And as we bring new technologies like TULSA AI that we are trying to figure out, how do we monetize some of that innovation? So it’s – as I said at the moment, I just wanted to sort of give you a heads up that it’s something that we’re evaluating. And so you might see some changes in the mix. But I don’t think, Michael, there’s anything unusual with respect to what the hospitals are asking or what we will evolve into.
Michael Sarcone: Okay, got it. Thanks a lot, Arun.
Arun Menawat: Super. Thank you.
Operator: One moment for our next question. Our next question comes from Brian Gagnon with Gagnon Securities. Your line is open.
Brian Gagnon: Hi, guys. A couple of questions. I’m going to stick on this capital sale thing. I understand completely as to why it’s beneficial, because there are capital budgets out there for this. On the disposable side of things in our minds, should we be thinking about a relatively small discount from where your current disposable prices are?
Arun Menawat: Yes, I think so, Brian. I think that the other way that would be helpful is we’ve talked about the fact that our margins are decent even at the low volumes. And I think that we’ve talked about the fact that as the volume 70% plus 70% to 75% range. And I think from that perspective, we are still very comfortable that as the volumes increase, that our margins will be in that 70%, 75% range. So whatever that discount will be, it will not affect the margins of our business.
Brian Gagnon: Great. That’s excellent at this point in the game. Can you talk at all about new contract signings for 2023? Kind of how many did you do? What are you thinking about for 2024, you signed some very big ones that are multi year. And then if you would layer into that what your pipeline looks like and how you’re doing on executing against the pipeline that’s there.
Arun Menawat: Yes. So I think that we have – publicly said we have had multiple corporate agreements, and if we add those up, I think we feel very comfortable with the number 75. But having said that, I think historically it’s taken some time to get them installed, and even in some cases, even after they’re installed, to getting them going with respect to decent treatment rates has taken six months or longer in some cases. And we’ve talked about that historically as well. So I would say again, it’s an estimate, a guesstimate that we think that at least half of the 25 will come from the contracts that we already have, and the other half will probably come from the pipeline that we have, which continues to build. That’s probably sort of a reasonable overall estimate.
I think that we – I think at least logically, as the reimbursement data unfolds, I think it’s possible that some of those commercial contracts or the corporate contracts could start to accelerate. So I think it is one of those inflection year points where a lot of the rate of adoption is likely to depend upon the data at the end of July. But I do think that coming into 2024, we’re coming in with a pretty good set of contracts that we should be able to meet the target of 75.
Brian Gagnon: Okay. If you would, can you talk a little bit more about your pipeline and how it’s looking to you at this point?
Arun Menawat: I think this year we’re primarily focusing on hospitals at this point. Part of it is because a lot of the Medicare patients tend to go to these hospitals. And so most of our pipeline at the moment is for hospitals. I think you will continue to see further adoption in the leading hospitals because we’ve had such a good uptick in the Pristine Hospitals. I think you will continue to see that trend, but I think this year you will see mid-tier hospitals also adopting the technology. And part of this is that we will be talking with ASCs, we’ll be talking with LUGPAs about the full motor treatment pathway and getting their feedback for this year. And if this whole concept makes sense, I think then ASCs and LUGPAs are more ripe for a 2025 strategy. So 2024, our thought process is more focusing primarily on – continue to focus on hospitals.
Brian Gagnon: Okay. Last question for me. It’s always been a good indication for me on a technology, if there are multiple installs within an institution. And I think you have multiples at Mayo, RadNet and Halo. One, confirm that for me. And two, are there others like Cleveland that you could see multiple installations being completed by the end of the year?
Arun Menawat: Yes, most certainly. I think probably by end of this year, we’ll probably have five or six, maybe seven institutions where we’ll have multiple systems.
Brian Gagnon: Terrific.
Arun Menawat: I agree with you. That is something we’ve been looking at. Also I mean, just to see, I think the Mayo was a very good example where they started, very conservative start at the Florida site, and then it went on to the Rochester site, which is doing very well. And I think Cleveland Clinic, I expect will happen the same way. I think the Harvard system with both Brigham and Women and Massachusetts General, they’re now the same system, so on. So you will absolutely see that. And I agree with you. That is a good early indicator.
Brian Gagnon: Is Cleveland installed and up and running the first one?
Arun Menawat: Yeah, Cleveland is installed and up and running. Yes.
Brian Gagnon: Terrific. Thank you very much, gentlemen.
Arun Menawat: Thank you.
Operator: One moment for our next question. Our next question comes from Chris Potter with Northern Border Investments. Please proceed with your question.
