Monogram Orthopaedics, Inc. (NASDAQ:MGRM) Q4 2024 Earnings Call Transcript

Monogram Orthopaedics, Inc. (NASDAQ:MGRM) Q4 2024 Earnings Call Transcript March 12, 2025

Larry Holub: Good afternoon everyone. I’m Larry Holub, Director at MZ North America, and would like to welcome you to the Monogram Technologies fourth quarter and full year 2024 financial results and business update conference call. A question-and-answer session will follow the formal presentation. Webcast viewer can submit written question for the Q&A portion of this presentation. As a reminder, this conference call is being recorded. Before we begin the formal presentation, I would like to remind everyone that statements made in the call and webcast may include predictions, estimates, or other information that might be considered forward-looking. While these forward-looking statements represent our current judgment on what the future holds.

They are subject to risks and uncertainties that could cause action results to differ materially. You are cautioned to not place undue reliance 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 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 was issued today March 12, 2025 and is available in the investor relations section of the company’s website, monogramtechnologies.com. Your hosts 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. At this time, I will turn the call over to Monogram’s Chief Financial Officer, Noel Knape.

Noel Knape: Good afternoon, everyone. I’m glad to be with you today and thank you for joining us. 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 coming up in the near future. As you know, as a startup cash us extremely important and we’ve done a good job of shepherding our cash this year, ending with a cash balance of $15.7 million which was higher than the cash balance at the end of the previous year. This is due to, you know, 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. And then we were also able to access, 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 milestones. 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 BNB project, portion of the project wound down and we’re focused on getting the air submitted and onto our next objectives. Again we have no traditional debt and very limited short-term warranties obligations right now and we expect to have solid cash, you know, through the year.

Q&A Session

So all things 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 Sexton, the CEO who’ll walk you through the exciting things that are on the agenda and coming up shortly. Thank you.

Benjamin Sexson: Thanks Noel and thank you everybody for joining us today for our fourth quarter call. I appreciate everybody’s time. 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 could 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.

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. So Monogram really has always from the beginning 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. 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. So instead of putting an implant in and cementing it down, they can help with, let’s call it a more precise bone 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 one out of two knee replacements will be robotic within the next five years. So if that’s kind of just setting the table for where the market’s going, it’s important to kind of look at where we are now. And, and there are a lot of factors, obviously. Stryker is a, what you see here is stock prices for various players in our space. Striker 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 MAKO was cleared for total knee, that Stryker’s outperformance has gone parabolic. And obviously they’ve made a lot of really smart moves and they’re a well-diversified business and probably the most well-diversified of any of the orthopedic total joint reconstruction players.

But 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. 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 Orthopedic News Network are press fit and that market is owned by Stryker. 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.

And I think that that certainly may be true and maybe 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. And we’ve 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. And 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.

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 going to be that simple. 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 has 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 surgeon initiated cutting, the surgeon is the one moving the robot around. 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 has ever done it with a saw as we’re doing it, and nobody has 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, we can now very, very efficiently cut with a saw. 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 pull this up. This is a fairly one of our larger sized femurs. You can see that with this new upgraded end effector, I don’t know if it’s frozen on your side, it’s not playing on my side. Can you see it, Noel? Is it playing for you or is it frozen?

Noel Knape: It’s frozen Ben.

Benjamin Sexson: Okay.

Noel Knape: At eight seconds.

Benjamin Sexson: Okay. Looks like the video is frozen, but it is. We did have and if you look at our last press release, I’m not sure why it’s not playing. Sorry about that. If you go to our last press release, we can drop a link here, but we are now cutting the bone and blade time or blade and bone time is 2 minutes and 47 seconds. Right? So this is with an unconstrained saw. The feed rates… Let me see if I can maybe play it from the presentation. I know that has a link too. No, it’s not going to play here. There might be one more option. I might be able to play it in our YouTube and share the screen. Let me try that real quick, because I do think it’s helpful for folks to see what our system is actually going to be capable of.

So I’m just going to play this here real quick. Okay and this was made public in the 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 of things I just wanted to get you to notice. Can you see it, Noel?

Noel Knape: No, still on the presentation. Not sharing your screen. Yes, says I’m sharing. Okay, I’ll drop a link in here. Here’s the link for folks to see it later. There we go. No, so I’m on the presentation. Okay I’ll drop a link in here, here’s the link for folks to see it later. There you go, thanks Chris. So 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. And then from there we have a 7 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 and 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. In terms of updating on the regulatory side, so I know that there’s folks that 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.

So I will kind of restate what’s happened and try and give folks an update. So 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 the clock restarted on February 26th and we had full support from IQVIA, which was our CRO, formerly Micra. 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 and we are eager 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. It’s fully in the FDA’s hands to provide their clearance decision. 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 Shalby Limited. So the principal investigators will be surgeons that are employed by Shalby. We will be doing the clinical trial at three of Shalby’s hospitals across India. We have already shipped a training system to India. 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 are ongoing. You know, 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 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 the Indian Regulatory Authority. So those are the two regulatory updates. Obviously, we 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. So 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 you can’t make major changes to the system subsequent to initiating the 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, it’s almost 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 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. So just to give you guys some sense, the RMSE [ph] in terms of the cut accuracy in the — and this is in nonclinical testing, this isn’t cadaveric testing with the protocols was around 1.1 millimeters and the limb alignment 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. 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. And with that, we want make sure we give everybody an opportunity to ask questions. I’m seeing a lot of questions about FDA timeline, but beyond what we said, there’s not really much more we can say.

Larry Holub: At this time, we will be conducting a question and answer session. If you’d like to ask a question, please submit your question by typing it into the webcast viewer platform. Ben?

A – Benjamin Sexson: Sure, let’s start with Jason. Hi. Jason, how you doing?

Jason Wittes: Hi, Ben and Noel, thanks for all the color here on this call. I had a few questions, if I could kick it off.

Benjamin Sexson: Yes, that would be great.

Jason Wittes: I appreciate all the color on in terms of what’s going on with the regulatory bodies. 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. let’s assume, you know, 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 semiautonomous device potentially in the U.S. 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 be about two months, give or take. And then, we have a 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.

So 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 be in terms of actually executing the system. So we know for sure, obviously, we’re going be sending one robot to India. We have a PO for a second robot, and we anticipate that 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 volumes. So, Doug and I have actually been in the Operating Room and it’s incredible how many surgeries they do a day. 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, 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 Shalby is pretty well recognized in India, a lot of patients do travel from outside of the cities that we’re going 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 see that to be a huge blocker. It’s really how hard we want push it. I would say, initially, we’re going be kind of a little bit slow and careful. So, you know, once first couple weeks, I would say we’re not going be doing 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 scale as we get, you know, let’s say the first ten surgeries under our belt and we’ll start to scale. But the robot is going to be, we’re — it’s unlikely that we will be running multiple sites simultaneously. So, it’s most likely that we will start at kind of the main site in Ahmadabad do maybe on the order of 50 surgeries there and then, it will be a mix of maybe like 30, 20, the other two, something like that. So, you know, I think we’re going get through it in a reasonable amount of time, but it’s not going be, if we want have a really good trial and we want to do a really good job. So, hopefully, that does that help give some color?

Jason Wittes: Yes. That gives some color. Yes. I mean, it sounds like there’s some moving — it’s hard to pinpoint, but it’s a relatively quick enrollment. I mean, it’s under your control for relative quick enrollment. I don’t know if you venture to guess whether, in terms of months, it’s 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 a 100 patients or is that right?

Benjamin Sexson: You know, I think that sounds like a reasonable, that’s that sounds like what we’re kind of planning internally, with the caveat that, you know, if anything came up that was unexpected, that could slow it down. You know, we’re not going 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. And so I think, maybe at the peak, I will do maybe two surgeries a day. I don’t anticipate we’re going go more than that. And they do operate on weekends as well. So…

Jason Wittes: Got it. No, I mean, it makes perfect sense that you want a clean dataset. And then in the U.S…?

Benjamin Sexson: Just, don’t discount the time it takes for the data to be processed. So, you know, 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, you know, protocol. So we’re going need a protocol report summarizing the findings of the study and it’s a three-month follow-up. So, we’re going start really kind of knowing how we’re doing. But there is going be, some period where we’re just going have to wait for that follow-up on the back end. So…

Jason Wittes: Okay. I understand, yes.

Benjamin Sexson: Yes. So then in the U.S. so, just to be honest with you, the performance of the upgraded end effector has far exceeded our expectations. 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 510(k) on a Gen 1 version of a system with the goal of submitting a subsequent one to move the ball forward to the ultimate, let’s say, market competitive product. 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 yes we expect.

Jason Wittes: We what was that? Sure. Sorry. Sorry, Ben. I so that yes.

Benjamin Sexson: Yes, go for it.

Jason Wittes: The FDA might rule might approve what you submitted, and then it’s a relatively straightforward, Adenium [ph] or et cetera or something to that exact.

Benjamin Sexson: Exactly. Yes, exactly.

Jason Wittes: Okay.

Benjamin Sexson: Yes. So basically we’ve changed, we’ve made upgrades to the cutting system but the nice thing is that for India there’s a lot of accuracy studies that we’ve had to do and a lot of BNB work that has had to go into that that can be leveraged to improve the Gen 1 system. And then we think it could be pretty competitive out of the gate. Yes…

Jason Wittes: No, that makes a lot of sense and I didn’t mean to interrupt you. I just have one follow-up related to that, it sounds like there’s, you guys have a lot of innovation going on here. One other area which I know you’ve mentioned in the past and I don’t know if you can give us an update on is the mapping and tracking and the registration. Is there any movement there that you can disclose today or how should we be thinking about how you’re approaching that problem?

Benjamin Sexson: Sure. So, this is a biased non-clinical claim, Jason.

Jason Wittes: Fair enough.

Benjamin Sexson: I think the new end effector on our autonomous system is extremely competitive with the current state of the art with. So 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 within navigation. So just so everybody knows what Jason is referring to is what we call mVision. So mVision is a technology that Monogram is 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.

It starts to become like if you can optimize cutting and you can optimize planning, it’s really the long pole in the 10 in terms of really driving throughput for robotics is registration and that setup time, it’s really hard. The fundamental problem Jason is, if you had a supercomputer in the operating room we could do it. 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, we’re calling it approach where maybe you can do something that does require bicortical fixation of a bone pin that’s a lot faster. Maybe has 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.

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, work in a clinical setting.

Jason Wittes: Okay. And maybe if I could just ask one last question, I’ll jump back in queue. I know you have other questions. 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.

Benjamin Sexson: Sure. Noel, do you have that?

Noel Knape: Yes. So we were able to, 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 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.

Benjamin Sexson: Yes, 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 had to pass at 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. So we’re going to have to put an outlay for that. And then we have another robot cart that we’re, making at the moment. So that’s significant. And then we’re the second quarter. We’re going to be aggressively doing testing. So for the BNB, 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.

It’s not going to be as heavy as the Gen 1 which had, we had at its peak, we had quite a few contractors. It was a really big push. A lot of surgeons came in. We have, we had on the order of 20 surgeons come in. Obviously that contributed to the elevated burn, but I would expect Q2 to be on the heavier end and then, but in terms of baseline, the headcount, we’re holding it pretty steady right here and we’re really not going to be counting our eggs before they hatch. So we need to hit the milestones and actually have them under our belt before we keep growing and increase the burn. Let’s call it the baseline burn.

Jason Wittes: All right, got it. Thanks so much for all this detail here. I’ll jump back in queue.

Benjamin Sexson: Sure. Thanks Jason, I appreciate it. And then next up we have Tom Kerr, who’s with Zacks. Hey Tom, how are you doing?

Tom Kerr: Good. How’s it going? A couple of clarifications. I think the answers just you gave were pretty thorough. But on the clarification on the spending, the normalized $3.2 million, $3.3 million quarterly burn rate, is that inclusive of the $1.2 million spent on the India trial or is that on top of that? Does that make sense?

Benjamin Sexson: So the incremental spend on the clinical on India is not. Yes, go for it. No.

Noel Knape: Oh no, I was just going to say that, that is in included. We’re just taking kind of an average rate for the, Indian trial. It will be more sporadic, but we’ve just kind of averaged it out over the year. 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.

Tom Kerr: Okay. It’s not like it’s $3.3 million quarterly burn plus $1 million on top of that.

Noel Knape: Yes, that’s right.

Tom Kerr: That’s good news. Going back to the FDA, this is a big picture question but with the recent administration federal cuts, FDA wasn’t immune to that. Have you heard any scuttlebutt or rumors and how the FDA cuts would affect clinical trials? I know it’s probably hard to answer that, but…

Benjamin Sexson: Yes, sure. So our CRO IQVIA is pretty well connected with the FDA. 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 there. They haven’t, they don’t see an impact at this time but that’s, it’s. We certainly could be impacted by that. He didn’t anticipate there would be one from it. We actually have confirmed with the lead reviewer that the application’s being reviewed and there’s nothing’s been flagged.

Tom Kerr: And can an AIR, is that a one-time event or could they come back and say here’s a second AIR, here’s a third AIR, et cetera.

Benjamin Sexson: That’s a one-time event.

Tom Kerr: Okay.

Benjamin Sexson: Yes. So we expect the next communication to be a clearance decision.

Tom Kerr: 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 happens the next day and when we have robots in the hospitals, what is the month, is it, similar to India or kind of, how does that work?

Benjamin Sexson: Yes, it’s going to take a little bit of time. Right. Because we’re going to have to ramp the working capital needed to support. But we have KOLs that really like what we’re doing. We – there’s only one shot at a good first impression. 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. But I wouldn’t, I would, I think kind of what you’re thinking with India is sort of a reasonable thought, but we think that, we think it’s, going to be a pretty competitive solution with a new end effector. But I wouldn’t be too aggressive initially, just as we, the company is going to need more capital for an aggressive launch.

Tom Kerr: Okay. That was one of my questions. Sales and marketing would increase and that would be funded by new capital and so on, so forth, right?

Benjamin Sexson: Yes. Exactly.

Tom Kerr: Okay. That’s all I have for now. Thank you.

Benjamin Sexson: Sure. Appreciate it. Yes. I mean, just looking at the chat here, obviously I see, there’s investors who are frustrated with how long it takes to do, 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 a degree of accuracy and the engineering accomplishment 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. We’re doing everything we can do. I’m sorry, it takes a long time. 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 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, but at this point the company has done everything it can do to try and get this thing cleared. 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. 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. You cannot become. When MAKO was acquired, they were doing $100 million in sales and you cannot get to $100 million in sales with $14 million, unfortunately.

So I just have to be fully transparent, folks. We, this is, we’ve developed what I think is going to be a very competitive system, but 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 and then that’s where the rubber is going to meet the road.

Larry Holub: This concludes today’s conference call webcast. Thank you again for your participation.

Benjamin Sexson: I appreciate it. Thanks so much.

Noel Knape: Thank you.