Q4 2022 Milestone Scientific Inc Earnings Call
Okay.
Greetings and welcome to the milestone scientific 2022 year end financial results and business update conference call.
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A question and answer session will follow the formal presentation.
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Turn the conference over to your host David Waldman Investor Relations you may begin.
Thank you Holly good morning, and thank you for joining milestone Scientifics 2022 year end financial results conference call on the call with US today are oriented overhauls, Chief Executive Officer, and Peter Milligan, Chief Financial Officer of milestone scientific the company issued a press release today March 31 containing 2020.
Through year end financial results, which is also posted on the company's website. If you have any questions. After the call or would like any additional information about the company. Please contact crescendo communications at 21267110 to zero. The Companys management will now provide prepared remarks, reviewing the financial and operational results for the year ended December 31, two.
'twenty two before we get started we would 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 assumptions involving judgments with respect to future economic competitive and market can.
Additional 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 the 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 early.
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, 2022. The forward looking statements made during this call are based upon management's reasonable belief as of today.
At March 31, 2023 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, However Hall Chief Executive Officer. Please go ahead.
Thank you, David and thanks to everyone for joining us today.
<unk> 22 was an eventful year for the company as we achieved a number of milestones related to the rollout of the complex slow epidural system.
Most importantly, we were successful in seeding the market across a number of key all spitballs healthcare systems and pain management clinics.
Well as key opinion leaders in the field of anesthesiology and pain management.
The fact that our technology was adopted by these leading physicians and hospital systems reinforces our confidence in the market potential for our instrument, particularly within the labor and delivery and pain management markets, where we've focused our initial efforts in 2022.
More recently, we received five 10-K FDA clearance for use of the company's slow epidural system in the thoracic region of the spine, including surgical thoracic junction, where the incident rates of morbidity I believe could be much higher than in the lumbar spine region at 17 and 30%.
Respectively due to the difficulties accessing DRP dual space.
Is widely acknowledged risks factors have helped drive adoption of our content slow epidural system within a number of prominent pain management clinics.
The importance of the pain management market cannot be understated.
Pain management market is believed to be at least twice the size of the labor and delivery market segments and not only includes numerous hospitals, but also a specialty centers outpatient centers and sports medicine centers.
Furthermore, we have experienced that the decision, making time or sales cycle is much shorter in these private pain clinics compared to the labor and delivery department at hospitals in other words. The recent FDA five 10-K approval increased our accessibility to the total addressable.
Markets for that'd be dual analgesia.
We didn't just two weeks of receiving the thoracic clearance, we announced that we commenced sales of company's slow epidural disposables across free pain management clinics in Colorado Adele.
Adoption of the technology by these clinics follows a successful evaluation process by Doctor breath system.
The AR recognized pain management Doctor.
Dr decision initially conducted several cases, using the company flow epidural instruments and <unk>.
Which he reported 100% success.
The evaluation included procedures within the touristic region of the spine.
Similarly, Dr. Dennis Man and interventional pain medicine physician has begun using our technology within its practice at University pain and spine center. Following the similar successful evaluation as a result, we commenced to sales of a constant flow epidural disposables.
Across the University pain, and spine Center in Somerset, New Jersey, which operates in another seven offices across New Jersey, and New York.
We remain encouraged by the interest in our epidural instrument by anesthesiologists and pain management providers, especially for patients with complex anatomy and difficult cases that involve the thoracic and cervical thoracic junction.
The further validation of our technology by these physicians illustrates their commitment to incorporating the latest technologies to improve patient outcomes and safety.
Another important milestone in 2022 was the issuance of a category III CPT codes, which became effective on January 1st of this year.
We believe this would potentially allow billing and payment pathways for healthcare personnel, who choose to use our technology for coverage and discretionary payment by payors, such as Medicare and navigate as well as commercial health plans.
This code will be a focus of ours in 2023 and is expected to play an important role, especially in private pain clinics, where administration of financial decision, making will be made easier, thereby potentially helping accelerate our commercial rollout.
In addition, we were recently granted registration with the U S. Government system Forward Award management also known as <unk>, which is a key step in the overall Gulf of mental decision, making and payment process. Sam registration is required for entities to bid on contract.
And conduct business with department of Defense and the Department of Veterans of SaaS Indian Health service and other Gulf of them to agencies.
We are actively pursuing U S federal supply service approval for the content flow epidural instruments, which if granted would provide uniform pricing and reimbursement across government agencies.
In addition to our direct sales channel. We are also expanding our network of distribution partners to assist in further adoption of <unk> system.
We recently added a new international distributor in Greece, and re engaged with our domestic partner clinical technology incorporated a leading specialty distributor of medical products in the Midwest and East coast regions of the U S. Each of these distributors brings relationships within key global Mark.
That's and proven track records, introducing medical devices within their territories.
Look forward to announcing additional international distributors as we advance our commercial rollout.
So to summarize we are continuing our efforts to seed the market with our technology and among key positions, which we believe will ultimately translate into widespread adoption.
We remain committed to our goal of establishing the <unk> epidural instrument as the new standard of care with Abdul anesthesia by providing patients with effective pain relief, while reducing the risk of complications.
Turning now to our dental segment, we made a number of key changes to our sales and marketing strategy. This past year that we believe will enhance our long term growth.
In the United States, we launched a new online portal for U S dentists to order the SDA single tooth anesthesia system instruments and patent pieces. This new site went live on January <unk> 2023.
We ended the agreements with our prior distributor at the end of 2022.
This change in U S distribution strategy resulted in lower fourth quarter 2022 sales as the prior distributor wound down its operations and did not preorder hand pieces for the first quarter of 2023.
As they did in the fourth quarter of 2021.
Despite this short term impact we expect our new direct online channel will provide us with a closer and direct relationship with our customers, which we believe will result in better follow up and improved margins.
In turn we believe this strategy could result in an increase in dental sales at higher margins in the U S market in the coming quarters.
Meanwhile, we continue to work closely with other channel partners for our SDA instruments, especially in specialized areas of dentistry, such as implant dentistry in aesthetics as well as large dental groups also known as dental service organizations or Dsos.
Offsetting the temporary weakness in domestic sales due to our transition to a direct sales model.
Mist continues growth in international sales, excluding China.
As part of our strategy to grow our dental business, we have placed a major emphasis on entering new markets and expanding our penetration within existing international markets.
Specifically, we have added new global distribution partners for instance, we recently granted technique health technologies exclusive distribution rights to market milestones SDA single tooth anesthesia system in Brazil, one of the three largest markets in dentistry.
In fact, Brazil has a population more than 200 million people with over 240000 dentists.
We also recently appointed Sweden, and Martina is our exclusive distributor in Italy, France, Spain, and Portugal, we believe that Sweden in Makena is an ideal partner given that <unk> penetration within these key European markets, which represent a combined population in excess of 180.
80 million people.
We look forward to announcing additional international distribution agreements as we continue to build a network across Asia Africa, South America and Europe .
At the same time, we continue to carefully manage our expenses, while investing in sales marketing and new product development, along with analyzing new areas for our technology.
So to summarize we believe that through our new sales strategy in combination with our increased marketing efforts. We aim to further grow the dental business in the coming years.
Our dental business continues to generate positive 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 at.
At this point I'd like to turn the call over to our Pizza Milligan Chief Financial Officer to go over the financials in detail. Please go add Peter.
Thank you our in total.
<unk> for the year ended December 31, 2022 was $8 8 million versus $10 3 million for the same period last year.
Dental revenue decreased by $1 4 million due to lower revenue from China of $1 4 million and a decrease in domestic revenue of 278000.
Which 179000 related to an allowance for sales returns due to the termination of a U S distributor agreement.
Medical revenue for the 12 months ended December 31, 2022 was approximately 53000 versus.
152000 for the prior year, which was primarily the result of changes to the company's near term commercial strategy.
Gross profit for the year was $4 9 million or 56% of revenue versus $6, three or 61% for the prior year.
Year over year decline in gross profit was driven by lower revenue and the impact of a approximately 400.
<unk> thousand dollars.
Noncash inventory reserve related to the medical.
Products.
Operating loss for the year was approximately $8 8 million versus seven four for the prior year.
And then the loss to common shareholders was $8 712 cents a share versus six eight or 10 cents a share for the comparable period in 2001.
Now I'd like to turn your attention to liquidity and capital resources, we continue to carefully manage expenses and have maintained a solid balance sheet.
The company had approximately $8 7 million at the end of 2020 to current assets were $13 seven and working capital was nearly $10 million.
At this point I'd like to turn the call back over to Ari.
Thank you Peter as Peter mentioned, we continue to maintain a strong balance sheet with approximately $8 $7 million of cash and cash equivalents as of December 31, 2022, which provides us substantial resources and the ability to accelerate our sales and marketing activities.
Around both our dental and medical instruments.
Through our new sales strategy and our enhanced marketing efforts around the SDA single tooth anesthesia instrument. We believe this will increase our market penetration as we focus on the significant value drivers of our instruments, including safety efficiency and importantly, supporting the growth of them.
Practices.
We believe we have developed an efficient and scalable platform to help drive our dental instrument and handpiece sales in the coming years.
In addition, we remain confident in the market potential of the content flow epidural system, which we believe will transform the industry and ultimately become the standard of care.
In summary, we are gaining momentum building upon the early success of our initiatives and given the recent developments, including the addition of new hospitals in pain management clinics.
Expanded distribution and a streamlined operating structure, we believe the future is bright.
We are excited about the recent 500 10-K FDA clearance for use of the <unk> epidural system in the thoracic region of the spine, including the cervical thoracic junction and finally, we look forward to continuing our efforts regarding the implementation of the CPT codes, which we.
We'll support planned initiatives on the reimbursement front.
We also look forward to advancing a number of key initiatives followings, Sam approval, and leading up to potential federal supply system approval, which would open up the sizeable government market.
We remain committed to drive shareholder value and look forward to providing further updates as developments unfold.
I'd like to thank you for joining the call today and at this point, we would like to open the call up to questions operator.
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One moment, while we poll for questions.
Your first question for today is coming from Anthony Vendetti at Maxim Group.
Thank you.
And I was wondering if you could talk a little bit about the.
The transition away from.
Your previous.
Central product distributor towards an online platform.
If you could just I know that impacted sales.
In the fourth quarter.
Can you talk about.
The uptake that you're seeing or the traffic numbers that youre seeing.
Terms of your onsite sale in <unk>.
Do you feel like that transition.
Is is complete all the customers are aware of it or do you think it.
It will continue to play out over the next couple of quarters.
Good morning, Anthony and thank you for your question would.
I would be delighted to shine for more light on the situation.
As we reported.
Historically, we all know that the agreement with our prior distributor.
Domestically ended by the end of last year.
And then the company of course has several opportunities as we all know we have a.
Pool of smaller distributors or.
Or you do a hybrid or decides to go direct.
And we took the decision to go direct for the very simple reason.
And the simple reason being that.
The end market price, so, let's say if we.
To sell our products at a transfer price to a distributor compared to the.
In market price the price would almost double that by also on margins.
Significantly increase two different levels than historically within the company now what's the risk in that operation absolutely but.
I made the decision that we made the decision.
That there was no other opportunity and in particular for the mid term and the long term.
There was so much upside potential that we decided to launch the portal so that activity already in that preparation took place during the midst of the third quarter last year fourth quarter last year to be prepared for the official launch of.
The portal in the beginning of this year now.
The challenge as you say is of course, how do you reach out to the entire dentistry population in the United States.
I don't know if everybody has seen that but I would say, we did not overload the market, but we made sure that the dental population.
Was targeted and receipts as a minimum the information that we went.
With our portal and that they could order the products.
One line overall portal.
And Thats brings me to the second question or the second part of your question.
How the pickup has been and how to take up has been.
I can without going into detail I can assure you that.
I am pleased with the development of the portal in the first quarter.
And.
Shine a little bit more light on that.
Not only am I pleased but I'm also convinced that this has been the right decision for the company moving forward.
Which I believe that in part of.
Despite of the let's say the the lower results in the fourth quarter that we will gain.
Enjoy increasing revenues and higher margins in the next coming quarters I'm very pleased with the development that we have seen as a direct result.
The portal and also I would say of the number of customers that we have been able to serve.
And in addition, there is a lot of marketing market in challenges coming our way of which we can benefit from and also drive upselling.
Through our portal and the people internally that provide excellent customer service and support that by growing the business further does that answer your question Anthony.
Yes. Thank you are and then maybe as we shifted.
To the.
The medical side.
I had a couple of recent events, including.
The five 10-K clearance.
For the comp you flow epidural system in the thoracic region, including the cervical thoracic junction, which obviously there is that's one of the areas.
Our theirs.
Increased rates of morbidity.
We all know the lumbar spine is a big area can you talk about the opportunity now because you've mentioned that it's much easier to get into the pain management clinics, it's much shorter sales cycle.
Where are you.
How you see that opportunity playing out over 2023.
Because now you also have a category three CPT code.
Do you feel like your 2023.
Well set up now to really develop the medical side of the business.
Yes, thanks for the question Anthony.
Personally I believe without sounding arrogant or bullish, but I do believe that the company.
Now better tools in the toolbox, so to say compared to one two years ago and the main reason is is.
Is the following.
Of course for good reason to the company entered the labor and delivery market segments.
We all know.
That the.
The decision, making process within the LNG Department has much longer it's six to nine months without let's say the larger hospitals, where it can even be longer.
And remind ourselves that a year ago, we made an attempt to go in the private pain clinics personally visited a number of that and I challenge the organization to reapply or resubmit for a CPT code and in addition to that we made the decision.
Two.
Submit an FDA file.
This 10-K file to the FDA 40 surgical thoracic.
Indication.
Now beautifully all of these elements came together.
By the end of last year and the beginning of this year and let me explain what I mean by that.
First of all.
We had.
Success with private pain clinics.
Some of them decided to use our technology because of allergic reactions to fluoroscopy. In contrast media di some of them use that technology and complicated cases for spinal cord stimulators, but we all knew that being successful or having an opportunity to be successful.
Within the private pain clinics, you need to have access to reimbursement code right.
Now what I've always had said is the reimbursement code is a journey we have a temporary code. We work with professionals that has a lot of know how within that whole reimbursement environment.
And as a result of the five 10-K approval. We also were able to get the official approval of using our system within the thoracic surgical spine.
I can share with you that since that announcement there are a number of hospitals that not only we have contacted but also have contacted us because to your point.
The unique selling proposition of <unk> technology within the surgical thoracic spine.
It's much better understood and higher than in the lumbar because of the morbidity rates and loan by being 5% in the thoracic being 17% and in the cervical spine being 30%, but in addition.
The CPT codes, our code or temporary codes, what we should not forget it is an additional codes to existing codes, including surgical and thoracic. So for example.
The two clinics that we announced they have used our technology in the thoracic spine in the cervical spine and as we speak to have submitted.
The paperwork also to the.
<unk> local insurance providers, which is a mix of Medicare and private healthcare insurance providers.
Now.
Wait for feedback of the insurance providers, where they accepted or whether they deny it and then we help the clinicians.
Through a service network to have these discussions with the health insurance providers.
Most important to understand the following we as a company.
And our management team is in no way and.
Titles or allowed to give direct recommendation to the clinician what the price of the reimbursement would be or having direct relationships and communications with the healthcare insurance providers.
So during the fourth quarter, the third and the fourth quarter of last year, we have prepared exactly what we are currently doing right now.
Yep.
Last part of your question.
Do I believe that that will have an impact on.
The medical revenue potentially yes, it will have an impact on the medical revenue it remains to be seen what the magnitude.
And we'll be on the revenues that we have projected internally. So in parallel just going one step further it is a combination of both the FDA approval as well as also the potential access to.
To our federal supply sort of emphasis or the Gulf of mental business I am not saying that.
We are only focusing on the Gulf of mental side every time, we have to do our work and we have to execute on the plans that we have provided but I do believe that.
And Thats the goal and the aim of management of this company.
We should see results of the pathway that we have chosen I know if the initiatives that we have undertaken.
Okay.
That's great I think.
There's.
One last follow up.
Because I spoke to our Kols on the pain Center.
Who.
It was very knowledgeable.
And.
He said he is going to be recommending this to his colleagues because it's.
It's pain free.
You get an exact.
Location.
So.
Is there is there I am sure there is a plan, but maybe just elaborate on the plan to get more kols, because we all know that healthcare is local.
<unk> onboard on the pain management side or is there.
Either simultaneously or plan to get into or penetrate more of the university hospitals.
You can get further validation that your copy flow system is sort of a must have versus the traditional way of of injecting.
Patients.
Absolutely.
And in.
That's absolutely the case so definitely.
I know, what's going on of course, but on the type of person that I only announced news when it is.
When it is valid whether it is confirmed and when there was the signature in place, but I can share with you that as we speak we are adding clinics to the existing two clinics that we announced.
And also automatically these clinics.
Of course also.
Work on the not only the thoracic and the cervical indication as well as lumber.
And we.
We will send in the documentation to the healthcare insurance providers being in public or private privately owned that's one side.
On the University side again.
Our potential and our opportunities have increased because we are not only dependent on labor and delivery with a thoracic surgical indication. We can go like we did in the University of Illinois.
Illinois University of Louisville, Kentucky, Kentucky.
We're at that time, they only decided to use it for the lumbar region and the whole lot of pain in the labor and delivery now that you have the other indication, but more importantly.
We add the number of physicians that could benefit from the technology that we are providing like neurosurgeons surgeons in general internal medicine, because what I meant by that we have increased the accessibility.
Two the total addressable market instead of only addressing $2 4 million.
Abbvie dual procedures.
<unk> labor and delivery as part of the total of 11 million procedures in the U S. Only as the total market now we are in that position that we can address that entire market like the cervical thoracic junction is about what we always say it's twice.
Then the loan back pain markets.
That's a large market, but now we are playing and then we have the potential to play.
In different segments of that market and we all know that we are on.
Underpenetrated in that market, but with the tools. We are having now we have to execute and find additional partners that can help us in increasing the penetration and adoption of the technology in the medical segment.
Okay. Thank you. Thank you very much for all that color.
I appreciate it and I'll hop back in the queue.
Thank you Anthony you have a good day.
Once again, if there are any questions or comments. Please press star one on your phone at this time.
Your next question for today is coming from John Corp, a private investor.
Good morning hours on our year to date I'm.
Im doing well John how are you.
Sure.
Anthony answered you answered a lot of the questions that I've had for answering these questions.
I was struck by that day, you announce that.
Correct SEC approval.
No.
Participation in the market.
Milestone triggered almost 2 million shares out of the blue our standby that maybe you werent true.
Just told me that a lot of people a lot of market observers and investors were waiting for this approval I remember now.
That approval was.
Yes.
Are you waiting for other types of approval from the FDA or is perfect.
Well, if we wait for other approvals for the FDA to them it would be in.
In total different areas I think focusing on the.
On the current portfolio and the current technology.
I think we are very well positioned and covers in the I call. It the spinal region, but because we cover the.
Entitled Spinal cord.
But more importantly, we cover all indications procedures.
Diseases therapies et cetera that are in the spinal regions. So we can play a role in.
In spinal cord stimulators, we're looking into.
Combination of radiofrequency spinal stimulation spinal infusion et cetera.
<unk>.
To your point I can give you an example.
And that is of course, a market that we continue.
Dangerously annualize it.
For example, the market of peripheral nerve block right, which is the peripheral anesthesia for larger procedures.
Where we have been granted a patent not only in Europe , but in the United States as well.
That would be a potential.
Next research and development area and that would allow.
For a potential new submission to the FDA, but.
You know I don't want to to dream here we.
Have not initiated any steps in that direction.
With the size of the company and the organization, we have enough on our plate to.
To work on day in day out I always say, it's a joke. Unfortunately today has only 36 hours. So we are trying to do whatever we can do to to make things work and I think you will be appreciated.
Of the explanation to my questions My answers to the questions that Anthony raised is theres a lot of activities going on in the background like a simple thing like a thoracic approval or a CPT approval. It requires tremendous work of my team and I need to.
Keep them motivated we need to create a good environment. There is a very positive light in the company based on the.
The initial results of the simple thing on the portal and that will help creating a high performance team and a high performance culture that we need to bring the company forward, So im going a little bit sidetracked, but I hope.
You bet.
Answer to your question in a professional way.
The feedback was very helpful.
Yes.
I wonder, sometimes what is going on I cant I presume, especially after about one <unk>.
Trading.
After that approval was granted that things are going on but I don't know about.
Shareholder.
No absolutely Jon it's a very good question I just have one other comment to make just because you said that you. Appreciate that you are appreciative of the activities that are ongoing.
Also what we what we're currently doing that.
In particular in the dental market space.
We have recently addressed much more.
The patients right because we always go to the dental professionals.
Shouted that several months from the rooftops that I wanted to see a direct patient marketing approach, we have initiated that and it's very nice to see that in the last two weeks of the instruments that we sold ourselves direct that our team has very.
Yes executed very well from a professional point of view that the reason why a number of these instruments are new accounts were coming our way was because the patients were asking the dentist, whether they had that technology available.
So that's another activity that we are accelerating on.
Tremendously.
Because I've always said that at the end of the day.
If you or I go to the dentist and we would say do you have that technology, because I don't want to have any pain and the dentist said no and you would say I will go to another dentist.
That's your dentist would not be very happy because there is no dentist into world that likes to lose patients. So it's just another flavor of the activities that are ongoing in our company.
Okay.
I have kind.
When a recipient of.
<unk> technology.
And that's wonderful.
That gave me encouragement.
At one point, we've talked about this before you had started our <unk> for the hospitals and universities.
Youre down to five do you still have five salesman or has that changed no.
No we have three full time equivalents.
And that's also the reason why we have.
Signed up in the middle of last year.
CGI clinical technologies incorporated that Hasnt footprint.
In 22 states in the United States.
And.
For the time being.
We are looking at more and more partners because we all know and we all are appreciative that the direct sales team.
<unk>.
Sufficient pressure on our balance sheet, so to say from a direct point of view.
Now of course, you can say.
Going with the distributor it will hurt your margins, absolutely, but that is controllable.
Through pricing or through other activities.
But.
It didn't make sense for us and for management of the company to continue to maintain a direct sales organization of 10, 11 people and I have to be fair without significant success at that time and I'd rather.
Our focus on creating shareholder value in keeping the financials of the company and a good in a good place and the good spirit.
Okay.
From our Android faster in your question, you may not be able to or want to answer.
What what can we look forward to this.
Sure at one point, we talked about the snowballing effect or theyre going to get a critical mass dividend.
David on pain management, our average or wherever.
And there's going to be a snowball effect.
Is that still.
A possible scenario youre looking at or is there going to be more of a slow steady rollout.
And when might we really gained traction.
Sales and earnings wise so.
It's noticeable through to shareholders and to investors.
More than it is now.
From a one day of all of a sudden tumor ensure Australia there was a lot of people.
Paying attention on the milestone side traffic somewhat.
Are you more encouraged than ever for this year or are we just.
And all very Canada still or what's your current thinking okay.
You can comment.
A fairly kind of pass through costs.
So I'm definitely.
Positive and I am definitely encouraged.
The snowball effect.
Always potentially possible and.
Its triggered through different things not only on the on the thoracic FDA approval, but a snowball effect would be when we hear back from.
The first healthcare insurance providers.
We would accept them we'd set of pricing on the reimbursement that will be one thing another snowball potential snowball effect would come.
If we would be successful in the Gulf of mental business, another snowball effect with the column.
If you would be successful then in neurosurgery department at a major hospital that would use our technology for the spinal cord stimulator. So it's a lot of things there.
Im respectful that you are aiming at the medical business as such but of course as management, we look at the overall company.
And the goal for our dental business is growing that business significantly exponentially.
The goal for the medical business is to get a foothold in our footprint in the marketplace.
Whatever that number will be we will now go to allude on that.
And of course for the company overall.
We are looking at operations and the financial well being of the company to secure.
So at the moment whenever that will be in time that at least we would get a quarter that we would be cash neutral.
That's the goal of the management without going into the details on the about the timing and when that's going to be because I cannot look into a crystal ball like I said, the only thing that we can do is execute execute and execute and following.
The strategy that we have identified undecided.
And always make sure that for the investors and for the shareholders.
A consistent message from us from management, which is based on facts on which is based on the <unk> picture.
Great well. Thank you so much R&M trigger bank of Jonathan hard work day and Paas purchase.
Thank you okay.
Your next question for today is coming from Mike Fifer.
And hymer.
Good morning.
Michael.
What are your can you talk a little bit about your expectations for cash burn going forward. How do you think about whatever you can share with us.
Yes, so the expectation on the cash burn this year. The goal is that that should be at lower levels that we had in prior year.
From a general point of view I will not go into detail, what the cash burn will be a year of quarter by quarter, but.
But I would say also what you what we should not forget is the following.
By having the portal it will definitely also help us in our cash management.
The majority of the.
Some of the transactions that have been done over the portal is by credit card.
At higher prices than what we normally would distribute that to the.
Prior distributor.
No.
From a cash situation and the cash balance point of view, we would be in a better position than in prior year, but I'm not in a position to share with you what the burden would be quarter by quarter for the coming year.
Okay and then.
Obviously, the <unk> CPT code could be very important for you guys and you talked about I think you said you're sort of at the point where.
The doctors are waiting for feedback.
The insurance companies, whether they can accept or deny these claims can you talk anything more about that about the process or the timing to hear that what can you.
Make us smarter about that.
Absolutely no.
Two to be 100% sure what I said.
Is that the doctors the two claims that we had been working with and that we have announced and we are adding more clinics that these doctors had send in the inflammation to the health care insurance providers and then.
It's in it's superior.
Where the health care insurance providers has to provide us feedback to the clinicians right.
That can be 30 days can be a week it can be six weeks out of our control dependent on the health care insurance providers.
And then what normally happens is you get an immediate acceptance or you'll get the denial now the denial can be based on procedural mistakes I think I mentioned that to you on one of the other calls Michael that it can be a very simple thing from you.
Using a staple instead of the pay per click or.
It is a clinical argumentation or a procedural or filling out the forms right.
That depends and I don't know yet because I have not received any feedback yet what the.
What the quality and what type of feedback of questions have been.
From these health care insurance providers now without promising anything I'm just sharing what my expectation is so this is just.
Me shining.
A light on that.
I do hope and my ambition is.
You noted.
Within the quarter at least we get some initial feedback from these health care insurance provides it that's all I can say right.
<unk>.
Otherwise, it's going to be guessing and I don't want to create any false hopes or provide any false expectations will whatsoever.
The only thing that I can say is we're doing whatever we can do to professionally executed on this process.
The goal is to have additional clinics sending in more.
Claims to the health insurance providers, because when we increase the volume.
The health care insurance providers see that more clinicians sending in the coding and billing.
Papers it will potentially also first enhanced speed of feedback the three eight and increased awareness of the health care insurance providers and see hopefully facilitate the decision making process at these healthcare insurance providers.
All I can share now.
Michael because.
I would not know more about that than you would potentially find out with other <unk>.
People that are active within the medical health care.
I guess the takeaway, though I heard from you is that you can expect from your comments or we can expect from your comments that.
Other clinics will be putting in more claims as well beyond these two that there's other things emotion that there'll be a greater volume going occurring going forward at some point is that reasonable to say.
That's absolutely correct, Okay and then the last question and I. Thank you for your time Sam approval like.
What's the potential timing of like how long could that take can you give us any color on that.
Yes, so the Sam approval so.
We are approved for Sam.
And families is one step in the entire process.
To be approved.
As a vendor or supplier.
Our having access to the government business, so I always explain it in the following way.
Sam gave us a license to hunt.
But you still need the <unk>.
Federal supply schedule, you need to be at the federal supply schedule and why is that important because that would mean that all the VA into special operations of the department of defense.
It would mean that you are approved but more importantly, also the price effect.
And so you would not have any.
Yeah.
The VA.
Fees that we are on the FSS Oded our technology on the FSS there is no.
A discussion about the pricing and there is no discussion about being approved.
Technology.
Forward to.
Of course, you still need to work.
With partners that have access to the VA and you're still.
It has to.
Presented products and demo the product and evaluate the product et cetera, et cetera, but there I believe that we are in a good spot to have access to <unk>, but still that there's work to be done.
So then just on this federal supply schedule can you give us any color on the timing of that how long does that take.
Yes again it is the same thing that the discussion that I had with with you and other people about the FDA. The FDA normally has a timing schedule, let me put it in this way.
Without promising I expect that in the near future.
And.
Potentially I believe that that will come.
Perhaps somewhere within the within the quarter within the second quarter.
Well that sounds very promising, but again, but again.
Asked me the question, what I believe I am not making a promise and I'm not saying that that will be the case.
Okay well.
Thank you for your time and continue the good work I appreciate it.
Thanks, a lot Michael will have a good day.
We have reached the end of the question and answer session and I will now turn the call over to management for closing remarks.
Yes. Thank you all for your time.
I do believe that you would be in agreement with me and with management.
The company is in a good position.
And we are executing on the strategies that we have identified a really thank you for your time on the appreciative of the quality of the questions that were raised.
In case, you have any further questions and you want to contact management outside of the normal earning call.
We are approachable.
And.
I wish you and a good Friday and a good weekend and please do stay safe and.
To be continuous and looking forward to our conversations in the future.
Have a great day. Thank you so much.
This.
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