BoneChat #81 - Bolt Navigation and Patrick West have completely simplified spine navigation.

Foreign.

This is Bone chat discussion number 81 with Patrick West. He's the CEO at Bolt Navigation and I love what Bolt is doing because they're uncomplicating Spine Navigation. And we had a theme here for the last few months that where the companies that uncomplicate things for customers are going to win. And this is, this is brilliant. So I'm going to hand the mic over to Patrick. Thanks. He said Amsterdam.

I think actually the Hague to be excited.

Okay, nice.

So. Well, nice to meet everybody. Thanks for, for joining us. And I'm familiar with some of your companies but I don't think any of us have ever met which is a little surprising. I've been in the space on and off for 35 years. Started my career at Stryker as a straight commission sales guy. And I, as I like to say to everybody, once a sales guy, always a sales guy. But have, you know, worked my way up at Stryker. Then left and founded three different companies, built them, sold them, then was a investment banker, primarily a sell side m and a advisor in particular in the med tech and orthopedic space. Leveraging my knowledge and experience. And then in 2019 I got introduced to Dr. John Dorman who's the inventor of this technology. John's a neurosurgeon out in West Texas, Midland and Odessa. He works in. And John is a, John's a genius. He's not just a great thinker, which he is. He's not just a concert pianist, which he is, rock drummer, which he is, neurosurgeon, which he is. But he's also a computer programmer and he's a very, very good one. And in particular he likes programming solutions for iOS devices for Apple mobile technology. He has a number of app on the App Store. None of them are medically related. All things that as he says are itches that he needed to scratch and nobody else was doing it. So he developed them and put them on the app Store. So that's the kind of guy John is. When I met John, a couple things were clear. He's really smart. Now most neurosurgeons are really smart, but even on the neurosurgeon bell curve, John's pretty far out there on the right hand side. In addition to that, he's a incredibly nice and humble guy and an excellent if quiet communicator. So he was sort of an unusual combination. Hey Mark, just doing a quick intro here and I'm Patrick west and John is the kind of guy who is quiet. But who was that guy back in the government. Don't mistake my mild demeanor for a lack of resolve. That's definitely John. Is. That's definitely John as well. So when I met John, he explained to me, I got introduced, friends of friends, and, you know, what are you doing? You know, once a week, got introduced to a surgeon, said, I've got a great idea. You know, it's going to be worth a billion dollars. I'm sure you guys have this experience as well, and you think, yeah, okay. And so where, you know, what is it? Well, I've got this drawing on a napkin, or if they're really like, oh, I've got a patent issued on this. Okay, great. And so when I said to John, you know, explain to me what you're doing. And I. And I said, you know, it sounds kind of cool, you know, but spine spines, it's kind of a really tough area. Navigation enabling technology. Okay, that's interesting. What are you. What are you doing? You're doing it on an iPhone. What. How are you doing that? And I said, listen, I don't get it. I'm smart enough to keep up with what you're saying. Can you show this thing to me? And he said, yeah, you can come see me use it in surgery. I said, what? And he said, yeah, I've probably done 150 cases with it. And right there, I'm sure all of us who have been in this world would have the same reaction I did, which is, well, how the hell are you doing that? Well, I got opinion from counsel that this fell underneath the physician device exemption rule, which it does. I'm not selling it or intending to sell it across state lines, which is what the FDA regulates, and I'm allowed to do this. I said, all right, I'll be down on Tuesday. Right? And I go in and I see John use this system and I see him do the registration and put one screw in. And my brain started swirling with all of the things that this hits on. First of all, it's a cool technology with what it does right now. But what was really cool was that he's using an off the shelf Apple product, that he's just writing a program for the solution that he's developed because he's a surgeon and he developed it for himself. It made him faster, not slower. All other enabling technologies make you slow. I don't care what anybody says. They add complexity and they decrease efficiency in the operating time. When you saw John use his. It streamlined what he did and it made him faster. Okay, there's a winner, right? There it's something that can be used in the ASC setting. Right? We all know that these procedures are trying very hard to move their way into the ASC setting. This is the right size, right cost, and right complexity profile, which, when I explain it to you, it'll make sense to fit into an ASC where you don't have a highly trained surgical staff that's dedicated to one set of procedures. The biggest thing, though, was what else can we do with this platform? If he can do this with, with this platform, what else can we do? How quickly can we innovate, and most importantly, how quickly can we innovate in a capital efficient manner? Because we're essentially just, we're writing software and yes, we're developing some components that it interacts with that allows it to be entered into the sterile field and allows it to interface with surgical instruments. But really, it's this incredibly powerful tool that we carry around in our pocket and we call a phone. Now, this phone, for those of you who don't know, it has an incredibly sensitive and powerful gyroscope, accelerometer, magnetometer, it has surface mapping camera, it has an RGB camera. I can keep going on it has. And it also has this incredibly powerful processor in it, which, by the way, was designed such that it interfaced seamlessly with, with all of these processors. And so the ability to take this powerful computing platform packed with sensors and turn it into a powerful surgical assisting device, that's what really got me juiced up. So I quit my fat and lazy investment banking job and went back to be a scrappy entrepreneur again. And here I am today. So that's a little bit of background history on the company and me in particular. And I'm going to try to keep the next section to about 10 minutes. Nobody likes a bunch of PowerPoint slides, me in particular, but I think it's probably the most efficient way to describe the product and how it works. So I'm going to bang through that and then come back and we can have a discussion. I've got information on our clinical study, one that's already been published in the Spine Journal last year. We, we've got an RCT that's going on that I'll tell you, I think is going to be one of the best musculoskeletal studies ever done. We can talk about those, we can talk about new indications. I'll leave it open to you guys, but let's start with a foundation here. Is that Chatu? Okay, I got it. Thank you so Let me just throw up a couple of slides here. And you guys know this field so well, I'm going to bang through these things really quickly. Stop me if, please, if there's something you want me to go over from a use case standpoint. Navigation, robotics, generally speaking, computer assisted surgery, as I say, are trying to become the standard in orthopedic surgery and in spine in particular. But depending on which data you look at, you know, it's there, but it's not widely, widely used. It may be in hospitals, but I was just talking to a surgeon down at University of Texas who said they have both a Missouri robot and an Excelsior robot and both of them are being used as lead hangers in their operating room. They don't use them. So even if they have them, they may not be using them. And then there are a bunch of people who don't have them. And there's a reason for that. And it has to do with ease of use, complexity. You know, all those things that we know surgeons hate. They want to get in and out of their case more efficiently, have better outcomes, get to see their patients and get home to see their kids or go play golf. Right? So can your technology help them do those things? Navigation is out there. The data is clear that it increases accuracy of pedicle screw placements. The placement. The challenges are again, cost complexity. There are issues with reliability, there are line of sight, there are clinical issues, line of sight issues, patient movement issues. In fact, little known is the FDA issued several years ago a warning letter, a general warning letter to users of enabling technology because the number of SAEs being reported in the MAUD database were so high for these enabling technologies that they issued a blank warning letter to all users of this technology that basically said to the complexity and all these other issues, you need to be very careful when you're using these technologies. So while they are good in the hands of the right surgeons and used correctly, they are not a panacea. This is one that I love a screenshot from, from a doctor who we work with. And this, this is classic, right? My, the docs we work with love sending me photos of their enabling technology with the red out of service tags on it. Or this, this is one of my, one of my favorites. You know, forgot to plug it in, it's dead. Can't use it again for another week. It's going to cost us, you know, however many thousands of dollars to replace this battery. So sort of classic stuff. So for Bolt, John invented this thing for himself to make him faster Better and reduce radiation exposure. For he and his staff, 510k cleared initial cases in late 2023. We've done over 1,000 procedures. Those include both our commercial cases as well as the procedures that we've done as part of our clinical studies in Europe. John, I've already talked enough about, but he's a unique character and part of our special SA know that technology evolves in leaps and navigation is a perfect example of that. Here is a framed navigation system from the late 1890s. Right. This was used actually in surgery. And over the ensuing decades you developed this very sophisticated framed navigation system that is actually used by some people for some procedures still. Then about 35 years ago, 30, 35 years ago, a company called Breakaway Imaging had the idea of combining infrared cameras and desktop computers with an in room CT scanner which allowed them to do real time navigation even though it's not really real time. And then over the ensuing decades we now have this very powerful and valuable in the hands of most surgeons, tool called Stealth Station Brain Lab. As a system there are other systems and now there are robotics as well. Well, now there's this big leap where we have these powerful systems that I talked about. We call them iPhones, but they're not. And we are the first ones to utilize it for doing navigation. As I say, incredibly powerful technology. And what's going to be exciting is what the next few years look like because I'll tell you that our ability to evolve and improve is compressed because we're a software company, not a hardware company. The product, simple it is an iPhone that we buy from Apple through our developer account. We control it, we load the Software. There's only one app on here, we 100% QC them. We probably know more about Apple's gyroscope than Apple does at this point around accuracy and reproducibility of that accuracy and what impacts it. There's a single use drape that we provide that allows it to be entered into the sterile field. And then this single use case. And this single use case not only holds onto the device, but it allows it to be attached to any surgical instrument from in this case, a jamshidi to a needle to a gearshift probe, to a driver or a tap mark. Did you have a question? You're on mute.

I think I just said holy.

Oh.

Because I'm looking at this thing going, wait a second, what? How does this work? So, sorry. Yeah, so I did more of an exclamation.

Let me, let me, let me, let me, let me tell you let me tell you how it works. One, John's genius is not just in being a programmer and a math guy and being able to figure out all the math that goes into making this thing work. And that's, that's the thing. He's a programmer. People get carried away with, oh my God, neurosurgeon is a programmer. But John's really special at is, I don't want to overstate it, but a da Vinci esque ability to perceive forces and space and the math that goes into being able to sort of control and manipulate that and then being able to program this thing to be able to take advantage of that. He's also a genius at taking complex problems and making them simple. A perfect example of that is how do you get the images in here? When he first started working on this, it was around, you know, interfacing with the PAC system, with the EMR system. Anybody who's been in this space knows that's a nightmare. There's, there's encryption, there's compatibility. And then he said, well, what am I doing? I actually have this really powerful image capture system that we call a camera. But it's incredibly accurate image capture system that all I have to do is take photographs of the, the imaging of the radiographic imaging that I need. And again, I'll talk to exactly how it works here in a minute.

So Mark, we got, Mark's got our hand up.

Oh yeah, please.

I, you know, I love precision because I'm not precise. So I really value that. And I invested heavily in surgical navigation when Escalat brought in their first program. And I lost a lot of money because I learned the hard way that a surgeon would rather do six cases in one day without, without robot, without robotics than four cases with a better outcome. And so I will preach the easy and speed. Always sell very Malcolm Gladwell in that regard. So I believe what you're doing. And the other thing is that I want to introduce this your guy to my guy because we're both huge Apple fans and we both use Apple in a software that saves time. And my orthopedic surgeon that I'm working with has been programming since he was in high school. So he's one of the. I so far I've only met two doctors that are really good software engineers and coders and your guy sounds like a third. So I mean I'd love to introduce those at some point. So.

Absolutely, absolutely. So the way that, the way the system works is as I said, you use the camera system to capture Images. It then goes in the drape into the case. Then at the time of use, you plan, you place it on the instrument and it gives you your telemetry. So what you're doing is you're eliminating a CT based navigation system. Or if you don't use that, what you've got is a C arm in there. And you take X rays and you take iterative X rays. Some people are really good and they may only take 2 or 3x rays a screw. Some people are not so good and they may take 8 or 10x rays per screw. With our system, you take 1x ray once the patient's position on the table and that's it. So you're taking one X ray. So you eliminate all that time and all that radiation, all that complexity that goes, Mark to your point about how is you, how are you faster, how are you simplifying, that's how you're doing it. At the same time you're making the or a safer place to be. We just met this morning with a surgeon, a very well known orthopedic surgeon, spine surgeon. His name's Andy Cappuccino. I don't know if any of you know them. I see Jamie smiling and Andy, as those of you who know him probably know, but those of you who don't. Andy had leukemia and had two bouts of it and his second bout really all but killed him. As he said, he was brought right to the edge of death through chemo more than anything, and then brought back, lost the vision in his left eye. So he can't operate anymore. And he, and he ascribes his cancer directly to the radiation exposure that he had. This is a big deal and we're talking to him about being a champion for us on this very specific topic of radiation exposure. I'm going longer than I wanted to. That's the way the system works. Again, simplicity. Most navigation systems use an external frame that attaches to the spine and then you take a CT scan and everything's compared to that. And so that that thing gets bumped, everything's off. John's genius was he said, well, I need a reference standard that doesn't move, that's the same every place and that I can understand how it works and manipulate. And that reference standard is gravity. Thus the use of a gyroscope which uses gravity as its reference. So what you'll see is they're very clever. They're little clever bits of technology built in here that are incredibly difficult and sophisticated. But what they do is they make the use incredibly easy for the actual user. So I'm going to go to full screen mode here and show you how this works. And again, workflow. Surgeon walks in, patient is being intubated. And surgeon typically will walk over and look at the MRI that the patient came to him with to remind himself of the pathology and what am I doing here today? Once that patient is intubated, they will flip them position on the table and they'll take a localizing lateral and AP X ray. Right. We don't ask them to do anything other than what they already do. So what you see here is John, in this case, what he's doing is he's taking a photograph of the axial slice of the levels that he's going to operate on. So in this case it's L4. And now he's entering L5 and you'll see that he scrolls down to L5. Then he takes a picture of that. That's it. Then he walks over and in this case we had him do this. He's already taken those lateral X rays, takes a photo of the lateral X ray, takes a photo of the AP X Ray and that's it. So in 42 seconds he's captured all images and done all registration for the, for the, that all during a time in which he would otherwise not be doing anything other than looking at notes and answering emails. So it hasn't interrupted his workflow at all. The next thing that happens is, and nurses love this, right, because they don't have to do anything other than put the thing into a sterile drape, fold the sterile drape and then, and then put it into the single use case. They can do this at any point in the surgery when they've got downtime. Nobody's yelling at them about why the system's not set up, why it's not registered, why it's not registering. So yeah, you can see the smile behind the mask. She, she loves it. So that's super easy. And then when you go to use it, you, you can, you can plan right before you use it. And what the surgeon is doing, if you can see my cursor on the left, is they're picking the entry point and they're planning the trajectory on that axial image that they took. That allows them to plan their ideal medial lateral angle. They'll then do the same thing on that lateral X ray that they took. That allows them to plan the ideal sagittal angle. The system then will take those two pieces of data and turns it into a three dimensional construct using Trigonometry. So what you'll see here is Dr. Dorman right before he uses it, he's planning it now on the axial slice. He's planning it on the sagittal. And now he's planning the entry point on the apartment. And that's it. So his planning. His planning took 7, 18 seconds. And then when he goes to use it, he attaches it to any surgical instrument. And what he's doing is he's utilizing the telemetry that's on the screen. So you've got an AP photo that's telling you your plan trajectory and your actual trajectory. So you're getting sort of real time virtual reality. I'm looking down at the patient. I can see where it is. And then you're also getting this bullseye telemetry. And it's telling them which direction to move that to achieve the direct. The plan telemetry.

Wow. It's almost like a bubble level where you can. You can sort of move the bubble until you hit the bullseye.

That is exactly what it is. And John, again. John is a genius at making things simple. His initial embodiment kind of looked like a mini stealth station where you had an axial view and a lateral view. And you had to match up the. You know, literally what you do with the stealth station, right? You match it up. He's like, that takes cognitive overhead and time, right? All you're doing is trigonometry in your head, plan the angles, and then I'll tell you where to go to achieve them in three dimension, three degrees of freedom. So that's in the words of Ross Perot, it's just that simple. Now, it's just that simple because of the incredible sophistication and thought that went into John's design and programming to make it so quick and easy to capture that image. And again, sort of a perfect example of that is you need to have the. When you're taking the image, the system needs to be perfectly perpendicular to the floor when you're capturing that image. If you take a picture with it crooked, going to introduce error into the system. So you can't take it until it's less than 1 degree from perpendicular. Well, that's what those bubbles are. But if you try to match this, one degree is almost nothing, right? So if you try to match up one degree in all, all these planes and then you hit. Go to hit the image capture button, inevitably you're going to move it. So John, being John, said, well, I can utilize the API that basically the core program that's in here for. We mostly use it for doing our automatic check deposits. When you go to capture a check and it grabs it automatically, he's utilizing that where you press the shutter button and you move it slowly until you get to the right position, and it grabs it as soon as you're in the right position. So little things like that, that make it. So that's seamlessly easy for the surgeon to use it.

Cope, go ahead.

Yeah. I have a million questions for you, Patrick, but I'll start with the first one. The. The procedure you were just showing, was that an MIS procedure? I didn't see an open incision. I, I. But I couldn't tell because of his hands.

He's a. He's a mini open guy. So he works through it. Through. Through a little. I mean, some people would call that mis. It's not. I call it mini open. I sort of differentiate between there's perk, there's mini open, and there's open.

So was he doing that through, like, a. A wilty approach retractor? I just couldn't tell from where his hand was.

Yeah, we'll see. Approach retractor.

Wow.

So we've got guys doing, you know, doing that, doing perc, doing cortical screw trajectory. The system seems to be really good for cortical screw trajectory in particular. I mean, it just makes it really fast. And a lot of people went away from cortical screw trajectory because it's got that funky sagittal angle. Right. It makes people nervous. We're really good at that Sagittarius. We're really good at all these angles. Right. So we're really good at that. So we've got people who went away from cortical screws, bringing them back, particularly as they're looking to move into the asc. They don't want to do perk. They don't believe in perc. They don't feel like you can get a good enough decompression on the majority of their cases, but they don't want to do a bigger open procedure in an asc. So they're going back and saying, well, listen, cortical screw trajectory, small incision, minimal stripping, minimal blood loss, really good fixation. But if I can get comfortable with that sagittal angle, which this thing is doing for me, I suddenly have a tool now where I can move these patients to the asc, where, by the way, I'm making three times the amount of money on the patient.

How. How. How does it align with the patient on the table? I'm an English major man, like a salesperson. So you gotta, like, keep it, keep it simple. How does it know where it is in space without an array? Right, Like I know you said gravity. I'm gonna need more than that.

No, no. So listen, Mark, that, that is literally. And I was, I was gonna get there. All right, so it sounds perfect, right? It's not. No new technology is perfect. And if any of you have been around long enough to know, the Breakaway imaging first product, you know, or the first stealth stations, they were really limited and really challenged. And you know, we're much further along than that. But the existing program, the program as it exists today, you're identifying the entry point on the bone and then you're telling the system the entry point. You can either do that. If you're doing perk, you can do it with an ap, right? And you look for your owl's eyes and you go to three o' clock on your right hand owl's eye, and you know that you're on the medial border of the right hand pedicle, right? So that's your entry point. And then you plan the trajectory appropriately. If it's open, it's even easier, right? You've got the facet and the teepees and you've got the landmarks. And this really came from John's experience as a neurosurgeon using Stell station for cranial cases. And what he'll tell you is it'll, you know, that thing will tell you that you're here, but you're actually here or here or here, you know, and you look at the Data and it's 2 to 3 millimeters, right? It'll tell you you're here, but you could be off 2 to 3 millimeters. And his view was, I can match that at least 2 to 3 millimeters, probably better, and do it quicker and more reproducibly. So that's the product that's out there today. So having said that, that meets the needs of a portion of the surgeons, it does not meet the needs of particularly the younger up and coming surgeons who have only been trained on enabling technology and who can't pick that entry point, don't know the anatomy well enough, respectfully. You know, they look at this and they're like, if it doesn't tell me where the entry point is, I don't, you know, the big companies have one, right? They've got complete learned helplessness. I can't do this procedure without your enabling technology. So I have to use your enabling Technology and your implants. The next product that we're coming out with here will. We will be able to tell them entry point as well and do skin to bone. So we're probably 12 to 18 months from that. But the product is great for a subset segment of the, of the, of the. The market right now. And it's a big one, it's a valuable one. But. So we're starting here and then we'll evolve to cover the rest of it. But that's actually for an English major mark. A very insightful question mark. Maloney.

So, yeah, I'm an, I'm an English major too, which is why I'm very imprecise. I'm talking more, more metaphors and abstractions, kind of like Copeland does. But what have you. Have you guys looked at other applications besides spine?

Yes, of course.

Why does every ortho guy want them to take it out of spine and put it in ortho? Spine's a cool place to be. Maloney.

Well, because things like HTOs are very difficult to do. And he can't tell you how many, how many knees I've seen notched because the doctor believed the robot, which was wrong because it wasn't that good. And I'm just curious, really. There's so many procedures that could benefit from greater position, whether it be distal radius repair, you know, and just so many other procedures. And so I'm sure you have looked at that.

We have. And I should. I'm sorry for being a little bit silly here. I mean, listen, you guys are startup guys, right? This, you know, that our, our challenge is how do we stay focused and execute on what we've got while keeping a door open to the next big thing. And I literally lay awake at night.

Oh, yeah.

You know, are we being unfocused or are we missing opportunities? Right. And right now I kind of feel like, I mean, time will tell that we're doing a reasonable balancing act on that. We're very focused on landing and expanding in the spine. So we're starting with thoracolumbar posterior spine open, mini open. We'll be going to Perc. We'll be doing SI S2AI moving up to cervical, right. So land and expand there is our primary focus. But we have just recently formed a wholly owned subsidiary that is called Bolt xt. It has. You guys are the first ones to know this outside of internal purposes. And Bolt XT XT stands for extremities. And so that company is set up specifically to look at applications in extremities of which we think there are a number of them. There's some particularly low hanging fruit in some areas and that company will. We're going to do some. We've already got, we nearly have proof of concept. I don't want to say we got proof of concept, but I'm pretty sure we've got proof of concept. We're going to be utilizing different sensors and different capabilities in the iPhone, but the same kind of programming, the same general kind of use, but event. But what we're going to end up doing is we'll end up raising a separate, separate money for that hire. Probably end up hiring a, you know, a general manager or president to run that business to take advantage of. And again as you guys probably as much or more than anybody will appreciate the reason we've dropped it down into a sub company. One is so that we can raise money separately for it. Two, so that when we give equity to the surgeons, they're getting equity in the product, in the applications that they can have an impact on. And third, and most importantly, putting my investment bankers hat on, we all know that when you go to sell that you can't pull them apart. And the company that buys your spine product is probably not going to be the one that wants the Bijoux extremities product.

They're more valuable separate than. Yeah. Combined. Yeah.

We're doing that from the beginning with good cross licensing agreements so that they're clean. So that when we go to exit we have, you know, we've made it, made the separation clear from the very beginning and it should hopefully be a much cleaner exit. How's that for being hopeful for both companies?

Yeah. Thanks Al, you're up.

Yeah, so I, I'm not in spine like Mark. I drift away from spine trying to apply technologies and everything that you stated about the benefits of this technology is applicable, applicable across any specialty. But I can think when the time is for the, the extremity version there is a couple of niche procedures that companies are struggling with because they're relian on, you know, preoperative imaging. So if that technology is going to cross over across specialties, I think you could have a real benefit to certainly licensing and changing some smaller companies that are just so reliant upon that preoperative imaging. If in fact you can read it, you know from a, from a simple, you know, from, from a detailed X rays.

Yeah. Depending on the positioning and the application. The answer is maybe. And I don't think I'll be oversharing by saying that the first extremities application that we're going after is total shoulder arthroplasty. Robots are not a great solution for that. It's a small opening, you want to move very quickly. It's highly mobile during the procedure.

I think shoulders is perfect. I think you've nailed it. That's the one I was thinking about. Shoulders, I think, is the perfect application for this.

You've got a really good ct, by the way. You've got really great programs done by every implant company that gives you the opportunity, optimal, the optimal entry point and angles. But do you know how they communicate? How they actually make that happen in the operating room? I was just down. The surgeon will remain nameless, but this is, this is best practice right now. This guy is top of his game, right. He did six procedures by six total shoulders by two o' clock in the afternoon. And the way he did it was he took the planning software results and he printed screenshots and he hung them up on the wall. Right. So he did all this careful planning and then he sort of looked up and he was like, yeah, yeah, I think that's about it. And I was like, what, why do the planning? Why not just eyeball? You know what? We're really great at entry point and angles and do it quickly. So that's it. That's.

So do you have to. Does it have to be for shoulders? We're getting ahead. But is there have to be a certain beach chair angle that has to be standardized or can you, the patient kind of be in any position?

I'll say that the patient can be in any position. And then I'll say that I, without being rude, I'll probably not say anything more about it at this point.

That's fine. That's fine. Yeah. And so every time you have new application, there's obviously new software has to be written and you've got. And then you've got to go through 510k each time, but it's got to be way faster than building hardware or robots.

Exactly. If you look at what Mark just put in the chat, that's exactly right. The number of sensors in this thing are incredible. Their accuracy varies and their accuracy varies on how you program them. And as I was saying to Tiger earlier, fortunately, Apple has recognized John's genius and he's part of a select group that gets invited to Apple on a regular basis for them to share future developments, but also developments that people don't know about. There are capabilities, there are APIs that are in there that aren't turned on for most people, and they give John the cheat code to be able to turn these capabilities on or to improve accuracy when others don't. Your general person, so they're very specific about. They don't put their finger on the scale for any developers, but they kind of do. And so fortunately, John is on the inside and has access to that. And this one, I can tell you, because John's just this kind of guy. He started using the Apple Vision Pro headset to do his cranial cases, to do his. Nothing to do with our company. He just, you know, he wrote the program so that he can have all of his. He's got all of his MRIs, he's got all of his imaging. He's got everything there. And I don't know if you know, but those are not glasses that you look through. That stuff's projected on. Those are true virtual reality glasses. Everything that you're seeing comes from cameras that are. That are on, that are on the outside. So he literally can. He can look at all of his imaging. He can look at the patient. And he went to them and he said, listen, the only reason I can't really use this is all the time is there are cases where I need the microscope right. Where I'm working through, you know, very. And. And. And they said, well, what kind of magnification are you looking for? He said, well, usually, you know, 7 to 10x. And they said, oh, those will do 7 to 10x. He said, yeah, but you. But they said, well, we just haven't turned that on for most people. So here's the cheat code to turn that. So now he doesn't need a microscope. He literally just goes like this after it goes tap, tap, and then expand. And he's got a microscope on his face. So again, that's. That's not a company thing. That's a John thing. So I can, I can share that one. But that's those. The kinds of things that we're. That we're hopefully leveraging here.

Cope.

Yeah, we. I sold Patrick and still use. I have one spine surgeon. I got out of spine years ago, but I have one spine surgeon customer who insists for whatever reason and still using me. And we got him a 7D navigation.

Yes.

And it's great. It's machine vision. So there's no O arm for the. Because he does. He still does most of his cases open. So we don't need an O arm. We basically roll it in, take a picture. It matches the ct and we're live. Right. It's it's, it's, it's a very nice advancement until I just saw what you showed me. But, but like they, that company sells those things for around $700,000.

Yeah.

And if you wanted to do perk stuff, you'd need something o arm similar. So you're looking at 1.1 million somewhere in there. 1 million. And ASCs want something because all these cases are migrating. But as, as you, you know, everybody knows here, that's the. No, they don't say which pocket did I leave my million dollars in that we can buy this thing. You just made this hyper ASC friendly. That's not for everybody. But I, I'm trying to think like you. You describe the young surgeons but the. Or I forget he learned. Well, what was the term you use? Learned what? Ignorance. Learned something like.

Oh, learned helplessness.

Learned helplessness. That's a great term. But, but this does apply for a lot of the people that are 46 years old have been using stealth are starting to move cases like especially in Al's area in New Jersey, all those cases have moved to ASCS or a lot of them. And the companies are trying to figure out how to sell them some big piece of equipment that they don't have room for, don't have time for.

That's right, you're never going to do it. So the data is that unfortunately regionally it's different. But latest smart track data is less than 5% of thoracolumbar fusions are done in the ASC. Five years ago the projection was 25 to 30%. Why is that? Because people are not comfortable moving those procedures over there without having an added level of certainty. Because we know if you get into one of those vessels, if you air ball a screw and you get in one of those vessels, the best thing you can do is call 911 and hope the ambulance gets there in time. Right. Because you don't have a general surgeon on staff to come in and help you fix that problem. Right. So they are nervous about moving their procedures there. That's number one. Number two, the average as the average capital spend, annual capital spend for an ASC is $500,000 total. So what are you going to do? Spend three years, two years worth of capital on one you're not. Oh, and oh by the way, as you say, it doesn't even fit down the hall or in the rooms because they're smaller. And oh by the way, those rooms aren't lead lined so you can't use a ct, a CT system in There. So it's. Yeah, all those things. And that's where, you know, we feel like we have a lot of hay to make. The other thing that we're seeing is as surgeons are losing block time or more importantly, beds. I don't know what happened during COVID but they're not getting block times in beds that they used to get. So they're starting to move these procedures to the satellite hospitals. They might work at Leahy up in Burlington, but they're starting to look to try to do their procedures at Emerson Hospital, a 200 bed hospital in Concord, Massachusetts. Right. Because the con. Because Emerson's begging them to do their procedures there. We can support them to do that. And. Oh, by the way, and this goes to sort of, I think, perhaps where you were going. Our business model matches for them. We can either do it on a per procedure basis, which is often where we start, or we do it on a subscription basis, monthly or annual subscription. For the software, you do the subscription, we give you the hardware. And It's a Microsoft 365 model. You've got the subscription. If we have an upgrade or an update, including hardware, we give it to you. It's part of the subscription. And then you've got the per procedure disposable on top of that rasp right now is running about $1,800. No matter how you slice it, if we get into a very busy account where they've got a subscription, they can get that cost down to about $1,200 per procedure. If we look at starting to do more of the endoscopic cases that are being done in surgeon owned hospitals or, you know, physician owned facilities, you know, that is a strip mall. We can drop the price down lower than that. You know, we're a software company. My landed cost on this is a thousand bucks. I landed cost on this is about 100 bucks. So even at $500, I'm at an 80% gross margin.

Yeah, we didn't talk about. You're agnostic too. So they can use any implant system where some of the robots, they try to tie up their implant choices. Right?

That's right.

That's got to be really attractive to ASCs to be able to use their favorite system.

It is, it is. You know, our challenges. You know, we've got nine minutes left. Our challenges. Inertia, Big company inertia.

I know.

I'm telling you guys everything. You know, it is really hard to change that inertia and fight through that. Even ASCs, we had a surgeon who really wanted to use the system at an ASC where we actually have national approval by the asc. And when he said, I want to use it, they said, well, you need local approval for it, too. Fortunately, he had enough stroke that he said, fuck you, we're going to use it. And we ended up doing the cases. But there's the practicalities of working through the vacs. But there's also. Again, just being this is meant to be an open forum, there's a bit of a perception issue. Part of the reason why doing the clinical study was so important is you say you're telling me that this is going to do the same thing as a $1.5 million CT navigation system. Well, yeah, I can show you the clinical data. More importantly, I can have you just do cases and use it as much or as little as you want. In your case, don't do anything differently, the first case or two. Just use it as an adjunct, get comfortable with it and then go forward. But it's hard selling, man. Disruptive is fun to talk about, and it's hard as hell to do.

Have you thought about creating a new category, Patrick? So it's not using the word navigation, but just.

Yes, we have. The problem with that is you open. It's a. It's a philosophical discussion we struggle with. There is a CPT code, right, for navigation, so we want navigation so they can. That's why it was important to get that in our labeling. We want to be seen as navigate, build a CPT code. There are buckets in budgets for navigation, you know, so if you start saying you're I, as much as I like the idea, and two years ago, we spent a lot of time thinking about what would this new segment be. After testing, we kind of backed away from it and felt like we're better off saying we're just a better version. We're a more modern, more advanced version. You know, mainframe computer versus, you know, laptop computer sort of comparison.

Or helicopter versus drone. I mean, it's just. I mean, Jamie's in the same boat. He's got a better dynamic brace, but he doesn't want to use the word bracelet because it's really a new category. Go ahead, Cope.

Patrick, if a surgeon wanted to try this, it sounds like you were just telling me how you'd have them evaluate it, but do you like. Do you. Do they do a lab? Do you recommend they do a dry lab? A. A cadaver lab? What? Like it? I know it's going to be. It's going to vary a Little bit depending on what they are. Like, is there a process you guys tend to find effective?

We're a technology company, so we leverage technology. When I started five years ago, the first thing I said is we need a better way to train people how to do navigation. Having to fly to Memphis to do, for a weekend to do a cadaver lab is not attractive. So we worked with a couple of different simulator companies. Right now we're leveraging the medability product, which is out of Germany. And as I like to say, it's a cadaver in a box. It's a pull along big pelican case. It's just under £50, so you can check it on an airplane and in 15 minutes we can set the thing up. And it gives you the ability to do real time, super accurate simulated X rays and CT scans. And so we can have them go through the whole workflow, place screws and take post placement CT scans and X rays and validate the accuracy of the placement. So we can go to a surgeon's office and in 15 to 30 minutes the night before the procedure, they can train or retrain on the system, go in and do surgery the next day with the system. Well, could you do it?

Could you have a big complicated navigation system? Do the left pedicles and bolt. Do the right pedicles like side by side. That would be really. That would be just slam the door.

Yeah. So the study that was published in the Spine journal last year I think was an even better version of that, which is that you attached. Well, you know what, hold on. Instead of me waving my hands, I've actually got a slide here. I can get down there fast enough. Oh, I was going too fast and then my computer froze. Let me try it this way. This will be faster. Okay, so in this study.

It'S coming up. There we go.

You, you, you attach the bolt system to the gear shift probe. That's a stealth station gear shift probe. You can see this is the reference frame here on the patient. And here's the reference frame for, for the gearshift probe. You position it such that the bolt system blocks the, blocks the stealth station from working. And you, you use the bolt system to make the pilot hole. Once you've done that, then you rotate bolt out of the way and you compare it to what the stealth station showed you. So basically what it did is it not just side to side, but screwed. It allowed us to do a screw to screw comparison between our system and the CT nav system. So that was the first study that we did. That's what we used to apply for our CE mark and now that's what morphed into the RCT where you randomize either to CT nav or to bolt nav. And we're at 104 of our 132 patients. We've got hundreds of screws placed and I'm happy to say we did an interim analysis that was presented the other day. And of the 300 screws, give or take, in each group, every single one of them in the bolt group are as graded by an independent radiologist blinded to the treatment, are considered perfectly placed or Gertz von Robbins, as if you're familiar with that literature. So they're all, you know, all of both screws are perfect. Almost all but one of the CT nav screws are perfect, but they have one that was not, that was not perfect in their case, which is sort of jives with what the literature is.

And that's not to mention the time it took, the setup and referencing time.

And all that stuff.

Yeah, that's. Wow, this is really cool. You've democratized, you're democratizing navigation. That's, that's what's coming to my head.

Yeah, that's, that's the idea.

Any other, any questions before I. Go ahead. Coke.

Patrick, I just can't. I just sent you a connection on LinkedIn because I, I would like to talk to you about some of the things that I thought 7D did really well during COVID that drove inner interest from surgeons in a very inexpensive, remote way without.

So I would love.

It was like another step. Yeah. So I, I'll, I'll share with you what I've tried to get other companies to, to look at the concept and other things and, and they seem to scratch their heads and I can't find video. But like I, I think you would get it immediately and I think it would be another step to help grow awareness in a way that is very inexpensive.

You know, I'm all, I'm all ears.

So let's, let's catch up. We'll catch up. But yeah, this tiger. You told me my mind would be blown. And I'll be honest, I didn't believe you. I think it was.

Yeah, right. I mean, you know, obviously the software and this, the genius neurologists, you know, in the background, we don't, we didn't see that. But I mean, as soon as you see it, why would anybody bring a refrigerator size thing into a operating room that costs hundreds of thousands of dollars? And it, and it Burdens the staff. And it only does one thing. It's just crazy. Yeah, but like, like Patrick said, there's a lot of legacy momentum that's.

It's like turning the battleship contracts. There are a lot of contracts. Right. You can't bring. We just have one of those the other day where surgeon really wants to use it. Well known, super active on social media. We worked through the local. Hot. Through the hospital committee. Local hospital committee. Everything was good. We were going to go do cases the next week. We got a letter that said, sorry, you're not welcome in the hospital. You can't come in. So we dig into it, and the best we can tell so far is that Medtronic has a contract with them and went to him and said, if you bring that in, you've. You've violated the contract and you won't get your discount on your screws.

That's exactly what it is.

It's 100% what it is.

Signed Medtronic.

Yeah.

Let's be honest. Yeah.

Dear, dear entrepreneurs, we squash you like a bug. Yeah. I mean, that's why we gotta fight asymmetric warfare here, right? It's guerrilla marketing, guerrilla selling. That's why, Mark, I'm, I'm. I'm ears wide open for anything that can help us make, you know, fight that kind of asymmetric battle here.

Yeah, I got a couple of ideas for you too.

Let's see. I have something that can help you fight that stupid Medtronic agreement. But yeah, Maloney's the one with all the.

I like ideas, I like guerrilla marketing. You know, within every company evolution, there's a time for the marines on the beach, and there's a time later for the army on the land. You know, you're on the beach. And that's the fun part, actually. So highest. Also the highest casualty radius, too.

Some. Some days. Some days, Mark, I kind of feel more like. Like. Like a special forces that's been dropped in behind enemy lines and I'm surrounded.

That's right.

And you ask the guy next to you who.

Who brought the batteries?

What?

Exactly. Exactly. So. So, Mark, Mark Copeland, you reached out to me on. On LinkedIn. All right, and. And Mark Maloney, can I reach out to you on LinkedIn as well?

Yeah, yeah. I looked for you real quick, but there were too many. Patrick west couldn't.

All right, actually, I have you right. I think I have you right here. Healthcare compliance, physician practice.

Yeah, that's my public Persona is my compliance company.

Mark's got multiple startups in his back pocket right now.

You know what? I can message you, but I can't link with you, Patrick.

I'll just send you offline. I'll send you Maloney's cell and do that.

Yeah, do that, and I'll connect with both.

Thanks.

Thank you. I hope I didn't drone on too much. And you found it interesting.

Pretty fascinating.

All right, cool.

It's looking at the future. We're looking at it in the future.

What is.

What's the famous quote? The future is here now. It's just not widely distributed yet.

Yeah, exactly.

Yeah, it was awesome.

I'm working on the distribution thing.

Yeah.

Take care.

Thanks, guys.

Thank you so much.

Thanks, guys.