The second part of your question was related to margin. All our margins are criteria, which I’ve noted on any sort of channel opportunity, be it M&A or partnership license distribution. That’s one of our key criteria, right, that it’s accretive to our gross margin day one $1, and that’s proven to be true. So, while we don’t break out margin by product, I think the accretion in our gross margin has been material, but expected. We saw that coming. We knew how it would build based on the way we were building our menu and our expectations on cost control and pricing. So, that’s how we would expect that to continue to hold. And then as far as our growth opportunities, yes, urology is our focus. So, we are a growth company focused in the urology.
And I would just say without speaking specifically, there’s a number of opportunities for growth that we see. And per my previous comment on the process we run, which is quite disciplined. We have a dashboard of opportunities that we see as viable. And that, coupled with to your question, from an R&D perspective or the previous question, our monitor project, we’re very excited about the potential there. Now, we’re not guiding to that. We’re not building that into any of our assumptions, but we think that that can really change the landscape for the patients in active surveillance.
Jason Bednar: Okay. All right. Very helpful. Maybe if I can drill in on gross margins a bit, maybe it’s related to my last question there. But pretty strong exit rate, putting up the 65% plus exiting 2023. Was that strength due to testing mix with Resolve being stronger? And then maybe talk about the sustainability of that gross margin performance as we think through modeling future years, should we be anchored to the 65% or plus or minus that level here in 2024 and 2025?
Michael McGarrity: Yes, I think plus or minus, is probably right. And you’re right in each of your assumptions of your question, right? So, mix on any given quarter mix can move our margin a couple of points. But our goal — if we go back to a year ago, our goal was to target 65% plus or minus. So, as we look at the quarters coming up, I think anywhere in that range of 2 or 3 points below or 2, 3 points above is reasonable based on mix. Ultimately, could our margins start with the 7? It could, but we’re not guiding or projecting to that right now. So, we think we’re building and it’s really important. The two things we control are coverage, which drives our ASP in cost, which we are very focused on. And so there’s — as we scale our business, we’re continually looking at ways to drive cost benefit that would affect margin.
But also as we look at opportunities, that last criteria I noted was — it’s critical. We won’t — we really won’t look at anything that isn’t accretive even if initially not unlike Resolve where it builds and we have visibility to how it lands on our targeted gross margin. That’s the way we think about those things and we’re confident that that margin is sustainable.
Jason Bednar: Okay, great. And one last clarification question here. The $6.3 million operating loss in the period, I just want to confirm that included one-time costs from the sole listing transition, correct? I think that really figure would have been a $4.6 million operating loss, if not for those one-time costs. Do I have that right?
Ron Kalfus: That’s correct, Jason.
Jason Bednar: Okay. Thanks Ron. Thanks guys.
Michael McGarrity: Jason, thank you.
Operator: And your next question comes from the line of Mark Massaro from BTIG. Your line is open.
Mark Massaro: Hey guys, congrats on a great 2023. Yes. So, obviously, a lot of the questions have been asked, but — okay, so if you’re looking to either partner or acquire, I’d just be curious if you have a preference to either? And then Mike, you indicated that whatever you do would need to be accretive on day one. So, I have to assume that if you do look to bring in another clinical test, is it safe for us to assume that reimbursement would need to be in place already?
Michael McGarrity: That’s a good assumption, Mark. We had quite an odyssey, as you know, with the reimbursement landscape is challenging for everybody in the clear lab diagnostics sector. So, yes, that is indeed a key criteria for sure. And as — to the front part of your question, when we think about — it’s clearly, the GPS acquisition was somewhat transformative for us, particularly at our stage when we made the acquisition from an M&A perspective. Resolve is a good example of — and that’s why I comment on, it was really important that we got that right. So, now we have a model for that for what I would refer to. I obviously referred to more as channel growth opportunities that don’t require the capital investment that an M&A or GPS, but any M&A would have to look like the GPS, right, were bought immediate revenue and gross margin accretion to the business.
But I think your assumption is correct that it would probably be more of the latter on our more near-term growth opportunities that we’re looking at.