Q2 2020 Motus GI Holdings Inc Earnings Call

Ladies and gentlemen, thank you for standby and welcome to the Motors do you I Holdings Inc. second quarter 2021 Ashwin operation.

At this time all participants are in listen only mode. There will be a presentation by the mortgage the management team followed by a question and answer session I must advise you all at the conference today is being recorded.

I'd like to turn the call.

Over to Bob Yedid like side rises.

Please go ahead Sir.

Thank you operator, and thank you everyone for joining us for the betas Ci.

Second quarter 2020 update call.

Representing the company, our 10 Moran Chief Executive Officer, Andrew Taylor, Chief Financial Officer, Mark Pomerantz, President and Chief operating officer of modest yacht.

Before turning the call over to management for opening remarks, I'd like to take a minute to remind you that this conference call webcast will contain forward looking statements about the company.

These statements are subject to risks and uncertainties that could cause actual results differ.

No that piece for the statements reflect our opinions only as of the day. That's called we will not undertake an obligation to revise or publicly released the results of any revisions to these forward looking statements in light of new information or future results.

Factors could cause actual results or outcomes to differ materially.

From those expressed.

Or implied by such forward looking statements are discussed in greater detail.

Most recent filings on form 10-K, and other periodic reports on forms 10-Q, an 8-K filed with Securities and Exchange Commission.

Those prepared remarks, it's now my pleasure to turn the call over the 10 Moran CEO of motives Ci Kim.

Thank you Bob and good afternoon.

Thank you for joining us today for our second quarter 2020 earnings call.

Start by providing a business update and then turn the call over to Andrew to review, our financial result for the second quarter.

At the end of our prepared remarks, we will open the call for QNX.

I'd like to start my thinking all of our employees that modus g. I the extraordinary resolve they've shown over the last several months as weve navigated through the unprecedented challenges of cobot 19, and most importantly for their continued focus on driving our commercialization strategy for the pure view system.

In addition to providing a progress update on the execution of our U.S. product launch I will discuss three key topics today.

First of all the current operating environment has been challenging due to the Corona virus impact on U.S. hospitals, we're now seeing activities picking back up in certain areas of the country.

Next the impact of the pandemic has amplified the importance of hospital efficiency and pure you can play a key role in ensuring Colin I'll be procedures are completed on time the first time.

And can result in clear clinical outcomes and positive economic benefits.

And finally, we believe there's a strong need in the market for our technology and this quarter. We saw our first account you see Irvine developing new inpatient protocol centered around the use of pure view.

Spite of market issues, we continue to generate demand for pure view, adding new vac approvals and devaluation during the quarter.

As it relates to the challenging operating environment due to cope with 19, our business during the last period with most directly impacted by two main theme.

First the volume of U.S., Colin off to be procedures was dramatically lower.

According to a survey conducted by end why S.G.

Weekly endoscopy volumes declined by 57% to 96% for all G.I. procedure types.

Hospitals turned their attention to addressing kobin related patients and when possible either canceled or delayed Colin Oscar peas, and less absolutely necessary.

Second due to CDC guidelines for social distancing ourselves people were and continue to be unable to enter many of our account, which challenges our ability to drive both new system placements and support utilization for systems already placed.

Most hospitals also temporarily halted their value analysis committee meetings, and any new technology evaluation.

In spite of these significant roadblocks that affected us in Q2 I am pleased to report that our team found ways to continue to make solid commercial progress.

In California, Texas, and the mid Atlantic, We successfully launched new pure view evaluations well also restarting existing trials that had been interrupted by the Kobin shutdown.

As a reminder, our strategy aims to earn the endorsement and use of the pure view system by leading physicians and key opinion leaders, who through experience and peer to peer interaction helped to drive awareness of the pure you system in the U.S. Hospital market.

I'm pleased to report that we now have the pure view system in use at more than 20 major hospitals.

In Q2, we also started new evaluation at additional target institutions, including.

You see Irvine health.

Guy Senior Medical Center.

Sinai Hospital in Baltimore part of the Lightbridge health system.

And Memorial Hermann Health system.

Additionally, several of our accounts, including University of Texas, you feel a and B, a Boston began performing procedures again, although at a lower volume as they work through their existing inventory a pure view sleeves.

I wanted to dive a bit deeper into a few highlights this quarter that we believe confirmed that our commercial strategy is working and there was a significant need in the market for our technology.

Despite the pandemic you see Irvine health began evaluating pure view in early June.

Their valuation has gone extremely well and they reported successfully using pure view to accelerate treatment of patients that historically would have been delayed.

Dr., Jason Samaras Sina, a key interventional gastroenterologist at you see I has implemented a pure view protocol that aims to ensure you see I can provide a high quality exam in less than 24 hours on most patients.

Regardless of how inadequately prep the patient is when they're calling off could be is scheduled to be conducted their now avoiding delays and utilizing the power a pure view to ensure ontime procedures.

We believe the development of this protocol will serve well as a proactive process for patient identification.

And as a protocol that we will continue to share with other hospitals across the U.S.

Dr. Samaras Sina shared the following thought based on his experience to date and I quote.

Pure view has been instrumental in addressing the clinical needs of our calling off to be patient that present in the G.I. lab with inadequate Bell prep.

Inadequately prep patients or a problem that we see regularly and before the pure view systems availability these patients procedures, where either delayed or even boarded prior to completion, leading to unnecessary additional nights of hospitalization.

Your view has allowed us to diagnose these patients earlier, which enables us to therapeutically treat when appropriate, especially in light of cobot 19, we strive to avoid extended hospitalizations due to insufficient bell prep and with pure view, we believe we can get a high quality exam in less than 24 hours on most patients. This has it.

Significant impact not only on overall patient care, but also our hospital economics.

This is the end of Dr. Samaras, Cienas quote and we greatly appreciate him sharing his perspective and developing a protocol to optimize the impact of pure view on procedures and patient.

I believe we will eventually see brought adoption by hospitals across the country overtime.

We are building traction in our effort to generate demand for the use of our pure view system within targeted health system.

Most recently, we added additional hospitals within both the Mayo clinic, and the Cleveland clinic systems to our schedule of upcoming evaluations.

This is a key part of our future expansion strategy and I'm pleased to see this broader adoption. After just a few quarters into our commercial launch.

The commercial team has proven to be nimble in adjusting to ongoing changes related to cobot 19.

Some areas that previously were minimally impacted by the virus are now facing a surge.

In order to continue driving our execution forward, we've focused on ensuring our pipeline remains full and we are currently tracking approximately 150 sites that we believe overtime will perform evaluation.

In order to overcome access issues for our salespeople at many of our sites.

We launched a virtual customer support program in the second quarter.

The early feedback has been positive and we've been able to support procedures remotely as well as conduct training for new sites.

As part of this effort in late May we launched a new mobile modus GE <unk> App that provides a plethora of valuable resources for pure view system users.

Specifically this app provides chapter and narrated video support that covers the set up and the use of the pure view system.

We're pleased with the early adoption of our App and I've seen a growing number of downloads in just a couple of months.

From a strategic partnership perspective, we continue to evaluate the potential for accelerating our commercial execution via partnership opportunities that could provide additional scale and a larger commercial footprint to bring the pure you technology to customers more quickly.

Despite the difficult market conditions associated with Cobot 19, I am pleased that we continue to make solid progress gain new evaluations at the top G.I. hospitals and are seeing many of them progress through the vac process towards purchase and utilization.

This is a challenging as well as exciting time promoters G.I. as we continue to introduce a new technology into an established market.

We remain confident that overtime, our solution can provide significant clinical and economic benefit to our customers.

I will now ask Andrew to review, our financial results for the second quarter.

Andrew.

Thank you Tim and thank you everyone for joining us today.

Revenues for the second quarter were nominal which was attributable to the macro disruptions in the market caused by the ongoing cobot 19, pandemic, which Tim just detailed in his comments.

For the three months ended June Thirtyth 2020, we reported a net loss of approximately $4.4 million or a net loss per diluted share a 15 cents.

Compared to $5.7 million or a net loss per diluted share up 26 cents for the same period last year.

During the second quarter net cash used in operating activities and for the purchase of fixed assets was $4.3 million as compared to a similar $4.3 million for the same period of 29 cheap.

As reflected on our year over year comparisons of net loss and cash spend activity. The early results of our previously announced cost cutting measures began to take shape during this past quarter.

We have largely implemented this plan, resulting in a significantly reduced cash burn rate of approximately 50%.

Paired to previous forecast as we entered the second half of 20 Twond.

The total restructuring charges under GAAP were approximately $625000 and together with other expenses associated with this plan of approximately $300000. We are under our previously provided range of 1 million to $1.5 million onetime costs. So.

This program.

At June Thirtyth 20, each one we held approximately $17.1 million in cash and cash equivalents. That's included the $8 million from our 2019 term loan agreement with Silicon Valley Bank with a maturity date of June 2024, and interest only payments through June 2022.

And with that I'll now turn the call back over to Jim.

Thank you Andrew.

Let me summarize.

While the current operating environment has been challenging due to the Corona virus impact on U.S. hospitals, we are now seeing activities picking back up in certain areas of the country.

Assuming this trend continues and we acknowledge that there's ongoing risk. We believe the hospital environment is becoming more favorable for us to gain traction with the pure view system.

The impact of the pandemic has amplify the importance of hospital efficiency and pure view can play a key role in ensuring calling off to be procedures are completed on time. The first time, which can result in clear clinical outcomes and positive economic benefits.

And finally, we believe there's a strong need in the market for our technology and in spite of market issues. We continue to generate demand for pure view heading newly approved hospitals and the valuations during the quarter.

I will now as the operator to open the call for QNX.

Thank you at this time will be conducting a question and answer session. If you'd like to ask your question. Please press star one on your telephone keypad confirmation Tony will indicate your line is in your question Q You May Press Star too if you like to remove your question from the Q.

All participants using speaker equipment, maybe necessary to pick up your handset before Christmas Carnegie.

One moment, please while you pull for questions.

Oh first question is from Matthew O'brien with Piper Sandler. Please proceed with your question.

Afternoon, Thanks for taking my questions.

Yes for starters, Tim can you just talked about.

What you saw in the utilization side throughout the quarter because the revenue number you know is obviously attention getting.

But it sounds like you're hospitals are working on existing.

<unk> existing products. So what did you see April May June and then what are you seeing so far here in July from an actual utilization of pure view perspective.

Thanks, Matt and thanks for the question Yeah. So [noise].

First let me start by saying I'm you know in the early part of the quarter. Yeah. Obviously, the procedure volume as I mentioned in the prepared remarks was down significantly.

We also saw that process, new technology evaluation process really halted in most of our sites and a bit of a you know a a refocus if you will the mindshare or was it was not there for embracing new technologies. So obviously that had a direct impact on you know just consumption of sleeves in the early part of the quarter.

As as we would've expected other reorders to happen a that we're you know internally forecasted I've seen seen them now moved to Q3. So yeah. I think we will start to see some of the planned reorders coming in we've already seen some of it in the early part of Q.

Three here.

But really it really was just directly impacted by the fact that procedure volume was down in you know as I said in some cases upwards of call. It a 80% to 90% in many of our key target hospitals.

Okay, but suffer for June specifically, Tim I mean did you see utilization trends appear a view that were encouraging or you know our people still pretty locked down at this point, especially with respect to Colin Austin Peitz, Yes. So I think we started to see you know from my view, we started to see encouraging signs in.

It was interesting so we started to see California, Texas come back early which was very encouraging as I mentioned also some some facilities that were working with in the mid Atlantic in Pennsylvania.

Which now you know the search has shifted their so things have started to slow down, but we're seeing things open back up in places like New York believe it or not so I think we're seeing the signs Matt I think about half of our accounts.

Our back to actively doing procedures, but there's still certainly I'm a slowdown in the balance.

Okay, and then when you say, they're doing procedures are they employing pure view with those cases or yeah doing procedures with was what I was quoting yep.

Okay. Okay. That's that's really helpful for you see Irvine, specifically I know you have over 20 hospitals now where you've got a pure if you placed but you know for for urban they seem to have really adopted this how impactful could they be how many procedures.

Could we think about them alone doing here in the third and potentially even the fourth quarter.

So Matt first of all we're really pleased with what we've seen from you see Irvine, So dr. samaras seen its been a tremendous collaborator here on the on the product. He sees the significant need as I mentioned, the protocol, which I outlined its really critical I really can't overstate how important.

This protocol is because patient identification and coming up with a proactive process for where to use pure view is really really important, particularly if we have that now coming out of a very prestigious facility and we have a okay. Well that you know a folks are taking his guidance that input to we've actually been utilized him to help in a few other.

Their sites, where he was part of a training and in servicing remotely which was that was tremendous if you look at that site. It's there's significant upside opportunity I'm not going to comment specifically, but I'll tell you that they fall in to that range of I've said it for a couple of quarters now in that call at 500 to a thousand MPS.

And procedures a year, so I'd like to a think Matt that as we get towards the end of 2020, we can start to make an impact I would say probably starting in call. It the 10% to 15% of the of the procedures and then that'll ramp and accelerate quite nicely. The reason they will start at a lower rate is as you know.

We start with just a couple of the docs trained and doing and doing the procedures as we bring more physicians on I would expect that to a you know a each quarter.

Continue to accelerate.

Got it and then last one for me. It's just on the financing side of things I think you said you expect to get down to about a $3 million burn rate. Starting this quarter is that still the target do you think you can get that that number to lower.

And then how are you feeling about the capital situation of the company I mean is partnership the most likely Avenue.

In terms of you know a fresh capital or potentially some other option.

Yeah. So so listen I mean, I think as you know, we where we were pretty decisive in making decisions on the cost reduction program, we announced that on you know at call. It March Thirtyth April 1st the team did a great job pulling together executing that here in the second quarter. So that is behind US now so I fully expect on a go forward basis will be in the three to three and a half million a quarter.

Cash burn a range, which is a as you know about a 50% reduction from our forecasted amount prior to the to the program being installed. So if you look at that and based on what Andrew just detailed we have over a year of cash right. Now you know we continue to have dialogue as it.

Relates to financing of the company you know, but there's a variety of different options that will continue to weigh obviously the capital markets are available to us, but as you mentioned we have continued to have very very good dialogue on the strategic partner ship front. You know so I think some of that comes down to being able to get that executed and timing of that.

I'm also evaluating other non dilutive avenues as well. So you know I think we've got a time here and we're just going to be opportunistic with what's best for the company and for our shareholders.

Okay fair enough. Thanks, so much them.

Thank you Matt.

Your next question is from Sea Ray Smith with Oppenheimer and company. Please proceed with your question.

Thank you Hi, guys I'm just was wondering on a on a commercial update side, how many physicians have been a train today now and.

And then Tim You mentioned 150 House was your engage with how many would you say or in a more definitive backlog in in your mind now.

Yeah, So Steve we trained call it roughly about another 20 physicians this quarter I'm, obviously, it that was a smaller number than we've done in previous quarters for all the reasons that we outlined but that obviously be it continues to become an important part of you know getting the brought awareness of the product into the market and comfort with the with.

The procedure I will say just on a side note regarding training I am pleased that the modus GE <unk> App that we launched in late May is allowing us to actually do remote training successfully so we've had a significant number of downloads by both physicians and staff in these facilities and you know the feedback and very very pop.

Sort of in terms of if the rep is either not allowed based on hospital protocol or can't be there for the procedure. They now have a a very easy to use tool to be able to get the procedure done without us there.

You know up from a pipeline perspective.

One of the things that I'm pleased with his last year. In 2019, you know we spent a lot of time developing the market in terms of I'm getting a backlog together of sites that have expressed interest when we launched in Q4, you know we prioritize that grouping of hospitals, we've been very clear about you know the the planning.

In terms of large national regional Influencers being the types of facilities that we want to build our foundation with but you know we're continuing to chop away at the at that backlog. So we reported about 150 accounts in the pipeline we already have seven of those facilities through this third quarter that are scale.

Drilled for evaluation before the year is out.

You know all based on timing of you know when when their hospitals are opening up for reps to be on site and participate but we continue to take it I think it very methodical approach in terms of you know, how we add new facilities into our evaluation process and also keep in mind. Steve are you know as part of the cost reduction we did reduce the number of sales.

People that we have out there. So we're trying to continue to manage the right number of opportunities. So we we have a good experience with each of these sites.

Okay. Thanks to them and then in terms of placements I know you've said you know system placements are obviously is important you over the long term is prisons consumable. So should we continue to think that you know looking forward the sort of I guess in the near term overwhelming majority of of systems would be it's within the lease model versus.

Bye.

Yeah, that's what it's looking like we kind of expected that I think even upon launch that that the you know the capital budgets have typically just been very constrained, but with Cove bid, we're seeing more of that as a matter of fact, you know just had dialogue today with one of our larger facilities that has been you know revenue account from us.

Perspective, and now is working towards capital and basically came back in and indicated that.

Due to the impact of cobot on their facility. They there how they're gonna have to either go to a lease a rental or to commit to a usage model. So I would expect to see that over the next couple of quarters as we start to lock down capital programs on some of these early sites or my my best estimate would be they would be typically you know amortized.

Over the course of the next year or two.

Got it and then just lastly from me you. Obviously, you mentioned procedure volumes given the environment. Our overall low right now can you talk to the potential for data collection from you'll have to Dr. samaras Sina or others over the next several months such that you could start getting publication or podium presentation.

Look out sort of over the next few quarters. Thanks.

Sure Yeah. Thanks, Steve So you know one of the things before it mentioned specific data, but at the that you may have seen we launched on social media a the modus CCI pure view podcast series. So we've now launched three podcast into the market with three significant kao ALS talking about specifically.

How they're utilizing pure view I'm talking about you know real World cases, and you know the impact it's had on both patient care as well as economic so we're going to continue to do that.

As it relates to data collection you know we continue now that we're starting to see some of the procedures ramp back up we continue to work on creating patient case studies I think we're up to you know high single digits approaching double digits in terms of the number of case studies that we are now I'm out in the market with a that our salespeople use as you know key tools.

To drive awareness as some of these conferences come back or you know hopefully in the next several quarters. We will have a we will expect to have more of a podium presence with some of the K wells that have had experience now the other thing I'll mention is we are embarking on some additional clinical study work that will get into.

More detail here in the future, but one of the most prominent healthcare institutions in the U.S., we're working with right now on you know final stages of kicking off a clinical study that will be focused on the most critical I see you type patients so more to come on that but you know that's absolutely something that will.

Continue to invest in I think it will be important part of a accelerating the commercialization.

You know in the into 2020, but also 2021.

Great. Thanks, Dan Thank you.

And our next question is from Jeffrey Cohen.

Adam burned down. Please proceed with your question.

So hard to manage your Mark how are you.

Hey, Jeff how are you.

Good I guess first question for freighter German you spoke about doing.

<unk> towards ourselves and then on future disruptions most mob anymore.

<unk> ability to change or so so.

625, I'm, assuming so what's in your today and then going forward in Q3 do you expect any further disruptions you're able to also show up in.

In June as well.

Yes.

Hi, first of all Oh, a everyone's doing well, yes, the 625000 restructuring charges, they actually fell a little bit ER in across the board Gionee marketing sales and R&D.

Primarily.

In severance.

Payments apparent personnel related payments and we're not expecting any.

Restructuring charges in Q3 or Q4, so I think we are at the low and what was expected and it's behind us.

Got it Okay and can you talk about to November hostels, and you talked about the other 20 plus users.

Let me talk she'd been trained on average are for hospitals are closer to one or two or three or four.

It's closer to three or four Oh, Jeff I think that's probably a good number it doesn't necessarily translate you know.

In an average like that some of the early sites have you know upwards of seven or eight or <unk> or more physicians, but I think thats, probably the way to think about it. We we start typically with somewhere between you know call. It two to three and then quickly start to bring on additional docs.

Okay and could you talk first about your you've already for sure and server your books or.

Units under sleeves. So it looks like the inventory change from Q2 is just a minimally firebird talks about the I'd be inventories and the bills in the process there.

Okay.

Yes, sure you know so what I'll say, Anna and Andrew can expand on this if necessary, but you know right now we have a good number of workstations on hand that we think are enough to.

Allow for the additional evaluations and conversions that we expect between now and the end of 2020 and really into probably the first quarter of 21 and similarly, we've we've we did a large enough built to have enough of our disposables. It seems that you know when you look at the breakout our slim disposable is.

It is probably the most preferred I'm. So we have ample inventory on both and we feel good about being able to serve our customers. Both of our manufacturing partners are also you know up and running out of not been directly impacted by by Cove. It.

Yes, Okay perfect. That's those are for me thanks for taking my questions.

Thank you.

Your next question is from kind of those are Colliers. Please proceed with your question.

Hi, good evening, thanks for the updates here.

Maybe following up on one of matts earlier questions.

For for new accounts they of course get the machine placed and then I believe of five pack of sleeves is samples.

Do accounts typically get more than than five samples I'm, just trying to get a sense of how many sleeves had been recognized.

On the marketing expense line item, but but not revenue, particularly in a in the early adopting hospitals and then.

Secondly, I think you mentioned sales reps haven't been able to obviously enter the hospitals to drive utilization due to the reps typically need to be present or available virtually for the peer v.

Procedures to take place.

It Kyle thanks for the questions and hope you're well so the first part is that so so from a from a rep perspective, let me take the latter part of that from from a Rep perspective, if you think about the process right with the new technology, you know and how we've been.

Clear about wanting to build this large group of of a reference sites right with key K well support we've I would say overemphasized in the early quarters here, you know being available onsite, making sure that the physician the staff the supporting a cast if you will.

So you know so nurses on the floor I understand the technology right. So there's some some leg work that needs to be done there to do it right, but as we continue you know further along than what these accounts they become self sufficient and they don't need the rep. There to perform the procedure. So we do have.

Well it a handful of accounts that are doing procedures without you know the help of any modus personnel on site.

And we'd expect that you know over time, that's what we've built to bring you know all of these accounts right. So I'm just to answer. Your question. This is not a procedure that require sarepta be there you know in perpetuity, if you will.

And kind of remind me the first part of the question.

Oh, just about the samples if it Oh, yeah, yeah yeah.

Yeah, Yeah, yeah. So on average we typically will give us site two boxes for evaluation.

And we try to get the evaluation done over the course of 10 procedures now that can that can go a little bit one way or the other so some facilities could get done you know call seven or eight procedures. Some of the larger sites, where they want more physician input could be potentially a third box, but on average call. It 10.

Ah 10 sleeves.

Okay got it and thanks Rep updates on the reader study burn rate really nice progress here, so adding to the headcount sounds like.

Likely won't take place in the near term can you remind me if you're still at five wraps down from 10 and has that been sufficient through cove, it or do you envision needing to get back to 10 in the near term to cover the initial target hospitals.

Yes, so we're taking 'em. So so nothing has changed we haven't we haven't made any changes to the head count since we did the cost reduction program. We're taking a very close view I'm on demand in certain markets. So you know kind of the way we're looking about it as we add back I think it'll be probably.

Early in commercial and we'll do it in places where the Rep is so far stretch that you know we just can't continue with the number of folks that we have but right now we're taking a very cautious view as you know you know, it's a bit of a moving target in terms of where the virus surge has taken place and we've been.

Well to handle you know if I think about this quarter.

We were able to get a couple vac approvals.

Completed right so through the entire purchasing process and and approved so we'll start to see orders coming in from Ohio State that was done this quarter, which as you know a great accomplishment by the team. We completed three evaluations that have now been submitted to the value analysis Committee for approval and we actually started some new evaluations all within a quarter that was very.

A very difficult and that was what the size team that we have today, so I'm comfortable with the size of the group that we have for accomplishing what were what we're working to accomplish but we'll keep a very very close eye on that and I think as add backs calm it will be in commercial and in salespeople.

Okay got it. Thank you and then just lastly regarding the.

Pipeline opportunities you've identified upper Gi eyes is a natural target for expanding the indication how would regulatory path look here would it be just a simple special five 10-K or do you think you'll need to make some additional modifications for a potential gen. Three version.

Thank you.

Thanks, Kyle Great question. So we remain bullish on the opportunity for upper Gi I. The last time I had mentioned that a I think to the to the to the team here you know we talked about the size of the market and the fact that this is a merged really organically. So a large majority of the facilities that we've been working in for.

We're calling us could be a have indicated an interest in potentially using our technology for upper Gi. So we believe that that can be very interesting in terms of a kind of a platform expansion. We do have a an authorized and funded internal project on the product development.

We're not ready to say, specifically the regulatory path, but right now I think the viewpoint is it would be a it would be a five 10-K potentially a standard five 10-K, but we'll update everyone as we get a little bit closer.

Okay great.

Thanks for the updates Tim and Andrew.

Thank you.

And again as just as a reminder, if you have any questions. You may just press star one or your telephone keypad. Our next question is from Aegion.

H.C. Wainwright. Please proceed with your question.

Hi, This is bill Baldwin dialing in for each and can you hear me okay.

Yes.

Are you aren't yeah, great how are you.

Well. So your question first one I wanted to hear your general thoughts about the inpatient and outpatient put an obstacle the landscape, especially like this quarter versus the previous quarter, and then what might or might not change moving forward for the remainder of the or.

Sure. So you know I talked about I'm, calling us to be procedure.

Para IV study that was done by NYSE that you know looked at facilities caught in the New York region. I'm you know a of course, there's been significant reductions in overall cooling off skippy and G.I. procedure types and I think that translated through both inpatient and outpatient I'm more specifically I'll speak to <unk>.

Inpatient as you know that's the market that we're currently focused on and what we saw and I communicated I think last quarter at least the initial feedback was the fact that these procedures aren't necessarily elective, but due to the surge of patients related to co bid hospitals had to make the.

Difficult decision to to really odd delay these procedures wherever they were able to in many cases RG <unk> colleagues were working from home and their units had been converted to a you know kind of makeshift units to handle cobot patients. So that's what I think attributed directly to the decline but the feed.

Back that we've gotten and and we there's a few data points here. You know has been a lot of these patients are the sicker patients that do need to be seen.

So we're expecting as these procedure start to ramp up there. They are gonna be patients that pure if you will be very important too right. One from the standpoint of a they often times have co morbidities or other issues were getting through the bowel prep is very difficult and arduous and time consuming I'm you know as.

We discussed earlier with the the patient protocol, that's being implemented at you see I you know that's directly related to the fact that they don't want patient spending you know any more than their desired 24 hours in the hospital, if they don't need to and obviously pure views allows for that so we think arm the message in the market is really resonating.

Particularly with the types of procedures that there will be doing as they ramp back up and we we did see some of our facilities that you know have bounced back pretty significantly, but I would say on average, it's probably about 50% of the pre covert procedure volume for inpatient.

And so I'm not sure I go down because for the second part of the question, which is what might or might not change moving forward for the remainder of the.

So you know <unk> I think the one obvious thing in our minds that could change obviously as if there's a resurgence of the of the virus right. So I think the procedure volume could continue to be impacted.

If if not you know when things remain stable in many markets. Then we would expect many of these facilities to get back up to their normal volume if not you know higher than their previously managed volume you know many of these physicians I've talked to to US about the fact that you know they want to try to get up above their there.

Our prior covert levels just start to recoup some of the you know the lost revenue at these facilities as well. So you know it's difficult right now as you know it's as I said, it's a bit of a moving target in terms of the the virus, but you know that's the way we kind of see it over the next quarter or too is that was that when you're looking for you.

I think that's absolutely yeah, and then switching gears, a little bit or what are some of the only comment.

Did you receive regarding the launch of the mobile App and <unk>. If you can maybe I've got areas for improvement.

Sure Yeah, so the first bit of feedback was.

The fact that you know one it's a very accessible you know a on there I pad or I phone very easy download.

But its its got a significant amount of resources in there right. So detailed.

In service that as I mentioned is is a really high quality video, but also narrated.

Not only is it the full in service from beginning to end, but what they like about it and I would say probably the the most positive comments have come around the fact that weve chapter to it. So these physicians and clinicians don't have you know time to sit and watch you know 30 minute video right. So they can go to a specific part of of the device. So let's say.

For example, there setting up the device and their new to setting it up they can go to the set up and they can look at a specific part of that and what they need to do as a refresher I'm. So I think the fact that we've made it easy. We also did take some feedback over the quarter about being able to customize the app a four facilities. So we're in the process of now making the App customizable.

So if you're at a specific health system, you could actually input other tools and documentation you know around the procedure say for example physician preference on the type of scope that they like to use and it with would obviously only be available to folks that have access an approval at that site. So we're working on maker.

I mean, those adaptations to the App, but we think that this is something that obviously not only important during cove it but will be important just on a go forward and I think the team the marketing team did a great job getting that together and really are less than a month.

Alright, Great and then I would like you I'd like to hear your thoughts on the approval of Gen. Two approval in Israel, and what kind of impact. This approach will have on the top line growth during the near term or not.

So you know I would I would put that in the category of kind of the way that we are looking at least today.

For opportunities outside of the U.S. So our sole focus as you know is on building out the the U.S. market you know commercially with our direct team. We continue to engage in partnership discussions whether that be with you know large well recognized distributors.

In certain markets or other med tech players that may brings scale and size that could accelerate our commercialization, but I think the way to think about Israel, but also really Europe and and Oh, you asked today, we'd be looking to access those markets through a partnership as opposed to building out a team diary.

At least in the near term you know given the current environment.

Great. This meant to hypothetical but thinking long term do things drift process will be eliminated entirely by the fuel.

<unk>.

Well that would be nice, but you know so so what what I'll say about that is we have shown now in multiple clinical studies several of which your peer reviewed.

That ER physicians were able to administer a significantly reduced prep or a micro prep if you will and get results in terms of cleansing the coal in both in a rapid fashion into a significantly high degree very pristine coal and with with the reduced prep. So.

You know in our first couple of quarters here of commercialization I've shared a few case studies, a previously where physicians have used our device for patients that needed a an urgent procedure and they did so without any prep at all and they were able to get a high quality exam done and diagnosis in.

Therapy therapeutically treating those instances so I think clinicians as they continue to get comfortable with our device will start to challenge the.

The status quo, you know I I can't forecast, a if and when a bow prep would be eliminated, but I do think that there's an opportunity.

You know for it for them to reduce the amount of time, you know in our minds. It just it seems a bit archaic to think that a patient would remain in a hospital bed up particularly for longer than 24 hours to have a call enough to be a procedure done and you know our sole focus is a is bringing the technology to both our our hospitals, but also the benefit.

For the patients.

All right that's it from me thanks, so much.

Thank you.

And we have reached the end of our question and answer session and I'll now turn call back over to tune Moran for closing remarks.

Great. Thank you and I appreciate Everybodys time today, you know as we said, it's a difficult operating environment right. Now obviously, there's a there's been some headwinds, but I'm very pleased and hopefully you know we were able to share some of the things that we were able to accomplish even in this.

Called quarter, I think the cost reduction program as we mentioned was the right decision. It has put us in a position now to be able to weather. The storm. We reacted quickly with digitizing our go to market model in our support tools that is starting to resonate in allowing us to overcome some of these access issues and we remain focused on.

You know driving these accounts through each stage of the sales process ultimately to purchase and then over time, a broad utilization. So we'll continue to update everyone and look forward to speaking during next quarter, So Ah stay safe and stay healthy.

This concludes todays conference you may disconnect your lines at this time. Thank you for your participation.

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