Q4 2024 Monogram Technologies Inc Earnings Call
Unknown Executive: on these forward-looking statements, which reflect our opinions only as of the date of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. Throughout today's discussion, we will attempt to present some important factors relating to our business that may affect our prediction.
What our opinions only as of the date of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward looking statements in light of new information or future events.
Throughout today's discussion we will attempt to present some important factors relating to our business that may affect our predictions you should also review our most recent Form 10-K and Form 10-Q for a more complete discussion of these factors and other risks, particularly under the heading risk factors a press release detailing these results.
Unknown Executive: You should also review our most recent Form 10-K and Form 10-Q for a more complete discussion of these factors and other risks, particularly under the heading Risk Factors.
Unknown Executive: A press release detailing these results was issued today, March 12, 2025, and is available in the Investor Relations section of the company's website, monogramtechnologies.com.
<unk> was issued today March 12, 2025 and is available in the Investor Relations section of the company's website monogram technologies Dot com.
Unknown Executive: Your host today, Ben Sexson, Chief Executive Officer, and Noel Knape, Chief Financial Officer, will present results of operations for the fourth quarter and full year ended December 31, 2024.
Our host today, <unk>, Chief Executive Officer, and <unk>, Chief Financial Officer will present results of operations for the fourth quarter and full year ended December 31, 2024 at this time I will turn the call over to <unk>, Chief Financial Officer know cannot be.
Noel Knape: At this time, I will turn the call over to Monogram Chief Financial Officer, Noel Knape. Good afternoon, everyone. I'm glad to be with you today. Thank you for joining us.
Okay.
Good afternoon, everyone.
Glad to be with you today, Thank you for joining us.
Noel Knape: I'm just going to dive right in and give you a review of where we are for the year from a financial perspective, and then I'll hand it over to Ben to share some exciting upcoming events that are that are coming up in the near future. As you know, as a startup, cash is extremely important, and we've done a good job of shepherding our cash this year, ending the cash balance at $15.7 million, which was higher than the cash balance at the end of the previous year. This is due to, one, being very frugal in our spend and maintaining our monthly cash burn to around $1.2 million, as it's been for some time, and also due to a successful preferred D-raise, where we had an oversubscribed $13 million successful raise, combined with some significant investment by senior management, and this is indicative of the faith they have in the technology and the business and management going forward, so we're very happy to see that.
I'm just going to dive right in and give you a review of where we are for the year from a financial perspective, and then I'll hand, it over to Ben to share some exciting upcoming events that are that are coming up in the near future.
Speaker Change: As you know is a startup cash is extremely important and we've done a good job of shepherding our cash this year ending cash balance of $15 $7 million, which was higher than the cash balance at the end of the previous year.
Speaker Change: This is due to one being very frugal in our in our spend and in maintaining our monthly cash burn to around $1 $2 billion. It has been for some time.
Speaker Change: And also due to a successful preferred day raise where we had an oversubscribed $13 million of successful race.
Combined with some significant investment by senior management.
Speaker Change: And this is indicative of the.
Speaker Change: The faith, they have and the technology and the business and management going forward.
Speaker Change: So we're very happy to see that and then we were also able to access.
Noel Knape: And then we were also able to access, with some institutional investors, access to our to raise a little bit more there. So we have a strong balance sheet going into the year, and to meet our upcoming milestone.
Speaker Change: With some institutional investors access to our ATM facility to raise a little bit more there. So we have a strong balance sheet going into the year and to meet our upcoming.
Speaker Change: Stones.
Noel Knape: We are still very highly variable in our cost structure. We have 27 full-time employees. and we leverage outsourced engineering talent when needed. We were able to scale back on that some in Q4 as the V&V project, portion of the project wound down and we're focused on getting the AIR submitted and on to our next objectives. Again we have no traditional debt and very limited short-term warranties, warrant obligations right now and we expect to have a solid cash through the year.
Speaker Change: We are still very.
Speaker Change: Highly variable in our cost structure, we have 27 full time employees.
Speaker Change: And we leverage outsourced engineering talent, where needed we were able to scale back on that some of that in Q4 as the <unk> project.
Portion of the project wound down.
Speaker Change: Focused on getting the AAR submitted and onto our next objectives.
Speaker Change: Again, we have we have no.
Speaker Change: Traditional debt or in very limited short term warranties.
Speaker Change: Current obligations right now and we expect to have a solid cash.
Speaker Change: Through the year. So all things are looking positive all things going forward and we're prepared to enter the next stage of our journey, so with that I'll hand, it over to Ben section. The CEO Who'll walk you through exciting things that are on the agenda and coming up shortly.
Noel Knape: So all things looking positive, all things going forward and we're prepared to enter the next stage of our journey.
Benjamin Sexson: So with that I'll hand it over to Ben Sexson, the CEO, who will walk you through the exciting things that are on the agenda and coming up shortly. Thank you. Thanks, Noel, and thank you, everybody, for joining us today for our fourth quarter call. appreciate everybody's time.
Thank you.
Ben Section: Thanks, Nolan and thank you everybody for joining us today for our fourth quarter call.
Ben Section: I appreciate everybody's time, so I'm just going to start by.
Benjamin Sexson: So I'm just going to start by Really recapping what the Monogram Investment Thesis is, and it's really pretty simple. We think that robotic penetration today is not what it will be in the future. We think it's going to be significantly higher in the future, driven by a lot of clinical factors that we can get into. And we think that we can get into the reasons for why this is, that there's one dominant player that really has demonstrated significant robotic utilization. They have the strongest market position. They're consistently growing year over year. And we think that they really have demonstrated what's valuable in orthopedic robotics, specifically in the knee replacement area, which we think will grow significantly in terms of robotic adoption.
Ben Section: Really recapping, what the monogram investment thesis is.
It's really it's pretty simple.
We we think that robotic penetration today is.
Ben Section: Is not what it will be in the future.
Think it is going to be significantly higher in the future driven by a lot of clinical factor. So we can get into.
Ben Section: And we think that.
Ben Section: We can get into the reasons for why this is that.
Ben Section: Theres one dominant player that really has demonstrated cigna.
Ben Section: Significant robotic utilization.
Ben Section: We have the strongest market position there.
We're consistently growing year over year.
Ben Section: And we think that they really have demonstrated what's valuable in orthopedic robotics, specifically the knee replacement area, which we think will grow significantly in terms of robotic adoption.
Benjamin Sexson: And so our thesis is that any company that really does not get its act together with a robotic knee strategy, let's say, and then moving into other applications as well, will really have a lot of an uphill climb, let's say. Monogram really has always from the beginning have been developing a robot that we hope will address this market pain that we think is going to become more and more obvious over time, in our opinion. So just kind of starting out, you know, we think that the market is currently digesting robotics as a growth driver, but not a kill shot.
Ben Section: And so our thesis is that.
Ben Section: Any company that really does not get its act together with a robotic.
Ben Section: Yes.
Ben Section: The strategy, let's say and then moving into other applications as well.
Ben Section: We'll really have.
Yes, a lot of an uphill climb.
Ben Section: So.
Ben Section: Monogram really is has always from the beginning.
Ben Section: Been developing a robot that we.
Ben Section: That we hope will.
Ben Section: Address this market pain that we think is going to become more and more obvious over time in our opinion.
Ben Section: So just kind of starting out we think that the market is currently digesting robotics as a growth driver, but not a kill shot and what do I mean.
Benjamin Sexson: And what do I mean? I mean, If you look at the market today, in total knees, robot utilization is still low. As you can see here, it's not like the majority of knee replacements are not robotic. Maybe the key question is, where is this going to be as we move forward? When you think about it from a clinical perspective, especially MAKO, which has utilizes a personalized CT scan, robotics enable more personalized surgery. They enable different types of alignment. They help with press fitting of implants. Instead of putting an implant in and cementing it down, they can help with, let's call it a more precise...
If you look at the market today in total knees robot utilization is still low as you can see here, it's not like that.
Ben Section: The majority of knee replacements are not robotic maybe is the key question is where is this going to be as we move forward.
Ben Section: When you think about it from a clinical perspective.
Ben Section: Especially Mako, which has utilizes personalized C T scan.
Ben Section: Robotics enable.
Ben Section: More personalized surgery.
Ben Section: To enable different types of alignment.
Ben Section: They help with.
Ben Section: Press fitting of implants, so instead of putting an implant and in cement to get down.
Ben Section: They can help with.
Ben Section: Let's call it a more precise.
Benjamin Sexson: Phone Prep Surface, which can accommodate press fit implants. Systems like MAKO have safety boundaries that we think are really imperative for helping to minimize the risk of cutting soft tissues or adverse outcomes. Then if you just look at the demographic trends, 70% of fellowship programs have access today to a MAKO. At 60% of orthopedic surgeons will be over the age of 65 by the year 2031. So, and we've seen forecasts that suggest that 1 out of 2 knee replacements will be robotic within the next 5 years.
Ben Section: So perhaps surface, which can accommodate press fit implants.
Ben Section: Systems like Mako has safety boundaries that.
Ben Section: We think are really imperative for.
Ben Section: Helping to minimize the risk of cutting soft tissues are.
Ben Section: Adverse outcomes than if you just look at the demographic trends, 70% of fellowship programs have access today to a mako.
Ben Section: At 60% of orthopedic surgeons will be over the age of 65% by the year 2031. So.
Ben Section: And we've seen forecast that suggests that one out of two knee replacements will be robotic within the next five years.
Benjamin Sexson: So that's kind of just setting the table for where the market's going.
Ben Section: So thats kind of just setting the table for where the market's going.
Benjamin Sexson: It's important to kind of look at where we are now. And there's a lot of factors, obviously Striker is a What you see here is a Stock prices for various players in our space, Stryker is the one in black and some of the other publicly traded companies. And we don't think it's any coincidence that around the time that NACO was cleared for Total Knee, that Stryker's outperformance has gone parabolic. Obviously, they've made a lot of really smart moves, and they're a well-diversified business. are probably the most well-diversified of any of the orthopedic total joint reconstruction players.
Ben Section: It's important to kind of look at.
Ben Section: Where we are now in and.
Ben Section: There's a lot of factors, obviously stryker as a.
Ben Section: What you see here is.
Ben Section: Stock price stock prices for various players in our space strikers the one in black.
Ben Section: Some of the other publicly traded companies.
And we don't think it's any coincidence that around the time that.
Ben Section: <unk> was cleared for total knee.
Ben Section: Our strikers outperformance has gone parabolic.
Ben Section: Obviously, they've made a lot of really smart moves in there.
Ben Section: Well diversified business.
Ben Section: But probably the most well diversified or any of the orthopedic total joint reconstruction players but.
Benjamin Sexson: That aside, it's clear that they have done something right. And I don't think that the market has fully understood what exactly it is that they've done right.
Ben Section: That aside it is clear that they have done something right.
Ben Section: And I don't think that the market is fully understood what.
What exactly it is that they've done right.
Benjamin Sexson: and understanding that is really fundamental to the monogram investment thesis and this is just to stress the point even more. When you look at robotic knee replacements, 88% of robotic knee replacements use a Mako system. and 73% of press fit knee implants. This is per the North Peak News Network, our press fit, and that market's owned by Striker. So, in our opinion, the market has spoken. If you talk to surgeons, and we talk to a lot of them, you're going to hear a whole bunch of different reasons why that is. I think the most common reason you'll hear is because Stryker had a significant first-mover advantage with Mako.
Ben Section: And understanding that is really fundamental to the monogram investment thesis and this is just too.
Stress the point even more.
Ben Section: When you look at robotic knee replacements, 88%.
Robotic knee replacements.
Ben Section: Ecosystem.
Ben Section: 73% of press fit.
Knee implants.
Ben Section: This is per the speak news networks.
Ben Section: Our press release.
Ben Section: Debt markets owned by Stryker.
Ben Section: So in our opinion the market has spoken.
Ben Section: If you talk to surgeons, and we talked to a lot of them you're going to hear a whole bunch of different reasons why that is I.
Ben Section: I think the most common reason youll hear us because stryker had a significant first mover advantage with Mako.
Benjamin Sexson: and I think that that certainly may be true and it may be a contributing factor, but when you dig into the details, there are things about the MAKO system that are unique to the MAKO system that nobody else really can do. In terms of taking a complex problem and trying to distill it down into what actually makes it different, I think it really boils down to the fact that with MAKO, a surgeon can efficiently do the surgery by themselves. We know a lot of surgeons that don't even use retractors. You have safety boundaries, and you can efficiently cut bone with safety constraints.
Ben Section: And.
Ben Section: I think that that certainly may be true and it may be a contributing factor, but when you dig into the details there are things about the Mako system that are unique to them ecosystem that nobody else.
Ben Section: Really can do and we.
Ben Section: <unk>.
Ben Section: In terms of taking a complex problem and trying to distill it down into what actually makes it different.
Ben Section: Boils down to the fact that with Mako, a surgeon can efficiently do the surgery by themselves.
Ben Section: We know a lot of surgeons that don't even use retractors.
Ben Section: Your you have safety boundaries and you can efficiently cut bone with safety constraints and there's just no other system on the market today.
Benjamin Sexson: There's just no other system on the market today that has been able to efficiently cut bone with safety constraints in the way MAKO has, and the primary reason for that is their IP portfolio and the complexity of executing this problem without infringing on that IP portfolio.
Ben Section: Been able to.
Ben Section: Efficiently coupled with safety constraints in the way it may go Hasnt.
Ben Section: The primary reason for that is.
Ben Section: The IP portfolio and the complexity of.
Ben Section: Executing this problem without infringing on that IP portfolio.
Benjamin Sexson: And so that is the monogram investment thesis in a nutshell, is that we think that we have a system that can efficiently cut bone very accurately with safety constraints. and it really is gonna be that simple.
Ben Section: And so as that as the monogram investment thesis in a nutshell is that we think that we have a system.
Ben Section: Efficiently cut bone very accurately.
Ben Section: With safety constraints.
Ben Section: And it really is going to be that simple and we we announced.
Benjamin Sexson: And we announced not too long ago, we had a press release and in that press release, we had a video that- I don't think it's been fully digested by the market. So, the MAKO system does not utilize external fixation, meaning the surgeon doesn't have to bolt the bone down. It's not like a CNC, it's a real-time system and the bone is free to move. and they utilize something called haptics, where the surgeon is actually, it's surgeon-initiated cutting. The surgeon is the one moving the robot around.
Ben Section: Not too long ago, we had a press release and in our press release, we had a video of that.
Ben Section: I don't think its been fully digested by the market.
So so mako the Mako system does.
Ben Section: Does not utilize external fixation, meaning the surgeon doesn't have to both the bone down its not like a CNC. It's it's a real time system and the bonus freedom boat.
And they utilize something called haptics, where the surgeon is actually.
<unk> initiated cutting the surgeon is the one moving the robot around.
Benjamin Sexson: What Monogram is doing is fully autonomous cutting. The challenge of this, which it's never been done before, is nobody's ever done it with two things. One, nobody's ever done it with a saw, as we're doing it, and nobody's ever done it unconstrained with a saw. So, what we put out in that video not too long ago, and I'll just upload that, is... is we we can now. very, very efficiently cut with a saw.
While monogram is doing is fully autonomous cutting.
Ben Section: <unk> of this which it's never been done before is nobody has ever done it with <unk>.
Ben Section: Two things one nobody's ever done it with a soft as we're doing it.
Ben Section: And nobody has ever done it unconstrained with assault.
Ben Section: So what we put out in that video not too long ago, and I'll just upload that.
Okay.
Ben Section: As we we can now.
Ben Section: Very efficiently cut with a soft and this is our nextgen endo factor that we will be.
Benjamin Sexson: And this is our next-gen end-effector that we will be deploying in our clinical trial, which we hope to talk more about. But we can now, this is a, one of our larger size femurs. You can see that with this new upgraded end-effector, I don't know if it's frozen on your side. on my side. Can you see it, Noel? Is it playing for you? or is it frozen? It's frozen, Ben. Okay. At eight seconds. Okay, looks like the video is frozen, but we did have, if you look at our last press release, I'm not sure why it's not playing.
Deploying in our clinical trial, which we hope to talk more about.
Ben Section: But we.
Ben Section: We can now.
Ben Section: This is Dave.
Speaker Change: Affiliates of one of our larger sized streamers, but you can see that.
Ben Section: With this new upgraded end effector.
Ben Section: I don't know if its frozen on your sites.
Ben Section: On my side.
Ben Section: Can you see at Newell.
The plan for you.
Ben Section: Or is it frozen.
Ben Section: It's frozen.
Ben Section: Okay.
Ben Section: Sure.
Okay. It looks like it looks like the videos frozen, but it is.
Ben Section: We did have a if you look at our last press release I'm not sure why it's not flying sorry about that.
Benjamin Sexson: Sorry about that. It's if you go to our last press release, I'll drop we can drop a link here. But we are now cutting the bone and blade time for blade and bone time is two minutes and 47 seconds, right. So this is with a unconstrained saw the feed rates. Let me see if I can maybe play it from the presentation. I know that has a link to No, it's not going to play here. There might be one more option, I might be able to play it on our YouTube and share the screen. Let me try that real quick because I do think it's helpful for folks to see.
Ben Section: If you go to a less press release I'll drop we can drop a linked here.
But we are now cutting the bone and blade times blatant bone time is two minutes and 47 seconds right. So this is with a unconstrained soar.
Ben Section: The feed rates, let me see if I can maybe play it from the presentation I know that hasnt linked to.
Now, it's not going to play here.
Ben Section: There might be one more option I might be able to.
Ben Section: Played in our Youtube ensure that screen, let me try that real quick.
Ben Section: Because I do think it's helpful for folks to see.
Benjamin Sexson: what our system is actually going to be capable of. So I'm just gonna play this here real quick. Okay. and this was made public in a press release, but I don't think a lot of folks really caught on to this. So I'm going to try sharing and see if that works. Okay, so just sharing here. I'm going to press play. Hopefully this does it. But there's a couple things I just wanted you to notice. Can you see it, Noel? Now, still on the... presentation. Thank you. as I'm sharing. Okay, I'll drop a link in here.
Ben Section: What our system is actually going to be capable of so I'm just going to play this year real quick.
Ben Section: Yeah.
Ben Section: Okay.
Ben Section: And this was made public.
Ben Section: The press release, but I don't think a lot of folks really can't someone tried sharing and see if that works.
Ben Section: Okay. So.
Ben Section: Just sharing here.
Ben Section: In our press play hopefully this does it.
But there's a couple of things I just wanted to get a notice can you see at Newell.
Ben Section: No.
Ben Section:
Ben Section: The presentation.
Ben Section: Alright.
Ben Section: Yeah.
Ben Section: I am sharing okay.
I'll drop of Lincoln here, Here's the link.
Benjamin Sexson: Here's the link for folks to see it later. There we go. Thanks, Chris.
Ben Section: Or folks to see it later.
Thanks, Chris.
Ben Section: Sure.
Benjamin Sexson: So the The impact of this end effector release and getting to cutting speeds that are starting to be competitive with manual surgery, we think has not really been fully digested. And what Monogram has really been working to put together is a system that can very efficiently do a total knee replacement with uncompromised safety and uncompromised accuracy. And so our system... is really designed for a surgeon to have a very easily, with a minimal learning curve, come in and do a total knee replacement. And we think we have something that's going to be very, very competitive for total knee.
Ben Section: So the.
Ben Section: The impact of this and factor release and getting to cutting speeds that.
Ben Section: Are starting to be competitive with manual surgery, we think has not really been fully digested.
Ben Section: And what monogram is has really been working to put together as a system.
Ben Section: It can very efficiently do a total knee replacement.
Ben Section: With Uncompromised safety.
Ben Section: Uncompromised accuracy.
Ben Section: And so our system.
Ben Section: Is is really designed for a surgeon to.
Ben Section: Very easily with a minimal learning curve coming into a total knee replacement.
Ben Section: And we think we have something thats going to be very very competitive for total knee.
Benjamin Sexson: And then from there, we have a seven joint arm, which is a really high degree of freedom arm that we think is going to be pretty scalable to other clinical applications where we see similar opportunities for robotics to make a clinical difference. And that's really the monogram thesis in a nutshell. And you look at the impact of what Mako had for the Stryker brand. And we are hoping to do the same thing in orthopedics with a fully autonomous robot.
And then from there we have a seven joint arm.
Ben Section: Which is a really high degree of freedom arm.
That we think is going to be pretty scalable to other clinical applications, where we see similar opportunities for robotics to make.
Ben Section: Clinical difference.
And Thats really the monogram and thesis in a nutshell and you look at the impact of what Mako head for the Stryker brand and we are hoping to do the same thing.
Ben Section: In orthopedics with a fully autonomous robot.
Benjamin Sexson: In terms of updating on the regulatory side, so I know that there's folks are eager to get an update on this, and I'm just as eager as everybody else. And a lot of this is really out of our hands at this point.
Ben Section: In terms of updating on the regulatory side so.
Ben Section: I know that there is.
Folks are eager to get an update on this.
Ben Section: Okay.
Ben Section: I'm, just as eager as everybody else.
A lot of this is really out of our hands at this point.
Benjamin Sexson: So I will kind of restate what's happened and try and give folks an update. On February 26th, we announced that we had formally responded to the FDA's questions about our system. The FDA responded to us with those questions on September 30th. So the clock had stopped about 73 days into the submission timeline. So we the clock restarted on February 26th And we had full support from IQVIA, which was... our CRO, formerly NICRA. They helped us review all of the documentation, make sure we had a really solid package. The team worked really, really hard. you know, what I could say is that I think that we have done We've made every possible effort to address the FDA's questions.
So I will kind of restate, what's happened and try and give folks an update so.
Ben Section: On February 26, we announced that we had formally responded to.
Ben Section: The fda's questions, but our system.
Ben Section: The FDA.
Ben Section: Responded to us with those questions on September 30th.
Ben Section: So the clock has stopped about 73 days into the submission timeline.
Ben Section: So we the clock restarted on February 26.
Oh.
Ben Section: And we are we had full support from <unk>, which was.
Ben Section: Our CRO, formerly Mitra.
Helps US review all of the documentation make sure we had a really solid package. The team worked really really hard.
Ben Section: What I can say is that I think that we have.
Ben Section: <unk>.
Ben Section: We've made every possible effort to address the fda's questions.
Benjamin Sexson: and we are eager to to hear what they think of our submission. So. At this point in time, that's really what we could say. There's not much more we can say.
And we are eager too.
And to hear what they think of our submission so.
Ben Section: At this point in time, that's really what we can say.
Ben Section: There's not much more we can say where it is.
Benjamin Sexson: It's fully in the FDA's hands to provide their clearance decision.
Fully in the Fda's hands too to provide their clearance decision.
Benjamin Sexson: In parallel to that, we are working on trying to get clearance to initiate our clinical trial. So, we submitted to the Indian Regulatory Agency in October. We're working with a CRO called Reliance Life Sciences, which is one of the largest private companies or subsidiary of one of the largest private companies in India. We're going to be doing the clinical trial with Shelby Limited, so the principal investigators will be surgeons that are employed by Shelby. We will be doing the clinical trial at three of Shelby's hospitals across India. We have already shipped a training system to India.
Ben Section: In parallel to that.
Ben Section: We are working on trying to get clearance to initiate our clinical trial.
So we.
Ben Section: We submitted to the Indian regulatory agency in October.
Ben Section: We're working with our CRM called reliance life Sciences, which is one of the largest private companies or a subsidiary of one of the largest private companies in India.
Ben Section: We're going to be doing the clinical trial, which shall be limited. So the principal investigators will be surgeons that are employed by Shelby.
Ben Section: We will be doing clinical trial at three.
Ben Section: Of Shelby as hospitals across India.
Ben Section: We have already shipped a training system to India.
Benjamin Sexson: Dr. Yunus, myself, and other Monogram employees were in India in late January for training and for the investigator meeting, which was successfully held late January, February. and the communications with the Indian agency or... ongoing. You know, this is The CRO really are the experts in terms of that process, but we feel like we've submitted a strong application. We did a lot of testing, obviously, for the FDA submission. So we're, we're eager to hear back. But again, just like with the FDA. The timeline is really not in our hands at this point. We're eagerly waiting to hear back from and the Indian Regulatory Authority.
Speaker Change: Doctor units myself and other monogram employees.
Ben Section: We're in India in late January.
Speaker Change: Or training.
Speaker Change: And for the investigator meeting, which was successfully held late January early February.
Speaker Change: And the communications with the effort with the Indian agency or <unk>.
Speaker Change: Im going.
This is.
Speaker Change: The CRO really are the experts in terms of.
Speaker Change: That process.
We feel like we've submitted a strong application we did.
Speaker Change: A lot of testing.
Speaker Change: Do you see for the FDA submission.
Speaker Change: So we're eager to hear back, but again, just like with the FDA.
Speaker Change: The timeline is really not in our hands at this point.
Hum.
Eagerly waiting to hear back from.
Speaker Change: The Indian regulatory authorities so.
Benjamin Sexson: Those are the two regulatory updates. Obviously, we... I want to hear back just as much as all of our investors, we're very eager to move forward. I will say that we're not sitting by idly. The time it's taking to get clearance in India, in some ways, plays to our favor because Once we ship our clinical trial system to India, that design is frozen. So, we. You can't make major changes to the system subsequent to initiating a clinical trial. So we're going to be releasing the higher feed rate, so it's significantly faster cutting time. So. to give you some sense.
Speaker Change: Those are the two regulatory updates.
Speaker Change: Obviously, we.
Speaker Change: One of your back just as much as all of our investors, we're very eager to move forward.
Speaker Change: I will say that we're not sitting by idly so.
Speaker Change: The the time, its taking to get clearance in India, and some ways plays to our favor because.
Speaker Change: But once we shift our clinical trial system to India that design is frozen.
Speaker Change: So we.
You can't make major.
Speaker Change: Changes to the system so subsequent to initiating the clinical trial.
Speaker Change: So we're going to be releasing the <unk>.
Speaker Change: Higher feed rate so its significantly faster cutting time so.
Speaker Change: To give you some sense, it's almost <unk>.
Benjamin Sexson: It's almost a 300% increase in feed rate. So we're actually cutting, it almost looks like you're cutting manually with our system now. And the cut times are significantly reduced, which in our research is the number one driver for surgeon adoption, is how long does it take? If a surgeon has to slow down, do less surgeries a day to use your robot. It really is a hard to drive adoption, so. The fact that we can cut this fast and the accuracy of our system is really, really good right now. Just to give you guys some sense, the RMSE in terms of the cut accuracy in the and this is in non-clinical testing, this is in cadaver testing with the protocols was was around 1.1 millimeters.
Speaker Change: Almost a 300% increase in feed rates, so we're actually cutting.
Speaker Change: It almost looks like youre cutting manually with our system now.
Speaker Change: Cut times are significantly reduced which in our research is the number one driver for surgeon adoption is how long does it take.
Speaker Change: If a surgeon has to.
Speaker Change: Slowdown do less surgeries are day to use your robot.
Speaker Change: It really is hard to drive adoption so.
Speaker Change: The fact that we can.
Speaker Change: Can cut this fast.
Speaker Change: The accuracy of our system is really really good right now so.
Just to give you guys some sense.
Speaker Change: Our MSC.
Speaker Change: In terms of the cut accuracy.
And the.
Speaker Change: And this is this is a non clinical testings not this isn't category testing with.
Speaker Change: With the protocols.
Speaker Change: It was around $1 one millimeters.
Benjamin Sexson: and we're at the limb alignment was. was less than a degree in the testing we ran in cadavers. Obviously not a clinical claim, but in the cadavers we feel like we have a really, really started to have it dialed in. So we keep making the system better. We're making a lot of software upgrades, a lot of upgrades to the guidance application. a lot of upgrades to the case management application. So, the team is working very, very hard to make sure that we have a product that's going to be well received by the market when we launch.
Speaker Change: And we're at the limit.
Speaker Change: Lim alignment was was.
It was less than the degree and the testing we ran in cadavers.
Obviously, not a clinical claim but in the cadaver suite, we feel like we have a really really started to have it dialed in.
So we keep making the system better work.
Speaker Change: Making a lot of software upgrades, so a lot of upgrades to the guidance application.
Speaker Change: A lot of upgrades to the case management applications. So.
Speaker Change: The team is working very very hard to.
Speaker Change: To make sure that we have a product that's going to be a.
Speaker Change: Well received by the market when we launch so.
Benjamin Sexson: So, in terms of just timing, it's not all negative that it's taken time for India to clear. It's given us time to really make sure we have an A-plus product.
In terms of just timing.
Speaker Change: It's not all negative that it's taken time for India to clear, it's given us time to really.
Speaker Change: Make sure we have an a plus product.
Benjamin Sexson: And with that, we want to make sure we give everybody an opportunity to ask questions. I'm seeing a lot of questions about the FDA timeline, but beyond what we said, there's not really much more we can say.
Speaker Change: And with that we want to make sure we give everybody an opportunity to ask questions.
Speaker Change: I'm seeing a lot of questions about FTE.
Speaker Change: FDA timeline, but beyond what we said.
There's not really much more we can say.
Unknown Executive: At this time, we will be conducting a question and answer session.
Speaker Change: At this time, we will be conducting a question and answer session. If you'd like to ask a question. Please submit your questions by typing them into the webcast with your platform.
Unknown Executive: If you'd like to ask a question, please submit your question by typing it into the webcast viewer platform.
Unknown Executive: Sure, let's start with Jason. Hi, Jason. How you doing?
Ben Section: Sure, let's let's start with Jason.
Speaker Change: Hi, Jason.
Ben Section: How are you doing hi, Ben no. Thanks for all the color here on this call I had a few questions if I could kick it off yes, okay. Great I appreciate all the color on in terms of.
Jason: Hi, Ben. Noel, thanks for all the color here on this call.
Jason: Yeah, I had a few questions, if I could kick it off. Yeah, that'd be great. I appreciate all the color in terms of what's going on with the regulatory bodies.
Ben Section: What's going on with the regulatory bodies.
Jason: I think you gave a lot of color there, but I'm just curious in terms of once you get those approvals, how long do you anticipate the trial to run in India? And in the U.S., let's assume in terms of the potential outcomes here, how should we think about that? I mean, it seems like you're actually on the cusp of getting an approval, at least for I believe a semi-autonomous device potentially in the U.S.
Ben Section: I think you gave a lot of color, but I'm just curious in terms of what.
Once you get those approvals how long do you anticipate the trial to run in India and in the U S.
Ben Section: Let's assume.
Ben Section: In terms of the potential outcomes here.
Ben Section: How should we think about that I mean, it seems like you're actually on the cost of getting an approval at least for I believe a semi autonomous device potentially in the U S. What does that mean for you guys.
Benjamin Sexson: What does that mean for you guys?
Benjamin Sexson: Sure, so I'll start with India. So from the day we get clearance to the first surgery, That time is going to be about two months. give or take. and then we have 102 patients that are going to be enrolled in the study. So once we get clearance, we anticipate that we would start enrolling patients. probably about four weeks after getting clearance. Maybe more, maybe four to six. So kind of clearance plus. Let's just go with two to three, two and a half months, something like that before first live in human. And then from there, it really is a function of enrollment and how Monogram is the bottleneck, so As Noel said, you know, we're really trying to count pennies and be really careful about not getting over our skis in terms of spending money after we've actually realized milestones.
Ben Section: Sure So I'll start with India.
Ben Section: So.
Ben Section: From the day, we get clearance to the first surgery.
Ben Section: That time is going to be about two months.
Ben Section: Give or take.
And then we have.
Ben Section: 102 patients that are going to be enrolled in the study.
Ben Section: So once we.
Ben Section: Once we get clearance, we anticipate that we would start enrolling patients.
Probably about four weeks after getting clearance.
Ben Section:
Ben Section: Maybe maybe more maybe four to six.
Ben Section: So clear.
Ben Section: Clearance plus.
Let's let's just go with two to three two and a half months something like that before first live in human.
And then from there it really is.
Ben Section: A function of.
Ben Section: Enrollment and how much.
Ben Section: Monogram is the bottleneck.
Ben Section: So.
Ben Section: As Noel said, we're really trying to count pennies and be really.
Ben Section: Careful about.
Ben Section: Not getting over our skis in terms of spending money after we've actually realized milestones.
Ben Section: So the constraint is the number of systems, we have in India.
Benjamin Sexson: The constraint is the number of systems we have in India and the personnel we have to manage those systems. and how aggressive we want to be in terms of actually executing the system. So, we know for sure, obviously, we're going to be sending one robot to India. We have appeal for a second robot and we anticipate that we may send two robots to India, which would speed things up. but it's really the constraint of hardware and personnel, not so much enrollment. So the hospital we're working with does huge volume. So, Doug and I have actually been in the operating room and it's incredible how many surgeries they do a day.
Ben Section: The personnel, we have to manage those systems.
Ben Section: How aggressive we want to be in terms of actually executing the.
Ben Section: The system so.
Ben Section: We know for sure obviously, we're gonna be sending one robot to India.
Appeal for a second robot.
Ben Section: And we anticipate that we may send to robust, India, which will speed things up.
Ben Section: But it's really the constraint of.
Ben Section: Hardware and personnel.
Ben Section: Not so much enrollment so the hospital, we're working with those huge volumes.
Ben Section: So Doug and I have actually been in the operating room and it's incredible how many surgeries they do a day.
Benjamin Sexson: You know, it's not uncommon for the surgeons we're working with to do 15 surgeries in a day. and they've even done more than that. So, um... really the one thing with enrollment that is a little bit different than maybe in the U.S. is that a lot of people, because Shelby is pretty well recognized in India, a lot of patients do travel from outside of the cities that we're going to be working out of to have surgery, and then they go back to wherever they live. and that can be, we can't enroll those patients but still we don't.
Ben Section: Yes.
Ben Section: It's not uncommon for the surgeons, who are working with to do 15 surgeries in the day.
Ben Section: Given that more than that.
Ben Section: So.
Ben Section: Really the the one thing with enrollment that is a little bit different than maybe in the U S is that a lot of people because shelby is pretty well recognized in India.
A lot of patients do travel from outside of the cities that we're going to be.
Ben Section: Working out of two to have surgery and then they go back to wherever they live.
Ben Section: And that can be.
Ben Section: And we can enroll those patients, but still we don't.
Benjamin Sexson: We don't see. to be a huge blocker. It's really how, how hard we want to push it, I would say. Initially we're going to be kind of a little bit slow and careful so you know once first couple weeks I would say we're not going to be doing you know five surgeries a day it's probably going to be a couple surgeries a week. and just make sure that everything is going exactly to plan and then from there we're going to scale as we get, you know, let's say the first 10 surgeries under our belt and we'll start to scale.
We don't see.
That to be a huge blocker, it's really hope how hard we want to push it I would say.
Ben Section: Initially, we're going to be kind of.
Ben Section: A little slow and careful.
Ben Section: So once the first couple of weeks I would say, we're not going to be doing five surgeries a day, it's probably going to be.
Ben Section: A couple of surgeries are weak.
Ben Section: And just make sure that everything.
Ben Section: It's going exactly to plan.
Ben Section: And then from there we're going to scale.
Ben Section: Let's say the first 10 surgeries under our belt that will start to scale.
Benjamin Sexson: But the robot is going to be, it's unlikely that we will be running multiple sites simultaneously. So it's most likely that we will start at the main site in Ahmedabad, do maybe on the order of 50 surgeries there, and then it'll be a mix of maybe 30, 20, the other two. something like that. So. you know. I think we're going to get through it in a... Reasonable amount of time, but it's not going to be We want to have a really good trial and we want to do a really good job. So etc. In terms of months, I know you said it's basically two months to get it going.
Ben Section: But the robot is going to be.
It's unlikely that we will be running multiple sites simultaneously.
Ben Section: So.
Ben Section: It's more likely that we will start with kind of the main site.
Bob.
Ben Section: Do.
Ben Section: Maybe on the order of 50 surgeries there.
Ben Section: And.
Ben Section: It'll be a mix of maybe like.
Ben Section: 30, <unk> the other two.
Ben Section: Something like that so.
Ben Section: Sure.
Ben Section: I think we're going to get through it.
Ben Section: Reasonable amount of time, but it's not going to be.
Ben Section: We won't have a really good trial and we wanted to do a really good job. So.
Ben Section: But hopefully that does that help give some color around that.
Ben Section: Give some color.
Speaker Change: Yeah, I mean, it sounds like it.
Ben Section: It sounds like there's some moving it's hard to pinpoint, but it's a relatively quick enrollment I mean.
Americans Marlboro the a quick enrollment.
I don't know if you venture to guess whether.
Ben Section: In terms of months, if I know I know you said, it's basically two months to get it going is it another three to six months to complete the trial generally speaking to get 100 patients or so.
Benjamin Sexson: Is it another three to six months to complete the trial, generally speaking, to get 100 patients? Yeah, I think that sounds like a reasonable... that's that sounds like so what we're kind of planning internally, with the caveat that, you know, if and so I think maybe at the peak. that will do. maybe two surgeries a day. I don't anticipate we're going to go more than that. And they do operate on weekends as well. Got it. No, I mean, it makes perfect sense that you want a clean data set. And then just don't discount the time it takes for the data to be processed.
Ben Section: Alright.
Ben Section: I think that sounds like a reasonable.
Ben Section: That sounds like so what we're kind of planning internally.
With the caveat that if.
Ben Section: If anything came up that was unexpected.
Ben Section: It slowed down sure.
Ben Section: We're not gonna be crazy aggressive in terms of just hitting it with five surgeries a day from day one.
But we're going to scale kind of in a measured way.
Ben Section: And so I think maybe at the peak.
Ben Section: Will do.
Maybe two surgeries a day I don't anticipate we're going to go more than that.
Ben Section: And they do operate on.
Ben Section: Weekends as well so got it it makes perfect sense that do you want to clean dataset.
Ben Section: And then I know you.
Just don't discount the time it takes for the data to be processed.
Benjamin Sexson: So, you know, once we, once we, and obviously I think we're going to have opportunities to give feedback on how we think it's going. but that data does need to be. Basically, this is a protocol, so we're going to need a protocol report summarizing the findings of the study. It's a three-month follow-up. So, you know, we're going to start really kind of knowing how we're doing, but there's going to be uh some some period where we're just going to have to wait for that follow-up on the back end. So, okay. Okay, I understand. Yeah.
Ben Section: So once we once we and obviously I think we're going to have opportunities to give feedback on how we think it is going.
Ben Section: But that data does need to be.
Ben Section: Basically this is our protocols so we're going to need a protocol report.
Summarizing the findings of the study.
Ben Section: It's a three month follow up.
Ben Section: So.
Ben Section: We're going to start really kind of knowing how we're how we're doing but theres going to be.
Ben Section: Some some period, where we're just going to have to wait for that follow up on the backend.
Ben Section: So okay.
Ben Section: Okay I understood.
Ben Section: Yes, So then on the.
Benjamin Sexson: So then in the, in the, um, in the U.S., um, So, just to be honest with you, the performance of the upgraded end effector has far exceeded our expectations. um you know when We didn't expect that we would be able to get the feed rates to be this fast, honestly. It's very impressive. And so, in light of that, you know, our thinking was that autonomy was a major selling feature of our system. And a lot of companies have a kind of, let's call it a multi-generational product release strategy, where they'll try and get a 510K.
Ben Section: In the U S.
So.
Ben Section: Just to be honest with you.
Speaker Change: The performance of the upgraded end effector has far exceeded our expectations.
Speaker Change: When.
Speaker Change: We didn't expect that we would be able to get the feed rates to be this fast honestly.
Speaker Change: Very impressive.
Speaker Change: And so.
Speaker Change: In light of that and our thinking was that.
The economy was a major selling feature of our system.
Speaker Change: A lot of companies have a kind of let's call. It a multi generational product really strategy. We're.
Speaker Change: Try and get a 500 10-K.
Benjamin Sexson: on a Gen 1 version of a system. with the goal of submitting a subsequent one to move the ball forward to the ultimate. Save Market Competitive Products. I think that with the new cutting system, if we can upgrade the system that has been submitted to the new end effector, which we are confident we can without too much of a regulatory lift, we think what we would be getting clearance on would be pretty competitive. So, uh, yeah, we were there. Sure. Sorry, Ben. So that means the FDA might approve what you submitted, and then it's a relatively straightforward adenium, et cetera, or something to that effect.
On a gen. One version of the system.
Speaker Change: With the goal of submitting a subsequent one.
Speaker Change: To move the ball forward to the ultimate.
Speaker Change: Save market competitive product.
Speaker Change: I think that with the new cutting system.
Speaker Change: If we can upgrade the system that has been submitted to the new factor, which we are confident we can without too much of a regulatory lift.
Speaker Change: We think what we would be getting clearance on would be pretty competitive.
Speaker Change: So yes.
Yes.
Speaker Change: Sure sorry, sorry about that.
Speaker Change: Yes.
Mike might approve what you submitted and then it's relatively.
Speaker Change: Straightforward.
Speaker Change: Denny M or et cetera, or something to exactly yet.
Benjamin Sexson: together. Okay. Yeah, so, you know, the Basically, we've changed. We've made upgrades to the cutting system. But the nice thing is that we For India, there's a lot of accuracy studies that we've had to do and a lot of V&V work that has had to go into that that can be leveraged to... to improve the Gen 1 system and we think it can be pretty competitive out of the gate. Okay. Thank you. That makes a lot of sense. I didn't mean to interrupt you.
Speaker Change: Exactly.
Speaker Change: Yes so.
Speaker Change: The.
Speaker Change: Basically we have changed we've made upgrades to the cutting system, but the nice thing is that we.
Speaker Change: For India.
Speaker Change: There's a lot of accuracy.
Speaker Change: Studies that we've had to do and a lot of work that has had to go into that that can be leveraged to.
Speaker Change: To improve the Gen. One system and then we think it can be pretty competitive out of the gate.
Speaker Change: So.
Speaker Change: Yes.
No that makes a lot of sense and I didn't mean interrupt you.
Speaker Change: Yes, yes, sure one follow up related to that.
Benjamin Sexson: One follow-up related to that. It sounds like there's, you know, you guys have a lot of Innovation and Research. Sure. So, you know, this is a biased, non-clinical claim, Jason. I think the new end effector on our autonomous system is extremely competitive with the current state of the art. I think right out of the gate we have something that's really compelling. In terms of the upgrading the navigation system. We've come a really long way. It's a really hard problem. I think that similar to what we've done with Gen 1, Gen 2 on the robot, we're going to have to do a similar approach with the...
Speaker Change: It sounds like you guys have a lot of.
Speaker Change: Innovation going on here.
Speaker Change: One other area, which I know you've mentioned in the past I don't know if you can give us an update on is.
Speaker Change: Is the mapping and tracking in the registration.
Speaker Change: Is there any movement there that you can disclose today or.
How should we be thinking about how youre approaching that problem.
Speaker Change: Sure. So this is a biased non clinical claim.
Speaker Change: Jason.
Speaker Change: Fair enough I think the new end effector on our alternative tunnel system.
Speaker Change: Is extremely competitive with the current state of the art.
Speaker Change: With.
So I think right out of the gate, we have something that's really compelling.
Speaker Change: In terms of the Upgradings and navigation system.
Speaker Change: We've come a really long way.
Speaker Change: It's a really hard problem.
Speaker Change: I think that.
Speaker Change: Similar to what we've done with Gen. One Gen. Two on the robot, we're going to have to do a similar approach.
Speaker Change: With the.
Benjamin Sexson: within navigation. So just so everybody knows what Jason is referring to is what we we call Envision. So Envision is a technology that Monogram's developing to try and go with fiducial-less tracking. So a pretty significant pain point in the industry is registration and tracking. You have to place bone pins to originally mount arrays that are tracked. uh it it's it starts to become like if you can optimize cutting and you can optimize planning It's really the long poem 10 in terms of really driving throughput for robotics is registration that set up time. uh it's it's really hard the the fundamental problem uh Jason is You know, if you had a supercomputer in the operating room, we could do it.
Speaker Change: Within navigation. So just so everybody knows what Jason is referring to is what we call envision.
Speaker Change: So envision is a technology that monogram is developing to try in.
Speaker Change: Go with fiduciary less tracking so.
Speaker Change: Pretty significant.
Speaker Change: Pinpoint in the industry as registration and tracking you.
Speaker Change: You have to place both ends too.
Speaker Change: Originally amount arrays that are tracked.
Speaker Change: It starts to become like if you can optimize cutting and you can optimize planning.
It's really the long pole in turn in terms of.
Speaker Change: Really driving throughput robotics as registration in that setup time.
Speaker Change: It's really hard the fundamental problem adjacent is.
Yeah.
Speaker Change: If you had a supercomputer in the operating room, we can do it.
Speaker Change: But.
Benjamin Sexson: But the amount of compute needed to track with a low enough latency is really tricky. So we anticipate there needs to be an intermediate step where you have sort of, let's call it a marker light, what we're calling an approach where maybe you can. do something that doesn't require bicortical fixation of a bone pin. That's a lot faster, maybe is subject to less occlusion, but I would say, don't bake it into your numbers right now. It's a very sexy demo. But jumping from a demo to a clinical product. is difficult. So. Yeah, it's something that dazzles when people come look at it, but Realistically, it's going to take us a little bit of time to get it robust enough Okay, and I work in a clinical setting.
Speaker Change: The amount of compute needed to to track with a low enough latency is really tricky.
Speaker Change: So we anticipate there needs to be an intermediate step where you have sort of let's call. It a marker light.
Speaker Change: We're calling it approach where may be you can.
Speaker Change: Yes.
Speaker Change: Do something with that.
Speaker Change: Doesn't require by critical fixation of a bone pain.
Speaker Change: That's a lot faster.
Speaker Change: Maybe has is subject to lesser collusion.
Speaker Change: But.
Speaker Change: I would say don't bake it into your numbers right now, it's a very sexy demo.
Speaker Change: But jumping.
Jumping from a demo to a clinical product.
Speaker Change: Difficult.
Speaker Change: Sorry.
Speaker Change: Yes, it's something that Dazzles when people come look at it but realistically, it's going to take us a little bit of time to get it robust enough.
Speaker Change: Okay.
Speaker Change: Clinical setting.
Unknown Executive: And maybe if I could just ask one last question, I'll jump back to Q.
And then if I could just ask one last question I'll jump back in queue. I know you have other questions.
Unknown Executive: I know you have other questions.
Noel Knape: And that is, so what was the cash burn this quarter? And I don't know if you can give any kind of outlook for what the cash burn might be for the remainder for 2025 as we look forward. Sure. Noel, do you have that? Yeah, so we were able to, you know, reduce the third party contract spend a bit that we've been really focused on getting the robot ready for the India clinical trials and then going through the The AIR submission. So we've reduced it. We're running under the 1.2 a month burn rate that we've been on for the last year or so, but probably in the 1.1 area, and we hope to keep it around there going forward.
And that is.
Speaker Change: So what was the cash burn this quarter end.
I don't know if you can give any kind of outlook for what the cash burn might be for the remainder for 2025 as we look forward.
Speaker Change: Sure.
Speaker Change: Nor do you have that.
Yeah. So we were able to reduce the third party contract spend.
Speaker Change: Right.
Speaker Change: And we've been really focused on getting.
Speaker Change: The robot ready for the India clinical trials, and then going through the.
<unk>.
Speaker Change: The AAR submission.
Speaker Change: So we've reduced it we're running under the $1 two a month burn rate that we've been on for the last year or so but probably in the $1 one area.
Speaker Change: I'll keep it around there going forward.
Noel Knape: Yeah, I will say that we have some big cash outlays coming. So, The system has to be IEC 6601 compliant. and that required a special type of panel that could pass. This is an impact test. There's all these tests that it had to pass.
Speaker Change: Yes, I will say that we have some big cash outlay is coming.
Speaker Change: So.
Speaker Change: The system has to be IEC 60, 601 compliant.
Speaker Change: And that required a spur.
Speaker Change: Special type of panel.
Speaker Change: Could pass.
Speaker Change: Sure.
Speaker Change: The impact test there's all these tests that it had to pass it.
Noel Knape: The most efficient way for us to, basically the only way for us to have a sellable product is to make panels that pass this and that requires tooling, which is very expensive. uh so we're going to have to put an outlay for that and then um We have another robot cart that we're making at the moment, so that's significant. We're, the second quarter, we're going to be aggressively doing testing, so for the BNV, for the India trial, so to actually run the clinical trial in India, there's some more testing that has to be done on the fully autonomous version of the system that cannot be cherry-picked from the Gen 1 testing that was done.
Speaker Change: The most efficient way for us to basic.
Basically the only way for us to have a.
Speaker Change: Sellable product is to make panels that past us and that requires tooling, which is very expensive.
Speaker Change: So we're going to have to put an outlay for that and then.
Speaker Change: We have another robot cart that we're making at the moment so that's.
Speaker Change: That's significant and then.
Speaker Change: We're second quarter, we're going to be aggressively doing.
Speaker Change: Testing so for the bnb for the.
Speaker Change: India trial.
Speaker Change: Two.
Speaker Change: To actually run the clinical trial in India. There is some some more testing that has to be done on the fully autonomous version of the system that cannot be cherry picks from the Gen. One testing that was done.
Noel Knape: It's not going to be as heavy as the Gen one, which had, you know, we we had at its peak. We had quite a few contractors. It was a really big push. A lot of surgeons came in. We had we had on the order of 20 surgeons come in, obviously, that contributed to the elevated burn. I would expect Q2 to be on the heavier end, but in terms of baseline, the headcount, we're holding it pretty steady right here. We're really not going to be counting our eggs before they hatch, so... what we need to hit the milestones and actually have them on our belt before we keep growing.
Speaker Change: It's not going to be as heavy as the Gen. One which had at its peak we had quite a few contractors with really big push a lot of surgeons came in we had on the order of 20 surgeons come in obviously that.
Speaker Change: Contributing to the elevated burn.
Speaker Change: But I would I would expect Q2 to be on the heavier end.
Speaker Change: And then.
Speaker Change: But in terms of baseline.
Speaker Change: The head count we were holding it pretty steady right here.
Speaker Change: We're really not going to be counting our eggs before they hatch so.
Speaker Change: What we need to hit the milestones and actually have them under our belt before we keep growing.
Noel Knape: increase the burn. Let's go up the baseline burn. All right, got it.
Increase the burn let's call it the baseline burn.
Speaker Change: Alright got it thanks, so much for all the detail here on our jump back in queue.
Unknown Executive: Thanks so much for all this detail here. I'll jump back in queue. Sure. Thanks, Jason. Appreciate it.
Speaker Change: Sure. Thanks, Jason appreciate it.
Tom Kerr: And then next up, we have Tom Kerr, who's with Zacks. Hey, Tom, how you doing? Good. How's it going?
Tom curve: And then next up we have Tom curve.
Speaker Change: Who is with <unk>.
Tom curve: Hey, Tom how are you doing hey, how's.
Tom curve: How's it going.
Tom Kerr: A couple clarifications. I think the answers just you gave were pretty thorough. But on the clarification on the spending, you know, the normalized 3.2, 3.3 million quarterly burn rate, is that inclusive of the 1.2 million spent on the India trial? Or is that on top? So the incremental spend on the clinical on India is not yeah go for it Oh, no, I was just going to say that that is included. We're just taking kind of an average rate for the Indian. it will be more sporadic That we've just kind of averaged it out over the year.
Speaker Change: Couple of clarifications I think.
Speaker Change: Answers just you gave a pretty thorough on the clarification on the spending.
Speaker Change: Yes.
Speaker Change: Normalized three to $3 3 million quarterly burn rate is that inclusive of the $1 2 million spent on the Indian trial or is that on top of that.
Speaker Change: That makes sense.
Speaker Change: So the incremental spend on that clinical.
Speaker Change: He has not yet no.
Speaker Change: No.
Oh, no I was just going to say that that is an included were just taking kind of an average rate for the.
Speaker Change: The Indian.
Speaker Change: The trial it will it will be more sporadic and we've just kind of average it out over the year, we anticipate that to be one.
Noel Knape: We anticipate that to be about 1.2 million for the entire project. So we've just, we're seeing that as 100,000 incremental over the year. That's kind of be an offset from previous run rate of the lower third party spend. So it's inclusive. Okay, it's not like it's 3.3 million quarterly burn plus 1 million on top of it. That's right. That's good news.
Speaker Change: $1 2 million for the entire the entire projects. So we've just we're seeing that as a 100000 incremental over the year, that's kind of an offset from previous run rate.
Speaker Change: The lower third party spend.
Speaker Change: It's inclusive.
Speaker Change: Okay, it's not like it's $3 3 million quarterly burn plus $1 million.
Speaker Change: Got it.
Speaker Change: That's right.
Speaker Change: Well, that's good news going back to the FDA. This is a big picture question, but with the recent administration federal cuts you know FDA wasn't immune to that have you heard any.
Noel Knape: Going back to the FDA, this is a big picture question. But with the recent administration, federal cuts, you know, FDA was immune to that. Have you heard any Scuttlebutt, or rumors of how the FDA cuts would affect clinical trials? I know it's probably hard to answer that. Yeah, sure. So our CRO IQV is pretty well connected with FDA. And they actually talked to them not too long ago about this specifically. And the feedback was that the orthopedic devices branch that's reviewing their application is They haven't, they don't see an impact at this time, but that's We certainly could be impacted by that.
Speaker Change: Scuttlebutt rumors and how the FDA would affect clinical trials I know, it's probably hard to answer that.
Speaker Change: Yes sure so.
Speaker Change: And our CRO <unk> pretty well connected with FDA.
Speaker Change: And they've actually talked to them not too long ago.
Speaker Change: This specifically and the feedback was that the orthopedic devices branch, that's revealing your application.
Speaker Change: As.
Speaker Change: Yes.
Speaker Change: They're they have.
They don't see an impact at this time, but.
Speaker Change: That's.
Speaker Change: We certainly could be impacted by that.
Noel Knape: He didn't anticipate there would be one. We actually have confirmed with the lead reviewer that the application is being reviewed and nothing has been flagged.
Speaker Change: He didn't anticipate there would be one from it.
Okay.
We actually have confirmed with.
Speaker Change: The lead reviewer that the applications being reviewed that Theres nothing has been flagged.
Noel Knape: And, Ken, an AAR, is that a one-time event? Because they come back and say, here's a second AAR, here's a third AAR, et cetera. That's a one-time event. Yeah, so we expect the next communication to be a clearance decision.
Ken: And Ken.
Speaker Change: Or is that a onetime event.
Speaker Change: They come back and say, here's a secondary hours or 30, IR et cetera, that's a onetime event.
Speaker Change: Okay, yes so.
We expect the next communication will be a clearance decision.
Benjamin Sexson: Okay, and then just following up on that one more and talk about this in the last few minutes, but once FDA approval, clarify again what happened. next day, and when we have robots in the hospitals, what is the month? Is it, you know, similar to India, or kind of how does that work? Yeah, it's going to take a little bit of time, right, because We're going to have to ramp the working capital needed to to support but we have KOLs that really like what we're doing. We, we, there's only. one shot at a good first impression.
Speaker Change: Okay, and then just following up on that one.
Speaker Change: More and talk about this in the last few minutes, but once FDA approval clarify again what.
Speaker Change: The next day.
Do we have robots in the hospital what does the month is it similar to Indiana or kind of how does that work.
Yes, it's going to take a little bit of time right because.
Speaker Change: We're going to have to ramp the working capital needed to to support but we have.
Speaker Change: Kols that.
Speaker Change: I really like what we're doing.
Speaker Change: We.
Speaker Change: Theres only.
One shot at a good first impression.
Speaker Change: And.
Benjamin Sexson: and so we don't want to launch, we want to upgrade the system to the new end effector. So there's going to be a little bit of work required to do that. You know, I think kind of what you're thinking with India is sort of a reasonable thought. but we we think that We think it's going to be a pretty competitive solution with the new end effector. and Michael Wittman, MD, PhD The company is going to need more capital for an aggressive loss.
Speaker Change: So we don't want to launch.
Speaker Change: We want to upgrade the system to the new end effector.
Speaker Change: So theres going to be a little bit of work required to do that.
But.
Speaker Change: Yes.
Speaker Change: I would I think kind of what youre thinking with India is sort of a reasonable thought.
Speaker Change: But we.
Speaker Change: We think that.
Speaker Change: We think it's going to be a pretty competitive solution with a new and a factor.
Speaker Change: And I wouldn't be too aggressive initially just as we.
The company is going to need.
Speaker Change: More capital through an aggressive launch.
Benjamin Sexson: Okay, that was all of my questions. Yes. Sales and marketing would increase and that would be funded by new capital and so on and so forth, right? Yeah. Exactly.
Okay.
Speaker Change: My questions have yet sales and marketing would increase that would be funded by new capital so on and so forth right yes.
Speaker Change: Yes.
Speaker Change: Exactly.
Speaker Change: Okay.
Unknown Executive: Okay, that's all I have for now. Thank you. Sure, appreciate it.
Speaker Change: That's all I have for now thank you.
Speaker Change: Sure I appreciate it.
Speaker Change: Okay.
Speaker Change: Okay.
Benjamin Sexson: Yeah, I mean, just looking at the chat here, obviously, I see, you know, there's investors who are frustrated with how long it takes to do this. I don't think that there's an appreciation for how difficult it is to autonomously cut unconstrained within 1.1 millimeter and less than the degree of accuracy and the engineering accomplishment that that is. We've submitted what I believe is a very strong application. We've had the leading CRO in the world, IQVIA, support the application. They've told us it's a strong application. Yeah, we're doing everything we could do. I'm sorry. It takes a long time.
Speaker Change: Yes.
Speaker Change: Just looking at the chart here obviously.
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Speaker Change: There is investors who are frustrated with how long it takes to do this.
Speaker Change: I don't think that there is an appreciation.
Speaker Change: Or how difficult it is to autonomously cut unconstrained within $1, one millimeter and lessen the degree of accuracy.
Speaker Change: And the engineering accomplishment that that is.
We've submitted what I believe is a very strong application we've had the leading CRO in the world like UBS support the application they have told us its a strong application.
Speaker Change: We're doing everything we can do I'm sorry, it takes a long time.
Benjamin Sexson: Obviously, the team is I wish that when you submitted something to the FDA it was a Five-minute turnaround, it's not. It's a lot of paperwork that they have to go through, a lot of testing they have to go through. The reason I was highlighting how many pages have been submitted is because it takes the FDA time to go through all of this testing and make sure that the company has done a good job proving safety and efficacy of the system, so. I hear the frustration, but at this point the company has done everything it can do to to try and get this thing cleared.
Speaker Change: Obviously the team.
Speaker Change: As.
I wish that when you submitted so linked to the FDA was.
Speaker Change: Five minute turnaround it's not.
Speaker Change: It's a lot of paperwork that they have to go through a lot of testing they have to go through.
Speaker Change: The reason I was highlighting how many pages had been submitted is because it takes the FDA time to go through all of this testing and make sure that the company has done a good job proving safety and efficacy of the system. So.
I hear the frustration.
Speaker Change: Yes at this point the company has done everything it can do too.
Speaker Change: To try and get this thing cleared it and now it's in the FDA.
Benjamin Sexson: And now it's in the FDA's hands. And as I said, the clock at the time we submitted was 73 days and We welcome folks to go online and try and see what the FDA's average turnaround times are.
As I said the <unk>.
Speaker Change: <unk>.
Speaker Change: At the time, we submitted was 73 days.
Speaker Change: We welcome folks to go online and try and see what the Fda's average turnaround times are.
Benjamin Sexson: Yes, I see a question about needing capital. Yes, you should go and look at what medical device companies, how much capital it takes to launch a product. When Mako was acquired, they were doing $100 million in sales, and you cannot get to $100 million in sales with $14 million, unfortunately. I just have to be fully transparent folks, we, you know, this is a We've developed what I think is going to be a very competitive system. It's obviously very difficult. I think the product itself is... going to be game changing for the orthopedic market, but it has to get cleared.
Speaker Change: Yes.
Speaker Change: Question about meeting capital yes.
Speaker Change: Yes, you should go and look at what met medical device companies, how much capital it takes to launch a product.
Speaker Change: You cannot become when Mako was acquired they were doing $100 billion in sales.
Speaker Change: You cannot get to $100 billion in sales with $14 billion. Unfortunately.
Speaker Change: Okay.
Speaker Change: So.
I just have to be fully transparent folks. We this is.
Speaker Change: We've developed what I think is going to be a very competitive system.
Speaker Change: But it's.
Speaker Change: Obviously very difficult I think I think the product itself.
Speaker Change: As.
Going to be game changing for the orthopedic market, but it has to get cleared.
Benjamin Sexson: and then that's where the rover is going to meet the road.
Speaker Change: And then that's where the rubber is going to meet the road.
Unknown Executive: This concludes today's conference call webcast. Thank you again for your participation. Appreciate it. Thanks so much. Thank you.
Speaker Change: This concludes today's conference call and webcast. Thank you again for your participation.
Speaker Change: I appreciate it thanks, so much.
Speaker Change: Thank you.