Asensus Surgical, Inc.

Thank you. Good afternoon.

And thank you for joining us for the TransEnterix first quarter conference call. Joining us on today’s call are TransEnterix President and Chief Executive Officer, Todd Pope and its Executive Vice President and Chief Financial Officer, Joe Slattery.

I would like to remind you that this call is being webcast live and recorded. A replay of the event will be available following the call on our website.

To access the webcast, please visit the Events link in the IR section of our website, transenterix.com. Before we begin, I would like to caution listeners that certain information discussed by management during this conference call, including guidance related to the number of Senhance systems expected to be sold in the second quarter of 2019 are forward-looking statements covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

Actual results could differ materially from those stated or implied by our forward-looking statements due to risks and uncertainties associated with the company’s business. The company undertakes no obligation to update the information provided on this call.

For a discussion of risks and uncertainties associated with TransEnterix business, I encourage you to review the company’s filings with the Securities and Exchange Commission, including the Form 10-K for the year ended December 31, 2018 filed on February 27, 2019 in the Form 10-Q for the quarter ended March 31, 2019 expected to be filed shortly and the other filings we make with the SEC. During this call, we will also present certain non-GAAP financial information related to adjusted net loss and adjusted earnings per share.

Management believes that non-GAAP financial measures, taken in conjunction with U.S. GAAP financial measures, provide useful information for both management and investors by excluding certain non-cash and other expenses that are not indicative of the company’s core results.

Management uses non-GAAP measures to compare our performance relative to forecast and strategic plans to benchmark our performance externally against competitors and for certain compensation decisions. Reconciliations from U.S.

GAAP to non-GAAP results are presented in the tables accompanying our earnings release, which can be found in the Investor Relations section of our website. With that, it’s my pleasure to turn the call over to TransEnterix President and Chief Executive Officer, Todd Pope.

Thank you, Mark, and welcome to our first quarter 2019 conference call. We will begin today’s call by providing a high level overview of our first quarter performance, and the progress we have made toward our strategic priorities for the year.

I will then turn the call over to Joe to provide a financial overview, after which we will open up the line for questions. Starting with our first quarter performance.

During the first quarter, we reported revenue of $2.2 million comprised of one system sale, as well as instruments accessories and service. System was sold to an end user hospital in Taiwan.

Obviously, the segment our system sales came in below our expectations during the quarter is disappointed. As we’ve stated before, capital sales are inherently difficult to predict, particularly when working with a developing pipeline.

Each of the pipeline sales that did not occur in the quarter had their own reasons that caused them to be delayed, ranging from a change in decision maker to longer than anticipated time to convert surge in interest into an order from hospital administration. While, we believe that all of the sales identified remain opportunities, we do not necessarily expect all of them to close in the second quarter.

Having said that, we believe that our longer term pipeline remains strong, and as I will detail in a minute, we have taken a number of actions in the quarter that we believe will make us even more competitive in the market. I now like to spend some time discussing the progress against our strategic priorities for 2019.

As a reminder, these priorities are; focused on driving the adoption of digital laparoscopy with Senhance in the U.S. implement key instrument expansions in the U.S., advance the technological capabilities of Senhance throughout the integration of surgical image analytics technologies and continue to facilitate the commercial adoption of Senhance in Asia.

Taking each of these in order, we placed driving the adoption of digital laparoscopy with Senhance in the United States at the top of our list for 2019, because U.S. represents the largest potential opportunity for Senhance.

The current focus on adoption is the next phase of our commercial U.S. strategy, following our initial launch activities last year.

When we discuss adoption, we include activities in addition to new system sales. Importantly, our success and adoption is also demonstrated by our driving the utilization on our installed base, both in the number and diversity of procedures and the number of surgeons actively utilizing our systems.

This growing foundation of committed users will enable peer to peer selling among surgeons to complement our own selling and in marketing investments in driving creasing system sales over time. Thus far in 2019, we've made solid progress in transforming our current U.S.

installed base into reference sites with engaged high volume surgeons. This is included investing time helping these sites get up and running, including activities like installations, training, surgeons, credentialing Proctor's and ensuring quality outcomes.

Today, some of the U.S. installations now have enough experience with the system to allow us to bring in potential customers and interact real time with current Senhance users.

We anticipate that additional installations will come up to speed shortly. Into the site together with new customers, we'll grow our hospital reference base throughout the year.

We have previously been limited in scheduling large numbers of surgeons to attend live case observations. To address this challenge.

We have begun to program to broadcast live surgery utilizing Senhance to surgeons throughout the world. Three live surgical broadcasts occurred in Q1 and more are planned throughout the year.

These broadcasts are vital tools to help surgeons envision how they can implement Senhance in their own practice. We're also continuing to focus on physician education and peer-to-peer interactions as evidenced by our activity at last month's Society of American Gastrointestinal and Endoscopic Surgeons Meeting in Baltimore, Maryland.

At the SAGES meeting, we were able to turn our efforts to expand adoption into rich user based content for the meeting. For the first time, we had a U.S.

surgeon, Dr. Robert Mariama from Flagler hospital, conducting multiple in-booth presentations to share his experience with Senhance.

Another first for this meeting was the TransEnterix Symposium, which included a panel of three surgeon users, two from the United States and one from Europe. These surgeons varied in adherence, from one who'd have the system for four weeks and perform 14 cases to a surgeon with more than 300 Senhance procedures, offering a broader array of perspectives to the attending audience.

Let me share some color on each of these surgeons and the focus of their presentations. Dr.

Amit Trivedi has worked in private practice for nearly 20 years as part of a high volume laparoscopic group, covering multiple hospitals, and he’s currently Chair the Department of Surgery at Hackensack Meridian Health Pascack Valley Hospital in New Jersey. He’s a new user who began performing Senhance surgery just one month before attending SAGES.

In his presentation, Dr. Trivedi shared his first month of experience, during which he performed 14 surgeries.

He discussed that he was attracted to the Senhance because of the ability to leverage his laparoscopic experience, advance technologies like eye tracking camera control and haptic feedback, and the cost effectiveness of the system. He also noted that Senhance provided him an opportunity to be a leader in the implementation of new technology in the local market.

Dr. Mariama was an early adoption of laparoscopy and he’s been performing laparoscopic surgery at high volumes for nearly three decades, currently serves as the medical director of Bariatric and General Surgery at Flagler Hospital in Florida.

Dr. Marema began using Senhance in late 2018.

He was grant to the systems due to its open architect, the open platform which allows direct visualization of the surgical field and the patient, the fact that the system was staff friendly, and that it allowed OR personnel to integrate quickly into the team. At the time of his SAGES presentation, Dr.

Marema had completed 40 cases using Senhance, performing a wide variety of procedure types. He noted that the use of familiar laparoscopic motion, as well as maintaining laparoscopic triangulation in poor placement resulted in a rapid learning curve for him and his surgical team.

finally Dr. Dietmar Stephan from St.

Marienhospital in Siegen, Germany, discussed his extensive hospital case history with the system. Dr.

Stephan has over two year of hands-on experience of Senhance, during which time he has actually completed over 300 cases across hernia repair, cholecystectomy, colorectal and upper GI procedures. Dr.

Stephan highlighted the rapid docking and short turnover time he’s achieved at his hospital. He also presented advanced procedures now enabled by Senhance with the use of ultrasonic energy, as well as his experience utilizing 3 millimeter instruments were virtually scar less procedures.

One of the other highlights at SAGES was the introduction of the Senhance surgical simulator. This has been a significant development project over the past three years that we're very proud of and we're receiving high marks from surgeons that were able to get hands on for the first time.

The simulator leverages our existing surgeon cockpit and mimics the robotic arms for a number of applications. These include providing from more cost effective demonstrations offering users the ability to practice without the need for a full system or a bedside assistant and it tests our skills with standardize exercises for laparoscopic antibody surgery.

The simulator offers a complete experience, including our exclusive eye tracking camera control and haptic feedback. It also will service as an engine, on which we can continue to expand our image analytics and augmented intelligent capabilities.

Notably, this is the first time haptics are enabled in a robotic surgery simulator. Recognizing the progress being made with the Senhance platform and instrumentation, including the simulator, our growing case experience and the ability to leverage reference sites, we’ve been focused on expanding our commercial infrastructure in the U.S.

to accelerate the adoption of Senhance. Since the beginning of the year, we've made a number of high quality hires in new roles and capital sales, marketing and training.

These new hires have significant experience in developing and executing successful commercial strategies for medical devices coming from leading medical technology companies, as well as surgical robotics companies. From a sales perspective, we have began to expand our geographical presence to include the West Coast and also brought on significant early stage robotic sales capabilities.

We have added significant marketing and market development experience to increase enhance Senhance awareness and pipeline maturation, and also to support customer marketing objectives once the installation occurs. Equally as important, we've brought on talent with demonstrated ability to create and build world-class training programs, as well as customers clinical support programs.

All of our hires have deep functional expertise, with most of them bringing long standing relationships with surgeons that are forward thinking and are attracted to new technology. Additionally, we are in the final stages of recruiting a Vice President of Sales for the U.S., and we expect to have this person hired and on-boarded in the second quarter.

Now, shifting gears to implementation of key instrument expansions in the U.S. Expanding on our significant strides in 2018 on this front, we set out in 2019 to broaden our instrument offerings even further.

In the first quarter, we achieved the most significant of these with the FDA approval of Senhance Ultrasonic Instruments, which we achieved in January. All of our U.S.

accounts have now received and begun to utilize Ultrasonic with the Senhance. And the clinical feedback from our global install base has been excellent.

Many surgeons are utilizing the instruments to perform complex dissections across general surgery, colorectal, bariatric, gynecology and urology with speed and safety. Based on the feedback we've received from surgeons in the field and perspective customers in our pipeline, we feel this device expands the overall attractiveness of the Senhance platform meaningfully.

The second is articulating instruments through which we continue to expect to receive FDA clearance later this year. Our third priority for 2019 is the advancement of the technological capabilities of Senhance through the integration of image analytics technologies.

We believe that the innovative capabilities we acquired will meaningfully advance the benefits of digital laparoscopy to patients, surgeons and operating rooms globally. In 2019, we will work toward the rollout of these innovative capabilities.

We've begun to make progress on this front with the initial step being additional product development, followed by submission of a FDA 510(k) application, which we continue to expect to complete by the end of 2019. Through our interactions with hospitals considering Senhance, we have received interest in evaluating the Senhance for pediatric surgery.

Currently, pediatric surgeons typically utilize standard laparoscopic instruments designed for the adult population when operating on children, because instrument control is so important when working on smaller anatomy, robotics would seem to be a natural solution. But the larger instruments of existing technologies have limited adoption in this population.

Based on the Senhance's robotic instrument control, haptic feedback and three millimeter instruments we believe we may be in a unique position to address this market. We have conducted some preliminary testing to evaluate the potential to serve this market, and we'll continue to work over the coming quarters.

We look forward to updating you with our progress as this exciting opportunity evolves. Our final strategic priority is the continued facilitation of the commercial adoption to Senhance in Asia.

As noted on our last quarterly update, we received full Taiwanese FDA approval in the fourth quarter of 2018, allowing us to begin to market to both surgeons and healthcare providers. We’re able to quickly capitalize on this approval of the sale in the fourth quarter of 2018, as well as another system sale in the first quarter of 2019 to Veterans General Hospital in Taipei.

The system we sold in December 2018 was installed and the surgeon training was completed in the first quarter. The team at Fu Jen Catholic Hospital began performing surgery last week with 12 general surgery cases completed in a span of just seven days.

This demonstrates how the Senhance's familiar interface for laparoscopic surgeons can simplify the rapid adoption of the clinical program. We expect to install the systems sold Veterans general hospital and begin the clinical program later this quarter.

And in Japan, we continue to make progress on the regulatory activities. This process is typically measured in years not quarters, so we will provide update as warranted.

We plan to leverage a hybrid model in Japan where we will appoint a national distributor sales marketing and technical support, while we manage regulatory, clinical and training activities directly. We are in the final stages of appointing a distributor representative and expect to complete this selection later in the quarter.

I’d now like to turn the call over to Joe to provide a financial review.

Thanks Scott. For the three months ended March 31, 2019, the company reported revenue of $2.2 million as compared to revenue of $4.8 million in the three months ended March 31, 2018.

The company sold one system in this first quarter of 2019 as compared to two systems in the prior year period. Revenue related to system sales totaled $1.3 million and $3.5 million respectively for the comparable periods.

Instruments and accessories sales in the first quarter of 2019 [gained] $546,000 versus $1.1 million for the comparable prior year period. Services increased to $348,000 for the three months ended March 31, 2019 compared to $202,000 for the comparable prior year period.

Total revenue in the quarter attributable to be the Taiwan systems sale was $1.3 million. Gross margin for the first quarter was negative 13% due to fixed and variable costs in excess of revenues.

R&D expenses in the quarter increased to approximately $5.7 million as compared to the prior year period at $5.3 million due primarily to increase personnel and supplies costs. Sales and marketing expenses in the quarter increased to $7.7 million from $6 million in the prior period as we continue to expand investment in our commercial infrastructure with a focus in the U.S.

General and administrative expenses in the quarter increased to approximately $4.6 million from approximately $2.7 million from prior year period, primarily due to increased headcount and consulting services to support our overall growth and geographic expansion. GAAP net loss for the quarter was $22.5 million or $0.10 per share compared to a GAAP net loss of $882,000 or zero cents per share in the prior year period.

For the three months ended March 31, 2019, adjusted net loss was $18.7 million or $0.09 per share as compared to an adjusted net loss of $11.3 million, $0.06 per share in three months ended March 31 2018 after adjusting for the gain from the sale SurgiBot assets and non-cash charges for amortization of intangible assets, change in fair value of continuing consideration and change in fair value of Warren liabilities. Cash and short term investments as of March 31st was $48.4 million.

We have not raised any capital through the ATM that we announced last December. We continue to believe that our existing cash and additional debt proceeds will support the business in the late 2020, including incremental debt under our agreement with Hercules Capital.

Now, I'll turn the call back over to Todd.

Thanks, Joe. Now turning into guidance.

In the second quarter, we expect to sell two to four systems globally. And although, it's been a slow start to the year, we remain confident in the quality of our pipeline and expect to show meaningful revenue growth in the back half of the year.

As a recap, we remain confident about our future here at TransEnterix with the benefits of significantly expanded market opportunity, the recent additions of key instrument offerings; a newly bolstered and expanding commercial sales infrastructure and increased geographic opportunities our confidence in full year 2019 sales growth remains. We continue to strongly believe that will drive adoption and enhance both in the U.S.

and abroad, leveraging the outstanding foundation our team has worked so hard to build. With that, I'd like to open up the line for questions.

Let me start off with a question about pipeline and the outlook to the rest of the year, Todd. I mean, thank you for giving us some clarity about the second quarter.

And I guess it might be help for me and for everybody to hear why you're confident -- your thoughts about your confidence about meaningful revenue growth, it sounds like in the second half of the year. Is it that you have purchase orders in-hand, is that the pipeline is clearly evolving?

Is it that you feel like you have the team and technology in place just help us understand your thinking behind your, clearly -- and I think it was being well funded optimism about the way the year unfolds.

Thank you, Rick. And I appreciate the question, I think those are all spot on.

Let's talk a little bit about, Q1. Certainly, we're dealing with a lot of small numbers as an emerging commercial growth company.

Two of the deals that we felt like we closed at the time we provided guidance had extenuating circumstances, those deals are delayed they're not necessarily lost. We had a change in decision maker in one and just longer time to convert surgeon interest to hospital administration approval.

So disappointing, but that's a little background. As we talk about Q2 as you think about our approach to guidance has really evolved over the last year, a year ago, we just felt that our visibility was pretty limited.

We just didn’t feel good about providing guidance. We were just getting going.

As our visibility improved and we felt like our ability to predict sales improved a little bit, we wanted to do that. And we certainly recognize the importance of providing guidance that we can achieve.

And we didn’t meet our own standards in the first quarter. Taken all that into account, we felt like when we wanted to give guidance in the Q2, I’ll give you a little more color on that.

As we sit here today, we currently already have one first order in hand and another that we expect in next week or two. So we feel like as we will be hitting in the middle of the Q2, we're well on our way to hitting our target in the Q2 of two to four systems.

So I think that’s a little bit of background on Q1. Certainly, little bit of confidence check for us in Q2.

And I would you say that as we look toward the back half of 2019, we certainly have bid out in the early U.S. market, it's a little longer.

We’ve had several accounts up and going close to three years outside the U.S. So we’ve been able to take our perspective pipeline there.

If you think about OUS surgeons, they’ve got strong laparoscopic surgery skills, and many of these markets are cost conscious as it relates procedure costs. And when we go out there right off of that that offering of Senhance really resonates.

And as we think about the U.S., there are a little bit different competitive dynamics. And what we really felt like we needed as we’ve seen everywhere in the world hospitals and they get close to purchasing, they want to have some good reference accounts in their geography that they can get.

As a final step, talk to people, both surgeons and administrators and spend some time there and get those people’s feedback. And we’ve been standing in the last several quarters that's our most important task.

And we feel like now and I think you and others that have seen some of the news coming out of SAGES, we now are starting to get not just European KOLs to get out and talk about their experience, share some of their data and their enthusiasm, we're starting to give some advocates in the U.S. at multiple different sites.

And that’s what you need to be able to make that final step to convert these pipeline accounts into purchases. It's taken us a little bit of time to get there, and we feel good about where we are.

But now that those sights are starting to progress from training to credentialing, to comfort, to higher volume, to multiple specialties, to advocates that’s where we feel like it’s really going to start paying dividends in our pipeline throughout the year. And we feel very good about our full year 2019 growth.

So a long answer to your question, but I wanted to make sure to go into the depth to provide a perspective on your question.

You talked about, both the reference sites and the way you’re reaching out with these broadcast, a couple of questions around that. But it seemed like you have -- if I'm understanding correctly, two U.S.

reference sites now even if I'm -- if it’s three even I don’t have the right number. How many do you need, at this point because it feels like you have a solid reference site -- U.S.

reference side base? And do you think you can get there this year maybe gives us a little more color about these live broadcast?

Are single-digit docs listening in, are 100 listening in? And what impacted that -- the live training discussions, what impact is it having?

The best way I can describe what we think is ideal is when we look at our experience outside of the United States, especially in Europe. We early on had one site in Europe that was fairly busy, and then we added a second.

And now we've added a third at a very high volume, very high volume with Senhance. So we've been seeing that when you have different sites across different geographies that have different specialties, that really allows you to cover a lot of ground.

So in U.S., we feel like we've got two or three of those now that are in different parts of the U.S., easy to get to with a driver or a plane flight. And we think at that point, we also have different specialties doing different procedures.

So we're starting to now replicate what we saw in Europe that really allowed Europe to get out and have success over the last year, year and a half. We feel like we've got those reference sites now.

And to answer your question how many is enough? I think everyone that you adds exponential impact certainly.

Now your question on live broadcast, there's no doubt. I've been in surgery now going on 30 years and surgeons like to see surgery with devices.

That's what they like to see. And we realized early on some of our purchases we were able to convert my traveling perspective hospitals and surgeons to the sites.

But with today's technology, we've now set up some of our higher volume sites to be able to broadcast surgery on a monthly basis. This is very effective because from the comfort of your own laptop, you can dial in you can watch procedures being done.

We've got a nice camera aspect where you can see inside the patient, you can see the console and you can see the greater room. So you can have multiple camera angles, you can have Q&A, the surgeon is able to moderate throughout the procedure.

So this is really, really helped us. It helps with awareness but it also helps people later stage of pipeline accounts.

They don't necessarily have to travel. They can sit there and have an interactive experience.

And as far as the numbers, whenever you get your numbers back, you don’t know if someone's there in the room with 10 people or not that our logins are hundreds of people, and not three or four, it's just hard to say exactly how many people are in each one of those rooms. And that continues to be revisited time and time again.

So it's really helped, I think, with awareness and also just comfort of some of our pipeline accounts being able to see multiple different procedures done and have a lifetime Q&A.

Great, a couple more for me if you don't mind. Todd, given the timelines in Europe and as you say, you've been out there for longer.

Should we be -- I mean I hear about the delayed U.S. systems and stuff happens, I get that it's still early days.

But should we be surprised that there were no sales in Europe, or Eastern Europe this quarter?

I think that was a disappointment to us. I don't think there's any way around it.

It really was you find in a company like ours when you sell your first couple of systems that's great and you get up and going. But when you get systems in the teams in different countries with different languages, it's a big effort for the company to go out.

Make sure you're training, prospering, you're creating credentialing requirements and you're also starting to host other pipeline accounts from different parts of the world. So some of the organizations focus really gets on making sure the systems that you have out there are operating in a tip-top.

And we hope that those sites to be cultivated in to hosting our pipeline, not everyone wants to host, but I think that's one of the things that we've certainly spent some time with our European team on. We’re seeing in pipeline acceleration certainly in Western Europe.

Now, we have two of our busiest sites in the world there that really helps us. And when you look at Eastern Europe, we’ve got a strong pipeline there typically the ASPs are a little higher there.

And these are deals that are pretty major undertakings, because a lot of the hospitals are part of a government program, and it takes a lot of coordination between the government funding and the end users. But those systems that fall into that criteria are really lining up well.

As you keep going around the globe, it’s early days for us in Asia, but you see we got approval in Taiwan. And very quickly we’ve been able to move to get systems sold, installed, trained and used.

So that’s an encouraging sign. I’ll say that Japanese regulatory clearance, when that happens will be a significant opportunity for us.

We’ve talked about it in the past, that’s the second largest market for robotics in the world, as you rate by country. And then also, in Asia, we’ve not talked about this in the past but we are now exploring the Chinese market.

It's certainly a market that people pay attention to. Big market and we have good knowledge, if you follow the company.

We have a good understanding of the Chinese market. So we’re now in the stages of the exploring commercialization in China, which gives a lot of attention from a lot of people, especially with some of the features we offer in our cost per procedure.

So, a little commentary on the globe, both U.S. and outside the U.S.

And just last from me for now, Todd. I know in many recent quarters, you’ve talked about the upcoming quarter in press release, I didn’t look back to see how many precisely, but I feel like a number of recent quarters you’ve previewed good or bad events.

And I noticed that there’s no early comment on this quarter. Just wondering, does this is to reflect the change in your thinking about how you’re communicating or something about your changing strategy?

Maybe just tell us how your thinking has evolved, and what we should expect going forward? Thank you very much.

In the past, from time-to-time, we have put out an early quarter update on the prior quarters' results. But as we have matured as a business we feel like the focus of our communication to the street should be these calls.

And while we may put out releases in for quarter on specific events that are material, we feel like focusing on energy and communication on single calls is the right path for us going forward.

I had a few questions I wanted to get into. Firstly, can you talk about the placement this quarter?

What country was in? You said Asia in the press release?

Taiwan…

And then could you give us some color as far as types of cases that were performed this quarter, any particular that stand out or any that surprised you on the upside, or vice versa?

Well, I would say that general surgery and GYN continue to be the lion share of the business. There's so many general surgery cases to be done.

And certainly, when you talk about hernia cases and in the GYN side, 3 millimeter instruments continue to be a draw. So we continue to see some acceleration there.

We continue to get drawn to higher volume lower reimbursed procedures. I think in the past, a lot of people categorized what is appropriate for robotics was higher reimburse maybe more complicated procedures.

But with our cost per procedure being close to parity with laparoscopy, we're starting to see not as much pressure on what types of procedures are done and that's been helpful. I would say that a big milestone for us was getting our ultrasonic energy device approved in the Q1.

So, in Europe, I know that we've started to see more very accurate procedures done too. When you're working like was short vessels that attach to the stomach, gastric epiploicae and whatnot, you really want tissue dissection capabilities with ultrasonic, which is ideal on that.

I will say that our feedbacks universally have been fantastic with the ultrasonic device. So, we see that probably about a third of our cases now are utilizing the ultrasonic.

So that would be the commentary, Jeff, I'd give you on case mix and how it's evolving some.

And then, Todd, I know Rick probed you a little bit as far as the funnel description? Can you give us a sense for maybe its risk or its depth, and maybe how that compares today with what it look like in the end of '18, as far as number of accounts that have made it to early stages, mid stages, late stages?

I'll probably give you some commentary more from the macro level on the pipeline. I think you as many people who have followed us over time, we feel like we continue to have a pretty rich pipeline for the number of sales representatives we have out there.

One of the reasons we haven't continued -- we get some questions of why don't we add more sales folks? We wanted to make sure, especially in the U.S., that when we do continue to build our pipeline that these places have good referenceable accounts to go to, we rarely come and talk to people and telling the story about Senhance than when they're not interested.

So to continue to add to that before we had places to go and show them surgery, we've elected not to do that. But if you heard in my commentary of the Scrip, we've added someone out west, so we are starting to look west as any company would.

We've added a few other folks, both on the commercial side that are account focused market development, both pre pipeline purchase and after people purchase, how can we help them develop their market. So if you heard some of the increase and hiring we've done in the Q1, I think you can take that as a vote of confidence for us that we're ready to start investing more in our commercial infrastructure and capabilities.

We have a fantastic team that's already in existence here at TransEnterix. They just continue to need some help to be a manage little bit broader and wider pipeline.

So that's how I'd give you some descriptors there.

And then lastly, Joe, could you come in any on the G&A for the quarter, looked a little bit on the heavy side? Anything that was one time in nature or stood out on that front?

There wasn't anything one time. Compared to last year, we had pretty significant headcount growth as we've expanded our footprint globally.

So is that the type of pace that we should expect for 2019 on the G&A side?

No, there is some stock comp that is confounding that number a little bit that you should be able to get at through the 10-Q to see what the underlying cash number is.

Todd, I was hoping you might be able to talk a little bit about the image analytics technology. And I guess the specific question is when you launched that first version of it.

What are the expectations for what the capabilities will be there?

That comes from our acquisition of MST over in Isreal. Really have been excited about that, we've started to show this to some of our surgeons.

And when we think about image analytics, we think about it in a couple of ways. Today, cameras continue to improve over the years and we've certainly seen one of the advancements in imaging has been what fluorescents.

We get a lot of positive feedback, because we’re able to take best-in-class fluorescents and plug it right into the Senhance. We don’t have to rely on years' old software.

So that’s really helped us with being front of class with image and robotics. With the image analytics, we want to stop just showing surgeons images, and we want to be able to start doing something with that.

We know that one of the biggest frustrations of both laparoscopic and robotics is controlling your vision. We know that that’s important to address.

So we've certainly done with our eye tracking technology and we’ve got some capabilities with the MST acquisition will do in that. So as we think about our initial application of that technology, its three new features that we’ll focus on early.

First, we don’t want the instruments to have to leave the field of view. This is a best practice if you talk to surgeons on laparoscopic surgery, and we’ve gotten ability to do that to keep the instruments centered.

Second, permits the camera to follow instruments autonomously, that’s a big deal. That’s just another way to control your vision that certainly improve what we’re hearing from surgeons, both from current laparoscopy and current robotics.

And then third is the suture assist feature, it'll recognize when the surgeon is suturing. And it automatically zoom in-and-out to ensure the placement of sutures is where they want, and it simples workflow.

The technologies that are continued to learn when you’re getting ready to do something, it can take the next step instead of requiring human interaction and we think that’s helpful. So in ’19, we’re going to continue to work toward rolling out these capabilities.

And we continue to feel confident that our product development integration will follow through with the submission of a 510 (k) by the end of this year.

I guess just two other quick questions for you relative to the two to four systems that you talked about for the 2Q. You mentioned that one sold and the other one, sound like you’re getting close on.

Would you be willing to give us some color on the geography of those two systems?

Those systems that we have PO in and the system that we expect to get a signature on in the next week or so, those were both in our EMEA. But we obviously have a pretty active pipeline around the world.

Certainly, the U.S. is one of our big focuses and we know people are ready for us to convert some of those interests into sales, that's a big focus.

And as we talked about, Asia, we have a lot going on to that. But that's where the first two that I referenced are.

And then lastly, I'm not sure how much color you can provide on this. But I listened carefully to your comments relative to the second half of the year, and you talked about meaningful growth.

What's the right way that to put meaningful growth in context to, as you’ve called the two to four that you're expecting for the 2Q. I'm just trying to make sure that we're calibrated here?

Well, as I think about the commentary and I chose those words carefully. I look at medtech and what we think is meaningful growth for medtech companies that are growing at a good clip.

We want to compare our 2019 sales to our 2018 sales and be considered high growth quality medtech as far as sales growth. And we look at 2018 and we look at our pipeline on the back of the year, and we think we're going to finish 2019.

And that'll be categorized as high growth medtech. So that's the way we think about it year-over-year and we feel confident in that.

I just want to thank everybody for joining us on today's call. And we certainly look forward to updating you on our progress in the next quarter.

Thank you.