Perimeter Medical Imaging AI Reports 2020 Financial Results and Provides Corporate Update

Perimeter Medical Imaging AI, Inc. (TSX-V:PINK)(OTC:PYNKF) (FSE:4PC) (“Perimeter” or the “Company”), a medical technology company driven to transform cancer surgery with ultra-high-resolution, real-time, advanced imaging tools to address high unmet medical needs, today reported financial results for the year ended December 31, 2020 and provided a corporate update.

Jeremy Sobotta, Perimeter’s Chief Executive Officer stated, “In 2020, we achieved a number of key milestones, added to our leadership team, and created momentum that continues to build in 2021. The FDA’s recent 510(k) clearance for Perimeter S-Series OCT allows us to bring our commercial-ready imaging platform to the U.S. market, and sales development activities are underway. Importantly, we have a strong balance sheet that allows us to execute against our clinical development and commercialization plans as we strive to enable physicians to create better patient outcomes with lower healthcare costs.”

Mr. Sobotta added, “In addition, we have made significant progress with our ‘next-gen’ development work combining artificial intelligence tools with our OCT imaging system under the ATLAS AI project, which is funded, in part, by the Cancer Prevention and Research Institute of Texas. We believe the recent Breakthrough Device Designation from the FDA is further validation that Perimeter’s technology could provide significant advantages over existing alternatives for intra-operative evaluation of margins and has the potential to be a transformative, disruptive new technology that helps surgeons treat breast cancer. Looking ahead, we aim to initiate a randomized, multi-site, pivotal study this year to evaluate Perimeter OCT coupled with ImgAssist AI against the current standard of care and assess the impact on re-operation rates for patients undergoing breast conservation surgery.”

Corporate Highlights

• In February 2020, Perimeter was awarded a $7.4 million grant by the Cancer Prevention and Research Institute of Texas (“CPRIT”), a leading state body that funds cancer research, to support the development of Perimeter’s artificial intelligence software under the ATLAS AI project.
• In 2020, Perimeter announced the additions of Ian Mortimer, President and Chief Financial Officer of Xenon Pharmaceuticals Inc., and Aaron Davidson, CFO and Senior Vice President of Corporate Development of Profound Medical Inc. to its Board of Directors. The appointees bring key expertise in the areas of financial management, public company oversight, life sciences, and medical device technology development to the board.
• In September 2020, Perimeter added to its leadership team with the appointment of Steve Sapot as Chief Commercial Officer. A proven sales leader, Mr. Sapot led a capital sales team during his tenure at Faxitron that achieved an install base of thousands of new radiography systems in leading hospitals and breast cancer centers around the globe.
• Subsequent to year end, in March 2021, Perimeter completed the acceleration of certain share purchase warrants issued on June 29, 2020 and, since the Company’s third quarter results ending September 30, 2020, has received a total of approximately $8.3 million in proceeds from the exercise of approximately 4.3 million warrants.

Product and Clinical Development Updates

• On March 1, 2021, Perimeter announced that it had received 510(k) clearance from the U.S. Food and Drug Administration (FDA) for version 2.1 of the Perimeter S-Series OCT, enabling Perimeter to bring its commercial-ready imaging platform to the U.S. market. Previously referred to as “OTIS,” Perimeter S-Series OCT is indicated for use as an imaging tool in the evaluation of excised human tissue microstructure by providing two-dimensional, cross-sectional, real-time depth visualization with image review manipulation software for identifying and annotating regions of interest.
• On March 30, 2021, Perimeter announced that Dr. Beth DuPree, a surgeon at Northern Arizona Healthcare Verde Valley Medical Center, initiated a clinical study, which will enroll up to 100 patients, that will evaluate the use of Perimeter S-Series OCT during breast conserving surgery, with the aim of demonstrating that surgeons can effectively use Perimeter S-Series OCT to aid their decisions if additional tissue needs to be excised.
• On April 15, 2021, Perimeter announced that the FDA granted a Breakthrough Device Designation for Perimeter OCT combined with ImgAssist AI – to be called Perimeter B-Series OCT. This designation allows for accelerated interactions with the FDA during product development and prioritized review of future regulatory submissions. In addition, a new Medicare policy program (Medicare Coverage of Innovative Technology, or MCIT) provides national Medicare coverage for up to four years for FDA-designated Breakthrough Devices upon market authorization, enabling more rapid utilization of new and innovative technologies for the Medicare population.

ATLAS AI Project

• In July 2020, Perimeter initiated the first phase of its ATLAS AI project which involved collecting images of breast tumors from patients at leading cancer centers in Texas – including Baylor College of Medicine, M.D. Anderson Cancer Center, and UT Health San Antonio – to both train and test its ImgAssist AI technology.
• On April 14, 2021, Perimeter provided an update on its ATLAS AI Project. Using more than 400 volumes of images of excised breast tissue collected in the first stage of the project, the standalone AI algorithm achieved a key performance metric of 0.94 AUC (area under the receiver operating characteristic curve). The data generated to date support the continued advancement of Perimeter’s “ImgAssist” AI technology to the next stage of the ATLAS AI Project. Perimeter intends to conduct a randomized, multi-site, pivotal study to evaluate Perimeter OCT combined with ImgAssist AI against the current standard of care and assess the impact on re-operation rates for patients undergoing breast conservation surgery.

Summary 2020 Financial Results

All of the amounts are expressed in Canadian dollars unless otherwise indicated and are presented in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”) applicable to the preparation of interim financial statements, including In