Vicarious Surgical Inc. (NYSE:RBOT) Q3 2023 Earnings Call Transcript

Bill Kelly: Yeah. We haven’t given the external guidance on what that would be, but as we have talked about, it’s going to be about 30 to 60 patient trial, probably closer to the 30 side, hopefully. So, it’s within the guidance that we would’ve earned, that we provided here. It’s not — it’s probably less than a month’s worth of burn.

Adam Maeder: Okay. Okay. That’s helpful, Bill. Thank you for that. And then, I guess, just in terms of the integration process and trying to better understand exactly kind of some of the bottlenecks or speed bumps that you’re hitting. I heard comments referring to both software and hardware components. Maybe just flesh that out for us in a little bit more detail and what’s being done to remedy those. Thanks.

Adam Sachs: Yeah. So, the V1.0 system, as we’ve mentioned in the past is kind of ground up rearchitecting of the beta two system. The beta two was the kind of final prototype, had all the functionality we needed, got rave reviews from our hospital partners and surgeons. And over the course of the last year and a half has been rearchitected and redesigned into the V1.0 system that we have today. That system, the way to think about, it’s somewhere around eight or so, depending on how you slice it, different, fairly complex medical devices, patient carts, surgeon console arms, the gooey, the camera, et cetera. And each of those has been designed by their own subsystem team brought up, and is running effectively. And as they’re all being integrated together, as we use the term integration phase, we’re starting to encounter some bugs in some issues across the system.

So — excuse me — overall, most components are functioning effectively, but we’re starting to encounter some software challenges, which are then, as things come up uncovering some hardware challenges, they’re nothing that’s particularly significant, hence why we’re looking at instead of around now having it integrated, looking at next spring. So really just a one or probably two quarter delay there, and the rest being the anticipated impact of reduced spending and our inability to preemptively resolve challenges that come up.

Adam Maeder: That’s helpful color. Thanks Adam. And if I could just sneak in one more, another kind of follow on to Ryan’s question just around the organization. Can you be a little bit more specific in terms of what the R&D org looks like, kind of at the beginning of the year versus where we are today? Just trying to get a better understanding for kind of the magnitude of the reduction, and how many folks are currently working on the development of the system. Thank you for taking the questions.

Adam Sachs: Yeah. I don’t have the exact numbers in front of me, but it is — we started the year ballpark of 230 people and have reduced to about 130. And that is just the internal, we obviously indexed more on external reduction than internal reduction for capital efficiency reasons.

Bill Kelly: Yeah. I would say if you look at people touching the product between operations, quality R&D, all those sorts of things, it’s probably 70%, 75% of the business are people touching the product still in this reduced headcount.

Adam Maeder: Thanks for the color guys.

Adam Sachs: Yeah. Thanks for the question.

Operator: Thank you. The next question will be from the line of Josh Jennings with TD Cohen. Your line is now open.

Josh Jennings: Hi, good afternoon. Thank you. I was hoping, Adam and Bill, to just to ask about verification and validation testing. And I know there’s a process. And you’ve may let mapped out these timelines that includes V&V I’m assuming. But I guess, what — where does that stand and is there any timeline specifically for verification validation, I guess? And then, the real point of the question is to ask about on the manufacturing side, understanding is V&V, the agency has to get comfortable, manufacturing systems are in place, and where does that stand today? And then, when do you plan to have V&V done and in manufacturing in a place where you can move forward?