa-Pro systems this year.
• Profound continued to see a wide variety of prostate disease patients treated by its Tulsa-Pro customers in the first quarter of 2024:
  • Approximately 71% were treated for prostate cancer, 21% were hybrid patients suffering from both prostate cancer and benign prostatic hyperplasia ("BPH"), 6% were salvage, and 2% were men with BPH only;
  • For cancer grade, approximately 15% were GG1, 47% were GG2, 27% were GG3, and 13% were GG4 & GG5;
  • In terms of ablation, approximately 53% were whole gland; 26% were sub-total but more than half the gland; 10% were hemi-ablations; and 12% were focal therapy; and
  • For prostate size, approximately 4% were < 20cc; 29% were 20 - 40cc; 40% were 40-60cc; 23% were 60-100cc; and 4% were over 100cc.
• Profound's next TULSA AI module, Contouring Assistant, which has been designed to enable the creation of a suggested treatment design based upon the specific prostate anatomy of each patient, is currently under U.S. Food and Drug Administration (FDA) review.
• In or around late-July 2024, the Company anticipates that the U.S. Centers for Medicare & Medicaid Services (CMS) will issue its proposed outpatient prospective payment system (OPPS) reimbursement rule for the three new CPT Category 1 codes and their descriptors covering the TULSA procedure, with the final rule anticipated in November 2024, which will become effective on January 1, 2025.
• The ongoing Level 1 CAPTAIN trial comparing the TULSA procedure to radical prostatectomy in men with localized prostate cancer remains on track to complete patient enrollment by the end of this year.
• Earlier this week, Profound announced that 25 TULSA-related scientific research presentations have already been delivered at major medical meetings around the world thus far in 2024.
• Today, the Company is providing annual revenue guidance for the first time.

"Concurrent with growing awareness of the TULSA procedure's potential to become a mainstream treatment modality for prostate disease among urologists via our sales, marketing and clinical education programs, our preparations continue for the permanent CPT Category 1 codes for TULSA going into effect at the beginning of 2025," said Arun Menawat, Profound's CEO and Chairman. "As we continue to advance toward what we anticipate will be a major inflection point for our business, we believe that we now have sufficient visibility into the pace of TULSA adoption ahead of it, both in terms of existing system utilization and installed base growth, to initiate full-year revenue guidance."

Summary First Quarter 2024 Results

For the quarter ended March 31, 2024, the Company recorded revenue of approximately $1.91 million, with $1.48 million from recurring revenue, which consists of the sale of Tulsa-Pro consumables, lease of medical devices, procedures and services associated with extended warranties, and $428,000 for one-time sale of capital equipment. First quarter 2024 revenue increased approximately 3% from $1.86 million in the same three-month period a year ago.

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 $8.8 million in the first quarter of 2024, an increase of 9% compared with approximately $8.1 million in the first quarter of 2023.

Expenditures for R&D for the three months ended March 31, 2024 were approximately $3.9 million, an increase of 2% compared with approximately $3.8 million in the three months ended March 31, 2023, primarily driven by improved enrollment for the CAPTAIN trial and recruitment efforts, additional travel associated with system installation and clinical trials, and increased software costs associated with thermal boost and artificial intelligence development software. Partially offsetting these amounts was a decrease in rent due to lower MRI time usage and a decrease in share-based compensation due to fewer awards granted to employees.

G&A expenses for the 2024 first quarter increased by 13% to approximately $2.4 million, compared with approximately $2.1 million in the same period in 2023. Salaries and benefits, consulting fees and travel increased due to higher cost of living salary increases, increased legal and accounting fees, and increased travel for investor relations and conferences. Partially offsetting this was a decrease to insurance expense due to lower premium rates and a decrease to general office expenses.

First quarter 2024 S&D expenses increased by 15% to approximately $2.4 million, compared with $2.1 million in the first quarter of 2023. This was driven by increases in salaries and benefits, consulting fees, and marketing and travel expenses due to increased salesforce and commission payments, consultants engaged to assist with Veteran Affairs and military sales markets, release of commercial segments and marketing advertisement campaigns, and increased in-person conferences and customer meetings. These were partially offset by a decrease in share-based compensation due to fewer awards granted to employees.

Net finance income for the three months ended March 31, 2024 was approximately $1.3 million, compared with approximately $145,000 in the three months ended March 31, 2023.

First quarter 2024 net loss was approximately $6.2 million, or $0.26 per common share, compared to approximately $6.7 million, or $0.32 per common share, in the three months ended March 31, 2023.

2024 Financial Outlook

Based on the Company's current business planning and budgeting activities, it expects total revenue for full-year 2024 to be in the range of $11.0 million to $12.0 million, which represents 53% to 67% growth compared to its prior year revenue.

Liquidity and Outstanding Share Capital

As at March 31, 2024, Profound had cash of approximately $41.2 million.

As at May 9, 2024, Profound had 24,428,899 common shares issued and outstanding.

For complete financial results, please see Profound's filings at www.sedarplus.ca, www.sec.gov and on the Company's website at www.profoundmedical.com 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 pm ET during which time the results will be discussed.

To participate in the conference call by telephone, please pre-register via this link to receive the dial-in number and your unique PIN. The call will also be broadcast live and archived on the Company's website at www.profoundmedical.com 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.