Apyx Medical Corporation (NASDAQ:APYX) Q3 2024 Earnings Call Transcript

Apyx Medical Corporation (NASDAQ:APYX) Q3 2024 Earnings Call Transcript November 8, 2024

Operator: Ladies and gentlemen, good morning, and welcome to the Apyx Medical Third Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jeremy Feffer from LifeSci Advisors. Please go ahead.

Jeremy Feffer: Thank you and welcome everyone to our third quarter 2024 earnings call. Representing the company on the call are Stavros Vizirgianakis, Executive Chairman of the Apyx Board of Directors, who will participate in the first part of the call; Charlie Goodwin, Chief Executive Officer; and Matt Hill, Chief Financial Officer of Apyx. Before we begin, I would like to remind everyone that our remarks and responses to your questions today may contain forward-looking statements that are based on the current expectations of management and involve inherent risks and uncertainties that could cause actual results to differ materially from those indicated, including, without limitation, those identified in the risk factor section of our most recent annual report on Form 10-K, our most recent 10-Q filing, and the company’s other filings with the Securities and Exchange Commission.

Such factors may be updated from time to time in our filings with the SEC, which are available on our website. We undertake no obligation to publicly update or revise our forward-looking statements as a result of new information, future events, or otherwise. This call will also include references to certain financial measures that are not calculated in accordance with generally accepted accounting principles or GAAP. We generally refer to these as non-GAAP financial measures. Reconciliations of those non-GAAP financial measures to the most comparable measures calculated and presented in accordance with GAAP are available in the earnings press release on the investor relations portion of our website. I would now like to turn the call over to Mr. Charlie Goodwin, Apyx Medical’s President and Chief Executive Officer.

Please go ahead.

Charlie Goodwin: Thank you, Jeremy, and thank you all for joining us today. Per our usual format on these quarterly calls, I will be providing a review of our performance in the third quarter, and then I will turn the call over to Matt for a review of our third quarter financial results and full year guidance. We will then open up the call for your questions. However, before I get started, I would like to have Stavros take a few minutes to address the strategic changes announced this morning at the Board and corporate levels of Apyx, as well as actions taken to strengthen the company’s balance sheet. Stavros?

Stavros Vizirgianakis: Thank you, Charlie, for having me join you on today’s call to address the strategic changes happening at Apyx, along with the financial actions taken, which we believe strengthen the company’s balance sheet. First, as announced in the press release issued earlier today, the Apyx Board of Directors and management team have decided to implement an organizational restructuring that is expected to better focus the company’s resources and streamline operations. Under the restructuring, Apyx reduced its US workforce by nearly 25%. As part of the reduction, Todd Hornsby, Executive Vice President of Sales and Marketing, will be leaving the company effective immediately. Todd has been a valuable member of our sales team for more than 10 years.

We are grateful for his contributions to the company during this time. Under the new structure, Charlie has assumed direct responsibility for the sales organization, in addition to his other duties as CEO. As a reminder, Charlie has decades of experience leading medical device sales teams and is well positioned to support the function. In order to free up Charlie’s time, I’m also pleased to announce Shawn Roman has been promoted from his current position of Vice President Research and Development to Chief Operating Officer. Shawn has been with the company since 2015 and is well qualified for his new role. In a moment, Matt will discuss the specifics in regards to the expected cost reduction and one-time costs, as well as how the restructuring is expected to extend our runway into 2027.

I wanted to be clear that this wasn’t a decision the Board of management took lightly. We carefully evaluated our options and determined that this restructuring was needed to right-size the business. Looking to the future, with the introduction of our game-changing new platform, which will enable the company to dominate surgical aesthetics with various best-in-class solutions, we expect to see an even greater utilization of our Renuvion technology and a return to overall growth. Charlie will elaborate on this exciting new platform momentarily. Turning to the Board changes being implemented, we have decided to right-size the Board, reducing the number of seats to five Directors from the current eight. While we value the contributions each of our Directors brings to the table, it’s important to right-size the Board given the changes and cost reduction being implemented at the corporate level.

Board members John Andres, Michael Geraghty and Craig Swandal have stepped down from the Board effective this week. John, Michael and Craig each have served on Apyx Board with dedication for many years and their steady leadership and thoughtful counsel have helped to bond Apyx’s mission to be a leader in the cosmetic surgery market. In line with the same thought process, in order to be fully aligned with shareholders, the Board has also decided to take a significant reduction in cash compensation. The Board has added John Featherstone as the Board Observer to further bolster our commercial efforts and align our interests more closely with shareholders. John is an accomplished commercial executive with over 20 years of progressive leadership experience in the aesthetic and medical device industry.

He has held senior leadership positions at several leading medical ethics companies, including Cytrellis Biosystems, Inc., Cutera, Inc., and Cynosure Inc., where he led strategic initiatives that drove revenue and built high-performance teams. We are pleased to announce our lender and partner, Perceptive Advisors, has agreed to amend the revenue covenants as a result of the near-term macro challenges which caused us to narrowly miss the covenant this quarter. We have also added covenants on total operating expenses in 2025 and 2026 which is in line with our plans. We are pleased to announce a $7 million registered direct cash investment from Nantahala Capital Management, which serves to strengthen our balance sheet and further validates the potential of our technology.

As a significant shareholder who purchased over 1.7 million shares in the spring, due to my belief in the technology and its ability to provide superior results for doctors and patients, I remain optimistic that the team will return the company to growth. I wanted to be clear that the Apyx management team has the Board’s complete confidence and support. I’ve worked closely with Charlie and Matt over the last few months and I’m positive that we have the right team in place. We view this restructuring as a necessary step to extend our runway and return to growth. I’ll now turn the call over to Charlie to provide the third quarter update. Charlie?

Charlie Goodwin: Thank you, Stavros. The management team and I appreciate your support. The Board’s decision to make its own set of cost reductions alongside the corporate restructuring speaks volumes and is a positive signal to the entire team that everyone is committed to bring down costs while utilizing our resources to drive future revenue growth. Moving now to our review of our third quarter performance, we reported total revenue of $11.5 million for the quarter, a decrease of 4% compared to $12 million for the same period last year. Looking at this by segment, sales of our Advanced Energy products decreased 6% year-over-year to $9.3 million. Our year-over-year business was down due to soft generator capital sales. This is not unique to us and have seen other companies in the aesthetic space experiencing the same challenges due to the macroeconomic environment and GLP-1 drugs, which has affected procedural volume.

What I am excited to share with you is that in spite of the reduction in the number of surgical procedures in our space, in the third quarter, our disposable handpiece revenue grew 9% overall and 15% in the United States. This year, we are approaching 90,000 units globally and disposable revenue now accounts for more than 60% of our total AE revenue. Our OEM or generator manufacturing business continues to perform well and grow. Going forward, we see even more opportunities for our technology due to the rapid uptake in the GLP-1 drugs and their associated side effects of loose skin. The broader market pressures I referred to are tied to the emergence of GLP-1 drugs, which has resulted in patients postponing aesthetic procedures. We expect these macroeconomic challenges will continue to negatively impact the capital equipment side of our business through the near future.

While this market shift has pressured sales of our generators over the past year to 18 months, we believe there is an emerging opportunity within the market for surgical treatment of loose skin, and our team is moving quickly to position Apyx to be the leader. Due to this rapid weight loss, these patients will suffer significant loose and lax skin, which will require a surgical intervention and/or body contouring procedure, which provides a durable and transformational result as compared to non-invasive procedures. Considering the size of the population already on GLP-1 drugs, over time, this has the potential to be a significant tailwind for Renuvion, which is the only FDA-approved solution for loose skin. We believe this should be the standard of care for these patients.

We are approaching 400,000 procedures performed using Renuvion. The procedure has proven to be transformational and durable for patients. Part of our strategy is to educate patients and doctors on the benefits of using Renuvion to treat loose and lax skin. We have launched a direct-to-consumer strategy in order to generate broader awareness for Renuvion at the patient level. This program leverages key influencers, amplifying awareness through our premier lifestyle expos, and exclusive retreats that boost visibility for Renuvion. In addition, we have launched a campaign to educate patients and physicians on Renuvion as the number one trusted contouring technology focused on loose skin. And approximately 50% of consumers say they would consider a treatment to reduce loose skin because they want to look and feel more like themselves.

In order to enhance patient outcomes and continue to lead surgical aesthetics, we are excited to announce the Apyx team is in the final stages of developing the Ayon body contouring system. Ayon is an all-in-one platform that seamlessly integrates Renuvion, ultrasound-assisted liposuction, power-assisted liposuction, infiltration, aspiration, electrocoagulation, and fat transfer into a single, streamlined device. We believe Ayon is a game-changer for surgeons that will differentiate us and position Apyx as their surgical partner. I can picture a time when we walk into just about any surgeon’s practice and see an Ayon positioned in the heart of their operating room. Our goal is to be the company that surgeons think of when it comes to all of their surgical needs.

We currently plan to submit a 510(k) for Ayon to the FDA no later than the end of Q1 2025, which we believe would put us on track to launch this new system in the second half of 2025, which should kickstart equipment sales growth again, as we have the opportunity to capture new market share and expand our total addressable market in aesthetic surgery. This is an exciting opportunity for our business that is in the early stages. We look forward to gaining traction as we close out ‘24 and into 2025. I will now turn the call over to Matt for a review of our third quarter financial results in more detail, along with our financial guidance for 2024, which we updated in today’s release.

Matt Hill: Thanks, Charlie. Before I get started, please note that all references to third quarter financial results will be on a GAAP and year-over-year basis unless noted otherwise. As Charlie mentioned, we reported a 4% decrease in total revenue to $11.5 million in the third quarter of 2024 when compared with the $12 million for the third quarter of 2023. This was primarily due to Advanced Energy revenue, which decreased 6% year-over-year to $9.3 million. The Advanced Energy decrease is mostly driven by a lower average selling price of Advanced Energy generators to domestic customers, fewer domestic customer upgrades to the Apyx One Console, and a decrease in international sales of new generators. These decreases were partially offset by increased volume of single-use handpieces domestically and sales of upgrades to the Apyx One Console internationally.

OEM segment sales increased 3% for approximately $0.1 million in the third quarter of 2024 when compared to the third quarter of ’23. The increase in OEM sales was due to increases in sales volumes to existing customers. Gross profit for the third quarter of ‘24 decreased $1 million or 13% to $7 million. Gross profit margin was 60.5% compared to 66.6% in the prior year period. The decrease in our gross margin was primarily driven by a decrease in the average selling price of generators, changes in the sales mix between our two segments with our OEM segment comprising a higher percentage of total sales, and changes in geographic mix within our Advanced Energy segment with international sales comprising a higher percentage of total sales.

Operating expenses decreased $2 million or 16% to $10.6 million, reflecting our continued emphasis on controlling costs, including the elimination of ‘24 bonuses. The decrease in operating expenses was primarily driven by salaries and related costs, and selling and general administrative expenses, which decreased by $1 million and $0.6 million respectively. Loss from operations decreased $1 million or 22% to $3.6 million. Total other expense net was $1 million compared to $0.4 million in the third quarter of ‘23. The change was driven primarily by increased net interest expense related to our outstanding debt obligations in the third quarter of ‘24 as we had lower borrowings in the prior year period. Net loss attributable to shareholders was $4.7 million or $0.14 per share compared to $4.6 million or $0.13 per share in the prior year period.

Adjusted EBITDA loss decreased $0.6 million or 20% to $2.4 million compared to $3.1 million in the third quarter of ’23. As a reminder, we provide a detailed reconciliation from net loss attributable to stockholders to non-GAAP-adjusted EBITDA loss in our earnings press release. For the three months ended September 30, 2024, cash used from operating activities was $4.4 million, which is consistent with $4.4 million used in the prior year period after adjusting for a one-time tax refund of $8.1 million. As of September 30, ‘24, the company had cash and cash equivalents of $28 million compared to $43.7 million as of December 31, ‘23. We are pleased to announce we have closed the $7 million registered direct offering with Nantahala Capital Management, allowing us to strengthen our balance sheet.

In addition, we amended our credit agreement with our lender and partner, Perceptive Advisors, reducing our revenue covenants and adding max operating expense covenants at $40 million and $45 million for ‘25 and ‘26 respectively. Associated with the amendment, we issued to Perceptive 150,000 shares of our common stock. As Stavros discussed in his prepared comments, we’ve just implemented a cost savings restructuring that will reduce our workforce by nearly 25%. We estimate the annualized future cost savings from the reduction in force to be approximately $4.3 million, which we expect to contribute to our goal of decreasing loss and achieving cash flow breakeven. We will incur a pre-tax charges of approximately $0.6 million in the fourth quarter of ‘24, representing, for the most part, one-time cash expenditures, severance, and other employee termination benefits.

In addition to the organizational changes, we have identified other direct cost savings we anticipate achieving in 2025. The identified cost savings, which include, among other initiatives, reduction in professional fees, the research and development costs as we complete the development of Ayon, credit card fees, and stock compensation. We foresee in totality these cost savings will reduce our operating expenses below $40 million. Turning to a review of our ‘24 guidance, which we updated in our earnings press release today. For the 12 months ending December 31, ‘24, we expect total revenue in the range of $46.6 million to $47.6 million, representing a decrease of approximately 11% to 9% year-over-year. Our revenue guidance assumes advanced energy revenue in the range of $37.2 million to $38.2 million, representing a decrease of approximately 14% to 12% year-over-year.

OEM revenue is expected to come in at approximately $9.4 million, representing growth of 5%. This range assumes approximately $2 million OEM revenue in the fourth quarter of ‘24. In terms of our profitability guidance for fiscal year ‘24, we expect a net loss attributable to stockholders of approximately $25 million, compared to our prior expectation of approximately $24.5 million to $23.5 million. The low end of our formal financial guidance for net loss attributable to stockholders now assumes the following for modeling purposes. First, gross margins of approximately 60% this year. Second, we expect total operating expenses in the range of $48 million to $49 million. Lastly, at the low end of our net loss, we expect cash used in operations in ‘24 of approximately $20.1 million.

This compares to cash, normalized cash used in operations of approximately $13 million in ‘23, excluding the one-time tax benefit in the third quarter of 2023. Year-over-year change in cash used in operations is driven by the change in net loss offset by improvements in working capital. Lastly, in our earnings release today, we introduced 2025 revenue guidance. For the 12 months ending December 31, ‘25, we expect total revenue in the range of $47.6 million to $49.5 million, representing a growth of approximately 2% to 6% year-over-year when compared to the low end of our ‘24 guidance range. Our total revenue guidance range assumes Advanced Energy revenue in the range of $39.1 million to $41 million, representing a growth approximately 5% to 7% year-over-year.

OEM revenue is estimated at approximately $8.5 million, representing a decrease of approximately 10% year-over-year as we return to more normalized customer ordering and order fulfillment. We expect that these revenue results will be achieved with operating expenses of no greater than $40 million. We believe based on our projections, including the uptake of the Ayon platform, working capital management, our strict cost controls, and the recent capital investment, will yield cash into 2027. This completes our prepared remarks. Charlie and I will now open the call for questions. Operator?

Q&A Session

Operator: [Operator Instructions] The first question comes from the line of Matthew O’Brien from Piper Sandler. Please go ahead.

Matthew O’Brien: Great. Thanks for taking the questions. And, Stavros, good to reconnect here a bit this morning. Maybe just starting with ’25 and the Advanced Energy commentary, Charlie or Matt, just where is this growth, this kind of 7.5% going to come from? Is it really just on the handpiece side of things or do you expect the generator side to start to flatten out and even improve somewhat next year as rates start to fall a bit?

Charlie Goodwin: Yeah. So, thanks for the question, Matt. Our budget for ’25 assumes that the capital equipment market stays the same that it is right now. To your point, it is not expected to do that. It is expected to get better. But from a budget perspective, that is our expectation that it doesn’t get any better and it stays exactly the way that it is now. And so, yes, that growth would come from continued handpiece growth and a little bit from Ayon in the back half.

Matthew O’Brien: Got it. And then, can you just talk a little bit more about Ayon and coming to market with such a robust product? First of all, just the development requirements to get that product to market. I mean 510(k) seems like it makes sense, although something as robust as this seems pretty differentiated. So I’m not sure what you anchor it to specifically, but just how that product specifically can catalyze the company late next year and then into ’26. Thanks.

Charlie Goodwin: Yeah. Thanks for the question. And I’m so happy that we actually get to actually talk about this now because it’s been in the development for quite a while, and it’s been part of our overall strategy to be the company that all aesthetic surgeons think about for surgery. We think that this is a game changer. We think, combined with the Apyx One generator, that this becomes the heart and soul of every doctor’s operating room because quite frankly, there’s not a single surgical procedure that they cannot do without this platform now, and it’s all integrated into one incredibly nice package. But it is just a 510(k). And I don’t want to say anything is relatively simple, but there are predicate devices for all the technologies.

And so, that makes it a lot easier when you’re going through the 510(k) route. And we actually did a pre-submission already with the FDA to let them know what is coming and already got their feedback. So we feel pretty good that we’re on the right path for getting this through the agency in a pretty good length of time. But obviously, it’s incredibly exciting for us here at Apyx Medical and something that it’s been the hardest thing not to talk about for the longest time now because we’ve been working on it for a while, obviously.

Matthew O’Brien: Got it. Thank you.

Operator: Thank you. The next question comes from the line of Matt Hewitt from Craig-Hallum Capital Group. Please go ahead.

Matt Hewitt: Good morning. Thank you for taking the questions. Maybe first up, can we talk a little bit about the environment right now? Obviously, with expectations that rates are going to come down, how are you positioning for this return to growth in 2025, either from a pricing perspective, or are you still actively participating in marketing campaigns? Just how do you kind of position things for growth next year?

Charlie Goodwin: Yeah. No, it’s a great question. Thank you. Yes, as we talked about on the call, we unfortunately had a 25% reduction in our force this week to lower our cost basis and to basically right-size the organization and get us ready for all of this. But one of the things that we actually are spending more on next year is our direct-to-consumer campaign. It is — we’re starting to see unbelievable metrics from that. The uptick is starting to be really good from the efforts that we’re putting in there. And we think that putting more on that and educating patients more about the options that they have for loose skin is going to pay dividends. And as I’ve mentioned before, it’s not just direct-to-consumer, it is also business-to-business, too. And so, that is an area of focus for us as we move into ’25 and into ’26 to help do this. And so, that is something that we will keep doing.

Matt Hewitt: Got it. And then, regarding the Ayon, just a couple of things. First, it’s exciting to hear that you’re launching this new product. Will this replace Renuvion? Is it the same generator and then just different attachments? I’m just trying to figure out if there’s any risk to maybe cannibalizing a little bit of the Renuvion market. Just help me understand that a little bit better.

Charlie Goodwin: Yeah. No, it’s a really good question, and it’s really important at this point that everybody understands. The heart and soul of the Ayon system, the brains of the Ayon system is the Apyx One generator. The Apyx One generator was designed with this in mind because obviously, we had this in the works too. And so, the Ayon system will not work without an Apyx One. And so, for all the doctors that have already upgraded to the Apyx One, now they could just upgrade the rest of their body contouring offering around that. And for the doctors who have the RS3, they would need to upgrade to Apyx One first for that because the Apyx One is the key. And for all the other technologies that are in Ayon, I think it’s important to note this, when we looked at designing this system, we worked with some of the top body contouring doctors in the world to help design this platform.

And we have taken everything that is in there and made it better and state-of-the-art. Some of these technologies that are in Ayon had not been enhanced in about 20 years. And you can imagine, with technology, 20 years is antiquated. And so we have not only taken some of the technologies and made them better, but we have taken all of the processes and all of the things that help make the procedure safer, faster, more convenient for the doctor, and then we have put it elegantly into one tower. And so, if you think about space in these procedure rooms, they’ve got stuff all over the place. This is going to be elegant and all into one tower with state-of-the-art everything that exists in the marketplace today.

Matt Hewitt: That’s super helpful. Thank you, Charlie.

Charlie Goodwin: Thank you.

Operator: Thank you. The next question is from the line of Sam Eiber from BTIG. Please go ahead.

Sam Eiber: Hey, good morning, everyone. Thanks for taking the questions this morning. Maybe I can start on the reduction in force and just better understand where some of the reductions are coming from. Is it really across the board? Are you still maybe emphasizing some of the commercial teams? Just want to better understand where that’s coming from.

Charlie Goodwin: Yeah. It was really across the board of the entire organization. We looked at things that we could live without and focus on the things that we had to have over the next couple of years to get to profitability. And I just want to be clear on that 25%, that was just in the US, the Bulgaria facility stays the same, but that was just a US reduction.

Sam Eiber: Okay. That’s really helpful, Charlie. And then maybe following up on some of the questions for Ayon and specifically the new features, is this something surgeons are necessarily asking for, updated ultrasound and PAL also? Just want to better understand adding all those features and some of the benefits that could drive for Apyx.

Charlie Goodwin: The short answer to that is, absolutely. One of the things that they were asking for is to have all of this put together because they’ve got stuff all over their procedure room and space is limited. But we didn’t want to just put it together. We wanted to make the procedure safer, faster, more efficient and everything else. And so when you look at what we have actually done, we have actually made the surgeons and their staff’s job easier in almost every way, and this will help drive better patient outcomes. This will help drive more efficiency. This will help reduce the time that is needed for the procedure. And so, there is really nothing that this platform won’t help these surgeons out. And our goal, obviously, has always been to have Renuvion be the standard of care for all of these body contouring procedures, and we think that this just tremendously helps in that area.

Sam Eiber: Great. Thanks for taking the question.

Charlie Goodwin: Thank you.

Operator: Thank you. The next question is from the line of Ben Haynor from Lake Street Capital Markets. Please go ahead.

Ben Haynor: Good morning, guys. Thanks for taking the questions. First off for me, on the $4 million in additional cost savings that you mentioned having been identified, how quickly will those be put in place? And do you anticipate there are going to be any additional charges associated with those? And then, do the — any onetime charges, do those count against the $40 million covenant?

Charlie Goodwin: Yeah. No, look, we’ve got everything. There are no extra onetime charges. And just to give you a level of the cost reductions, the cost reductions just haven’t been going on for ’25 and ’26. I think — I believe that we finished the end of last year with an operating expense of around $53 million. Matt is nodding his head, my CEO math is correct. And so, we will go all the way from that over the next two years down to no more than $40 million next year. And all of that has been factored into everything. So we’ve had substantial cost reductions this year, too. We’re just carrying it on to another level for next year.

Ben Haynor: So, that $4 million run rate that will come out sometime in the current quarter and then you’ll get the benefit of it as we get into 2025 and beyond?

Charlie Goodwin: Yeah, that’s correct. So the charges for that $0.6 million that we talked about is specifically related to Q4 in ’24.

Ben Haynor: Okay. Got it. And then, on the change in assumption on Advanced Energy utilization, how does — or did that change to inform the altered guidance for the remainder of the year? Or is it mostly stay the same on the utilization side and less on the capital side, if that makes sense?

Charlie Goodwin: Yeah. No, I understand the question. The utilization and the growth of our disposables is still going to stay. I think we said that we expect to grow disposables low double-digits for the year, and that still remains the same. The softness still is in the capital equipment market.

Ben Haynor: Okay. Got it. And then, lastly for me, it sounds like this Ayon product is going to be quite the unit. But just curious, if you worry at all about kind of an Osborne effect where prospective customers kind of wait on things until this fantastic new unit comes out. Do you think that, that could impact capital sales as we get into, I guess, the remainder of this year in 2025?

Charlie Goodwin: So, are you asking if it’s going to hurt capital or potentially help capital?

Ben Haynor: Well, I would imagine, by the end of the next year, it would certainly help. But in the meantime, do you get folks that maybe would have purchased a unit kind of sitting on their hands waiting for Ayon?

Charlie Goodwin: Yeah. I think it’s actually just the opposite because remember that doctors have to have the Apyx One in order to be able to use Ayon. And we will prioritize customers that already have the Apyx One to upgrade to Ayon when it becomes available. So what we foresee happening is a lot of our doctors that would want Ayon could upgrade to the Apyx One, start using the Apyx One and continue using Renuvion. And then, when Ayon comes out, we can upgrade the rest of that system. So there is no reason that doctors would wait. And in fact, it’s just the opposite. One of the reasons that we wanted to start talking about this, too, is because doctors are always planning their businesses, and we’ve got people that are opening new practices and doing new things later in the year.

We want to make sure that they know that this is an option for them, and when they’re looking to replicate their body contouring offering that they would come and talk to us about that. So we don’t see it as any hindrance in the short run. In fact, it’s probably a net-net positive.

Ben Haynor: Okay. Got it. Just want to make sure. That’s very helpful. Thanks for taking the questions, guys.

Operator: Thank you. Ladies and gentlemen, this concludes our question-and-answer session. I would now hand the conference over to Charlie Goodwin for his closing comments.

Charlie Goodwin: Thank you, everybody, for attending the call. We appreciate it very much, and thanks for all your support. Thank you.

Operator: Thank you. The conference of Apyx Medical has now concluded. Thank you for your participation. You may now disconnect your lines.