Q2 2021 Zynex Inc Earnings Call

Good day and welcome to the <unk> 2.

And then on 'twenty, 1 second quarter conference call all participants will be in a listen only mode share do you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

After todays presentation, there will be and opportunity to ask questions to ask a question you May Press Star then 1 on your telephone keypad and to withdraw your question. Please press star.

And then too.

Certain statements in this release are forward looking.

And as such are subject to numerous risks and uncertainties actual results may vary significantly from the results expressed or implied and such statements risk factors that can cause actual results to materially different.

From forward looking statements are described in our filings with the securities.

And exchange Commission, including the risk factors section of our annual report on form 10-K for the year ended December 31 of 2020 as well as forms 10-Q, 8-K, and 8-K and a press releases and the company's website.

Please note. This event is being recorded I would now like to turn the conference over.

With Vanguard founder Chairman and Chief Executive Officer. Please go ahead Sir.

Good afternoon. My name is Thomas sudden got President and CEO of <unk> welcome to our 2.

2022nd quarter earnings call.

I'm excited to announce.

To total another quarter of revenue growth and positive net income.

Our second quarter revenue of $31 million is the highest quarterly revenue and the company's history.

And increased 61% compared to the same quarter last year.

We continue to see good order flow as the economy returns to.

A normal and second quarter orders came in 247% higher than Q2 of last year, and 11% sequentially compared to the first quarter of this year.

Yeah.

The continued strength in the order of speaks volumes to the relationships and our sales force has been the 90 prescribers and the need for them.

And to prescribe non opioid none of the.

Prescription strength solutions for the patients in pain.

As a reminder of the majority of cash and revenue related to and order comes in over the year and following years. Following the receipt of the order and the patient choose and use the device and related supplies, which.

Should lead to expanding revenue and profitability for the throughout 'twenty 'twenty 1.

And beyond.

During the second quarter, we continued to focus on the productivity of our sales reps and trimmed our less productive reps the trimming of sales reps and the high competitive.

<unk> market.

All of it and not hiring.

And as many of our reps as we said goodbye to and therefore saw a decrease in the active sales reps and now here throughout the second quarter to approximately 450 reps at the end of the second quarter the.

Joyce and sales reps.

And now.

Slightly decrease the forecast of revenue, but also in turn which I think is very important book.

<unk> profitability here and the near term and.

And it's obviously very difficult to grow as fast as we had been growing.

For the for Awhile.

And and and invest in the sales force was the very high expense and.

And and post a and.

The significant profit.

And we know so all of the beginning of hitting Q2 and expect to see that throughout the rest of the year.

And that will will be slightly more profitable than and then we had originally expected we still expect to have approximately 550 sales reps by year end.

The addition of of net of 50 sales reps compared to the beginning of this year.

The compares to.

And net of almost 300.

And that we added in 2020 most of those in the second half of 2020. The additional sales force gross is now happening at a much slower pace, which will the direct to help our bottom line.

I also want to mention.

That oh.

To break from still continue without issues and all of the supply change remains uninterrupted as we've discussed previously.

Taking a very conservative position and responds to COVID-19 and any possible supply of supply chain issues, which were solid and an increase in inventory.

At the end of Q1.

Approximately 3 million and excess of our normal levels in Q2 on inventory level.

The level of started moving back to more normal levels, which will continue during the second half of 2021.

And as announced earlier this year.

Moved into our new corporate headquarters during the quarter.

The new building has additional square footage and expansion rights to support out of continues Roche.

And the opioid epidemic continues to be a serious issue and this country and we are increasingly working to get patients off opioids and for physicians to use our prescription strength of technology as the first line of defense from treating pain.

Currently the devastating impact of suites that are level with tens of thousands of die yearly due to the opioid abuse.

We continue to develop more tools to make physicians aware of all the technology. The literally has no side effects.

Our product for pain management and be able to station instead of stand out of some of the best in the.

Industry. The next wave for pain management on new move devices for stroke rehabilitation and the invite a friend and continent of treatments.

Puts us in a very strong product position and the rehabilitation market.

We continue to see great potential in both our product innovation, our existing revenue generating area for pain management.

And that's a huge unmet potential power of blood volume monotone.

As most of you probably already know the managed to get FDA clearance for our XI and 1500 mm.

Book value monitor a year ago. We recently also filed a patent.

On top of the 3 patents and set up that have now been issued.

<unk> for the blood volume on the chip, but also for and noninvasive method to detect Oh early detection of sepsis.

The C and 1500 as of Noninvasive monitor intended to monitor patients fluid balance in the hospitals and surgical centers.

We expect to.

And initially target or some surgeries of typically display substantial part loss as well as recovery rooms, and I see us where internal bleeding. So they are common and difficult to detect until serious complications of occur we.

We believe this product will lead to safe of surgeries fewer complications and the less mortality 1 of the biggest unmet needs and hospitals today.

We continue to see solid preliminary results from our clinical study of wake Forest.

We've now had the device and wanted to more than 1 and 120 patients and.

And the device so far has.

And solid in terms of ease of not providing a false positive of 1 that has been.

And bleeding and the other.

Oh, the fluid loss shown a significant change and so this is this is obviously very encouraging.

And we are we giving up 2 of them to commence more studies and.

On the device shortly.

Our engineering team.

It's also expanding pretty significantly and.

And well underway with building prototypes of the next generation, the CMC and Honda that'll be easier to use and surgical settings compared to 2 of the see and 1500, and we also adding personnel and other resources.

The more clinical research.

Hum.

And I will turn the call over to Dan Moorhead, our CFO.

Yeah.

Thanks Thomas.

First I'll review, our 2021 second quarter results.

And there is grew 247% year over year and net revenue.

To kind of 61% to $31 million from $19.3.002 million 20.

It's also worth noting the Q2 revenue increased 29% sequentially compared to Q1.

Device revenue increased 83% to $7.8 million compared to $4.3 million last year.

Supplies revenue increased 55 per cent year over year to $23.2 million from $15 million.

Gross margins were 77% and the quarter.

As we've mentioned previously we transitioned our production and warehouse to a new facility during Q1. This.

And this is greatly enhanced our efficiency, but and the short term and.

It has put some pressure on gross margins.

Sales and marketing expenses increased 102% year over year due to our sales force growth.

G&A expense grew 43% year over year.

Of the increase was related to increased head count and our reimbursement and patient patient support functions related to our order.

Order growth.

Second quarter, net income was $2.8 million or <unk> <unk> per diluted share.

Adjusted EBITDA, which is the standard EBITDA calculation, plus and exclusion of noncash stock based compensation severance noncash lease expense and other income expense and as reconciled.

And our press release was $4.8 million and the second quarter of 2021.

I will now review our 2021.6 months results orders grew 186% year over year, which increased net revenue, 60% to $55.1 million from $34.5.002 million 20.

Device.

<unk> revenue increased 84% to $14.2 million compared to $7.7 million last year.

Supplies revenue increased 53% year over year to 41 million from $26.8 million.

Gross margins were 76% and the first half of 2021.

Sales and marketing.

And this has increased 123% year over year and G&A expense grew 44% year over year.

2021, 6 months net income was $2.1 million or <unk> <unk> per diluted share compared to net income of $6 million of <unk> 17 per diluted share last year.

Adjusted EBITDA was $4.4 million.

And the first half of 2020.1.

On the balance sheet as of June 30th cash was $32.3 million, which is down slightly from Q1.

But mainly related to the $2 million and purchases and our stock buyback program.

Our working capital was $52.9 million at June 30th.

And the that I'll turn the call back over to Thomas.

Perhaps you're muted.

Pardon me Mistras handguard.

Oh, sorry.

Sorry.

I am sorry, I'll be right back and I'm pleased from the second quarter order growth of 247% and our revenue growth of 61% it clearly justifies.

<unk>, the investments and our sales personnel and sales management and insight support functions.

Our focus for 2020, 1 is increasing sales force productivity is selling ratios through the normal course, continuing to leverage the investments.

And we have made within sales and the DNA.

The improved profitability and most importantly, helping our patients and pain.

We will continue our sales force growth and the second half of 'twenty, 'twenty, 1, but a slower pace than in 2020.

We have made the investments and growing our sales force primarily in the second half of 2020. This investment is showing.

On a totally right signs as the first quarter loans grew 140% year over year and.

And again in the second quarter, 247% the OEM.

These orders.

Convert into revenue over the next several quarters I should say several years and further out and therefore.

We we continue to build profitability.

In the second half of 2021 and 2022.

We estimate our third quarter revenue to come in between 34.5 and 36 million.

And with an adjusted EBITDA of between 5 and 6 million.

The third quarter revenue range is now 72% to 80% higher than 2000, Twenty's third quarter revenue.

We have narrowed our full year 2021 and revenue estimate to now be between 130, and 137 and a half million with adjusted EBITDA expected to come in.

Between 16.5, and $21.5 million.

The full year 2021 revenue estimate is on the lower end of previously provided guidance due to the she was unexpected sales reps our wishes.

And partly due to the the and how hard it is to 2 of them to higher sales.

From fly, but the good part about it is that it is having a positive effect on our near term profitability.

The full year revenue estimates of approximately $62.72 per cent of 2020 revenue of $80.1 million.

My long term goldfarb on length of therapy.

Therapy, and we have division is to continue to grow our share of the huge market the prescription pain management and to take advantage of the huge void in the market. After the disappearance of our main competitors. This includes growing our domestic sales force as well as potential acquisitions of complementary complementary technologies.

And our long term goal.

He has to fail, all 800 territory and the U S.

And eventually have all of our sales reps all become fully productive.

We see that it takes up to 2 years to make yourself from fully productive.

In summary.

We had announced strong gross and autos.

And we.

We see those will drive revenue growth and profitability gross and the second half of 'twenty 'twenty 1.

We will now answer questions from all the listeners.

Thank you we will now begin the question and answer session.

And ask a question and you May Press Star then 1 on your Touchtone phone.

And if youre using a speakerphone please pick up your handset before pressing the keys and to withdraw. Your question. Please press Star then 2 and at this time of pause momentarily to assemble our roster.

And the first question, what kind of come from Matthew O'brien with Piper Sandler.

Hi, guys. This is summer and on for Matt and Thank you for taking the question and so I wanted to speak on the sales force.

You guys are looking to onboard more rod I think you mentioned 550 was the target by year end.

Correct me and for the spend.

Here in the back half of the year in order to hit that target and then can you also speak on the attrition, you're seeing and the sales force, which seem to impact this quarter's total rough number.

More so and then in previous quarters.

Yeah, I would say it impacts the.

The bottom line.

The line more than anything are the relative to new reps that got added and maybe.

And maybe at the very end of last year would.

And would not have provided the whole lot of orders that have contributed to order of 2 of true revenue yet.

So.

The fact that we and the first quarter, where the very conservative about adding a whole.

And perhaps and.

And we're more focused on on trimming those that were not so productive and.

And and and continued that trend is for the second quarter and.

As more contributed to a better bottom line than we originally estimated not really contributing so much to the to any of any change in the.

Revenue.

And we we see as really ramp up the sales force again.

Although it will be at a much slower pace.

And we'll see that the rest of the year looks flip book.

Pretty solid in terms of the Bottomline and and.

And we would be coming in at approximately the same revenue or debt, we were expecting going into the year.

Okay, and sorry, I think I had 1 of them at what would you have to spend more in order to hit that target in order to on board and those reps the 550.

The that you're trying to hit by year end.

Hum.

It is the theres not a whole lot of the additional expense.

And I think the fact that we lend up at 550 of mover of Wild back 6 months 6 months ago, we were thinking of 7 months ago, we were thinking more.

And our 600 reps at the end of the year some of them. We will as a result of of that will end up spending less.

And and therefore.

And we're very optimistic about the.

On the debt to EBITDA and the EBITDA margin and.

And then if you look at the percentage of just real quick.

If you look at it as a percentage of revenue Q2 sales expenses were about 44% it should be similar to that in Q3 as a percentage as the revenue goes up and then we will continue to gain more leverage on it so it should be approaching 40% 41% of revenue by Q4.

Okay. Thank you guys and then just a follow up could you maybe provide some color on what that means for the outlook in 2020.2.

Yeah.

Yeah. Since we are we have seen here several quarters with the order growth.

1 of the 100%, which.

Is the doubling of revenue.

And of course, it's yet to be seen how well Oh. So for the first sales force will continue to ramp up and how well are the new reps, we add inc will be ramping up and the they're the early early days.

To see if we can get the same kind.

Kind of order gross and next the.

The next quarter or 2 obviously.

And our numbers the.

The top line and.

<unk> continue to go up and we feel we feel more and more territories and they become more mature the the percentage growth will eventually stopped dropping.

But but revenue for next year compared to them.

Compared to the revenue for this this year could could well be approaching 100%, but again that that'd be a pretty pretty significant. The this early that's of significant tolerance on on that it's always.

It is easier to predict when the company gross 5 or 6% of year and.

And when you're when we're talking about this kind of growth here on this.

And that's a pretty big Tullow and zone on the revenue growth and in the order gross we'll see next year.

Okay perfect. Thank you guys for taking the question.

And the next question.

The next question will come from Jeffrey Cohen with Ladenburg Thalmann. Please go ahead.

Hi, Dan and Thomas This is actually destiny on for Jeff. Thank you for taking my question I was just wondering if you could first maybe talk about some of the progress you've made around securing and additional supply.

For additional supply sources, and I know that you mentioned that you're taking precautions and being conservative. So I'm wondering if there's any any additional information you could give us around that.

Oh, no not really any and any material significant.

The information we the is it just.

Fire or sort of quarter after quarter that the strategy, we apply the started applying.

About 2 years ago.

And it's working really well, having having so many second sources and in place and also of.

And being very conservative, placing orders followed and the future has put.

Shown in a strong position and and we just obviously of trimming or the inventory levels of a little bit of just so that.

And as we we see that the long term debt.

The supply chain will be more.

And it will be more stable of debt.

But we.

We don't carry too much inventory, but so the total cash position of that a little bit on the other hand, as we were able to afford it and I think that money was well spent.

Understood. Thank you, perhaps all lots of transition over to some sales force questions could you remind me how many sales reps 1.

Call Center of backend individual of support can typically manage and in terms of patient volume.

Yeah. It changes all the time, because we and our into in terms of the the infrastructure of the at the back office supporting all of our sales reps are we have here. The last couple of years, we've probably.

Structured debt.

And what 2 years, probably 4 or 5 times as we continue to grow.

As the issues, we are dealing with on the sales force keep changing.

But probably more and more importantly, as we are in the middle of last year the second.

The second half of last year.

And expanded our regional sales manager from from 5 up to 15 to many of trial, how many sales reps. We have we have now and so we wish all of that we've actually been able to make it a little lighter on the inside of the move people over to more processing orders.

And I'm sure that of the prescriptions, we get and the the background information of the demographics et cetera and more.

That's all more complete and.

And so it it it can't change, but typically we've had 1 sale support person if you want to put it that way of per region and.

And a couple of support people per region as well.

On that debt that helps the reps with the getting the the paperwork and complete et cetera. So it it.

And depending on how you create the structure, but it takes about.

The 3.3 maybe 4 people.

The smaller per region to support them and you multiply that by 15 and so but the tells you about the support organization.

Okay its value.

And you're right yes.

Got it alright, Thank you and you know I have to ask.

And the progress around the blood volume on there and how.

Oh, well what kind of feedback are you getting internally from your VP of sales and ops as well on.

And on some of the initial customers and placements and then you mentioned some clinical work and I was wondering if you could provide a little more detail on that as well.

And it doesn't have the Leslie on me, but that's that's the model.

People put on a half of dozen the.

Clinical sites.

And we searched hospitals et cetera that we were working on them I don't I don't remember the names of right here and and the more that are kind of and in the half of that we are we're talking to are obviously very he's he's very excited.

The more I think they are all very excited about the kind of day. We are we are getting from wake forest the.

I believe it's it it's better than we would expect them but.

We are also trying to especially with new studies will be starting and I've tried to stress tested. So that's the the more extreme situations we put.

Put the device and.

And and therefore potentially learn more about how to.

Trim and optimize some of the of the parameters, we used to add into the index, but but so far it's it looks like a very very solid product.

Okay, that's very interesting.

I think I'll take the rest of my questions offline and let someone else jump and thank you.

Okay. Thanks.

The next question will come from <unk> Chen with H C. Wainwright. Please go ahead.

Oh. Thank you for taking my question I think your original go for the sales Rep number.

And number by the end of this year was 600.

Now that's a bit lower so would you say the overall timeframe for to reach your ultimate go on.

For the number of sales reps has shifted a little bit later due to the difficulty of funding experienced.

Great Big productive sales reps.

Yes, I would say and <unk>.

I'm not sure we have been specific about on endpoint for that but we should be able to add the net from here on out of up to a couple of hundred reps.

Yeah.

And we could probably push it because we saw what we could do last year was it probably push it to get to 600 by by year and but at this point.

The because it's not as easy as it was a year ago I think it's better that we are we also.

Stan and see about who we are who we hire so we have a higher success rate with the 2 hour true.

Of course, I think that's important too and.

And I decided effect, obviously is at it and it's kind of the as we continue to grow over the next several years and it's going to give us the slightly better.

EBITDA.

EBITDA margin or profitability by not growing as fast.

Bucket, but technically you're right yeah.

Okay got it.

At this point of what you'd be able to provide.

From my son clarification regarding the potential launch of the law.

Also pickup truck body of monitor potentially in 2020, 2 and whether that's going to be the original model or did the the newest of motto.

And that's a good question personally I think the the features including being wireless instead of having a cable out of the patient.

And is 1 of those things that's going to make it a much easier sell.

And and there's a few things and the use of frankly, the state of the concept of the algorithms and all of that is still the same.

And so that that's something we are we are definitely looking at I think it's probably more about having the having little more substance in terms of the debt.

Clinical support.

So that when we do approach or at a broader scale hospitals and general surgical centers et cetera.

That we may get a and easy sell for the sales force and and all of the.

The medical device companies, we might be working with them.

Yeah and.

The future to get it out but.

It's.

Yeah the.

And that definitely building via the clinical evidence and we are.

We also are debating internally, whether we should put the the biggest push or whether it should be and get the existing model.

All of 1 of the 2 next models that we have in the in the pipeline and and literally prototyping now.

So by the end of this year, we will have better clarity as to the launch plan yeah, Yeah, Yeah, probably I think of it.

And so much happening and that division now that the there'll be a lot more to talk about.

And the nice and neat.

And a couple of quarters definitely yes.

Okay. Thank you Thomas.

Yeah.

The next question will come from Mark Weisenberger with B Riley. Please go ahead.

Thanks, Good afternoon, the does the updated guide contemplate any potential.

And from the Delta variant and the second half of the year or is it based essentially on and unchanged environment from the second quarter.

I would say no and.

And.

To be more specific unchanged environment, yes.

That's sort of that'll be estimate yeah got it and then a little.

Disrupt commentary on the calling of the sales force was there a change in any quota levels or or what kind of went into the decision to trim. Now was it that you just kind of your tolerance for some wider on a.

Performance was no longer acceptable or kind of maybe just help us understand.

Stay on your thought process on trimming now.

At and I think it's the it's a combination of the things, but 1 of the primary driving factors was obviously considering.

On the the 300 of net additions the law.

Last year of or the majority of the was towards the end of the.

A year.

We.

We did have quite quite a few of people that were not performing to the U.

You used the term quota.

And sort of the minimum requirements of tell us that we will have a solid per forma longterm.

And that's been and quite a bit of a terminal and.

And that and deliberately early in the year, we we were hiring at a and a much lower rate of probably about a fifth of what we did and the second half of last year.

And that obviously net it out to be a deduction and the sales force and it's not something that a of a I would look at as the negative of course.

So I'll take the.

And the increased bottom line and any day, while we assume syndrome and the order significantly but as and it's it is as we're looking at it it it's now becoming easier to manage the sales force for our regional sales managers and.

Because.

They are they have few and and and.

And more or I should say less dysfunctional reps anything to attend to so that's a lot of benefits and as we as we we didn't that debt that many into the sales force during the period.

We have now and.

And the double triple debt effort, so that the we'll be adding.

Adding and publicly.

Probably a net of probably of net of 20 every months throughout the rest of the year.

Got it. Thank you can you talk about the net top 10 reps and what percentage of sales and they represent.

As well as the top 50 sales reps and how of those percentages change since the end of the last end of last year.

Okay.

Oh I don't have the numbers in front of me. So I'd have to our guests are a little bit.

But our top 10.

And.

We're probably.

The producing something like 4 of 5% of all all of us.

And.

Theres also.

Let me let me let me think.

Ren and Theres not necessarily a of.

The correlation between the who are the top 10, the auto producers and and who of the better revenue producers, but we still have some reps that are there and a few rocks that produce.

Maybe $2 million or close to 2 million of year and.

And.

Quite a few of more than if it doesn't the produced well over a million of year.

And 2 and a lot of reps and a slowly creeping up there, but they obviously need to have been employed here for quite a while.

Before the the accumulated revenue as it comes in months after months of.

After the order comes in before the revenue.

Slowly starts of.

And moving D and the average revenue per per sales rep number.

And <unk>.

The question is up 50.

That's about 10% of Oh.

And our sales force, we probably get something.

And 15% of all of hours from the most of it it's very widespread that's as you can hit on that.

The the the orders Fortunately on and not just concentrated to a few reps, but but but definitely spread out of true through the entire country.

Sure Yeah, just 2 final.

Like and it's for me with regards to the next wave do you of any plans to kind of update it at all maybe make it wireless or add additional functionality and and just not how do you. How long do you think the current iteration can sustain its reception and the market as we do see some early.

Entrants are having maybe more of kind of updated the pain management devices.

Currently we don't we don't have any plans are we we got we got really great engineers, so that the relatively quickly can bring new.

A new version of that technology.

The question of all the products to our to the market if if if need be.

And.

And as we see the new technologies coming from the market. All the time, we did that we saw the 30 years ago with all of that 20 years ago 10 years ago, It et cetera.

And it's still a very strong.

And in terms of the market adaptability of of very strong horse the very strong position.

And then what do we see as most of the what's more important its obviously that.

Pretty much all insurance cover it.

And we also see that obviously of prescribers.

Uh huh.

Familiar with it and becoming the more and more familiar with it and and 1 of the most important things are that the.

Debt.

That that drives a when prescriptions are written is true.

The 2 lots of extent.

The relationship between the sales Rep and.

And the prescriber.

And as well as how will we as an organization not just the device, but how long do we take care of the patients on.

And we help them and it was insurance questions with our health and the technical questions and we literally follow up of the patient same day or the day. After the worst case of we get the prescription we follow up of the patient.

Same day or the day after the perceived the device and.

And we have a very extensive customer service department debt.

And we try to to keep as a well staffed I should say and in some cases all of the staff. So that we can answer them.

All on calls that come in and.

Hello, and 90%.

And at a time, so so no 1 gets too to leave voicemails, when you're saying, it's part of the overall experience and also makes the prescriber want to continue to do the prescribed the device because we take good care of the patients. So it's not just having a great device, it's the entire experience and.

And having a strong sales force.

And with strong relationships.

That's that's important for the.

Generating the prescription and the future of revenue as you're alluding to so the.

And there's less pressure on just having.

The Ascension you.

Technology, it's it it's really the the whole package and being able to.

And with prescription strength.

I'd like to say, if you'd be able to help patients with with the pain. So I don't I don't see of competitive from a product point of view competitive price shuttle.

Understood. Thanks, and then just the final 1.

For me.

Have you added any sales reps and the monitoring division.

At all.

And we are we about to add a few people who call the business development people and debt.

And call them qualified sales reps or the.

Well the booth of spending.

A lot of the time of developing key opinion leaders.

More than just knocking on doors and and trying to move some box.

The that's the.

That's the literally the the.

The strategy here early on it's about the.

Getting more clinical research.

Also build and key opinion leader.

And and it's just part of the.

On the stair steps that you are you have to take and in this type of medical device sales.

Understood. Thank you very much.

The next question will come from James Terwilliger of Northland Capital markets. Please go ahead.

Hey, Thomas can you hear me.

The Canadian.

Excellent. Thank you and first of all thanks for taking my question and nice job on the quarter very quickly and I apologize Thomas I've been kind of flip and between of different earnings calls. Unfortunately on on the pain management side and I've heard this from some other companies are you.

We're getting hit by any type of wage pressure and it's hard to find employees out there and let alone. Good employees are you seeing any type of increase and wage pressure and what's your what you have to pay these particular on.

Sales reps that you're trying to hire.

Yeah.

James.

Yeah, I don't really have I don't know if we lost Thomas there or not but we are seeing you know, it's just general hiring pressure 1 finding them and then it becomes wage pressure because they may have offers from a lot of different places to work and it's just very competitive in this industry period.

Sales of med device or med Tech and I would say generally it's really competitive so yeah that that ends up putting some pressure on wages.

Wages and how of that wage packages structured for sure.

Yeah, no I'm hearing that from from other companies as well and and again I apologize I've been jumping.

And around on a couple of calls.

How many people and moving on to the to the the monitor division how many people are and that I know, we talked about business development and working with Kols and how many is it of 5 to 10 person team and there I know its pretty lean and mean, but I mean is that still kind of or how.

The we're in that.

That monitoring division at this time.

It had been.

And of that book.

You're back or they go and put them back on the call. Yeah. Just go hit the great.

Yeah, No I think its been a handful and that kind of 5 to 10 range, but we've definitely seen some new hires here. So we've bumped.

Many people on and then the hiring plan for the rest of the year. Thomas you can comment more but I think it's going to push us close to 15 to 20 by the end of the year.

Yeah, absolutely, we are and are investing heavily and it.

And we are of great Guy and done great debt, that's that's running debt division and.

That's it it's very true encouraging to see how we are we see a lot of activity and debt that division.

So I got 2 more questions there.

On the on the on the on the monitor.

I thought I heard the wake forest earlier in the call and again I apologize again, how many clinical.

The test sites or how many beta sites or you and right now I know, it's early but and I know, it's you know it's gonna be a tough sell of the cap piece of capital equipment going into a hospital after the hospital shut down with Covid.

But how many different.

Hospital clients or you're kind of working through with with this monitor at this time.

We are talking.

2 a lot and as of.

Look the hopefully will we get started very very soon but technically we just end up on the right now.

Okay and the.

And then.

And lastly, Thomas this is this is this is for you if you look into 2020, 2 and how you would.

And the launch this monitor and I.

Clinical and into the numbers because it's too early.

Would your preference be to go with an internal sales force or a strategic partner.

Or maybe.

And maybe monitor with with your business development people. So maybe some independent distributors that can call on those hospital was there any and what is your thought.

I don't want to go on ideally I know you may not have the answer yet what you would want to do in terms of distribution for this monitor.

I think as the small medical device company on this is a fairly a new area for us relatively speaking.

And I think the best thing we can do is explore all options.

Thought on them and Fortunately, we do have the the financial ability to to take the time to do it right and and also to develop on all fronts, whether it's.

The private labeling whether it's strategic partnerships or whether it's licensing whether it's the direct sales force.

And he could also from a geographic perspective be different.

Applying different distribution strategies, depending on the the part of the the globe debt we are addressing.

No no that makes complete sense once again, a nice job on the quarter and I'll jump back in queue. Thanks for taking my question guys take.

Take care of yourself.

Thanks James.

And this will conclude our question and answer session I would like to turn the conference back over to Mr. Thomas and God for any closing remarks.

Thank you I hope today's earnings call and it's been informative and for everyone and.

And I appreciate the interest and signage and listening in on this call.

And of Great day to all.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Okay.

Yeah.

[music].