Thank you for standing by, and welcome to the ClearPoint Neuro, Inc. Q3 2023 Earnings Conference Call. Comments made on this call may include statements that are forward-looking within the meaning of securities laws. These forward-looking statements may include, without limitation, statements related to anticipated industry trends, the company's plans, prospects and strategies, both preliminary and projected, the size of total addressable markets or the market opportunity for the company's products and services and management's expectations, beliefs, estimates or projections regarding future results of operations. Actual results or trends could differ materially. The company undertakes no obligation to revise forward-looking statements for new information or future events. For more information, please refer to the company's annual report on Form 10-K for the year ended December 31, 2022, and the company's quarterly report on Form 10-Q for the three months ended June 30, 2023, both of which have been filed with the Securities and Exchange Commission and the company's quarterly report on Form 10-Q for the three months ended September 30, 2023, which the company intends to file with the Securities and Exchange Commission on or before November 14, 2023. All the company's filings may be obtained on the SEC or the company's website at www.clearpointneuro.com. I would now like to turn the call over to Joe Burnett, Chief Executive Officer to begin the call. Joe, over to you.

Thank you, Mandeep. And thank you to all of the investors and analysts on today's call. ClearPoint Neuro is the premier cell, gene and device therapy enabling company, uniquely focused on precise navigation and quality control delivery to the brain. Our four-pillar growth strategy continued its progress here in the third quarter with some important updates that I will discuss momentarily. The most important highlight or point of emphasis we want to make on the call today is our stated priority of flattening operational expenses and improving cash flow. Our operational cash burn in the third quarter was reduced to only $1.8 million, the lowest quarterly operational cash burn since 2020. The last few years, we have raced to build a foundation, a team and a product portfolio that can prepare us to realize a total addressable market that could treat more than 1 million newly diagnosed patients each year and in doing so, create a $12 billion revenue opportunity for ClearPoint via our products, services and partnerships. That unserved market is still very much our intention and our vision. However, instead of continuing to invest in growing our capabilities and portfolio in the near term, we are going to focus on extracting value from the existing capabilities that we have already built and invested in, as well as new product launches that we already have planned here in 2024 and 2025. Our deepening partnerships with biologics and drug delivery companies, expansion of our navigation platform into the operating room and the full market release of our Prism Laser Therapy system can sustain top line growth in the years ahead, while the flattening of operational expenses scales in our newly certified Carlsbad manufacturing facility, and an improvement to gross margins can create leverage and ensure revenue grows faster than expenses for at least the next couple of years. We continue to believe our goal of operational cash flow breakeven is achievable sometime in the second half of 2025. While the strategy does slightly reduce our forecasted revenue in 2023, and to the range of $23 million to $25 million. We continue to expect operational cash flow to be meaningfully less in the second half of 2023 compared to the first half with our Q3 result being the first tangible example of that commitment. Our strong balance sheet with over $24 million in cash and equivalents will continue to enable us to launch these key new products and execute on our strategic plan, while at the same time, reduce our operational cash burn. We are more excited for the company and its prospects than ever. As we expect that these launches in 2024 will introduce three new and additive revenue streams to our base, which I will talk about in more detail a little bit later on the call. I will now turn the call over to Danilo to discuss our Q3 financial results, after which I will provide additional color on our four-pillar growth strategy. Danilo?

Thank you, Joe, and thank you all for joining us today. Looking at the third quarter 2023 results. Total revenue was $5.8 million for the three months ended September 30, 2023, and $5.1 million for the three months ended September 30, 2022, which represents 12% growth versus the third quarter of 2022. As a reminder, our revenue is made up of three components: Biologics and drug delivery, functional neurosurgery navigation and therapy, and capital equipment and software. Biologics and drug delivery revenue includes sales of disposable products and services related to customer-sponsored preclinical and clinical trials utilizing our products. Biologics and drug delivery revenue growth accelerated to 55% or $3.5 million in the third quarter, up from $2.2 million in 2022. This increase was fueled by a 109% increase in biologics and drug delivery service revenue as we expand our service offering to pharmaceutical customers. The biologics and drug delivery service growth was partially offset by a $0.3 million decrease in product revenue. Functional neurosurgery navigation revenue consists of commercial sales of disposable products and services related to cases utilizing the ClearPoint system to deliver medical device therapy to the desired target. This revenue segment declined $0.5 million to $1.9 million for the third quarter. Capital equipment and software revenue, consisting of sales of ClearPoint reusable hardware and software and related services, decreased 26% to $0.4 million in the quarter from $0.5 million for the same period in 2022. Gross margin for the third quarter of 2023 was 57% as compared to a gross margin of 71% for the third quarter of 2022. The decrease in gross margin was primarily due to an increase in biologics and drug delivery preclinical services, which to date have had a lower margin than the prior year as we launched new services and increase our presence in the space. Increased costs related to the transition to the new manufacturing facility also contributed to the decrease in gross margin. Research and development costs were $2.4 million for the three months ended September 30, 2023, compared to $2.7 million for the same period in 2022, a decrease of 8% and the decrease was due primarily to reprioritization of certain research and development initiatives, partially offset by higher personnel and share-based compensation costs. Sales and marketing expenses were $2.8 million for the third quarter compared to $2.4 million for the same period in 2022, an increase of $0.4 million or 17%. This increase was due to additional personnel costs, including share-based compensation as we expand our commercial reach and preparation for multiple new product launches over the next 18 months. This hiring reflects the learning curve required to train and educate on the expanding ClearPoint product portfolio, which we'll be targeting new physician customers and new surgical areas within hospitals. General and administrative expenses were $2.9 million for the third quarter compared to $2.4 million for the same period in 2022, an increase of $0.5 million or 21%. This increase was nearly all due to an increase in the allowance for credit losses of $0.5 million, partially offset by lower professional fees of $0.1 million. With respect to our cash position, as of September 30, 2023, we held cash and cash equivalents of $24.3 million compared to $26.5 million as of June 30, 2023. Our operational cash burn in Q3 was $1.8 million, down 54% from the prior year third quarter. We maintained our focus on appropriate resource allocation and cash management and remain committed to effectively and carefully managing our operating expenses. As anticipated in our prior earnings call, our operational cash burn in the third quarter was meaningfully below the operational cash burn of the prior quarters. In fact, it was the lowest quarterly operational cash burn since 2020. The reduction in operational cash burn versus the first half of 2023 will continue enabled by one, the easing of supply chain conditions that allows us to gradually reduce inventory levels. Two, operating leverage due to higher revenue. Three, the completion of the transfer of the company's manufacturing operations to Carlsbad; and four, on the expense side, our existing headcount should be sufficient to support our business for the next 12 to 18 months. We will continue to take measures to reduce and contain cash burn going forward. With that, I'd like now to turn the call back to Joe.

Thanks, Danilo. Our third quarter results represent a shift of priority to cash flow improvement, leading to $1.8 million operational burn, while still demonstrating double-digit growth overall and an acceleration to 55% growth in biologics and drug delivery. These preclinical services are arguably our newest product launch and are already delivering great early results. Let's add a bit more detail to our four-pillar growth strategy. First, looking at biologics and drug delivery, our strategy of building deeper and more strategic partnerships continues to make progress with additional sophisticated and long-term agreements signed in the quarter. As a reminder, a couple of years ago, we were very much a product-oriented biologics company, simply selling devices to pharma companies for use in clinical trials as part of an arm's length transaction. Over the last two years, we have invested in tools and talent to add clinical development, regulatory and other preclinical CRO services to our portfolio. That investment or pivot is already yielding terrific results with growth of 55% in that segment and $3.5 million total revenue for the quarter. To say it another way, this new capability in the last two years has already grown to be the largest part of our business today. Our growth strategy is now less focused on accumulating partners but rather on building deeper strategic partnerships. These more sophisticated agreements may include longer duration, quarterly commitments, direct commercial pricing, clinical and regulatory milestones on the drug itself, and even royalties on commercial drug sales. Newly signed agreements are expected to be a combination of these different features, all of which are designed to demonstrate the long-term commitment and value that we offer. We continue to view ourselves as a device extension of our pharma partners, something that by working with us, there is no need for them to replicate internally. Our total number of active partners remains more than 50 despite the challenging capital markets that have forced some companies to delay or shut down programs. Our diversification in biotech has served us well as we continue to be viewed as a sort of lower-risk biotech ETF, if you will, spread across multiple corporate partners, different patient indications, and even redundancy within the same indication with often multiple partners looking to treat the same disease. While the mix of products and services in this segment can change dramatically quarter-to-quarter based on the timing of certain preclinical and clinical trials, we do expect this to remain our fastest-growing segment for at least the balance of 2023. As we look to 2024, we will add a new revenue opportunity in our biologics business as we expect to achieve GLP readiness next year. We have also already built additional capacity for studies into our current expense run rate. This means that in 2024, we will be able to accept pharma company requests for GLP studies that we've had to turn down in the past, and we'll have the added capacity to accommodate these studies without any significant increase to our expenses. This new capability and capacity will act as an additional source of revenue that will be new in 2024. Moving on to Pillar number 2, functional neurosurgery navigation, we made significant strategic progress preparing for our next generation of products designed for use beyond the MRI and in the operating room itself. From a financial standpoint, the segment showed a significant decline of more than 20%. However, the vast majority of that decline, almost $400,000 in the quarter, was the result of one development partner who is funding a brain-computer interface project in 2022 and had to pause the program in 2023 due to financial constraints. From a capital standpoint, we see a shift away from outright capital purchases to more rental programs, which can sometimes fit in a hospital operating budget without having to go through lengthy capital committee reviews. Now, the economics of the total sale are similar. However, ClearPoint may be receiving and therefore, also recognizing a monthly fee instead of the entire purchase upfront. Now we expect this trend to continue, which spreads the recognition of revenue over a longer period of time, but still provides the company with healthy gross margins and cash flow. If this strategy can accelerate the install of more ClearPoint systems, then a delay in the revenue recognition still fits our model as the installation enables our disposables to be used and sold into the account. From a strategic standpoint, we submitted multiple new products to the FDA for clearance, including our SmartFrame product for navigation designed in the operating room. Our ClearPoint 2.2 software with the integrated Maestro Brain Model and our Array 1.2 software, which also achieved FDA clearance in the quarter. We believe the timing of these submissions will set us up for revenue traction of these products in 2024 with limited market releases starting in the first half of the year and full market releases in the second half of the year. To highlight the theme of new revenue streams via product launches, we currently do not have any revenue at all from the operating room-only segment, which is an investment that we have been making for the past two years. The new SmartFrame navigation product for the operating room will act as an additional source of revenue in this segment that will be new for us in 2024 and again, has already been submitted to the FDA for clearance. For pillar number 3, therapy and access products, we continue to execute our limited market release of the PRISM Laser Therapy System and collect real-world product experience as well as develop marketing and training materials. Over the next six to nine months, we expect to submit multiple new hardware and software product improvements, which should enable full market release in the second half of 2024, as well as more substantial revenue traction. This is an exciting second-generation laser therapy system with many clear advantages compared to the currently available systems. While our installation experience has been limited, we have been able to win exclusive business from some early users who plan to use PRISM for all of their cases moving forward. The limited market release revenue for this year of 2023 that is built into our guidance is very minimal. So as we look to a full market release in 2024, PRISM Laser Therapy capital, rentals and disposables will all be contributing an additional source of revenue that will effectively be new and additive for 2024. And finally, pillar number 4 of achieving global scale made significant progress as well. In the third quarter, we began production of sellable product in our new Carlsbad facility, and as of today, we have already shipped products to customers from the new site. I'm also pleased to report that as of today's call, we have also fully exited our Irvine facility ahead of schedule, which will allow us to enter 2024, having removed many of these redundant manufacturing tight costs and construction expenses. This entire facility transition has been an amazing example of execution across our operations, development, quality, regulatory and legal teams. With the transition behind us, we can now turn that execution towards the exciting new product launches that we have planned for 2024. As products get launched from the new site and revenue grows, we expect our gross margins to continue to improve. The gross margin in Q3 improved to 57% compared to 53% in Q2, so we are once again moving in the right direction. The mix of products, services and capital from quarter-to-quarter will always have an impact. But directionally, we expect further gross margin improvement in 2024 and 2025. At this point, we believe that we have the team, the portfolio and the infrastructure in place to see our strategy play out for at least the next couple of years. As a result, it is our intention to keep our headcount and operating expenses relatively flat through 2025, while at the same time launching new products and revenue streams as we fill our capacity of biologics and drug delivery services, launch our SmartFrame navigation platform into the operating room, execute a full market release of the PRISM Laser Therapy System and increase our customer base to 100 global sites. With that, I would like to turn the call over to the operator for any questions.

Our first question comes from Mathew Blackman with Stifel. Please go ahead.

Good afternoon, everybody. Thank you so much for taking my questions. I've got three, a question on the quarter and the outlook and then a couple of bigger picture questions for you, Joe and Danilo. If I could start on the quarter and the softer revenues in functional neuro and now the lower 2023. I'm just trying to tease out how much of this is demand related versus perhaps a shift to more leases or how much of it, if any, is being toggled by your profitable growth strategy?

Sure, I can start, and thank you for the question, Matt. The decision to slightly lower our guidance stems from a few factors. As mentioned earlier, we've seen a shift towards more rental programs. In the past, a capital sale of around $200,000 would be recognized in the quarter it was sold and installed. Now, those same financials can take two or three years to recognize. For instance, this year we might only recognize $15,000 or $20,000 in revenue instead of the full $200,000. Historically, around 90% to 95% of our deals were outright capital purchases, but as we launch our navigation and laser therapy systems, we're facing challenges in allocating capital dollars. Rentals, which fit better into operational budgets, have become more favorable. Another factor affecting our revenue for Q2 is a significant service project related to functional neurosurgery that has been paused. Originally expected to resume in Q3, it’s now going to extend beyond that time frame, which compels us to remove that revenue from our projections as well. The third factor involves timing, especially on our biologics and drug delivery side. As we expand our services, the dollar amount associated with individual deals can vary dramatically. For example, we currently have a signed purchase order valued at $1.4 million to $1.5 million, but the timing for deliverables can fluctuate. These changes in timing affect how we recognize revenue since, unlike the device sector where we often get paid upfront, some of our services require us to collect down payments in advance without being able to recognize the revenue simultaneously. Regarding demand, we have not observed a significant decline in demand from our core business. Case volumes have remained relatively flat. Our efforts will lead to future growth, particularly with the new product launches planned for 2024. We have a strong queue of new systems that will contribute to increased volume. While we have lagged somewhat in demand this year, it is primarily due to the slower deployment of capital and new installations rather than a reduction in usage or demand from existing accounts.

I appreciate that. That was helpful. Reasonably good segue to the next question, which is just on the more let's call it the more refined profitable growth strategy, how do you navigate that balance between growth and profitability, is there an ROI threshold you're using? Just curious how you're making these decisions now going forward? And then if I could ask a specific question on some of these new product rollouts, let's use the laser system as an example, how much of the launch costs are still to come? And I do have one more follow-up question.

I think the first question was about our definition of profitable growth. Previously, we addressed concerns about a dip in our gross margin to 53% in Q2, partly due to a couple of significant biologics deals. These deals were strategic in establishing connections with large pharmaceutical companies, even though they had lower margins. Currently, we're looking at these decisions differently, focusing more on cash flow in today’s capital markets. For instance, would we pursue a deal with a gross margin in the 20% to 30% range, especially if it requires hiring new team members for additional capabilities? Last year, we might have done that, but given the current environment, we prefer to concentrate on our existing capabilities to ensure new biologics deals achieve gross margins of 40% or higher, rather than settling for lower entry fees. Regarding our competitive laser product, we need to do some work to expand our market access. We have approval for the three Tesla scanners, but we still need to complete regulatory and development work for the 1.5 Tesla scanner approval. The question is how urgently we need that approval versus securing cash for a longer period. As for your second question about additional launch costs, we are effectively staggering expenses instead of accumulating them. We’re planning the 1.5 Tesla study, but we're prioritizing the completion of our current project before moving onto the next one. This means we’ll be reallocating resources rather than hiring new engineers. Therefore, while there will be some additional costs associated with the product launch, they will largely come from transitioning team members from existing projects to the new one, enabling us to keep headcount and expenses steady overall. Some hiring may occur for new products, but those costs would be included in the gross margin calculations, as they involve service providers or operators for increased production.

All right. Really appreciate that, Joe. I'm going to try not to be greedy. I'll get back in the queue. Thank again for taking my questions.

Sure. Thanks, Matt.

Our next question comes from the line of William Wood with B. Riley Securities. Please go ahead.

Thanks so much for taking our questions and congratulations on another quarter.

Thanks, William.

A couple from us. Just actually, the follow-up sort of on the expenses, which you were just discussing about sort of rolling on from one project to the next to the next. I'm just trying to think about with quarter-over-quarter burn and just sort of expenses overall just because, as you know, if you do them once you have one, maybe two bad quarters, and then you increase up but when you do them in parallel, like should we be expecting for this to sort of trick along for multiple, multiple quarters? Or is this more of a limited thing that other revenue and growth or cuts or modifications will sort of balance out going forward? Just a little bit extra, I guess, color on that.

Yes. The way I think about it, it's tough to think about just Q3 or Q4, but if you think a little bit more annually or directionally here, 2024, 2025, these are the years where we expect revenue to sort of significantly outpace expense growth. So that's where we get scale from these investments that we've really already made. So one side of the equation is, yes, maybe we'll slow down a little bit of development. But the second part of that question is, does that really cost us anything on the top line revenue side in the next two years? And the answer is, as we look a little bit further out is I don't think it does. I think the competitiveness that we have heard from our early development efforts as we roll into the operating room. I think the competitiveness we've seen of our laser therapy system as we look at some of the other products that are on the market and some early feedback that we've gotten and simple improvements we continue to make. I think the addition, as I mentioned, of the capability to be able to do GLP studies on the biologics side, which significantly increases the revenue even for the same project if it's a GLP one. So these are all things that I think are really additive to the revenue line. And coming from a year in 2023, where that base business really hasn't grown from a product standpoint. Just reintroducing and reaccelerating that through our software improvements and through this queue of new hospitals that are going to get our navigation system even for our traditional product in the MRI. Those four things together, I think, put us in a position where if we can keep our operating expenses relatively flat, but then have these three to four avenues of new additive growth on top, that's, I think, where we're going to see the impact. So a long way of saying, I think we are making a couple of modest sacrifices right now, but we're doing that with the additional insight that we're very pleased with the development we've made with our products. And maybe we just don't have to go as fast as we would have two or three years ago because we know these new products are going to be competitive and successful.

That's definitely helpful. When considering your partnership, you mentioned that you will be slowing down the number of partnerships you're looking to expand. Instead, you will focus more on achieving better value in your partnerships. Looking ahead, how should we view the decrease in new partnerships? There will still be new partnerships, but regarding your existing ones, will you aim to secure better deals when it's time to renegotiate? Additionally, do you think that reassessing the terms of these deals might result in losing some customers due to the new structure you're seeking?

I understand your question. There's always a cost associated with acquiring a new customer, which is typically lower on a percentage basis compared to retaining an existing customer. Our approach is to engage with companies in the preclinical services phase, long before they begin clinical trials for gene therapy. The goal is to demonstrate our value and establish ourselves as a key part of their team, so when these drugs progress to clinical trials and regulatory approval, we have been involved throughout the process. We aim to strengthen the existing partnerships we have. I wouldn't say we are letting customers go, as that term is often used. Instead, we focus on maximizing our productivity and determining where to best invest our time. If we can see that a company's capabilities and progress are promising, it makes sense to deepen that relationship into a more profitable long-term partnership, rather than signing an initial consulting agreement with a company that may not be ready yet. An example would be our strategy for launching our navigation system in operating rooms; we would prioritize hospitals performing a higher volume of surgeries rather than those with minimal activity. This targeted approach is more beneficial for our current team's efforts. We plan to apply this strategy across both areas of our business.

That makes sense. I'm curious if there are any updates on partnerships or regulatory approval internationally, particularly in Brazil. Additionally, how do you think the shift towards rental and changes in partnerships will be received outside the U.S.? Do you believe it will be better received, and has there been any feedback on that?

That's a great question, William. Currently, we are only doing what is necessary to support our pharmaceutical partners internationally. If we had unlimited funding, we could hire a full commercial team in Europe to sell navigation for laser therapy or similar uses. However, given the current environment, we are taking a more cautious approach. Our focus is on responding to the interests and needs of our pharmaceutical partners. Right now, that means prioritizing a small number of companies that are looking to initiate clinical trials overseas. Understanding where these trial sites are and ensuring they use our navigation and cannulas enables us to work closely with our partners on regulatory compliance. This is quite different from a strategy based on simply building a team and trying to generate demand. I believe this illustrates how we've decided to slow down our traditional commercial efforts internationally and concentrate more resources domestically, where our product lineup is more established and we have clear visibility on upcoming FDA submissions, which I've mentioned are already in the pipeline.

Got it. That's really helpful. I think I'll leave it there. I appreciate you taking our questions. Thanks very much.

Sure. Thanks.

Our next question comes from the line of Frank Takkinen with Lake Street Capital Markets. Please go ahead.

Great. Thanks for taking the questions and apologies if I am a little repetitive have been hopping between calls, but I was hoping you could talk a little bit more about the laser business. I know you spoke about some competitive pressures in that business as well as when you do end up moving for the OR and just thinking about prudently investing in those areas. But maybe just talk more about what you're learning in that initial pilot launch and if that's changed your strategy for when you look to a full commercial launch in that laser market, given some of the competitive factors offset by some of your cost controls that you're speaking to.

Sure. I believe the market remains intriguing and has the potential to be exciting. While the actual expansion has been somewhat hindered by COVID, we've seen stronger growth in tumor-related areas compared to epilepsy. Despite these challenges, I see this market as a worthwhile investment opportunity. Starting from scratch gives us many avenues to capture existing market share, in addition to benefiting from overall market growth. Regarding our competitive position, we've achieved promising early results with our device, demonstrating its effectiveness in specific patient groups and collecting positive feedback on various aspects of our technology that offer us a near-term advantage. When it comes to access, I consider two main factors. First, we currently only have approval for 3 Tesla scanners, which complicates matters since we cannot yet offer our products to customers using 1.5 Tesla scanners. All our installations so far have been with 3 Tesla machines, so we inform interested customers that 1.5 Tesla approval is on our agenda, but not yet available. The second factor is where the laser procedure is performed. ClearPoint Navigation has a competitive edge because our system allows the entire procedure to be conducted within the MRI suite, eliminating the need to transport patients. However, we’ve encountered some hospitals that permit laser procedures in the MRI but restrict the placement of the device itself to the operating room, forcing patient transportation. This realization has been new for us. In response, we plan to provide an option for placing our laser catheter in the operating room next year. We're also developing our own operating room navigation system. Instead of trying to change how doctors currently perform procedures, we will adapt our products to integrate into their existing workflows. Currently, we might only have access to about 10% to 20% of the total patient volume. However, by adding support for 1.5 Tesla scanners and incorporating our operating room navigation and laser solutions, we can quickly expand our access to around 80% or 90%. This forms a significant part of our strategy for 2024.

Got it. Okay. That's helpful. And then maybe on the shift to the OR opportunity. I think we spoke about this in the past, but I think it's worth talking about again. Just talk about once you have that entire portfolio of products in place to do those placements in the operating room. Can you just talk about how the selling process changes at that point and your excitement around when that is commercializing?

Yes, I believe that will significantly benefit us. From a market perspective, over 95% of the primary procedures that utilize stereotactic navigation—such as laser, biopsy, and deep brain stimulation—are conducted in the operating room today. While we lead in MRI navigation, it currently represents only a small fraction of the market. This transition enables us to engage directly where the procedures are happening, which is crucial. MRI guidance will persist in its growth, and many doctors will confirm that although some procedures occur in the OR, specific therapies are performed in the MRI room when precision is paramount. This trend is expected to continue as these procedures expand. Presently, the majority of volume is in the operating room, and our new range of tools positions us to target that market more effectively. Moreover, we can also operate at a lower price point, making our offerings more competitive against standard procedures and tighter budgets. Physicians might appreciate the precision of ClearPoint's MRI guidance but may consider less precise options if they can reduce costs. Thus, a lower average selling price (ASP) is advantageous for hospital operators aiming to balance overall expenses. Our simpler workflow decreases the need for constant communication with an MRI magnet and adjusting image quality coils. This allows us to reduce our overall costs, as we will not require a clinical specialist for every procedure. In the operating room, you'll likely see a model where ClearPoint is present for the first several procedures; however, as our ASP decreases, our clinical support can taper off over time. We'll still train on new software advancements, but the necessity for our presence at every case will diminish, allowing our clinical team to concentrate on more complex laser and MRI procedures without incurring additional operating costs. Additionally, in some instances, our system may not require the latest ClearPoint software; instead, we could utilize our disposable hardware in conjunction with existing navigation systems in hospitals. This approach streamlines the capital budget process and avoids delays in revenue recognition typically associated with rentals. Essentially, we can introduce a new, improved option that integrates seamlessly with current hardware and software in use, sidestepping extensive capital procurement processes. These elements represent the key strategies we are focusing on for our operating room initiatives moving forward.

Got it. That's good color. I'll stop there. Thanks for taking the questions.

Thanks, Frank.

There are no further questions at this time. I would now like to turn the call over to Joe Burnett for closing remarks.

Once again, thank you to everyone interested in being a part of this team's journey here at ClearPoint. This is an exciting time as we plan for new product and service launches across all four of our growth pillars. We've worked hard to get to this spot and are incredibly excited for the team, but also for the patients that we hope to treat with new devices and therapies in the very near future. At the end of the day, the patient and their family are why we are here and ultimately, who we are working for. So with that, thank you and have a good evening.

I would like to thank our speakers for today's presentation, and thank you all for joining us. This now concludes today's call, and you may now disconnect.