Monogram Technologies Inc.

Welcome to the Monogram Technologies first quarter 2024 Business Update conference call. I'm Larry Halep, Director, MZ Group North America, representing Monogram Technologies as their external investor relations advisor. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. A press release detailing first quarter 2024 financial results was issued on May 14th and is available in the investor relations section of the company's website. I will now turn the call over to Monogram Technologies Chief Financial Officer, Noel Kanopi.

Good afternoon, everyone. I'm looking forward to this conversation. Welcome to our Q1 2024 investor call. Could you please Forward to the next slide, I'm going to go over the forward looking statements disclaimer real quick for everyone. So this is a legal disclaimer. This presentation by Monogram Orthopedics Inc. Monogram may include forward looking statements to the extent that the information presented in this presentation discusses financial projections, information or expectations about monogram business plan results. or operations, products or markets or otherwise make statements about future events. Such statements are forward looking. Such forward looking statements can be identified by the use of words such as should, may, intends, anticipates, believes, estimates, projects, forecasts, expects, plans, goal, target or proposes. Although Monogram believes that the expectations reflected in this presentation are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward looking statements. Thank you for that. So this presentation is summarized here. It's going to be a quick recap of the Q1 summary financial data, the investment thesis, timeline review and next steps. So here is the summary financial data of Q1 2024. Importantly, at the end of the quarter, our cash balance was as projected at about $2.1 million. That's a quarterly burn of about $3.6 million or $1.2 million per month. It's important to note that management was able to pay down The accounts payable balance of a net of one point one million dollars. This balance related to elevated balances from the the the activity in Q4 related to verification and validation activities. We expect that the monthly burn, this will not be repeated in subsequent quarters and the monthly burn will reduce to around one million a month. Important to note in our financials and our cost structure, we have 28 full-time employees, 22 of which are in engineering and six are administrative support, and an additional 26 engineering contractors, 12 of whom support the V&V efforts that I just mentioned. It's very important to note that 60% of our costs are labor. And so it's a highly variable cost structure. As the VNV activity winds down, we will be able to reduce that cost significantly, particularly on the contractor side. About 12 of the contractors support the VNV activities, and we should be able to reduce some of that cost outlay when those activities are done. And we anticipate that to be done most largely at the end of the first half of the year. It's an extremely highly variable cost structure and we will manage it accordingly. It's important to note that we still have no debt and we have no warrant obligations as overhangs. We expect to have sufficient access to cash through our 510 application and significant milestones as they occur. With that, I'll hand it over to Ben to give you an update of recent progress.

Sure. Thanks, Noel. Appreciate that color. And thank you everybody for joining us today and for those of you who are watching the recording. So I want to start by just highlighting some of the key recent progress we've made and then walk through where we're headed. So as we have communicated, we have our fourth formal pre-submission communication with the FDA. We put out a press release on that. Management was pretty excited about the feedback we received. The FDA reviewed substantial portions of our verification and validation testing plans, provided helpful feedback that we're integrating into those plans. We feel that our verification and validation plan is pretty robust. The FDA also reviewed, as part of that process, our planned OUS clinical trial protocol. And we felt that they provided a very fair and constructive feedback to that. We feel like the FDA didn't, there were no kind of objections to the plan that was proposed. So we felt pretty good about that. We plan to share with the FDA our final clinical trial protocol when that's ready at the appropriate time. feeling very good about where we are with the FDA and their understanding of how our product works. It's been an extremely busy quarter and this second quarter is also very busy. We're really pushing very hard through the verification and validation testing. We'll get into the weeds on that shortly, but there's a lot of activity happening. So for example, as part of the verification effort, we need to bring in external surgeons to run fully end-to-end simulated surgeries on cadaveric specimens. We so far have completed nine of 15 surgeries successfully. We've also made very significant progress with our Envision navigation. We hope to share more, potentially demo more soon. Envision is our AI enabled navigation technology that when combined with robotics, really was the impetus for us to expand the name. We felt like Monogram Orthopedics was not really truly representative of the potential application opportunities for what we call kind of markerless or marker light registration and tracking. We're very excited about the promise of that technology in potentially other areas. As Noel said, we're pretty aggressively resourced right now. Our burn is is certainly elevated as we push through the verification and validation phase in anticipation of a submission for 510 approval. We've brought on a lot of experienced contractors to help us with execution of the various verification test protocols. And that certainly contributed significantly to the elevated burn. But again, that is pretty variable. And we have, Been recently supporting ongoing site visits and demos with tier one capital allocators. So that's also been taking a lot of effort and resources from the team. But overall, it's been very busy. We're working a lot. There's been a lot of weekends that the team's been putting in late nights. So I'm really, really proud of how hard the team's working. The next thing I want to jump into is just a recap on the investment thesis. of Monogram. I feel like this is a little bit misunderstood and I want to make sure we really highlight what it is we're doing and why we think it's important. So in really simple terms, the largest robotics player in our market, in our view, has a monopoly. So if you look at Stryker's market share for robotic joint replacements, they have 89% of those. And then if you look at their share of the cementless knee market, they have 75% of those. So in any other industry, if you were to talk about a company with 89% or 75% market share, you would call that a monopoly and we would not disagree. Basically, they account for the majority of cementless and robotic procedures in our market. Now, I think a lot of people fail to realize why that is, is they don't appreciate the significant IP advantage that MAKO has established. So they have owned essentially robotic cutting with what's called haptics. Now, haptics is essentially haptic control, so that's control with impedance or admittance where external forces are applied to the arm. So in MAKO's case, the surgeon is actually pushing on the infector to move it around within a virtual no-fly zone. That technology and that patent portfolio is broad, extensive, and we think extremely well protected. And we think that's a huge reason why MAKO has 89% of the market. And I feel like this is really not well understood. And I want to try and highlight that today. So of 1,352 patents assigned to MAKO, this is kind of approximate, about 600 of those include a haptic claim. Haptics does not mean just something vibrating. It's far more than that. And we feel like this is really not well understood. If you look at any of the competitors on the market today, basically none of them are of significance are doing really robot cutting. Even those that do claim to do robot cutting in practical use, surgeons are still kind of using limited portions of those systems. So there's a picture there, for example, the largest player in these, which is Zimmer, that you can see that they have a robotic jig. So that would be a robot holding a jig that constrains a saw, wherein the surgeon manually completes the cut. There's other systems on the market that have, let's say, a rotary tool, but we think the efficiency of making all six total knee cuts with such tools is challenging. So really, just to recap, Mako has a very, very solid market position. They essentially own haptics and there are serious problems with every other kind of system on the market. So for example, most of the other systems don't use a CT scan, so it's not a patient specific surgery. Some systems, some embodiments don't have any safety boundaries. Some systems use a rotary tool, which has issues with thermal necrosis and requires irrigation. There's potential accuracy issues in the sagittal plane when you're cutting with a manual saw. So there's serious limitations. Monogram looked at this and we saw an opportunity. And what was the opportunity we saw was there's an opportunity for a robot to come in and cut, but to cut actively or autonomously. So this is a completely different paradigm. Now there are companies that have tried to do this in the past, but they have relied primarily on rotary cutting tools. The problem with rotary cutting tools is that they are not sufficiently efficient to resect bone as far as we've seen in the research we've conducted. The most efficient way to execute six planar cuts in the knee is with a robotic saw. Actively cutting or autonomously cutting with a rotary saw is a non-trivial challenge that we believe we have solved. So the monogram system works by a robot that's autonomously executing the cuts, and the surgeon is controlling the arm with a foot pedal. It's a completely different paradigm. And what we think the advantages of the system may include, and this is not substantially by clinical claims, but it's really how we design the system, is we're looking to minimize surgeon fatigue. We're looking to eliminate user skill. We're looking for a faster learning curve. We're looking for a robot with more dexterity, so no tool changes during cutting. We have patient-specific bone boundaries at the resection level for enhanced safety. We believe that accuracy is less encumbered when you don't have significant forces being applied to the robot arm. We believe robots are inherently accurate if they're well programmed. And we believe that this morphology is more scalable to other clinical applications. So we're planning to execute a one robot for the operating operating room business model. And we do not believe that haptics is the perfect embodiment for other applications outside of knees. So in some senses, we've started with what we believe is the most difficult application for our robot, which is knees where you require extreme efficiency, and it's very difficult to compete with the haptic system. And the idea is to demonstrate that we can do it in the most difficult clinical application. And therefore we believe it's scalable to other applications. And if you think about it from the perspective of a large strategic, our goal is to not require cannibalization of an existing product. So we want to enhance what would be an existing product needs, but have something scalable to other applications. Now, we think the benefit of being early and again, we can't speak. Maybe somebody has this under under the radar. We don't know about it, but we believe that we have a significant first mover advantage. benefit of being first to market is that it allows you to encounter problems that you are almost impossible to foresee until you start executing the solution so we believe that we now have a very compelling patent strategy as one of the first robot companies to demonstrate autonomous cutting with a saw with high efficiency without fixation we believe that that's going to help us build an ip portfolio or a patent portfolio that will in a sense allow us to claim active or autonomous. Our goal is to own active or autonomous in the same way Mako owns haptics, we want to own active robotics. So that's really what our vision is to be the first active saw cutting robot and establish a broad patent portfolio around that. And we think that that's a pretty compelling value proposition given how well Mako has done claiming 89% of the market with basically the only robot cutting system on the market. So, again, just to highlight the opportunity, you could just see now, obviously, Stryker is a much larger company than Smith & Nephew or Zimmer Biomed has shown. But really what we're trying to show here is, and I believe we also have a novice on there, what we're trying to show is, yes, even though Stryker is a well-diversified portfolio, since acquiring Mako, their knee business has really thrived. And we believe this presents a really significant opportunity. You have one company that's really consolidated a market and has monopoly. That value creation needs to be shared, or we believe should be at least competed with. So a lot of times we hear as a criticism, oh, well, you're just doing Mako. That's the biggest compliment in the world to us. Mako is 89% of the market. If we're competing in a way and comparable to them, Look at the value that that's created for the Stryker brand. Would that not be accretive to somebody else? That's really how we're thinking about it. And then if you think about other clinical applications, we think just objectively that an active autonomous robot scales better than a haptic system with four joints versus seven joints. And we can get into other details on that. So with that, I really want to talk about what, as a management team, is front and center for us to execute over the coming months. So there's really a couple of big things. The first is we need to complete 6601 certification. The second is we need to complete, the 6601 is a big part of this, but all the verification validation testing. Then we need to submit the 510K for FDA clearance that we want to demonstrate and vision integrated into a robotic pipeline. We also then anticipate our first live at patient surgeries. and then hopefully 510K clearance. What we've said publicly is that we expect verification and validation testing to be largely complete by the end of this quarter. And we anticipate a 510K submission in the second half of this year. So that's what we've said publicly. Just to give you a little more detail on what we're talking about when we say IEC 6601. So really consists of two major things. it's 6601-1-2. So the electron EMC testing is basically largely complete. So we expect to have our final test report this week, but we have passed. This was, for any of you who know this testing, was extremely difficult, a ton of effort. And I'm incredibly proud of our hardworking team for getting there. And now we're in the same vein, aggressively pushing IEC 6601 testing. It's approximately 40% complete. And this is the critical path to our 510K submission. So getting the certification, all this testing done is the most important thing for us to submit a very robust application to the FDA. It's not a requirement by the FDA, but it certainly makes for a very strong application. And the robot is getting put through a lot of rough handling. I just want to give take a video of a test uh share with with everybody to give people a sense of sort of what the robot's getting put through so this is a test that was run on the foot pedal and they literally connected it to a fire hose which you can see kind of the pressures coming out of this thing and they sprayed it at our foot pedal and you know the foot pedal uh can't have any leakage and needs to be fully functional after this testing this kind of hopefully gives folks a a flavor of what we're dealing with and kind of the level of rigor. So any of you who have any familiarity with IEC 6601, it really is a bear, and it's by far kind of the lion's share of the focus for a lot of our teams, just pushing through that. In terms of internal testing, so we have a lot of verification and validation test protocols. So these are things like system accuracy, registration, validations, all kinds of every little kind of minutia of the system has to be thoroughly tested, both on the software and the hardware side. The electromechanical testing is about 63% complete and the software cycle three, this is really the final version of the software that we anticipate is the cycle three testing is about to kick off and that testing is going to take about four weeks. But really, A lot of this is really coming together and just to kind of highlight the verification validation to give folks a sample of what that looks like. So, you know, what that looks like is bringing in surgeons, running simulated surgeries on cat cadavers. And then it's a pretty, pretty gruesome process. I don't want to share pictures, but then what we do after the surgery is complete, we literally remove the bone from the specimen, put it into a chemical bath and then laser scan. and compare the planned cuts versus the actual cuts. And right now we're very, very happy with the accuracy of our system with the specimens that have been tested so far. So we're looking at submillimeter accuracy and it's not a statistically significant sample size yet, but we're aggressively getting there. So again, it's just a ton of testing that we're going through. And again, you know, Folks sometimes really don't appreciate the difference between a medical device and a prototype. Monogram had a prototype five years ago. It's a really big difference between a product that's been through all of this testing, all of these validations, all of this verification testing and a prototype. It's a very heavy lift. So with that, just kind of jumping into the capitalization plan. A couple of things I want to reiterate here. One is that we are still an early stage company. We're not in the market yet, but we're obviously trying to get close. And fundraising is certainly milestone driven, and it's also driven by de-risking events. So continued bulletproofing and de-risking of the system are critical. You guys saw a flavor of the IEC 6601 testing that we have to do. Large capital allocators in the space are not ignorant. They understand how difficult it is to take a product through all of this testing, through all the remediations and bulletproof. And so a lot of times you really do need to do the heavy lifting and continue to move the ball forward. And that's exactly what we're trying to do. We closed the quarter, what we said publicly is with 10.1 million in cash. We believe we have the capital we need to submit a 510K, which is, in our opinion, a very significant milestone. And we have done significant on-site visits and demos for various people who allocate capital in MedTech. We believe that we are starting to build value in terms of the product that's being created, but obviously it takes time, effort, and time. we are sensitive to kind of the timing of critical milestones versus the money that comes in. It's not easy, but again, we believe we have some very significant catalysts coming up. So we're going to continue to communicate our value proposition of our system, which is really, we aim to be the first autonomous active cutting saw-based robot on the market. And, you know, Mako kind of demonstrated what happens when you build a solid IP portfolio around a very effective way of doing the surgery. And we plan to try and do the same thing that they've done in haptics with active and monopolistic markets, a lot of times create opportunity. So we're gonna try and do all we can to have a compelling product. One thing I do wanna say is, for a startup, it's important to have options. One of the things that's still, I would say kind of a intangible asset is we have a lot of a very significant investor base that's been with us for a long time that really understands the story and we see opportunities to potentially open up access to additional investment opportunities that could be a creative in it in advance of some of the critical milestones we have planned so we're gonna be uh sharing more in the future about how we plan to uh raise capital but we're considering uh a small bridge uh potentially uh from our community and kind of as a as a potential way to give back uh before we have what we anticipate could be some pretty significant updates but uh we'll stay stay tuned for that um we just don't want to be in a position where we where we are only beholden to institutional capital, especially as we have access to this intangible asset and especially as we have some pretty significant milestones on the horizon. So basically we're taking a parallel path to fundraising and it really is a balance between raising kind of absolutely what you need to and trying to anticipate what's going to happen with the economy and also what we have in terms of critical milestones. So not always easy to juggle that, but we're doing our best to kind of manage. We think we're in a good spot for the next milestones. This is just kind of highlighting that. So when you look at 510K approval in our space, we think that it's generally very accretive. We think the market generally rewards companies that have taken technologies through all of this testing, through all of this development, and especially if the product market fit is solid. So with a market cap today of a little over 60 million, we think that there's certainly the potential for this to be an interesting opportunity if we can continue to execute our goals. And with that, just to recap the investment thesis. So Our vision broadly is to advance medicine through technology adoption. So in orthopedics, we're starting with knees and Mako owns robotic cutting with haptics. Monogram wants to own robotic cutting autonomously or active. We want to be the first robot company to do that with a saw. We think that a first mover advantage in autonomous robotics is going to help us establish very significant patent protections that would make it potentially difficult for another player to do the same thing. We believe that active robotics have a lot of potential benefits. Again, we have not yet conducted a clinical trial to substantiate this, but it's just our design objectives. So, for example, we think active robotics could enable more personalized surgery, 3D printed custom implants, for example. We believe that they may offer enhanced patient safety, reduced learning curve, We believe that it could be more scalable to other clinical applications, drive increased efficiencies potentially over time, even decrease surgical time. And that kind of lends into Envision Navigation, which is our next-gen navigation solution, which we're hoping to demonstrate as well as a catalyst. And we believe we have some pretty significant catalysts coming up, not the least of which is our planned 510k submission. And then just for anybody who has any questions, you guys met Chris Tyson, who runs the investor relations for Monogram. We really want to make sure that folks have somebody they can contact. Please reach out to Chris if you have any follow-up questions. But I do want to give everybody here an opportunity to ask questions and engage with management, and hopefully to the best of our abilities, we'll be able to answer that um okay so if you want to if you want to uh write a question uh just on the right hand side there is a comment and uh we will do our best to answer as many of these as we can uh so tom kerr asks uh can you provide more color on why and how the fda can or needs to rely on a no us clinical trial to help make a decision what is the length of the OUS trial. So the OUS trial is more of a belt and suspenders, Tom. So right now, we don't believe that our 510 submission will require a clinical trial for approval. We believe that our equivalence to the predicate device is that we're substantially equivalent. We believe that our solution addresses uh the concerns that have been raised by the fda over the past two years and for formal pre-submission communications but uh we want to run a clinical trial uh in parallel to our submission for two reasons the first reason is you know Once we hopefully get FDA clearance, which we hope we can get on a reasonably quick timeframe if the submission is well received, we want to have data to actually market with. So we would go to a surgeon and say they might ask for clinical data. We would have the live patient data to market the solution with and In addition to just the safety of our system, we're really looking at some additional features in capturing additional data. So we're going to be looking at surgical time, learning curve, the accuracy of the system. So not just the accuracy of making bone cuts, but the accuracy of the planned stress laxity to the postoperative stress laxity. So we would have data that would be actual clinical real world data that we could share and that our sales force could use to help communicate the value proposition but then the other potential benefit is if for whatever reason the FDA was unconvinced we think this is a low probability we've had a lot of very smart people assess the application but let's say the FDA said we really really want to see clinical data with the submission well we would have clinical data ready to go in parallel to that as a backup plan so kills two birds with one stone. The benefit of doing it OUS is it's substantially cheaper. So like on the order of more than 10 times cheaper. And the partner that we will be running the trial with uses the same implant, a cemented version of our implant that we licensed. So we wouldn't need a bunch of implant inventory. It's a very, very high volume institution. So we think we could enroll patients and get through the study very quickly. The study is actually pretty small in scope, so it's less than 100 patients, and the FDA has reviewed this protocol and three months of follow-up with four critical endpoints, which are kind of four critical safety factors. So that's really kind of the idea there, and our goal is to try and have that data as soon as possible. I would say the blocker there is the IEC 6601, so that's... globally recognized certification that we think will greatly enhance the time to approval of the clinical study. So we think the smart approach is to get that in hand and then go for the study. Okay. Just want to make sure I tackled it because I was answering this question. This is from Kapil. OUS trials practice system are semi-active. If for some active, then what is the approval path for the active So, Kapil, that's a really good question. We are going to do semi-active OUS, and that's because for two reasons. Basically, I articulated both of those reasons, but just to recap, we want to have post-marketing data and we want to have an approval really completely de-risked as much as possible. The plan for active would be to subsequently run OUS the active version. So the institution we're working with is very receptive, wants to work, wants to partner, wants to collaborate. The market we're looking at is extremely large. And so we envision having a long-term relationship with this institution. We plan on, for example, collaborating with Envision, which is our next-gen navigation solution. We're not really seeing it as one and done. We plan on having a clinical sort of pipeline as part of our R&D process. So we're going to be running trials continuously. The partner we're working with, we can do it very efficiently and a lot, lot cheaper than here in the US. So we think it's actually a great relationship. And if the FDA is accommodative accommodative to the data which they really certainly seem to be we think it's a real win um so this is kind of tied to the same thing um so sal's asking about the first sale uh last year and first revenue what what does this distributor intend to do with the first robot and can we sell more so uh we um you know the the the country that we're looking at uh is uh has a let's say it's a very large population uh and uh we think that there's a great and bright future for robotics um the uh the partner that we have been uh talking to is actually a different partner than we sold the first system to uh and uh we think the partner we're now working with is kind of a a better uh a better relationship for us long term uh and they do a lot of uh the surgeons that their their kols are actually highly recognized uh and publishing so uh the plan is really to go through the process and uh the approvals and all of that uh with them which is what we're working through and the clinical trial is part of that so I should have mentioned the third benefit of doing the clinical trial is that it's going to facilitate approval in the country, which we think is a very attractive market. Let's kind of keep going. So James Bull says the ROSA robotic surgery equipment has been getting increased exposure lately. Any comments as to how Monogram competes? So just to kind of go back so rosa is uh the robot that is owned by a zimmer you can see here it's shown on the right so it's a it's a robotic jig uh it's um uh you know it's what's difficult is uh all we know is what we hear uh from surgeons that are that are users and kind of having our ear to the ground uh it says the zimmer implant is an incredible implant We've talked to one of our surgeon KOLs loves the ROSA system. And so you're right, they're a great company and a great brand. And so we think that any player in the space is formidable. They have been looking at different applications for the robot. I know that it started out really with helping treat epilepsy and there's applications in now shoulder. You know, fundamentally, though, we think that the opportunity is in robotic cutting. We think that's partly what was demonstrated by Mako, which is really the only robot cutting system on the market. So Mako owns robotic cutting. Nobody else is really with a robot arm using a saw in the way that Mako is doing it. And we plan to be the second player in the market to do that. And the way we're going to do that is actively instead of haptically, which is an extremely challenging engineering problem. So we think we have a pretty compelling value proposition. One of the things that's a problem for any manual system that relies on a jig is we think that certainly the accuracy in the coronal plane tends to be okay, but in the sagittal plane, we think that it's challenging for manual-based instruments. And if you think about just where the market might be going, which is more safety, more accuracy, ease of use, scalability, all of those factors. We think that we continue to believe in robot-based gutting. Okay, any other questions here? Oh, there's a question from James about NVIDIA. I think anything that's been publicly said there is what we're going to say at this time. Let's see here. Does a successful OUS clinical trial pave the way for approval in the EU or other regions? So we think an FDA approval is by far the kind of most, that's kind of the gold standard for getting into other markets. And so it's not FDA approval, FDA clearance. And Having clinical data can't hurt, right? So the more real-world data you have, the stronger the application, certainly. But again, there's kind of multiple layers to having an OUS clinical strategy. It really is, Monogram wants to be at the forefront of technology, and it's really important to have real-world data. So for example, the Envision navigation solution uses a machine learning based pipeline to auto segment critical structures. And we can do that in cadavers all day long. But we want to have data of live patients where we want to be training our models when there's blood and when there's other things happening in the operating room in different lighting conditions, so on and so forth. And so those are the kinds of things that are really imperative to an ongoing clinical relationship And the partner we're working with, we think, is going to allow us to do that in a very scalable, efficient way at low cost. I mean, much, much lower cost. So the cost to run a clinical trial in the US far exceeds what it will cost us to run it outside the US. So maybe time for a couple more questions. We really appreciate everybody's time. If you do have questions, please type them into the chat on the right. I'll give you guys 20 more seconds. Yeah. So, you know, it's been a very busy time here. Hopefully that gives you some idea of what we've been working on. Oh, sure. So Thanks. Thanks, Steven. So just a discussion about anything ongoing with tier one relationships. So thanks for the question, Chris. So, you know, again, we think that the investment thesis that I laid out is potentially starting to be more and more recognized as time goes on. And as Mako continues to do incredibly well, Mako has some very distinct things about it. It's the only saw based cutting robot on the market. It uses a CT scan, so it's a personalized surgery and surgeon, adoption is really tremendous and surgeon utilization is tremendous. So when you look at the utilization of their system, you know, 60% plus, uh, striker procedures are robotic and they have 75% of the press fit knee market. So maybe I want to spend a little bit of time just understanding that. So if you think about hips, I think the utilization of press fit hips today is, is more than 95%. And over a 10 year period, it went from about 40% to 95% utilization of press fit hips. Let's look at knees. The utilization of press fit knees today is about 15%. And Striker has 75% of that. Now imagine if that 15% does something similar to what happened in hips and goes to 95%. So I do think that large companies are starting to realize that there's a synergy between robotics and press fitting implants. The benefits of press fitting implants are really twofold. One is surgical time. You don't have to wait for the cement to cure, which takes about 12 to 15 minutes. And then for younger active patients, press fit implants, the bones constantly remodeling over time. You're not relying on bone cement for fixation. So there seems to be significant clinical benefit too from press fitting implants. So Stryker has 89% utilization of robotics and 75% of the press fit knee market, which is only 15% of knees today. But what if that goes to 95% of knees today? do the other companies in this market have compelling robot utilization and a compelling, uh, answer to compete with Stryker? I think that's the fundamental question people need to ask. And, uh, we, we think that we have a compelling robot that, uh, works very well with breast implants. Hopefully that helped answer that Chris. Sure. Um, so, uh, Michael's asking us to please define haptic, and that comes down to really this slide here. So the Mako system, which is shown on the left, the user grabs an end effector that has a handle on it at the end of the robot and moves the robot around. And the user's force is what's really moving the robot arm. So in robotics, this is called haptic control. So generally speaking, it's either impedance control or admittance control. And the Meiko portfolios or patent portfolios cover more than just this. But in essence, this is really what it's about. So with the Meiko robot, the user is moving the robot around along a plane unconstrained until they reach boundaries, virtual boundaries that seem to be tied to the implants. So that's haptics. So if you want to have the user move the robot around, you're really at risk of stepping on striper's toes, in our opinion. And the FDA, the benefit of this is that it's very efficient at cutting. human beings are very smart, and we do a lot of dynamic compensation without even knowing it. And a human being, it really allows a user to cut as they would with a manual instrument very efficiently, but safely within boundaries. Now, we will say that we think the boundaries could be enhanced, and that's what we've tried to do with our version of the system, but that's really what haptics is. And nobody else, it's really, they've created an incredible impenetrable fortress around this technology. And we think that's why the other companies are struggling and for active or autonomous, which is where the robot is autonomously executing a cut path. So it's not really reliant on the user to move it around. It's moving autonomously. There's been no robot company that's been able to cut efficiently. most of the robot company companies that have tried to cut autonomously have used a rotary tool which is not efficient there's a lot of problems and so the surgical times with rotary tools are just too high so if it takes you 15 minutes plus to resect bone you're never going to be competitive with mako so from the ground We said we need to have an active saw-based system. Now, the problem with autonomously cutting with a saw is that it's incredibly challenging for a number of reasons. One is there is a lot of vibration into the arm. The second is that you have to have a sequence of cuts. So a sagittal saw can only cut on a vector moving kind of on a specific vector. It can't side cut. which makes it incredibly challenging. So you have to create cut paths that are generalizable to any anatomy and it's not trivial. And we think we have some very, very clever ways of doing it. And we think that it would be very difficult to do it without stepping on our patents, which we think have the potential to be extremely broad. So hopefully that helps answer it, Michael. Um, so David's asking, you know, why do we think the stock is valued in selling so low and what do you think will happen? Um, I think fundamentally, David, the problem we have is, um, is that we don't have enough institutional ownership. So we're mostly kind of retail driven. And I, I think that, um, the, uh, the value proposition, uh, requires a little bit of, uh, digging to really understand, you know, we're talking about haptic robotics, active robotics, autonomous. And I think a lot of people just think that, well, everybody has a robot and all robots are the same. And they don't dig a layer deeper to see, well, not all robots are the same when one of them has 89% of the market and 75% of press fit needs. And the arguments that, well, Striker has a first mover advantage. are really null and void when you look at utilization of their system, which is over 60%. And I don't know any other robot company that has that level of utilization, right? So they've done something right. And I think that a lot of retail investors don't really fully understand that. I think that, you know, again, to get institutional capital interested, it takes time, it takes milestones, it takes moving the ball forward. And that's really what we're focused on is trying to do everything we can to continue to de-risk the opportunity. We believe the value proposition is going to become more and more and more obvious over time as Stryker continues to do what they're doing, which is demonstrating that robotic cutting with a saw efficiently is what surgeons want and is what drives utilization and press fitting is what surgeons want. And that's really, we think our investment thesis is that there isn't a good answer to what Mako is doing. And we think we have a reasonably good answer for that. You know, it's obviously, I think it's a lot of people also appreciate that it's a very difficult market to raise capital in. Orthopedics doesn't have a lot of startup activity. and the cost to distribute is high and so forth. So I think there's just a lot of people who remain skeptical and don't fully understand our investment thesis, which is why we're really trying hard to explain it. It is a little bit technical, but again, you know, David, we're focused on the long term and ultimately what we're focused on is patients and trying to enhance patient outcomes and trying to bring technology to a market that we think will help drive utilization. So our goal is to have a robot that is as safe as possible, as accurate as possible, that automates the procedure. One of the things we don't really get into is surgeons don't do the surgery the same way. We're bringing in different surgeries to do our verification labs, and they all want to plan the knee differently. Well, what is the best way to plant a knee? There has to be a better way. Some ways have to be better than other ways. And these are areas of opportunity where we think that technology is going to help us answer critical questions that are going to make patients' lives better. So fundamentally, that's the value add that we're focused on. We're focused on how to make products that'll make patient outcomes better. And we're going to let the rest take care of itself. That's really what we're doing. And if we are able to drive patient outcomes and build something that is going to be helpful for humanity, I'm optimistic that that will be rewarded. And if we aren't able to build something that's valuable, then we'll continue to be penalized. I really do believe in what we're doing. I believe that it's going to be a very, very accurate, safe system. I've never been more excited about what the product can do and, and, uh, more optimistic about the product. Um, let's see if we can get, you know, get to a point where we, we can get this into more certain heads. But yeah, again, it's, it's tough. Markets are tough, David. Uh, so David's asking, um, know what's the general timeline for the fda approval so the most recent timeline we've seen i think um no correct me if i'm wrong i think we i think we actually put it into um i recently pulled that data it's it's about five five-ish five and a half months something like that i think is the average time i want to say yeah that's correct so um you know we think that's uh a good a good target to plan and And we're pushing to get through the verification validation testing as quick as we can, and then have all those test reports done. And in parallel, we're working on the 510 . And so we want to be in a position to submit as aggressively in as timely manner as we can. So let's see here. So let's have this be kind of let's Second to last question. So I want to go for an hour. Okay. There we go. Thanks for the compliment. Um, so Carmel said he would, would trust this and honestly, Carmel. So, uh, you know, I, um, my, uh, my mom has two knee replacements and a hip replacement, and my dad needs a knee replacement. I want a system that I would trust and that I would be comfortable doing on my own family. So we have made painstaking efforts to have a system that performs at the highest level and I'm incredibly proud of that. Okay. Can you provide a little more color on the next steps that need to happen before you submit the application in the coming weeks? So that's really all of this stuff here. We need to get through this IEC 6601. So we're through the EMC portion. We need to get through the basic safety and essential performance, which is about 40% of the way through. And when I show this video of the fire hose being shot at our system, I mean, this is the kind of stuff that we're dealing with. And it's just working very, very hard to get through all of that. And there's a a massive amount of paperwork that goes through it too. And they go through the FMEAs and all of the components, and it's just a huge amount of work. So there's that piece of it, but we're aggressively resourced. And then there's the internal sort of verification and validation testing. So this is all of the test protocols of looking at every detail of the system. What is the system latency? How can you prove that it follows exactly within the cut paths? How can you prove the system accuracy? What is the end-to-end system accuracy? What is the accuracy of the arm? What is the accuracy of your registration? What is your accuracy of your segmentation? All of these details and then all of the software to make sure that there aren't critical bugs, to make sure that it can't be hacked. There's a ton of things. So what I'm saying here is we are 63%. the way through our electromechanical tests, there's not any real concern about the test protocols. So like the big one that would have been a risk, right, is system accuracy. So let's say we were doing a simulated cadaveric surgery and our accuracy was three millimeters, we would have problems. But right now our accuracy is basically less than or equal to one millimeter. So we're very, very accurate so far. Now this is not statistically significant, but what we're seeing is looking extremely promising that we're going to get through all of this and that there's not a lot of high risk to our verification. So we're not biting our nails whether or not the system is going to pass our internal testing. We've tested it very, very, very robustly. The big critical path, so when I say critical path, the thing that's going to slow down our 510k submission if anything would be the IEC 6601 which is a little bit out of our hands we're reliant on a third party to test our system and you know just takes it takes time but we're pushing as hard as we can so hopefully that's that but before we can submit the application in the coming weeks so know we never said that uh what we what we said is uh that we expect the vmv to be largely complete by the end of this quarter and then we plan to submit the 510k in the second half of the year but i certainly like your enthusiasm kyle and the team is being very aggressive about working hard so kapil's asking about the timeline for custom print imprints and um I love this question. So I'm actually, I have this, I have our Impress implant. It's my paper where you have my desk. So the plan is going to be we're launching with Impress, which is already cleared. So it's a press fit total knee that has a clinical track record in the cemented version. And so we really like the articulation, inserts, locking mechanisms, all of that. And we have a very attractive supply agreement. So that's our Gen 1 knee. And then the plan is to swap out the tibial component with a 3D printed customized tibial component that we think has some significant clinical benefits. We've been working with the University of Nebraska on the development of that. We've shown that it has improved initial stability over the current state of the art total knee. And we think it's going to be easier to revise. hypothesis we have is that it's more peripherally loading, which we think could be really positive. We haven't provided a timeline for that. We're really focused on getting the system cleared and getting adoption of the robot, which we think is a very significant opportunity. And then once people are comfortable with our robot and our implants, we're going to start swapping components out of those with the PressFit 3D printed custom implants. So starting with the tibial component of the total knee and then going from there. So, uh, see here, I think that's, I think that's pretty good. What do you think? No. Seem to answer everybody's questions.

I think, I think so. I think it's important to reiterate the milestones that are forthcoming and keep everybody, you know, aware, of that and keep their ears open for those activities, because those are important for our continued evolution.

Yeah, these are really big things that companies recognize, right? So large strategics appreciate how hard it is to get 6601 certification, how hard it is to submit a high-quality 510 . All of these things are just big milestones, and we're continuing to push forward as hard as we can. So perfect. Well, thanks everybody for your time. We appreciate it. We will look forward to updating you next quarter and hopefully, you know, going back to some demos like we've done in the past to give folks a flavor of what Envision can do. That's, I think, a sort of underappreciated hidden gem in our portfolio. But stay tuned for more news. And thank you so much for your support and your continued support. And we'll be updating you next quarter. Have a great one. Thank you, everybody.

Thank you.

Companies recognize, right? So large strategics appreciate how hard it is to get 6601 certification, how hard it is to submit a high-quality 510K. All of these things are just big milestones, and we're continuing to push forward as hard as we can. So perfect. Well, thanks everybody for your time. We appreciate it. We will look forward to updating you next quarter and hopefully, you know, going back to some demos like we've done in the past to give folks a flavor of what Envision can do. That's, I think, a sort of underappreciated hidden gem in our portfolio. But stay tuned for more news and thank you so much for your support and your continued support. and we'll be updating you next quarter. Have a great one. Thank you, everybody.

Thank you.