Milestone Scientific, Inc.

Hey, ladies and gentlemen, and welcome to the Milestone Scientific second quarter 2021 business update call. All lines have been placed on a listen-only mode, and the floor will be open for questions and comments following the presentation. If you should require assistance throughout the conference, please press star zero on your telephone keypad to reach a live operator. At this time, it is my pleasure to turn the floor over to your host, Natalia Rudman. Ma'am, the floor is yours.

Thank you. Good morning and thank you everyone for joining Mobstone Scientific second quarter 2021 financial results conference call. On the call with us today are Ariane Haverhal, chief executive officer and Keisha Harcum, controller of Mobstone Scientific. The company issued a press release today, Monday, August 16th, containing second quarter 2021 financial results, which is also posted on the company's website. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212-671-1020. The company's management will now provide for prayer remarks reviewing the financial and operational results for the second quarter as of June 30th, 2021. Before we get started, we would like to remind everyone that during this conference call, we may make forward-looking statements regarding timing and financial impact of Mothlone's ability to implement its business plan, expected revenues, and future success. These statements involve a number of risks and uncertainties and are based on assumptions involving judgment with respect to the future economic, competitive, and marketing conditions and future business decisions, all of which are difficult or impossible to predict accurately, and many of which are beyond Moscow's control. Some of the important risk factors that could actually result to differ materially from those indicated by the forward-looking statements are general economic conditions, failure to achieve expected revenue growth, changes in our operating expenses, adverse patent rulings, FDA or legal developments, competitive pressures, changes in customer market requirements and standards, and the risk factors detailed from time to time in Milestone's periodic filings within the Security and Exchange Commission, including without limitation, Milestone's report on the Form 10-K for the year ended December 31, 2020, and Milestone's report on Form 10-Q for the second quarter ended June 30, 2021. The forward-looking statements made during this call are based upon management's reasonable belief as of today's date, August 16th, 2021, Milestone undertakes no obligation to revise or update publicly any forward-looking statements for any reason. With that out of the way, we'll now turn the call over to Ariane Hatterhall, Chief Executive Officer. Please go ahead, Ariane.

Thank you, Natalia, and thanks to everyone for joining us today. I'm pleased to report that our revenue for the second quarter of 2021 increased more than 14-fold to $2.4 million versus $168,000 for the same period last year. Our dental business continues to generate strong cash flow as a result of dental offices reopening across the country and around the world. Moreover, we have enhanced our sales and marketing activities, which should support sales of our dental instruments and help drive high-margin recurring handpiece sales. We believe our progress illustrates the positive response and growing market demand for our dental products. Through our new decentralized dental sales strategy, we are working towards our goal of building a robust distribution network in the United States and Canada. In parallel, we are focusing our efforts into new global markets while supporting our present distributors. Overall, we are encouraged by the growing interest in our dental technology. Our dental business continues to generate positive cash flow on a standalone basis, and as we continue to grow this business, we expect to benefit from high recurring margins on our disposables. Turning now to our medical instruments. In the first half of 2021, we began selling CompriFlow epidural and cath jack disposables to four medical centers in the United States and one in Europe. We recently reported that the University of Texas Medical Branch Health Clear Lake Campus Hospital has initiated use of our CompuFlow epidural instrument, which follows the successful use of the instrument and disposables at the UTMB Galveston Campus Hospital. This expansion within the UTMB Health Network is a validation of the favorable response to our technology by anesthesiologists. The purchase orders received from these medical centers reinforces our confidence in the outlook for both CAT-CHECK and CompuFlow and the value proposition to other healthcare systems as we strive to become the new standard of care in epidural procedures and the testing of catheter placement. We believe these expanded orders are confirmation that our technology provides a level of safety and efficiency not currently available to medical professionals using conventional standard of care. The clinical and safety benefits of the CompuFlow epidural systems are backed by extensive published clinical data demonstrating significant reductions in epidural punctures and complication rates. We expect to announce several additional publications that further reinforce the clinical benefits of our technology. In addition, the CompuFlow instrument has been shown to significantly reduce the total cost per hospital stay, providing a direct economic benefit to healthcare institutions. Since joining Milestone and subsequently taking over as CEO, we have embarked on a number of initiatives to move the company from an R&D focus to a sales-focused sales organization. We will continue the development of the instruments for additional areas of drug delivery in diverse areas of medicine. Bear in mind, during the peak of the pandemic, our primary consideration was preservation of capital. However, now as things are trending towards normal, we are investing in marketing and sales. Towards this end, we have completely overhauled the sales and marketing teams. I've set ambition goals for our sales team with very specific near-term targets that they are held accountable for. That said, I've been pleased by the traction we are gaining and the feedback we are receiving from the marketplace. We now have a direct sales team of 11 sales representatives, including Chad Trachok, our newly appointed Vice President of Sales for Medical. Chad brings an impressive track record in both medical devices and in the field of epidural drug delivery, which I'm confident will help accelerate our growth and support our expansion initiatives. In the short time since joining the organization, He has already had a meaningful impact. Chad brings extensive relationships with key opinion leaders and physicians in the field of epidural drug delivery, which has been extremely helpful in opening doors. Overall, these sales initiatives are taking hold, and our sales pipeline is robust. I know our investors are expecting updates on new hospitals. I can reassure you We are in late stage discussions with a number of hospitals. We are working with large and complex organizations that are also dealing with the global pandemic. The feedback from both anesthesiologists and healthcare institutions remains positive given the safety and economic benefits of our instruments. This feedback that I have witnessed firsthand has only strengthened my conviction that our instruments can, in time, become the new standard of care. On the international front, we remain focused on expanding our global footprint. Earlier this year, we announced we had commenced sales at the University Hospital of Würzburg in Germany. They are increasing utilization within the hospital and are now placing repeat orders as one of the leading national hospitals in Germany. and highly regarded across Europe, they are a great referential account as we seek to bring on new hospitals in Europe. We are also in the process of adding new international distributors to expand upon our internal efforts. At this point, I'd like to turn the call over to our controller, Kisha Harkam, to go over the financials in detail. Please go ahead, Kisha.

Thank you, Arjun. Total revenue for the three months ended June 30th, 2021 was 2.4 million versus 168,000 from the same period last year. Dental revenues increased by approximately 2.2 million due to the reopening of dental office throughout the country and the rest of the world. Medical revenue for the three months ended June 30th, 2021 increased to 21,000 as compared to the three months ending June 30, 2020, which reflects initial purchase orders from our new customers. Revenue for the six months ending June 30, 2021 was $5.4 million versus $2 million for the six months ending June 30, 2020. Dental revenue increased approximately $3.4 million for the six months ending June 30, 2021, as compared to the six months ending June 30, 2020 medical revenue increased to 92 000 compared to the same period gross profit for the three months ending june 30th 2021 was 1.4 million or 50 56 of revenue versus 112 000 or 57 of revenue for the three months ending june 30th 2020. gross profit for the six months of 2021 was 3.2 million or 61% of revenue versus 1.4 million or 71% of revenue for the six months ending 2020. The decrease in gross margin is due to an increase in sales to China, which have a lower growth margin. Operating losses for the three months ending June 30th, 2020 was approximately 2.9 million versus approximately 3.2 million for the three months ending June 30th, 2020. Operating losses for the six months of 2021 was approximately 3.9 million versus approximately 4.8 million for the same period last year. Net losses was approximately 2.7 million or 0.04 per share of the three months ending June 30th, 2021 versus a net loss of 3.2 million or 0.06 per share for the comparable period in 2020. Net loss for the first six months of 2020 was 3.4 million or 0.05 per share versus net loss of 4.8 million or 0.09 per share for the comparable period in 2020. Now I would like to turn your attention to liquidity and capital resources. At June 30, 2021, the company had cash and cash equivalents of approximately $16 million and working capital of $17.2 million versus working capital of $15.7 million on December 31, 2020. At this point, I'll turn the call back over to Arjun.

Thank you, Keisha. As Keisha mentioned, we continue to maintain a strong balance sheet with approximately $16 million of cash and cash equivalents as of June 30th, 2021. We are very well funded and have no plans and no need to raise additional capital. In addition to hiring more salespeople and expanding our sales funnel, as I mentioned earlier, several trials are underway with leading hospitals. We are witnessing growing interest in our CompuFlow epidural instrument and cath check system among anesthesiologists and hospitals and believe we are well positioned to take advantage of the growing momentum and adoption of our technologies as we pursue our goal to become the new standard of care for epidural procedures in labor and delivery. Although we face challenges during the pandemic, we are back on a strong growth trajectory, and I'm encouraged by the outlook for the balance of 2021 and beyond. We remain committed to driving shareholder value and look forward to providing further updates as developments unfold. I'd like to thank you for joining the call today. At this point, we would like to open the call up to questions. Operator?

Thank you. The floor is now open for questions. If you do have a question, please press star 1 on your telephone keypad at this time. Questions will be taken in the order they were received. If at any time your question has been answered, you can remove yourself from the queue by pressing 1. Again, ladies and gentlemen, if you do have a question, please press star 1 on your telephone keypad at this time. Our first question comes from Anthony Zendetti. Can you state your question?

Sure. Hi, this is Anthony Vendetti from Maxim Group. Good morning, Anthony. Good morning. How are you? You mentioned that Chet has 11 sales reps. I was wondering if you could talk about, you know, are they completely trained? Do a couple of them still need to be trained? And once they're trained, has there been a sales quota set for them at this point? And then I have a couple follow-ups.

Yes, a very good question and I think you asked a couple of questions within this sentence. So let me go one step back. Have the sales force been trained? Absolutely. At the beginning of the quarter, April as you know and as we commented on in previous calls, I would say we had a handful of sales representatives and then in the second quarter, as there was more clarity about the pandemic in terms of the increase in vaccinations, we aggressively started by recruiting more sales representatives. That all culminated in an in-depth, very fast-track onboarding program. And as of today, all the sales reps have been trained and are equipped with the right tools to be successful in the marketplace. So that's a continuous process, so to say. As we speak this week, there is a specific three-day sales meeting for the sales rep to make sure that everybody is aligned for the goals that are set for the second half of this year. So yes, the sales reps have been properly trained. Yes, they also do get a target in terms of quotes. I will not go into detail how many quotes per sales rep. It also depends a little bit on the territory and the presence of the hospitals that are within the territory, but rest assured that yes, the sales representatives, they do get quotes in terms of targets, in terms of hospitals that they have to have in their portfolio to be able to come up with new opportunities for the company. So the results of that and also I would say also in combination with the experience that Chad brings, his coaching, his salesmanship, his mentorship, that is very encouraging for me as I have seen an immediate effect in an increase in the number of demos and trials of numerous accounts that we are currently active in. Does that answer your question, Anthony?

Yes, thank you very much. And then just as a follow-up, you said you're in late-stage discussions with a number of hospitals. You know, a number is obviously a relative term. Is that a handful, four or five, or is that you know, 10 or more? Or is this, is, I was just trying to get a better sense of that. And then, and then just in terms of the, you know, there's late stage discussions and then there's a pipeline of what you would consider reasonable targets. Maybe you've had, you know, you've reached out, you've had early stage discussions. How would you, how would you quantify those two categories?

Now, again, a very good question. At the same time, I'm afraid it, I cannot share in detail the number of hospitals because at first it will create some false expectations or expectations. This update call is an update call on the results for the second quarter. But again, I would like to reiterate and reassure you that the targets have been set. We have seen a number of hospitals where we actually went through the value assessment committee, so that is short-term, mid-term opportunities for us. And then to your point, yes, the pipeline is of course completely focused and targeted on the period between now and the end of the year. Like I said in earlier calls as well, This year is so important for the company because we are in a turning point. We want to create that baseline with a number of hospitals during the course of this year from which we then can build further on in 2022 in terms of recurrent revenues of those initial hospitals and in addition then of course continuing our hunting activities. At the same time, that could be another question and perhaps I'm preempting on that for the time being. With the 11 sales representatives that we have in our organization, I do not have immediate plans to further expand on that sales organization because at the same time, I'm still focusing very much so on having our cost under control.

Understood, understood. And then maybe just, and maybe it's hard to, and each hospital is different. I know some are dealing with the surge in COVID cases. But if you looked at in a normalized environment, what is the sales cycle from first reach out to interest to closing? Is it a three to six month cycle? Is it six months or more in general? And I know it varies, but if you can give a range and an average.

Yeah, I think my reply to your question would be the following. It completely depends on the type and the magnitude of the hospital. Let's say, for example, if we would go to Harvard in Boston, that's definitely going to be a longer cycle than the hospitals that we already have been engaged with. So what we are doing is providing the right mix from a strategic importance level to have the right hospitals, but also the smaller hospitals. There are also hospitals that do not necessarily have to go through a value assessment committee. What we also are doing is going into ASCs or private clinics because we do not necessarily need any value assessment committee approval whatsoever. At the same time, in this stage, in this transition, like I said, we are trying to change the company from an R&D-focused organization to a more sales-driven organization. We are also looking into other areas for private practices where our technology definitely can be used today.

Understood. And then just the last question on publications. I know there's been a drive to publish the results, which from the early studies have indicated obviously a huge decrease in complications, particularly for epidural punctures using CompuFlow versus the traditional, shall we say, needle stick. Do you have any expectation of any other publications showing the safety and efficacy and superiority of the CompuFlow system?

Yes, there will be publications, like I said, coming our way, in particular from a group in Italy that is also further confirmation and validation of what we already have seen and reported. Like we said on previous calls, we also have publications in the area of peripheral nerve block which is in potential new yeah area for us as well globally there are about 41 million procedures but of course we need to to make some developments on on the product as well and also what we are working on is the indication for thoracic indications of injection of the drug. As you know, it has been approved in Europe, and it's also important that we get approval for that indication in the United States, because even in the thoracic indication where the space is smaller and narrower, the immediate need for an injection technology like ours is evident.

Okay. Excellent. I'll hop back in the queue. Thank you very much. Thank you.

Okay. Our next question comes from James Terwilliger. Please state your question.

Good morning. Can you hear me okay?

Yes, James. Good morning.

Okay. Excellent. Thank you for taking my questions. Very quickly, you said previously 11 sales reps on the medical side. Are all of those in the United States?

That's correct, yes. So the way it is constructed, so within the 11 medical representatives, one vice president of sales, one senior director of sales, and then nine territory managers, whereas then those 10 People that I just mentioned all have their individual quotas, sales quotas in the United States. The next question could be, you know, where are they situated in the United States? So I can share that with you. We have covered the greater Chicago area, Boston, Connecticut, New York, Texas, California, North Florida, South Florida. Maryland, North Carolina, South Carolina. I think that's, if I count quickly, that should be the correct number. So those territories have been initially selected by us as, you know, they represent those states where the majority of important hospitals are, or even larger IDNs. And of course, we also take the benefit still what we are continuously doing, taking the benefit of the GPO agreement that we have with the Premier Group, so that's important for our targeting as well. And then on the international platform, our sales strategy is more through distributors, although we do have a dedicated salesperson, but that is on a contract basis because We do not have a legal entity yet in Europe where we can have people on our payroll, so that's on a subcontracting basis. But that person also has experience within the medical device industry, and his responsibility is to assist and help us further in all the business development and sales developments in Europe, Middle East, and Africa.

Excellent. Thank you for all that clarity. My next question is, as we spoke about the medical, can you remind me how your distribution strategy is on the dental side?

Yes, absolutely. So I go one step back. At the beginning of the year, we announced that we moved away from our dependency of Henry Schein as our exclusive distributor. And we changed that into a multi-distribution channel strategy. And the main reason is the following. If you look back, and I always look back to the revenues of 2019, if you look back to the revenues in 2019, which were about $8.4 million in total revenue for the dental business, $7 million of that $8.4 million has come from consumables alone. So if we want to grow the business exponentially in the dental segment, we need to have additional placements of units, what I always call new customer acquisition, right? Because that's the only way that we can grow the dental business instead of taking the benefit of the recurrent revenue stream only. So that decided us to make a move. So we changed the exclusive distribution agreement with Henry Schein into a non-exclusive one. And then at the same time, we were able to appoint seven distributors in the United States and one in Canada for the reason of growing the business. But we also go one step further because as you know probably from managing distributors, they always need help and they need strong help from an organization like ours as well. Personally, I handle the distributors as an extension of my sales force, so that means that we as a company have a responsibility to provide them with the right marketing tools, the sales tools, the right strategic initiatives, for them to be successful as well as providing services in terms of field sales trips or call visits for their representatives and we have a very well experienced salesperson in our organization in the United States which is Mr. Dale Johnson who also take those initiatives to help the distributors. If we go one step further, As I'm a strong believer in the pyramid or the triangle, which is marketing, sales, and education, we also recently have entered into other type of quality agreements partnerships where we support these distributors with other organizations like practice management organizations and DSOs. That gives us then the opportunity to have direct access to a number of, if I combine the two companies or organizations, direct access to 2,100 dental clinics. And that gives us then a more targeted, specified approach through our marketing and sales efforts, but also through these DSO and that practice management institution to continuously tell the clinicians what are the benefits of our dental solution. And I'm sorry that I perhaps take a little bit of time, but I think it is important for everybody to understand the changes that we have made within the dental approach. Because historically we focused a lot, I would say, on the clinical outcome in terms of comfort and the avoidance of side effects or adverse events for the patients like numbness, collateral numbness, or lip numbness. But recently we just have launched a campaign which is much more focused on the dentist and their practice growth. And that campaign is entitled How to Increase Your Bottom Line. Because for the dentist, we need to help the dentist to build their business. And as you probably know, Our technology provides a unique opportunity for the dentist to, in a way, increase their fees to the patients, not to exorbitant high levels. But we have in our concept all the possibilities for the dentist to increase their fees because the determination for doing so is that it has to be a new technology. The dentist needs to invest in its own technology, but also his own education. and he is able to increase those fees if there is a consumable or a single use patient disposable in play. All those three elements come with our solution and that is definitely important for the dentist. So in other words, what we're trying to say is that if you look on the cost of the disposable for the dentist, which is, depending on the distributor, on the in-market price, an additional $2.50. But if you do the following math, seven to eight injections per day times 220 days a year, and if the dentist would increase his fee for a crown and bridge work by $20, let's say, that is a guaranteed additional income of $35,400. So what I'm trying to say is that instead that the dentist thinks every time he opens a consumable and thinks, oh, this is costing me $2.50, I want to give him that feeling, I have to open more of those disposables because I can make as a minimum $35,400 during the year. In addition to the avoidance or the increase in additional patient throughput, And of course, yeah, the differentiation opportunities for the dental clinic and for growing as practice. So that's the change that we are making. And of course, everything is strongly supported by the safety features in our dental value proposition.

Excellent. Thank you for all of that additional, Keller. I've got two very quick questions. One, when I look at the balance sheet and the inventories, the inventory levels dropped a little bit. Are you having any supply issues? I know a lot of companies are having issues with their supply chain. Are you having any supply issues as it relates to inventories?

No, we do not have any supply issues to that extent that it is dangerous for our business at all. There are two issues, of course, based on raw materials, which are normally the sensors and the chips, but we have catered for that. The only reason why you see a drop in the inventory is primarily related to the difficulties of getting the containers that are shipping the goods between China and the US. There is a shortage of that. There's no manufacturing issue whatsoever. So as we speak, we already have taken measures to increase further the buildup of our inventory.

Okay, great. And then the last one, in the previous remarks, I'll jump back in queue. Did they say, did I get this correct, the medical business was approximately $21,000 in the quarter and $92,000 For the first half of 21, are those numbers the correct number?

That's correct. Yeah, we said that the medical revenue in the first quarter increased to $21,000 compared to the same period last year. And for the first six months of the year, the medical revenue increased to $92,000 compared to the same period last year. That's correct.

Excellent. Thank you very much for taking my questions and providing all that teller, and I'll jump back in queue. Thank you very much.

You're welcome.

Thank you.

Okay. Our next question comes from Les Quantis. Please state your question.

Yes. I'd like to know when you expect to see milestones become profitable on a sustainable basis.

That's a very good question. Everything depends, of course, on the uptake of the medical business, as we have said many, many times. As we are looking at the current business in both dental and medical, I do not believe that Cash Positive will be possible this year. but we are doing our utmost to turn this into cash-positive operations in the year 2022. Thank you very much. I appreciate your answer.

Again, ladies and gentlemen, if you would like to ask a question, please press star 1 on your telephone keypad at this time. Our next question comes from Michael Mortensen. Please raise your question.

Yeah, thank you for taking my call. Look, I'm kind of caught up because obviously the technology is, I believe, fantastic. Yet, if you just view things based on what's been going on, the first quarter of 2020 seemed to be flat or down from an average quarter in 2019 to with, of course, no COVID around in the first quarter of last year. And then this year, although, of course, the number is quite, so to say, eccentric 14 times, I mean, the reality is that you grew revenues by about 33%. And I'm just wondering, I mean, I don't know how big or what the sales force was like in 19, but If we've increased it and improved it so much, shouldn't we be seeing a much larger number of growth? But more importantly, I mean, when are we going to see 25, 50 million? I mean, this is a great product, and it seems like it's only going out to a few hospitals. And I'm just wondering, is it an insurance thing? I mean, what seems to be the problem? This type of growth, I don't know if we'll ever get profitable with it being the case.

That's a very good question, so let me comment on that. If you look at the revenues in 2019, 2020, and 2021, the revenues reported in 2019, 2020, and 2021, the major revenues or contributions from the dental business, right? And that's independent of having a direct sales force or not having a direct sales force because the direct sales force is primarily responsible for the medical business. Now, the first quarter this year, unfortunately, and I've mentioned that on previous calls as well, unfortunately, we had a little setback. Firstly, because of the sudden passing of our Vice President of Sales, Eric Gilbert, and also the departure of another salesperson. So, at the end of the quarter, we had two salespeople. then at that time it didn't make any sense for the company to invest money in further Salesforce expansion because the situation with COVID was unclear. Why should we invest in building up a Salesforce in the first quarter knowing that they are knocking on doors that are closed, i.e. the pandemic? When we saw in the second quarter a change in that economic environment that we all have faced business-wise, private-wise, personal-wise. That's what we decided then in the midst of the quarter to accelerate the recruitment and the expansion of the sales force. We should not forget that we started the commercial activities with the sales team in the beginning of 2020 and then COVID came. Hospitals closed the doors, hospitals did not invite representatives of their vendors at the hospitals. Capital equipment budgets were frozen and that slightly changed in Q3, Q4 last year. That made us possible with those three people to have a number of hospitals at the end of last year and beginning of this year to actually provide purchase order for this technology. Then you're right, we had a setback in Q1 as I explained to you. Then we reacted in further investing aggressively in our sales team. And that's where we are now. And like I said, I am very encouraged about the increase in demos and trials that I see. And I'm also encouraged and positive with the outlook. The question that you have, when are we going to be, you know, when do we see the revenues of $25 to $50 million, that's a very good question because that's the question that I raise myself and ask myself every day, and that should be embedded in the right strategy for the company to reach those numbers in the coming years.

Well, at $92,000 in medical right now with an increased sales force, could take forever i don't know if i'll be alive and and you know it again it just is shocking because i mean this company should be growing in leaps and bounds um and i'm wondering why you know mckesson or someone of that nature you know hasn't either looked into you know distributing or even considered violence themselves because of the technology yet You know, I don't even see a site yet potentially for tenders. And we've got, you know, additional shares out right now. I think there's a number of, what, let's call it 49 million, 50 million, that certainly, of course, may have to increase because at this rate, with continued hiring and expansion of the force that's only growing in baby steps, it's It's just hard to believe for my clients to continue to hold, you know, that we're going to see. I mean, even the market. It was 194 this morning. It's now 167. Obviously, people are questioning it and deciphering what I've seen, which is, you know, it should be way, way further than where it's at. But, hey, that's my opinion, and I certainly am not in your shoes. But if you've got this great sales force, I mean – Let me ask you this. Are they selling both of the products and trained to do so, or are these guys just doing the medical that really hasn't went anywhere?

Again, perhaps it wasn't clear in my statement. We only have a direct sales force for the medical business, so only for the CompuFlow, Epidural, CastCheck, and CompuWave. The reason for that is It's a pretty intensive sales process because you have to do the demos and the trials. Now, with all due respect, I don't think the 92,000 can be directly linked to having a sales force being successful or not successful as these people come on and came on in the middle of June. The 92,000 in the first six months, 88% is coming from, I think, the international business. So that has nothing to do yet with the expansion of the sales force. I repeat again that where we are today, we are building that, creating that baseline to benefit and to harvest from all these activities that we have undertaken since the end of June and throughout the month of July to have more hospitals adopting and buying our technology during the course of this year. So I think that's what I would like to reiterate. And again, I remain positive. I can understand that perhaps you think it takes longer time than you anticipate. But I always say, again, that nothing has changed with the company. We are in a very strong financial position. I believe that we are taking the right decisions of where to make the investments. And let me take one concern away. Are we only focusing on the direct sales force? Absolutely not. As we speak, we also have discussions, in particular in those areas where we currently are not present, We have already initiatives with more local or regionalized distributors that will assist, support, and help us in the sales of the epidural instruments and the epidural consumables and the cath check consumables.

obviously I'm, I'm a salesman for 36 years. And I can tell you that if I was only doing that, those types of increases, I wouldn't survive. So, um, and I'm only myself. So maybe I expect a lot more of people and myself, but, um, I, you know, I just, I'm hoping that the second half of this year is more like something in the neighborhood of 5, 10 million, because that's really where it should be. And, and certainly looked like where it was starting in 19, although I wasn't aware of the company at that time, and I only started participating when we did the offering at $2 or so back in October. But, you know, I do believe in the technology, and I hope to see, you know, as certainly with the Agostino at the helm, certainly the burn rate was very low, and I thought a lot of it, and that's something that I'm certainly going to keep an eye on going forward because we certainly need to get to profitability, but it's the leaps and bounds of the product, especially when two of the products are probably the golden thumb rule in the industry. You start to wonder, I mean, does it have to do with insurance? I mean, are people that pathetic that they're stepping over hundreds to pick up, you know, 20s, it just doesn't make sense because although I haven't used the product and I went out and endeavored to try it, but I didn't find the right dentist, certainly, of course, I believe in it. And if it's the way it is, you know, I really think it should be moving a lot faster. And it just doesn't seem to be catching the momentum that that I believe the product deserves. So, on that note, look, Mr. Haverhaus, it's certainly never an easy task, especially when you've got what you're up against, but this, you've got a great product. If you've got a golden sun room product, it really, it should be multiplying in much bigger ways, and again, now we're back into something different with the COVID again, so I don't know how bad or good that'll be, but In the hospitals, babies are still being born and epidurals are still needed. And, I mean, if it is what it was said to be, and I believe that it is, I certainly think that, you know, that business should be doing a lot better than what we're seeing, although it's kind of new. You know, that should be a multimillion-dollar business for the second year. But then again, it may be there. I don't know. I'm hoping.

No, I can agree with your outlook and your expectations. I think the only, yeah, I would say where we perhaps have not the same opinion is the time that we can achieve those numbers. And also your comment on the dental business that you expect a faster uptake or a faster development. If I look back at the first half 2019, I know that we, you know, in this call, are not directly reporting and comparing the results of this year versus previous years, but I do that for my own sake. That was a year prior to the pandemic. Then in the first half year, we have achieved a growth rate of 27%. Is it good? Is it bad? I'd rather be happy to see that the initiatives that we are undertaking, that they saw its effect. And of course, to your point, it can always be better. But we are working hard on that to get the numbers that we would like to have.

Well, I wish you a lot of luck with that and I hope that we get there. You know, again, I believe in the product and the technology and I think it's something that's just not, I don't know. In my opinion, I, I'm just thinking explosiveness when I first viewed it and I'm not catching that. But of course, again, it's a situation right now that's unprecedented and I'm not an easy thing to be up against. So I do wish you well and I hope for the best. And, um, you know, let's get to $25 million this year, and sure, we won't be looking at a $2 stock or a $1.70 stock. That's for sure. Yeah.

Well, thank you for your questions, and perhaps there might also be other people on the line that want to ask some questions.

Okay, and it looks like that was our final question. I'll turn it back over to Arhan for closing remarks.

Yes, well thank you for your time and the interest in our company and your support also for our company. As you see, we believe in our technology, we believe in having and doing the right initiatives in terms of marketing and sales also. investing in other areas where our technology can be employed in the medical industry. And we remain very positive and are encouraged to follow up with you in future calls. So thank you again and stay safe. All the best.

Thank you. This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time and have a