Q3 2023 NEXGEL Inc Earnings Call
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Good afternoon I'll be your conference operator today at this time I would like to welcome everyone to Nextgen third quarter 'twenty to 'twenty three earnings conference call I will now turn the call over to Valter Pinto managing director of K C. S. A strategic communications for introductions. Please go ahead.
Speaker 1: Good afternoon, I'll be your conference operator.
Speaker 1: At this time, I would like to welcome everyone to Nextel's third quarter 2023
Speaker 1: I will now turn the call over to Walter Pinto, Managing Director of KCSA Strategic Communications for introductions.
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Speaker 2: Thank you, Operator. Good afternoon and welcome everyone to the NextGel third quarter 2023 earnings conference call. I'm joined today by Adam Levy, Chief Executive Officer, Adam Drafick, Chief Financial Officer of NextGel.
Thank you operator, good afternoon, and welcome everyone. The Nextgen third quarter 2023 earnings Conference call I'm joined today by Adam Levy, Chief Executive Officer, Adam drastic Chief Financial Officer of Nextera.
Speaker 2: Before we begin, I'd like to remind everyone the statements made during today's conference call may be deemed forward-looking statements within the meaning of the safe harbor of the Private Securities Litigation Reform Act of 1995. The actual results may differ materially due to a variety of risks, uncertainties, and other factors.
Before we begin I'd like to remind everyone that statements made during today's conference call maybe deemed forward looking statements within the meaning of the safe Harbor of the private Securities Litigation Reform Act of 1995.
Actual results may differ materially due to a variety of risks uncertainties and other factors.
Speaker 2: For a detailed discussion of some of the ongoing risks and uncertainties in the company's business, I refer you to the press release issued this evening and filed with the SEC on Form A-K, as well as the company's reports filed periodically with the SEC.
A detailed discussion some of the ongoing risks and uncertainties in the company's business I refer.
For you to the press release issued this evening and filed with the SEC on form 8-K, as well as the company's reports filed periodically with the SEC. The company disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information future events or otherwise unless otherwise required by law with that.
Speaker 2: The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless otherwise required by law. With that, it's my pleasure to turn the call over to Mr. Adam Levy. Adam, please go ahead.
Let's turn the call over to Mr. Adam Levy Adam. Please go ahead.
Speaker 3: Thank you, Walter, and thank you, everyone, for joining us today to discuss our third quarter 2023 financial and operating results.
Thank you Walter and thank you everyone for joining us today to discuss our third quarter 2023 financial and operating results.
Speaker 3: We are pleased to deliver yet another record revenue quarter in Q3 of 1.22 million, an increase of 115% year over year, and up slightly as compared to revenue of 1.17 million for the second quarter of 2023.
We are pleased to deliver yet another record revenue quarter in Q3 of one point to $2 million, an increase of 115% year over year and up slightly as compared to revenue of 1.1 dollars 7 million for the second quarter of 2023.
Speaker 3: Of note, the 2.3 million in revenue generated the last two quarters exceeds our full year of 2022 revenue.
Of note the $2 3 million in revenue generated the last two quarters exceeds our full year of 2022 revenue.
Speaker 3: Growth year-over-year was driven by an increase in contract manufacturing. This is our second consecutive quarter of revenue contribution from the acquisition of a 50% interest in the JV with CG lab.
Growth year over year was driven by an increase in contract manufacturing. This is our second consecutive quarter of revenue contribution from the acquisition of a 50% interest in the JV with C. G labs there.
Speaker 3: The return on this $500,000 investment into the JV, which we recently made the last payment on, has proved to be an excellent mutually beneficial transaction, and one in which we have quickly realized the benefits.
The return on this 500000 dollar investment into the JV, which we recently made the last payment on has proved to be an excellent mutually beneficial transaction and one in which we have quickly realized the benefits.
Speaker 3: It has contributed materially to our top line growth and is accretive to the bottom line as well.
It has contributed materially to our topline growth and is accretive to the bottom line as well.
Speaker 3: We also have yet to realize the full benefits to margins, as that will come as the new equipment is installed and validated. We expect the first equipment to come online in Q1 of 2024.
We also have yet to realize the full benefits to margins that will come as the new equipment is installed and validated we expect the first equipment to come online in Q1 of 2024.
We recently announced executing our supply agreement with Abbvie to be the supplier of gel pads for their rapid acoustic pulse device in.
Speaker 3: We recently announced executing a supply agreement with AbbVie to be the supplier of gel pads for their Rapid Acoustic Pulse device.
Speaker 3: In December of 2021, AbbVie acquired the owner of this technology, Soliton, for 550 million in cash after its Rosonic device demonstrated significant improvement in the appearance of cellulite.
In December of 2021, Abbvie acquired the owner of this technology. So all the time for $550 million in cash after its rysanek device demonstrated significant improvement in the appearance of cellulite.
Speaker 3: After extensive due diligence from AbbVie for many months, our hydrogels were chosen as the required razor to its razor blade model for each procedure to be done.
After extensive due diligence from abbvie for many months or hydro gels were chosen as the required razor to its razorblade model for each procedure to be done.
Speaker 3: Our ability to meet the high standards of AbbVie demonstrates the uniqueness of our technology, and the fact that a company of their size would select us is something we are very proud of. We expect the Rosonic device.
Our ability to meet the high standards of Abbvie demonstrates the uniqueness of our technology and the fact that the company of their size would select US is something we're very proud of.
We expect the Rysanek device to be launched next year.
Speaker 3: We have been making the necessary preparations to ensure we are fully prepared for this potentially significant and impactful revenue opportunity for next year.
We have been making the necessary preparations to ensure we are fully prepared for this potentially significant and impactful revenue opportunity for nexgen.
Speaker 3: Our branded consumer products grew year-over-year 54% and
Our branded consumer products grew year over year or 54%.
And quarter over quarter by 37%.
Speaker 3: This was led by Silver Seal, which continues to be a hero product for us, consistently gaining popularity.
This was led by Silversea, which continues to be a hero product for us consistently gaining popularity and positive reviews.
Speaker 3: This product is a unique hydrogel dressing for wounds and burns. The sterile silver patches are FDA cleared and have been clinically shown to kill 99% of staph, MRSA, and strep. They've also been shown to reduce.
This product has a unique hydrogel dressing for wounds and burns sterile silver patches are FDA cleared it had been clinically shown to kill 99% of staph MRSA and strep.
They've also been shown to reduce scarring and painting wounds Silversea all was it behind the counter hospital device for many years and our messaging of hospital grade product now available for home use has resonated with our consumers.
Speaker 3: SilverSeal was a behind-the-counter hospital device for many years, and our messaging of hospital-grade product now available for home use has resonated with our consumers.
Speaker 3: In North America, we are making good progress with Enigma Health for retail distribution. Now that we have fully vetted the audience for our leading products and have gained steady traction in the market, it is time to put these products on shelves. Our active discussions with many leading retailers have been going well, and we realistically could see our products on shelves by this coming summer.
In North America, we are making good progress with a <expletive> health for retail distribution now.
Now that we have fully vetted the audience for our leading products and it gained steady traction in the market. It is time to put these products on shelves are active discussions with many leading retailers have been going well and we realistically you could see our products on shelves by this coming summer.
Speaker 3: Last quarter, we provided an update on our amblyopia patch. We have since launched the product and have shipped to approximately 30 ophthalmology offices, and the feedback thus far has been very positive.
Last quarter, we provided an update on our amblyopia patch, we have since launch the product and have shipped to approximately 30 ophthalmology offices and the feedback. Thus far has been very positive. We are currently monitoring reorder rates adoption and consumer feedback to plan. The next phase of our rollout strategy.
Speaker 3: We are currently monitoring reorder rates, adoption, and consumer feedback to plan the next phase of our rollout strategy.
Speaker 3: Importantly, we have also made significant strides improving our gross profit, going from a gross loss in Q1 to a gross profit in Q2 and improving again in Q3. Gross margins improved sequentially to 28.1% in Q3 compared to 15% in the prior quarter.
Importantly, we have also made significant strides improving our gross profit going from a gross loss in Q1 to a gross profit in Q2 and improving again in Q3.
Margins improved sequentially to 28, 1% in Q3 compared to 15% in the prior quarter.
Speaker 3: Our net loss in the third quarter also continued to trend lower quarter over quarter in line with our goal to become profitable in 2024 from $814,000 in Q1 to $695,000 in Q2 to $552,000 in Q3.
Our net loss in the third quarter also continued to trend lower quarter over quarter in line with our goal to become profitable in 2024 from 814000 in Q1 to $6 95 in Q2 to 552000 in Q3.
Speaker 3: Included in our let loss of $552,000 for the third quarter are approximately $95,000 of non-cash items.
Included in that loss of 552000 for the third quarter or approximately $95000 of noncash items.
Our cash and cash equivalents decreased from $4 3 million at June 30 of 2023 to $3 3 million at September 30th 2023, the Delta between our improved net loss during the quarter and the net cash decrease over the period was related to an increase in accounts receivables and property plant and equipment investments.
Speaker 3: The delta between our improved net loss during the quarter and the net cash decrease over the period was related to an increase in accounts receivables and property plant and equipment investment.
Speaker 3: As we mentioned last quarter, the customers of CG Converting and Packaging require lengthier payment terms. Their payment terms are closer to 90 days as compared to NexGel's core business customers who typically receive 30-day payment terms. Therefore, AR increased during the period by $208,000.
As we mentioned last quarter, the customers of C. G converting and packaging require lengthy lengthy or payment terms. Their payment terms are closer to 90 days as compared to Nextgen <unk> core business customers, who typically received 30 day payment terms, therefore increased during the period by $208000.
We also invested 361000 in additional property plant and equipment during the quarter.
Speaker 3: We also invested $361,000 in additional property, plant, and equipment during
Speaker 3: Before I turn the call over to Adam, while Q3 was a significant quarter for us, we also have a lot to be excited about as we head into next.
Before I turn the call over to Adam while Q3 was a significant quarter for US. We also have a lot to be excited about as we head into next year.
Speaker 3: Given our growth into retail and new markets and our branded product line, as well as the opportunity to onboard new customers, we have strategically invested in inventory and equipment to increase capacity and automation to meet the significant increase in demand we expect for our proprietary hydrogels in 2024 and beyond.
Given our growth into retail in new markets and a branded product line as well as the opportunity to onboard new customers, we have strategically invested in inventory and equipment to increase capacity and automation to meet the significant increase in demand. We expect for our proprietary hydrogel is in 'twenty 'twenty four and beyond we expect our revenue to continue to grow.
Speaker 3: We expect our revenue to continue to grow year over year, margin expansion, and the net loss decrease to continue as we move towards profitability, which is always our highest priority.
Year over year margin expansion and the net loss decreased to continue as we move towards profitability, which is always our highest priority.
Speaker 3: With that, I would like to turn the call over to our CFO , Adam Drapczyk. Adam?
With that I would like to turn the call over to our CFO Adam drops it Adam.
Thank you Adam.
Speaker 3: Today, I'll review financial highlights of our third quarter 2023.
Today, I'll review financial highlights of our third quarter 2023 results.
Speaker 2: For the third quarter of 2023, revenue totaled $1.22 million.
For the third quarter of 2023 revenue totaled one point to $2 million, an increase of 653000 or 115%.
Speaker 2: increase of $653,000 or 115% as compared to $568,000 for the same period the year prior.
As compared to 568000 for the same period the year prior.
The quarterly increase in overall in overall revenues was primarily due to sales growth in contract manufacturing and branded products year over year, including revenue contribution from the joint venture formed with C. G labs.
Speaker 2: including revenue contribution from the joint venture formed with CG Lab.
Gross profit for the third quarter of 2023 was 344000.
Speaker 2: Gross profit for the third quarter of 2023 was $344,000 compared to a gross profit of $148,000 for the same prior year period.
To a gross profit of 148000 for the same prior year period.
Speaker 2: Gross profit margin for the third quarter of 2023 was 28.2% compared to 26.1% for the same period the year before.
Gross profit margin for the third quarter of 2023 was 28, 2% compared to 26, 1% for the same period the year before.
Gross margin increased sequentially to 28, 2% during the third quarter of 2023 as compared to 15% during the second quarter of 2023.
Speaker 2: Gross margin increased sequentially to 28.2% during the third quarter of 2023, as compared to 15% during the second quarter of 2023. Total operating...
Total operating expenses, including R&D and SG&A expenses decreased to 956000 for the three months ended September 32023, compared to 1.19 million for the prior year period.
Speaker 2: decreased to $956,000 for the three months ended September 30, 2023.
Speaker 2: compared to $1.19 million for the prior year period.
Speaker 2: The year-over-year decrease was attributable to a decrease in total SG&A and R&D expenses period over year.
The year over year decrease was attributable to a decrease in total SG&A and R&D expenses period over period.
Speaker 2: Net loss for the quarter ended September 30th, 2023, improved to 552,000, or 10 cents per basic and diluted share compared to net loss of 1.2 million, or 22 cents per share.
Net loss for the quarter ended September 32023 improved to 552000 or 10 cents per basic and diluted share compared to net loss of $1 2 million or 22 cents per basic and diluted share for the same period in 2022.
Speaker 2: per basic and diluted share for the same period in 2022.
Speaker 2: Net loss also improved sequentially to $552,000 during the third quarter of 2023, as compared to $695,000 during the second quarter of 2020.
Net loss also improved sequentially to 552000 during the third quarter of 2023 as compared to 695000 during the second quarter of 2023.
Speaker 2: As of September 30, 2023, NexShel had approximately 3.3 million of cash.
As of September 30th 2023 next shell had approximately $3 3 million of cash.
Speaker 2: During the quarter, the company invested in capital expenditures for new equipment and increased its capacity at Texas facilities to prepare us to execute our new supply agreements in 2024.
During the quarter the company invested in capital expenditures for new equipment and increased capacity at our Texas facilities prepare us to execute our new supply agreements in 2024.
Speaker 2: As of November 13, 2023, NexGel had 5,717,629 shares of common stock assets.
As of November 13th 2023 next gel had $5 million 717629 shares of common stock outstanding.
Speaker 2: I would now like to open the call for questions. Operator?
I would now like to open the call for questions operator.
Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue.
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Speaker 1: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions.
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One moment, please while we poll for questions.
Yeah.
Our first question comes from not from <unk> with Maxim Group. Please proceed with your question.
Speaker 4: Hi everyone, congratulations on the progress and thanks for taking our questions. I have a few, if I could start. On the supply agreement with AVI for the Resonic product, could you talk a little more about the market opportunity and the potential economics to NexGel in 24?
Hi, everyone. Congratulations on the progress and thanks for taking our questions I have a few.
You if I could start R&D on the supply agreement with Abbvie for the refining product could you talk a little more about the market opportunity and the potential economics to Max shell and 24.
Speaker 3: Sure, good to hear from you again. So look, we're under NDA with AbbVie. So I can't obviously share their forecast. We're obviously not in control of their launch. But I can say that you really couldn't ask for a much better partner in a product like this. And I can say that if they are successful, this is extremely significant and impactful revenue for us.
Sure Hey, that's good to hear from you again.
So look we're under NDA with Abbvie. So you know I can't obviously share their forecasts, we're obviously not in control of their launch but.
But I can say that you know you really couldnt ask for a much better partner in a product like this and I can say that if they are successful. This is extremely significant and impactful revenue for us.
Speaker 4: Got it. And on kind of a similar note, you also signed a deal with Halion earlier this year for a product launch by them. Do you have any updates on the product or do you have any potential timelines on when we could hear more about the product itself and a potential launch?
Got it and I'm kind of a somewhere and know you also sign a deal with Haley on earlier this year for a for a product launched by Dom do you have any updates on the product or do you have any potential timeline.
I'm wondering we could hear more about the product itself on a potential launch.
Speaker 3: Yeah, that product is actually a little bit further off than the Admi product, so think about that for, or certainly an update somewhere in mid-24 as they're probably targeting the end of 24 has always been kind of our guidance on that product.
Yeah that product is actually a little bit further off than that in the abbvie products. So think about that for or certainly an update somewhere in mid 'twenty four as they're probably targeting the end of 'twenty four has always been kind of our guidance on that product.
Speaker 4: Got it. That's helpful. So on those two points, now more of like a high level strategic question I've had and had conversations about is you always had a very, very transformative 2023 and you have a lot of different initiatives going on. Based on internal thinking and with everything that's happened, what do you think it's like the most significant or potential strategic growth driver, at least in 24? Unquestionable.
Got it that's helpful. So on those two points now more of a like a high level strategic question I've had and had conversations about is you always had a very very transformative 2023, and you have a lot of different initiatives going on.
He's an internal thinking and with everything that's happened what do you think it's like the most significant or potential strategic growth driver at least in 'twenty four.
Unquestionably, it's probably abbvie.
Speaker 3: There's going to be some other good things, but that one is staring us right in the face.
There's going to be a good thing, but that's that one as you know Darrin is right in the face.
Speaker 4: Do you have any thoughts on how much of that revenue, how much of your revenue that could have actually been compromised?
Got it do you have any thoughts on how much of that revenue how much of your revenue that could be cured compromise.
Speaker 3: Again, look, it will be very significant, we think. They paid more than half a billion dollars, $550 million for this product. I can't imagine they're going to go out, and again, I don't have any direct knowledge and I'm under NDA, but I can't imagine they're going to go out weak with that kind of investment. If they really do the job that we think they can do on that product, that is by far the biggest opportunity we have.
Again look they this is it will be very significant we think they paid more than half a billion dollars $550 million for this product I can't imagine they're going to go out and again I don't have any direct knowledge and I'm under NDA, but I can't imagine why a week with that kind of investment.
So if that if they really do the job that we think they can do on that product that is by far the biggest opportunity we have.
Speaker 4: Understood. On the, on the program works, you commented a little about the amblyopia patch launch. Could you provide more color on what feedback you got from physicians regarding the patch? And I was also curious, in terms of the actual use of the patch, have you found that they're being mainly given to, I guess, new patients or switches? And do you have any idea of how many patients are either new or switches, like in terms of percentages?
Understood. Although on the prepared remarks, you commented a little about the amblyopia patch launch.
Could you provide more.
Color on what feedback you got from physicians regarding the patch and I was also curious in terms of the actual use of the patch have you found that.
They're being mainly given two I guess, new patients are switches and do you have any idea of how many patients are either new or switches like in terms of percentages.
Speaker 3: So great question. So as far as so far the feedback has been terrific. Generally they're being given to existing patients because the patients with the worst irritation and the worst issues are the ones that we're using a different patch. The children are complaining, they've got those red rings around their eyes there that are either blistering or we're very irritated. So those are who I think the doctors are giving it to first and foremost.
So great question so.
As far as so far the feedback has been terrific.
Generally they're being given to existing patients because the patients with the worst irritation in the worst issues are the ones that we're using a different patch children, they're complaining they've got those red rings around their eyes, there that are either blistering or we're very irritated. So those are who I think the doctors are giving it to first and foremost and then theyre going to offer it.
Speaker 3: and then they're going to offer it to other people. And as the practice goes through, you know, patients come in every month, you get a different set in, they seem to be now steadily reordering and steadily giving it to more and more patients. I think what we need to understand and don't have the full picture of yet.
The other people and as the practice goes through you know patients come in every month, you get a different stat in they seem to be now steadily reordering and suddenly giving it to more and more patients I think what we need to understand and don't have the full picture of yet.
Speaker 3: is exactly what percentage of their patients are going to switch to this, right? It's a slight premium or a significant premium, actually it's about 50% more expensive than
It's exactly what percentage of their patients are going to switch or that's right, it's a slight premium or or a significant premium actually it's about 50% more expensive than.
Speaker 3: you know, something else you can buy on Amazon. And I think what we need to determine is.
Something else you can buy on Amazon and I think what we need to determine is if everybody is going to like it because it feels so much better or are really the patients that are going to use it the ones with the Warsaw irritation from the worst problems and that of course define the size of the market. So we're getting a lot of feedback from these doctors were doing a lot of research we're talking to some of the patients that want to tell us some.
Speaker 3: Is everybody just going to like it because it feels so much better or are really the patients that are going to use it the ones with the worst eye irritations and the worst problems and that of course defines the size of the market.
Speaker 3: So we're getting a lot of feedback from these doctors. We're doing a lot of research. We're talking to some of the patients that want to tell us some great stories. And as we determine what our next step should be, that'll kind of tell us where we should put our resources and how we should really try to ramp it up.
Stories.
We determine what our next step should be that will kind of tell us where we should put our resources and how we should really try to ramp this thing.
Okay.
Speaker 4: That was helpful, thanks. And also on that point on Amliopia, have you gotten any inquiries for potentially very large wholesale orders beyond initial orders or reorders?
That was helpful. Thanks, and also on that point on amblyopia have you gotten any inquiries for potentially very large wholesale orders beyond initial orders or reorders.
So no I mean, we've gotten some large practice orders you're gonna practices that have ordered 100 boxes at a time.
Speaker 3: So, no, I mean, we've gotten some large practice orders, you know, practices that have ordered 100 boxes at a time, but those are still small in the overall scheme of things until you get a lot of practices. I don't think we're quite ready yet, and that's part of what we're trying to determine before we engage one of those more expensive, like, professional sales forces that might go out to a whole bunch of doctor's offices.
Those are still small in the overall scheme of things until you get a lot of practices I don't think we're quite ready yet and that's part of what we're trying to determine before we engage one of those more expensive like professional sales forces that might go out to a whole bunch of doctor's offices.
Speaker 3: We want to understand our product, understand the pitch, understand what we're doing because that's not cheap to engage someone like that. But when we're ready, that is definitely one of the things that we will talk about and make a plan around.
I want to understand the product understand the pitch understand what we're doing because thats not cheap to engage someone like that but when we're ready that is definitely one of the things that we will talk about and make a plan around.
Speaker 4: understood. So obviously you have a lot of initiatives ongoing and very immediate near-term initiatives, but I was also...
Understood. So obviously you have a lot of initiatives on growing and very immediate and near term initiatives, but I was also I also wanted to talk a lot about your pipeline could you provide a potential update on the progress and development of the 500 10-K devices Youre working on sure sure. So the main thing that we have for the 500 10-K devices.
Speaker 3: I also want to talk a little about your pipeline. Could you provide a potential update on the progress and development of the 510k devices you're working on? Sure, sure. So the main thing that we had for the 510k devices that pushed them off was our inability to, at scale and at an effective manufacturing cost, to produce them with the dies and pumps that we currently had.
Is that pushing them off was our inability to at scale and at a effective manufacturing cost to produce them with the dyes and pumps that we currently have we have tested the new prototype dies. They worked very very well and we've now going ahead and ordering those guys to come in.
Speaker 3: We have tested the new prototype dyes. They worked very, very well and we're now going ahead and ordering those dyes to come in. And so we're probably going to be ready to manufacture product in the next 60 to 90 days and then we will, you know, submit it for testing and start moving those products forward.
And so we're probably going to be ready to manufacture product in the next 60 to 90 days and then we will submit it for testing and start moving those products forward again, Fortunately for us despite that delay we've had so much to work on that.
Speaker 3: Fortunately for us, despite that delay, we've had so much to work on that that's only one project out of several, but we do think it's an important project and we are going to pick it back up as soon as we can manufacture it effectively.
That's only one project out of several but we do think it's an important project and we are going to pick it back up as soon as we can manufacture it effectively.
Speaker 4: That was a very, that was very helpful. Thanks for taking my questions and I'll get back to you.
That was a very that was very helpful. Thanks for taking my questions and I'll get back in queue.
Okay. Thank you.
As a reminder, if you would like to ask a question. Please press star one on your telephone keypad.
Speaker 1: As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. Our next question comes from Chris Wachowski. Please proceed with your question.
Our next question comes from Chris <unk>.
Housekeeping.
Please proceed with your question.
Oh good afternoon, congratulations on very good results.
Thank you Chris.
Speaker 5: During the LOD micro-conference, you said that you wouldn't need any additional cash to reach profitability next year. Given this quarter's cash use, do you still confirm this statement?
So driven to the LD Micro conference you said that.
You Wouldnt need any additional cash to reach profitability next year.
Given this quarter's cost shoes do you.
Do you still confirm this statement.
Speaker 3: Yeah, so we we are not going to need any cash to reach profitability. But I've also always said that if an opportunity presented itself or there was something accretive that we could purchase.
Yeah. So we we are not going to need any cash to reach profitability.
But I've also always said that if an opportunity presented itself or there was something accretive that we could purchase.
Speaker 3: that we would, at that point, do a financing tie directly to that.
That we would you know at that point do a financing tied directly to that so as of right now our cash loss was well below 500000, and we still have about $3 3 million.
Speaker 3: So as of right now, our cash loss was well below $500,000 and we still have $3.3 million.
Speaker 3: Fortunately when you're ramping with some of these bigger companies that we now have, you're not dealing with payment terms like when you go into retail. So I think we're going to be okay right now. We're projecting profitability before we run out of cash with a pretty good cushion. But if there is something that we need to do and it means that that's going to allow us to scale and not have a hiccup in the way we scale, at that point we'll think about it.
Generally when you're ramping.
With some of these bigger companies that we now have them you're not dealing with payment terms like when you go into retail. So I think we're gonna be okay, right now, where we're projecting profitability before we run out of cash with a pretty good Cushing, but if there is something that we need to do and it means that that's going to allow us to scale and not have a hiccup in the way we scale at that point, we will we will think of.
Speaker 3: adding some cash. But as of right now, unless there's a really good reason that we're going to announce at the same time, we don't need any cash.
Adding some cash but as of right now unless there's a really good reason that we're going to announce at the same time, we don't need any cash.
Speaker 5: Okay, this is very good to hear. Congratulations on great growth in SilverSeal. If I heard you correctly, SilverSeal had very good sequential growth as well as annual. Was there any part of your business that shrunk sequentially because sequentially your revenue did not grow that much?
Okay. This is a very good to hear so congratulations on good growth in Super Cool.
And does a if I heard you correctly, it's super soaks up a very good sequential growth as well as on Euro and was there any part of your business the trucks sequentially, because the grocery or whatever and it did not grow that much.
Speaker 3: Sequentially, revenues did not grow that much, but silver seal grew. You always have a couple of products that you get rid of that didn't work out.
Sequentially revenues did not grow that much but silver seal.
Silversea grew as we always have a couple of products that you get rid of that didn't work out so when you're when we're launching a new product, especially when we test our products on Amazon, which is our model.
Speaker 3: So when we're launching a new product, especially when we test our products on Amazon, which is our model.
Speaker 3: Those products will have a very high advertising rate compared to the profitability. So they're really not profitable as you start acquiring various customers. And then what we do is we watch the overall advertising drop if the product's popular because you get reorders, you get subscribe and saves. And then you have to get to a certain threshold which is probably around 25% or 30% tacos and our heroes are much lower than that. But then the products seem to be scaling.
Those products will have a very high advertising rates compared to.
The profitability, so they're really not profitable as you started acquiring various customers and then what we do is we watch the overall advertising drop if the product's popular because you get Reorders you could subscribe and save and then you have to get to a certain threshold, which is probably around 25% to 30% tacos and our heroes are much lower than that but then the products seem to be.
Scaling we every all the time not every product we put out works, we're dropping products that don't meet that criteria. So yes, there's a few products that we drop.
Speaker 3: All the time, not every product we put out works, we're dropping products that don't meet that criteria. So yeah, there's a few products that we drop. That's part of the weeding and culling process, but the real growth in silver seal is no longer gonna come from sequential growth on Amazon because that's a limited market. The next step for us is gonna be retail and foreign markets, and that's what's coming in the near future.
As part of the weeding, calling process, but.
The real growth in silver steel is no longer going to come from sequential growth on Amazon because that's a limited market.
The next step for us is going to be retail and foreign markets and that's what's coming in the near future.
Speaker 5: Okay. And the retail, as you said, is going to be sometime next year.
Okay and.
And Oh, you said this is gonna be sometime next year.
Speaker 3: Yeah, I think it's reasonable to think, you know, mid-summer, around that time. There's just a process that retailers go through. All of our meetings have gone extremely well. There's a lot of interest on several products, not just Silver Seal, because we have probably three to four hero products now that we think would be viable at retail. And as I get a clearer picture, we'll give you updates on the next quarterly call as to exactly when we think we'll have products in the marketplace.
Yeah, I think and I think it's reasonable to think you know mid summer around that time, they're just a process that retailers go through all of our meetings have gone extremely well, there's a lot of interest on several products not just overseas because we have probably three to four hero products now that we think would be viable at retail.
And as they get a clearer picture will give you updates on our next quarterly call as to exactly when we think we'll have products in the marketplace.
Okay, and it seems that at least to financially it seems that you fit the profile of a company undergoing strong sequential growth your cold.
Speaker 5: It seems that, at least financially, it seems that you fit the profile of a company undergoing strong sequential growth.
Speaker 5: accounts receivable are growing, you're investing more money in inventory, so any comments for Q4? Are we going to see sequential growth again?
You can also Super Bowl growing youre investing more inventory so any comments for Q4 or are we going to sequential growth again.
Speaker 3: We really don't give guidance as to the quarters. I will tell you that you're going to continue to see very strong growth from us. But remember, we also have very large customers that tend to kick in periodically. So it doesn't look like a straight line up, like a flat hill. It looks more like a staircase. So it is always possible that you have a flat quarter. We kind of had a flat quarter this quarter. But then as new things are announced and new customers come online, you'll see large jumps.
We really don't give guidance as to the quarters I will tell you that youre going to continue to see very strong growth from us, but remember we also had very large customers that tend to kick in periodically. So it doesn't look like a straight line up like a flat hill it looks more like a staircase. So it is always possible that you have a flat quarter I was kind of had a flat quarter this quarter.
But then as new things or announce a new customers come online, you'll see large jumps and thats kind of the pattern. I think you can you can kind of take as a general description going forward that makes sense.
Speaker 3: And that's kind of the pattern I think you can kind of take as a general description going forward. Does that make sense?
Speaker 5: Yes, yes, thanks. Okay, this is it for me. Good luck to us all.
Yes, yes, okay.
Okay. This is it for me good luck torso.
Thank you very much.
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Yeah.
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