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During 2018, the Company confirmed with the Food and Drug Administration of the United States Department of Health and Human Services (the “FDA”), that confirmatory human data will be required for its planned regulatory submission.
The performance of human surgeries with the SPORT Surgical System will require an Investigational Device Exemption (“IDE”) from the FDA, which must be submitted and approved in advance.
Further, the recruitment of surgeons from multiple hospital sites will be necessary to perform the surgeries. Each of these sites will require approval of their independent Institutional Review Board (“IRB”) to approve the studies. During the first three quarters of 2019, the Company plans to pursue the recruitment of surgeons and hospitals for the studies, IDE approval by the FDA, and approvals by the IRB of each hospital, in preparation for the confirmatory human studies planned for completion during the fourth quarter.
A complete estimate of the timing and costs for development milestones beyond 2019 is speculative. The Company estimates that a minimum of US $64.1 million will be required to fund its operations in 2019. Based on the cash and cash equivalents on hand, including deposits with suppliers as at December 31, 2018, the Company believes that it will need to raise approximately $45 million to fund it operations in 2019.
This includes projected capital resources necessary for the Company to submit its 510(k) application to the FDA and apply for CE Marking which indicates that a product for sale within the European Economic Area (EEA) has been assessed to conform with health safety and environmental protection requirements. If successful with those efforts, the Company expects to proceed with early commercialization activities in the U.S. in 2020.
Given the uncertainty of, among other things, product development timelines, regulatory processes and requirements (such as live animal and human cadaver studies and confirmatory human studies), as well as the availability of required capital to fund development and operating
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costs, actual costs and development times may exceed management’s current expectations and an accurate estimate of the future costs of the regulatory phases and development milestones beyond 2019 is not possible at this time.
The Company’s current plan is to raise sufficient financing and continue the development and commence commercialization of the SPORT Surgical System at estimated incremental costs, and according to the timeline, as set forth in the table below.
Current Development Plan
The Company anticipates development costs through to the fourth quarter of 2019 to be as set out in the table below (the “Current Development Plan”).
Milestone 4
Document results of confidence build unit testing, implement subsystem design improvements and schedule preliminary audit of quality system by European Notified Body
Q1 2019
Milestone 5
Update system design and related hardware and software
documentation
Verify production system operation with clinical experts under rigorous formal (summative) human factors evaluation under simulated robotic manipulation exercises
Initiate SPORT Surgical System Design Freeze
Initiate preclinical live animal (swine) and cadaver studies according to final protocols for FDA submittal
Submit Investigational Device
Exemption (IDE) application to FDA
Q2 2019
Submit draft protocols to FDA in Q- submission(s) for comment
Milestone 6
Milestone 7
Complete and document preclinical live animal (swine) and cadaver studies according to final protocols for FDA submittal
Obtain ISO 13485 Certification Receive IDE approval from FDA
Complete and document human confirmatory studies under IDE protocols for FDA submittal
Submit Technical File to European Notified Body for review for CE Mark
Submit 510(k) application to FDA
Q3 2019 –
Q4 2019
