Milestone Scientific Inc (MLSS) 2024 Q1 法說會逐字稿

Good morning, everyone, and welcome to the Milestone Scientific Incorporated first quarter 2024 financial results and business update conference call. (Operator Instructions) Please note this conference is being recorded.

I will now turn the conference over to your host, David Waldman, Crescendo Communications, the floor is yours.

Good morning and thank you for joining Milestone Scientific's first quarter 2024 financial results conference call. On the call with us today are in Adriaan Haverhals, Chief Executive Officer; and Keisha Harcum, Vice President Finance of Milestone Scientific.

The Company issued a press release this morning containing first quarter 2024 financial results was also posted on the company's website. If you have any questions after the call would like any additional information about the Company, please contact Crescendo Communications at 2126711020Company's Management will now provide prepared remarks reviewing the financial and operational results for the first quarter ended March 31, 2024.

Before we get started, we'd like to remind everyone that during this conference call, we may make forward-looking statements regarding timing and financial impact of Milestone'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 judgments with respect to future economic competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond Milestone's control.

Some of the important factors that could cause actual results 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 and 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 with the Securities and Exchange Commission, including without limitation, Milestone's report on Form 10-K for the year ended December 31, 2023, and Milestone's report on Form 10-Q for the first quarter ended March 31, 2024.

Forward-looking statements made during this call are based upon management's reasonable belief as of today's date, May 16, 2024. Milestone undertakes no obligation to revise or update publicly any forward-looking statements for any reasons.

With that, I will now turn the call over to Adriaan Haverhals, Chief Executive Officer. Please go ahead, Adriaan.

Thank you, David, and thanks to everyone for joining us today. We achieved revenue of more than $2.2 million for the first quarter of 2024. Although our revenue was down slightly compared to the same period last year. This was largely a reflection of a reserve reversal in the first quarter of 2023, coupled with a decline in international sales during the first quarter of 2024. However, these results do not reflect the true underlying improvement in the business.

Most notably e-commerce sales, which reflect our new online sales portal achieved growth of 31% over the same period last year. As you may recall, as part of this strategy, we terminated our relationship with Henry Schein at the end of 2022 and terminated our remaining US distributors in September 2023.

As a result, we recorded no revenue for US distributors for the three months ended March 31, 2024, compared to approximately $219,000 for the three months ended March 31, 2023. This deliberate shift to a direct sales model has resulted in improved gross margins. Specifically, gross margin in the first quarter of 2024 increased to 74.5% from 72.7% for the same period last year.

In addition to these higher margins, establishing a closer and more direct relationship with our dental customers has allowed us to do a much better job selling and providing outstanding customer service, which has led to much greater stickiness and potential repeat orders with existing clients.

Specifically, this direct relationship also allows us to provide ongoing training and support to ensure continued usage by dentists and hygienists. For example, we have implemented educational programs to enhance the customer experience. In particular, we anticipate introducing an interactive digital learning platform targeted at dental teaching institutions, dentists, hygienists, international distributors and international customers.

This direct relationship has proven effective with individual practices. Dental service organizations, also known as DSOs and large group practices. The greater interaction and our ability to provide higher level support had helped attract premier customers. As an example, we commented direct sales of the SCA to Meridian Endo and Perio, a large endodontics, periodontists and implant dentistry practice with three offices in Wisconsin.

This includes the deployment of the SDA in each of the operating rooms and across all the endodontics and periodontists within the practice. We also added Maine dental group, which operates 21 practices across the northeastern United States. As you can hopefully see the new sales strategy within our Dental segment has proven effective, and we anticipate enhanced benefits from this transition to a direct model over the course of 2024.

At the same time, we have engaged in more direct-to-consumer marketing or more direct-to-patient marketing. At the beginning of this year, we launched a digital marketing campaign simultaneously targeting dental clinics and patients by creating this push pull, we have seen an increase in qualified leads resulting in higher conversion opportunities and thus more revenues. In other words, these activities have resulted in leads from dentists contacting us directly to order our instruments because patients requested them to do so. We will absolutely continue to increase our marketing efforts with dedicated campaigns directly targeted at patients.

In summary, through our direct sales model, in combination with enhanced certification and targeted marketing campaigns, we continue to focus on new customer acquisition and development of the existing customer base. While international sales declined slightly, it's important to note that orders from third party distributors can be lumpy due to the timing and size of orders as well as certain distributors working through inventory.

We also made the decision to pull back from China until market conditions improve. As previously disclosed, our focus in 2023 and early 2024 was on the domestic front. However, we have reinvigorated our international focus heading into 2024 and anticipate steady improvement this year. We also look forward to announcing the addition of new international partners, which should support our global expansion strategy over the coming quarters, we are expanding our efforts to enter new international markets and deepen our penetration with existing international markets.

On a final note, we are on track with our next-generation dental instruments and look forward to unveiling it in the near future.

So to summarize, within our dental business, our e-commerce sales increased. We are benefiting from higher gross margins and we continue to generate solid cash flow on a stand-alone basis. In fact, the dental division generated approximately $625,000 of operating income on a stand-alone basis in the first quarter of 2024. Through our new direct sales strategy and increased marketing efforts, we aim to further grow our dental business in the coming quarters. As we continue to grow our revenues, we expect to benefit from economies of scale as well as the recurring nature and high margins on our disposables.

I'd now like to take a moment to turn to our medical segment where we are making significant progress on the reimbursement front. But first, let me provide a recap of our overall strategy and execution. Specifically, we have continued to introduce the CompuFlo technology within prominent hospitals, health care systems and pain management clinics.

As an example, during the quarter, we commenced sales, disposable sales with PRC Alliance Pain Relief Centers in Florida, which operates seven offices and an ambulatory surgical center located across Central Florida with 15 providers.

Adoption of the technology follows a successful evaluation by Dr. Sanjay Bakshi, a pain management physician and CEO of PRC Alliance Pain Relief Centers in Ormond Beach, Florida. Dr. Bakshi has been practicing for over 30 years and is triple board-certified in anaesthesia and pain management.

Additionally, we commenced sales of CompuFlo Epidural disposables to Omaha Pain Physicians, a comprehensive medical pain management centre in Omaha, Nebraska. This approval follows an extensive trial and evaluation by Dr. Matthew Stottle, its founder and Medical Director.

Both of these rollouts followed successfully evaluation periods and 100% clinical success with zero epidural punctures. The evaluations included epidural steroid injection procedures within the lumbar forensic and cervical thoracic junction of the spine. While the addition of these clinics further validates our technology and strategy demonstrating CompuFlo's clinical utility and benefit.

We believe the true value lies in the support these and other clinics provides in advancing our [broader] reimbursement strategy. As more physicians and anaesthesiologists perform procedures and submit for reimbursement, our goal is to secure growth coverage for our technology as we execute on our goal of establishing CompuFlo to become the standard of care in epidural analgesia.

As I have discussed in the past, we have implemented a very strategic and targeted approach to securing reimbursement with Medicare, Medicaid and private commercial payers. I'm pleased to report we are making significant process and progress in advancing this strategy. The first step in this approach was to work closely with key pain management providers in the use of the new CPT tracking code for accurate and timely CompuFlo claims submission.

Additionally, we are providing support to the clinical facilities for each individual claim to have an appropriate response. We have established multiple sites across the US that are actively utilizing CompuFlo and submitting claims to payers across the country, rather than bringing on too many hospitals and paying clinics before reimbursement approval. We realized it is better to laser focus on working closely with a select group of pain clinics and provide them the necessary professional support to help ensure positive payer reimbursement.

We are also supporting these clinicians utilization of CompuFlo across a variety of use cases, which is important in demonstrating widespread utilization of the technology. I'm pleased to report that we are effectively executing on this strategy, as evidenced by the fact, we have now submitted more than 160 claims to payers systems, including a variety of Medicare jurisdictions using the specific CPT code, the 777T code. If you'll recall the American Medical Association assigned this CPT code as an ad on code to be used in conjunction with one of the eight existing epidural steroid injection code. And it is very specific to the unique computerized aspects of our technology.

The high level of claim activity that is now being generated by us, provided us an opportunity to engage directly with the payers, including Medicare to directly educate them on CompuFlo technology and the unmet need the technology serves. In turn, we believe this is helping build support for the appropriate level of reimbursement. As I mentioned, we are making significant process and progress, and I look forward to providing further updates as developments unfold.

We also believe there is a significant market opportunity for our CompuFlo Epidural instrument within federal and other government agencies. And as we have discussed in the past, we are advancing initiatives following the same approval and working to secure approval with FSS, the Federal Supply System. That would open up the sizable government market.

Turning to the international front, we are expanding our network of distribution partners for CompuFlo, we are targeting independent distributors with existing relationships within key global markets and proven track records of introducing medical devices within their territories.

We have also received preliminary indication that CompuFlo has received regulatory approval in one of the largest brick countries, and we expect to report on this further in the near future. In anticipation of this approval, we have already established key relationships with leading medical institutions and commercial entities in this country, which we look forward to formalize in the near future.

So, to summarize, we are continuing our efforts to seed the market among key physicians and pain clinics across the US, which we believe will ultimately translate into broad adoption. We remain committed to our goal of establishing CompuFlo as the new standard of care in epidural anesthesia by providing patients with effective pain relief while reducing the risk of complications.

At this point, I'd like to turn the call over to Keisha Harcum, Vice President of Finance to go over the financials in details. Please go ahead, Keisha.

Thank you, Adriaan, For the quarter ending March 31, 2024, and 2023 revenue was approximately $2.2 million and $2.6 million, respectively. As of January 3, 2023, the company launched a e-commerce platform, selling and shipping the STA Single Tooth Anesthesia System and handing directly to end users, including dental office and dental groups to replace its previous US distribution alignments with Henry Schein

The US e-commerce revenue for the three months ended March 31, 2024, was approximately $1.3 million compared to $989,000 at March 31, 2023. The Company recorded no revenue for other US distributors for the three months ending March 31, 2024, compared to approximately $219,000 for the three months ending March 31, 2023.

The company terminated our nonexclusive agreement with other distributors in the US in September of 2023. For the three months ending March 31, 2024, international revenue was approximately $930,000, a decrease of $274,000 compared to March 31, 2023. Gross profit for the quarter ending March 31, 2024, was $1.7 million or 75% of revenues versus $1.9 million or 73% of revenue for the year ended for the three months ending March 31, 2023.

The increase in gross profit margin was due to higher margin sales with the launch of the new online store. Operating losses for the three months ending March 31, 2024 was approximately $1.5 million versus $1.3 million for the first quarter ending March 31, 2023. Net loss was approximately $1.4 million or $0.02 per share for the three months ending March 31, 2024 versus net loss of $1.3 million or $0.02 per share for the comparable period in 2023.

Now I'd like to turn your attention to the liquidity and capital resources. We continue to carefully manage expenses to have maintained a solid balance sheet. At March 31, 2024, the Company had cash and cash equivalents and marketable securities of approximately $5 million and working capital of $7.2 million and no long-term debt.

At this point, I'll turn the call back over to Adriaan Haverhals.

Thank you, Keisha. As Keisha mentioned, we continue to maintain a strong balance sheet. We had approximately $5 million of cash, cash equivalents and marketable securities as of March 31, 2024, which we believe provides us sufficient resources to execute on our sales and marketing activities, around both our dental and medical instruments without the need for additional capital raise.

We believe our new direct sales strategy, including the launch of our new online sales portal and US, as well as our enhanced marketing efforts around DSDA have been effective as illustrated by the increase in our e-commerce sales as well as the gross profit margin improvement during the quarter. Our dental business continues to generate positive cash flow on a stand-alone basis, and we remain focused on achieving our goal of positive cash flow company wide.

On the medical side, we remain encouraged by the outlook for the business given our sales pipeline. The addition of new pain management clinics as well as expansion of our international distribution partners. Most importantly, we are making progress advancing our reimbursement strategy around the CompuFlo Epidural System and look forward to providing an update as developments unfold. The medical segment represents a large addressable market, and we remain confident in our belief that QuantaFlo will ultimately become the standard of care, given both the safety, predictability and efficiency advantages.

So to wrap up, we believe we have developed an efficient and scalable platform to help drive high-margin recurring sales in the coming years and look forward to reporting further developments in our Medical segment on the reimbursement front. At the same time, we have maintained a lean operating structure and remain committed to driving shareholder value.

I'd like to thank you for joining the call today. And at this point, we would like to open the call up to questions. Operator?

(Operator Instructions)

Anthony Vendetti, Maxim Group.

Thank you. So just on the on the 160 claims submitted so far to Medicare. Was that in the first quarter or is that a year to date? And then can you talk about how do you think that's going to grow throughout the year? Is there our pipeline of claims that you have? And then the additional pain clinics? I know you announced some, what's that pipeline look like and the opportunity for the remainder of 2024?

Yes. Thank you, Anthony. So, to answer your question, first question was the number of sites or just the number of claims that we have submitted. Just to recall, at the end of 2023, we had submitted in a nine months' period about 100 claims. We also explained what was happening to the letter of the shareholders in the beginning of the month of January. So, the 60 additional claims is from the period January until today, which is May 16, 2024.

So does 160 claims, that means that patients have been treated with the technology, all the documentation that is needed for submission to the health care insurance provided, including letter of medical necessity, et cetera, have been submitted to these healthcare insurance providers, including we can confirm that these claims have been uploaded in their system, which is very important because uploading the claims means that there is evidence and there is an identification of our technology for healthcare insurance provider. So that's the first part of your question.

The pipeline of claims, or the pipeline of clinicians, like I said, we are laser focused. It's not a matter of getting 20 or 30 more clinics that are sending in the claims. It is more important that we have sufficient and the smaller group of clinics where we are 100% sure that the document that is sending in and submitted to the healthcare insurance provided is professional, is correct and that we avoid back and forth with the discussion with the healthcare insurance providers to optimize the quality of the documente patients.

What is key to understand. It's not so much of just doing the technology and treating the patient with the technology. The main part of the of the effort made is, I would say at the back end of this process where the billing and coding manager of the office has to send it into the insurance providers. I'm quite sure that everybody from their own experience is aware of what kind of paperwork needs to be submitted to get even the payment from insurance providers.

As we speak, yes, we are adding additional sites, additional clinics, additional hospitals that we are in discussion with and where we are going to perform first patients to further support the approval and the payment of the procedure by the reimbursement providers.

Now what the outlook will be for the end of the year, that is completely dependent on the feedback that we expect to receive from some of the jurisdictions that have already confirmed that there's coverage of the technology, but they are in the process now to finally establish a pricing for their insurance, for Medicare. In some of the jurisdictions for this technology as an add-on code in addition to the epidural steroid injection. And that will, of course, trigger them a faster acceleration of commercialization of our CompuFlo Epidural System in the United States.

Does that answer your question, Anthony?

Yes, I was just wondering for the some of the claims that have been -- that were submitted last year. What does the adjudication process look like so far? Has there been some price, some reimbursements established or is it too early to say at this point?

Now as I explained in the first quarter and in January, when you say reimbursement established means for us in our terminology, that means the Medicare has to establish a price for this technology right, commercial payers, some of commercial payers have paid for this technology and the motor vehicle patients or the motor vehicle insurance has decided in some of the clinics here in New Jersey to pay for the specific motor vehicle cases.

What is very important is to understand in particular, why is Medicare important? Medicare is important because in particular, our technology in the patient group of the Medicare insured patients will work very well because of the anatomy and the elderly patients calcifications and that is in particular part of the letter of medical necessity for the Medicare insurance provider that they understand what this technology is doing. Like I mentioned this morning that we are in allow to engage with the Medicare providers now.

Yes, I have had with our Medical Advisor a meeting with one of the jurisdictions to explain in detail what this technology is doing what the benefit is for the patients and which helps and support these jurisdictions to come with a pricing statement for our technology for the Medicare patients.

When we get that, that would be in your terminology in the establishment of reimbursement.

Okay and then maybe just explain the difference or the sales force difference between the dental business, which is now direct as you terminated the Henry Schein agreement versus how you're going about the medical side for the CompuFlo our system?

Well, I'm afraid I do not understand your question, but if the dental business, all the revenues are generated by the dental business. Year to date, 99.5% is dental sales.

Your question about the dental business is generating the revenues as we have reported, it's $1.3 million on the e-commerce sales in the dental business in the US alone versus, I think about $989,000 in the same period last year. So that's the 31%. And then, of course, the revenues that we are getting, including the profitability of the dental business, we use that money to further invest and help support the buildup of the medical business.

The medical business revenue that we hope to enjoy within the year 2024 is strongly dependent on having reimbursement and getting the initial price indication and price positioning of the reimbursement and the healthcare insurance provider. That's exactly what we are doing and what the strategy has been. Look, we are living in an environment, in an healthcare environment where unfortunately it is not sufficient. If you have a new technology that is more efficient, safer, more comfortable, a higher predictability.

At the end of the day, it completely depends on what the health care insurance providers are going to pay and reimburse and establish that reimbursements for the patients and the clinicians, right. So, what we are doing is building it up stage by stage and step by step, as I've alluded on earlier, where we have identified and last year, three jurisdictions that we are active in.

This year, we have expanded of the three jurisdictions to seven jurisdictions where we are currently in. those 12 jurisdictions in the United States and the target is to be present in all those jurisdictions. And the seven out of the 12 is in a way a confirmation that we are now present in about 60% to 65% of all the states in the United States. So the game here is really to roll it out. Every jurisdiction has their own decision making process. But when we get the establishment of the first jurisdictions in the United States, it will have an effect on the other jurisdictions for Medicare and other parts of the country and the US.

That's why it is so important. And that's why I said, we have made significant process and progress because, yes, we have been able to engage with in a meeting with one of these jurisdictions to explain in detail what this technology is about, what the benefits are in particular for the patient population. And now we are waiting for their feedback.

That is a pretty fantastic result, I would say for the company on our side, the numerous company that never ever get as far as we have been. So that's the reason why I say significant progress. And that's the reason also why and I'm pretty positive that we will hear in a short to mid-term from these health care insurance jurisdictions. What that price is. I don't have any influence on what the final price is going to be.

I'm also not going to share which jurisdictions we have been in discussion with because I don't want to jeopardize any of their decision-making process to come to a final price statement and pricing decision.

But have we made progress? Absolutely. And proud of what the team and this company has been doing as a smaller entity in this whole jungle of reimbursement and coding and getting that established. So yes, I'm pretty positive.

Okay, great. Just shifting gears to the dental business are you you'd you you're talking about e-commerce and then restarting the international. Is the restarting the international this year already underway? And then is there going to be an e-commerce model there?

Well, and let me take the opportunity. I would like to correct your statement. It's not a matter of restarting the international business is another matter, but we have not focused on the international business that has been good reasons why some of these distributors based on the inventory buildup or based on their quarterly purchase orders and forecasts of why they have not ordered the products in the first quarter.

So what I mean was that, you know that we are having a rather lean organization also on the sales side. For the dental business, we have, including myself, three people working directly with the sales and then three people in the back office from an education and a customer service and the customer support point of view, focusing on the higher level of activity within the United States because we know now the customer identity.

On the international front, we have quarterly business meetings with the top 15 distributors, which is representing 90% of our dental business to really understand and work closely together with these distributors so that we can get a steady and a consistent solid baseline of business quarter by quarter because we are not in a business of seasonality. It's completely depends on the build and the magnitude of the order and we would like to spread that out over all the four quarters so that we can come with a more efficient sales and operations planning with a more efficient management of sales efficiencies and sales execution.

We will not -- For the time being we will not have an e-commerce platform for the international markets and primarily based on language, based on different tax systems based on different regulatory requirements within these countries. So we prefer to go through the distributors. Now, the majority of these distributors do have their own online platform within their country. So what we are doing is supporting them in all the service at the back end and to be able for them to increase their marketing and sales efforts to their customer base because we do not own the customer in the individual countries, our customer is the distributor. The distributor owns the customer relationship with the end user in the markets.

That's the reason why we decided and that's a rather beautiful a modem, I would say why we decided to develop an interactive learning program, which is online with the clinicians and the distributors and the local clinicians in each individual country window where there is a real time translation in their local languages. So that's the type of activities that we are undertaking with the distributors.

Okay. That's very helpful. Yes, I'll hop back into queue. Thank you.

Thank you, Anthony. Thank you.

John Cole, Private Investor.

Thank you. Hi, Adriaan, and I'm John Cole. Nice to speak with you again, can you hear me?

Yes, loud and clear, John.

Okay. Your discussion with Anthony, help me to better understand the process that Milestone is incurring and trying to establish a rollout of the CompuFlo technology.

One of my questions is when you get the price fixed with Medicare and insurers and when you get that end of it when you get the insurability part, all set up then whereas Milestone are all these doctors really enthusiastic by using CompuFlo technology or once you get the insurance part of it all as towers, are you going to have to engage a sales force to go around the country to pain clinics or hospitals trying to get them to use it.

In the dental business, part of the traction you're getting is from patients. Is the same process going to be necessary from Milestone to do that? Or are these doctors are engaging with saying, okay, we really like CompuFlo. So, we want to use it in our total practice, but we have to make sure we can get paid.

Where is the level of acceptance or enthusiasm for the CompuFlo technology with hospitals and pain clinics and class? And Dr. could you tell me that?

Yes. it's very simple, like I said, reimbursement is key. We do not have to invest in a heavy sales organization in medical because, as you know, what we have shared in the past as well, we are lined up already with a distributor called CTI, that in 24 states in the United States, they are experiencing in anaesthesia in the operative room. So I'm not so worried about the expansion of the sales force.

From the dental product as well. Is that exactly for the question that you asked, The short answer to that is that's the reason why we have opened the portal and why we are so successful in the sales in the United States, combined with digital marketing, increasing marketing, qualified leads where we do not necessarily need to have a heavy sales force.

Because what everybody needs to understand, yes, of course, you need to have additional new customers. But the main part of the business is the recurring revenue stream of the consumables. And that's what we decided to do to open the portal, increase our customer service, customer support, after-sales service. And that's also the reason why we enjoy the growth that we have reported.

So, I think that answers your question. Thank you for your question, John.

Okay. One more question, it seems to me that you're working on two fronts with government approval. You're working with Medicare, and you're also working to get CompuFlo as the standard of care with certain government agents. If you get that wouldn't that just kind of eliminate any more influence you have to have with Medicare for adaptability of this technology, I mean, because --

No, I think all things, John, there are two different things. The one is not going hand-in-hand with the other. So Medicare doesn't have any influence on the government. The government doesn't have any influence on the Medicare that is two different processes, et cetera. So, I hope that that is sufficient in answering your question. Thank you, John.

Robert Brennan, Private Investor.

Hey, Adriaan and thanks very much for the call. So a couple of questions on great to see the improvement on the margins in the dental business, I think you're obviously headed in the right direction because if you can sell less and make more, that's always going to be a positive in light of the anticipated growth in our in addition to that, but what kind of and growth you anticipate in the dental business and also what the opportunities might be in Europe?

Yes. That's a good morning, Rob. Thanks for the question without going into details what my growth objective is for the organization. I think first of all, definitely there is a gigantic growth opportunity in the United States based on what we have been doing in the past.

Right. So the growth for the Company would definitely be driven firstly, by the growth in the United States. I mean, you know, let's agree on one thing. I definitely want to outperform the results that we had over the entire year 2023 because otherwise, it's not from if we would have similar results rank. That's one thing.

Secondly, in the in the international markets, what I'm doing there, and that's important to understand that from an operational business. I want to make the current goods distributors being better distributors than what I want to do is the mid-tier of -- and the good distributors is the 15 distributors being responsible of 85% to 90% of our business.

Then you have a group below that that you want to develop into the to the higher tier and then you have a number of fragmented distributors, and it does not always help to put a lot of emphasis on that, let's say a distributor that is ordering for 5 grand or 10 grand a year. If I looked at the cost of acquisition, that's pretty high based on the revenue that you are getting.

So we're cleaning up on that, what is key is the expansion in other markets, in other international markets, like for example, I told you last year ago we entered in Brazil and of course, the results could have been better, but the Brazilian dental distributor actually have continuously to invest and have added and growth their dental sales force from two people to eight people. So instead of only being in São Paulo, we are in others.

We have initiated in-depth discussions with the dental chain in Brazil and that own 100 clinics. We are doing a financial evaluation, where we establish the usage of our technology and look at the financial impact of five clinics that are belonging to the dental chain in Brazil. So I do believe that Brazil will also contribute to more revenues as we speak throughout the course of the year.

So, in a nutshell, three growth drivers for success, the US markets, international expansion and increased the utilization of handpieces and recurrent business in the international markets.

Does that answer your question?

Well, goes. I mean, I was just on, you know, obviously, I think you've done it the right way in terms of getting margin improvement and then kind of cleaning up the periphery of that thing. You're getting rid of Henry Shien and all that stuff. And so how many how many salespeople do you actually have in the dental? Did you say three?

No. So, to be precise, I have and two people, let's say in the field, including myself, I spent time as well in the field as part of the CEO role. And then we have three people in the back office from a dental hygienists point of view that are doing education and after-sales support and customer development.

Look, we are not in our marketing approach and our go-to-market approach. We are not knocking on doors. We are using the digital marketing platform and lead generation over the marketing platform as a tool to acquire new customers. What we also are not doing is to go to the larger dental trade shows and meetings because from an ROI perspective that it doesn't make sense of people do not tend to buy on these tradeshows.

But what we do specifically is a number of smaller scale and Zoom meetings. So, what you have to envision then is that you'll have about 20 clinicians coming to an educational program where they use the technology where they get lectures and that results in a normally in a 50% conversion whilst we are there. So we have to be smarter in our marketing approach and in our sales approach, and that's what we are doing within the current go-to-market setup.

Okay. So I guess the other question I would have is that I'd like to fully expect this to become the standard of care on the epidural side? Yes. So we talk about it, what [11 million] epidurals given a year from, but can you kind of quantify that and what the actual monetary market size and you know, in anticipation of getting and I don't want to jinx anything, but Medicare approval and FSS approval. I would expect that as you indicated you've got a couple of Medcare areas approved that's going to have some kind of an echo cascading effect into the other Medicare jurisdictions. But what kind of like monetary revenue market. Are we looking at in terms of the epidural space?

Yeah, absolutely. This is a very important question, Robert. Thank you for asking that. So total market of that, the duals is 11 million procedures, right? I will take you through it step-by-step now, let's assume just for doing the math, we do [2 million] procedures as a target just to create a good picture about the potential, right.

So, 2% to 20% of that market is 2 million procedures okay. So, 2 million procedures versus what I hope to establish a an average sales price on the consumables of $200, right? That would be $400 million in revenue with a gross margin of 60% to 70%.

So that is gigantic. So going back to your question, my responsibility is then to say, okay, if the target would be in this case, 20% of the total market by when can we have that penetration of 20%.

And that is where it where the importance of reimbursement is coming in right. And that's the also the revision the way that I've targeted at the first two jurisdictions that we are currently active and represents about 22% of all the epidural steroid injections in the United States that's the reason why it is so important for us to get that price point establishment by the insurance providers because then we can go full force out because the clinical concept is proven. The clinical efficiency has proven people would like to use it. and then once they also know that they get paid for it, then all the hurdles. So to say, in the mindset of definition are gone and then we can start moving ahead. So that's a very important driver for growth for the Company, Rob,

Very good call and I guess my last thing would be you only have one analyst that covers your company, I believe, am I correct in that?

I have for the time being we have Maxim and historically also had Northland.

Okay. Yes. So are there any plans because, you know my own on self-interested opinion as of stock does not belong where it is currently but just the opportunities are so bad. Are there plans? I know there's only 24 hours in a day, but what kind of road show are these guys going to be doing on your behalf or some kind of IR push?

Well, again, good question and thank you for asking that. Definitely, I welcome. I welcome always a coverage to that extent. And yes, I'm working in roadshows and but it's all a matter of timing. And I think the timing is right now in the second half of this year, we will see an increase in the being at conferences, you know, it's not that nothing is happening. You know, I do a number of calls during the course of the week. So so that is fine.

Really good call, great opportunity. I think you're doing a great job.

Thank you, Robert.

James Fishtard, Private Investor.

Thank you. Well, I look at it, I guess a little different than Robert did, when sales go from $2.6 million to $2.2 million and losses continue at $1.5 million per quarter with $5 million of cash, I see that more investment has to be made in the next nine months or so. Is there any possibility that a larger medical instrument company could come in and acquire MLSS?

Well, thank you for your question. You know, in all honesty, I don't agree with your comment. I think what we have stated we have sufficient cash and cash equivalents at hand and also the way we manage the Company from a cash preservation point of view, we do not foresee to raise capital in the next nine months but I'm more than willing to give you more details in a call out of this scope of the conference call.

The second part of your question related to is there a willingness of companies, you know, buying and being interested in our technology? My comment to that is that everybody that has a business background has to understand that what we are currently doing and laying the groundwork for this company will have any effect not only on the stock, but also on entertaining other discussions with other companies, there's a number a number of potential opportunities in terms of strategic cooperation, whether it is synergistic, whether it is research and development related.

But really the key for us is and also for other potential companies that would like to entertain discussions with us is really the establishment of reimbursement. It's not so much about the technology as such. But it is also very important what people are willing to pay or what they get reimbursed when they use the technology in this. Yes, in this business segments.

Okay. Thank you.

You're welcome.

[Richard Durando, Dr. Richard Durando DDS],

Good morning, Adriaan.

Good morning, how are you?

I'm right well. So I have a couple of questions over the years you have now to all these centers that are used to your device and the like. Yes, it seems to be that it's not that you haven't tried this, but I'm asking what happens, does it take the anesthesiology Association have some say that members would go. You know, this is a really good technology. We would like to at least write some quote letter of endorsement that this is a wonderful technology, and it is superior to what we're using.

And I illicit that arm because that's a much bigger entity than milestone is by far. And you have all these. I mean, there was an announcement, I don't know, 18 months ago where there was a large medical group in New England you didn't name it and that's fine. I don't care who it is. We know basically who it is. So, the point being are you are you able and it can't be a lot of things. You can't talk to these people and pitch that line thinking to them two to move this process along a little bit quicker.

Can you comment on that? I have maybe some follow-up questions.

No, no, that's a very good question. Thank you for the question. And absolutely endorsement of organization. It is, of course, always more than helpful and also important. And that brings us always back to development of KOLs that we have been doing, right. And yes, indeed, I so I and I also have had my discussions with and the organizations, you know, the American Anesthesiology society. I've had the meetings with them and it's some it's a rather long paper trail process as well to get that established.

So what we have been doing, we go a little bit different route now because all the work that we have been doing lately also in the Interventional Pain Society, we have an abstract and we are on the platform at the meeting in Miami and Florida, where we use that to spread in a way the news and to share the results of our technology for these organizations.

To your point, what we are also doing and what is very important is with a safe way with the American Association for Anaesthesiologists and other professional organizations, we are reaching out to them because it is also important, not only from an endorsement immediately, but later on also for supporting the technology on the final pricing on reimbursement establishment and in particular, of course, also for having discussions for further development of this technology.

As I would like to recall, we have patents in Europe. We have patents granted in the United States for peripheral nerve block where we would hope that other entities could be of potential interest on working together with us and to develop together with us a new technology or a new entity within the field of anaesthesia. So, I know it's a little bit long answer to your question because the short answer would be it hasn't happened. But what I want to do and want to explain to you is yes, we do have these discussions how to work with them and how to further endorse that.

Now of course, you always have to and that's the challenge that we have as a provider of a disruptive technology, we always have to explain very well, why we have this technology. People perceive anaesthesiologists proceed that we are saying that they are doing not their job very well or that we want to simplify these types of injections. And all of the above is not true.

What we are going to provide to them. It's actually a guidance system in the trajectory of placing an epidural needle in the epidural space. And my approach is also not only to focus on anaesthesiology department but also at surgical internal medicine and other societies because it's the side effects of the current loss of resistance technique are not necessarily be detected and depicted immediately and by the anaesthesiologist, but they are going to be seen and managed by the aftercare, for example, in labor and delivery or doing pay in procedures or doing spinal cord stimulator procedures.

A good example here is what we are working on this It's neurosurgery, right, where neurosurgeons are doing spinal cord stimulator procedures, and they are using our technology because you know it increases safety and efficiency. They don't get any dural puncture and they are able to, like I said, to have a more efficient and safe procedure.

Yeah, So, here's my point from my point of clinicians. again, when I perform a procedure in dentistry, you have the anaesthesiologists that are brilliant people. Yes, they really want to use this you should then be able to tap into that native interest of those people and have them rally in some way to help augment what you're doing because their voice is much louder and much clearer.

So absolutely, it so I assume you have I assume that you have list that this form of please for them because you have all these clinics that have at least some KOL or somebody that says, wow, this is really good. Let's get this moving. What's happening there, where is the colour there. I'm not talking about the company is doing. I'm talking about what I need and interest by the clinicians are that are providing the service that's worth. That's where they could be a huge help to you.

I wonder what the same thing is going on in Europe. If you have these people, they're so influential, why are they able to help bring the cost to you? It should be more organic on their part to want to use this and I don't sense that that's happening.

No, no, it isn't happening. It is happening to the extent where --

I got that part. Okay. So now, when do you go out there request them to do this because that is the key you could do all the other marketing you want to and, you know, there's a tremendous number of procedures that are done every day to provide epidurals and all panels.

And is there anything happening what labour and delivery are there? Are there claims being proposed procedures being done with the epidural in labor and delivery. That's where the money is. There's a huge number of procedures that go on there. So, what's happening there where some color there. Can you give us some color,

Yeah, why not. Absolutely. What we are doing. In particular, these people that we are working now with the pain physicians like the pain physicians, interventional pain market is much larger than OBG via an epidural and JJ So both we have two advisory boards where we use and utilize the input of these people to help us to generate new leads and opening doors in other in other entities and hospitals.

But you have to be respectful of the fact that you still have to go through internal procedures, value assessment committees, financial committees to get that into a hospital. What we are doing with all these people with the parts with Compania with people in Europe as well they are part of the group where they are continuously help us in opening doors and getting access to additional clinics. You still have to do the groundwork. You still have to do the demos, you still have to follow the internal procedures of the hospital?

It's not a top-down approach where they will say, okay, I will use this right away. There's a cost issue does a reimbursement issue to your point, but absolutely, that's what we are doing as well.

Yeah, thank you very much to all. We appear to have reached the end of our question-and-answer session. I will now hand back over to management for any closing remarks.

Thank you for your time, and thank you for the lively discussions, good questions, and we remain positive and encouraged about what we have initiated and what we are going to do. We will keep you posted on any progress made on the activities that we eluded and highlighted on, and we will keep you posted. I wish you a fantastic day and looking forward to our continued discussions. Have a good day.

And thanks a lot. Thank you very much. I and this does conclude today's conference. You may disconnect your phone lines at this time and have a wonderful day, and thank you for your participation.