Q2 2024 AVITA Medical Inc Earnings Call

August 8, 2024

After the speaker's presentation, there will be a question and answer session to ask a question. During this session you will need to press star one on your telephone you will then hear an automated message as waving your hand is raised to withdraw your question. Please press star one again.

Please be advised that today's conference is being recorded.

Jessica <unk>: I would now like to hand, the conference over to your first speaker today, Jessica <unk> director of Investor Relations.

Speaker Change: Thank you operator, welcome to <unk> Medical's second quarter two.

Speaker Change: 2024 earnings call joining me on today's call are Jim Corbett, Chief Executive Officer, and David O'toole, Chief Financial Officer.

Speaker Change: Today's earnings release and presentation are available on our website www dot Davita medical Dot com under the Investor Relations section.

Speaker Change: Before we begin I would like to remind you that this call includes forward looking statements within the meaning of the private Securities Litigation Reform Act of 1095.

Speaker Change: These statements are neither promises nor Gary and team.

Speaker Change: <unk> and involve known and unknown risks and uncertainties that could cause actual results to differ materially from any expectations expressed or implied by the forward looking statements.

Speaker Change: Please review our most recent filings with the SEC for a comprehensive description of the risk factors and.

Speaker Change: These forward looking statements provided during this call are based on management's expectations as of today.

Speaker Change: I will now turn the call over to Jim for his comments.

Jim Corbett: Thank you Jessica.

Jim Corbett: Good afternoon, and thank you for joining us today.

Jim Corbett: I will begin today's call by discussing our financial and business results for the second quarter.

Jim Corbett: Followed by our priorities and outlook for the remainder of 2024.

Jim Corbett: Following this update I will turn the call over to David who will provide commentary on our financial performance for the quarter before opening the call to Q&A.

David O'Toole: During the quarter, we focused on addressing the challenges we faced in the first quarter by.

David: By implementing an enhanced coverage strategy and other strategic initiatives focused on execution.

David: Our commitment to these efforts and sustaining growth are reflected in our second quarter commercial revenue of $15 1 million.

David: Which was at the higher end of our previously provided guidance range of $14 3 million to $15 3 million.

David: Additionally, one week ago, we entered into an exclusive multiyear development and distribution agreement with regenerative Biosciences.

David: Through this agreement.

David: Following 500 10-K approval by the FDA.

Pin and press pound when finished.

David: We will hold the marketing sales and distribution rights to in a veto medical labeled collagen based dermal matrix manufactured by ridge entity.

David: I will discuss it in more detail later in the call.

Speaker Change: Our commitment to these efforts and sustaining growth are reflected in our second quarter commercial revenue.

David: To further support our growth and strategic initiatives, we have significantly strengthened our management team.

Speaker Change: A $15 $1 million, which was at the higher end of our previously provided guidance range of $14 $3 million to $15 3 million.

David: The addition of Robyn Vandenberg as senior Vice President of U S commercial sales.

Speaker Change: Robin who joins us from a distinguished career at Smith <unk> nephew is an accomplished executive with a proven ability to drive new product adoption and growth across multiple specialties.

Speaker Change: Additionally, one week ago, we entered into an exclusive multi year development and distribution agreement with regenerative <unk> Biosciences.

Speaker Change: Her the ideal leader of our sales organization.

Speaker Change: He officially joined US earlier this week and we were confident that her vision and industry experience will be instrumental in expanding our market presence with the resale go driving adoption of our portfolio products and accelerating growth.

Speaker Change: Through this agreement.

Following five 10-K approval by the FDA.

Speaker Change: We'll hold the marketing sales and distribution rights to in a vida medical labeled collagen based dermal matrix manufactured by regenerative.

Speaker Change: I will discuss it in more detail later in the call.

Speaker Change: In addition to implementing enhanced coverage strategies, we are beginning to yield results from our full thickness skin defect launch is <unk>.

To further support our growth and strategic initiatives, we have significantly strengthened our management team with the addition of Robyn Vandenberg as senior Vice President of U S commercial sales.

Speaker Change: Percentage on slide three of our earnings presentation, we have become more efficient with both the vac approval process and closing new accounts.

Robyn Vandenberg: Robin who joins us from a distinguished career at Smith <unk> nephew is an accomplished executive with a proven ability to drive new product adoption and growth across multiple specialties make her the ideal leader of our sales organization.

Speaker Change: In the second quarter, we added 31, new accounts all of which placed orders. Moreover, we added an additional six accounts received <unk> approval, but have not yet ordered for a total of 37 accounts for the quarter.

Speaker Change: As a reminder, new accounts or are launching with resale go from the gate, eliminating the need for conversion.

Speaker Change: In terms of our pipeline.

Speaker Change: Full thickness skin defects, we have 52 accounts in the evaluation stage and 37 accounts and the decision stage.

Speaker Change: In addition to implementing enhanced coverage strategies, we are beginning to yield results from our full thickness skin defect lunch.

Speaker Change: For total in back as of July 31 of 89 accounts.

Speaker Change: As presented on slide three of our earnings presentation, we have become more efficient with both the vac approval process and closing new accounts in.

Speaker Change: With a healthy pipeline of additional prospects for the rest of the year in.

Speaker Change: In addition, we have 19 facilities that are in fact for Permian Darren.

Speaker Change: In the second quarter, we added 31, new accounts all of which placed orders.

Speaker Change: With that let's turn our attention to resell go.

Speaker Change: Moreover, we added an additional six accounts received vac approval, but not have not yet ordered for a total of 37 accounts for the quarter.

Speaker Change: In 2022.

I outlined three initial priorities for beta medical.

Speaker Change: Which included a commitment to our next generation retail device now known as resale go for.

Speaker Change: As a reminder, new accounts or launch a worst result go from the gate, eliminating the need for conversion.

Speaker Change: For those new to the story at the prior version was a single use battery operated manual system used to prepare spray on skin cells capable of covering a wound area of up to 90 to 120 square centimeters or approximately 10% total body surface area.

Speaker Change: In terms of our pipeline for full thickness skin defects, we have 52 accounts in the evaluation stage and 37 accounts and the decision stage.

Speaker Change: For total in back as of July 31 of 89 accounts.

Speaker Change: We saw go prepares the same spray on skin cells increase the same wound area, but features an evolutionary design with two components, a multi use AC powered processing device and a preparation kits containing a single use cartridge.

Speaker Change: With a healthy pipeline of additional prospects for the rest of the year in.

Speaker Change: In addition, we have 19 facilities that are in Vac for Permian.

Speaker Change: With that let's turn our attention to resell go.

Speaker Change: Segregation head the resale enzyme and other components there.

Speaker Change: In 2022.

With 89 accounts.

Speaker Change: I outlined three initial priorities for Vida medical.

Speaker Change: With a healthy pipeline of additional prospects for the rest of the year in.

Speaker Change: The resale go processing unit controls the pressure applied to the donor skin to disaggregate the cells and precisely regulate stock time to optimize cell yields and viability.

Speaker Change: Which included a commitment to our next generation retail device now known as resale goal for those new to the story at the prior version was a single use battery operated manual system used to prepare spray on skin cells capable of covering a wound area of up to 1900 Twenty's.

In addition, we have 19 facilities that are in Vac for Permian Derm.

Speaker Change: With that let's turn our attention to resell goal.

In 2022.

Speaker Change: The standardizing of the process produces consistent results. Additionally, these enhancements streamline the preparation and simplify the user interface, reducing the training burden on medical staff and our field team.

Speaker Change: I outlined three initial priorities for <unk> medical.

Speaker Change: Which included a commitment to our next generation retail device now known as <unk> goal for those new to the story at the prior version was a single use battery operated manual system used to prepare spray on skin cells capable of covering a wound area of up to 90 820 <unk>.

Speaker Change: Square centimeters or approximately 10% total body surface area we.

Speaker Change: We saw go prepares the same spray on skin cells increase the same wound area, but features an evolutionary design with two components, a multi use AC powered processing device.

Speaker Change: On May 29, we received FDA approval for resale go for the treatment of thermal burns and full fitness skin defects, demonstrating our unwavering commitment to patient care and rapid response, we shipped the first resale go the next day.

Speaker Change: Square centimeters or approximately 10% total body surface area we.

Speaker Change: In a preparation kit containing a single use cartridge does.

Speaker Change: This swift action allowed committed clinicians together with our team to complete the first resale go case on May 31, just two days after if the approval and yes. The procedure was a success. This extraordinary effort was made possible by the dedication of our entire organization I want to thank each and every member.

Speaker Change: Aggregation head the resell enzyme and other components there.

Speaker Change: We saw go prepares the same spray on skin cells increase the same wound area, but features an evolutionary designed with two components a multi use AC powered processing device.

Speaker Change: The resale go processing unit controls the pressure applied to the donor skin to disaggregate the cells and precisely regulate stock time to optimize cell yields and viability.

Speaker Change: And in preparation kit containing a single use cartridge.

Speaker Change: Disaggregation head the resale enzyme and other components there.

Speaker Change: Team member for their invaluable contributions.

Speaker Change: The resale go processing unit controls the pressure applied to the donor skin.

Speaker Change: Now, let's dive into what resale go means for our business.

Speaker Change: Disaggregate to cells and precisely regulate stock time to optimize cell yields and viability.

Speaker Change: Please turn to slide four so you can see for yourself.

Speaker Change: For those of you participating by telephone slide four has three inches.

Robyn Vandenberg: The standardizing of the process produces consistent results. Additionally, these enhancements streamline the preparation and simplify the user interface, reducing the training burden on medical staff and our field team.

And the first image to resale go processing devices were used one device has completed its multi step process, while the other device had seven minutes left.

Speaker Change: Given the two single use cartridges, where necessary we can assume that this patient had a burn injury.

Speaker Change: This swift action allowed committed clinicians together with our team to complete the first resale go case on May 31, just two days after if he approval and yes. The procedure was a success. This extraordinary effort was made possible by the dedication of our entire organization I want to thank each and every member.

Speaker Change: More than 10%, but less than 20% total body surface area as one cartridge can treat up to approximately 10% total body surface area.

Speaker Change: This swift action allows clinicians together with our team to complete the first resale go case on May 31, just two days after FDA approval and yes. The procedure was a success.

Speaker Change: In the second image.

Speaker Change: Team member for their invaluable contributions.

Speaker Change: Three devices were utilized for this case.

Speaker Change: Now, let's dive into what we saw go means for our business.

Speaker Change: Indicating a burn injury of more than 20%, but less than 30%.

Speaker Change: Please turn to slide four so you can see for yourself.

Speaker Change: One cartridge had been fully processed and those spray on skin cells were ready for application while the other two devices. We are still in use.

Speaker Change: This extraordinary effort was made possible by the dedication of our entire organization I want to thank each and every team member for their invaluable contributions.

Speaker Change: For those of you participating by telephone slide four has three images.

Speaker Change: And the first image to resale go processing devices were used one device has completed its multi step process, while the other device had seven minutes left.

Speaker Change: And then the third image for resell co processing devices are operating simultaneously, suggesting a burn injury of more than 30%, but less than 40% total body surface area.

Speaker Change: Now, let's dive into what resale go means for our business. Please.

Speaker Change: Please turn to slide four so you can see for yourself.

Speaker Change: Given the two single use cartridges, where necessary we can assume that this patient had a burn injury of more than 10%, but less than 20% total body surface area as one cartridge can treat up to approximately 10% total body surface area.

Speaker Change: For those of you participating by telephone spud four has three inches.

Speaker Change: If you find that compelling please turn to slide five.

Speaker Change: And the first image to resale go processing devices were used one device has completed its multi step process, while the other device had seven minutes left.

Speaker Change: Here, you see a burn center condition proudly showcasing not one not two but six resale go processing devices that were used for patient with more than 50%, but less than 60% total body surface area.

Speaker Change: Given the two single use cartridges, where necessary we can assume that this patient had a burn injury.

Speaker Change: In the second image.

Speaker Change: Three devices were utilized for this case, indicating a burn injury of more than 20%, but less than 30%. One cartridge had been fully process and those spray on skin cells were ready for application while the other two devices. We are still in use.

Speaker Change: More than 10%, but less than 20% total body surface area as one cartridge.

Speaker Change: It's hard to see because of her masks, but I can promise you she is smiling.

Speaker Change: And so are we.

Speaker Change: Up to approximately 10% total body surface area.

Speaker Change: For starters we.

Speaker Change: So goes advanced features not only streamline the preparation of spray on skin cells, but also significantly boost workflow efficiency in the operating room.

Speaker Change: In the second image.

Speaker Change: And then the third image for re Selco processing devices are operating simultaneously, suggesting a burn injury of more than 30%, but less than 40% total body surface area.

Speaker Change: Three devices were utilized for this case, indicating a burn injury of more than 20%, but less than 30%.

Speaker Change: A physician can start preparing a patient's burn wound for the application of spray on skin cells, while the resell go devices processing that donor skin sample, whereas with our prior we sell device design the physician would still be scraping cells from the <unk>.

Speaker Change: One cartridge had been fully processed and those spray on skin cells were ready for application while the other two devices. We are still in use.

Speaker Change: If you find that compelling please turn to slide five.

Speaker Change: And then the third image for resell co processing devices are operating simultaneously, suggesting a burn injury of more than 30%, but less than 40% total body surface area.

Speaker Change: Importantly, when the injury exceeds 10% total body surface area like slide number five.

Speaker Change: If you find that compelling please turn to slide five.

Speaker Change: Multiple resale go processing devices can be used concurrently.

Speaker Change: It's hard to see because of her mask, but I can promise you. She is smiling and so are we.

Speaker Change: This allows physicians to continue delicate and complex patient treatment, while the machines are processing.

Speaker Change: Here, you see a burn center clinician proudly showcasing not one not two but six resale go processing devices that were used for patient with more than 50%, but less than 60% total body surface area.

Speaker Change: For starters.

Speaker Change: Significantly reducing operating room time for patients with major and severe burns and trauma injuries in critical condition.

Speaker Change: We saw goes advanced features not only streamline the preparation of spray on skin cells, but also significantly boost workflow efficiency in the operating room.

Speaker Change: When you shorten the operating room time, a positive domino effect occurs, especially with large burn injuries.

Speaker Change: It's hard to see because of her mask, but I can promise you she is smiling.

Speaker Change: A physician could start preparing a patient's burn wound for the application of sprouts skin cells, while the resell go devices processing, the donor skin sample, whereas with our prior we sell device design the physician would still be scraping cells from the <unk>.

Speaker Change: So are we.

Speaker Change: Following major burn injuries patients lose the ability to regulate their core body temperature, placing them at high risk of hypothermia and other metabolic issues as such the ambient temperature and operating rooms for surgeries can be upwards of 100 degrees most commonly around our average body temperature of 98 degree.

Speaker Change: For starters.

Speaker Change: Resale goes advanced features not only streamline the preparation of spray on skin cells, but also significantly boost workflow efficiency in the operating room.

Speaker Change: The physician could start preparing a patient's burden wound for the application of <unk> skin cells, while the resell go devices processing that donor skin sample.

Speaker Change: Importantly, when.

Speaker Change: When the injury exceeds 10% total body surface area like slide number five multi.

Speaker Change: Yes.

Speaker Change: Multiple resale go processing devices can be used concurrently.

Speaker Change: Pending on the size of the injury and the patient's vitals.

Speaker Change: That to the average temperature in an office space, which is between 70 to 74 degrees.

Speaker Change: Whereas with our prior we sell device design, the physician would still be scraping cells from the <unk>.

Speaker Change: This allows physicians to continue delicate and complex patient treatment, while the machines are processing.

Speaker Change: Thus shortening operating room time directly benefits the patient by reducing.

Speaker Change: Importantly.

Speaker Change: Significantly reducing operating room time for patients with major and severe burns and trauma injuries in critical condition.

Speaker Change: When the injury exceeds 10% total body surface area like slide number five multiple resale go processing devices can be used concurrently.

Speaker Change: Thermo regulatory and hyper metabolic danger.

Speaker Change: Most importantly, we.

Speaker Change: When you shorten the operating room time, a positive domino effect occurs, especially with large burn injuries.

Speaker Change: We saw goal was not just designed with the clinicians and mine was designed for the for patients as a reduction in operating time means patient spend less time with open wounds and less time under anesthesia.

Speaker Change: This allows physicians to continue delicate and complex patient treatment, while the machines are processing.

Speaker Change: Significantly reducing operating room time for patients with major and severe burns and trauma injuries in critical condition.

The faster patients exit the operating room, the fascia faster patient start their lean journey.

Speaker Change: When you shorten the operating room time, it positive Domino effect occurs, especially with large burn injuries.

Speaker Change: This is <unk>.

Speaker Change: We saw go along with the ability to run multiple resale go devices simultaneously.

Speaker Change: Yes.

Speaker Change: Pending on the size of the injury and the patient's vitals.

Speaker Change: <unk> in a new era in the treatment of partial thickness and full thickness wounds.

Speaker Change: That to the average temperature in an office space, which is between 70 to 74 degrees.

We believe integrating resale go into patient care empowers clinicians to expand treatment capabilities reach more patients and achieve optimal outcomes, thus drive greater adoption and setting a new standard of care and wound care management.

Speaker Change: Thus shortening operating room time directly benefits the patient by reducing thermo.

Speaker Change: Thermo regulatory and hyper metabolic danger.

Speaker Change: Depending on the size of the injury and the patient's vitals.

Speaker Change: Most importantly, we.

Speaker Change: That to the average temperature in an office space, which is between 70 to 74 degrees.

Speaker Change: We saw go was not just designed with the clinicians and mine was designed for the for patients as a reduction in operating time means patient spend less time with open wounds and less time under anesthesia.

Speaker Change: As discussed last quarter we.

We identified the need for a solution to treat smaller wounds, leading to the development of resale go many designed to address small wounds up to 480 square centimeters or approximately two 5% total body surface area or less.

Speaker Change: Thus shortening operating room time directly benefits the patient by reducing thermo.

Speaker Change: Thermo regulatory and hyper metabolic danger.

Speaker Change: The faster patients exit the operating room that fasher faster patient start their healing journey.

Speaker Change: Most importantly, we.

Speaker Change: We saw go was not just designed with the clinicians in mind. It was designed for the for patients as a reduction in operating time means patient spend less time with open wounds and less time under anesthesia.

Speaker Change: This is resale go.

Speaker Change: We saw go along with the ability to run multiple resale go devices simultaneously.

Speaker Change: While resale is viewed as highly effective for large firms.

Speaker Change: It's primarily seen as a large burn solution, leading to underutilization for smaller wounds.

Speaker Change: <unk> in a new era in the treatment of partial thickness and full thickness wounds.

Speaker Change: The faster patients exit the operating room, the faster faster patient start their lean journey.

Speaker Change: And burn surgeons prioritize clinical utility and often percy's perceive the use of the current large kit for smaller wounds as inefficient.

Speaker Change: We believe integrating resale go into patient care empowers clinicians to expand treatment capabilities reach more patients and achieve optimal outcomes, thus drive greater adoption and setting a new standard of care and wound care management.

Speaker Change: This is <unk>.

Speaker Change: We saw go along with the ability to run multiple resale go devices simultaneously.

Speaker Change: Recognizing that a majority of full thickness skin defects are smaller than 480 square centimeters. We saw go many is poised to address the significant market need offering a tailored solution for these smaller wounds.

Speaker Change: <unk> and a new era in the treatment of partial thickness and full thickness wounds.

Speaker Change: As discussed last quarter we.

Speaker Change: We believe integrating resale go into patient care empowers clinicians to expand treatment capabilities reach more patients and achieve optimal outcomes, thus drive a greater adoption and setting a new standard of care and wound care management.

Speaker Change: We identified the need for a solution to treat smaller wounds, leading to the development of resale go many designed to address small wounds up to 480 square centimeters or approximately 2.5% total body surface area or less.

Speaker Change: Regarding the timing of recycled many we submitted a PMA supplement to the FDA on June 28.

Speaker Change: This version utilize the same multi use processing unit as resale go and features a cartridge design for the smaller donor samples needed for smaller wounds.

Speaker Change: As discussed last quarter we.

Speaker Change: While resale is viewed as highly effective for large burns.

Speaker Change: It's primarily seen as a large burn solution, leading to underutilization for smaller wounds.

Speaker Change: Importantly.

Speaker Change: This submission benefits from the same breakthrough device designation that was granted to our existing resale system, ensuring a prioritized 180 day Interactive review period, implying an approval date of December 27.

Speaker Change: <unk> and burn surgeons prioritize clinical utility and often percy's perceive the use of the current large kit for smaller ones as inefficient.

Speaker Change: While resale is viewed as highly effective for large burns.

Speaker Change: Recognizing that a majority of full thickness skin defects are smaller than 480 square centimeters resale go many is poised to address the significant market need offering a tailored solution for these smaller wounds.

Speaker Change: It's primarily seen as a large bearing solution leading to underutilization for smaller wounds.

Speaker Change: Before we move into our new dermal matrix.

Speaker Change: <unk> and burn surgeons prioritize clinical utility and offering proceeds perceive the use of the current large kit for smaller wounds as inefficient.

Speaker Change: <unk> update on our international expansion efforts.

Speaker Change: We are making progress expanding into most of the European Union through third party distribution partnerships over the last few weeks, we've executed distribution agreements in Belgium, Poland, Ireland, Italy, and the United Kingdom and for Nordic countries.

Speaker Change: Regarding the timing of recycled many we submitted a PMA supplement to the FDA on June 28.

Speaker Change: Igniting that a majority of full thickness skin defects are smaller than 480 square centimeters. We saw go many is poised to address the significant market need offering a tailored solution for these smaller wounds.

Speaker Change: This version utilize the same multi use processing unit as resale go and features a cartridge design for the smaller donor samples needed for smaller wounds.

Speaker Change: Additionally, the countries, Spain, and Portugal are on the near term horizon.

Speaker Change: Regarding the timing of recycled many we submitted a PMA supplement to the FDA on June 28.

Speaker Change: Importantly, this submission benefits from the same breakthrough device designation.

In regard to our European Union efforts, we expect to receive the CE Mark for resale go this quarter.

Speaker Change: This version utilize the same multi use processing unit as resale go and features a cartridge design for the smaller donor samples needed for smaller wounds.

Speaker Change: Was granted to our existing resale system, ensuring a prioritized 180 day Interactive review period, implying an approval date of December 27.

Speaker Change: As demonstrated with our success in the U S. We are fully prepared to meet their supply demands upon approval.

Speaker Change: Importantly, this submission benefits from the same breakthrough device designation that was granted to our existing retail system, ensuring a prioritized 180 day Interactive review period, implying an approval date of December 27.

Speaker Change: Moving onto our portfolio of products.

Speaker Change: Before we move into our new dermal matrix of a brief update on our international expansion efforts.

Speaker Change: Last quarter, we showed you slide six.

Speaker Change: Which reflects a broad continuum of clinical needs and burn surgical traumatic in chronic wound care.

Speaker Change: We are making progress expanding into most of the European Union through third party distribution partnerships over the last few weeks with executed distribution agreements in Belgium, Poland, Ireland, Italy, and in the United Kingdom and for Nordic countries. Additionally.

Speaker Change: While resale will remain the cornerstone of our portfolio, we have been actively exploring wound bed preparation and dermal replacement products to complement resell and address this full spectrum of clinical needs.

Speaker Change: Before we move into our new dermal matrix of a brief update on our international expansion efforts.

Speaker Change: Additionally, the countries, Spain, and Portugal are on the near term horizon.

Speaker Change: To that end, we added Permian during the first quarter.

Speaker Change: In regard to our European Union efforts, we expect to receive the CE Mark for resale go this quarter.

Speaker Change: Now have a veto medical.

Speaker Change: <unk> dermal matrix and development with regenerative.

Speaker Change: And Ireland, Italy, and the United Kingdom and for Nordic countries.

Speaker Change: Both Permian Jerome and the dermal matrix are compatible with resale and each other and both can be used alongside the treatment of many of our burn and full thickness cases to further aid in healing.

Speaker Change: As demonstrated with our success in the U S. We're fully prepared to meet their supply demands upon approval.

Speaker Change: Additionally, the countries, Spain, and Portugal are on the near term horizon.

Speaker Change: Moving onto our portfolio of products.

Speaker Change: In regard to our European Union efforts, we expect to receive the CE Mark for resale go this quarter.

Speaker Change: Last quarter, we showed you slide six.

Speaker Change: Collectively these products align with our vision to build a broad based wound care company.

Speaker Change: Which reflects a broad continuum of clinical needs and burn surgical traumatic in chronic wound care.

Speaker Change: As demonstrated with our success in the U S. We are fully prepared to meet their supply demands upon approval.

Speaker Change: To better understand our strategy with regenerative I will provide an overview of regenerative and discuss our regulatory clinical and commercial plans for our dermal matrix.

Speaker Change: While resale will remain the cornerstone of our portfolio, we have been actively exploring wound bed preparation and thermal replacement products to complement resell and address this full spectrum of clinical needs too.

Speaker Change: Moving onto our portfolio of products.

Speaker Change: Last quarter, we showed you slide six.

For more than 25 years regenerative has been a leading global developer and manufacturer of proprietary bio resorbable materials used to repair and regenerate natural tissue and bone for a variety of clinical areas, including dental spine orthopedic neurosurgery E&P.

Speaker Change: Which reflects a broad continuum of clinical needs and burn surgical traumatic in chronic wound care.

Speaker Change: To that end, we added Permian during the first quarter and now have a veto medical.

Speaker Change: Label, dermal matrix and development with regenerative.

Advanced wound care and nerve repair.

Speaker Change: Initially focused oncology based medical devices regenerative has since expanded its platform to include first of all by Resorbable embolic compatible synthetic polymers <unk> other bio resorbable materials.

Speaker Change: To that end, we added Permian during the first quarter and now have an a vida medical.

Speaker Change: Collectively these products align with our vision to build a broad based wound care company.

Speaker Change: Label, dermal matrix and development with regenerative.

Speaker Change: Both Permian germ and the dermal matrix are compatible with resell and each other and both can be used alongside the treatment of many of our burn and full thickness cases to further aid in healing.

Speaker Change: To better understand our strategy with regenerative I will provide an overview of regenerative and discuss our regulatory clinical and commercial plans for our dermal matrix.

Speaker Change: Throughout its history regenerative is successfully assisted med tech clients and securing regulatory approval for more than 70 product lines.

Speaker Change: Collectively these products align with our vision to build a broad based wound care company.

Speaker Change: After a robust diligence and preclinical research we have the animal data to demonstrate the effectiveness of a regenerative dermal matrix to promote still growth in the wound bed. We expect 510 clearance in the fourth quarter, followed by an initial launch with the 500 10-K indication.

Speaker Change: For more than 25 years regenerative has been a leading global developer and manufacturer of proprietary bio resorbable materials used to repair and regenerate natural tissue and bone for a variety of clinical areas, including dental spine orthopedic neurosurgery.

Speaker Change: To better understand our strategy with rigidity I will provide an overview of regenerative and discuss our regulatory clinical and commercial plans for <unk>.

Speaker Change: Our dermal matrix.

Speaker Change: Regarding our clinical plans immediately following clearance we plan to initiate multiple post market clinical studies to establish the unique synergies between our new thermal matrix and resell.

Speaker Change: Advanced wound care and nerve repair.

Speaker Change: Initially focused oncology based medical devices regenerative has since expanded its platform to include personal by resorbable and Biocompatible synthetic polymers bio ceramics, other bio resorbable materials.

Speaker Change: These studies will include the evaluation of our new dermal matrix and other commercially available dermal matrices and full thickness wounds, followed by delayed treatment with a split thickness skin graft plus resale and a two stage procedure, which is the current standard of care.

Speaker Change: Advanced wound care and nerve repair.

Speaker Change: Throughout its history regenerative is successfully assisted med tech clients and securing regulatory approval for more than 70 product lines.

Speaker Change: Initially focused oncology based medical devices regenerative has since expanded its platform to include first of all by Resorbable embolic compatible synthetic polymers <unk>.

Speaker Change: After a robust diligence and preclinical research.

Speaker Change: To demonstrate improved time to grafting and wound closure.

Speaker Change: Have the animal data to demonstrate the effectiveness of a regenerative dermal matrix to promote still growth in the wound bed. We expect 510 clearance in the fourth quarter, followed by an initial launch with the 500 10-K indication.

Speaker Change: Other bio resorbable materials.

Speaker Change: Throughout its history regenerative is successfully assisted med tech clients and securing regulatory approval for more than 70 product lines.

Speaker Change: Additional clinical studies will evaluate the use of our new dermal matrix with immediate grafting together with resale and a single procedure.

Speaker Change: Aiming to establish a new standard of care.

Speaker Change: Regarding our clinical plans immediately following clearance we plan to initiate multiple post market clinical studies to establish a unique synergies between our new thermal matrix and resell.

Speaker Change: We expect to begin enrollment in both of these studies in the fourth quarter for completion in 2025.

Speaker Change: Let's revisit slide seven of our presentation, which illustrates the complementary nature of resale per meter and our new dermal matrix with the other potential additions to our portfolio.

David: These studies will include the evaluation of our new dermal matrix and other commercially available dermal matrices and full thickness wounds, followed by delayed treatment with a split thickness skin graft plus resell and a two stage procedure, which is the current standard of care to.

Speaker Change: Here's an example of a full thickness skin defect with concern for infection.

Speaker Change: In this instance, the dark blue layer represents dressings for wound bed preparation a current focus.

Speaker Change: These studies will include the evaluation of our new dermal matrix and other commercially available dermal matrices and full thickness wounds, followed by delayed treatment with a split thickness skin graft plus resell and a two stage procedure, which is the current standard of care to.

Speaker Change: Demonstrate improved time to grafting and wound closure.

Speaker Change: This product serves as protective anti microbial layer and the base of the wound bed to maintain an optimal healing environment. This layer can be used in every single patient.

Speaker Change: Additional clinical studies will evaluate the use of our new dermal matrix with immediate grafting together with resell in a single procedure aiming to establish a new standard of care.

Speaker Change: The green layer represents the new dermal matrix.

Speaker Change: Demonstrate improved time to grafting and wound closure.

Speaker Change: We expect to begin enrollment in both of these studies in the fourth quarter for completion in 2025.

Speaker Change: Type of matrix aims to generate vascularized tissue further supporting definitive closure.

Speaker Change: Additional clinical studies will evaluate the use of our new dermal matrix with immediate grafting together with resale and a single procedure aiming to establish a new standard of care.

Speaker Change: Let's revisit slide seven of our presentation, which illustrates the complementary nature of resell perimeter and our new dermal matrix with the other potential additions to our portfolio.

Speaker Change: The light blue layer represents resell with a mesh.

Speaker Change: Lyft thickness skin graft.

Speaker Change: We expect to begin enrollment in both of these studies in the fourth quarter for completion in 2025.

Speaker Change: As you are aware of this procedure provides definitive closure using significantly less skin compared to traditional auto grafting.

Speaker Change: Here's an example of a full thickness skin defect with concern for infection.

Speaker Change: Let's revisit slide seven of our presentation, which illustrates the complementary nature of resell permitted arm and our new dermal matrix with the other potential additions to our portfolio.

Speaker Change: Lastly is the purple layer, which is the transparent permitted during dressing optimized for protection and moisture management.

Speaker Change: In this instance, the dark blue layer represents dressings for wound bed preparation a current focus.

Speaker Change: Addressing the full spectrum of clinical needs across our portfolio.

Speaker Change: This product serves as a protective anti microbial layer and the base of the wound bed to maintain an optimal healing environment. This layer can be used in every single patient.

Speaker Change: Here's an example of a full thickness skin defect with concern for infection.

Speaker Change: We believe that we can improve accessibility and reach more patients, which is our number one priority.

Speaker Change: In this instance, the dark blue layer represents dressings for wound bed preparation.

Speaker Change: Now an update on tone, which is our post market study for vitiligo.

Speaker Change: The green layer represents the new dermal matrix. This type of matrix aims to generate vascularized tissue further supporting definitive closure.

Speaker Change: Focus.

Speaker Change: We have completed the six month follow ups and are on pace to have the research accepted for publication with a six month term data and manage script by the end of the fourth quarter.

Speaker Change: This product serves as a protective anti microbial layer and the base of the wound bed to maintain an optimal healing environment. This layer can be used in every single patient.

Speaker Change: The light blue layer represents resell with a meshed split thickness skin graft.

Speaker Change: At the same timeframe applies to the health care economic study associated with our <unk> initiative.

Speaker Change: The green layer represents the new dermal matrix. This type of matrix aims to generate vascularized tissue further supporting definitive closure.

Speaker Change: As you are aware of this procedure provides definitive closure using significantly less skin compared to traditional auto grafting.

Speaker Change: In closing, we are taking advantage of a well executed quarter and our momentum.

Speaker Change: Lastly is the purple layer, which is the transparent premier Durham dressing optimized for protection and moisture management.

David: And remain committed to our efforts to expand our reach drive increased adoption and sustained growth with our indications as well as our expanding portfolio all with the goal of delivering value to our shareholders, our customers and their patients and our employees with that I'll turn the call over to David.

Speaker Change: The light blue layer represents resell with a meshed split thickness skin graft.

Speaker Change: As you are aware of this procedure provides definitive closure using significantly less skin compared to traditional autographing.

Speaker Change: Addressing the full spectrum of clinical needs across our portfolio.

Speaker Change: We believe that we can improve accessibility and reach more patients, which is our number one priority.

Speaker Change: Lastly is the purple layer, which is the transparent permitted durham dressing optimized for protection and moisture management.

Speaker Change: Now an update on tone, which is our post market study for vitiligo.

Thank you Jim for the three months ended June 32024, our commercial revenue reached $15 1 million.

Speaker Change: We have completed the six month follow ups and are on pace to have the research accepted for publication with a six month to one data and manage script by the end of the fourth quarter.

Speaker Change: Addressing the full spectrum of clinical needs across our portfolio. We believe that we can improve accessibility and reach more patients which is our number one priority.

David: Which is an increase of approximately 29% compared to the same period in 2023.

Speaker Change: As you can see on slide eight the revenue growth trajectory over the last eight quarters has been significant and we believe it will only accelerate over the remainder of the year and subsequent years.

Speaker Change: The same timeframe applies to the health care economic study associated with our <unk> initiative.

Speaker Change: Now an update on tone, which is our post market study for vitiligo.

Speaker Change: In closing, we're taking advantage of a well executed quarter and our momentum.

Speaker Change: Resale products accounted for approximately 98% of our commercial revenue, while our other wound care products contributed approximately 2%.

Speaker Change: The same timeframe applies to the health care economic study associated with our <unk> initiative.

Speaker Change: With our two new products Permian Derm, and our dermal matrix the revenue for other wound products will increase in subsequent quarters.

Speaker Change: In closing, we are taking advantage of a well executed quarter and our momentum.

Speaker Change: And remain committed to our efforts to expand our reach drive increased adoption and sustained growth with our indications as well as our expanding portfolio all with the goal of delivering value to our shareholders, our customers and their patients and our employees with that I'll turn the call over to David.

David: Thank you Jim for the three months ended June 32024, our commercial revenue reached $15 1 million.

Speaker Change: Our revenue results for the quarter, plus improved commercial and back processes and the hiring of Robyn Vandenberg positions us well for sustained revenue growth for the remainder of the year.

Speaker Change: Which is an increase of approximately 29% compared to the same period in 2023.

Speaker Change: Gross profit margin for the quarter was 86, 2% compared to 81, 2% in the same period in 2023.

David: Thank you Jim for the three months ended June 32024, our commercial revenue reached $15 1 million.

Speaker Change: This 500 basis point increase is in line with our expectations for the full year 2024, as revenues and volume production continue to provide.

Speaker Change: This is an increase of approximately 29% compared to the same period in 2023.

Speaker Change: Resale products accounted for approximately 98% of our commercial revenue, while our other wound care products contributed approximately 2%.

Healthy and improving gross margin.

Speaker Change: With our two new products Permian Derm, and our dermal matrix the revenue for other wound products will increase in subsequent quarters.

Speaker Change: Total operating expenses for the quarter were $28 7 million compared to $21 2 million in the same period in 2023.

Speaker Change: Resale products accounted for approximately 98% of our commercial revenue, while our other wound care products contributed approximately 2%.

Speaker Change: The increase in operating expenses is primarily attributable to an increase of $6 3 million in sales and marketing expenses due to employee related costs, including salaries and benefits commissions and travel expense collectively as a result of it.

Speaker Change: With our two new products Permian Derm, and our dermal matrix the revenue for other wound products will increase in subsequent quarters.

Speaker Change: Gross profit margin for the quarter was 86, 2% compared to 81, 2% in the same period in 2023.

Speaker Change: Spansion of the commercial sales organization in the second quarter of 2023, and again in Q1 2024 to support our growing commercial operations.

Speaker Change: This 500 basis point increase is in line with our expectations for the full year 2024, as revenues and volume of production continue to provide.

Speaker Change: Gross profit margin for the quarter was 86, 2% compared to 81, 2% in the same period in 2023.

G&A expenses increased by $1 4 million as a result of higher salaries and benefits and an increase in severance benefits.

Speaker Change: Healthy and improving gross margin.

Speaker Change: Total operating expenses for the quarter were $28 7 million compared to $21 2 million in the same period in 2023.

Speaker Change: This 500 basis point increase is in line with our expectations for the full year 2024, as revenues and volume production continue to provide.

Speaker Change: Really offset by lower stock compensation and professional fees.

Speaker Change: Additionally, R&D costs decreased by 0.2 million due primarily to lower employee compensation costs.

Speaker Change: Healthy and improving gross margin.

Speaker Change: Total operating expenses for the quarter were $28 7 million compared to $21 2 million in the same period in 2023.

Speaker Change: For our medical science liaison teams.

Speaker Change: Other income increased by 0.8 million to $1 6 million in the current quarter.

Speaker Change: Other income for the quarter consisted of noncash income of $2 1 million due to the change in fair value of the warrant liability.

Speaker Change: Spansion of the commercial sales organization in the second quarter of 2023, and again in Q1 2024 to support our growing commercial operations.

Speaker Change: In fact by $1 2 million of expense for the change in the fair value of the debt.

Speaker Change: G&A expenses increased by $1 4 million as a result of higher salaries and benefits and an increase in severance benefits, partially offset by lower stock compensation and professional fees.

Speaker Change: And zero point $7 million in income related to our investing activities.

Speaker Change: Expansion of the commercial sales organization in the second quarter of 2023, and again in Q1 2024 to support our growing commercial operations.

Net loss for the FERC second quarter was $15 4 million or a loss of <unk> 60 per basic and diluted share compared.

Speaker Change: Additionally, R&D costs decreased by 0.2 million due primarily to lower employee compensation costs for our medical science liaison teams.

Speaker Change: Compared to a net loss of $10 4 million.

Speaker Change: G&A expenses increased by $1 4 million as a result of higher salaries and benefits and an increase in severance benefits.

Speaker Change: Or a loss of 41 per basic and diluted share in the same period in 2023.

Speaker Change: Yeah.

Speaker Change: Really offset by lower stock compensation and professional fees.

Speaker Change: Other income increased by 0.8 million to $1 6 million in the current quarter.

Speaker Change: As of June 30, we had cash cash equivalents and marketable securities of $54 1 million compared to $89 1 million as of December 31, 2023.

Speaker Change: Additionally, R&D costs decreased by <unk> 2 million due primarily to lower employee compensation costs for our medical science liaison teams.

Speaker Change: Other income for the quarter consisted of noncash income of $2 1 million due to the change in fair value of the warrant liability.

Speaker Change: We maintain our previous guidance that we will reach cash flow breakeven and GAAP profitability no later than the third quarter of 2025.

Speaker Change: In fact by $1 2 million of expense for the change in the fair value of the debt.

Speaker Change: Other income increased by zero point $8 million to $1 6 million in the current quarter.

Speaker Change: Zero point $7 million in income related to our investing activities.

David: Other income for the quarter consisted of noncash income of $2 1 million due to the change in fair value of the warrant liability.

Speaker Change: Turning now to our revenue guidance for Q3 2024.

Speaker Change: Net loss for the FERC second quarter was $15 4 million or a loss of <unk> 60 per basic and diluted share.

Speaker Change: We believe it is crucial that we reestablish credibility with our shareholders.

David: In fact by $1 2 million of expense for the change in the fair value of the debt.

Speaker Change: We have taken significant steps towards this goal by reaching the upper end of our Q2 guidance.

Speaker Change: Compared to a net loss of $10 4 million.

Speaker Change: Zero point $7 million in income related to our investing activities.

Speaker Change: Or a loss of 41 per basic and diluted share in the same period in 2023.

Speaker Change: For the third quarter of 2024, we remain committed to providing guidance that reflects our capabilities, while achieving substantial revenue growth.

Speaker Change: Net loss for the FERC second quarter was $15 4 million or a loss of <unk> 60 per basic and diluted share.

Speaker Change: As of June 30, we had cash cash equivalents and marketable securities of $54 1 million compared to $89 1 million as of December 31, 2023.

Speaker Change: Compared to a net loss of $10 4 million.

Speaker Change: With that in mind, we expect commercial revenue to be in the range of $19 million to $20 million, representing approximately 40% to 48% growth compared to the same period in 2023.

Speaker Change: Or a loss of 41 per basic and diluted share in the same period in 2023.

Speaker Change: We maintain our previous guidance that we will reach cash flow breakeven and GAAP profitability no later than the third quarter of 2025.

Speaker Change: As of June 30, we had cash cash equivalents and marketable securities of $54 1 million compared to $89 1 million as of December 31, 2023.

Speaker Change: With a strong start in July we are confident in our commercial team's ability to deliver on this target.

Speaker Change: Turning now to our revenue guidance for Q3 2024.

Speaker Change: Regarding annual guidance, our Q1 revenue Miss has impacted our full year expectations.

Speaker Change: We believe it is crucial that we reestablish credibility with our shareholders.

Speaker Change: We maintain our previous guidance that we will reach cash flow breakeven and GAAP profitability no later than the third quarter of 2025.

Speaker Change: Although we are confident in our Q3 guidance, reaching the lower end of our prior guidance of $78 5 million is no longer feasible.

David: We have taken significant steps towards this goal by reaching the upper end of our Q2 guidance.

Speaker Change: Turning now to our revenue guidance for Q3 2024.

Speaker Change: For the third quarter of 2024, we remain committed to providing guidance that reflects our capabilities, while achieving substantial revenue growth.

Speaker Change: As a result, we are revising our annual guidance to an attainable range of $68 million to $70 million.

Speaker Change: We believe it is crucial that we reestablish credibility with our shareholders.

Speaker Change: We've taken significant steps towards this goal by reaching the upper end of our Q2 guidance.

Speaker Change: Even with this adjustment, we expect to achieve over 37% growth year over year, reflecting our ongoing growth trajectory with new sales management improve back and commercial processes. The recent launch of resale go and Permian <unk> and the anticipated <unk>.

Speaker Change: With that in mind, we expect commercial revenue to be in the range of $19 million to $20 million, representing approximately 40% to 48% growth compared to the same period in 2023.

Speaker Change: For the third quarter of 2024, we remain committed to providing guidance that reflects our capabilities, while achieving substantial revenue growth.

Speaker Change: With a strong start in July we are confident in our commercial team's ability to deliver on this target.

Speaker Change: With that in mind, we expect commercial revenue to be in the range of $19 million to $20 million, representing approximately $42, 48% growth compared to the same period in 2023.

<unk> of our new dermal matrix in Q4, we intend to build on our second quarter momentum and continue delivering strong results.

Speaker Change: Regarding annual guidance, our Q1 revenue mix has impacted our full year expectations.

Speaker Change: Given our solid performance in July we look forward to meeting our Q3 revenue expectations.

David: Although we are confident in our Q3 guidance, reaching the lower end of our prior guidance of $78 $5 million is no longer feasible.

Speaker Change: With a strong start in July we are confident in our commercial team's ability to deliver on this target.

Speaker Change: With that we thank you for joining us and now I will turn the call back to the operator for your questions.

Speaker Change: Regarding annual guidance, our Q1 revenue mix has impacted our full year expectations.

David: As a result, we are revising our annual guidance to an attainable range of $68 million to $70 million.

Speaker Change: Although we are confident in our Q3 guidance, reaching the lower end of our prior guidance of $78 $5 million is no longer feasible.

Speaker Change: Yeah.

David: Even with this adjustment, we expect to achieve over 37% growth year over year, reflecting our ongoing growth trajectory with new sales management improve back and commercial processes. The recent launch of resale go and Permian <unk> and the anticipated.

Speaker Change: Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please stand by while we compile the Q&A roster.

Speaker Change: As a result, we are revising our annual guidance to an attainable range of $68 million to $70 million.

Speaker Change: <unk> of our new dermal matrix in Q4, we intend to build on our second quarter momentum and continue delivering strong results.

David: Given our solid performance in July we look forward to meeting our Q3 revenue expectations.

Speaker Change: Our first question comes from Ryan Zimmerman of <unk>.

Hey, guys.

Ryan Zimmerman: Good afternoon, Thanks for taking our questions can you hear me okay.

Speaker Change: <unk> of our new dermal matrix in Q4, we intend to build on our second quarter momentum and continue delivering strong results.

Speaker Change: With that we thank you for joining us and now I will turn the call back to the operator for your questions.

Just mccann: Just mccann Ryan good to hear from you.

Ryan Zimmerman: Alright, well I wanted to ask about the guidance.

Speaker Change: Yes.

Speaker Change: Given our solid performance in July we look forward to meeting our Q3 revenue expectations.

Speaker Change: I appreciate you guys took a prudent approach.

Speaker Change: Yes.

Speaker Change: The adjustment to guidance here.

Speaker Change: Maybe David talk to us about kind of what underpins your view, particularly for the fourth quarter its still off of <unk>.

Speaker Change: With that we thank you for joining us and now I will turn the call back to the operator for your questions.

David: Sizable step up from what we saw this quarter.

Jim Corbett: And how much contribution are you expecting from full thickness skin defects, Jim if I recall last quarter. Your goal as you entered this year was about 15 accounts per month, and we're still not there yet. So I know July is off to a good start but talk to us maybe a little bit more about kind of what.

Speaker Change: Okay.

Speaker Change: Our first question comes from Ryan Zimmerman of <unk>.

Speaker Change: Please stand by while we compile the Q&A roster.

Ryan Zimmerman: Hey, guys. Good afternoon. Thanks for taking our questions can you hear me okay.

Jim Corbett: That means.

Jim Corbett: From July.

Jim Corbett: Yes, Ryan I think maybe I'll take the first.

McCain: Yes, Mccain Ryan good to hear from you.

Speaker Change: Alright, well I wanted to ask about the guidance.

Fundamentally there is the big drivers the number one driver is the resale go conversion, which we expect to substantially complete within the quarter and if you were able to see the slides you would note used.

Speaker Change: Our first question comes from Ryan Zimmerman of <unk>.

Speaker Change: I appreciate you guys took a prudent approach.

Speaker Change: E.

Speaker Change: The adjustment to guidance here.

Ryan Zimmerman: Hey, guys. Good afternoon. Thanks for taking our questions can you hear me okay.

Speaker Change: Maybe David talk to us about kind of what underpins your view, particularly for the fourth quarter it still off of <unk>.

Jim Corbett: Using resale go has a consequence of greater utilization. So thats just one of the underpinning efforts.

Ryan: Yes, Mccain Ryan good to hear from you.

Ryan Zimmerman: Alright, well I wanted to ask about the guidance.

Speaker Change: <unk> step up from what we saw this quarter.

Jim: And how much contribution are you expecting from full thickness skin defects, Jim if I recall last quarter. Your goal as you entered this year was about 15 accounts per month, and we're still not there yet. So I know July is off to a good start but talk to us maybe a little bit more about kind of what.

Speaker Change: I. Appreciate you guys took a prudent approach with the adjustment to guidance here.

Jim Corbett: During the quarter, we did.

Speaker Change: You are correct. We did not averaged 45. However, we had a total of 37 approvals 41 order to six you've got approved we're going to order so substantially improve that we also have 85.

David: Maybe David.

Speaker Change: Talk to us about kind of what underpins your view, particularly for the fourth quarter, it's still a.

David: Sizable step up from what we saw this quarter.

David: And how much contribution are you expecting from full thickness skin defects, Jim if I recall last quarter.

Speaker Change: In fact decision to stage, one or two different stages.

Speaker Change: That means.

Jim: From the from July.

Matt: Categorize that Matt.

Speaker Change: Yes.

Jim: As you entered this year was about 15 accounts per month.

Speaker Change: I think maybe I'll take the first.

Matt: 85% in the pipeline that have scheduled evaluations are decisions during the quarter. So we have a lot there plus the Permian term.

Speaker Change: Fundamentally there is the big drivers the number one driver is the resale go conversion, which we expect to substantially complete within the quarter and if you were able to see the slides you would note used.

Speaker Change: Not there yet so I know July is off to a good start but talk to us maybe a little bit more about kind of what that means.

Matt: The launch of it takes a little time, but it was really.

Speaker Change: From the from July.

Speaker Change: Yes.

Speaker Change: Using resale go has a consequence of greater utilization. So thats just one of the underpinning efforts.

Matt: Beginning of Q2 launch so we are just starting to get our legs under our feet at the moment we have.

Speaker Change: I think maybe I'll take the first.

Speaker Change: During the quarter, we did.

Matt: Just unattractive I believe 19 in the backstage and we're getting progressively more activity with that so we.

David: Using resale go has a consequence of greater utilization. So thats just one of the underpinning efforts.

Matt: We do have a lot of wind at our back on in terms of execution materials.

Matt: The things you need to make the number grow the way that it needs to so that is fundamental to whats driving our our guidance for the next two quarters.

David: During the quarter, we did.

Speaker Change: In fact decision stage one is two different stages.

Speaker Change: You are correct. We did not averaged 45. However, we had a total of 37 approvals 41 order to six you've got approved we're going to order.

Speaker Change: Categorize that Matt.

Speaker Change: 85% in the pipeline that have scheduled evaluations are decisions during the quarter. So we have a lot there plus the Permian term lumpy.

Matt: Okay.

David: Potentially improve that we also have 85.

Matt: That's helpful and then David.

David: You've repeated belief the guidance excuse me.

Speaker Change: In fact decision to stage, one or two different stages.

Jim: The launch of it takes a little time when it was really beginning of Q2 launch. So we are just starting to get our legs under our feet at the moment we have.

Speaker Change: You would be cash flow breakeven by the third quarter of 'twenty five but your expenses are up cash burns down a healthy bid.

David: Categorized.

David: Categorize M&A.

David: 85% in the pipeline that have scheduled evaluations are decisions during the quarter. So we have a lot there plus the Permian term.

Speaker Change: What are you going to cut back on.

Speaker Change: Just unattractive I believe 19 in the backstage and we're getting progressively more activity with that so we.

Speaker Change: Potentially.

Speaker Change: What can't work can you cut back just to get to that point or is it all predicated on top line revenue growth, particularly in 2025.

David: Launch of it takes a little time when it was really.

David: Beginning of Q2 launch so we are just starting to get our legs under our feet at the moment we have.

Speaker Change: We do have a lot of wind at our back on in terms of execution materials.

Speaker Change: As an acceleration off the levels you're seeing this year.

Speaker Change: The things you need to make the number grow the way that it needs to so that is fundamental to whats driving our our guidance for the next two quarters.

Speaker Change: Just unattractive I believe 19 in the backstage and we're getting progressively more activity with that so we.

Brian: Thanks, Brian.

Speaker Change: For the most part it's all driven by topline growth revenue.

Speaker Change: We are still projecting 86% greater margin.

Speaker Change: We do have a lot of wind at our back on in terms of execution materials.

Speaker Change: Okay.

Speaker Change: That's helpful and then David.

Speaker Change: So just for example, even with our guidance for this quarter, which is around $20 million.

Speaker Change: You've repeated the belief the guidance excuse me.

Speaker Change: The things you need to make the number of CRO the way that it needs to so that is fundamental to whats driving our our guidance for the next two quarters.

Speaker Change: You would be cash flow I think breakeven by the third quarter of 'twenty five but your expenses are up cash burns down a healthy bid.

Speaker Change: 86%.

Speaker Change: That's about $18 million of gross margin.

Speaker Change: And Youre right, our operating expenses are up but the operating expenses also include noncash items.

Speaker Change: Okay.

Speaker Change: That's helpful and then David.

Speaker Change: What are you going to cut back on.

Speaker Change: Potentially.

David: You've repeated the belief the guidance excuse me.

Speaker Change: What can't work can you cut back just to get to that point or is it all predicated on top line revenue growth, particularly in 2025.

Ryan Zimmerman: You would be cash flow I think breakeven by the third quarter of 2005, but your expenses are up cash burns down a healthy bid.

Speaker Change: So.

Speaker Change: Stock comp and depreciation and amortization and so.

Speaker Change: If you project out sequential revenue growth over the next few quarters.

Speaker Change: As an acceleration off the levels you're seeing this year.

Speaker Change: What are you going to cut back on potentially.

Brian: Thanks, Brian.

Speaker Change: Can you can pick a number that you would like to as far as whether it would be 30%, 20% and you can see that we can get there and we can get to covering our operating expenses in three to four quarters.

Speaker Change: Potentially.

Speaker Change: What can't where can you cut back just to get to that point or is it all predicated on top line revenue growth, particularly in 2025.

Speaker Change: For the most part it's all driven by topline growth revenue.

Speaker Change: We are still projecting 86% greater margin.

Speaker Change: As an acceleration off the levels you're seeing this year.

Speaker Change: So just for example, even with our guidance for this quarter, which is around $20 million.

David: No I appreciate it David yes.

Brian: Thanks, Brian.

David: Understood. Okay I'll hop back in queue. Thank you for the color guys. Thank you.

Speaker Change: For the most part it's all driven by topline growth revenue.

Brian: 86%.

Brian: That's about $18 million of gross margin.

Jim: We are still projecting 86% greater margin.

Speaker Change: And Youre right, our operating expenses are up but the operating expenses also include noncash items.

David: Our next question comes from Joshua Jennings at TD Cohen.

Speaker Change: And so just for example, even with our guidance for this quarter, which is around $20 million.

Josh: Hey, Josh.

Josh: Yes.

Speaker Change: So.

Joshua Jennings: Hi, good thanks for taking these questions.

Speaker Change: Stock comp and depreciation and amortization and so.

Jim: 86%.

Speaker Change: That's about $18 million of gross margin.

Speaker Change: Catch up here.

Speaker Change: I wanted to just ask Jim I think I know the answer to this but just.

Speaker Change: If you project out sequential revenue growth over the next few quarters.

Speaker Change: Youre right our operating expenses are up but the operating expenses also include noncash items.

Speaker Change: In the early days of the full thickness can be affect indication launch and just.

Speaker Change: You can pick a number that you would like to as far as whether it would be 30%, 20% and you can see that we can get there and we can get to covering our operating expenses in three to four quarters.

Speaker Change: And just what youre seeing out in the field.

Speaker Change: Right.

Speaker Change: Are you still as optimistic as you were prelaunch in any different thoughts just in terms of the.

Speaker Change: No.

Speaker Change: Stock comp and depreciation and amortization and so.

Speaker Change: If you project out sequential revenue growth over the next few quarters and you can you can pick a number that you would like to as far as whether it would be 30%, 20% and you can see that we can get there and we can get to covering our operating expenses in three to four quarters.

Speaker Change: The Tam and the opportunity here in the U S for resale in that indication.

David: No I appreciate it David yes.

David: Understood. Okay I'll hop back in queue. Thank you for the color guys. Thank you.

Speaker Change: Okay, Josh are you still there.

Jim Corbett: I am Jim Thanks.

Josh: Sure if you caught my question or not.

Speaker Change: Okay back to your question with regard to full thickness. So what we learned and what have we done so.

David: Our next question comes from Joshua Jennings at TD Cohen.

David: No I appreciate it David yes.

Josh: Hey, Josh.

Speaker Change: Yes.

David: Understood. Okay I'll hop back in queue. Thank you for the color guys. Thank you.

Josh: Simple answer to your question is we're just as optimistic about the Tam and the potential for it as we were.

Joshua Jennings: Hi, good thanks for taking these questions.

Speaker Change: Catch up here.

Speaker Change: I wanted to just ask Jim I think I know the answer to this but just.

Josh: What we've learned is that there is a.

Speaker Change: Our next question comes from Joshua Jennings at TD Cohen.

Speaker Change: In the early days of the full thickness can be effect indication launch and just.

Josh: We're going to centers, where resale is a very new idea, where they've known about it in the burn world for a long time, so that results in.

Josh: Hey, Josh.

Speaker Change: And just what youre seeing out in the field.

Speaker Change: Yes.

Speaker Change: Are you still as optimistic as you were prelaunch in any different thoughts just in terms of the.

Joshua Jennings: Good thanks for taking these questions.

Josh: Catch up here.

Really three forms of vac processes and two of them dominate.

Josh: I wanted to just ask Jim I think I know the answer to this but just.

Speaker Change: The Tam and the opportunity here in the U S for resale in that indication.

Jim: In the early days of the full thickness can be effect indication launch and.

Josh: We'll get a conditional back doing evaluation before we give you full approval or they will say prior to vac do an evaluation before we approve you would back and a smaller number than those two gives us approval straight away. So that's really created that longer vac approval peer.

Speaker Change: And just what youre seeing out in the field.

Speaker Change: Are you still as optimistic as you were prelaunch in any different thoughts just in terms of the <unk>.

Speaker Change: The Tam and the opportunity here in the U S for resale in that indication.

Speaker Change: Hello.

Speaker Change: One moment.

Speaker Change: Speaker heads are having some technical difficulties.

Josh: <unk>.

Josh: And you can see though the interest.

Speaker Change: Okay I thought that they were on my own. Thanks.

Speaker Change: Our numbers of accounts last quarter that we have converted or 'twenty. Two there. We have 37 approvals 31 awarded this quarter and we have 85 additional in the pipeline now further to what we've also learned caused us too.

Speaker Change: Hello.

Speaker Change: One moment.

Speaker Change: Speaker heads are having some technical difficulties.

David: Okay I thought that they were on my end. Thanks.

Speaker Change: Develop.

Speaker Change: Validate and submit the data for the resale go many.

Speaker Change: The smaller under 480 square salary loans, so I think thats going to continue to build.

Speaker Change: <unk>.

Speaker Change: Adoption in it.

Speaker Change: And so but those are things, we learned and we remain quite bullish on the market potential and of course, we get to add Permian term as a dressing.

Speaker Change: Additions excuse me and of course work with our dermal matrix will have that.

Speaker Change: And that won't be tandem because it'll be three product lines that can potentially be used on each of these patients.

That's great to hear.

Speaker Change: It's nice to see.

Speaker Change: Just the build out of the portfolio and addressing the continuing these.

Speaker Change: Of this wound care.

Speaker Change: Action.

Speaker Change: Wanted to hone in on the regenerative thermal matrix product and maybe just help us think about the competitive landscape there.

Speaker Change: <unk> of that segment.

Anything you can share in terms of pricing.

Speaker Change: Expectations.

Speaker Change: Per case, thanks for taking the questions.

Speaker Change: Yes.

Speaker Change: Multiple layer questions. So let me let me give you a.

Speaker Change: Arrange the competitive marketplace.

Speaker Change: As.

Speaker Change: Approximately a price range of let's say, 14% to $15 a square centimeter on average in the hospital.

Speaker Change: So if you took that you extended that and that will be the market leader with about most data.

Speaker Change: And then as you extended that it would be $28000 for a 2000 square centimeter won't okay. So thats a substantially.

Speaker Change:

Speaker Change: Significant potential sale now in our case, we have some expectations first of all.

Speaker Change: Selling it with a 500 10-K, we will have to sell it for less than that at the outset as we build our data.

Speaker Change: And achieve two stage comparability.

Speaker Change: We'll be able to achieve a higher DSP okay now.

Speaker Change: Stepping through that one more time, we have a high belief and based on the validated large animal pigs.

Models, where we've compared.

Speaker Change: The dermal matrix that we have to pad designs for us versus the competitors in the market. The two key measures or the time it takes to become graft ready.

Speaker Change: And Ah.

Speaker Change: The time it takes to fully close.

Speaker Change: And obviously the first one.

When you apply the grafts over the thermal matrix is key.

Speaker Change: Non non clinical animal studies.

Speaker Change: We close at nearly half the time.

Speaker Change: Any other product on the market.

Speaker Change: Which will naturally lead.

Speaker Change: So thats graft ready.

Speaker Change: Under half the time.

Speaker Change: And that obviously is going to lead to an earlier closure time, which is incredibly valuable for patient care for that.

Speaker Change: Getting out of the hospital for the cost of care.

Speaker Change: And if you take one further step, which we intend to still have to validate.

Speaker Change: The other qualities of this dermal matrix include its absorption and histological.

Speaker Change: Integration with the wound.

Speaker Change: We believe that we are one of the studies, we're going to run is going to be a single stage closure with resale, where you apply the <unk>.

Speaker Change: Thermal matrix.

Speaker Change: We sell a split thickness skin graft all in one.

Speaker Change: Procedure.

Speaker Change: And then you don't have to two.

Speaker Change: Two procedures, so it's really a rather.

Speaker Change: We achieved parity on the two stage, but we do it much quicker.

Speaker Change: Huge market competitiveness.

Speaker Change: If we can validate the size of wound that will.

Speaker Change: Spawn to a single stage closure.

Speaker Change: You define patient care. So this is really a big potential.

Speaker Change: Yes.

Speaker Change: That's super helpful. Thanks for those details.

Speaker Change: You bet.

Speaker Change: Alright.

Speaker Change: Thank you. Our next question comes from Brooks O'neil at Lake Street capital market.

Speaker Change: Hey, guys. This is Dan on the line for Brooks, Thanks for taking my questions.

Dan: Just going back to the guidance real quick.

Speaker Change: With this new range I guess are you guys feeling any sort of heightened pressure from the.

Speaker Change: Debt covenants as you start to move forward to the back half of the year I think with the new range or just the pod above the.

Speaker Change: The first revenue comments on the year I guess, just how does how are you sort of thinking about that as we approach the back half of the year here.

Speaker Change: Well fundamentally what we're thinking about is executed well in.

Speaker Change: In Q2, we improved our execution, we're really significantly over Q1.

Speaker Change: Q3, we're off to a.

Speaker Change: When we set this guidance keep in mind July is behind US. So we had a very strong July when we look forward to the year. Yes. There was a debt covenant there are we thinking much about it candidly now what we're thinking about is executing Q3, we execute Q3 Q4.

Speaker Change: We will take care of itself and we don't think Theres much challenge there.

Speaker Change: Yes, it's tighter, but we're not focused on that we're focused on executing on our plan building out our portfolio and.

Speaker Change: Getting back on the growth track and being reliable in our guidance.

Speaker Change: Yeah, Okay that makes sense. Thank you for that and then I guess, maybe just a little bit more color on the international expansion I know you mentioned.

Speaker Change: A few countries that you were starting to enter there in your prepared remarks, but maybe.

Speaker Change: Maybe just what does that process sort of look like long term do you have any areas, specifically, where you want to focus more or maybe just how you're sort of thinking about that expansion going forward. Thanks guys.

Speaker Change: Sure. That's a good question so let's recall the filter.

Speaker Change: Filter was number one type of healthcare system that can utilize resell so theres really not that many of those.

Speaker Change: The second filter was to have a population that made it worthwhile to go there and the ability to pay is a third filter so that largely confined you to Australia, Japan and most of the European Union, what we're focused on right at the moment.

Speaker Change: Our approximately 10 countries in the European Union. When we described that there is some Nordic countries UK, which is not in the EU of course, but it's nearby.

Speaker Change: The changing geopolitical world, but so Belgium Holland, Germany.

Speaker Change: Austria, and Switzerland, or with a single distributor, we're close with Spain, and we're close with Italy.

Speaker Change: In fact, we will we expect all those to happen this quarter.

Speaker Change: One of the things that has paced our entry.

Speaker Change: Is the approval of resale go.

Speaker Change: In the EU under the new MTR, we do expect that within the quarter. So that is going to.

Speaker Change: Breakout makeup breakout because it really it's.

Speaker Change: Much less training to use resale go then to implement the coverage strategy. We took here in the United States.

Speaker Change: The amount of case coverage and training that's required has been substantial in our history and we already see the difference so where do we principally focusing on the countries I just named.

Speaker Change: Australia, we're not quite there yet.

Speaker Change: On the market in Japan, as you know with the burn indication.

Speaker Change: We don't go as well.

Speaker Change: Well behind the rest of the.

Speaker Change: Geographies that we intend to operate in but we're going to focus.

Speaker Change: Australia, Japan internationally through third party distributor partnerships.

Speaker Change: Okay. Thanks for that color ship all of them. Thank you.

Speaker Change: You bet.

Ross Arenburg: Our next question comes from Ross onboard at Cantor Fitzgerald.

Ross onboard: Hey, guys. Thanks for taking my question.

Ross onboard: So what's your full thickness indication, which is clearly a broad indication are you seeing adoption for any particular effects within at more so than others and then with the launch of <unk> in combination with yourself is that particularly useful for <unk> more so than others again within that broad product application.

Speaker Change: Okay.

Speaker Change: Two broad questions. So what I'll say about full thickness is we are much more seeing the responsiveness.

Speaker Change: <unk> acute wounds gloving neck.

Speaker Change: <unk> got shot is.

Speaker Change: Those types of wounds severe trauma, let much.

Speaker Change: Much less focus.

Speaker Change: Moment and chronic wounds like.

Speaker Change: Diaries foot ulcers or <unk> will use for example, so we're seeing them in acute wounds thats, where the initial.

Speaker Change: We've been in the market now just about a year, that's really where the action is for us at the moment now turning to our dermal matrix, where we will apply it will actually apply.

Speaker Change: Two.

Speaker Change: Our burn our burn world in a big way it will apply to all of the full thickness cases.

Speaker Change: We'll also apply.

Speaker Change: The chronic wound market as will permit.

Speaker Change: So both the dermal matrix and timing of derm will fit the whole full thickness.

Speaker Change: Continuum.

Speaker Change: Resell and chronic takes a bit of study to figure out how do identify which patients will be responsive to that so we're doing some work on that.

Speaker Change: What's your question in terms of effectiveness is chronic wounds are chronic for a reason they have an underlying condition. For example, obvious leg ulcers failure to happiness return because of an incompetent deep vein valve.

Speaker Change: <unk> failure right, so without a solution to that.

Speaker Change: You have difficulty finding which patients will be responsive and have a durable.

Speaker Change: Skin graft as a solution. So there's work to do there, but it's a broad and rich and deep market that is for sure, especially with our new portfolio.

Speaker Change: Okay, Great. That's very helpful. And then one more on the international side of things.

Speaker Change: Can you walk through the reimbursement dynamics, probably realizing.

Speaker Change: By geography.

Speaker Change: And then in terms of the amount of sales force you think you'll need to support growth and is that contemplated in your thinking 25 cash breakeven guide. Thank you.

Speaker Change: Sure.

Speaker Change: Let me take the the reimbursement.

Speaker Change: Those 10 countries is different and each of them.

Speaker Change: All of them have sufficient.

Speaker Change: Health care systems, and ability to utilize resell and achieve reimbursement, which of course, we share with our distributor.

Speaker Change: That said.

Speaker Change: Reimbursement is a reflection of social system. So.

Speaker Change: It's a really complex question.

Speaker Change: Maybe we can have a separate call to talk about it because it is different we do expect to average.

Speaker Change: At AOSP at end customer that will be somewhere in the area of 75% to 80% of our U S ASP and.

Speaker Change: And which will be splitting in each of these cases.

Speaker Change: So thats.

One answer that helps you is that I think that's it.

Speaker Change: Yes.

Speaker Change: Reimbursement system.

Speaker Change: With regard to sales force.

Speaker Change: We are using third party internationally.

Speaker Change: We don't.

Speaker Change: Yeah.

Speaker Change: Of course, we don't need it in the U S. We have no plans to expand our.

Speaker Change: Our U S commercial head count over the next 18 months no plants, we think we've got sufficient.

Speaker Change: Head count to sufficiently cover and penetrate the accounts, particularly with our broader product line. We have a lot we'll have a lot to sell over the next 18 months.

Speaker Change: Okay, great. Thanks for taking the questions.

You bet.

Speaker Change: Thank you also as a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced.

Speaker Change: Our next question comes from Lyanne Harrison at Bank of America.

Lyanne Harrison: Hi, Good morning, David can you hear me okay.

David: Yes, we can hear you good morning.

Lyanne Harrison: Good morning, I'm, sorry, good evening for you over there, but can you talk about slide three and the pipeline that you've currently got there or something in that vicinity.

Speaker Change: 89 accounts in the pipeline can you tell me.

Speaker Change: How long, it's taking currently to get through the Vac evaluation stage that that decision stage.

Speaker Change: Also for this quarter, you've got something a vac approved but no orders yet.

Speaker Change: LNG doesn't normally take once they are approved for them to put all this right.

Speaker Change: Perfect.

Speaker Change: Youre, helping us break down there is there is a few stages there.

Speaker Change: <unk>.

Speaker Change: In the Vac decision stage.

Speaker Change: Multiple vac stages.

Speaker Change: Characterize it this way.

Speaker Change: There are banks that have a pre case evaluation clinical used.

Speaker Change: The fact is given that direction and then there was subsequently.

Speaker Change: Prove there is a category which is in there.

Speaker Change: As <unk> has said.

We provisionally improve do.

Stuart: Stuart evaluation and report back to US before we officially do it at a subtle difference between the two but that's the difference and that is the majority.

Speaker Change: Those two together and the third is we occasionally.

Speaker Change: In fact proof all step straight away, but it is a minority of our experience now how long is it taking this group.

Speaker Change: In general.

Speaker Change: Is between four and six months. So what you see is that unlike for example, the 31% and six this quarter.

Speaker Change: That of course is up from 22 Q1 to 31, plus 631 ordered <unk>.

Speaker Change: <unk> didn't they were where they were.

Speaker Change: We're approved late in the quarter. So typically following back approval, we will get an order within a week or two so it's usually quite.

Speaker Change: Quite quickly.

Speaker Change: Getting through the process. However.

Speaker Change: Taking us rather consistently four to six months. So 85 is building so our pipeline if you go back.

Speaker Change: Well, we'll have well achieve more than 200, new accounts this year at our current pace.

Speaker Change: So its happenings.

A bit longer than we expected.

Speaker Change: As much as we work at it.

Speaker Change: Are you able to shorten it and make it more consistent and more understandable it still takes time.

Speaker Change #100: Okay, and just to understand that as well so if I'm looking at four to six months and what the prices fairly windy yeah.

Speaker Change: Has that process Scott Shaw has just gotten more efficient for you.

I'm just trying to understand if we get to this time next year do you think you'd still be taking four to six months to get through that process.

Speaker Change: So.

Speaker Change: What I will say is we.

Speaker Change #100: We have a much better understanding of it.

Speaker Change #101: Do I expect it to get shorter I do.

Speaker Change #101: One of the things that we realized as we launched into it.

Speaker Change #101: It's about a year at this point, we have not applied to a VAT.

Speaker Change #101: Any regularity for more than two years. So it became a new skill and experience for our organization. So I do expect it to get shorter also I expect a number of accounts to diminish.

Speaker Change #101: At some level, if you take all trauma centers.

Speaker Change #101: You are in the order of.

Speaker Change #101: We see something in order of 700.

Speaker Change #101: Two 750 accounts in the United States and if you reverse back to where we currently are.

Speaker Change #101: We've got somewhere around 220 230.

Speaker Change #103: <unk> got 85, and our pipeline for Q3, So we'll end the year well over 303 quarter $3 50 and an.

Speaker Change #103: Mostly those are the bigger accounts. So there will come a time when penetrations to the bigger name of the game and one of the benefits of resale go.

Speaker Change #104: Is that it makes it so much easier to adopt as you.

Speaker Change #105: Hopefully you saw the slides if not I'll send them to you.

Speaker Change #105: But also the resale go many will be applicable to many more smaller full thickness.

So in combination those gives us a lot of opportunity and of course.

Many of them need a dermal matrix and all of them needed addressing like permanent term.

Speaker Change #105: Okay, and previously spoke about approval rate.

Speaker Change #105: The rates that Tom.

<unk> pre sac khameni student to praise them resell can you talk to us about that.

Speaker Change #106: What happened to the second quarter of 'twenty for an end to.

Speaker Change #107: To the extent that there were any non approvals have you gone back to them and it does.

Speaker Change #107: To change and become approvals eventually.

Speaker Change #108: Yes, we've had a very small number historically, we had no turn downs during the quarter for example.

Speaker Change #108: And we have historically still had only four or five out of now nearly 200 ads. So it's it's a statistical.

Speaker Change #108: Just unlikely event for us as we've learned.

Speaker Change #109: Okay. Thank you and then.

Speaker Change #110: So are you able to give us an indication I know, it's still small but for the fourth for the second quarter, how much of total revenue with <unk>.

Speaker Change #111: Yes, we did.

David: David So thank you for the question.

Speaker Change #112: It averaged around 2% for the quarter.

David: So.

Speaker Change #113: Very small amount in the second quarter, we see that picking up very substantially over the rest of rest of the year.

Speaker Change #114: Okay. Thank you.

Speaker Change #114: But adding any.

Speaker Change #115: Head count to your sales force in the United States, but I'm just trying to understand how much of your sales force time is currently spent you know promoting or selling we sell versus time you're done.

Speaker Change #116: I guess I'm trying to understand.

Speaker Change #117: Yes, I think it's great that you've got a wider product of.

Speaker Change #117: The portfolio, but.

Speaker Change #118: Could you perhaps have that sales force time, more directed towards selling resale and getting that top line traction.

Speaker Change #118: Well.

Speaker Change #119: The fortunate thing around this strategy is first of all the center of our strategy is resell so from a sales person point of view or any person in the field point of view, they basically get to sell in the moment.

Speaker Change #119: I put it that way.

Speaker Change #119: If you are covering a case with resell.

Speaker Change #119: Resellers, what is being trained on our coast are supported at that moment.

Speaker Change #119: Upon the application of resell. The next thing you do is you put addressing on it which is when you would promote cell permanent or.

Speaker Change #119: The third thing you would do is.

Speaker Change #119: We follow up with our customers.

Speaker Change #119: Round aftercare, so using resale has some very important.

Speaker Change #120: Requirements around aftercare, So you don't change the dressing in a manner that disrupts the healing process.

Speaker Change #120: During the aftercare.

Speaker Change #120: Interaction weather.

Speaker Change #120: Wherever you could talk to that is when you get to talk about permanent Durham.

Speaker Change #120: Also if you apply that to our future dermal matrix it will happen.

Speaker Change #120: Right after.

Friedman: Friedman of the wound.

Friedman: When you use a dermal matrix you then apply splits.

Friedman: Skin graft combined with resell in the moment and then the moment after that you're applying in addressing so it doesn't they don't conflict with each other from a time point of view same patient same doctor.

Friedman: Same procedure.

Friedman: Okay. Thank you and just one last question.

Speaker Change #122: If I think about costs.

Speaker Change #122: The next few quarters.

Speaker Change #123: You mentioned that they were going to be some clinical studies using the dermal matrix and resale how should we be thinking be thinking about that in terms of additional cost.

Speaker Change #124: I think comparatively year over year it won't cause a significantly increased cost because of course, we conduct clinical studies. For example tone was one that we've been investing in which is now winding down from a cost point of view.

Speaker Change #124: And the size.

Speaker Change #123: Size of these studies.

Speaker Change #123: Would not be greater and.

What we've reflected in the past because of course, we did clinical research in R&D related to resell go then we did related to the so called mini those will get replaced from an R&D point of view, which is where clinical goes.

Speaker Change #123: In a similar fashion, we're not expecting a big.

Speaker Change #123: Uptick in expense.

Speaker Change #123: Okay, great. Thank you very much I'll leave it there.

Speaker Change #125: Thank you Leah.

Speaker Change #123: Yeah.

Speaker Change #123: Thank you. This concludes the question answer session I would now like to turn it back to Jim Corbett for closing remarks.

Jim Corbett: First of all thank all of you for attending the call and I. Appreciate the questions. We're looking forward to our future meetings communications in next quarter's call to report our Q3 results. Thank you again.

Speaker Change #126: Thank you for your participation in today's conference. This does conclude the program you may now disconnect.

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