Monogram Orthopaedics, Inc. (MGRM) This fall 2023 Earnings Name Transcript

Monogram Orthopaedics, Inc. (NASDAQ:MGRM) This fall 2023 Earnings Convention Name March 21, 2024 5:00 PM ET

Firm Members

Benjamin Sexson – CEO
Noel Knape – CFO
Doug Unis – Founder and CMO
Kamran Shamaei – CTO

Convention Name Members

Benjamin Sexson

Okay, nice. Thanks Greg. Properly, good afternoon, all people. We actually respect you becoming a member of us right now for this Replace Name. I wish to attempt to lay a few floor guidelines from the beginning. We’ll be actually collaborative on this. You are going to have the ability to chat with us. There is a chat on the right-hand aspect of your display, and we shall be that and doing our greatest to not — it will be a free speech platform, so please maintain it respectful. Please no dangerous language, nothing apparent — clearly sort of unconstructive. However as a administration crew, we actually wish to be as open and accessible as we probably can and provides all people an replace on how every thing is doing and go from there.

So, we will begin out with a — and I ought to introduce the crew. So, on the left, I do not know if it is in the identical order for our viewers, however my identify is Ben Sexson, I am the CEO of Monogram Orthopaedics. Straight under me on the left there’s Noel, perhaps Noel you’ll be able to wave to the viewers, Noel Knape, our CFO. We now have our CTO, Kamran Shamaei under him; after which Dr. Unis, our Founder, who continues to be a practising orthopedic surgeon, and we bought him out of the working room for this name.

So, with that, I will flip it over to Noel to simply point out among the disclaimers about forward-looking statements after which we’ll leap into the decision.

Noel Knape

Thanks Ben. Good afternoon all people. Just a few little housekeeping right here. I wish to go over the forward-looking statements disclaimer with you earlier than we get began on this presentation, we’re actually excited to provide.

As a authorized disclaimer, this presentation by Monogram Orthopaedics, Monogram could embody forward-looking statements. To the extent that info offered on this presentation mentioned as monetary projections, info or expectations about Monogram’s enterprise plans, outcomes of operations, merchandise or markets or in any other case, make statements about future occasions, such statements are forward-looking. Such forward-looking statements could be recognized by means of phrases as they need to, could, intends, anticipates, believes, estimates, tasks, forecasts, expects, plans, purpose, goal, and proposes.

Though Monogram believes that the expectations mirrored on this presentation are primarily based on affordable assumptions, there are a variety of dangers and uncertainties that would trigger precise outcomes to vary materially from such forward-looking statements. So, nobody has a crystal ball.

Benjamin Sexson

Terrific. Thanks Noel. Recognize it. So, the presentation goes to cowl these 5 matters. We’ll begin with a fast monetary abstract. We’ll get into an in depth regulatory technique evaluation, provide you with some market evaluation and simply an summary of the place we’re. We’ll have, hopefully, Dr. Unis to sort of communicate from a surgeon’s perspective on our product.

After which from there, we will open it as much as a Q&A. And in case you have questions, please sort them in the proper, and we shall be doing our greatest to get to sort of nearly all of these.

So, with that, Noel, why do not you kick it off?

Noel Knape

Okay. Just a few key factors about the place we’re financially talking. As our 10-Okay mirrored as of the tip of the 12 months, we had $13.5 million in money. As you are all conscious, we had it raised earlier within the 12 months and we have marshaled that money nicely by the 12 months, protecting our burn at a minimal.

We had an account receivable from that first robotic sale on the finish of the 12 months of $365,000 and no points with that. Our working money movement for the 12 months is $13.5 million. So, as you’ll be able to sort of do the mathematics, it is a burn of about $1.1 million.

Benjamin Sexson

Hey Noel, simply actually fast. I am seeing some feedback that folks cannot hear and might’t see. Can any person within the chat simply verify you can see the abstract monetary knowledge slide and you can hear Noel?

Noel Knape

Sure, are you able to hear me? I–

Benjamin Sexson

Okay. Good. So, protecting Noel.

Noel Knape

Okay. Sorry about that. Okay. So, some folks perhaps have some points, I apologize for that. However anyway, so our month-to-month burn has been about $1.1 million, and it has been working a bit of scorching with the verification and validation part that we have been going by. We anticipate that to come back down a bit going into the brand new 12 months.

Some choose info to provide you a bit of shade behind that’s we now have 28 full-time workers. We’re very product centered. We now have 22 in engineering and simply 6 within the administrative perform. So, we’re very, very a lot centered on the product growth.

We now have 26 engineering contractors, 12 particularly supporting the V&V course of. Like I mentioned, as that winds up on the finish of the primary half of the 12 months or shortly thereafter, we’ll be capable to in the reduction of on that a bit of bit. And that is denoted on this extremely variable value construction. That is what we’re sort of referring to, we’ll be capable to dial again on {that a} bit.

We now have no debt, and that is a giant remark for a start-up similar to ourselves to not having leverage debt to get money movement to have the ability to assist our operations and growth of our product is a giant accomplishment.

And as we communicated a short while in the past, we have been in a position to finalize the one excellent warrant that we had. And that holder really was an early strategic investor, they usually transformed their warrant for $1.25 million in money. In order that’s sort of indicative of their confidence in our ahead progress, they’re prepared to place in extra cash. So, we took that as an excellent signal.

We now have no different warrant overhang excellent, so now we have a really, very clear stability sheet. We’re very happy with that. And importantly, I am going to let Ben get into the regulatory roadmap, however we anticipate to have ample entry to money to get us by the 510(okay) approval course of.

So, that is — I imply these are the details that–

Benjamin Sexson

Simply to say, I feel what we mentioned, Noel, it isn’t by the approval by the submission is what we mentioned. So, we’re comfy with the submission. Actually assume that from there, we’d transfer ahead from there.

Okay, excellent. Sounds good. So, I will dive into the regulatory technique. And for these of you who’re unfamiliar with among the vernacular, we will clarify all of it, however if you’re, simply bear with us.

So, I will sort of undergo the main points of this to assist convey folks in control on the place we’re and what we’re doing. So, Monogram’s Surgical Robotic, we have known as it mBôs and it is a Class II threat machine. And Class II threat units are eligible for what’s known as a 510(okay) submission.

A 510(okay) submission, for all intents and functions, it is simply FDA submission for clearance of a tool. To legally promote our machine in the USA, it needs to be accepted — or not accepted, the FDA’s most well-liked vernacular is cleared on the market within the U.S. and that entails taking a product by a really intense, what’s known as, verification and validation testing course of. So, there’s a complete growth that has to happen and to sort of no more concentrate on all the particulars, however the machine needs to be very totally examined.

And that testing relying in your equivalents to different cleared predicates could or could not require medical knowledge. So, the best way the 510(okay) submission works, which is the FDA submission for approval, you discover predicates that you simply assume are sort of reflective of the know-how and software has the identical meant use as your machine and it is related in perform in operation.

And you then present the FDA by a proper communication course of, how your system works after which they consider whether or not or not you are equal or function equally to the opposite units that you simply’re evaluating to.

After which they take a look at the protection options and profile of your machine and the way that compares to the predicate machine. And the place they particularly scrutinized are anyplace the place there is a technical distinction between the predicate that you simply’re claiming equivalence to and your machine, that is the place the heightened stage of sort of scrutiny goes, these variations want to reinforce security and efficacy, and it may be generally troublesome to show to the FDA by non-life affected person testing that that is the case.

So, there’s — sometimes talking, the FDA is trying to first set up technical equivalents after which they’re evaluating the variations and attempting to find out whether or not or not these variations are in danger that mainly cannot be confirmed to be protected with out medical knowledge.

So, the corporate has not been simply sort of going at this alone. We’re working with the preeminent of a CRO, whether or not they’re mainly regulatory consultants that run medical trials and supply consulting. We now have retained a agency known as Mikra [ph] to assist us with the technique of this submission and to guage our know-how, consider all of the predicates in the marketplace, consider the technical equivalents, and decide whether or not or not the machine would want a medical trial with our submission.

So, we did this in July 2022, we bought a proper report from them and their conclusion was that we have been equal to the predicates and they didn’t see a necessity for medical testing. So, that is actually sort of been administration’s opinion as nicely that we predict now we have enhanced the protection of our machine versus predicates.

I do not wish to go too far into the weeds on that, however sometimes, then what occurs is you submit, let’s name it, for all intents and functions, a tool description. You defined to the FDA what your machine does, the way it works, all the particulars of the machine. And the FDA, as you’ll be able to think about, with receiving a chunk of paperwork that is many tens, if no more than, I do not know what number of pages it was, most likely 50 to 100 pages describing your product. That is quite a lot of info for them to digest.

So, you then interact on this technique of going forwards and backwards on how the machine works, the way it features, there’s questions — simply actually high-level questions on what the product does, proper? So, to-date, now we have had three formal FDA pre-submission communications, and now we have a fourth plant in April.

And actually what this forwards and backwards has been meant to do is simply assist the FDA, initially, simply perceive how our product works, which, as you’ll be able to think about, is a reasonably concerned course of. This a really advanced piece of apparatus. It is not simply sort of a fast here is the way it works, then they perceive every thing there’s to know about it.

So, there is a studying curve and course of that has to occur. And also you begin to current to them varied facets of your verification and validation plan, how you plan to check the system.

You present them the technical equivalence claims that you simply’re making. You present them how the protection compares to your predicate. And there is a back-and-forth communication.

So, what’s been established to this point with the FDA is that our system has the identical meant use because the predicate and our predicate has mainly been accepted. We now have — I might say, it is a 510(okay) submission that is been fairly well-established.

Administration by no means bought a proper written sure or no from the FDA, it nonetheless have not concerning medical knowledge. The FDA is usually very reluctant to provide you in writing a sure or no reply earlier than you do a 510(okay) submission. So, it is a fairly subjective course of the place administration has to — and the crew must attempt to deduce from clues and sort of, in some situations, considerably obscure responses what one of the best plan of action is.

The FDA has not overtly mentioned, it’s essential to run a medical trial, they’ve simply given us areas of how we have been involved about this after which we reply to their issues and there is this forwards and backwards and it’s extremely troublesome to know precisely the place the FDA — how they really feel about your machine. They actually do attempt to maintain again from providing you with a agency opinion till they completely must, which is when you submit. So, there’s quite a lot of technique that goes into this. So, I simply wish to sort of lay the groundwork to assist folks perceive.

The purpose of our subsequent April assembly is — our evaluation, I am going to simply provide you with administration’s evaluation. At this level, administration’s evaluation is that the danger of the FDA after we submit with our present, let’s name it, our Gen 1 system, the danger of the FDA asking for a medical knowledge request after we submit, in our opinion, it is nonetheless too excessive with what we’re calling our lively embodiment.

Now, it isn’t as a result of the FDA has mentioned it’s essential to run a medical trial. It is a subjective evaluation that, as a administration crew, we attempt to weigh the dangers to advantages.

So, the purpose of our subsequent assembly is to particularly get hold of suggestions associated to our verification take a look at plan in addition to a medical trial protocol that we put collectively that will contain working a medical trial on a goal inhabitants outdoors of the U.S.

Now, we’ll get into sort of why we’re serious about doing that in a second. However proper now, we’re sort of attending to the purpose the place I might say, if we have been to do every thing completely by way of the verification take a look at plan, it could be largely derisked by way of figuring out what the FDA desires to see in our 510(okay) submission.

We introduced in a really great distance. The FDA understands our product, they might perceive the verification and testing plans and all of the ways in which we will take a look at the system and together with the medical trial take a look at protocol that will have the variety of sufferers, the endpoints, the follow-up time, all of that element. So, that is actually the place we will have a really clear understanding of what it’s going to take to submit a totally derisked 510(okay), assuming the lively model of the machine.

Now, clearly, as you begin to trip with the FDA, the rationale of a medical examine is of a lot significance is as a result of Monogram is an oligopoly, proper? The orthopedic market is very consolidated. The highest 4 gamers account for 75% of the market, and the highest robotics participant has virtually 90% market share in orthopedic robotics and had 75% market share in press-fit implants. It is not straightforward for brand spanking new market entrants to come back into oligopolies. It is — there’s shortage of capital and these massive firms perceive this.

So, getting funding for a medical trial, which may have a big value, now it isn’t an astronomical value, however it’s a big value. However to provide you some framework for that, our CRO estimates that the price to run the medical trial could be someplace within the order of $30,000 to $40,000 per surgical procedure that we would want to run on the order of 90 to 100 surgical procedures with three to 6 months of follow-up relying. So that will provide you with some scale.

It is not a lot even the price of working the medical trial itself and paying for these surgical procedures, the massive problem is the variety of websites that the FDA would request. So, for those who, as an example, had a three-site trial, it’s essential to have stock for 3 websites. And the most important problem that now we have in our business is the lead-times to acquire implants is important. This is the reason we exist. We wish to have a just-in-time 3D-printed implant mannequin.

However on the earth we reside in now with generic implants, the lead-times are very vital. They are often in extra of eight months, they’ll even be as much as a 12 months. In the event you think about for a small firm, you need to have the working capital to fund all of that implant stock, it’s essential to have robotic stock. And it is — after which you need to clearly fund the operations, whereas the medical trial is working.

So, it turns into not an astronomical value, however a big value in a market that’s an oligopoly, the place there is a basic let’s name it, adversity to new market entrants and the place funding could be costly.

So, that is a great distance of claiming we do not wish to do a medical trial if we do not have to. And in order we began to get a sense that we could have to do a medical trial with out certainty, it is nonetheless a grey space, we might nonetheless submit a 510(okay) and say we predict now we have good arguments, however we do not assume that is prudent. We now have been engaged on making some technical variations to our system that we predict might considerably improve the protection profile and equivalents to techniques which can be in the marketplace already.

So, now we have sort of — we’re placing a bundle round what our, let’s name it, our lively system is. We’ll know precisely what the FDA desires to see. After which in parallel, we will have one other model of the product that we’re engaged on and really probably going to be the one we submit for approval, that we predict is — actually doesn’t meet the edge of a medical trial, and they’re going to say that, that is our opinion. Possibly the FDA would see it one other method, however we have had sufficient conferences with them the place we predict we perceive the place their issues lie and which I am going to get into what their issues are largely they usually — I do not wish to characterize every thing they’ve mentioned, perhaps there’s different issues that we have not recognized, however these are those that we predict are related.

And so I will leap into that subsequent. So, the place do we predict the primary drawback lies with the FDA’s, form of, issues about our product and the technical equal to the present state-of-the-art.

You assume it largely pertains to what they characterize as lively versus semi-active. So, on the left there, you’ll be able to see two semi-active techniques, Mako, which is owned by Stryker and Velys, which is owned by J&J. And what you may discover is that the surgeon is holding the noticed that’s mounted to the robotic arm. And the surgeon is chargeable for shifting the noticed throughout slicing.

With the Monogram system, the motion of the noticed would not rely on drive utilized by the consumer on to the slicing software. So, that is extra of an lively embodiment. That is actually what the FDA has issues with.

Now, I’ll say — I will leap into this now, we had superb causes for designing the system this fashion. We really assume that our embodiment doubtlessly enhances the protection profile of our machine. So, for instance, with each hands-free, the surgeon who’s essentially the most skilled and skilled consumer of the machine and essentially the most skilled individual within the working room now has two free fingers to carry retractors and defend tender tissue. So, we predict that is a reasonably vital enhancement.

You haven’t any surgeon fatigue as a result of the surgeon is not holding a set off and attempting to wrestle a robotic. They’re focusing totally on the place the blade is slicing. And there is quite a lot of different issues we are able to get into. However be it as it might, that is sort of the attitude that we’re working with.

The rationale we designed an lively system actually was a few of these issues I already mentioned, we imagine that it could decrease the educational curve, we imagine that eliminates quite a lot of the surgeons talent required with slicing, surgeon fatigue. Our purpose is basically to allow advanced bone preparation, so milling for patient-specific implants, decrease the disruption to the workflow.

We additionally do not assume that it is an ideal security function for units which have digital boundaries for the consumer to be pushing right into a digital boundary. Loads of instances, these digital boundaries are defending tender tissues, and we do not assume it is sort of an ideal system to be pushing right into a boundary that’s defending tender tissue. And actually, our purpose typically is to have a robotic system that’s multi-application and we imagine {that a} extra lively paradigm is extra scalable for that. So, that is among the design motivation.

With that mentioned, there’s limitations to an lively design that we’ll get into. However I am not going to get into the weeds on that. That is extremely proprietary, and we’re simply not going to speak about how we’re altering our system. However we mainly imagine that we are able to modify our robotic to mainly be nearer to the predicates that we’re claiming substantial equivalents too.

So, we predict the units out there that have been extra just like are Mako and Velys. Velys didn’t must do a medical trial, they usually declare substantial equivalents to Omni, which is one other system in the marketplace. We predict now we have fairly sturdy equivalents arguments. So, for instance, for those who simply take a look at the Velys 510(okay), they describe their system as a motorized instrument managed by the system robotically positioning the reception airplane inside the deliberate airplane.

For the bone resection, maintains alignment by dynamic compensation. So, to make an extended story brief, we imagine that now we have some very, very sturdy equal arguments with that system. It’s foot-pedal-operated for motion of the arm between reception planes, and we are able to — we’ll go away it at that.

So, there’s — the corporate has determined that the technical variations of concern regarding lively versus system-active could be addressed with some technical tweaks and that is what we will be doing.

And we imagine that these modifications will mitigate the danger of the medical knowledge request. So, we predict that is actually optimistic information. We introduced that within the 10-Okay, and I will get into a bit of extra element on that. However earlier than I do, I simply wish to speak about doubtlessly some advantages as a result of there’s actually ways in which these technical enhancements doubtlessly enhance the system.

So, particularly, one of many obstacles to utilization of robots is the time it takes for the robotic to truly do the slicing. So, we imagine that our modifications might improve the price charges of the system, and we have confirmed that to be the case in sort of our testing.

Dr. Unis was right here really final week for a lab, and he can communicate extra to that. However there are some enhancements. So, I do not need people to assume that we’re simply purely modifying the system so we do not have to do a 510(okay) — not a 510(okay) medical trial. There are literally ways in which we predict this may make our machine much more enticing to surgeons.

So, I simply wish to sort of assist clarify the place we’re. Now, that is — could be a bit of bit tedious, however I feel it is actually essential. So, Monogram is sort of the place — not that it is a bit of bit small in manufacturing, ought to have made a bit of greater, however Monogram’s sort of — it says Monogram is right here and it is circled design verification part. So, we’re within the thick of the design verification part.

So, there’s roughly 60 {hardware} and system take a look at protocols that we’re working by after which one other over 100 software program take a look at protocols we’re working by. And these are all checks to mainly show that the system is protected.

The purpose is to be largely full, I say largely, and that is bolded full with the verification and validation, what we mentioned is within the first half of this 12 months. So, we’re pushing very aggressively on that. We’re making superb headway. Is it attainable for it to that point line to slide? Sure, actually. And I am going to get into what would make it slip. The largest threat actually is that we’re a reasonably small crew and dealing very laborious. And most of that is in our management, however there are a few of it that’s not, I am going to get into that.

After which we’re in parallel getting ready the 510(okay). So, our high quality and regulatory crew is working very laborious to have sort of every thing prepared, so that when we end the verification and validation testing, we’d be capable to submit that to the FDA as shortly as attainable.

So, our goal that we have mentioned publicly is for a submission within the second half of 2024. And what we have mentioned is we imagine now we have the capital available for that submission. And the rationale I corrected Noel is the — proper now the time for the FDA to reply is on the order of between 5 and 6 months, that is sort of their turnaround time for clearance or approval or rejection of a 510(okay). So, that is variable.

The FDA — that is out of our fingers if the FDA took longer, clearly, we would want to account for that in the event that they took shorter, that is nice. However this provides you some thought of sort of the place we’re.

So, we — the most important threat, and I am going to simply sort of discuss to the verification and validation. So, that is what now we have to do earlier than we eat at 510(okay), I am simply going to get into among the huge ones.

The largest threat is — and now we have Kamran on the telephone who’s had many sort of sleepless nights over that is what’s known as ISO 6601. So, this can be a sort of an business gold customary for security. It is a third-party that mainly is sort of certifying the protection of your machine. It is not a requirement for the FDA, however it’s a really, very, very sturdy and good, good to have, and we predict that it tremendously enhances our 510(okay) submission to have this.

The largest, most dangerous a part of this that we have already handed was radiated and conductive emissions. So, we pushed very laborious by that. The crew — I can not say you had many sleepless nights getting by that, however the tempo at which we cleared that was phenomenal and so we’re midway by that. And we anticipate that that is going to be performed.

And the subsequent piece of it, now we have extra confidence in. We have been in a position to derisk the remaining piece with inside testing. The radiated and carried out emissions could be very laborious to simulate in home, however the remaining checks we have already examined, we’re fairly assured our system is nice. There’s an enormous quantity of paperwork concerned, however we’re pushing actually laborious on that. However that may be a threat if that — that is a third-party and a gentle or gradual, there’s not a lot we are able to do about it. However we do assume we’re on monitor there. We’re pushing them very laborious.

The opposite factor is simply sort of useful resource constraints. We now have a lean crew. We have been working it very lean, and that is all the time a threat in case you have key folks get sick that hurts us, however I feel we’re in a great place.

We — human elements, which is a part of the verification requires a minimal of 15 affected person surgeons. Surgeons are very busy. We now have recognized the surgeons for essentially the most half that we will be working with, and we’re getting them booked in on aggressive schedules, however it’s robust. Surgeons have very busy schedules and generally issues don’t work out. We predict now we have loads of cushion there, however I do wish to flag it as a threat.

After which once more, that is what we have mentioned. These aren’t ensures. We predict now we have a reasonably good shot at it and we’re pushing to do it as aggressively as attainable. And naturally, we predict that it is a very significant milestone for the corporate to submit a 510(okay) with what we predict are very, very sturdy equivalence arguments and what we predict is a really, very enticing security profile to the FDA.

So, to — we’re not simply moving into with threat of that. We wish to mitigate threat each attainable method. So, what we’re doing in parallel, as I mentioned, is we’re getting ready to launch a medical trial outdoors of the U.S. That is nicely underway. So, we anticipate, hopefully, we are able to make some extra bulletins within the close to future about this. However we’re at present concentrating on about — we have to do exactly to make the statistics work out about 88 surgical procedures at three websites, and now we have — we’re searching for a 25% security occasion price discount.

We now have recognized the endpoints we’re searching for. They may largely relate to atherogenic damage. We’re pushing for a six-week follow-up, which is fairly aggressive. We have already recognized the websites, we have already recognized the CRO, we have recognized the PIs, recognized the distributors. So, this might be at a considerably decreased value to what it could value for us to run a medical trial in the USA.

So, the plan is that if we submit the 510(okay), which we predict is a really, very sturdy 510(okay) with superb equivalence arguments, but when the FDA have been to come back again to us and say that they’d an unfavorable view of our submission and want to see medical knowledge, our plan is to have it very nicely, far alongside in parallel sort of as a belt-and-suspenders the place we might simply say, okay, nicely, right here it’s. And in April, we hope to completely derisk the FDA’s view on the medical knowledge submission.

So, I hope that is sensible. We’re actually attempting to have optionality. And if the FDA have been to approve the 510(okay), it is nonetheless high quality as a result of, initially, the price to run this trial will not be very vital. I imply actually, there’s value there, however it’s a lot less expensive than within the U.S. After which we might use that knowledge for post-marketing post-launch advertising in the USA, and we might search for different endpoints like studying curve, accuracy of our system, surgical time, and so forth. After which we’d have the additional advantage of with the ability to launch OUS in what we predict is a really enticing market. So, it is sort of a win-win and killing two birds with one stone.

So, I simply sort of wish to give people a bit of little bit of a view of how we’re serious about simply the market typically. And Doug, that is the place I am going to tee you up in a second right here, however once we began, that is like very merely what we noticed the market alternative is. In the event you simply take a look at the market dynamics right now, there’s one firm that has 89% market share in orthopedic robotics for knees and 75% market share in press-fit wants.

Now, in anyone’s definition of a monopoly, that is what a monopoly appears to be like like. And our funding thesis was — could be very easy. We predict that not all — actually, Stryker is a well-diversified enterprise, however we predict that Mako has added billions of {dollars} of worth to Stryker. It is mirrored in how the inventory has carried out. It is mirrored out there efficiency of Mako versus everybody else. And so we predict there is a very merely a chance for a compelling robotic system.

And we actually are serious about it in a really related phrases. That is what we see as the chance. We predict there’s an apparent market. It is a very high-margin market. And we predict that our funding thesis moving into was that this might be worthwhile to any person. May we be fallacious? And will this be a whole not worthwhile? Actually. However we’re not — I do not assume that is the place we as a administration crew are right now. I feel now we have a really compelling product. We predict it is aggressive with the present state-of-the-art. We predict that it enhances on the present state-of-the-art.

And we actually assume that with future upgrades that Doug will get into just like the mVision navigation, Kamran can describe as nicely, it will likely be hopefully a reasonably vital enchancment over time.

So, I am simply going to play this video, Doug, it is like a two-second video right here. And I would like you to attempt to clarify this as a result of I feel it truly is — units the stage for a way early this market alternative is and the way vital it could possibly be. We wish to play this video.

[Video Presentation]

Benjamin Sexson

I will press pause right here. That is from a — it is on our web site once we launched an replace on mVision navigation, we had a Q&A, and that is Dr. Adler describing mainly why robotic adoption has been gradual. And this can be a huge a part of funding thesis. So, I am going to play after which, Doug, perhaps you’ll be able to touch upon it.

Doug Unis

Certain.

[Video Presentation]

Benjamin Sexson

So, Doug, what does that imply? I wish to be sure people perceive that.

Doug Unis

Sure, I wish to watch out to remain out of the weeds, so Ben, simply pull me out if I am going in too deep. However we have been doing knee replacements for 50 years with mechanical devices, mainly, that appear to be the sort of devices you’ll use to construct a chair. They’re actually simply jigs and noticed guides and that sort of factor.

And largely as a result of — and you may think about, that is pretty crude. You may’t make a lower that is 3 levels or 2.5 diploma, you’ll be able to sort of lower it proper angles. You may see that and choose that with handbook devices. However you’ll be able to’t actually make these little fine-tuned cuts. And so partially due to the constraint of the best way we have performed knees for the previous few many years, each knee will get put in basically straight in order that what we name mechanically aligned knee.

So, that — and the issue with that’s that very, only a few folks even have their knees lined up that method. And so about 20% of knee substitute sufferers do not love their knees.

And so a number of years in the past, most likely about 12-ish years in the past now, there was a transfer to align folks’s knees extra the best way that their particular person anatomy is as a result of we’re aligned in every kind of various methods. Some folks [Indiscernible] knee, some individuals are a bit of bit bowlegged, and there is been an increasing number of analysis sort of the unfold of how individuals are aligned.

The issue — one of many issues with giving folks again their sort of the best way that their knee must be aligned is that to try this with handbook devices is tough. And most surgeons cannot actually do it. And so — and there is a very sturdy motion on this path to sort of get folks to sort of align their knees — we name it customized alignment.

And so there’s an enormous alternative for know-how to make it extra attainable to get there, to get to these targets. The present know-how platforms which can be on the market, they actually weren’t designed for that. They have been designed to do a greater job of sort of giving all people that straight knee they usually try this. However the issue is that it hasn’t — giving all people that completely straight knee and hitting that focus on each time, it hasn’t really actually moved the needle on how nicely folks do after a knee substitute.

Even with robotic knees performed with the sort of conventional alignment, the identical 20% of individuals are nonetheless not tremendous proud of their knees. However for those who use the proper robotic to sort of give folks again their very own anatomy, unexpectedly, there’s knowledge popping out saying that they really do a lot, a lot better. And you’ve got 95% plus very, very proud of their knees.

So, we predict that there is — we’re designing a system that basically is the place the puck goes, as Ben likes to say, and that’s at customized alignment. So, we’re designing into it the power to resurface the joint to revive their affected person’s anatomy.

It is one of many causes we predict having a CAT scan is essential since you’re attempting to resurface their knee. And with out that CAT scan, there are quite a lot of techniques on the market which can be imageless that do not use a CAT scan and we predict a CAT scan is essential as we transfer extra towards customized alignment.

So, — anything you wish to say about that, Ben?

Benjamin Sexson

I feel you nailed it, Doug. I am seeing a few questions that relate to — are we mainly downgrading our product to enchantment within the FDA, I might say, definitively no, proper?

In something in life, in any engineering or there’s trade-offs, proper? So, the advantages of a totally lively system, we predict I articulated these, there’s additionally advantages to the present state-of-the-art. And so what we envision is a system that may do each. So, we wish a system that could possibly be lively when it must be lively and its most effective to be lively. And we wish a system that has different modalities when it fits the surgeon for the opposite modalities to be working.

We don’t imagine every thing we do at Monogram is for mainly the advantage of the affected person. If we did not imagine that we had a compelling product, I do not assume we’d be right here. I imply, Doug, you used it on this weekend. Do you assume it is — with out saying an excessive amount of, do you assume it is a downgrade?

Doug Unis

No, as a result of what we have performed is we have stored the protection options. We have stored the sort of the pluses of the lively system. We have stored all these security options. The hand-guided a little bit of it simply means that you can go sooner, which is finally a premium.

And as Ben was saying, we — there are some issues that you simply wish to be lively. For instance, our final imaginative and prescient for the corporate is — and the rationale it is known as Monogram is that we finally assume that pairing a robotic with customized 3D-printed implants is the place issues are going.

And customized milling for instance, the place you swap a noticed out for basically a drem [ph] or a bur, for customized milling, we predict lively is a a lot better method to go for that a part of it. So, we wish to maintain the lively match for that sort of factor. However for slicing with noticed, hand guiding positively helps

Benjamin Sexson

Sure. If hand guiding is the best way we go. Is semi-active, simply sort of broader. We now have a special embodiment that we predict enhances the equal, however we predict we finally may have a extra strong product. And simply sort of to recap the essential design options of our product and this is the reason we’re right here.

So, once you take a look at the present sort of state-of-the-art, proper, each system mainly follows these workflows. And perhaps, Kamran, you’ll be able to discuss a bit of bit in regards to the — our novel navigation that you have developed?

Kamran Shamaei

Particularly in regards to the — subsequent Gen or the present one?

Benjamin Sexson

mVision.

Kamran Shamaei

Okay. Sure. So, one of many main steps in joint substitute is mainly known as registration. Registration is a course of that permits the robotic to know the place the affected person’s anatomy are meaning the place the bones are, you identify it. So, at present, the — all of the robots out there, they use a know-how known as optical monitoring. And what meaning is that we place a collection of markers on the bone or the anatomy that we wish to monitor. After which we run some algorithms to register the bone. We mainly inform the bone the place the bone is after which from that time on we monitor these markers on the bone after which that is how we all know the place the anatomy of the affected person, all of the bones and all of the totally different tissues are through the process.

This a part of the workflow takes time. There’s — we’d like time to reveal the bone. We have to mount these markers on the bone, after which we have to register these — the affected person anatomy to their markers and so forth and so forth.

And these procedures complete, all these elements of the workflow might take round Quarter-hour with set up of the markers all through the precise knowledge assortment and registration. It might go between 15 to twenty minutes relying on the system.

So, the know-how that now we have developed right here and we’re now productizing it, mainly removes that step. And in a matter of a few seconds, we mainly register and begin monitoring the bone.

And so what meaning is that Quarter-hour-ish of the process — 15 to twenty minutes of the — I imply primarily based on the info you see right here is greater than that. However I am simply being harshens or so. That step is mainly totally eliminated. What meaning is that Quarter-hour of OR time, which could be very costly, is eliminated.

Along with that, all of the consumables and all of the navigation devices that we have to do the present monitoring and registration, they’re additionally eliminated. That’s, once more, a serious cost-saving per process, but additionally for OUS market, that’s mainly a game-changer, not solely within the U.S., however much more so for OUS as a result of consumables are usually far more costly when the foreign money is exchanged. Sure, so we’re very enthusiastic about that.

Benjamin Sexson

Good. Thanks Kamran. So, sort of simply actually recap the design options. So, we’re innovating on the surgical strategy and registration that is not going to be in our Gen 1, however it will be, the mBôs goes to be upgradable to mVision.

And the concept right here could be, as Kamran mentioned, no point-based registration and hopefully very streamlined navigation. We now have — we predict improve actually over among the state-of-the-art options with, we predict, improved joint balancing have been an enormous concentrate on for the corporate. We predict this can be a main good thing about being a CT-based system is joint balancing and particularly as you get to extra patient-specific strategies, our system accounts for issues like tibial rollback and among the actually the biomechanics, which isn’t a trivial factor.

After which the bone preparation, we predict now we have a really excessive effectivity mode of eradicating bone. And — however now we have enhanced security and — our mVision now we have a cleared mPress implant line that is able to go. So, now we have state-of-the-art cement-less implants which can be already accepted.

After which as we’re profitable, our plan is to scale to different purposes. Our plan is to scale to affected person optimized 3D-printed implants that can occur in collection. So, what we have mentioned is we’re beginning with the mPress implant line. The tibial part shall be changed with a novel tibia part that Doug has been spearheading the design of after which we’d search for additional optimizations from there.

After which lastly, launching OUS, we predict, can be a reasonably enticing I am unsure. I feel which may have been a working [ph] bullet. So, I will — mainly, we imagine that the answer now we have, as Kamran mentioned, is sensible OUS as nicely from a consumables perspective.

Simply by way of sort of how we’re serious about what the corporate — simply comparable firm evaluation for predicates — or not predicates with comparable firms within the house that bought approval. There’s not quite a bit right here. It is a very consolidated market. There actually have not been quite a lot of good comps.

I feel we might argue why Monogram is totally different than any of those, why we predict that the worth of Monogram in these metrics could not totally replicate the worth of sort of what we’re doing right here and the way disruptive what we’re doing could possibly be. However this provides you some thought of the place an organization like Monogram could possibly be post-approval, however actually not a forecast or make your individual determinations of what you assume Monogram could possibly be value. However these are the metrics that bankers and so forth typically take a look at.

And now I simply wish to recap our funding thesis. So, our imaginative and prescient is to commercialize an orthopedic robotic that advance the standard-of-care in orthopedic robotics, whereas addressing the financial obstacles of orthopedic robotics right now.

So, once you take a look at robots in the marketplace right now, we do not see any robotic in the marketplace right now that will increase throughput, so will increase surgical time — decreases surgical time and we see each robotic in the marketplace right now, mainly requires incremental consumables.

So, you are including value, you are including time, after which the medical profit for any system that does not actually do customized surgical procedure very nicely is form of, I might say, sort of marginal at greatest.

You may most likely do a mechanical knee substitute with handbook devices extra precisely than you’ll be able to with the robotic. So, the worth proposition of robotics actually hasn’t been totally realized. And our imaginative and prescient is to create a robotic that solves financial issues and medical issues.

So, how will we remedy the financial issues? We’ll attempt to make a robotic that is sooner. How are we going to try this? We’ll use know-how like mVision, the place we do away with point-based registration and hopefully do away with all the setup putting bigger charges. We now have very, very environment friendly slicing. After which we will have a system that does not — hopefully would not require any consumables within the navigation. So, for those who think about sort of eliminating the incremental consumables.

After which you concentrate on a system that may scale to different medical alternatives as a result of it’s such an unbelievable piece of {hardware}, proper? It is a seven-joint robotic arm, it has quite a lot of dexterity. We are able to nil hip cavities in prototype variations of our design in simulated surgical procedures.

We are able to — if you concentrate on minimally-invasive surgical procedure, having a system that could possibly be lively when it is sensible to be lively or semi-active. It actually — what we’re envisioning is one robotic for the working room, coaching, servicing, gross sales, all synergistic, mainly a Malicious program that for those who get it right into a hospital, now your backbone group has one thing to promote. Now, your knee group has one thing to promote. Now, your hip group has one thing to promote, your shoulder crew. That is actually the imaginative and prescient of the corporate. After which over time, now we have very compelling customized implant designs, and we plan to improve the mPress implant line to an increasing number of enhanced implants that we predict will deal with the — mainly the working capital burden.

I feel that mentioned, we wish to shut with this slide. First off, I wish to say one thing as a result of there are those who publish on-line and I simply wish to let you know, as a administration crew, we do learn these feedback. So, if you wish to talk with us, we do see the place individuals are pissed off and what they’re saying. And I wish to say a few issues proper out of the gate.

We’re not pleased about the place the inventory is at. It would not make us really feel good. We’re aggressive. We imagine now we have one thing compelling and that is not one thing that makes us pleased to see.

I am going to say to that as nicely, none of us as a administration crew have offered a single share. I have not offered a single share. Noel hasn’t offered a single share. Kamran hasn’t offered a single share. In truth, Kamran, I feel to procure not too way back — you participated within the IPO, I imagine. Doug hasn’t offered a single share.

So, we’re all on this. We’re not promoting. And that is sort of an fascinating simply form of anecdote, however for those who return and look, Mako Surgical, their inventory was down 75% six months earlier than Stryker purchased them for $1.6 billion. And when you concentrate on how a lot worth that know-how has added to the Stryker portfolio, I imply, it is fairly exceptional.

So, our remark to people who find themselves panicked is typically the market is true. It actually is within the short-term, a voting machine on sentiment, however we’re right here for the long-term. We’re not promoting. And we imagine in what we’re doing, and we’re right here to stay it out and do every thing we are able to to convey this know-how to market.

And if the inventory goes all the way down to $0.01 or if it goes to $10, we’re right here for the long-term. Finally, that is about know-how. We’re attempting to do one thing within the orthopedic market, proper? This is not oligopoly. We predict that there is been a shortage of innovation within the house. We really feel prefer it’s to the detriment of sufferers and we’re really attempting to do one thing and make a medical distinction and that is what drives us.

What would not drive us is the inventory value going up there and down each day. What drives us is — how will we make a know-how answer that’s going to reinforce affected person lives. That is the elemental motivator behind our firm. All people who’s right here has the identical ardour for sufferers. And in order that’s actually how we’re serious about it going ahead.

And with that, I wish to open the ground for questions. And I’ve seen a lot of impressions — questions right here that we sort of perhaps wish to faucet into. I am going to put them onto the display. I do know people have been asking quite a lot of questions right here. So, you see right here.

Query-and-Reply Session

A – Benjamin Sexson

Let’s put one from Greg. So, Greg says, I fear in regards to the lack of capital to maneuver it to the tip. It simply would not appear to be you may have sufficient to finish this system.

So, Greg, what you need to perceive is once you’re a start-up firm and any person says, by no means, the crew you are right here is we’re not quitters. That is — you are among the — we’re very, very, very, very devoted, okay? I labored at Monogram for 2 years with out earning money. And if I’ve to try this once more, I’ll.

If I’ve — and this isn’t going to die. It might die, it might fail. We could run out of cash high quality, however I refuse to let this factor die. If it does, it will be a large disappointment to — I do know, to me personally, to the crew, it will be devastating. I do know Doug, I do know Doug needed to sacrifice quite a bit.

We could run out of cash. There could also be individuals who do not imagine on this and do not wish to fund it and wish to see us fail. And the one method this might die for my part is that if this is not really a good suggestion.

If the merchandise we’re growing doesn’t assist enhance affected person outcomes, if it isn’t a great product, if the market would not need this product, then it ought to die. However so long as we imagine that that is really going to make a medical distinction, so long as we imagine we even have one thing. I feel the crew — I feel we will refuse as a lot as we are able to to give up.

I am not saying that we will not fail. We now have a going concern from the opposite — I feel that really bought cleared. However even when we did have one, there’s quite a lot of threat right here. We’d fail. It is not a assure of success. However what I can assure is that we actually wish to see this achieve success, and our motivation is extra than simply to become profitable.

We care about this know-how. I do not know if I communicate for everybody else Doug, if I communicate for you, we’re not okay simply seeing this all method, I feel there is a market want that we are attempting to deal with. So–

Doug Unis

Sure–

Benjamin Sexson

And pondering of capital, we do have the capital, we predict, to submit the 510(okay), proper? And that may be a main catalyst, proper? So, after you have a product that is submitted for clearance, then that basically does change the sport in our opinion. So, sure, Doug, go for it.

Doug Unis

Sure. I feel, look, you take a look at the market and also you take a look at the slide that Ben confirmed earlier than the place Mako nonetheless has basically the monopoly on the robotic market, even if a kind of robots on the checklist really got here out earlier than Mako and has basically nothing.

So, what occurred was Stryker got here and purchased Mako, it has been extraordinarily profitable at driving gross sales of implants for them. And so there was a simply determined drive out there to get a robotic out there and it was sort of cynical. It was like, we’ll simply get a robotic on the market and surgeons will use it as a result of the robotic’s a robotic.

And that seems to not be true, like surgeons know what helps them within the working room. They know what helps sufferers. They usually have largely rejected these different robots that have been sort of introduced on to the market. And we’re that.

I imply, I am a surgeon. Like I do know what helps me within the working room. I do know what my colleagues are speaking about and what helps them. And so we’re actually, actually delicate about not simply placing one other robotic in the marketplace and pondering that surgeons will see it as equal to every thing else that is on the market. That is simply not the case.

So, we’re engaged on a product that’s actually going to, as Ben mentioned, drive higher affected person outcomes, but additionally be a product {that a} surgeon desires of their fingers. It is a product that really lowers their blood strain, makes their day go simpler and sooner. And that finally is how these items get adopted and have endurance. So–

Benjamin Sexson

Thanks Doug. Sure. So, once more, there’s threat. Capital is tight, however we predict now we have a plan to execute and we’re centered on execution and doing all we are able to.

So, Kamran, this one is for you, will the software program be upgradable so as to add an AI component when AI know-how matures to extra. So, perhaps you’ll be able to speak about AI and–

Kamran Shamaei

Certain. Sure. So, our software program already has AI parts built-in in its pipeline, we extensively use them. And that is one of many advantages of our system the place we do not want like a person to take a seat again there and simply generate no matter knowledge the robotic must function within the OR. We have already got these.

However sure, our software program is, I might say, not solely software program, but additionally our {hardware} is designed from the bottom as much as be upgradable and to be modular and to assist multi-application.

Simply think about what number of years now we have spent growing this robotic to the extent of maturity that it has proper now. Now, think about if we wished to develop one other robotic for, as an example, backbone. Then we had to return to love step one and spend like we are able to spend round like 5, six years, 4 years, what number of years to get to the place we’re proper now and develop a backbone process.

However our system will not be like that. Our system is already upgraded. In a matter of months, we are able to convert this for a special software, combine AI modules in it and so forth and so forth.

Just like the mVision ambition that I discussed, that is very a lot AI-driven and our engineers right here already run it on our system for his or her proof-of-concept, for the prototyping, and all the opposite for the present model that now we have in-house.

So, the reply is sure. It is already — it already has AI components and is totally integratable and the software program is totally a lot [Indiscernible]. So, any part that at present — any module that’s at present doubtlessly not AI-driven if — or when now we have the AI base model of that, we are able to simply substitute it.

Doug Unis

There are such a lot of locations in our pipeline and in our know-how the place AI could be plugged in. Kamran simply touched on among the technical stuff. However even on the medical aspect, whereas I used to be speaking earlier about simply aligning knees and determining if all people would not get a straight knee anymore, like what’s the proper goal. And there is quite a lot of dialogue about that, like what — the place do you have to put a person’s knee if not like on this straight line that we have all the time performed.

An AI can actually be utilized in that sense to determine prefer to drive the place will we — a selected affected person, the place will we — what’s the proper goal for that affected person? I feel the — it is a very wealthy surroundings for utilizing AI in that sense and one thing that can get higher as we do extra instances, and because the know-how matures, as we get extra CAT scans, extra imaging, extra surgical knowledge, et cetera. Actually thrilling alternative.

Benjamin Sexson

Sure, that is an fascinating one from Stuart [Indiscernible] however he says there are individuals who wish to see it fail. They’ve deep pockets after which they decide up the IP in a fireplace sale.

I — Stuart, I do know I am an optimist. I do know Doug is an optimist, I do know Kamran is simply too, I do know — we actually imagine in attempting to — we imagine that the standard-of-care in orthopedics that for those who take a look at the market, proper, and that is true of any oligopoly.

What occurs with oligopolies, it will probably occur is you’ll be able to actually have two issues that I feel will not be optimistic. One is you actually mainly haven’t any new market entrants, proper? It’s totally troublesome for brand spanking new market entrants. And you can begin to have, in our view, over time a complacency the place the — these incentives to truly attempt to change issues and make issues higher and attempt to actually push the ball, the financial incentives begin to not be there anymore, proper?

Is it actually — is there actually an financial incentive to remove the obstacles to entry for brand spanking new gamers, proper? We really had just-in-time implants. Is that basically what’s greatest for incumbent gamers that have already got billions and billions of {dollars} to fund the working capital? So, that is true.

However alternatively, what we care about and why we’re doing this as sufferers. So, we basically imagine that. And there could also be many individuals who assume what motivates us is we’re simply attempting to get wealthy or we’re simply attempting to no matter. And I can let you know proper now that, that’s not the motivation of this firm.

The motivation of this firm is to attempt to advance the standard-of-care for sufferers. That is actually why we’re right here, what we’re attempting to do. And failure to me could be we fail to develop a product that does that. And each resolution we have comprised of an engineering perspective has been to attempt to make issues extra correct, make issues sooner, make issues simpler to make use of, drive utilization of robotics.

We imagine that the utilization of robotics will assist sufferers. And I will stick my neck out one stage additional. Each robotic firm that we’re conscious of in the marketplace has tried to be target-agnostic. So, robotic firms have mainly tried to say, okay, surgeon, do no matter you wish to do. If you wish to do a mechanical knee, do a mechanical knee. If you wish to do a personalised knee, do a personalised knee. We’re simply right here promoting an instrument. That is not the view we’re taking.

We really imagine that clinically talking, now we have very sturdy biases about what a knee substitute must be like. And our purpose is to attempt to drive the science there to show it.

Now, I am not saying we’re proper, however I feel that it is crucial that know-how firms in medication really attempt to determine what one of the simplest ways to deal with a affected person is and do not simply form of maintain doing the established order. And I feel that is a part of what frustrates folks about Monogram is that we’re biased — now actually, our instruments, any person can take our software and do a mechanical knee as a result of that is what they wish to do. However we shall be researching. We shall be attempting to alter how folks take into consideration knee replacements and we shall be attempting to assist reply the query of what’s the greatest goal, as a result of finally, why we’re doing this isn’t simply to make a software that cuts bone, however we wish to have a software that really helps drive affected person outcomes.

So, does that imply that any person goes to attempt to kill us? Certain. However I do imagine that if the mission is there and real and powerful sufficient, can any person squash it? Certain. However we’re extremely motivated to attempt to do that for the proper causes, and we’ll see what occurs.

And hopefully, that prevails as a result of I do assume that these firms that we’re competing towards, I feel they do care about sufferers. I simply assume it is generally being so massive, it may be troublesome. However I do assume that, that exists within the orthopedic house, the place I do imagine there’s lots of people with integrity, the place that is what they need. And I feel that an organization that cares about that, I do imagine that it really does resonate. So, that helps how we’re serious about it.

Kamran Shamaei

I simply wished so as to add, Ben, if I could?

Benjamin Sexson

Sure, after all, go for it.

Kamran Shamaei

So, I wish to discuss on the behalf of the engineering crew, which is true now just about aside from a few folks, a lot of the firm. We’re very lean. I can let you know and Denis, my witness, we labored across the clock. We labored each evening, and we get up at 7 A.M. again to work. And that is not the factor that we do sooner or later or two day, that’s mainly for all times ever since we joined Monogram.

We do not work like this out of worry. We work like that as a result of we love what we’re doing and we love what we’re growing. And — the instance I all the time give an individual from — the instance I all the time give is Alexander the Nice, when he began, the individual — kings have been laughing at me and see who wrote the historical past, proper? I simply restrict to that.

Benjamin Sexson

That was good. No, it is deep. We’re getting sentimental on this video. Sure. So, here is simply one other query for Mark. How do you intend to boost cash within the coming months earlier than you go to market, proper?

So, that is an fascinating query. As lots of you understand, we’re crowdfunded. We have been crowdfunded all alongside. I do assume there have been alternatives for our crowdfunded buyers to get out at accretive costs. Now, I actually would have hoped that it could have been increased for longer and whoever wished to get out and become profitable, might have. Whoever invested in our crowdfunding and continues to be with us, sadly, you are right here for the very long time, the lengthy haul.

Generally there’s an expression such as you began to become profitable, however now you are right here for the tech. Now, it is turn out to be a long-term alternative, proper, with the costs the place they’re.

When now we have gone out to institutional buyers, they actually have wished to see issues that we could not really reply. So, we did not know what number of sufferers the FDA was going to require for a medical trial as a result of we hadn’t submitted a medical trial protocol. And we hadn’t submitted a medical trial protocol as a result of the FDA hadn’t definitively — they usually nonetheless have not advised us whether or not we have to do a medical trial. So, why would we submit a medical trial protocol to them if we needn’t do a medical trial and bias the entire dialogue, proper?

So, there are some issues which have taken time which were troublesome for us to fund increase round, proper? As a result of if you do not know what the finances is to do one thing, it is laborious to get it funded.

However now quite a lot of these items are getting derisked, proper? So, we talked in regards to the dialogue we’re having with the FDA in April. That is going to be a massively derisking factor the place we now have clear solutions for all of that.

We’re planning to submit our 510(okay). That could be a big milestone. That has been a large, huge quantity of labor. There are — hopefully, we will get a medical trial accepted outdoors of the U.S. That is a really vital milestone.

So, now I feel we’re getting in an improved place the place we are able to inform the story and hopefully, we are able to discover buyers that imagine within the alternative simply as a lot as we do and resonate with the mission of the corporate, which is to attempt to enhance affected person outcomes, that is actually why we’re right here.

We now have, and I am simply going to drift this, there was some dialogue of ought to we even take a look at going again to — one of many issues that is actually fascinating, and it has been an issue for us, however it’s an issue that I really like and hate.

So, one of many issues now we have proper now could be our inventory would not have quite a lot of quantity, and that is as a result of we do not have a really massive float. And the rationale we do not have a really massive float is as a result of quite a lot of our buyers, the truth is, nearly all of our buyers, — and I have not pulled this like as of the sort of latest value motion. However quite a lot of our buyers invested as a result of they really need Monogram to succeed, as a result of they care in regards to the know-how, they usually have been actually simply virtually like a GoFundMe. They weren’t involved in regards to the returns on the inventory. They have been involved about this know-how attending to market.

Our common investor was 65 years previous and truly cared in regards to the know-how. And any time we do any sort of communication, we’re inundated with e-mails from individuals who really care in regards to the know-how. So, now we have an viewers that cares in regards to the know-how and is enthusiastic about extra than simply sort of maximizing to the very much less penny returns.

And as a administration crew, now we have been serious about, okay, nicely, perhaps there’s a chance to — at these ranges, give entry to individuals who care in regards to the know-how sort of yet one more alternative with hopefully quite a lot of accretive milestones. We’ll speak about that extra that is in dialogue, however simply one thing to have in your minds as we proceed shifting ahead.

So, I wish to be sure that we maintain attending to questions people have. So, — okay, right here we go. He’ll why a lot engineering, now I believed the product was submitted to FDA and sort of frozen till approval.

So, Mark, now we have not but submitted to the FDA. In truth, the engineering on this product is basically performed and has been for a very long time, Kamran can communicate to that. Proper now, it is simply going by all the testing that is required for the submission. So, you need to show to the FDA that your product is protected and efficient.

And that’s not a trivial course of. We’re making quite a lot of headway and we plan for that to be largely full within the coming months. So, all the engineering or the predominant engineering is on the mVision navigation, which is our novel navigation know-how.

I feel there’s been quite a lot of confusion and a part of it’s once we say 510(okay), and I do see there’s some individuals who assume now we have been deceptive in regards to the timing of the medical trial and so forth. We now have by no means been deceptive in regards to the timing of the medical trial. We have all the time mentioned that we’re discussing with the FDA. We are attempting to find out whether or not or not medical knowledge could be wanted and there was quite a lot of uncertainty round that.

And in reality, we discuss to regulatory consultants who nonetheless assume — nicely, at this level, administration has a robust feeling that we — it could be good to have a medical examine with this embodiment. However it’s by no means a definitive. The FDA would not provide you with definitive solutions and the time it takes to get to a degree of granular discussions could be very time-consuming as a result of each time you undergo the FDA for a response, it is 60 days for them to get again to you. So, you are speaking a few fairly tedious course of. However–

Kamran Shamaei

If I can add Ben.

Benjamin Sexson

Sure. Certain.

Kamran Shamaei

Sure. So, if the query is why did engineer crew is a giant, I might say, the engineer crew is definitely comparatively small in comparison with all of the rivals that I am conscious of. We are literally order — no less than one order of magnitude smaller by way of measurement.

But when the query was, why will we accomplish that a lot engineering work as a result of it actually takes a lot engineering work to get the surgical system of this scale to the market. And per Ben’s level, sure, no, now we have not submitted to 510(okay) by FDA but.

Benjamin Sexson

Sure. So, we bought a query right here about analyst protection, investor roadshows, strategic buyers. So, we just lately offered on the Canaccord Convention. Loads of it’s sort of what I mentioned, proper, is institutional buyers will not be as inclined to take threat, proper? They wish to know what the finances is, what the milestones clearly are, what the timelines clearly are and so forth, proper? So, we’re now attending to the purpose of getting that very clearly outlined for us. And we predict that that is going to be useful for them.

Now, what’s irritating is the inventory actually sort of taking place and changing into much less enticing for fundraising. And so — we’re not enthusiastic about diluting our shareholders. We actually need people who’ve been with the story with us a very long time to thrive. So, it is a actually delicate stability of attempting to maneuver the ball ahead so far as you’ll be able to, however clearly, derisking these milestones.

So, what now we have mentioned is we predict we’re in a great place to get by the verification and validation. We predict we’re in a great place to submit 510(okay). We predict these are fairly accretive milestones, after which discussions are ongoing.

Now, in the case of the analyst protection, that is one thing that’s troublesome to regulate. We now have talked to quite a few funding banks, and now we have retained funding banks. We didn’t just like the deal movement to this point that we have been seeing, however hopefully, that improves as we sort of proceed to maneuver the ball ahead. And customarily talking, initiating a relationship with an funding financial institution and dealing with them is useful to analyst protection. So, the 2 are largely tied collectively.

Okay. So, we bought perhaps — we’ll do 5 or 10 extra minutes right here. Every other questions for the crew? Okay. It is a good one. So, I feel this pertains to the medical trial, however it’s useful to simply speak about abroad.

So, the — there’s quite a lot of synergy to the OUS medical trial that we’re working. I — what we have mentioned is we have recognized the CRO. We have recognized the distributor. We have recognized the PIs. We all know we shall be utilizing the — mainly the mPress implant, cemented model of that. So, we predict that we’ll be — require much less stock and that it will likely be sort of much more environment friendly to run a medical trial OUS.

So, for strategic causes, it isn’t useful for us to say extra. The Indian — once we speak about sufferers, proper, there’s clearly an enormous want in the USA, however Kamran and I had the chance to be in an working room outdoors of the U.S., not too way back. And what I can let you know is that there’s a very critical want for know-how in sure markets outdoors the U.S. And I feel this might do quite a lot of good for humanity to have merchandise that mainly make surgeons higher at their jobs on the market.

So, we’re getting some feedback about extra common updates. And we have tried to have a stability of creating well-informed updates. It is — there’s quite a lot of elements that we hope folks can pay attention to, proper? We’re an early-stage firm, and we wish to watch out about how a lot we are saying once we say it and so forth. So, it is a bit of little bit of a stability.

However simply because we have not been speaking as steadily doesn’t imply we’re not working extraordinarily laborious, and we’re working very, very laborious and the crew is very devoted. We’re going to attempt to make extra of an everyday cadence of offering updates now that we’re sort of nearer to mainly a few of these huge milestones that we have described.

Ankush Sethi [ph] says, India is a big market, Sure, we agree, it’s a big market. What is the inhabitants of India proper now, what number of billions, Kamran are you aware?

Kamran Shamaei

1 billion to 1.5 billion.

Benjamin Sexson

There’s lots of people who want knee replacements.

Kamran Shamaei

Sure. However I feel for India, not solely inhabitants, however stage of sophistication of the surgeons over there and the healthcare familiarity with new applied sciences, with English, there are quite a lot of advantages to working with India for positive.

Benjamin Sexson

Sure. What’s good about India too is the inhabitants is receptive to know-how. They are not terrified of robotics.

Sure. Sure, it is Ankush says, you are able to do research there, too. Sure, we predict India is a reasonably mature marketplace for medical research.

Okay. Any individual is asking — so Greg is saying, so are you able to inform us what the international sale is being? So, once more in — just about — I imply, if there is a market on the earth the place you needn’t undergo a regulatory course of, please inform us. In the event you’re from someplace the place Monogram might simply go and promote robots which can be unapproved, we want to find out about it.

However sometimes talking, there is a regulatory course of the place to legally market your units and it would not matter the place, it has to undergo the correct channels, proper? So, what now we have mentioned is now we have employed a CRO. We now have discovered a distributor. We now have discovered PIs, now we have discovered websites, and we plan to hopefully provoke a medical trial outdoors the U.S. So, the — hopefully that’s useful context.

Benjamin Sexson

Okay. So, perhaps we get one or two extra final questions. Anyone have every other questions for the administration crew? Hopefully, this was useful. We respect all people’s time.

I do not assume quite a lot of public firms have this stage of engagement, however we felt prefer it was actually essential to provide our buyers an opportunity to speak to us.

One factor I’ve all the time mentioned this, proper, is thanks in your assist. We actually, actually respect it. In case your funding in Monogram is inflicting you stress, your outsized. Use correct threat administration. That is a part of a diversified portfolio, however I do not need anyone aping into this and going all in, proper? That is not what this presentation is about.

We would like folks to be conservative, cautious. If you wish to be supportive of the know-how, we respect it. However do not put your life’s financial savings into Monogram, please don’t try this. Simply assist us with no matter you’ve got. And even in case you have nothing, you comply with the story, share Monogram’s know-how, maintain people up to date on what we’re as much as. So, I do see individuals who appear very distressed, you most likely overpositioned for those who’re distressed by your funding in Monogram.

Nice. We actually respect all people. Thanks a lot for sticking with us, and we hope to do that with a extra common cadence. I might say we bought quite a lot of people who caught with us the entire thing, in order that’s nice.

We actually respect your assist and we hope to talk once more with you quickly. So, thanks, all people. Actually respect it. Thanks a lot. You comply with the story, share Monogram’s know-how, key people up to date on what we’re as much as. So, I do see individuals who appear very distressed, you are most likely overpositioned for those who’re distressed by your funding in Monogram.