Stereotaxis, Inc.
Q1 2022 Earnings Call Transcript

Published: 10 May 2022

[Operator:]

Good morning. Thank you for joining us for Stereotaxis' First Quarter 2022 Earnings Conference Call. Certain statements during the conference call and question-and-answer session period to follow may relate to future events, expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company in the future to be materially different from the statements that the company’s executives may make today. These risks are described in detail in our public filings with the Securities and Exchange Commission, including our latest periodic report on Form 10-K or 10-Q. We assume no duty to update these statements. At this time, all participants have been placed on a listen-only-mode. The floor will be open for questions and comments following the presentation. As a reminder, today’s call is being recorded. It is now my pleasure to turn the floor over to your host, David Fischel, Chairman and CEO of Stereotaxis.

[David Fischel:]

Thank you, Operator, and thank you all for joining us this morning. On our last call, two months ago, we provided a fairly comprehensive overview of Stereotaxis' mission, strategic focus and progress. We will keep today's call more brief. This is both a challenging and exciting period for Stereotaxis. On the heels of last year, where we demonstrated a restart in capital adoption and overall sales growth, a primary challenge has been driving consistent momentum and growth in capital activity. We are operating in a macro environment with a host of pandemic-related supply chain, personnel and economic disruptions. In face of these, we demonstrated the ability to successfully launch Genesis and start building a capital sales capability. While system orders and sales have progressed slower than expected, we are making progress. The $11 million in system revenue we recorded last year was higher than any other year in almost a decade. We received an additional Genesis orders since our call two months ago from an existing U.S. hospital customer. Given only the orders we have already received, we are on track for system revenue this year, that is approximately 90% of the total system revenue we reported last year. With multiple additional near term opportunities, we are confident we will show system revenue growth this year. We view ourselves as in the early stages of setting ourselves up for a multiyear period of robust consistent revenue growth. While many factors are outside of our control. There are factors within our control where we can improve our commercial sophistication, accountability and strategy. It's our responsibility to focus on what we can control. We are developing a new capital sales platform that will provide better transparency into the global capital pipeline, and more clearly flagged risks and actionable items to focus on during the effort to advance any individual deal. Given the complexity of each capital deals and organized platform like this is very helpful in creating clarity and providing actionable guidance. We hope this will fundamentally improve commercial execution, while simultaneously making us better at forecasting results with relevant pipeline analytics. Beyond this capital sales platform, we're looking to enhance our team with new senior sales leadership in Europe, where we see a particular opportunity for both clinical adoption and capital sales with the upcoming launch of our MAGIC catheter. Most important for broader adoption of robotics is that new users have positive experiences with our technology, good clinical outcomes, and successful growing practices. First quarter was particularly exciting for us on this front. During the quarter, we launched for the first time in many years, multiple fully greenfield robotic practices, and hospitals entirely new to robotics and with physicians, entirely new our technology. These launches took place at HonorHealth in Scottsdale, Arizona, the National Institute of Cardiology in Warsaw, Poland, and Fuwai Central Hospital in China. We are delighted to see utilization at these practices, and across the installed base of Genesis systems greatly exceed global averages. Exiting the first quarter, these three new practices were performing procedures at a rate over 50% higher than the average robotic practice. When we look at our Genesis systems globally, the utilization on these systems is over 100% higher than the average robotic practice. While there are various factors that impact utilization, the success of the Genesis system and these launches reflects well on the real-world performance, clinical value and relevance of our technology and the performance of our team. Qualitatively in speaking with the physicians, it has been heartening to hear how pleased they are with the technology and how they find value across a broad range of arrhythmia procedures beyond their original expectations. This positivity is helping create and perhaps also mirrors a similar sentiment that is emerging in the field. I was recently at the Heart Rhythm Society Conference in San Francisco, and before that, at the European Heart Rhythm Association Conference in Copenhagen. In both conferences we sent an increasingly positive tone emerging around Stereotaxis and our robotic technology. We had busy booths with many physicians test driving our system. Changing long established reputations, and countering misperceptions takes time. But there clearly seems to be a qualitative turning of the corner with Stereotaxis has being increasingly used as innovative, relevant, energetic and reliable. Innovation is key to living up to that reputation. On our last call, we discussed in more detail our technology pipeline. Five key pillars of our innovation strategy, service synergistic and independent growth drivers. Collectively, they enable a future where robotic technology is broadly accessible and can be used with a robust ecosystem of modern catheters in EP and for a wide range of endovascular procedures. We're continuing to methodically advanced these technologies, and our progress remains consistent with previously provided timelines, with many of these approaching regulatory submission, and initial commercialization within the coming year. Collectively, these innovations are transformational for us as a company and serve as the foundational product ecosystem for a preeminent medical robotics company that can broadly transform endovascular interventions. They allow for dramatic structural improvements to our commercial capability. And we are excited by the impact these innovations will have in 2023 and beyond. Kim will now provide some commentary on our financial results. And then I'll make a few financial comments as well before opening the call to Q&A.

[Kim Peery:]

Thank you, David. And good morning everyone. Revenue for the first quarter of 2022 total $7 million. This is down from $8.6 million in the prior year first quarter, primarily due to recognizing revenue on one robotic system this quarter compared to two systems in the same quarter last year. System revenue of $1.6 million reflects initial revenue recognition on the delivery of a greenfield Genesis system. Recurring revenue for the quarter of $5.4 million compares to $5.8 million in the prior year first quarter, with revenue impacted by slightly lower service revenue and procedure volume. Gross margin for the first quarter of 2022 was 70% of revenue. Recurring revenue gross margin of 85% remains consistent with previous quarters. System gross margin of 21% continues to reflect significant allocation of overhead expenses over low manufacturing volume. Operating expenses in the quarter of $9 million, included $2.5 million in non-cash stock-compensation expense, excluding stock-compensation expense, adjusted operating expenses were $6.5 million compared to the prior year adjusted operating expenses of $6.2 million. Operating loss and net loss in the first quarter were both approximately $4.1 million compared to $1.5 million in the previous year. Adjusted operating loss and net loss for the first quarter, excluding non-cash stock-compensation expense were $1.6 million, negative free cash flow for the first quarter was $3.3 million. At March 31, we had cash and cash equivalents of $36.9 million. I will now hand the call back to David.

[David Fischel:]

Thank you, Kim. Given the system orders we received to date along with our late stage pipeline, we are reiterating our guidance of revenue growth for the year driven by continued commercial adoption of the Genesis RMN system and stable recurring revenue. System revenue for the year will be primarily recognized in the second half of the year. We continue to be focused on driving our commercial and technological progress while maintaining financial prudence. A challenging macroeconomic environment accentuate the importance of self sufficiency and financial stability. The $3 million of negative free cash flow we had last quarter is above the more normalized level we have previously shown or expect going forward. It includes a meaningful amount of cash payments made for the building of our new headquarters, as well as continued purchases of robot inventory. Given the challenging supply chain environment, it wouldn't be prudent to try to time inventory purchases until we have been willing to spend on inventory earlier than necessary to protect against uncertainty and supply timelines. We continue to view our balance sheet with $37 million cash and no debt as very strong. We feel comfortable investing in our team and the infrastructure and projects that are critical for success, and we'll continue to do so while staying relatively near breakeven. Our existing balance sheet allows us to establish and commercialize product ecosystem we are developing and reach profitability without the need for financing. We look forward to now taking your questions. Operator, can you please open the line to Q&A?

[Operator:]

Thank you. [Operator Instructions] And first we'll go to Frank Takkinen with Lake Street Capital Market.

[Frank Takkinen:]

Great. Thanks for taking my questions, and congrats on all progress. Wanted to start on the new programs you called out, and the utilization you're seeing from those, as well as the Genesis installed base. Maybe just take us in a little bit deeper into what those programs fully entail. And if there's any early learnings that you could extrapolate out to Genesis users as far as utilization, averages, once fully scaled versus the previous installed base?

[David Fischel:]

Sure. So, like I mentioned, that was one of the real highlights of the last few months is the launch of these completely new greenfield sites. We've had, obviously, several Genesis installations over the last year and a half or so since we launched Genesis. Most of those were either to users who had moved to a new hospital, but had a lot of experience with our technology previously, or they were replacement projects at existing hospitals. In the first quarter, we had a launch in each of the three major geographies with completely new physicians, completely new hospitals. And what was nice was how positive overall those launches have been. The feedback that we received from the sites has been fantastic. And so overall, that's very heartening when you can go to completely new users and launch things smoothly. And they are -- they're grateful and excited to be part of the robotic community. And so, that has been particularly nice. I gave I think on the call, the utilization numbers for those three sites exiting the third -- the first quarter was about over 50% higher than what our average utilization globally at all robotic sites. And at the Genesis sites, globally, we are now at over 100% of the utilization of a typical robotic site. Obviously, utilization is driven by various factors and some of the early adopters of Genesis are particularly high robotic users regularly. But still, I think it points to the fact that Genesis is working very nicely in the field. The feedback has been positive. And hopefully, we can maintain that type of -- those types of statistics going forward.

[Frank Takkinen:]

Great. Okay. I'll just ask one more. I think last quarter, you called out four late stage replacement conversations ongoing. Can you give us an update on those four was one of the orders in the quarter -- was the order in the quarter one of those four and then what's the status of the other three if that's the case?

[David Fischel:]

Yep. The order that we received was one of those four and we have continued discussions with other parties and some in the very late stages and some still moving forward. And again, those were called out specifically as ones that were very easy to identify as very, very high likelihood orders. But there remains a relatively robust pipeline behind those of hospitals that were engaging with.

[Frank Takkinen:]

Perfect. I'll stop there. Thanks for taking my questions. And congrats again on all the progress.

[David Fischel:]

Thank you.

[Operator:]

Moving on, we'll go to Adam Maeder with Piper Sandler.

[Adam Maeder:]

Hey, good morning. Congrats on the progress, and thank you for taking the questions here. Maybe just to start with one, on the top line expectation and just trying to deconstruct that a little bit. So David, did I hear correctly with the orders that you have in hand, year to date, you're on track for 90% of system revenue that you had last year? Is that kind of like the driving force that combined with the pipeline, where you expect system revenue to grow year-over-year. I just wanted to kind of better understand that -- those puts and takes and then I had follow up two. Thanks.

[David Fischel:]

Sure. Hi, Adam. Yes. You heard that exactly correctly. So, with the existing orders that we have already announced now, we would come out to system revenue for this year, approximately 90% of last year. And so, based off of that, and the fact that we are still working on orders that we expect to turn into revenue this year, we're confident in the guidance of growth. In reality, we need one additional order and we would be above last year's level.

[Adam Maeder:]

Okay. Appreciate the color there. And then, maybe just to ask a big picture question next, just on capital environment? Are you seeing any kind of material changes and just CapEx budgets at hospital customers? Obviously, there's some macro economic challenges and pressures that are seemingly kind of coming down the pike. So, just wondering if you've seen any shifts or have things kind of remained fairly resilient, like we've seen over the past two years despite the pandemic. And then add one quick follow-up. Thanks.

[David Fischel:]

So, it's hard to discern a pattern that crosses all sites, and anecdotally, there are areas where there is incremental pressure and incremental financial pressure, I think, because of some of the costs that hospital systems are seeing, and then, their reluctance to spending more. And -- but then also, there are many cases where business continues as usual, or where there might be continued pressure, but obviously, electrophysiology labs are important financial centers of the hospital. And if they need to invest, then they're ready to invest. So, I think kind of it's a little bit of a mixed bag. I can't say that there's been any change in the environment. But we're definitely still working in an environment full of headwinds, I think headwinds from our customers perspective. And just general macro headwinds.

[Adam Maeder:]

Okay. Understood. That's helpful. And then just the last one, and thanks for taking the questions here. Just on the pipeline. So RF ablation catheter and the mobile system, it sounds like those are tracking according to plan in line with previous timelines, maybe just talk about the level of conviction and delivery, and against those guideposts. Kind of what's left to do before being in position to kind of make those regulatory submissions? Thanks again.

[David Fischel:]

So, yes, we are on track for development kind of timelines and submission timelines. On the MAGIC catheter, specifically the proprietary RF ablation catheter that we're developing. And we have done the vast, vast majority of all the testing required for a CE Mark submission. I think we're waiting to hear back from one or two final tests that were being done at an outsourced lab. And concurrent we're waiting for those results. We're also compiling all of the information for the CE Mark submission. And so, we should be able to do that in the summertime, hopefully earlier in the summer. And so that's obviously on track with what we described on the last call. And then obviously, the regulatory review period is not up to our timeline, but hopefully that would allow for commercial launch towards the end of the year or beginning of next year. And with a mobile system, we're also developing that. We're still in the stages of hardcore development of various aspects of the technology and working on the prototypes that we've built. But given kind of where we are to-date, we feel comfortable with the previously reiterated guidance of a submission around year end. So a commercialization at some point next year.

[Adam Maeder:]

Okay, perfect. Thank you.

[Operator:]

And moving on, we'll go to Alex Nowak with Craig-Hallum Capital Group.

[Alex Nowak:]

Great. Good morning, everyone. Just David, hoping for those three greenfield sites, how much did I guess the innovation coming down from Stereotaxis within a new catheter, but also the new interventional tools? How much should that play into their decision making to adopt Genesis? And then just taking that beyond the three sites, but just in your order and conversations, how critical are those new tools in the conversation?

[David Fischel:]

Hi, Alex. Good morning. So, I'd say that probably the knowledge that we are developing a next generation ablation catheter has -- that has been known to the community since we started commercializing Genesis. And I think it is important for them to know that there is a future not just in terms of a new robot, but in terms of new ablation catheters, and that overall concept of an open ecosystem around robotics. And so I think that was known when these hospitals order Genesis. And it is an important consideration, because just the robot by itself without the product ecosystem is not particularly meaningful. So they do think about in terms of the ecosystem. I'd say one of our biggest challenges still now is the fact that we are -- that we don't have a newer catheter, and the only catheter that's able to be used with the robot is 15 years old. And there definitely is pressure where some sites aren't willing to invest in things based off of future promises, they want to see what's available now. And so, I'd say that's probably one of the bigger pressures we have on our technology and adoption of our rollout right now, the fact that there isn't newer interventional technologies available to be used with the robot. I'd say the availability of a guidewires, guide catheters and the ability to use the robot for broader indications that was probably not part of any of the consideration of the hospitals when they purchased. And it's just kind of over the last couple months, few months that we've started to engage with hospitals and our existing physician installed base and more regularly sharing with them what we're doing also on the vascular navigation side, and starting to prepare them for when a guidewires available, the types of procedures that might be interesting to perform with it. And so I think that will start to become more part of the conversation going forward. But that was not really part of the conversation in the past.

[Alex Nowak:]

That's very helpful. And then maybe expand on the investments you're making and the changes you're making for the commercial organization. Just what have you done so far? What an additional do you plan to do over this year? And then maybe just kind of highlight the current salesforce comp plan structure for launching Genesis or selling Genesis this time?

[David Fischel:]

Sure. So I think I've described before that the vast majority of our commercial team is focused on clinical adoption and working with our existing customers around the world to make sure that they have successful robotic practices. We have a relatively small capital sales team. And that includes various people in sales leadership who spend a good portion of their time on capital sales. And I guess what I describe our capital sales capability, or efforts in the past is, on the one hand, we did create various infrastructure that is helpful. Things like an ROI model. Or the clinical dossier that we created that summarizes all the clinical data in a thoughtful fashion. Or information on the Model S x-ray and its image quality and radiation dose thing. And so we created various types of materials, but overall, I'd say that our efforts were type of hustle, and really relying predominantly on the relationship with the physician and being responsive to their questions and to their needs. And that was the primary way by which we advanced the deals. What we've noticed is that oftentimes, physicians only have part of the picture of how a capital process is advanced or what the main determining factors are or even the timing of things, the timing that a physician provides might be very, very different than what an administrator provides once you're able to actually speak with the administrator. And so, as we've been learning and again, at Stereotaxis for many years Stereotaxis was having practically no capital sales. And so to some extent, we're building a capital sales capability from a standing stop. So as we've been going through these learnings, we're becoming somewhat more sophisticated in the red flags to watch out for, and the things that can delay projects. And so, we're trying to channel all of those learnings into a more organized process that allows us to one provide kind of a quicker clarity on the status of a project across the key drivers of that project moving forward to provide better guidance to the sales team on what are the next actionable items that are most impactful? Are there gaps anywhere in terms of literature? Or kind of tool sets that would be helpful And are the red flags that kind of should be addressed much earlier in the process before they become material. So I think there's just kind of a maturization of our capital sales process that we're developing. And I think that will kind of take us a long way from moving from this more hustling environment to a more mature organization.

[Alex Nowak:]

Very helpful. And then just lastly, we're hearing about some shortages of hospitals by Iohexol [ph] and other contracting agent. Just curious, have you seen this delay, a potential cath lab procedures in the last couple weeks?

[David Fischel:]

You've been seeing delays in what?

[Alex Nowak:]

Iohexol and other contracting agents?

[David Fischel:]

That I've not heard. I've heard all sorts of things coming from the field in terms of challenges at the hospitals. I've not heard that one yet. So, we do hear still staffing issues. We hear various times certain types of supply constraints, but I've not heard that one.

[Alex Nowak:]

Okay. That's good. Appreciate the update. Thank you.

[David Fischel:]

Thank you.

[Operator:]

And next, we'll go to Jason Wittes with Loop Capital.

[Jason Wittes:]

Hi. Thanks for taking the questions. Maybe just follow up in terms of your discussions on capital equipment sales, has the mobile unit come into play there? Are customers aware of it? And are they reacting to it?

[David Fischel:]

There is now some awareness. And I'd say that, I do not believe that has impacted the Genesis orders to date. And I think overall, it is unlikely to have an impact on the vast majority of our Genesis pipeline, particularly on the placement cycle side. There is some awareness, though, and there is some discussions already on hospitals that might be interested in that type of platform.

[Jason Wittes:]

Okay. And then, I know you mentioned timelines are pretty much or basically in line for what was discussed last quarter. I think you've always sort of kind of mentioned that the U.S. approval for the catheter was roughly two years away from the European approval. Is that still the right way to think about timing on that?

[David Fischel:]

Yes. That feels roughly right. We were then -- we will be filing for an IDE in the second half of this year after the CE Mark submission, with a little bit of additional testing we have to do incremental to the CE Mark submission for the IDE. And then, we would run the IDE trial and submit the PMA. The IDE trial, the overall construct a bit is relatively well defined by now given our discussions with FDA, and it should be a relatively quick follow-up period, maximum three months. And so, we think that's a trial that can go fairly quickly given the type of arrhythmia and the fact that we have an installed base of users, we're confident that should be a trial that can go fairly quickly and have short follow up. And so, as we're able to submit the IDE, get that trial started, hopefully progress should be relatively quick.

[Jason Wittes:]

Great. I'll jump in queue. Thank you very much.

[Jason Wittes:]

Thank you.

[Operator:]

And Josh Jennings with Cowen has our next question.

[Josh Jennings:]

Hi, good morning. Thanks for taking the questions. I was hoping to just get a better understanding, David, of how your sales team is approaching or viewing the opportunity within IBM in the United States? I know, you have Niobes and placed at some major hospital systems and IDMs, I think Kaiser, HCA. And sometimes those IDMs take a kind of best practices approach and replicate the highest, the best technology and the most efficient strategies in -- from one hospital to another system to others. But do you see these IDMs as an opportunity? And how's your salesforce kind of attacking that channel currently?

[David Fischel:]

Yep. So, hi, Josh. That's a great question. And particularly the two dimension, HCA and Kaiser, our IDMs where we do have a very successful robotic practices that have great clinical outcomes, very efficient practices, and so kind of are viewed very positively. And we -- I say that the challenge in some ways of broader deal at an IDN mimics the challenges that I've described earlier of how accessible is your robot, and how -- what type of disposable product ecosystem, interventional product ecosystem is available to work with the robot. And the more that you address those two items, the more -- the easier it is for an IDN to think about multi system purchase, which can then be deployed broadly across the hospital network. And so, we do -- you were at the Heart Rhythm Society Conference. You notice those sitting with one of the networks probably, as there. We do have those discussions. And I think overall, we have -- particularly at one of those, we have good visibility to senior leadership also at the corporate side. And they have good visibility into the impact that our technology has more generally at some of their key accounts. And hopefully, we'll be able to advance something over the coming quarters. But again, I think the concepts of accessibility of robotics and having a broader ecosystem of interventional devices, a very impactful one, generally for any customers, and particularly for IDNs, as you think about wanting to pursue a multi system order that gets deployed broadly across accounts.

[Josh Jennings:]

Thanks. Thanks for that. And follow up on just China. And you're building out your kind of ecosystem with EP products with MicroPort. And there's challenges over there and COVID is been impactful, but hopefully, they'll -- some of the lock downs will open up. But what are you seeing over there? Any hurdle. I'm sure there's challenges in terms of this collaboration with MicroPort. But how should we be thinking about 2023 and where that ecosystem will stand? And then kind of facilitate kind of a ramp in new orders for your capital -- your robotic system in China?

[David Fischel:]

Sure. So overall, we're delighted about our collaboration with MicroPort. And as you mentioned, and is obvious that there's been more pressure in China recently, a lot of the MicroPort team, a lot of our team has generally been stuck in quarantine over the last several weeks. And if we look at just our numbers, our recurring revenue procedure numbers, we obviously hit later in the quarter and this quarter based off of reduced procedures in China. But that's -- that mimics what we've seen kind of in other geographies when COVID had flare ups, and overall isn't very impactful. But I think kind of the primary effort, and as we've described in the past, is the building of this robust ecosystem, getting Genesis approved, having mapping integration with MicroPort's mapping system, bringing both the MAGIC catheter and the family of MicroPort catheters to market in China. And that really allows you to take advantage of the robust commercial organization that MicroPort has in the country. And an overall despite the multiple disturbances there, it seems to be going fairly well in terms of advancing that product ecosystem. Even during the lockdown there, we've been in communication with their team on a fairly regular basis. There is progress being made. And so, we still look towards 2023 as a year, we're most likely the majority of that product ecosystem comes together and you can start to engage the broader MicroPort commercial team in a stronger launch in China.

[Josh Jennings:]

And just a thank you for that. And just a follow-up on the China market. I know there was a data set, I think published last year around asymptomatic through [Indiscernible] and the different, the lower -- much lower rates are not existing rates in robotic magnetic navigation, cardiac ablation cases, relative to understand your manual way of frequency ablation cases. Is that dataset taking kind of traction over in China? Are there any follow up studies plan to investigate that phenomenon further?

[David Fischel:]

Yes. So the data that you describe is the one where they did preoperative and post operative imaging of them, somewhere 150 or so patients that were getting a Atrial Fibrillation Ablation, some robotics are manual, and showed an 80% or so reduction in silent cerebral strokes in the robotic arm. So that overall, that was a beautiful study. And it did generate some interest. And we have actually a few sites that has been talking about potentially trying to replicate the study to corroborate the data. So there has been some interest in it. Again, I think that clinical data, shifts behavior relatively gradually in the world of procedural medicine. But there are -- there have been a few physicians that have talked about wanting to do a follow on study on that same topic.

[Josh Jennings:]

Great. And then just last question on the neurovascular arm and guidewire development program. Any updates there or anything you can change [ph] in the terms of how we should be thinking about the development progress and tracking it over the course of 2022? Thanks for taking all the questions, David. Appreciate it.

[David Fischel:]

So overall, we're in the development and manufacturing scale up and then testing phase. And we still look towards roughly the turn of the year as a period of when we would or the beginning of next year over time when we should be able to start commercializing the first in a family of guidewires. And then we'll kind of follow that up with a few variants of guidewires, and then also the guide catheters. And so that first guidewire will be kind of our initial foray into the vascular navigation world. And then, that product ecosystem will build itself out over the coming quarters.

[Josh Jennings:]

Great. Thank you.

[David Fischel:]

Thank you.

[Operator:]

And next we'll go to Javier Fonseca with Spartan Capital.

[Javier Fonseca:]

Hello, David and Kim. Thanks for taking my call. Two questions as far as the MAGIC catheter. So really early in the call was mentioned as far as like the timeline of bringing the catheter to market. And my question is, other than any meaningful changes to expected timeline. And when can investors really expect considerable growth in recurring revenue from the MAGIC catheter?

[David Fischel:]

So, we'd expect to start to see next year in 2023, as we launch the catheter in Europe to start to see an impact of the catheter being adopted in Europe. And hopefully also driving broader utilization of robotics with the launch. There's probably going to be in Europe, there's going to be somewhat of a gradual aspect to it, just because certain countries can adopt it kind of very easily after CE Mark approval, others still have local tender requirements. And so you have to kind of grind your way through that. But overall, we'd start to see in 2023, some of the impact. And then obviously, as we expand throughout Europe, and as we are able to achieve U.S. FDA approval, that would be kind of the second big step up.

[Javier Fonseca:]

Excellent. And my follow up question is on lines of the new mobile system. And so, assuming market approval, what you expect with typical sales mix for System revenue between Genesis system?

[David Fischel:]

It's very hard at this point to guesstimate that. And kind of there's both -- there's a value to both system. And it depends a little bit on the clinical indication, and the geography and how confident the hospital is in them wanting to adopt a robotic program that they're certain that they're going to be committed to for multiple years, or that they want to just try and see how it goes. And so, at this stage, I think it's a little bit to kind of premature to estimate that. I think that over the longer term, the concept of highly accessible robotics is likely to be more impactful. And so I think that you would have more of a trend towards mobile systems over time. But in terms of kind of for the first few years of adoption, it's hard to be certain what that mix would be.

[Javier Fonseca:]

Excellent. Thanks for taking my questions.

[David Fischel:]

Sure. Thank you.

[Operator:]

And that concludes the question and answer session. I would like to turn it back to our presenters for any additional or closing comments.

[David Fischel:]

Thank you for your questions and for your continued support and interest in Stereotaxis. We look forward to working hard on your behalf in the coming months and speaking again next quarter. Thank you.

[Operator:]

Thank you. And that does conclude today's conference. We'd like to thank everyone for their participation. You may now disconnect.