Q4 2021 Motus GI Holdings Inc Earnings Call

Ladies and gentlemen, thank you for standing by and welcome to the MODIS-GI Holding Fourth Quarter 2021 Financial and Operational Update.

Ladies and gentlemen, thank you for standing by and welcome to the motives Gi Holdings fourth quarter, 2021 financial and operational update.

Speaker Change: At this time, all participants are in a listen-only mode. There will be a presentation by the MODIS management team followed by a question and answer session. I must advise you all that the conference today is being recorded. I would like to turn the conference over to, I would like to turn the call over to Garth Russell of Lysi Advisors. Please go ahead.

At this time all participants are in a listen only mode. There will be a presentation by the modus management team.

I would buy a question and answer session I must advise you all that the conference today is being recorded I would like to turn the conference over to <unk> I would like to turn the call over to Garth Russell of Life Science Advisors. Please go ahead.

Garth Russell: Thank you, operator, and thank you everyone for joining us for the modus gi fourth quarter, 2021 update call today representing the company or Tim ran chief executive officer, Andrew Taylor, chief financial, sir, Mark Tom ramps, president and chief operating officer of modus gi.

Thank you operator, and thank you everyone for joining us for the motive Gi fourth quarter 2021 update call today, representing the company are Tim Moran, Chief Executive Officer, Andrew Taylor, Chief Financial Officer, Mark Pomeranz, President and Chief operating officer of motives Gi.

Speaker Change: Before turning the call over to management for the opening remarks, I would like to take a minute to remind you that this conference call and webcast will contain forward-looking statements about the company.

Turning the call over to management for their opening remarks, I would like to take a minute to remind you that this conference call and webcast will contain forward looking statements about the company. These statements are subject to certain risks and uncertainties that could cause actual results to differ. Please note that these forward looking statements reflect our opinions only as of the date of this call we will not undertake any.

Speaker Change: these statements are subject to certain risks and uncertainties that could cause actual results.

Speaker Change: Please note that these political statements reflect our opinions only as if the date of this call. We will not undertake any obligation to revise or publicly release the results of any revisions to these political statements in light of new information or future events.

Obligation to revise or publicly release the results of any revisions to these forward looking statements in light of new information or future events.

Speaker Change: factors that could cause actual results to four outcomes. The different materials from those expressed are implied by such forward-looking statements are discussed in greater detail in our most recent findings on Form 10K and our periodic file lines reports on Form 102 and 8K filed with the SEC.

That could cause actual results or outcomes to differ materially from those expressed or implied by such forward looking statements are discussed in greater detail in our most recent filings on Form 10-K and periodic filings.

On forms 10-Q, and 8-K filed with the SEC.

Speaker Change: I would now like to turn the call over to Tim Rand, CEO of Votastii. Tim, the floor is yours. Thanks, Garth, and good to see you.

I'd like to turn the call over to Tim Moran CEO of.

Jim the floor is yours.

Thanks, Garth and good morning, everyone.

Thank you for joining our call today I'm excited to share an update on our progress through the fourth quarter of 2021 and highlight several key upcoming catalysts that we believe will significantly accelerate our business in 2022.

Speaker Change: I'm excited to share an update on our progress through the fourth quarter of 2021 and highlight several key upcoming catalysts that we believe will significantly accelerate our business in 2022.

Speaker Change: Following my updates, Angie will provide an overview of our financial performance for the quarter and year-ended December 31, 2021. And then we will open up the call to take your questions. With that as an outline, we'll be back in a bit.

Following my update Andrew will provide an overview of our financial performance for the quarter and year ended December 31st 2021, and then we will open up the call to take your questions with that as an outline let's get started.

Speaker Change: Over the last 18 months, despite the challenging market conditions, we've delivered on many of the key milestones of our long-term growth strategy and believe the foundation has been built to move from our market development stage where we've established important

Over the last 18 months, despite the challenging market conditions, we've delivered on many of the key milestones of our long term growth strategy and believe the foundation has been built to move from our market development stage, where we have established important kols relationships gain.

Speaker Change: gained key procedural learnings and advanced our technology.

<unk> key procedural learnings and advanced our technology.

Speaker Change: into the next stage of our plan, which is to begin to drive broad commercial adoption and growth in the U.S. market.

Into the next stage of our plan, which is to begin to drive broad commercial adoption and growth in the U S market.

Speaker Change: We are entering an exciting time in the evolution of the company as we are now armed with the right technology, an expanding commercial team, and a significant backlog.

We are entering an exciting time in the evolution of the company as we are now armed with the right technology.

And expanding commercial team and a significant backlog of colonoscopy procedures as a result of the pandemic.

Speaker Change: First, let me quickly provide an overview of the past quarter, which will also help to frame the momentum that we see ahead.

First let me quickly provide an overview of the past quarter, which will also help to frame the momentum that we see ahead.

Speaker Change: As has been widely reported, much of the fourth quarter was impacted by the resurgence of COVID due to the Omicron variant.

As has been widely reported much of the fourth quarter was impacted by the resurgence of Covid due to the omicron variant.

Speaker Change: At our existing and target hospitals, we saw delays in commercial progress due to staffing shortages and overall capacity constraints.

At our existing and target hospitals, we saw delays in commercial progress due to staffing shortages and overall capacity constraints.

Speaker Change: This had an obvious impact on the quarter, including the rate of new placement of the peer-reviewed system and disposable revenue.

This had an obvious impact on the quarter, including the rate of new placements of the pure vu system and disposable revenues.

Speaker Change: While these issues continued into the first quarter of 2022.

While these issues continued into the first quarter of 2022.

Speaker Change: We have begun to see a general lifting of restrictions and improved resources over the last month.

We have begun to see a general lifting of restrictions and improved resources over the last months.

Speaker Change: We are optimistic that the combination of vaccine deployment and improved therapies may provide greater stability and as a result are hopeful there will be less disruptions to our business in the future.

We are optimistic that the combination of vaccine deployment and improved therapies may provide greater stability and as a result are hopeful there'll be less disruptions to our business in the future.

Speaker Change: With that said, in anticipation of our PureView EVS system gaining FDA clearance in the first quarter, we strategically postpone new customer evaluations and engagements for those accounts that were eagerly awaiting use of the new system.

With that said in anticipation of our peer view Evs system, gaining FDA clearance in the first quarter, we strategically postpone new customer evaluations and engagements for those accounts that were eagerly awaiting use of the new system.

Speaker Change: This strategy was validated when we received rapid FDA clearance for Pureview EVS at the end of February .

This strategy was validated when we received rapid FDA clearance for pure view Evs at the end of February .

Speaker Change: We now believe we have a commercial technology that is the most advanced and intuitive solution to address the significant unmet need associated with poor visualization due to insufficient bowel prep prior to colonization.

We now believe we have a commercial technology that has the most advanced and intuitive solution to address the significant unmet need associated with poor visualization due to insufficient bowel prep prior to colonoscopy.

Speaker Change: Every change we've incorporated into the all-new PureView EVS was designed to enhance the overall ease of use for the customer.

Every change we've incorporated into the all new pure view Evs was designed to enhance the overall ease of use for the customer.

Speaker Change: We have improved navigation capabilities, especially in torturous colons by streamlining the disposable sleeve, making it 50% lighter and 40% more flexible.

We have improved navigation capabilities, especially in tortuous colon by streamlining the disposable sleeve, making it 50% lighter and 40% more flexible. This is accomplished by utilizing a single multichannel tube that carries both irrigation and suction versus the.

Speaker Change: This is accomplished by utilizing a single multi-channel tube that carries both irrigation and suction versus the five individual tubes that were utilized in our previous.

Five individual tubes that were utilized in our previous sleeve.

Speaker Change: The new system is a true on-demand solution, as we have eliminated the reusable loading fixture and drastically simplified the setup. The new process allows for bedside loading of our sleeves, even onto a dirty floor.

The new system is a true on demand solution as we have eliminated the reusable loading fixture and drastically simplified the setup.

The new process allows for bedside loading up our sleeve even onto a dirty scope in 60 seconds.

Speaker Change: Therefore, if the physician starts a case and determines the patient colon is not prepped well enough,

Therefore, if the physician starts a case and determines the patient colon is not perhaps well enough.

Speaker Change: they can quickly load the peer review sleeve on their existing scope and complete the case rather than aborting.

They can quickly load the peer of your sleeve on their existing scope and complete the case rather than aborting the procedure.

Speaker Change: Further, the purview sleeve can easily be removed after use.

Further the pure vu sleeves can easily be removed after use in a case, where the physician prefers to complete aspects of the procedure without the device attached.

Speaker Change: in a case where the physician prefers to complete aspects of the procedure without the device attached.

Speaker Change: This ultra-fast setup and rapid breakdown in the procedure room makes PureView a simple, intuitive, go-to solution that requires minimal training for the GI staff.

This ultra fast setup and rapid breakdown in the procedure room makes pure view of simple intuitive go to solution that requires minimal training for the Gi staff.

Speaker Change: This will eliminate the need for our reps to provide ongoing in-person support.

This will eliminate the need for our reps to provide ongoing in person support.

Speaker Change: The sleeve suction capabilities have increased by 80% with a 25% increase in the number of irrigation jets moving from 4 to 5.

This leaves suction capabilities have increased by 80% with a 25% increase in the number of irrigation Jess moving from four to five.

Speaker Change: Together this allows for faster and more efficient colon cleansing, providing pristine visualization.

Together this allows for faster and more efficient colon cleansing, providing pristine visualization.

Speaker Change: This increase in cleansing capabilities can be extremely beneficial as we look to take the EVS platform into the upper GI space and it's dress acute.

This increase in cleansing capabilities can be extremely beneficial as we look to take the evs platform into the upper Gi space and its dress acute upper Gi bleeding.

Speaker Change: And finally, the new PureView EVS provides a significant reduction in overall cost of goods for both the sleeve and the workstation.

And finally, the new peer view Evs provides a significant reduction in overall cost of goods for both the sleeve and the workstation.

Speaker Change: We believe this reduction in COGS will improve overall margin.

We believe this reduction in Cogs will improve overall margins as well as allow for more flexibility in price sensitive markets, including outpatient procedures and certain regions outside the U S in the future.

Speaker Change: well as allow for more flexibility in price-sensitive markets, including outpatient procedures and certain regions outside the U.S. in the future.

Speaker Change: The PureView EVS was a focal point of our Innovation Day, during which we provided a detailed overview of the advancements I just discussed, as well as why we believe this next generation of our platform will be key to our commercial success.

The pure view Evs was a focal point of our innovation day during which we provided a detailed overview of the advancements I just discussed as well as why we believe this next generation of our platform will be key to our commercial success.

Speaker Change: This event also featured valuable market insight into the clinical need of our system from guest KOL Dr. Seth Gross, Clinical Chief of the Division of Gastroenterology and Hepatology at NYU Langone Health.

This event also featured valuable market insight the clinical need of our system from guest K O L. Doctor Seth gross clinical chief of the division of Gastroenterology and Herpetology at NYU Langone health.

Speaker Change: I'd invite you to listen to the replay of this event, which is available on the Modus GI website.

I'd invite you to listen to the replay of this event, which is available on the motives Gi website.

Speaker Change: In summary, the new Peerview EVS system simplifies our technology for real-world utilization and addresses the valuable feedback we've received from physicians and staff over the last 18 months.

In summary, the new peer view Evs system simplifies our technology for real world utilization and addresses the valuable feedback we received from physicians and staff over the last 18 months.

Speaker Change: We believe we can now drive wider adoption of the EVS product, getting it into the hands of general GI physicians, and positioning its utility for both hospital inpatient and targeted hospital outpatient.

We believe we can now drive wider adoption of Evs product getting it into the hands of general Gi physicians and positioning its utility for both hospital inpatient and targeted hospital outpatient procedures.

Speaker Change: I am pleased to report that in the first few weeks since our FDA approval, we already have PureView EVS deployed at multiple hospitals.

I am pleased to report that in the first few weeks since our FDA approval, we already have pure view evs deployed at multiple hospitals and would expect us to reach our first dozen sites in the very near future.

Speaker Change: and would expect us to reach our first dozen sites in the very near future.

Speaker Change: The end user feedback from both GI physicians and their staff has been very encouraging.

The end user feedback for both Gi physicians and their staff has been very encouraging.

Speaker Change: Rather than hear from me, let me share a few quotes directly from the physicians.

Rather than hear from me, let me share a few quotes directly from the physicians at these hospitals.

Speaker Change: The first is from Dr. Sri Kamenduri at Northwestern Medicine.

The first is from Doctor Sri common dory at northwestern Medicine.

And Sri comment that.

Speaker Change: The new lightweight and slimmer sleeve design feels and functions much more like a bare scope than the second generation, providing me much better control and the ability to retroflex as needed.

The new lightweight and slimmer sleeve design feels and functions much more like a bear scope and the second generation, providing me much better control and the ability to retroflex as needed.

Speaker Change: The next quote comes from Dr. John Rabine at Sinai Hospital LifeBridge Health.

The next quote comes from Doctor John Rebind at Sinai Hospital Life Bridge Health.

John Raybine: stated, the five focused water jets versus the four on the earlier generation provide improved irrigation capabilities that will allow me to target and cleanse in a more precise and effective way.

And he stated.

The five focused water jets versus the four on the earlier generation provide improved irrigation capabilities that will allow me to target and cleanse and a more precise and effective way.

John Raybine: As we lean into our commercial efforts in 2022, we've discussed our plan to grow the sales force in support of the Pureview EVS launch.

As we lean into our commercial efforts in 2022 we've discussed our plan to grow the sales force in support of the peer view Evs launch.

John Raybine: I am excited to report that since our last call, we have already doubled the size of our sales team, moving from three to six reps.

I am excited to report that since our last call. We have already doubled the size of our sales team moving from three to six reps.

John Raybine: and we expect to continue to invest in additional commercial expansion throughout 2021.

And we expect to continue to invest in additional commercial expansion throughout 2022.

John Raybine: By strategically expanding our team, we expect to be able to go both deeper and wider, which we believe will lead to significant future revenue growth for the company.

By strategically expanding our team we expect to be able to go both deeper and wider which we believe will lead to significant future revenue growth for the company.

John Raybine: Now let's discuss our progress on key upcoming catalysts.

Now, let's discuss our progress on key upcoming catalysts.

John Raybine: First, let me review our outpatient reimbursement strategy and our plan for the generation of new clinical data.

First let me review, our outpatient reimbursement strategy and our plan for the generation of new clinical data.

John Raybine: In Q1, we hired a new vice president of clinical affairs who came to us from Medtronic and will lead and oversee our clinical activities moving forward.

In Q1, we hired a new vice President of clinical Affairs, who came to us from Medtronic and will lead and oversee our clinical activities moving forward.

John Raybine: As discussed previously, we have developed a multi-pronged strategy

As discussed previously we have developed a multipronged strategy to seek and secure reimbursement of the pure vu system procedure by both private and public payers.

John Raybine: and secure reimbursement of the Pureview System procedure by both private and public payers.

John Raybine: Over time, if we can secure reimbursement, we believe it will help to further accelerate our commercial expansion into the large colorectal cancer screening market for out

Over time, if we can secure reimbursement we believe it will help to further accelerate our commercial expansion into the large colorectal cancer screening market for outpatients.

John Raybine: We believe the high medical need portion of this market represents approximately 4.7 million patient procedures per year in the United States.

We believe the high medical need portion of this market represents approximately $4 7 million patient procedures per year in the United States.

John Raybine: As such, we are currently designing a large multi-center clinical trial that we expect will generate clinical and economic endpoints in the outpatient cancer screening segment that we believe will support future applications for reimbursement of the Pureview EVS system.

As such we are currently designing a large multi center clinical trial that we expect will generate clinical and economic endpoints in the outpatient cancer screening segment that we believe will support future applications for reimbursement of the pure view Evs system.

John Raybine: Moving now to active clinical studies, I am pleased to announce that the European outpatient clinical study is fully enrolled and remains on track for completion in the second quarter.

Moving now to active clinical studies I am pleased to announce that the European outpatient clinical study is fully enrolled and remains on track for completion in the second quarter.

John Raybine: This study is evaluating the clinical outcomes in patients with a history of poor bowel preparation.

This study is evaluating the clinical outcomes in patients with a history of poor bowel preparation using a low volume prep with limited diet restrictions and the pure Vu system.

John Raybine: using a low volume prep with limited diet restrictions and the peer-review system.

John Raybine: This investigator initiated study is being conducted at two health centers in the European Union and has enrolled all 44 people.

This investigator initiated study is being conducted at two health centers in the European Union and has enrolled all 44 patients.

John Raybine: The primary endpoint for this study is improvement of the bowel preparation from baseline to post-procedure as assessed by the Boston Bowel Preparation Scale.

The primary endpoint for this study is improvement of the bowel preparation from baseline to post procedure as assessed by the Boston bowel preparation scale.

John Raybine: In the U.S., we are planning to incorporate PureView EVS into the existing investigator-initiated clinical study being conducted at the Cleveland Clinic.

In the U S. We are planning to incorporate peer view evs into the existing investigator initiated clinical study being conducted at the Cleveland clinic.

John Raybine: This study is designed to examine peer view in patients with lower GI bleeding, utilizing minimal pre-procedural bowel prep.

This study is designed to examine peer view in patients with lower Gi bleeding utilizing minimal pre procedural bowel prep.

John Raybine: As such, the physician will utilize just two tap water enemas in conjunction with peer view, allowing for faster time to diagnosis compared to the standard of care.

As such the physician will utilize just to tap water enemies in conjunction with pure view, allowing for faster time to diagnosis compare to the standard of care.

In terms of ongoing product innovation now that we received FDA clearance for the pure view Evs system, we have initiated a project to add upper Gi capabilities to the new pure view Evs platform.

John Raybine: Now that we've received FDA clearance for the PureView EVS system, we have initiated a project to add upper GI capabilities to the new PureView EVS platform.

John Raybine: If you recall, we've been running a limited pilot using our Gen2 approval and expect the larger suction port and more flexible sleeve design to optimize PureView EVS for use in upper GI bleed cases.

If you recall, we've been running a limited pilot using our gen. Two approval and expect the larger suction port and more flexible sleeve design to optimize pure view evs for use in upper Gi bleed cases.

John Raybine: There are approximately 400,000 upper GI blood cells in the world.

There are approximately 400000 upper G. I believe procedures performed in U S hospitals, each year and has been reiterated to us from Kols proper visualization is a critical requirement for the physician to locate and treat the bleed.

John Raybine: performed in U.S. hospitals each year and has been reiterated to us from KOLs, proper visualization is a critical requirement for the physician to locate and treat the bleed.

John Raybine: We'll provide project updates and timelines in the months ahead.

We will provide project updates and timelines in the months ahead.

John Raybine: And finally, turning to potential strategic partnerships and collaborates.

And finally, turning to potential strategic partnerships and collaborations.

John Raybine: We continue to advance our relationships and dialogue with several potential strategic parts.

We continue to advance our relationships and dialogue with several potential strategic partners.

John Raybine: Our focus is on evaluating all pathways to accelerate and expand our commercial efforts in the U.S. and in targeted regions outside the

Our focus is on evaluating all pathways to accelerate and expand our commercial efforts in the U S and in targeted regions outside the U S enhancing our technology development and unlocking value for shareholders.

John Raybine: enhancing our technology development, and unlocking value for shareholder.

John Raybine: As we continue to drive greater awareness and utilization of PureView EVS in the market, we believe strategic options that fit our criteria and are actionable will become available

As we continue to drive greater awareness and utilization of pure view Evs in the market, we believe strategic options that fit our criteria and our actionable we will become available for consideration.

Speaker Change: With that, I will now turn the call over to Andrew to provide detail on our Q4 Finance.

With that I will now turn the call over to Andrew to provide detail on our Q4 financials.

Andrew Taylor: Thank you, Tim, and thank you, everyone, for joining us today.

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

Andrew Taylor: We've reported revenue for the fourth quarter 2021 of approximately $100,000, compared to $36,000 for the same period last year.

We reported revenue for the fourth quarter 2021 of approximately $100000 compared to $36000 for the same period last year.

Andrew Taylor: full year 2021 revenues totaled approximately $390,000.

Full year 2021 revenues totaled approximately $390000 compared to $98000 for the full year 2020.

Andrew Taylor: compared to $98,000 for the full year 2020.

As Tim referenced the omicron very insignificantly impacted our fourth quarter results.

Andrew Taylor: The Omicron variant significantly impacted our fourth quarter results.

Andrew Taylor: We encountered delays with both existing and previously planned new evaluations due to hospital staff shortages and limited sales representative acts.

We encountered delays with both existing and previously planned new evaluation go.

At a hospital staff shortages and limited sales representative access.

Andrew Taylor: Additionally, the company strategically postponed certain sales and onboarding activities at hospital

Additionally, the company strategically postpone certain sales and onboarding activities and hospital accounts over the past few months in anticipation of the new system launch, which began a few weeks ago.

Andrew Taylor: over the past few months in anticipation of the new system launch, which began a few weeks ago.

Andrew Taylor: Over the course of 2022 and with the release of our new PureView EVS system, we expect to grow our number of new system placements and finalize commercial capital content.

Over the course of 2022 and with the release of our new pure view Evs system, we expect to grow our number of new system placements and finalized commercial capital contract.

Andrew Taylor: we anticipate new and reorders of peer-viewed sleeves to significantly increase throughout the year.

We anticipate new and Reorders appear view sleeve to significantly increase throughout the year.

Andrew Taylor: For the three months ended December 31, 2021, we reported a net loss of approximately $4.8 million, or $0.10 per basic and diluted share, compared to a net loss of $4.4 million, or $0.14 per basic and diluted share for the same period last year.

For the three months ended December 31, 2021, we've reported a net loss of approximately $4 $8 million or 10 cents per basic and diluted share compared to a net loss of $4 $4 million or <unk> 14 per basic and diluted share for the same peer.

<unk> last year.

Andrew Taylor: For the year ended December 31, 2021, we've reported a net loss of $19 million compared to $19.3 million for the same period last year. The net loss attributable

For the year ended December 31, 2021 we reported a net loss of $19 million compared to $19 $3 million for the same period last year.

Net loss attributable to common shareholders was $25 $2 million, which included a onetime noncash deemed dividend from warrant issuance totaling $6 $1 million associated with our warrant exchange agreement from the first quarter 2021.

Andrew Taylor: $25.2 million, which included a one-time, non-cash, deemed dividend from warranty issues.

Andrew Taylor: totaling $6.1 million associated with our Warrant Exchange Agreement from the 1st Quarter 2021.

Andrew Taylor: This compares to a net loss attributable to common shareholders of $19.3 million for the year ended December 31, 2020.

This compares to a net loss attributable to common shareholders of $19 $3 million for the year ended December 31 2020.

Andrew Taylor: Net loss per basic and diluted share attributable to common shareholders for the year ended December 31, 2021, was 54 cents compared to 60 cents for the same period last

Net loss per basic and diluted share attributable to common shareholders for the year ended December 31, 2021, with 54 cents compared to 60 cents for the same period last year.

Andrew Taylor: excluding the one-time dean's dividend for more issues.

Excluding the one time deemed dividend from warrant issuance, our net loss per basic and diluted share for the year ended December 31, 2021 would have been 41 cents compared to 60 cents for the prior year.

Andrew Taylor: Our net loss per basic and diluted share for the year ended December 31, 2021 would have been 41 cents compared to 60 cents.

Andrew Taylor: We believe this financial measure provides consistent and additional means of evaluating period over period operating performance.

We believe this financial measure provides consistent and additional means of evaluating period over period operating performance.

Andrew Taylor: During the fourth quarter, 2021, net cash used in operating activities and for the purchase of fixed assets was $4 million.

During the fourth quarter 2021, net cash used in operating activities and for the purchase of fixed assets was $4 million compared to $2 $8 million for the same period of 2020.

Andrew Taylor: compared to $2.8 million for the same period of 2020.

Andrew Taylor: NetCash used in operating activities and for the purchase of fixed assets during the year ended December 31, 2021, total $14.9 million compared to $17.1 million for the same period of 2020.

Net cash used in operating activities for the purchase of fixed assets. During the year ended December 31, 2021 totaled $14 $9 million compared to $17 $1 million for the same period of 2020.

Andrew Taylor: At December 31, 2021, we've reported $22.6 million in cash and cash equivalent.

At December 31, 2021 we've reported $22 $6 million in cash and cash equivalents.

Andrew Taylor: This balance included $12 million from our fully funded credit facility with Creos Capital, which was put in place

This balance included $12 million from our fully funded credit facility with Creoles capital, which was put in place during the third quarter.

Andrew Taylor: There are no financial or liquidity covenants associated with this facility.

There are no financial or liquidity covenants associated with this facility.

Andrew Taylor: Our current cash balance allows us to continue executing our value creation drive.

Our current cash balance allows us to continue executing our value creation drivers.

Andrew Taylor: and is expected to meet our overall anticipated cash needs through this year and into the first quarter of 2023.

And as expected to meet our overall anticipated cash needs through this year and into the first quarter of 2023.

Andrew Taylor: And with that, I'll now turn the call back over to Tim.

And with that.

I'll now turn the call back over to Tim.

Thanks, Andrew.

Tim Ran: In summary, we are at a defining moment in our company's evolution.

In summary, we are at a defining moment in our company's evolution.

Tim Ran: We have worked very hard to get to this point and to make sure we have the right technology, the right people at the right time to ramp up our commercial activities.

We have worked very hard to get to this point and to make sure. We have the right technology. The right people at the right time to ramp up our commercial activities.

Tim Ran: The team has impressed upon me their commitment to this strategy.

The team has impressed upon me their commitment to this strategy and continue to deliver again and again I am very excited to dial up. These efforts in 2022 and look forward to keeping everyone up to date on our progress.

Tim Ran: and continue to deliver again and again. I am very excited to dial up these efforts in 2022 and look forward to keeping everyone up to date on our progress.

Tim Ran: In terms of our visibility in the market over the next few months, we will be exhibiting at both the AGA Tech Summit in San Francisco in April and DDW, the largest GI conference in the world, in San Diego this May.

In terms of our visibility in the market over the next few months, we will be exhibiting at both the a G E Tech summit in San Francisco in April .

And D D W. The largest Gi conference in the World in San Diego This may I.

Tim Ran: I mention this because I believe it's just another example of our commitment to lean into the launch of Pureview EVS and drive much broader adoption and market awareness in 2022.

I mentioned this because I believe it's just another example of our commitment to lean into the launch of pure view Evs and drive much broader adoption and market awareness in 2022 .

I'll now ask the operator open the call to your questions.

Speaker Change: Thank you. We will now be conducting a question and answer session.

Thank you we will now be conducting a question and answer session.

Speaker Change: If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

If he would like to ask a question. Please press star one on your telephone keypad.

Information tone will indicate your line is in the question queue you.

Speaker Change: You may press star 2 if you would like to remove your question from the queue.

You May press star two if he would like to remove your question from the queue.

Speaker Change: Her participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.

Her participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: Your first question comes from Steven Lickman with Oppenheimer. Please go ahead. Thank you.

Your first question comes from Steven Lichtman with Oppenheimer. Please go ahead.

Thank you hi, guys.

Hi, Steve I was wondering why.

Stephen Ligickman: I'm wondering if you could talk about the backlog. You talked about being closing in on a dozen centers with EVS.

Wondering if you could talk about the backlog you you talked about being closing in on a dozen centers with E V S.

Stephen Ligickman: Can you talk about what the backlog looks like? Give us any perspective on size of it. Just trying to get a sense of the momentum that you indicated is building out there.

Can you talk about what backlog is the backlog.

Looks like how you know give us any.

Perspective on size of it I'm, just trying to get a sense of the momentum that's a that you indicated you're building out there.

Speaker Change: Sure, Steve. Thanks for the question. And, you know, we've been working since I would say the end of the third quarter on quality.

Sure Steve Thanks for the question and you know we've been working since I would say the end of the third quarter.

On qualifying.

Speaker Change: our pipeline and targets, as well as, as you know, adding more salespeople. I would say right now very comfortably that each of our salespeople have anywhere between 10 to 15 fully qualified accounts. So, in aggregate, that's in the range of 60 to 90 hospital targets that we're working with. Let me define that a little bit further. So, fully qualified means we have a GI champion.

Our pipeline and targets as well as as you know, adding more salespeople I would say right now very comfortably that each of our salespeople have anywhere between 10 to 15 fully qualified accounts.

So in aggregate that's in the range of 60 to 90 hospital targets that we're working with let me define that a little bit further so fully qualified means we have a G I champion.

Speaker Change: We understand their value analysis committee process. In most cases, we've already submitted pricing in a quotation to start that process.

We understand their value analysis committee process in most cases, we've already submitted pricing and a quotation to start that process and we are scheduling or already in some cases in evaluation to get them converted to the new Evs system. So the team has done a very nice job working.

Speaker Change: and we are scheduling or already in some cases in evaluation to get them converted to the new EVS system. So the team has done a very nice job working through those accounts and making sure that we're prioritizing accounts that can move quickly to revenue. That's a key gating item.

Through as those accounts and making sure that we're prioritizing accounts then can move quickly to revenue that's a key gating item and we will continue to build from there, but right now that's what the what the pipeline looks like Stephen and we'll expect that to grow over time, but that's certainly plenty to work with for now.

Speaker Change: And we'll continue to build from there, but right now that's what the pipeline looks like.

Speaker Change: Steve, and we'll expect that to grow over time, but that's certainly plenty to work with for now.

Speaker Change: Great. And thanks, Tim. On the outpatient strategy, do you believe that the trial that you discuss will be the only data that will be needed by payers ultimately? And when do you expect to start that trial?

Great.

Thanks, Tim.

On the the outpatient strategy do you believe that the the trial that you discussed would be the only data that will be needed by payers to ultimately end and when do you expect to start that trial.

Speaker Change: Yeah, so Steve, we've had some good engagement with insurers and with CMS and taken their feedback.

Yeah, So Steve we've had some some good engagement.

With insurers and with CMS and taken their feedback through a variety of different methods Oh, some being that the fast track programs that you know we were engaged with last last year and one of the things that was clearly stated to us was well they're pleased with the data that we've generated to.

Speaker Change: through a variety of different methods, some being the FastTrack programs that you know we were engaged with last year. And one of the things that was clearly stated to us was while they're pleased with the data that we've generated to date.

Date, which really shows the efficacy and safety profile of pure view.

Now its been used on you know hundreds of patients they have been asking for kind of more of the hard endpoint. So we provide visualization at the pristine level, but what does that actually do for the physician and connect that to both clinical and economic outcome.

Outcomes. So as we design this new study.

Speaker Change: That is the key goal. I'll ask Mark to expand just maybe a little bit more color on the work and kind of the guidance and inputs that we're getting around the design. But I think, Steve, from our understanding, if you couple that type of study along with the data that we've already generated, it should put us in an optimal position to apply for and hopefully gain reimbursement. But Mark, why don't I pass it to you. Maybe you can provide a little bit more color to Steve in terms of the advisory board and some of the other things that we're doing to ensure that we have the right study as we initiate. Sure. Hi, Steve. So as Tim alluded to, we've actually got some of the top KOLs in the world, folks that are involved in writing some of the guidelines around colonoscopy and what it means from a prep and visualization perspective and folks that even sit on the RUC to really help guide us on the clinical trial that we're designing. We're also.

Is that that is the key goal.

Last mark to expand just maybe a little bit more color on the the work and kind of the guidance and inputs that we're getting around the design but.

But I think Steve you know from our understanding if you couple that type of study along with the data that we've already generated it should put us in an optimal position to to apply for and hopefully gain reimbursement, but mark why don't I pass it to you and maybe you can find a little bit more color there Steve in terms of the advisory board and some of the other things that we're doing to.

Ensure that we have the right study as we initiate it.

Mark Tom: Sure. Hi, Steve.

Sure Hi.

Hi, Steve.

Mark Tom: So, as Tim alluded to, you know, we've actually got some of the top KOLs in the world, folks that are involved in writing some of the guidelines around colonoscopy and what it means from a prep and visualization perspective, and folks that even sit on the rocks.

So as Tim alluded to.

You got some of the top kols in the world folks that are involved in writing some of the the guidelines around call it off skippy and what it means from a prep and visualization perspective, and folks that even sit on the rock.

Mark Tom: to really help guide us on the clinical trial that we're designing. We're also working interactively with...

To really help guide us on the clinical trial that we're designing we're also working interactively with the CMS.

Mark Tom: CMS to make sure that the trial we're designing is going to be meeting their needs, you know, as we then move forward with that and putting all this together to make sure we design the right trial with their input. Now, our anticipation is that we would get this trial initiated through the latter part.

CMS so to make sure that the trial were designing is going to be meeting their needs. You know as we then move forward with that and putting all this together to make sure. We design the right trial with their input and our anticipation is that we would get this trial.

As she hated it.

The latter part.

Mark Tom: of this year as you work through the final trials and all the IRB submissions and contracting.

<unk> of this year you know as you work through the final trials and all the IRB submissions and contracting.

Mark Tom: And then, addition to that, you know, we do anticipate also

Et cetera, and then addition to that we do anticipate also.

Mark Tom: investigator-initiated studies and other activity happening to create more of a broader ecosystem with

Investigator initiated studies and other activity happening to create you know more of a broad O ecosystem with additional studies and the work is as we've talked about even the new EU study, that's coming out which is an outpatient study.

Mark Tom: you know, additional studies in the work as we talked about, you know, even the new EU study that's coming out which is an outpatient study will be supportive as well.

We'll be supportive as well.

Mark Tom: And then also working with some of the GI societies to help support this activity as well. So we create not only the study, but the great support network that we need to really push this activity forward.

And then also working with some of the GI societies to help support this activity as well so we create sort of not only the study, but the great support network that we need to really push this activity forward.

Great. Thanks, Thanks, Mark and Ed.

Speaker Change: And Steve, if I can just add one additional comment there. So obviously, this is an important investment and an important catalyst for the company. It opens up roughly around 5 million outpatient procedures in the US, which clearly will be a nice growth opportunity for the business in a couple of years. But with that said, I don't want to lose sight of one of the comments I said in the prepared remarks. The new design of the PureVue EVS.

Steve you know if I can just add one additional comment there. So obviously this is an important investment in an important catalyst for the company. It opens up roughly around 5 million outpatient procedures in the U S which you.

You know clearly will be a nice growth opportunity for the business in a couple of years, but with that said I don't want to lose sight of one of the comments I said in the prepared remarks, the new design of the pure Evs.

Speaker Change: And the ability now that the physician can load the sleeve onto the scope, a dirty scope.

And the ability now that the physician can load the sleeves onto the scope of.

Speaker Change: That's very critical for outpatient and we believe that we will now, at our hospitals, start to drive more hospital-based outpatient procedures. We're already getting some of those, but what we're finding is oftentimes in the outpatient, they'll start the case, they take the patient's word for how well did they do with their prep before their exam is scheduled, they get them on the table to start the case and lo and behold the patient is not nearly as clean as they were anticipating. Now they're able to take that scope out, put our sleeve on in less than a minute, go back in and complete that case, whereas in the past with the second generation, they would have to load our sleeve onto a brand new scope in a separate room because it was a reusable loading fixture and then bring the device in. That time that is associated with that would have us missing out on cases. We believe just the design change that we've made with EVS will open up some early outpatient procedures if you will at the hospital centers.

Dirty scope, that's that's very critical for outpatient and we believe that we will now at our hospitals start to drive more hospital based outpatient procedures. We are already getting some of those but what we're finding is oftentimes in the outpatient now they'll start the case that they take the patients you know word for how well do they do with their prep before there.

Exam is scheduled they get them on the table to start that the case and Lo and behold the patient is not nearly as clean as they were anticipating well now they are able to take that scope out put our sleeve on in less than a minute go back in and complete that case, whereas in the past with the second generation they would have to load our sleeve onto a <unk>.

New scope in a separate room, because it was a reusable loading fixture and then bring the device, saying in that that time, you know that that is associated with that would have us missing out on cases. So we believe just the design change that we've made with Evs will open up some kind of early outpatient procedures a few at the hospital centers.

Speaker Change: And just to pile on a little, on top of that, you know, one of the things, and Tim alluded to it in his prepared remarks, is

Okay, and just a pile on on top of it you know what I think.

And Tim alluded to it in his prepared remarks is because of the pandemic and people not getting screen. There is a backlog in some of the literature says that it could be much as three years of a backlog for people getting screen. So it's all the more important for folks to kind of have their their first colonoscopy successful one and not have to come back on early surveillance period, because they werent.

Speaker Change: You know, because of the pandemic and people not getting screened, there is a backlog and some of the literature says that it could be much is is three years of a backlog for people getting screened. So it's only more important for folks to kind of have their, their first colonoscopy successful one and not have to come back under an early surveillance period, you know, because they weren't appropriate, cleaned, appropriately clean. And the physician is uncomfortable to wait the five to 10 years that they would normally.

Cleaned appropriately cleaned and the physician is uncomfortable.

Eight to five to 10 years that they would normally.

Speaker Change: requires, so we think that's going to add some nice tailwinds to us as well.

It requires so we think that's going to add some it's a nice tailwind to us as well.

Yeah.

Speaker Change: Great. Thank you guys. I'll leave it there and I'll jump back in queue. Thanks a lot. Thanks, Tia. Next question, Jeffrey Cohen with Labenburg Salmon.

Great. Thank you guys I'll leave it there and I'll jump back in queue. Thanks, a lot.

Thanks, Steve.

The next question Jeffrey Cohen with Ladenburg Thalmann.

Alright, your image or embark how are you.

Hey, Jeff how are you.

Speaker Change: All right, a few questions from around. So firstly, the.

A few questions for maroon so firstly the.

Jeffrey Cohen: 12 sites for EVS that you discussed. How many of those may be overlaps from the previous system?

12 sites for Evs that you discuss.

How many of those may be overlaps from the the.

Previous system.

Speaker Change: Yeah, so it's a great question, Jeff. I don't want to get to the exact number, but I would say probably approaching half in that first dozen are existing accounts that had either purchased the equipment or were under some type of program. And we were able to get them upgraded immediately, which will start to drive revenue cases now, obviously using EVF. But we've also positioned new customers in this early mix. So I would say it's a pretty good blend. Getting our existing accounts on board, generating disposable revenue, but getting new deals done as well.

Yeah. So it's a great question, Jeff I don't want to get to the exact number but I would say.

Probably approaching half in that first dozen or existing accounts that were.

Had either purchase the equipment or were under some type of program and we were able to get them upgraded immediately which will start to drive revenue cases, now obviously using evs, but we've also positioned new customers. In this early mix. So I would say, it's a pretty good blend I'm getting our existing accounts.

Onboard generating disposable revenue, but getting new deals done as well.

Speaker Change: Got it. That's helpful. And for the outpatient clinical trial that you're planning on conducting, can you give us a sense of how many patients and how many centers may be involved?

Got it that's helpful and for the city.

Outpatient clinical trial that you're planning on conducting can you give us a sense of how.

Many patients and how many centers maybe involved.

Speaker Change: Sure. I don't know that we're ready to give, you know, hard point estimates on that. We're, as Mark said, we're actively working with our clinical advisory board and taking their input. Mark, if you want to just maybe touch on just some general kind of high-level points on the study, that'd be great.

Sure I don't know that we're ready to give.

<unk> point estimates on that were as Mark said, we're actively working with our clinical Advisory Board meet board and I'm, taking their input Mark if you want to just maybe touch on just some general kind of high level points on the study that'd be great.

Mark Tom: Yeah, so, you know, we do anticipate, Jeff, it being a fairly large trial.

Yeah. So we do anticipate a Jeff with being a you know a fairly.

A large trial.

Mark Tom: for one, to obviously make sure we drive the statistics and we really are looking at doing things that are highly powered.

You know for one to obviously make sure we drive the statistics and we really are looking at doing things that are highly powered.

Mark Tom: in the study, so we want to make sure there's no question on the outcome from that perspective, and also just to help make sure it's broadly applied as well.

In the study so we want to make sure Theres no question on the outcome from from that perspective, and also just tell you know make sure its broadly applied as well.

Mark Tom: We look at a significant number of centers, and we want to make sure that we cover a cross-section of centers that are, you know, really show the demographics across the country, because that's something that CMS is going to look for, you know, is the solution in the study you did, you know, generalizable to the population. So we need, you know, inner-city centers, rural centers, community centers, you know, to really make sure that it's going to meet the needs of CMS. So, obviously, you know, just in doing that, it'll be a fairly large trial.

At a significant number of centers and we want to make sure that we cover a cross section of centers that are you know really show the demographics across the country, because that's something that CMS is going to look for.

Is the is the solution and the study you did know generalizable to the population. So we need the inner city centers, where all centers community centers to really.

Make sure that it's going to meet the needs of CMS. So obviously just in doing that it'll be a fairly large trials.

Speaker Change: Lastly, I think probably for Andrew, as far as the sales and marketing expense for 2022 and then beyond, you talked about increasing the sales force from three to six. I think our models are three, three and a half, four million dollars for 2022. Does that creep up toward five or six in 2022 or is that more of a 2023 activity?

Got it and then lastly, I think probably for Andrew as far as the shows and marketing expense for 'twenty two.

And then beyond you talked about increasing the sales force from three to six I think you know our model sure.

Three three and a half $4 million for 'twenty two to start creep up towards five or six in 'twenty, two or something more of a twenty-three activity.

Okay.

Speaker Change: Yeah, hi. I'll jump in. You know, I would say...

Yeah, Hi, I'll I'll I'll jump in.

You know I would say.

Speaker Change: ballpark, we don't give specific guidance on on the exact numbers, but I think overall.

Ballpark, we don't give specific guidance on on the exact numbers, but I think overall, we're looking at somewhere in the ballpark of 30%.

Speaker Change: We're looking at somewhere in the ballpark of a 30%.

Speaker Change: increase across the board on our expenses, you know, it'll grow to that. It's not going to be...

Increase across the board on our expenses you know it'll wrote about it it's not going to be.

Speaker Change: You know, first quarter of 22 is 30% higher than...

First quarter of 'twenty, two is 30% higher than than it was in 'twenty, one, but I think it will grow to that level over the course of the year on our operating expenses in general and obviously more of a slant towards the commercial side of things with some of the other areas being you know flatter.

Speaker Change: than it was in 2021, but I think it'll grow to that level over the course of the year on our operating expenses in general, and obviously more of a slant towards the commercial side of things with some of the other areas being flatter.

Speaker Change: Okay, perfect. And one more if I can. Any change in previous thoughts as far as margins and how they're being modeled out there as you hopefully in 2022 increase some volumes?

Okay, perfect and one more friction any any change in previous thoughts as far as our margins and how they're being modeled out there.

You are a shoe hopefully in 'twenty to increase some volumes.

Bangie: Angie, you can take that as well. Yeah, sure.

And so you can take that as well.

Yeah sure.

Speaker Change: Yes, so in general, again, we don't give specific guidance as we haven't in the past as well.

Yes, so in general again, we don't give specific guidance as we haven't in the past as well, but we've talked.

Speaker Change: But we've talked publicly that our margins on the EBS product are expected to be higher, our cost of goods.

Publicly that our margins on the Evs product are expected to be higher our cost of goods is reducing we're able to hold our value based pricing constant and in fact in some cases will likely tick up and so when you put that.

Speaker Change: is reducing, we're able to hold our value-based pricing constant, and in fact, in some cases, we'll likely tick up. And so, when you put that equation together, we do anticipate that the margins will continue to increase, you know, over time, and really out of the gate, comparing EVS to Gen 2 will be higher, and then certainly, as we grow in volume, we'll get additional benefit on the margin as well. Perfect.

Equation together, we do anticipate that margins will continue to increase.

You know over time and really out of the gate comparing evs to Gen. Two will be higher and then certainly as we grow in volume, we'll get additional benefit on the margin as well.

Perfect. Thanks for taking our questions.

Thanks, Jeff.

Speaker Change: Next question, Matt O'Brien with Piper Sandler.

Next question, Matt O'brien with Piper Sandler.

Speaker Change: Hey, guys, this is Drew on for Matt, and thank you for taking the question.

Hey, guys. This is drew on for Matt and thank you for taking the questions.

Don: I do just want to follow up on the answer to the first question, those 60 to 90 accounts, how many of those accounts have seen peer view in the past and then how many of you had a chance to get EVS in front of them so far and can you just remind us how long the new product evaluation process has taken in the past in those accounts where you have been successful?

Hey, Joe I do want to just follow up.

I do just wanted to follow up on.

The answer to the first question you know those 60 to 90 accounts, how many of those accounts have seen peer view in the past and then you know how many of you had a chance to get Evs in front of them. So far and can you just remind us how long the new product evaluation process has taken in the past and in those accounts, where you have been successful.

Speaker Change: Sure, let me unpack that a little bit, Drew. So the 60 to 90 is a blend of customers that we've had some touch points with, customers that are already existing accounts of PureView, and then a lot of new customers.

Sure Let me, let me unpack that a little bit drew so.

The 60 to 90 is a blend of customers that we've had some touch points with customers that are already existing accounts, a peer view and then a lot of new customers.

Speaker Change: So, obviously, we're going back to places that we've already done a lot of the heavy lifting in terms of evaluations, or they've seen the product and they were waiting for the next generation enhancements to come out. Those are low-hanging fruit, so they're in there. I would say it's probably between, I don't know, call it 25 to 40 are accounts that we've had some touchpoint with. The other are accounts that we've had touchpoints with in the last, call it, couple of months as we've added to the sales team. So, as you recall, as we're hiring in these reps, most of them have, I would say, at minimum 8 to 10 years of experience in the GI space from typically a much larger medical device company. So, they're coming with relationships. So, getting accounts engaged, meeting with physicians and hospital staff, and kind of getting them into our process has moved relatively quickly, even for folks who just joined, you know, 30 days ago, because they're able to kind of go back and call and leverage those relationships that they have.

You know, obviously, we're going back to places that we.

We've already done a lot of the heavy lifting in terms of evaluations or they've seen the product and they were waiting for the next generation enhancements to come out you know those are low hanging fruit. So theyre in there I would say, it's probably between I'll call. It 25 to 40 are accounts that we've had some touch point with the other are accounts that we've had touch points with in the last.

Call. It couple of months as we've added to the sales team. So as you recall as we're hiring and these reps most of them have I would say at minimum eight to 10 years of experience in the Gi space from typically a much larger medical device companies, so they're coming with relationships so getting accounts engaged.

Meeting with physicians and hospital staff and kind of getting them into our process has moved relatively quickly even for folks who just joined 30 days ago, because they are able to kind of go back and call and leverage those relationships that they have.

In terms of the timing what we saw with it it was it was very difficult.

Speaker Change: the timing you know what we saw it with it was it was very difficult um if you look at the last kind of year as an example there were so many macro um

Look at the last kind of year as an example, there were so many macro.

Speaker Change: issues associated with evaluations with stopping and starting due to COVID and access and, you know, accounts being distracted, that it's hard to really get a good sense of, you know, in a normal world, what will it look like from start to finish? You know, so we were saying somewhere between, call it, you know, three to six months. I believe with EVS, and we're only about three and a half weeks into this, but I believe with EVS, things are going to move more quickly. And the reason I say that is the inservicing

[noise] issues associated with evaluations with stopping and starting due to COVID-19 and access and you know accounts being distracted there it's hard to really get a good sense of you know in a normal world what will it look like from start to finish so we were saying somewhere between call. It you know three.

Three to six months.

I believe with Evs, and we're only about three and a half weeks into this but I believe with Evs things are going to move more quickly and the reason I say that is the.

The in servicing or education staff training.

Speaker Change: or education, staff training, to kind of get an account up and running with the second generation required a lot more time and hand-holding and making sure that really every tech understood exactly how the device got connected and loaded and set up with the workstation, because if they didn't understand it, either it wouldn't get used or they would connect something incorrectly and obviously that is not something that you want them to do. What we're finding with the new device and all of the enhancements that I talked about and we shared on the innovation day.

Get into account up and running with the second generation required a lot more more time, and handholding and making sure that really every tact understood exactly how the device got connected and loaded and set up with the workstation because if they didn't understand it either it wouldn't get used or they would connect something incorrectly and obvious.

That is not something that you want them to do what we're finding with the new device and all of the enhancements that I talked about and we shared on the innovation day. It's it's Super simple right. So this is something that in one minute or less you can make a couple of connections you've got to sleep loaded and you're able to do the procedure. So what I think that's going to translate to is <unk>.

Speaker Change: Super simple, right? So this is something that in one minute or less, you can make a couple connections, you've got the sleeve loaded, and you're able to do the procedure. So what I think that's gonna translate to is much shorter evaluations.

Much shorter evaluations.

Speaker Change: And we're also, based on that thinking and kind of learning from the last several months, we're also putting a defined kind of endpoint on evaluation. So, we're not going to let an account use our product for six months without making a decision to purchase. So, we'll have, you know, some more kind of hard lines on how long an evaluation can run before the decision to purchase needs to be made. So, we think we'll shorten it, but I would say when we get on next quarterly call, we'll have a full quarter under our belt, and I could probably give, you know, a much more informed answer to what it's looking like in terms of sales cycle.

And we're also based on that thinking and kind of learning from the last several months. We're also putting a defined kind of end point on evaluations. So we're not going to let an account use our product for six months without making a decision to purchase. So we'll have some more kind of hard lines on how long the evaluation can run before the.

Decision to purchase needs to be made so we think we'll shorten it but I would say is when we get on next quarterly call. We'll have a full quarter under our belt and I could probably give you know a much more informed answer too to what it's looking like in terms of the sales cycle.

Speaker Change: Okay. Yeah, that was super helpful. Thanks for that. Thanks. And just second question, I guess maybe just an update on the minimum plea purchase agreement. You know, you signed a couple of those over the last year or so. So maybe just an update on how those accounts are tracking relative to those agreements and just how that will be structured in light of EVS rolling out.

Okay, Yeah, no that was super helpful. Thanks for that.

Uh huh.

Second the second question I guess, maybe just an update on the minimum. So you purchase agreements you signed a couple of those over the last year or so so maybe just an update on how those accounts are tracking relative to those agreements and just how that will be structured in light of of Evs rolling out as well.

Speaker Change: Thank you. Yeah, good question. So, in a few cases, we've already transitioned those customers actually over to a purchase.

Yeah. Good question. So in a few in a few cases, we've already transitioned those customers actually over to a purchase.

Speaker Change: or a lease program, so I won't get to specific accounts by name, but one of the accounts that ran through all four quarters, they met their quarterly compliance sheets quarter, they moved at the end of the year over to a 24-month lease. So now they're off of that minimum commitment. They're paying a monthly lease. The good news is they're...

Or a lease program so I.

I won't get specific accounts by name, but one of the accounts that ran through all four quarters. They met their quarterly compliance each quarter. They moved at the end of the year over to a 24 month lease so now they're off of that minimum.

Commitment theyre paying a monthly lease the good news is their procedure volume continues at the levels actually has now improved with evs than what we had seen before I think we will I think you'll see probably less of those types of agreements.

Speaker Change: Procedure volume continues at the levels actually is now improved with EVF than what we have seen before Drew I think we'll I think you'll see probably less

Speaker Change: of those types of agreements. I'd like to see us selling more capital or leasing more capital as opposed to trading capital in return for volume commitments. When we do that, I think our view is now to do it on a shorter term plan. So we'll do it for the set number of months before their capital becomes available to make the purchase. We'll just have to see how that plays out over the next couple of quarters, but that's our thinking. Very helpful. Thank you.

Like to see us selling more capital or leasing more capital as opposed to you know kind of trading capital in return for volume because it means when.

When we do that I think our view is now to do it on a shorter term plans. So we will do it for the set number of months before their capital becomes available to make the purchase and we'll just have to see how that plays out over the next couple of quarters, but but that's our thinking.

Very helpful. Thank you.

Thank you.

Next question Chen with H C Wainwright.

Speaker Change: Hi, this is Bubalan, dining in for HN. Can you hear me okay?

Hi, This is Bob Allen dialing in for <unk> can you hear me okay.

Yes, we can hear you great.

Speaker Change: Alright, awesome. So couple of questions from our end. Obviously the PureView AVS is a lot of attractive features. Just curious, can you discuss the pricing terms of PureView AVS in terms of capital as it's least? The price point

Alright awesome. So couple of questions from our end August is a few pure view evs. There's a lot of attractive features I'm. Just curious can you discuss the pricing comes a pure fuel evs.

In terms of capital lease.

The price point in the market is that the question.

So Glenn.

Speaker Change: Yes, I can hear you, yes, that's the one, yes. Yeah, so from a pricing perspective, as you know, our price on the previous system was $68,500. That was the capital cost, and the disposable sleeve was $975. We anticipate being in that same range from an ASP perspective.

Yes, I can hear you, yes, that's the one yes.

Yeah, so from a pricing perspective, as you know our price on the previous system was 68500 that was the capital cost and the disposable sleeve was 975, we anticipate being in that same range from an a S. C. A S P perspective.

Speaker Change: We took the capital list price up to $75,000. We took the disposable sleeves up just a small bit. I think it's around $1,100. That's really just with anticipation that as we drive greater volume to more customers across the US, there will be expected discounting off of the list price. So gave it a little bit of room to kind of hold the same end user price points.

We took the capital list price up to 75000, and we took the disposable sleeves up just a small bit I think it's around $1100. That's really just with anticipation that as we drive greater volume.

Volume to more customers across the U S. You know there will be expected discounting off of the list price. So gave a little bit of room to kind of hold the same end user price points.

Speaker Change: Okay, that's very helpful and can you sort of provide high-level comments on your business outlook for 2022 and some of the items you would like to accomplish this year?

Okay. That's very helpful and can you sort of provide high level comments on our business outlook for 2022, and some of the items you would like to accomplish this year.

Speaker Change: Sure. Yeah. I mean, as I said in the prepared remarks, but

Sure Yeah, I mean, as I said in the prepared remarks, but.

Speaker Change: It's been a long haul, as our investors know, and as our team knows, the last couple of years have been very difficult, not just for Modus GI, but for everyone, right? And particularly when you're kind of an emerging growth company that has a new...

It's been a long haul <expletive> as our investors know and as our team knows the last couple of years have been very difficult not just promoted Gi but for.

Everyone, right and particularly when you're kind of an emerging growth company that has a new.

Speaker Change: innovative technology and you're trying to change the kind of hearts and minds of the market and build out a new space. With the impacts of COVID, that's been very difficult and I don't want to, you know, go back down that path. Everyone understands what those have been. We believe we're at an inflection point.

Innovative technology, and you're trying to change the kind of hearts and minds of the market and build out of new space.

With the impacts of Covid, that's been very difficult and I don't want to you know go.

Go back down that path, everyone understands what those have been.

We believe we're at an inflection point for the company.

Speaker Change: We truly believe that despite those hurdles, we've listened to our customers. For a small company and a small commercial team, the relationships that we've built in the market with some of the top GI physicians at the top facilities across the country have given us tremendous feedback over the last 18 months that our then innovation center in Israel and our really talented R&D and engineering teams were able to incorporate into this new device. So we believe we're at an inflection point from a technology perspective.

We truly believe that despite those hurdles we've listened to our customers we've for a small company and a small commercial team the relationships that we built in the market with some of the top Gi physicians at the top facilities across the country have given us tremendous feedback over the last 18 months that are then.

<unk> Center in Israel, and are really talented R&D and engineering teams were able to incorporate into this new device. So we believe we're at an inflection point from a technology perspective.

Speaker Change: And if you think about other technology and the time it takes to kind of eventually get it broadly adopted, it sometimes takes some iterations to get there. So we're feeling very confident about where we are with the tech. So that's one. The other is, from a people perspective, and I've talked about this before, we made the right decisions over the last couple of years by keeping a very lean team and running the business as lean as possible, knowing what was happening in the kind of macro environment. But now is the time to go with a much bigger force. And as I said, we've doubled the team. It's still a small number. We're at six.

If you think about other technology in the time it takes to kind of eventually get it but broadly adopted it sometimes takes some iterations to get there. So we're feeling very confident about where we are at the tax. So that's one the other is from a people perspective, you know what I've talked about this before we made the right decisions over the last couple of years by keeping a very lean team.

<unk> and running the business as lean as possible knowing what was happening in the kind of macro environment, but now is the time to go with a much bigger force and as I said, we've doubled the team it's still a small number we're at six I'd expect to see us hire a few more folks even in this upcoming upcoming quarter and that's.

Meaning full because if every one of these reps can drive 10 15 20.

New accounts over time, you know you can start to do the math and start to see the type of business and the revenue uptake that we can build.

Execution is our number one priority right now global on execution as it relates to our engagement with customers getting the sell through the sell cycle quickly getting accounts up and running having a great experience.

That's a key priority so commercial execution. The second thing is we talked on this call quite a bit about the investment in clinical activities.

Speaker Change: call quite a bit about the investment in clinical activities. We need to execute over the next couple years in the hospital market and we can build a very nice business doing so. However, the investment that we're making now can be a tremendous catalyst for this company if we can get reimbursement for the large outpatient market. Everyone knows the size of that market. There's 18 million outpatient procedures in the U.S. each year. We believe 5 million, as I said earlier, are really qualified and perfectly positioned for Pureview to help them and to help their physicians. And that's three times the size of the patient population that we're calling on today in the hospital.

We need to execute over the next couple of years in the hospital market and we can build a very nice business doing. So however, the investments that we're making now can be a tremendous catalyst for this company. If we can get reimbursement for the large outpatient market everyone knows the size of that market Theres 18 million outpatient procedures in the U S. Each year.

Speaker Change: We need to execute over the next couple of years in the hospital market, and we can build a very nice business doing so. However, the investment that we're making now can be a tremendous catalyst for this company if we can get reimbursement for the large outpatient market. Everyone knows the size of that market. There's 18 million outpatient procedures in the U.S. each year. We believe five million, as I said earlier, are really qualified and perfectly positioned for PureView to help them and to help their physicians. And that's three times the size of the patient population that we're calling on today in the hospital. So really excited for the work we're doing. As I said, we hired a vice president of clinical affairs that comes with significant relationships in the industry, very talented person that's gonna help Mark and help us execute on this clinical program and get this off the right way in 2022 and position us well for reimbursement in the future.

Here, we believe 5 million as I said earlier, our are really qualified and perfectly positioned for pure vu to help them and to help their physicians.

And that's you know three times the size of the patient population that we're calling on today in the hospital so really.

Cited for the work we're doing as I said, we hired a vice president of clinical affairs that comes with significant relationships in the industry very talented person that's gonna help mark and help us execute on this clinical program and get this off the right way in 2022 and position us well for reimbursement in the future.

Speaker Change: And then the last thing I'll say is in terms of partnership opportunities, I mentioned we continue to build those relationships.

And then the last thing I'll say is.

You know in terms of partnership opportunities you know I mentioned, we continue to build those relationships folks know and the market what we're up to and what we're doing if there becomes an opportunity that will drive shareholder value to accelerate our plans, we will take a look at that and and we'll consider that.

Speaker Change: We will take a look at that and we'll consider those types of things, but we're also looking at opportunities outside the U.S. in the meantime where we can potentially, through a partner, enter a geography that we otherwise wouldn't enter today due to resources. So all of those things are still on the table for us and we'll continue to evaluate them, but I think first and foremost is getting EVS off the ground over the next couple quarters and establishing it in the market. That's very helpful. Yeah. Thanks for taking my questions. Great. Thank you for the question.

These types of things, but we're also looking at opportunities outside the U S. In the meantime, where we can potentially through a partner enter a geography that we otherwise wouldn't enter today due to resources. So all of those things are still on the table for us and we'll continue to evaluate them, but I think first and foremost is getting evs off the ground over the next couple of quarters.

Speaker Change: and establishing it in the market. That's very helpful, yeah. Thanks.

And establishing it in the market.

That's very helpful. Thanks for taking my question.

Great. Thank you for the question.

Speaker Change: I will now turn the call over to Tim for closing remarks.

I will now turn the call over to Ken for closing remark.

Tim Ran: Great, thank you operator. I just want to thank everybody for joining our call today. You can hear it. Hopefully in our comments are excitement and enthusiasm about 2022 and what we're able to do with our new pure view EVS and our and our larger team and we'll look forward to updating everyone on the next quarterly call in May. So thank you very much for joining the call.

Great. Thank you operator, I just want to thank everybody for joining our call today, you can hear it hopefully in our comments, our excitement and enthusiasm about 2022 and what we're able to do with our new pure view Evs.

Our larger team and we'll look forward to updating everyone on the next quarterly call in May. So thank you very much for joining the call.

Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.

This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation.

Okay.

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