Q4 2023 Vivos Therapeutics Inc Earnings Call
Good day, everyone and welcome to vivo therapeutics.
Therapeutics fourth quarter and full year 2020 conference call.
At this time participants are in a listen only mode. A question and answer session will follow management's remarks.
This conference is being recorded and a replay of today's call will be available on the Investor Relations section of vivo web site and.
And we will remain positive there for the next 30 days.
I will now hand over the call to jewelry Gannon vivo Investor Relations officer for introductions and the reading of the Safe Harbor statement.
Please go ahead.
Thank you operator, Hello, everyone and welcome to our conference call a copy of our earnings press release is available on the Investor Relations section of our website at Www Dot vivo dot com with us on today's call are Curt Huntsman, vivo, Devos, Chairman and Chief Executive Officer.
And Brad <unk>, Chief Financial Officer Today, We will review the highlights and financial results for the fourth quarter and full year 2023, as well as more recent developments in vivo plans for 2024. Following these formal remarks, we will be happy to take questions I.
I would also like to remind everyone that today's call will contain certain forward looking statements from our management made within the meaning of section 20 <unk> of the Securities Act of 1933 as amended and section 21 E of the Securities and Exchange Act of 1934 as amended concerning future.
Events.
Words, such as aim may could should projects expects intends plans believes anticipates hopes estimates and variations of such words and similar expressions are intended to identify forward looking statements.
These statements involve significant known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant risks uncertainties and contingencies and many of which are beyond the company's control actual results, including without limitation the results of.
<unk> growth strategies operational plan, including sales marketing product acquisition and integration.
Search and development regulatory initiatives cost saving plan and plans to generate revenue as well as future potential results of operation or operating metrics such as the potential for vivo to achieve future positive cash flows and other matters to be addressed by vivo management in this conference.
Carl may differ materially and adversely from those expressed or implied by such forward looking statements.
Factors that could cause actual results to differ materially include.
But are not limited to the risk factors described and other disclosures contained in vivo filings with the Securities and Exchange Commission, including the risk factors and other disclosures in our Form 10-K for the year ended December 31, 2023, which was filed with the SEC today and our other <unk>.
<unk> with the SEC all of which are or will be accessible on the investor Relations section of the vivo <unk> website as well as the SEC website.
To the extent required by law vivo <unk> assumes no obligation to update statements as circumstances change finally, please be aware that the U S food and drug administration has given certain vivo appliances, five 10-K clearance to treat mild to severe OSA.
The FDA clearance for severe last November treatment of patients with severe OSA is no longer needed to be performed off label at the clinical discretion of the treating doctor and is now an integral part of the treatment protocol for vivo now at this time. It is my pleasure to introduce Kirk Huntsman Chairman and.
CEO of vivo Kirk. Please go ahead.
Kirk Huntsman: Thank you Julie.
I want to thank you all for joining us on today's conference call.
In a moment I will turn the call over to our Chief Financial Officer, Brad Albin, who will walk you through the highlights of our fourth quarter and full year 2023 financial and operating results.
Brad Albin: After that we will be happy to take your questions.
Before I do that I'll offer some brief remarks on industry events and our progress throughout the past year.
None: 2023 began with a flurry brought on by a milestone FDA regulatory clearance in January.
Vivo for vivo and ended in November with an even larger and unprecedented clearance to treat severe OSA patients.
Each of these hugely important achievements garnered a higher level of visibility respect and overall interest in vivo both in the public markets as well as within the sleep Medicine World.
Meanwhile, other separate market forces and events created challenges across the dental sleep oral appliance space and we battled hard for every dollar of revenue throughout the year.
Only after our latest FDA clearance in late Q4 did we start to see sales stabilize and begin to trend positively again.
Throughout 2023, we accelerated our cost cutting and expense reduction efforts that began in 2022 and took many actions to adjust to the changing market conditions by implementing new revenue stimulating activities.
Here in 2024, we are now beginning to see the benefits of these initiatives.
In 2023, our full year operating expenses declined by 27% on a year over year basis.
And our net operating loss was down 57% year over year.
That is a considerable achievement and it speaks to the tremendous efforts and dedication of our entire team here at vivo.
Also let me be clear that these are not one time cost reductions.
None: Our full year results reflect ongoing operational cost reductions and efficiencies that we have been able to implement throughout our entire organization.
None: Complementing this we took further steps to strengthen our regulatory approvals enhance our liquidity position and shore up our capital structure.
For example, early last fall shareholders approved and we effected a one for 25 reverse stock split.
In November 2023, we closed a $4 million private placement priced at the market.
More recently just this past February at the Investor in the November private placement exercised 50% of the warrants issued in the November transaction at an exercise price of $4 <unk> per share, which generated about $4 million in gross proceeds for vivo.
None: We believe these actions in combination with our cost cutting measures over the last year.
<unk> given us a much improved financial foundation to support our revenue growth initiatives in the coming year.
While we will need to raise additional capital to enhance our revenue performance and boost our stockholders' equity for NASDAQ purposes.
We continue to anticipate that our revenue side initiatives will bear fruit, which could lead us to becoming cash flow positive from operations by the end of this year.
When I reflect on this incredible vivo journey.
I am extremely grateful and proud of our accomplishments.
Our singular vision to provide the best patient care for those experiencing breathing of sleep disorders, including obstructive sleep apnea or OSA.
Is being realized more and more each and every day.
As I mentioned earlier at the beginning of last year and for the first time ever the FDA cleared of vivo oral medical device that does not include the mandibular advancement.
To treat mild to moderate OSA.
More recently and in yet another unprecedented achievement.
<unk> received FDA 500, 10-K clearance for our care line of oral medical devices to treat severe sleep apnea in adults.
These clearances not only validated our tireless work and investment, but also gave us an amazing paradigm shift that points to a bright future.
Two other things happened during 2023 that are both noteworthy and potentially game changing.
First as a clinical breakthrough and the second is an important tweak to our overarching go to market strategy.
On the clinical front, we pushed the boundaries of our understanding of how to impact both the form and function of the human airway to new Heights.
Then we leverage that information to acquire develop and refine an entirely new set of interdisciplinary treatments and protocols.
This gives vivo as a full line of OSA treatment options across a range of price points for patients and represents an entire paradigm shift in the treatment of breathing and sleep disorders.
When applied to patients with varied degrees of breathing and sleep disorders, we're seeing new breakthroughs and greater levels of success in achieving dramatic clinical improvements much.
Much work remains and further testing is already underway, but we are extremely encouraged by what we've seen thus far.
None: The second 2023 potential game changer is that we discovered what we now believe is the key to scaling our business in a way that will allow our technology to have a broad and significant impact across the entire healthcare spectrum.
This discovery came about as we look closely at several highly successful independent vivo VIP practices.
The country and then identify the common traits behind how they would achieve their success.
These systems and best practices have been tried and tested in actual operating clinical practices across the country.
In the near future, we will report on our field execution of these important and potentially game changing tweaks to both our clinical diagnostic and treatment protocols to our business model.
Suffice to say for now that coupled with our recent regulatory victories and not to mentioned those that are still pending.
We believe we are well positioned operationally to competitively and competitively.
To deliver on the promise our technology holds.
Other important and very positive market developments came about in late 2023 in early 2024.
The first was the announcement.
By a leading CPAP manufacturer that they were suspending CPAP shipments into the U S pursuant to an ongoing recall and consent decree with the FDA.
Since 2021 millions of CPAP units have been recalled by the FDA due to serious safety and health concerns.
This caused a great deal of alarm and concern among both providers and patients that led many to seek alternative treatments such as oral appliance therapy.
The second important development came in in early 2024 announcement by United Health care of their new policy guidelines for OSA.
Effective March one of this year Unitedhealthcare now mandates a regimen of oral appliance therapy as a crucial first step.
Before considering surgical placement of neuro stimulation implants for adult patients diagnosed with moderate to severe OSA.
Many in the sleep medicine community believe that other insurance carriers will soon follow United's lead on this issue.
Thus, sending many thousands of prospective implant patients to first seek treatment at their dentist.
A large portion in perhaps a majority of such patients have severe OSA for which the only FDA cleared solutions is with vivo scare oral medical devices.
We believe these two market developments will likely serve to stimulate demand for all forms of oral appliance therapy, especially now that vivo care oral medical devices are now an integral part and prominent an integral and prominent part of moderate to severe OSA treatment.
In summary, as we move forward in 2024 and beyond we are extremely optimistic about the future. Our expectations are bolstered by all that I have just mentioned, but most of all by the reception and interest our products and technology are garnering throughout the medical field.
<unk> is no longer a story about a novel oral appliance directed at dentist today. It is about the world's first real medical alternative to the treatment of severe OSA and the only treatment that can offer all OSA patients a glimmer of hope.
They may someday become free of their CPAP machines.
I want to thank you all for joining us on today's conference call now, let me turn the call over to our Chief Financial Officer, Brad Amine to review our financial results. Brad. Please go ahead.
Thank you Kirk and good afternoon, everyone. Today I'll review the highlights of our financial results for the fourth quarter and full year 2023.
For further information on our results for the three and 12 month periods ended December 31, 2023, I'll refer you to our earnings release, which was distributed earlier today and our annual report on Form 10-K, which is available on the SEC filings portion of the Investor Relations section of the <unk>.
<unk> web site at.
At vivo Dot com forward Slash Investor Dash relations.
Today, we reported fourth quarter 2023, total revenue of $3 $2 million compared to $4 million for the fourth quarter of 2022.
None: The quarter over quarter decrease was due to lower revenue generated from our client sales and VIP enrollments, particularly.
And partially offset by increased home sleep testing service revenue and seminars conducted at the vivo sensitive here in Denver.
During the fourth quarter of 2023, we enrolled 40, Vips and recognized VIP revenue of approximately $700000 compared to 50 Vips for a total of approximately $1 2 million in revenue during the same period last year.
Revenue was impacted by the lower number of enrollments and the addition of new entry levels into the VIP program at lower price points.
We sold 1979, all appliance arches during the fourth quarter of 2023 for a total of approximately $1 4 million.
Compared to 2938 during the fourth quarter of 2022 for $2 million.
During the fourth quarters of 2023 and 2022, we recognized approximately $200000 of billing intelligence service revenue. We also recognized 200000 in <unk> functional therapy service revenue compared to 300000 during the same period last year and 300000 and sponsors.
Seminar and other revenue compared with none in the prior year.
Lastly, during the fourth quarters of 2023 and 2022, we recognized $200000 in revenue from our home sleep testing Green lease program.
For the full year 2023 revenue was $13 8 million compared to $16 million for the full year 2022. The decrease was attributable to the same factors I just mentioned.
During 2023, we enrolled 150 vips for revenue of $3 9 million.
Compared to a 196 vips and revenue of $4 8 million in 2022.
In addition to lower enrollment revenue revenue growth in 2023 was impacted by increases in estimated.
Customer lives, which are calculated separately each year, an estimated to be 23 months in 2023, an increase of 28% compared to 18 months in 2022.
This impacts the amortization of revenue to be spread over a longer period of time.
None: Thus decreasing the revenue that is recognized over the same period when compared to 2022.
Although this negatively impacts our revenue recognition. It is a result of customers staying active for a longer period of time, thus, increasing our customer retention year over year.
The average VIP enrollment contract during the period decreased from approximately 31500 during the year ended December 31, 2022 to approximately 26200 during the year ended December 31 2023.
Additionally, our revenue was impacted by new entry levels into the VIP program, ranging from $2500 to 50000, and adding the $8000 pediatric program, which was received positively by our providers.
However, it is also results in lower revenue per contract.
This coupled with fewer enrollments resulted in lower revenue for 2023.
During the full year of 2023, we sold 8240 oral appliance arches for a total of approximately $6 1, million% to 22% decrease compared to 12281 oral appliance arches for.
For a total of seven point.
$8 million, we attribute the decrease in product sales in part to a negative CBS News report that came out in March 2023 regarding an unrelated oral device called the agi that was not cleared for use by the <unk>.
By the FDA and was being used off label.
Vivo is care devices are cleared by the FDA based upon our continuing discussions with our dentist customers. We believe that some practitioners pas purchases until they learn more about the issue.
Additionally for the full year 2023.
None: We recognized $1 $2 million in home sleep testing service revenue.
Which is 100% increase compared to 600000 for the full year of 2022.
For the full year 2023, we recognized $900000 in Miami functional therapy revenue essentially flat with the prior year.
For the full year 2023, we had 900000 and billing intelligence service revenue compared to $1 2 million in the prior year.
None: Lastly, we recognized $200000 in center product revenue compared to 600000 for the full year of 2022.
Gross profit was $2 1 million for the fourth quarter of 2023 compared to gross profit of $2 4 million for the comparable period in 2022.
Gross margin was 64% and 60% for the fourth quarter as 2023 and 2022, respectively.
Gross profit for the full year 2023 was $8 3 million.
Compared to $10 million for the full year 2022.
Gross margin for the full year of 2023 was 60% compared to 63% for the full year 2022 due to lower revenue.
Sales and marketing expenses were once again lower quarter over quarter and year over year.
<unk> were $600000 for the fourth quarter of 2023 compared to $1 3 million for the fourth quarter of 2022.
For the full year ended December 31, 2023 sales and marketing expense was approximately $2 5 million compared to $5 3 million for the year ended 12 31 22.
The lower spend reflects website development for both vivo dot com and the vivo <unk> Institute Dot com that occurred in 2022, and lower sales commissions and sales related expenses in 2023 commensurate with lower VIP enrollments.
We continue to see significant reduction in general and administrative expenses as well for the fourth quarter of 2023.
General and administrative expenses decreased by $1 5 million or 21% to $5 4 million compared to $6 9 million for the fourth quarter of last year.
This year over year decrease reflects substantial impact our previously announced cost cutting efforts are making.
None: We continue to believe these efforts will re juice, our cash burn as we look to ramp revenues and move towards cash flow positive operations.
For the full year of 2023 general and administrative expenses decreased $6 6 million or 23% to about $22 5 million.
Compared to $29 million for the full year of 2022.
The primary driver of this decrease was a change in personnel and related compensation.
Approximately $3 7 million.
Total operating expenses for the fourth quarter of 2023 decreased by a significant amount $2 2 million or 26% versus the fourth quarter of 2022 also reflecting vivo as cost cutting initiatives.
For the full year 2023, operating expenses decreased by $9 $5 million or 27% compared to the full year of 2022.
Operating loss was approximately $4 $3 million and $17 3 million for the three and 12 months ended December 31 2023.
Compared to $6 $1 million and $25 million for the comparable periods last year.
This decrease.
Year over year, and operating loss was primarily from lower G&A due to expense cuts and the other factors I just discussed.
Our cost cutting initiatives also led to significant year over year reductions in net loss of $10 3 million or 43% reduction.
And a $1 8 million or 30% reduction for the fourth quarter respectively.
<unk> plans to utilize this cost cutting.
Our reductions to help achieve cash flow positive operations by the end of 2024 should revenue increase as planned.
Turning to our statement of cash flows cash burn from operations for the year ended December 31, 2023 was $11 9 million a decrease of seven 7 million compared to $19 6 million during the prior year.
This further is evidence of the positive impact of our expense reduction initiatives.
For the year ended December 31, 2023, net cash used in investing activities of $900000 consisted of capital expenditures for software related to the development of VIP ordering software for internal use which is expected to be placed in service in 2024 as well as a purchase of <unk>.
<unk> and other intellectual property and in February.
2023. This similarly compares to net cash used in investing activities of $900000 in the comparable 'twenty two period arising from the same capital expenditures for internally developed ordering software.
For the year ended December 31, 2023, net cash provided from financing activities of $10 $9 million related to our January and November 2023 private placements.
As of December 31, 2023, we had $1 $6 million in cash and cash equivalents compared to three 5 million as of December 31 2022.
As previously announced following the end of the year and February of 2020 for vivo entered into an agreement for the exercise of an outstanding common stock purchase warrants held by an institutional investor to purchase an aggregate of 983.
393 shares of <unk> common stock for gross proceeds to the company of approximately $4 million.
To augment its liquidity position in stockholders equity.
The transaction closed in February.
None: <unk> 2024.
As Kirk mentioned earlier earlier, our goal remains to become cash flow positive from operations by the end of the year back to yogurt.
So that concludes our prepared remarks, now we'll be happy to take questions operator.
Okay.
Thank you, ladies and gentlemen, we will now conduct a question and answer session. If you have a question. Please press star one on your telephone keypad.
And if you wish to cancel your request please press star two.
Your first question comes from Scott Henry from AGP.
Line is now open.
Thank you and good afternoon, I guess for starters now that we're into 2024.
Do you have any guidance for the year or how we should think about revenues and within that obviously first quarter is just a couple of days from being complete maybe how we should think about first quarter relative to the just completed fourth quarter.
Well Scott.
We've got a long a long history of not providing guidance simply because everything is is constantly evolving around here and I think that will become clear over the course of the next few weeks.
As further progress.
Progress is made in further announcements are made.
With respect to some of our our current and pending initiatives. So.
I would I would say that our.
Our model.
For how we're doing things at vivo.
Is going to evolve rather rather dramatically and rather importantly over the course of 2024 and I think it will reposition us too.
To garner.
Important new revenue streams and also too.
Develop greater.
Greater profitability and higher higher levels of.
Revenue so I.
It seems I know that I answered probably doesn't help you, but it is the absolute correct answer at this time, where we're making some important as I mentioned in my in my prepared remarks, we're making some.
Very important and dramatic.
Changes in pivots in our business model and we expect those two to.
To bear fruit through the course of 2024 again we.
We continue to maintain that.
As these things come about and and as they develop further that they will begin to reflect in our actual performance.
Both on the top line and in our profitability and cash flow.
Okay.
And I appreciate the color yeah, perhaps just asking it a little differently with a little dip.
Different spin on it.
First quarter, because a lot of these initiatives are going to take time should we expect first quarter 'twenty four to look similar to fourth quarter 2000 right.
And also as you mentioned the goal of profitability I guess in fourth quarter.
None: What sort of quarterly revenue number do you need to get to profitability.
Thank you.
So.
None: I think the answer to your first quarter consecutive quarters I would say.
At this point in time are likely to be fairly comparable.
I would I would say that the uptick that we are expecting here.
Would begin in Q2, and then and then really accelerate in Q3 and four.
None: And as far as what was the last part of your question I don't recall.
None: Quarterly revenue number would would you need to reach.
Cash flow breakeven from operations.
So.
About six between six and $7 million is going to get US there I think that's going to be pretty close.
That number is changing a little bit as we continue to reduce overhead.
If you think about revenue in the $25 million to $30 million range that gets us really close to and on an annual basis that gets us to.
So so what we're saying here is is that we would expect on a run rate basis to be cash flow positive.
By the by the end of this year.
Okay, so not necessarily the quarter, but maybe the last month of the year.
You are saying.
Something we expect depending on how things go here, we've got some some important things that are pending and we'll be making some announcements as they come to fruition, but I think probably in Q4 youll start to see the.
A full measure the full measure of the impact of these things that we're working on.
Oh, Okay great.
And then.
Fourth quarter is always the hardest to figure out because you got to kind of back it out of the other three quarters.
None: But it looks like the suite testing services.
Ticked up.
In a material way in fourth quarter am I interpreting that correctly and would you expect it to continue at these higher levels or was that a kind of a onetime event.
We're doing a lot more.
I think it's pretty well known that we use sleep image in there.
None: Cardiopulmonary coupling technology, that's delivered through a ring that's one on your finger.
That our doctors and those that are out there in the field are using that at an ever increasing.
Utilization rate and.
And so we would.
Yes, we would expect that to continue we're pleased with what's what's happening there we're helping our doctors today convert those those testing results and the patients who test positive into actual cases.
That's our that's one of one of our important initiatives that we have.
Okay great.
Thank you for taking the questions.
You bet.
Your next question comes from Lucas <unk> from <unk>. Your line is now open.
Thank you good afternoon, gentlemen, and congratulations on the tremendous progress that youre, making in the business.
Thank you Luke.
Youre welcome.
Lucas: I mean, it's just an amazing situation with the Philips recall.
At the same time you get this five 10-K clearance for the Oreo appliances for severe sleep apnea.
So in theory, there's millions of people that would be looking for an alternative but we don't really see any sign of it yet in the financials and I'm sure. It's frustrating to you as well I guess as an analyst I'm just trying to understand.
What is the scale of the opportunity.
What is the timing in terms of.
Lucas: Seeing.
The wave of people coming over let's say from from CPAP to vivo.
None: That's an excellent question and here's what I would say.
Sure.
The scale of the opportunity as you phrased it I think is.
And always has been.
None: Extremely large I think all of US who've been involved journey have have always believed in the in the.
The dramatic impact that this technology can have on on the population that suffers from obstructive sleep apnea and now that we've added the severe.
None: Segment of that population is even more powerful and more important the challenge has been that up is it up until now.
The channel the primary channel that Devos has had four.
The application of this technology and the distribution of this technology has been through the dental community.
Almost exclusively and.
That is that is what we hope to change that is what we are already in the process of doing and I <unk>.
I hesitate to get into too much detail about that just yet because we'd like to we'd like to make sure that we've got all of our ducks in a row with some of the strategic changes that we're making but suffice to say that there are there are.
The full realization of the potential of this technology will only be realized once we once we get this technology through other channels, which.
Are the focal point of our of our efforts today and in the new initiatives that we've referred to so I think that you are spot on with all the confluence of.
Events that I highlighted in my remarks.
The things we're seeing in the marketplace. There is a strong undercurrent of things coming on.
None: Our way and we are repositioning assets and resources, we've already begun that process and so.
None: So there are there are things that we will be announcing and we will be addressing here and making making public over the next few weeks and months that we will continue to.
None: Just sort of put put meat on the bones of what I just said there.
The opportunity is tremendous and we are we are refocusing and repositioning this company to be able to.
To put it in a position to really reach its full potential.
None: Okay, I guess related to that and then.
Some of the specific initiatives unit announced the partnerships you've got Arco, New Lincare Deca could you give us an update on some of those external partnerships and what you see happening in 2024.
I would say that we're very pleased with the progress of of most of those relationships I think we're a little frustrated with.
The Lincare relationship at this point in time in terms of where we're at and we'd hope to be a lot further along.
I think there's some logistical things that have happened out there that have made that progress go a little bit slower than what we had hoped but we continue to.
To push through and we hope that that continues to evolve in a positive way the other relationships that you mentioned.
Our exciting and moving forward and.
They're going to take a little bit of time, although the.
The Orange co relationship and all of that is actually taking off very very well, we're very excited about that and the kind of synergistic response, we're getting.
So it's.
I think I think all of those things are starting to bear fruit and it just takes a little bit of time to get it over the over the hump here, but what we're starting to see that one that you did not mentioned.
We're starting to see.
I think probably two years ago, maybe maybe more we mentioned the.
The entre that vivo as head into the DSO business and after just slogging it out for the last couple of years.
None: We finally have the attention of the DSO community and and I think we're fielding more calls and inquiries and have more DSO practices in some stage of of early development and.
I don't want to call it testing, but just basically early adopters within the DSO community that we're very very excited about it we have.
None: Doctors and all the the.
I'd say all of them I think most of the major DSO.
Companies and and the results that they're getting and the progress that they've made is is really has really caught the eye of senior management and I think finally, we're starting to see.
Some traction in the DSO business.
I've always said that that would be a low sort of a slow boil, but it starts to it feels like here, especially since we got our our latest clearance it feels like the interest level and the.
The interactions have have become much more.
Much more productive much more.
Much more encouraging to our entire team. So that's that's an area that we see that will also continue to grow throughout the years ahead.
We're encouraged by that.
Wonderful.
If I may I was wondering about the AFD acquisition sort of.
Nine months on whatever it is.
Yes, maybe it's almost a year.
How is that going from a revenue standpoint, obviously, you don't break it out but are you is it.
Okay.
As pleased with it now if you were at the beginning.
Yes, its actions to build a very very important void in our product line and also it gives us a piece of technology that.
That we have found and discovered to have some incredible potential and some incredible.
And powerful impact.
I mentioned in my prepared remarks that there were some significant.
<unk> advances that we've made internally around here on the on treatment protocols.
And whatnot.
That that technology.
<unk> two is unilateral bite block technology and other things that we're doing.
<unk> actually bearing great amounts of fruit.
None: That line of products is the is the fastest growing.
Lying in our entire product line today so.
None: We're very excited about that the futures really strong it's everything that we thought it was going to be when we acquired it and more so very excited about that thanks for asking about that I had referenced that earlier.
None: Sure Okay, one more question.
On the expense side it looks like we're.
It was about $6 1 million in operating expenses for Q4.
I'm just wondering.
Where you see that bottoming out can that continue to go down.
Or are we kind of at bottom already with.
Total operating expenses on a quarterly basis.
Brad do you want to take that sure sure.
We made some very significant.
Cost cutting.
And throughout 2023.
And we've cut.
Pretty much down to the bone in terms of personnel costs.
We have raised some capital.
And then also had some additional.
Our professional fees that.
In terms of relating to some of the capital raises that we've had and so forth. So in terms of professional fees I would say that component.
So.
Paul, but and then we will get a full year in 2024 of those cost cutting.
None: Okay.
The cost cutting decreases that we initiated in 2023, we will have a full year in 2024, so that will help us in terms of the full year.
First quarter over first quarter <unk> experienced the same thing in 2024 or so.
We'll have it for about half of the year.
See some additional reductions year over year, and then the second half of the year should be on par with with last year.
So I think just to put a fine point on that let me just add to what Brad just said there in Q3.
We actually had.
About $800000 lower.
Of course on a on a operating SG&A basis, right and I think it was as Brad mentioned the increase in Q4 was due to.
Several things related to professional fees that went up and whatnot, but we.
That's that's not going to be part of our run rate I think a steady state run rate would be more like Q3 would you agree with that Brad yes, more like Q3, yeah. So I think I think I would I would look at that as a proxy for what we're going to see in 2024 and as I mentioned.
And I, both mentioned our cost cutting initiatives.
<unk>. So we are extraordinarily conscious of every dime that we're spending and where it's going and and the ROI. On every dollar spent so we would expect to see.
That that continue.
As far as just either flattening out or continuing to drop as we move forward throughout the year as some of these new.
Revenue initiatives take hold then obviously, we hope that.
The losses begin to we would expect to see the losses begin to diminish so.
Okay.
Okay Kirk thanks, Thank you Brad and good.
None: There are no further questions at this time Mr. Huntsman. Please proceed with your closing remarks.
Well. Thank you everyone. We appreciate the time that you've spent with US here. This afternoon. We appreciate the support that we receive from our.
Our investors and the investment community.
We realize that this has been a long journey and and that we are.
There's a lot of things that we have had to do and had to put into place to get to a point, where we can.
None: Where we can say that we are.
Very very close to getting to cash flow breakeven and profitability.
As we roll forward in the future we expect to see many many.
Good things continue to happen more regulatory approvals more initiatives that will begin to enhance our revenue and we will reposition this company and allow ourselves to evolve until we get to that point and so we look forward to sharing our continued progress with you as we continue to execute on our.
<unk> throughout this year of 2024, so thank you and have a great evening and a great holiday.
Yes.
Ladies and gentlemen, this concludes today's conference call. Thank you for joining you may now disconnect.