Q3 2022 Milestone Scientific Inc Earnings Call
[music].
Okay.
Good day, ladies and gentlemen, and welcome to the milestone Scientifics third quarter 2022 business update call.
At this time, all participants have been placed on a listen only mode and the floor will be opened for questions and comments after the presentation.
It's now my pleasure to turn the floor over to your host David Waldman Investor Relations, Sir the floor is yours.
Good morning, and thank you for joining milestone Scientifics third quarter 2022 financial results Conference call. The company issued a press release. This morning containing third quarter 2022 financial results, which is also posted on the Companys website. If you have any questions. After the call or would like any additional information about the company. Please contact crescendo.
Communications at tier one to $6 7110 to zero on the call with US today is <unk> Chief Executive Officer, who will provide an overview of the financial results and recent developments for the third quarter ended September 32022, due to personnel complex Zetia Harsham Harcum control of milestone scientific is unable to join us.
Call today, so Mr. Hover hauls will also be covering a detailed financial discussion before we get started we'd like to remind everyone that during this conference call. We may make forward looking statements regarding the timing and financial impact of milestones ability to implement its business plan expected revenues and future success. These statements involve a number of risks and uncertainties and are based on.
Involving judgments with respect to future economic competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond milestones control. Some of the important factors that could cause actual results to differ materially from those indicated by the forward looking statements are general economic conditions failure to achieve expected revenue.
Growth changes in our operating expenses adverse patent rulings FDA or legal developments competitive pressures changes in customer and market requirements and standards and the risk factors detailed from time to time in milestones periodic filings with the Securities and Exchange Commission, including without limitation milestones report on Form 10-K for the year ended December 31 2021.
Milestones report on Form 10-Q for the third quarter ended September 32022. The forward looking statements made during this call are based upon management's reasonable belief as of todays date November 15, 2022 milestone undertakes no obligation to revise or publicly update any forward looking statements for any reason with that we'll now turn the call over to Orient overhauls chief.
Executive Officer. Please go ahead.
Thank you, David and thanks to everyone for joining us today.
Im pleased to report we are back on a solid growth trajectory in the third quarter with sequential sales growth of 34, 4% over the second quarter of 2022 in.
In addition, our revenue for the third quarter of 2022 increased 28, 6% over the same period last year without the benefit of sales to China.
As we discussed last quarter.
Dental segment faced temporary challenges in the second quarter of this year due in part to the challenging situation in China, and Russia, Ukraine more.
We believe we have in large part to overcome these challenges as illustrated by the fact that we just achieved both sequential and year over year revenue growth for third quarter of 2022.
The growth in revenue on both the domestic and international fronts reflects our successful decentralized multichannel sales strategy.
Importantly, we continued to add third party dental distributors in international markets, which we believe will help further accelerate our growth.
We look forward to announcing additional international distribution agreements as we continued to build a network across Asia Africa, South America and Europe .
In the United States, we are working to bring on new strategic distribution and channel partners that sell through their respective networks of dental customers, especially in specialized areas of dentistry, such as implant dentistry and the aesthetics as well as large dental service.
<unk> or dsos.
Dso's play an increasingly important role within the domestic dental market. The current DSO market penetration of approximately 30% to 32% is expected to grow to 75% to 80% over the next 10 years.
So to summarize within our dental business, we continue to generate solid cash flow on a standalone basis as we continue to grow our revenues, we expect to benefit from economies of scale due to the recurring nature and high margins on our disposables.
Overall, our dental business remained strong.
We are encouraged by the increased interest in our dental instruments and expect our momentum to continue.
Turning to our medical segment, we continued to advance our commercial efforts around the comp flow epidural instrument and the cash check verification system.
As a result of a focused sales and marketing activities, we have trial dot com to flow epidural system in key hospitals healthcare systems and pain management clinics. As an example in August we announced the adoption of the comp flow epidural system and its cast JAK capability at the University.
Of health, a leading academy health system based in Louisville, Kentucky, we are introducing comfy flow across three distinct departments labor and delivery acute pain and in the operating room.
<unk> health owns and operates six hospitals and four medical centers, providing patient care to more than one 5 million patients each year in the state of Kentucky.
This is on a note another important validation by a leading medical institution as we execute our strategy to become the new standard of care.
With each health system, we sign we benefit not only from the sales, but also growing validation within the market.
As part of our sales strategy, we are targeting several tier one university teaching hospitals. Some of these hospitals are among the top 20 in the nation. We believe that as we begin to penetrate some of these larger more recognized names it will add greater credibility and reduce to sale.
Cycle with smaller institutions.
Our sales pipeline is solid and we are advancing discussions with a number of hospitals and health care institutions. We will provide further updates as soon as we commence formal commercial sales with these respective institutions.
We also continue to introduce a concrete floor epidural system targeting the pain management market, which not only includes hospitals, but also specialty centers outpatient centers and sports medicine incentives.
With over $11 million reported epidural procedures each year the pain market segments is more than twice the size of the labor and delivery market segments.
Importantly, we recently announced the issuance of a CPT codes from the American Medical Association.
This code goes into effect on January one 2023.
The code will allow billing and payment pathways for health care personnel, who choose to use our technology for coverage and discretionary payment by Payors, such as Medicare and Medicaid as well as commercial health plans.
Specifically, we believe that reimbursement will accelerate our commercial rollout by aiding in the financial decision process within particular private pain clinics.
We are actively preparing our reimbursement plan to take advantage of this new AMIA cleared CPT codes that will be implemented in the first quarter of 2023.
In addition to our direct sales channels. We are also expanding our network of distribution partners on the heels of receiving the CPT code in August we announced our partnerships our partnership with <unk>, a leading specialty distributor of medical products in the Midwest and East coast.
Most regions of the United States.
We believe CGI is an ideal partner, bringing a sizable Midwest and east coast Salesforce extensive relationships with physicians pain clinics and hospitals as well as a proven track record of introducing new medical devices.
In Greece, our new partner F&I and feed is a leading provider of medical equipment devices and consumables.
Bring over 40 years of experience in the fields of health care, having a successful track record launching new medical devices and equipment.
We look forward to announcing additional international distributors as we advance our commercial rollout.
We also have invested heavily in our marketing initiatives to build brand awareness for the Companys slow epidural and cash check system and provide a sales representatives with the tools to be much more effective including training videos corporate brands videos education to digital marketing.
Materials and more.
We continue to believe the medical segment represents a large addressable market not only driven by cost and convenience for the provider, but driven by the safety considerations and cost savings.
These factors coupled with the recent issuance of a CPT code.
Ultimately lead to the content flow, becoming the standard of care.
Let me now take a moment to discuss some important financial initiatives we have undertaken.
As announced last quarter.
We continue to re allocate additional resources towards on medical segments, which we believe represents the future of the company.
While increasing our focus on DSO and third party avenues of distribution in the dental segment.
At the same time, we have reduced the number of operating expenses and certain corporate overhead in the third quarter, which is evidenced in the reduction in our billing rates.
We expect to see the continued benefits of these cost reductions in the coming quarters, which should help drive us towards improved performance as we continue to grow revenue.
Combined with our disposables, which provide high margin recurring revenue. We believe we are well positioned to drive significant shareholder value for years to come.
We ended the quarter with approximately $9 $8 million of cash on hand, and no long term debt, which provides us sufficient capital to continue executing our business strategy.
Clothing accelerating market activities around both our dental and medical instruments.
Given our strong cash position. We are also planning to launch new instruments are not pursuing new indications. So to summarize we have positioned our company for positive growth in the coming quarters.
We remain confident in the market potential of the comps slow with the dual system, which we believe will transform the industry and ultimately become the standard of care for epidural procedures in labor and delivery as well as Spain management by providing patients with effective pain relief while reduced.
Seeing the significant risk of complications with the associated costs.
Importantly, we have begun seeding the market with our comps flow epidural instrument within a number of key hospitals medical centers and pain management clinics in the United States and Europe and believe the issuance of CPT along with other steps we are undertaking will contribute to our long term.
Success.
At this point I'd like to provide a quick financial recap of our financial results for the three months for a more detailed discussion, including our nine month results. Please refer to our Form 10-Q, which has been filed with the Securities and Exchange Commission.
Total consolidated revenue for the three months ended September 32022 was approximately $2 2 million versus $2 1 million for the same period last year.
Dental revenue increased approximately $130000 as we expanded the partnership with new domestic and global distributors.
Dental domestic revenue increased approximately $88000 and dental international revenue, excluding the Chinese market increased approximately $403000.
<unk> through September 32021.
Company recorded no revenue from China in the third quarter 2022, as compared to approximately $360000 for the third quarter of 2021.
Medical revenue decreased approximately $23000.
Consolidated gross profit for the three months ended September 32020 to increase to approximately one 5 million versus $1 4 million for the third quarter of 2021.
Consolidated selling general and administrative expenses for the three months ended September 32022, and 2021 were approximately $3 3 million and $3 million, respectively. The increase of approximately $315000 was a.
Of the increase in warehousing quality control and professional fees for regulatory and other services.
At the same time, we reduced employee salaries and related expenses as well as certain marketing and other expenses, which also decreased during the period as.
As I mentioned earlier, we have increased our focus in dental on third party distributors and reallocated traditional resources towards some medical segments.
<unk> research and development expenses for the three months ended September 32022 and 2021.
Approximately 166000 and $356000 respectively. The.
The decrease of approximately $190000 is related to the delay of certain enhancements to the SDA single tooth anesthesia system.
The loss from operations was approximately 2 million for the three months ending September 32022, and 2021, respectively.
The net loss was approximately 2 million or <unk> <unk> per share for the three months ending September 32022, and 2021, respectively.
On September 32022 milestone scientific had cash and cash equivalents of approximately $9 8 million and working capital of approximately $10 $8 million versus working capital of $15 8 million on December 31 2021.
For the nine months ended September 32022, and 2021 with cash flows used in operating activities of approximately $4 $4 9 million and $3 6 million respectively.
So to wrap up we believe we have developed a cost effective and highly scalable platform to drive growth within both our dental and medical Division. We are witnessing growing interest in both our instruments and our disposables and we believe we are well positioned to take advantage of the opportunity.
Is available in the market.
Within our dental segment, we are back on a solid growth trajectory with sequential sales growth of 34, 4% in the third quarter compared to the second quarter of 2022.
Year over year revenue for the third quarter of 2022 increased 28, 6% over the same period last year, excluding sales to China.
As you can see we continue to grow our dental segment and believe this business will not only contribute to our revenue growth, but also provide a steady stream of cash flow that will continue to help fund our initiatives within the medical segment until that becomes self sustaining on a standalone basis.
<unk>.
We did our medical segment, we have built a solid sales pipeline added hospitals expand the Dol is on the on our distribution partners and look forward to formal implementation of the new CPT codes, which will support planned initiatives on the reimbursement front.
At the same time, we continued to streamline our operating structure and remain committed to driving shareholder value.
We are encouraged by the outlook of the business and look forward to providing further updates as the developments unfold.
I'd like to thank you for joining the call today at this point, we would like to open the call up to questions operator.
Ladies and gentlemen, the floor is now open for questions.
You have any questions or comments. Please press star one on your phone at this time.
Asks that while posing your question you. Please pickup your handset listening on speaker phone to provide optimum sound quality.
Please hold while we poll for questions.
Yes first question for today is coming from Anthony Vendetti at Maxim Group.
Thank you. Thank you. Thank you Ari.
I was wondering if you can talk a little bit more.
A major.
Yield to have a CPT code.
Before the epidural.
It goes into effect.
January 3rd.
So right around the corner here can you can you tell us what the actual code is it a.
Is it a temporary code that's good for five years and what the reimbursement amount.
He is going to be at this point.
Thank you for your question Anthony and good morning.
So did the reimbursement code is defined as a pressure sensing guidance system.
During Abdul Mlg's, yet so but.
But I'm always explaining is that we have been fathered a technology code.
Which has been.
<unk> a category III code, which is a temporary code.
And to your point, yes. The trajectory is normally 125 years to make that from a category III code a category one code.
The beauty is that the health care personnel and providers that want to use our technology.
And sending in.
The building and the coding based on their cost structure they can already.
Apply for billing and coding to their local insurance company soda Medicare Medicaid and private insurance company now in particular, what we do.
Yes.
In that whole process of the <unk>.
Temporary code, which is of course, a unique opportunity for the company moving forward because.
The future is extremely important and right.
Look at the.
Just a simple fact that we have been.
Issued and granted to that extent that technology code, but what we are doing then.
With a number of clinicians.
That we are going to work with is providing them with all the information that they need to be able to send it into the local insurance companies. So that is for example paper work that is needed like.
Sort of medical necessity.
Lesser of justification because as it is a new technology.
You have to explain to the clinicians and the and the insurance companies. What the benefits are of this technology compared to existing technologies and also why it is so important to use our technology compared to existing technologies now.
To your second part of your question the pricing.
We as a company we cannot set the price to that expense.
That is what the clinicians will do.
In their discussions with the <unk>.
Health insurance company, but we can give guidance on.
On the paperwork that we are providing.
And the goal is that.
That they get.
Recovering of the cost of the consumables plus something extra now and thats something extra needs to be defined.
What I can explain to you is if you look at the current reimbursement policies and the reimbursement six foot example, Medicare in the New Jersey area floater pricing pain clinics.
Medicare is reimbursing $304.
For an epidural procedure.
On top of that in addition to that when the clinician is using fluoroscopy in that procedure.
Finishing gets an additional $150. So our goal is to so to say position ourselves between that $150 $300. If everything works out to that extent.
So that the private pain clinics or the clinicians indeed private pain clinics.
Get an additional opportunity.
To reimburse enter sent in our documentation to the insurance company.
We are able to make more money.
It is important for everybody to understand that because the.
The issue really here is today in health care environment, everybody knows that.
Just having a more.
Patient or safer.
Technology is not sufficient to get adoption in the marketplace, because clinicians need to have an opportunity as well to make money with the new technology. So that is the whole area and scale of where the CPT code and the CPT code.
Reimbursement comes in.
So we are working hard in.
Trapping all the paperwork and the documentation that we are needed.
For example.
We also will establish a hotline because if the clinician when the clinician sends in the documentation too.
The health care insurance companies to the healthcare insurance providers.
You get either an acceptance or denial now we as a company are not allowed to.
<unk> with the insurance company directly about that denial or that acceptance of the insurance company. The only thing that we are able to do is provide services to the clinicians enabling him to come up with the right argumentation to make a denial.
Acceptance when he has sent in.
Status for reimbursement, what we called the billing.
And the coding.
E <unk>.
It needs to submit to the health care provider. So it is a.
It is rather interesting area and this is fantastic area for the company moving forward.
It is a journey to that extent because things.
We will change.
Overtime.
But what is important for us is that we are.
Table to set ourselves up to provide the right services.
<unk> two dee.
The private payers clinicians and.
Yes physicians.
Answering your question that's it.
Yeah, sorry, no thats, great and it sounds like Youre doing everything from your end.
The paperwork as well as the hotline for providers as they go through it because it's a new process for them.
This particular.
With your particular device.
<unk>.
Helping them to make sure that they get properly reimbursed makes it makes a lot of sense.
In terms of now with negotiations with customers.
Yeah.
Has that has that sort of paved the way or made it easier.
At least I know, it's early but at least from our initial conversations as it made it easier to.
So.
The <unk> system now that there is a code.
Around the corner here.
Yes. Thank you for your question.
Yes.
Ben.
Do I have been pretty extensive in the fields as well so.
Enjoyed several meetings during weekends to was the American Society of Anesthesiology 10 days ago. There was the New York, New Jersey American Society of Interventional pain physicians, but I can share with you just the simple fact that we were able to announce.
That we have.
Temporary codes the quotes it's called <unk>, 777, which I already explained earlier.
Opening doors that normally spaces are staying close people just a simple fact that we are having clinicians.
So.
The industry in general is looking at US and has impressed that we as a smaller entity.
I have been able to.
To get awarded.
The temporary code now the second part of course is yes, it will definitely open up a lot of opportunities.
With some.
So ambulatory surgical centers as well as private pain clinics.
And.
It also opens up.
To work together with them because they are eager and enthusiastic.
To be part of establishing a reimbursable fee.
For this technology to be used within the practices. So it's definitely I would say, it's definitely a win win for both the company and the clinicians, but more importantly of course for the patient because at the end of the day.
Improving quality of life for patients steady still.
One of the main.
Yes motivation factors for our company and every person that is working and representing Boston scientific.
No I agree I mean.
It should become the standard of care.
Just lastly, you said you have enough cash to.
Explore.
<unk>.
Products and applications.
I know we've discussed in the past I was wondering if you can remind us which applications.
Might be at the forefront now which ones are you starting to contemplate pursuing.
At this point, yes so.
The applications.
I explained several times as well.
They are numerous right.
As we speak.
We get requests from other companies to look into.
Different areas.
We have been granted patents in peripheral nerve block in Europe . We recently also has been.
I ran through the patent in the U S for peripheral nerve blocks of peripheral nerve brokers potentially on our radar screen.
We talked about neurology and general for specificity.
<unk>.
Cosmetic patents for both saline and toxin and cosmetic medicine applications, we have of course into articulate.
So.
The opportunities are.
Numerous here.
I also do believe that that could potentially be interesting.
Areas too.
To further discuss with potential cooperation partner is not that we identify them.
Two to further explore these opportunities one thing of course is.
Developing a new technology within a certain indication area, but we also have to make sure that you have the means to sell.
The products that come out of that research and development pipeline.
And that you are able to commercialize that and launch that and can enjoy their revenues for there for that so the only thing that we have set in the Q&A current coupon.
My comments. This morning short term, we're looking at some enhancements of the SDA dental instruments, we have not kicked off a major.
R&D.
Projects within the medical.
Area and like I said.
We are still looking into.
Yes, the potential then to high priorities and prioritizing to several opportunities I also would like to to bear in mind of everybody joining us on this call of course.
We still remain a smaller sized company, where each employee is we're in three to five hat. So I always say to my team we better execute.
The things that we can execute on and we do it right instead of taking too many things.
On a plate that would be difficult to execute on within the given timeframe.
Okay. Thank you for all that color and I'll hop back in the queue. Thanks.
Thank you Anthony.
Once again, if there are any questions or comments. Please press star one on your phone at this time.
Your next question is coming from John Corp, a private investor.
Hello.
Good morning, John .
Good morning, how are you im.
Doing well.
Good.
I'm wondering if you could.
Help me understand where milestone as a company.
And how.
This rollout.
Mike.
Have changed and how your expectations in the beginning.
Well, maybe not correct because you went from.
Tenant sales to five I'm not sure.
We even have the five.
What happened there and how has your.
View going forward changed.
From the original time, when you started out with.
With that sales force of Tam.
Then I've kind of dragged down on a nine year cutback.
Tomorrow show your resources and save costs.
And where are we now.
I have a bunch of questions and I don't want to jump on them all up but.
Help me understand let's say you go into the University.
The system in Louisville.
And to do so then what happens.
Just seven that has a one person.
Actually you are saying.
This copy of flow system or.
Where does that go.
ASP at all.
Accepts your technology.
So as I said, we can't do anything can we get the code or.
Help me understand where we are with all of that plays absolutely and thank you for your question John .
So in a way you asked two questions. Let me start with the first one you're absolutely correct that my initial vision.
Was to build up a direct sales force with 10 people at a certain moment, we had 11.
And then as I announced in the prior quarter.
Parted ways, we did.
Not only in light of cost measurements, but more importantly also of performance issues.
Taking too much time, not necessarily having the right.
Yes attitude.
Right skill set to to sell the products directly now what we should not forget that time. We also were able to do that because we liaised with CGI and <unk> presence in 22 states they have about 32.
Sales reps, we have trained the entire organization of CGI, So instead of having 10 direct.
Sales reps in my organization.
We still have four.
And I have a group of 30 plus.
Feet on the ground through CGI.
There are representing us and that will definitely help us not only with the penetration in the marketplace, but also on the cost side.
The balance sheet right. So that's one part of the comments Youre second question for example University of Louisville intend talking to processes.
Absolutely.
Our person in the field.
Gives us a tremendous jump in and being very persistent just to give you again a flavor that is a process of getting eight weeks prior to getting a trial, we filmed the trial with them at that time.
We would that we have had meetings with the CFO of that hospital.
And we were able and they were pleased with our technology and we were able to be approved in that hospital.
Rosales of causes.
And your question is how will that look like from an ordering pattern point of view.
In this case the University of Louisville, Kentucky, They placed an initial order.
Which I would call a high volume order so they started.
August and they placed an order of 200 consumables.
Consumables so.
Out of which 200 procedures day immediately committed to and they are working.
Through that volume in the first.
Two and half weeks, they did about three and half.
In the first two and half weeks. So they did about 30 cases, and the ramp up and normally what you see in hospitals.
They will use it for.
Typical cases in computation, so ida patients with a high BMI.
Or other patients that have complications with epidural procedures, and then roll it out to a higher acceleration pattern for daily clean.
Clinical routine use.
That's where our salespeople come in.
And making sure.
That there's enough product on the shelves and that they are continue to use their our products every time when a <unk>.
<unk> comes in so what people always ask me why isn't that they go from one day to the other day and penetrates 400%.
Clinical department.
Claiming the Anesthesiology department, it's probably everything between 10 to 15 anesthesiologists. When you have two to four champions that are championing and using the technology. So when a sales guy has been able to get it approved into department. He still has to work also with.
The other NFC geologist, thereby increasing the volume.
But the University of Louisville, Kentucky, using it in the <unk> room, and labor and delivery and in pain. That's of course Jive GNC for the company.
And also very positive with what I expect for the next three to chase orders that are coming that way.
Huawei sorry.
A good example, also has a huge AMB.
Were they a year ago initially got it approved for.
Patients with high BMI. So they went to route that they wanted to have it into teaching institution facilities and now after they have done that now they can enter that area, where they can use our products for daily clinical routine use so I.
I hope that that answers your questions and shine some light on the questions that you that you post.
It does thank you.
I have an additional question.
You have used the word I believe.
This is how it might play out.
Word snowballing.
That.
Kevin It started in various places is the most difficult.
And then.
It might snow ball because.
New prospects at all well.
Louisville, choosing others are using it.
Contact them and find out how they like it and then the sales are easier and they are beginning to grow and the hockey stick effect is that still.
What youre looking for.
Yes, but let me let me let me explain it in more detail.
Absolutely do I believe in the snowballing effect or the dome effects when we get.
Institutions, like Louisiana or larger institutions that you're working with also close in the area, where we are situated in.
Absolutely I believe in that what we should never forget the long decision making process.
That is taking place in these hospitals, we were recently in Texas. It took us nine weeks just to get registered to be able to do with trials. So yes, I do believe into snowball effect. If we are and when we are able to get more institutions.
That supporting and are using our products absolutely. However, what is even more importantly, I strongly believe that we have a second pathway or a third pathway the second pathway being.
With the reimbursement code.
The entrants of the pain market segments.
That will definitely be.
Very important driver for growth for the company moving forward and why is that.
You do not have that decision, making process from let's say six to nine months.
You do not have to go through a committee the owner of a pain clinic can make the decision right away there are no necessarily immediately.
Financial constraints and thirdly, the direct benefits for the private pain clinic is that he can make money with a technology that we are offering.
All in all.
Let's say a year ago, we were very much so dependent on one.
Yes.
Go to market I always call, it which was labor and delivery and are in the hospital centers in the mid size the larger regional hospitals with the longer decision, making process a year later.
Thanks to a CPT code and thanks to other things that we have undertaken.
And thanks to being granted that code. We are now in an opportunity to have a really really unique selling proposition for deprived with physicians enterprises clinicians now to your point through that hockey stick at the certain moments in time.
In 2023.
Yeah I agree.
Expect to see then that uptake.
All of these parameters going together and the execution of the strategy that we are currently undertaking that will then.
Resold in.
In the medical revenues of the company. So I do believe that apart from the snowball effect that I, probably mentioned in one of my earlier calls that snowball the initiatives. The initial size of the snowball is getting bigger.
He expect much more out of that in 2023.
So if I understand you correctly.
The immediate hope and thrust of milestone.
Is to work with pain clinics.
And get that going to a great degree.
On the epidural and hospitals might take a little longer do I understand you correctly.
Yes, but don't forget that we already have been in these hospitals. So we will continue working with the hospitals.
And we have.
A number of hospitals right now where we are.
In Trialing and evaluation, so I'm not saying, we gave up labor and delivery absolutely. No. My point is just that we are again were going to do that in parallel and both of them are important but short term decision, making process is definitely an advantage in the private.
Pain clinics compared to the hospital.
<unk>.
I would expect that we have faster results.
Enterprise explained clinic Division.
So it's a decision making process.
Then in the hospitals for labor and delivery and of course in the hospitals. We will also go into the painting and into the Operatory Opera Tor room.
It is just the process internally is difference between these two entities that's more my point. So one does not exclude the other another goal, but we are better positioned to take more benefits.
<unk>.
Both market segments compared to a year ago.
Okay.
I guess I understand a little better I must say.
I am a little disappointed in the.
The length of time, the rollout has taken and may be you are too I'm not sure.
But.
As a firm believer in this product.
I guess, it's a long time shareholder I expect that the embracing of this new technology to be at a faster track.
Are we on the threshold maybe of that in the coming year or so or is it.
Still going to be more of a drawn out process, how do you envision that.
No I think that we are in like I said during the call. This morning, I think we are in a good position I think we are in a better.
Physician.
Then.
Im allowed to say so.
Full of years ago.
Yes.
We have more.
Arguments initiatives.
And strategic options.
At our hand.
We should also not forget.
We have submitted and the FDA.
<unk> and the indication why do you make sure that we are not only focusing our lumbar and thoracic and Super Bowl of course, it's out of our control.
The timing of the FDA and what they will come up with but thats those those things are important.
Because the unique benefit of our.
Our technology in the lumbar spine.
Known but the benefits of <unk>.
<unk> technology into thoracic and the cervical spine or even higher and everybody understands that immediately because the morbidity rates are much higher the higher you entered the.
The spine right.
Lumbar spine morbidity rates of 5% so 17%.
And surgical is 30% to 32% so.
That gives us also a unique opportunities and.
No.
You mentioned that you were disappointed if it took a little bit time, I would say I am pleased with what we have been able to achieve in particular in the last year.
Compared to where we were a year ago with the opportunities we have in the marketplace.
Okay.
There are no further questions in queue I would like to turn the floor back to Mr. <unk> for any closing remarks.
Yes.
Thank you very much for your time.
And.
The questions and discussions and please do not hesitate to contact me personally in case, you have additional questions and like I said I think we are in a good position to continue to create shareholder value.
In the coming months and years.
I wish you and a very good two state please stay safe.
I'm sure that we will meet again and talk to all the best Bye Bye.
Thank you ladies and gentlemen, this does conclude today's conference call. You may disconnect. Your phone lines at this time and have a wonderful day.
You for your participation.