Q4 2020 Stereotaxis Inc Earnings Call
Ladies and gentlemen, thank you for scheduled by you're currently holding for today's stereo taxes fourth quarter and full year 2020 earnings conference. At this time, we are assembling audience members and should be underway. Shortly we'd like to thank you for your patience and ask that you. Please continue to standby.
[music].
Please standby we're about to begin.
Yeah.
Good morning, Thank you for joining us for stereo, Texas fourth quarter and full year 2020 earnings conference call.
Certain statements during the conference call and question and answer period to follow may relate to future events expectations and as such constitute forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
Such statements involve known and unknown risks uncertainties and other factors, which may cause the actual results performance or achievements of the company in the future to be materially different from the statements that the company's executives make today.
These risks are described in detail in our public filings with the Securities and Exchange Commission, including our latest periodic report on form 10-K, or 10-Q, we assume no duty to update these statements at this time all participants have been placed on a listen only mode.
The floor will be opened for questions and comments following the presentation. As a reminder, today's call is being recorded it is now my pleasure to turn the floor over to your host David Fisher, Chairman and CEO of stereo taxes.
Thank you operator, and good morning, everyone I'm joined today by comparing our Chief Financial Officer.
On the prepared remarks today will be a bit longer than normal I wanted to use the occasion of this being our annual call to provide a broader overview of stereo taxes on our vision all day.
Our accomplishments in 2020 and are focused on expectations for 2021.
Texas is the global pioneer and leader of robotics for Endovascular surgery, we have developed a highly innovative suite of robotic technologies that address the inherent limitations risks and challenges posed by manual catheters.
Our mission is to make minimally invasive endovascular surgery broadly available to improve its safety and outcomes and to modernize it with the benefits of Digitization and robotics.
And on vascular surgery is a broad class of procedures, where a catheter is inserted into a blood vessel and navigated through the vascular system to an area requiring therapy.
While millions of catheter based surgeries are performed annually to treat a wide variety of conditions.
Up action of manual handheld catheters as fundamental flaws.
During a procedure therapy takes place at the catheter tip, but Emmanuel catheter is held and manipulated several feet away at the handle.
Using a manual catheter is like writing a small fund while holding a pencil from its eraser, we're holding on to a gardening house several feedback from its and <unk>.
The mechanism leaps to limited precision limited stability and limited reach.
Manual catheters needs to be rigid to allow for control to reach the tip, increasing the risk of patient injury prestige are complex and operator dependent and visualization of a catheter exposes patients and physicians tax rate radiation.
So your taxes just robotic platform is designed to address these inherent limitations risks and challenges.
Fundamentally transforms and improves catheter navigation by allowing for direct control of the catheter tip using precise computer controlled magnetic fields.
Net fields can be viewed as invisible fingers holding on to the catheter tip.
Direct control leads compressed.
<unk> enables reaching areas previously unreachable and enhances patient safety.
Additionally, operating with a robot from a computer cockpit seeded and fully protected from radiation with full control over the procedure at their fingertips and within your ability to focus on the cognitive aspects of their profession, rather than the mechanical efforts.
Our technology is a platform technology and the benefits of robotic precision and safety are applicable across a broad spectrum of endovascular and alumina all procedures.
We have begun efforts to address several new clinical applications, but to date. Our primary focus has been on one specific endovascular procedure cardiac ablation for the treatment of heart arrhythmia Carty.
Cardiac ablation has become a widely accepted therapy with over 1 million procedures performed annually and over $5 billion in annual medical device sales.
The benefits of robotic magnetic navigation precision stability reach and safety are pronounced in cardiac ablation procedures and has been extensively validated hundreds of physicians at over 100, leading hospitals have treated over 100000 patients with our technology and there are over 400 scientific publications documenting our clinical Val.
<unk>.
A highly differentiated technology that confers meaningful clinical value to patients and physicians.
Large field of medicine serves as the perfect Foundation on which to build a pre eminent medical robotics company.
I have full confidence that stereo taxes magnetic mechanism of action is the best way to treat patients and to address the inherent limitations and risks of manual Endovascular surgery R.
Our vision is to positively transform endovascular surgery with robotics in a similar fashion to how intuitive surgical transforms laparoscopic surgery.
To realize that vision, we have spent the last four years rehabilitating stereo taxes from its previous missteps.
Planting the seeds and nurturing the green shoots that will lead to a significant long term growth.
Our rebuilding efforts can be viewed within three broad categories, establishing financial strength implementing the right commercial capabilities and advancing our strategic innovation plan.
2020 was it Europe significant progress on each of these fronts.
Financially stereotactic starts this year in the strongest financial position of its history with $44 million in cash and no debt. Despite.
Despite significant macro challenges last year and they're negative.
We're able to operate at essentially breakeven with cash used of $1 $2 million.
This financial Prudence is not at the expense of progress and we continue to invest meaningfully in the drivers of long term growth in our team and in our infrastructure.
Commercially stereotactic his primary focus has been on developing the infrastructure and processes that ensure existing robotic practices are successful can grow and can showcase there.
Technical leadership in their communities.
It's focused on the success of existing robotic practices may not be the quickest way to add new customers, but it is the best strategy from increasing adoption of robotics and enhancing long term business value.
View this as a multi faceted effort and if given various examples on previous calls of some of the key components.
A few highlights of 2020 include the broad deployment of Tolerability support, allowing our clinical team to support procedures remotely.
Our supporting multiple procedures daily around the globe with this differentiated capability and view our leadership as a strategic strength that will become increasingly valuable as remote support and collaboration in the operating room gains broader acceptance.
The robotic electrophysiology Fellows program continues to grow and plays a central role in ensuring the future leaders of our field are confident in our technology and its clinical value <unk>.
17 fellow successfully graduated from our program in 2020, and 21, new Fellows enrolled in the program.
The quantity and quality of clinical literature on on our technology also continues to grow with 31 peer reviewed publications in 2020.
Several publications last year were particularly interesting, including a case study on the treatment of a COVID-19 patient and been trickier storm a review of over 1000 patients treated at a single institution with outstanding efficacy and safety results in the first use of our technology to treat pulmonary hypertension patients on a prospective randomize.
Trial.
Were already aware of additional impactful publications in queue for this coming year and look forward to sharing one available.
We will continue to focus our commercial efforts on ensuring existing robotic practices are successful, but with the FDA approval of Genesis, we began incrementally investing experimenting and establishing capes.
It will allow for a robust capital sales pipeline.
We are building this capability.
Methodical fashion, along with the buildup of our supply chain and in a way that is prudent sustainable and can support significant growth in capital sales over many years.
In 2020, we were proud to sell and successfully installed the first two Genesis systems at Helsinki University in Finland, and banner University in Arizona.
Our Genesis system is performing to the highest expectations of our customers. Both sites are highly active in the Genesis system was showcased in live broadcast procedures from both sites in December.
On our last call, we provided preliminary guidance for 2021 of $10 million to $20 million in robotic system sales.
We are pleased with our momentum to date in meeting that guidance, we have five capital orders outstanding for robotic systems four of which were generated in the period since our last call.
The makeup of those orders are particularly interesting and reflect the initial green shoots of a broad based global resurgence in interest in a robotic technology.
Two of the orders are for Genesis systems from U S hospitals, one in the South East and one in the west.
Hospitals are establishing entirely new robotic electrophysiology programs and adoption of our technology is being championed by physicians that have no prior experience with robotics.
Two of the orders are for Genesis systems in Europe.
One a replacement system for an aging the Ob and the second is again, a greenfield system, which will represent the first robotic electrophysiology system in its country.
Each of these systems have been ordered along with stereo taxes. This model as imaging system.
The fifth order is a niobe system sold to a greenfield customer in China, a country, where we are seeing increasing interest in our technology, Despite genesis lacking regulatory clearance.
We expect all of these systems to be installed and recognized as revenue this year.
We are excited by our initial momentum, but 1% to temper that enthusiasm with a reminder, that the macro environment remains challenging for capital equipment and there is pronounced pressure from hospitals to delay lab replacement projects.
We continue to see significant interest in Genesis, but the timing of any individual order remains difficult to predict.
Genesis stimulating a return to robust system sales reflects the first wave of revenue growth outlined in our strategic innovation plan.
We have previously described two subsequent waves of revenue growth driven by strategic innovations. The first of these being a significant increase in disposable revenue with the launch of our proprietary ablation catheter and the next being a set of innovations that will expand our technology into additional clinical applications.
We are pleased with the significant progress we've had on both of these subsequent waves and how the three waves of revenue growth are poised to follow each other in relatively quick succession.
Sir your Texas advanced Robotically navigated magnetic ablation catheter has been advancing methodically through the establishment of a robust manufacturing process and bench in preclinical testing of that process. We are preparing production of hundreds of catheters to enable formal validation studies at the start of the second quarter.
And regulatory submissions for CE, Mark and FDA IDE trial in summer.
Concurrent with those efforts, we are progressing clinical regulatory and an EU commercialization plan we.
We've had initial discussions with regulators in both Europe, and the U S and continue to expect EU commercialization and initiation of a pivotal U S trial in 2021.
Given the feedback we received from physicians that have navigated our catheter in animal studies, where an phantoms, we're excited and confident that the catheter will prove to be a significant improvement in clinical care and physician experience.
We are proud of our robust investment in innovation and the impact that innovation will have on patients on our customers and on stereo taxes.
We are also cognizant that all of our technologies can be improved further and our third wave of innovation is designed to be the most impactful to our revenue growth both within electrophysiology and in expanding our robotics technology into several multibillion dollar adjacent markets.
We've been spending significant effort on this third wave and expect to be in a position to showcase key aspects of this third wave at the end of this year.
Tim will now provide some commentary on our financial results and then I'll make a few final comments before opening the line for Q&A.
Thanks, David and good morning, everyone.
Revenue for the fourth quarter of 2020 totaled $6 8 million consistent with the prior year fourth quarter.
Recurring revenue for the quarter was $5 9 million and system revenue was <unk> 7 million.
Revenue for the full year of 2020, total 26 6 million.
Recurring revenue of 22 million for the full year 2020 declined 14% from the prior year, primarily due to the impact of the COVID-19 pandemic on procedure volumes.
We continue to see a gradual recovery in procedure levels from the law.
Loans reached in the second quarter of 2020 with volume remains below pre pandemic levels.
It's from revenue of $3 6 million for the full year 2020 increased from $2 1 million in the prior year, reflecting the successful installation of our initial Genesis are in Manchester.
Gross margin for the fourth quarter and full year 2020 were approximately 77% and 71% of revenue.
Operating expenses in the fourth quarter were $6 4 million consistent with the $6 3 million in the prior year quarter.
Operating expenses for the full year 2020, total $25 7 million down from $27 6 million in 2019.
Operating loss and net loss in the fourth quarter were both $1 2 million weighted.
Full year operating loss of $6 7 billion with a net loss of $6 six volume.
Negative free cash flow for the full year 2020 was $3 3 million and including funding from the payroll protection program was $1 2 million compared to $4 6 million for the full year 2019.
At December 31st we have cash on cash equivalents of $44 2 million.
I will now hand, the call back to David.
Thank you Kim despite the.
A significant operational and commercial challenges thrust upon us in 2020. The year was one of significant progress we have a clear strategy for transforming Endovascular medicine with robotics and I'm proud of the way our team responded with resilience prudence and creativity to advance that strategy.
'twenty one is expected to be the start of a multiyear period of growth and we reiterate our guidance of robust double digit revenue growth in 2021, which Genesis system revenue of between $10 million to $20 million. We continued to invest in the team infrastructure and projects that are critical for success, but are proud that we are able to.
Do so while maintaining financial discipline, our robust balance sheet allows us to reach profitability without the need for additional financing.
We look forward to now taking your questions. Operator can you. Please open the line for Q&A.
Certainly thank you.
For a question. Please press star one on your telephone keypad also with you are using a speaker phone. Please make sure that your mute function is turned off to allow your signal to reach our equipment. Once again. It is star one at this time for questions and we will take our first question and that will come from Josh Jennings with Cowen.
Hi, good morning, Thanks, Stephen Kim.
Congratulations on that.
Stoking up demand for Genesis.
From order number I wanted to ask just there's five five orders since your last earnings call debt.
On the crush.
Crushed.
Beat our expectations clearly.
And then wanted to ask about the sales funnel you don't want to get carried away and it takes that that five order number that you just delivered and extrapolate it throughout the rest of 2021.
And I know, you're not providing order guidance.
I was hoping you could give us a sense of the sales funnel when we think about the pandemic in 2020, the Genesis launch.
Pushed out to 2021 have you.
Wanted to ask about the sales funnel.
'twenty, one here versus where it was in 2020 and just thinking about the launch dynamics moving our sense is that the demand funnel is exponentially higher multiple higher than that.
Size, where it was this time last year all the virtual visits that you were able to execute throughout the pandemic at all going into the third and fourth quarter I'm, sorry from along with your question, but really just to get to it.
I didn't comment on the sales funnel this year, where it stands versus where you were last year.
Yeah.
Sure. Thanks, a lot Josh.
So I think youre right that we don't want we feel its still premature ticks from.
Rather to kind of every subsequent quarter and we're still on the early stages of our lives and so we want to have a little bit of conservatism, and then and and caution on just kind of a strike extrapolating numbers out at overall theres multiple hospitals that were talking with both Greenfield and replacement cycle are hospitals that are in.
Various stages on the pipeline, we're still early in our in our history of having capital sales given that that really for many years stereotypes have not had a robust capital sales that effort at all and so it's been a.
It's still kind of we are in our own learning mode of trying to be able to understand when a hospital is that a specific stage in a process. What's the probability that they will move to the next stage. We just don't have enough numbers, yet so I hope that over the coming quarters and will become smarter, there and we'll be able to start giving kind of statistics.
But we're still kind of a young company and that whole effort. So again, it kind of blends to a desire to be conservative.
On the replacement side, if you kind of remember from my prepared remarks, I mentioned debt and we are seeing many of those still being delayed out and so while historically, we've talked about about a 15 million dollar a year replacement cycle.
On revenue that would be a very very easy to rely on I still very firmly believes that thats real and we don't see replacement cycles and kind of slipping away from us, but add but we just see those being pushed out I think given the macro environment I think hospitals are trying to push out anything that.
They don't have to replace and so on so that's been pushed out and I would expect day generally very little replacement cycle revenue this year.
And then hopefully we get a bolus of that debt next year or some of the pent up ones that had been delayed several years there are multiple ones and discussions that for also for next year and and so I guess kind of that's how we're looking at things I would expect kind of a steady pace of debt averse system orders to continue coming in but I don't necessarily.
Want to extrapolate from one quarter out to the future ones.
I hope that helps that helps thanks David.
Just a follow up on.
Just genesis utilization trends I know there's.
Just a couple of installs out there, but I was hoping to get a sense of in these early days.
Utilization levels of Genesis assets.
Centers.
On the elimination of latency reduction on latency and a higher percentage of Genesis cases are for Genesis centers are using Genesis.
Publishing cases, or do you expect to Genesis to drive deeper penetration in your pivot ablation vs beat here or other or other indications.
Indications.
So I think on our last call we talked to.
Over 90% of duress, having been performed at the first two hospitals since their installation and I looked it up before this call and it was still a little bit under 200 and it would've been nice if it was 200 or more we would have kind of called it out but it was a little bit under 200.
And so the utilization is definitely higher at those two sites than our typical average again, it's it's two hospitals and there are there are there are various circumstances that can lead to that at higher utilization of which Genesis is one of them, but I don't.
Want to yet with kind of small numbers too to create kind of expectations. There that every genesis launch is going to necessarily be at a higher level.
And we're being used at both sites for the broad range of arrhythmias.
From from what are generally considered the simple ones for the most complex.
Great and just my last question. Thanks for taking all of them on it maybe getting a little ahead of myself with the <unk>.
Genesis launched in them.
Early stages first inning, if you will with.
The tests are like CEO compensation agreement that was announced yesterday.
Plotters or just confirm so you believe the momentum robotics navigation is a platform technology and a long runway someone's milestones $1 billion 5 billion dollar valuations, but sort of triggers.
The compensation plan.
I wanted to just the direct question is could you talk about how Genesis evolves from its current form.
And then just anything high level in terms of you guys.
Comments here on your scripted remarks about it being a platform technology and moving out of just the EPS indication.
Just the Genesis technology as a whole and then there'll be indicators should progression on any updates there. Thanks for taking the question.
Sure. Thanks.
So yes, so in terms of the compensation plan and kind of I think it reflects the fact that we are looking to build.
Long term very robust company that has a significant positive impact.
In medicine, and then and very much want to create the right alignment of interests.
And to build that long term highly impactful company and and when we think about kind of Genesis and really the role of Genesis as a medical device is to create very precise a uniform magnetic fields that are controlled by a physician.
What are the patients that chester or or wherever the patient's anatomy is that it requires therapy and and and what you need to move to other indications is the right.
Intervention on devices that can be controlled by those magnetic fields and and right now there's a cardiac ablation catheter that has has the right kind of design. So that it can be controlled by those magnetic fields and in the future you will need.
<unk> family of other devices to be able to do so and again I think theres kind of every aspect of our technology can be improved significantly from where it is but and but kind of in order to move into other clinical applications. It's that kind of suite of interventional devices that needs to be developed.
Excellent.
Congrats again.
Thank you.
Moving on we'll go to Frank taken in with Lake Street capital markets.
Hey, Thanks for taking my questions and congrats on a good quarter.
First one from me Frank.
Absolutely first one from me is on the five purchase orders I'm curious if you could talk a little bit more to the cadence of those installs potentially from 2021, maybe if you could help us a first half versus second half just to get a little better understanding of the sales cycle from purchase order to cash.
So it will be fantastic.
Yeah.
Sure I would expect we've already shipped the first of those and then I would expect that that those installs all take place roughly in the second quarter or summer time.
Okay, Great and then moving on to the catheter speak about that a little bit could you talk to some of the milestones we should be looking for.
Throughout the next couple of quarters to ensure we are on track for the EU launch in the second half because the back half of this year as well as the U S. Pivotal and then maybe speak to the commercialization strategy and how that can change over the next couple of years with the launch of accounts.
Yes.
Sure so on the catheter side and we've been going through a very very intensive.
Our cycle of receiving batches of catheters and evaluating those batches to ensure that not just one catheter a few catheters, but but all catheters in a batch are performing according to specifications and kind of.
Across say you know a wide range of things that you test and our index. They continued to perform well. Despite some some use kind of then some use and abuse.
And then based on those learnings you refined the manufacturing process to kind of to fix any areas or improve any aspects that are that kind of need improvement and then you do another batch when you run the same cycle again, and so we've been running through that process multiple times, now and and and we're kind of getting to the point, where now we're and as star.
The manufacturing of of hundreds of catheters to do formal formal testing that gets submitted to regulators and so the real kind of next steps are running those formal testing and having hopefully successful results. Obviously as we expect expect a successful.
Results from those testings as submitting that debt.
A dossier that includes that testing and to the EU and notified body and and submitting it submitting an IDE application, which also rests on all of that testing and to the FDA and so kind of what you should see as kind of the next steps as us us kind of completing that testing successfully and may.
<unk> submissions, both in Europe, and the U S. And then receiving responses from both that the European regulators and the FDA and then.
And that's really kind of the next steps on the process, while we've been doing that we have been obviously, having discussions with the regulators in both debt both geographies and we've been planning for the commercialization in Europe, and so we are and making very detailed and business plans for every individual existing customer in Europe.
And about what the dynamics are in order to launch a catheter.
In that hospital and whether there are.
On whether there are kind of tenders that are necessary or what kind of purchasing processes take place at the hospital.
What the kind of drivers might be for adoption and how pricing should look like and so we're very much planning for that launch kind of been concurrent with all of these activities.
Perfect and just last one from me you guys have shown really good operating expense control. This year, how should we think about operating expenses in fiscal year 'twenty, one those revenues growth.
Yeah.
We want to continue investing in the business and Theres a lot of exciting things on the.
The R&D side still two to advance the technology further and I think again, we're still just in the earliest innings of what's possible with robotic magnetic navigation at both <unk> and obviously in many other clinical application and so theres a lot kind of that we can invest in and we will continue to build up the team and to investing meaningful.
<unk> that drive long term growth also on the commercial side we.
We are making efforts to really try to modernize across our.
Across the in house at team in the field team at various aspects of our commercial infrastructure and we will be growing the team in the coming quarters and so I think what you should expect is a gradual increase in operating expenses, while still maintaining financial prudence I'm, saying, we should never have a burn rate.
Where suddenly you have concerns about our about us needing to raise capital or or or having any viability concerns are the fact that we have a very prudent business and a strong balance sheet I think it day, it's great for our customers, it's great for existing partners and potential partners and then and it just kind of I think that's the right way to run the business.
Okay.
Perfect.
Congrats again on the quarter.
Thanks, a lot.
And next we'll go to Jason split from a lifeline.
Hi, Thanks for taking the questions first off you mentioned the China sale that you think will clear this year.
So that would require an approval from the government.
Et cetera, or whats regulatory what's required on the regulatory front to get them installed on it.
Net revenue recognized.
Hi, Jason Good morning, So the sales to China was actually of the Niobe system. So because genesis is not and it cleared in China. It was a sale of our R. Ryobi system, which has regulatory clearance in China.
I see okay that clarifies it.
Also can you kind of give some color on terms of how you're interacting with your partners, notably acute us, which I believe you're partnered with.
Are they helping with referrals or.
How how is that how is that relationship working in terms of promoting system.
Yeah.
So at its core and kind of we are we're great partners together, because they have an elegant diagnostic technology and and we have a very elegant a robotic technology that navigates the therapeutic ablation catheter and and so we're delighted with our collaboration.
We've started to see more and more.
Hospitals use us together.
We are seeing the initial use even.
This week <unk> of their contacts mapping capability with our system and so on and so theres a theres a positive kind of a collaboration there and a natural and a natural benefit of CCAR two technologies used together and then.
And tried to support each other and that's but thats kind of not a big driver to the revenue growth I think it's a broader aspect of our collaboration and the nice use of our technologies together, which is really the positive effect.
Okay that makes sense.
In terms of you mentioned these systems it sounds like Theres about.
There's a pretty wide range in terms of what the system is getting installed.
But it sounds like Youre, saying most of these are installed this summer or is it like did I hear that correctly in terms of the five orders.
That you received this quarter.
So that that would roughly imply a six months time to installation.
Maybe this has been asked before but just how should we think about this it sounds like.
Given thats the time line.
Bye.
Basically anything that you haven't had by the summer basically falls into next year for revenues is that is that the right way to think about it.
Yeah.
I think generally the timeline will range anywhere from three months to 12 months or so okay and and so some of these orders will be installed in the second quarter. Some will be in the third quarter and it's somewhat dependent on the hospital itself. So we don't have full control over the installation timeline.
Digital has its room ready for us and we can come in.
But roughly I think that three to 12 months timeline is right and what you see based on kind of the orders that we're talking about now it ends up generally we don't it doesn't seem like any of these five will be 12 months timelines. It seems like it will more be in the L. A six month or a sub six month timeline.
Okay, and then on the catheter.
I appreciate the update.
Or would you be ready to launch once you obtain CE mark or would it be some or will it be some delay.
From manufacturing once you get it.
We should be able to launch one way of sema.
Okay.
Well, thank you very much good quarter I appreciate it.
Thanks, Jason.
And once again it is star one at this time for questions, we'll pause to give everyone the opportunity to signal.
We will take our next question from Christopher Carol Hillary with Roubaix capital.
Yes.
Hi, good morning.
Hi, good morning.
I wanted to ask just just given the strong demand that you've been able to see or are there some things that you've been able to learn from your.
I'm kind of a virtual sale.
Sales process or are there metrics that you're able to gather that maybe would have been harder to see.
From in person and then.
Also does this change at all how you expect to kind of go to market as the economy reopens.
Great question.
I think from a metrics perspective again, the numbers of orders and the numbers of customers. It's still we're still in a relatively small and in the end in an early stage and so it's very hard test statistics that you build and modeling off of in debt you can really rely on the probabilities and but in terms of these are virtual.
On test drives tell a robotic test drives that we've been performing by now we've had over 300 physicians hospital administrators and on these types of calls and that has been an amazing amazing experience for us and has allowed us to reach more of our existing customers on more potential customers and then than ever before I I'm hosting.
Two physicians today, one from Europe, one from the U S and on on such calls after after this earnings call and then and the ability to do that kind of without the disruptions of travel and intend to do it in a in a very nice fashion has really been.
One of the big positives from last year, and that's something that I think will maintain and long after the COVID-19 restrictions and disappear and so that does impact some of how we're thinking about commercialization I think you can build a commercial team set very much like all other medical device companies, where you hire people you give them.
On the territories and and that's a that's a fair model that's something that we will we will do that type of building, but we also wont do we won't build on commercial capability fully in just that way and if you look at some of the best companies out there.
Apples, the teslas and of the World.
Many of them have built great strength by having direct connections between the corporation and the customer and making sure that that is that connection is a strong and very very kind of customer friendly connections and so I think you'll see that we're going to we're going to do something and we are doing kind of similar types of things Theres a lot of.
Work still to do there there's a lot of ways to make that better but I think that you can also build a medical device company that doesn't necessarily have to rely purely on the old model of our commercial teams and so it will be a hybrid of those two approaches and something like these that total body test drives is is much more in the latter model than the former.
An update on the on the new.
New product expansions that you've that you say thanks, thanks, so much.
Thank you.
Next we'll go to Chris Brown private investor.
Hey, David how are you.
Hi, Chris Good morning.
Good morning, Congrats on the on the quarter on the guidance moving.
Forward just had a question with respect to <unk>.
Some of your robotic tiers.
I'm wondering about five orders on the call is great. Some of the some of the previous or companies that are out there, we'll announce the order via press release and they get it are you still going down the path of potentially announcing needs via press releases once they are installed.
Or how do you think about you know how the shareholder base will learn about these.
New orders.
We will make press release announcements in coordination with our hospital customers and we want to use those also to the benefit of the hospitals in their region and so that they can showcase their leadership that to their stakeholders.
And so generally I would expect for these quarterly earnings calls.
B the primary source of hearing new orders, but but you, but theres no reason for you not to know the names of the hospitals that have ordered at the system that we described today and just those will happen in coordination with the local hospitals.
Okay, Great and then you've talked about this expansion into multibillion dollar adjacent markets, where we're going to learn more later this year I know you've been.
Tight to the best on this with respect to the divulging information, but if I could ask on the regulatory requirement front.
What's the <unk>, what's the outlook as you move into these new adjacent markets is that going to require you know mean filings across the board whats once you announce something can you go through immediately.
Give us some color on that.
Yeah.
We'll be I mean, whenever you develop new technologies, there is a regulatory process and so I would expect us to have a regulatory process I don't I don't necessarily think that youre going to have a PMA process.
For for some of these and so and so again I think kind of at the end of this year will be in a position to give you much more color on on the the various technological components of that third wave and kind of the timelines that we think.
We wouldn't talk about it if it was years off from commercialization and but there is but there is enough there will be a there will be also regulatory aspect to the timeline.
Okay, great well look forward to the future congrats on the compensation package you should be commended for what you've done so far on not getting paid for it and I hope you get the full 10% on the on the.
The deal that was put forth.
Thank you very much I will work very hard to get the full 10%.
Thanks, Dave.
Thank you and there are no further questions at this time I'd like to turn it back to our presenters for any additional or closing comments.
Okay. Thank you very much for your continued support and interest in stereo taxes. We're excited for the year ahead of us and look forward to speaking again in a couple of months. Thank you.
Thank you and that does conclude today's conference we'd like to thank you for your participation you may now disconnect.