Q2 2024 IRIDEX Corp Earnings Call

[inaudible]

Operator: Good day, and thank you for standing by. At this time, I would like to welcome everyone to IRIDEX's second quarter 2024 earnings conference call.

Speaker Change: Good day and thank you for standing by. At this time, I would like to welcome everyone to IRIDEX's second quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise.

Operator: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press the star followed by the number one on your telephone keypad. If you'd like to withdraw your question, again, press the star number one. Thank you. I would now like to turn the conference over to Tripp Taylor, Investor Relations. Please go ahead.

After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number 1 on your telephone keypad. If you would like to redraw your question, again press the star 1. Thank you.

I would now like to turn the conference over to Tripp Taylor, Investor Relations. Please go ahead.

Tripp Taylor: Thank you, and thank you all for participating in today's call. Joining me from the company are David Bruce, Chief Executive Officer, and Fuad Ahmad, Interim Chief Financial Officer. Earlier today, your next release financial results for the quarter ended June 29, 2024. A copy of the press release is available on the company's website.

Tripp Taylor: Thank you, and thank you all for participating in today's call. Joining me from the company are David Bruce, Chief Executive Officer, and Fuad Ahmad, Interim Chief Financial Officer.

Speaker Change: Earlier today, your next release financial results for the quarter ended June 29, 2024.

Speaker Change: A copy of the press release is available on the company's website. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Speaker Change: Any statements made during this call that are not statements of historical fact, including but not limited to statements concerning our strategic goals and priorities, product development matters, sales trends, and the markets in which we operate.

Speaker Change: All forward-looking statements are based upon our current estimates and various assumptions.

Speaker Change: These statements involve material risks and uncertainties that could cause actual risks, that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements.

Speaker Change: Accordingly, you should not place reliance on these statements for discussion of the risk and uncertainties associated with our business, please see our most recent form 10K in form 10Q filings with the SEC.

Speaker Change: Here at X disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise.

Speaker Change: This conference call contains time-sensitive information and is accurate only as of the live broadcast today, August 8, 2024. And with that, I'll turn the call over to Dave.

Tripp Taylor: All forward-looking statements are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place reliance on these statements. For a discussion of the risk and uncertainties associated with our business, please see our most recent Form 10K and Form 10Q filings with the SEC.

Dave: Good afternoon and thank you all for joining us today.

Tripp Taylor: You're disclosing any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, August 8th, 2024. And with that, I'll turn the call over to you today.

Dave: On the call I'll start by discussing our recent business progress including our second quarter 2024 performance.

David Bruce: Good afternoon, and thank you all for joining us today. On the call, I'll start by discussing our recent business progress, including our second quarter 2024 performance. Then I will provide updates on our strategic review process and color around our recent finances. Following that, Squad will provide details on the second quarter financials, and we will open the call to Quest.

Dave: Then I will provide updates on our strategic review process and color around our recent financing.

Speaker Change: Following that, Fuad will provide details on the second quarter financials and we will open the call to questions.

David Bruce: During the company's 30 plus year history, we've maintained a deep commitment to improving treatment for patients with site-threatening eye conditions through technical innovations such as the introduction of the 577 nanometer laser, our patented tissue bearing micro pulse technology, and non-incisional laser treatment for glaucoma. We've established a reputation for driving clinical proofs for laser treatment systems used by retinous specialists, and we continue to be the leading provider of non-incisional trans-cleral laser treatment for glaucoma. Now, let's review the second quarter highlights and recent business progress. Second quarter 2024 revenue was 12.6 million, representing sequential growth of 7% from the first quarter of 2024.

Fuad Ahmad: During the company's 30 plus year history, we've maintained a deep commitment.

Fuad Ahmad: To improving treatment for patients with site threatening eye conditions.

Fuad Ahmad: through technical innovations such as the introduction of the 577 nanometer laser, our patented tissue sparing micropulse technology.

Fuad Ahmad: and non-incisional laser treatments for glaucoma. We've established a reputation for driving clinical proofs for laser treatment systems used by retinous specialists, and we continue to be the leading provider of non-incisional transgleral laser treatment in the glaucoma market.

Fuad Ahmad: Now let's review second quarter highlights and recent business progress made.

Fuad Ahmad: Second quarter 2024 revenue was 12.6 million, representing sequential growth of 7% from the first quarter of 2024.

David Bruce: Overall, our results demonstrate recovery of capital equipment in the retina business and recovery of probe sails in the glaucoma business. In glaucoma, elimination of the uncertainty regarding U.S. Medicare reimbursement from late 2023 is driving stabilization for micropolls, and TLT procedures in the U.S., and we're beginning to benefit from a firmer capital equipment environment. We saw a notable strength in our retina business segment, with the sale of Pascal scanning laser systems growing double digits year over year, and in addition, we closed on some extended cycle equipment purchases, but in general, cycles remain elongated.

Fuad Ahmad: Overall our results demonstrate recovery of capital equipment in the retina business and recovery of probe sails in the glaucoma business.

Fuad Ahmad: Inglacoma, elimination of the uncertainty regarding U.S. Medicare reimbursement from late 2023, is driving stabilization for micropolls TOT procedures in the U.S., and we're beginning to benefit from a firmer, capital equipment environment.

Fuad Ahmad: We saw a notable strength in our retina business segment from the sale of Pascal scanning laser systems growing double digits year over year. In addition, we closed on some extended cycle equipment purchases, but in general cycles remain elongated.

David Bruce: We continue to expect our differentiated features and clinical evidence supporting Erodex technology, plus our upcoming launch of our new Erodex 532 and 577 single spot laser platforms to sustain our leading market position in glaucoma. The PsychoG6 product family revenue was 3.3 million, representing sequential growth from the first quarter, primarily driven by a 12% increase in PsychoG6 probes. Compared to the second quarter of 2023, glaucoma revenue was down, 0.3 million, due mainly to dishonest practices in systems.

Fuad Ahmad: We continue to expect our differentiated features and clinical evidence supporting IRIDEX technology plus our upcoming launch of our new IRIDEX 532 and 577 single spot laser platforms to sustain our leading market position.

Fuad Ahmad: In glaucoma, the cyclo G6 product family revenue was 3.3 million, representing sequential growth from the first quarter, primarily driven by 12% increase in cyclo G6 probe sales.

Fuad Ahmad: Comparative 2nd quarter of 2023, glaucoma revenue was down, 0.3 million, due mainly to softness in system sales.

David Bruce: Systems sales have been impacted by the ongoing capital purchasing constraint and some procedural reimbursements. We sold 15,100 G6 probes driven by increased awareness of Reimbursement Stability in the U.S. and a strong recovery internationally. Proborders were slightly down compared to the prior year period, but that was before the various Medicare administrators created reimbursement concerns with their issuances and then with all of coverage limiting LCDs.

David Bruce: Systems sales have been impacted by the ongoing capital purchasing constraints.

Fuad Ahmad: and some procedural reimbursement uncertainty.

David Bruce: We sold 15,100 G6 probes driven by increased awareness of reimbursement stability in the US and a strong recovery internationally.

David Bruce: Proborders were slightly down compared to the prior year period, but that was before the various Medicare administrators created reimbursement concerns with their issuances and then withdrawals of coverage limiting LCDs.

David Bruce: Well, we're encouraged to see improvements sequentially in our glaucoma laser system sales. We already have a strong U.S. installed base, and we're placing a greater emphasis on driving probe utilization, which drives penetration into the large moderate-stage patient opportunity and produces better gross margin in our retina segment. Product revenue was $7.3 million, representing sequential growth of 8% from the first quarter and growth of 6% from the prior year period.

David Bruce: Well, we're encouraged to see improvements sequentially in our glaucoma laser system sales.

David Bruce: We already have a strong U.S. installed base and we're placing a greater emphasis on driving probe utilization, which drives penetration into the large moderate stage patient opportunity and produces better growth margins.

David Bruce: in our retina segment.

David Bruce: Product revenue was $7.3 million, representing sequential growth of 8% from the first quarter and growth of 6% from the prior year period.

David Bruce: We saw strengthened Pascal scanning laser systems and closing on extended cycle equipment purchases, resulting from the improvements in interest rate and exchange rate macro and buyer. Changing topics, as you know, Aerodics is actively engaged in a strategic review process. The company is pursuing a transaction or a series of transactions that will benefit its stockholders. Discussions relating to our various product lines are ongoing, and the processes remain dynamic. At this time, we're not able to share specific updates regarding potential transactions.

David Bruce: We saw strength in Pascal scanning laser systems and closings on extended cycle equipment purchases resulting from the improvements in interest rate and exchange rate macro environment.

Iridex: Changing topics, as you know, IRIDEX is actively engaged in a strategic review process.

David Bruce: The company is pursuing a transaction or a series of transactions that will benefit its stockholders.

David Bruce: Discussions relating to our various product lines are ongoing, and the process is remain dynamic.

David Bruce: At this time, we're not able to share specific updates regarding potential transactions, but we remain committed to pursuing all options to unlock value for our stockholders, and our goal is to reach a transaction this fiscal year.

David Bruce: But we remain committed to pursuing all options to unlock value for our stockholders, and our goal is to reach a transaction this fiscal year. To support the strategic review process, in May, the Board of Directors promoted our Chief Operating Officer, Patrick Mercer, to President. Patrick now holds both positions and has assumed broader responsibility in driving our operational execution, cost reductions, and prudent asset management. I continue in my role as Chief Executive Officer and member of the board, with increased focus on the strategic alternatives process, sales growth, and capital management.

David Bruce: To support the strategic review process in May, the Board of Directors promoted our Chief Operating Officer Patrick Mercer to President.

David Bruce: Patrick now holds both positions and has assumed broader responsibility in driving our operational execution, cost reductions, and prudent asset management.

David Bruce: I continue in my role as Chief Executive Officer and member of the board with increased focus on the strategic alternatives process, sales growth and capital management.

David Bruce: Earlier this week, we announced the private placement financing of a senior convertible note with Lynd Partners for net proceeds of 3.4 million, and the option to issue a second note for an additional proceeds of $1.5 million. The financing improves our balance sheet and secures operating runway for the company to pursue both its strategic process and further business growth recovery. Several benefits make this financing favorable for the borrower. For example, flexible and low risk adjusted cost of capital, with optionality for discounted early pre-payment in the event of a transaction, and reduced delusion in the event of conversion at a share price premium.

David Bruce: Earlier this week, we announced the private placement financing of a senior convertible note with Lynd partners for net proceeds of 3.4 million.

David Bruce: and the option to issue a second note for an additional proceed of 1.5 million.

David Bruce: The financing improves our balance sheet and secures operating runway for the company to pursue both our strategic process and further business growth recovery.

David Bruce: Several benefits make this financing favorable for the company.

David Bruce: Flexible and low risk adjusted cost of capital with optionality for discounted early pre-payment in the event of a transaction and reduced delusion in the event of conversion at a share price premium.

David Bruce: To conclude, managing our capital and expenses prudently is a top priority, and we expect to continue making progress improving our operating cash flow. We have structured and funded the company to provide an appropriate liquidity runway in the business, to achieve success with our strategic process, and to continue our growth recovery to benefit the next stockholder. With that, I will turn the call over to Fuad.

David Bruce: [inaudible]

David Bruce: To conclude, managing our capital and expenses prudently is a top priority and we expect to continue making progress improving our operating cash flow.

Fuad: We have structured and funded the company to provide appropriate liquidity runway in the business to achieve success with our strategic process and continue our growth recovery to benefit Eridec stockholders.

David Bruce: With that, I will turn the call over to Fuad.

Fuad Ahmad: Thank you, Dave, good afternoon, everyone, and thank you for joining us today. I would like to begin by reviewing our financial performance for the second quarter ended June 29, 2024. Total revenue in the second quarter of fiscal 24 was $12.6 million, representing sequential growth of 7% from the first quarter of 24, and roughly flat compared to $12.9 million in the same period of the prior year. As Dave mentioned, these results demonstrate the recovery trend in our business.

Fuad Ahmad: Thank you, Dave. Good afternoon, everyone. And thank you for joining us today.

Fuad Ahmad: Now on to the product level details. Total revenue from the Cyclo G-Sec product family in the second quarter was 3.3 million, an increase of 0.4 million versus the first quarter of 24. This is driven primarily by a recovery in probe sets.

Fuad Ahmad: I would like to begin by reviewing our financial performance for the second quarter ending June 29, 2024.

Fuad Ahmad: This is also a decrease of approximately 0.3 million versus a second quarter of 23 due to the continuing softness and system sales impacted by ongoing capital purchase headwinds. We sold 15,100 cyclogistics probes in the second quarter, representing a sequential increase of 14% compared to the first quarter of 24. This was driven by strong recovery in OUS and by a stabilized glaucoma procedure reimbursement environment in the US. Overall probe sales recovered towards historical business patterns, compared to 15,500 sold in the second quarter of 2020.

Fuad Ahmad: Total revenue in the second quarter of fiscal 24 was 12.6 million representing sequential growth of 7% from the first quarter of 24 and roughly flat compared to 12.9 million in the same period of the prior year.

Fuad Ahmad: As Dave mentioned, these results demonstrate the recovery trend in our businesses.

Fuad Ahmad: Now on to the product level details, total revenue from cyclojuicic product family in the second quarter was 3.3 million and increased up 0.4 million versus the first quarter of 2014. This driven primarily by a recovery in probe sales.

Fuad Ahmad: This is also a decrease of approximately 0.3 million versus a second quarter of 23 due to the continuing softness in system sales impacted by ongoing capital purchase headwinds.

Fuad Ahmad: We sold 15,100 cyclogistics pros in the second quarter representing a sequentially increase of 14% compared to the first quarter of 24.

Fuad Ahmad: This was driven by strong recovery in OUS and by a stabilized glaucoma procedure reimbursement environment in the US.

Fuad Ahmad: Overall, probe sales recover towards historical business patterns compared to 15,500 sold in the second quarter of 2003.

Fuad Ahmad: We sold 28 psychological systems in the quarter compared to 22 in the first quarter and 41 in the prior year period. As previously mentioned, the year-over-year decline was largely due to the ongoing capital purchase headwinds, although conditions improved slightly in the second quarter, which led to the sequential improvement. Our retina segment revenue in the second quarter of 24 was $7.3 million, up 8% compared to the first quarter of 24, and up 6% compared to the prior year period. The second quarter growth compared to both periods was primarily driven by strengthening system sales internationally and conversions from the elongated purchase cycles experienced in the prior quarters.

Fuad Ahmad: We sold 28 psychological systems in the quarter compared to 22 in the first quarter and 41 in the prior year period.

Fuad Ahmad: As previously mentioned, the year-over-year decline was largely due to the ongoing capital purchase headwinds, although conditions improved slightly in the second quarter, which led to the sequential improvement.

Fuad Ahmad: Our retina segment revenue in the second quarter of 24 was 7.3 million up to 8% compared to the first quarter of 24 and up to 6% compared to the prior year period.

Fuad Ahmad: The second quarter growth compared to both periods was primarily driven by strengthening system sales internationally and conversions from the elongated purchase cycles experienced in the prior quarters.

Fuad Ahmad: Other revenue, which includes royalties, services, and other legacy products, decreased to $2 million in the second quarter of 2024, compared to $2.3 million in the second quarter of 2020. The decline was attributed to reduced royalty revenue from expired patent licensing, service revenue, and certain other revenue. Gross profit for the second quarter of 24 was 5.1 million compared to 5.4 million in the prior year. Our overall gross margin was 40.7% compared to 41.7% in the second quarter of 2013. The decline in gross margin was due to a shift in product mix and a reduction in high-margin royalty revenue.

Fuad Ahmad: Other revenue which includes royalty services and other legacy products decrease to 2 million in the second quarter of 24 compared to 2.3 million in the second quarter of 23.

Fuad Ahmad: The decline was attributed to reduced royalty revenue from expired patent licensing, service revenue, and certain other revenue.

Fuad Ahmad: Gross profit for the second quarter of 24 was $5.1 million compared to $5.4 million in the prior year period.

Fuad Ahmad: Our overall growth margin was 4.7% compared to 41.7% in the second quarter of 23.

Fuad Ahmad: The decline in gross margin was due to a shift in product mix and a reduction of high margin royalty revenue.

Fuad Ahmad: Operating expenses in the second quarter of 24 were $7.8 million, a decrease of $0.5 million compared to $8.3 million in the same period last year. The decrease in operating expenses was the result of continuing cost reduction in leadership and would have been greater without the inclusion of DNA expenses related to the company's strategic process not incurred in the price. Our net loss in the second quarter of 24 or 24 was 2.7 million or 16 cents per share compared to a net loss of 2.8 million or 17 cents per share for the same period in 23.

Fuad Ahmad: Operating Expenses, the second quarter of 24, where 7.8 million a decrease of 0.5 million compared to 8.3 million to the same period last year.

Fuad Ahmad: The decrease in operating expenses was the result of continuing cost reduction in initiatives.

Fuad Ahmad: and would have been greater without the inclusion of GNA expenses related to the company's strategic process not incurred in the prior year.

Fuad Ahmad: Our net loss in the second quarter was 24, second quarter of 24 was 2.7 million or 16 cents per share compared to a net loss of 2.8 million or 17 cents per share for the same period in 23.

Fuad Ahmad: Now I want to do our cash position and cash flow, cash and cash equivalents total 4.1 million as of June 29, 2020, and that cash reduction in the quarter was $1.3 million. Note that the cash balance of June 29th does not include 3.4 million of nest proceeds from the offering. Their proceeds from the offering will be used primarily to prove our working cap. Therefore, we expect net cash usage in the third quarter to be slightly higher than in the second quarter as this additional liquidity will be used to optimize our working capital position, improve our supply chain relationships, and manage short-term cash variability.

Fuad Ahmad: Now on to our cash position and cash flows.

Speaker Change: Cash and Cash, equivalent total 4.1 million as of June 29, 2024.

Fuad Ahmad: The net cash reduction in the quarter was $1.3 million.

Fuad Ahmad: Note that the cash balance as of June 29th did not include $3.4 million of NEST proceeds from the convertible note offering that was announced and closed this week.

Fuad Ahmad: The proceeds from the offering will be used primarily to prove our working capital.

Fuad Ahmad: Therefore, we expect net cash usage in the third quarter to be slightly higher than in the second quarter as this additional liquidity will be used to optimize our working capital position, improve our supply chain relationships, and manage short-term cash variability.

Fuad Ahmad: In summary, we have strengthened our balance sheet and continue making meaningful progress in decreasing operating costs. We remain focused on the company's future growth and making significant progress in the strategic review to unlock a share of the value by reaching a transaction this fiscal year. Dave and I would now like to open the call for questions.

Fuad Ahmad: In summary, we have strengthened our balance sheet and continue making meaningful progress in decreasing operating costs. We remain focused on company's future growth and making significant progress in the strategic review to unlock share of the value by reaching a transaction this fiscal year.

Dave: Even I would now like to open the call for questions operator.

Operator: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to rejoin a question, simply press star 1 again. We have a question from the line of Tom Stephan with Stifel. Your line is open.

Operator: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue.

Operator: If you would like to rejoin a question, simply press star 1 again.

Operator: We have a question comes from the line of Tom Stephan with Stiefel. Your line is open.

Thomas Stephan: Great. Hey guys, can you hear me okay? Yeah, hi, Tom.

Tom Stephan: Great. Hey guys, can you hear me okay?

Operator: Beautiful. Um, the first question for me is just on G6. Dave, can you talk about your view on the competitive landscape, just as it relates to G-Sec? As we look ahead, long term, Infinite is gaining traction, I think, in the moderate to severe patient population outcome by Belkin. I think that device may be launching in the U.S. soon. We obviously buy those. I guess Jesus can hold his own long term in this, I say, rapidly growing palliative environment?

Dave: Yeah. Hi, Tom.

Speaker Change: Wonderful. First question for me is just on G6.

Speaker Change: Dave can you talk about your view on the competitive landscape just as it relates to G6?

Operator: As we look ahead long-term, infinite, is gaining traction, I think in the moderate to severe patient population outcome, but Belkin, it got device maybe launching in the US soon, that we obviously buy those.

Operator: I guess can Jesus hold its own long-term in this, I say rapidly growing kind of environment.

David Bruce: Yeah, thanks for the question, Tom. Yes, I think the unique aspect of a non-incisional treatment that's repeatable, doesn't preclude other procedures, is going to continue to be in a category of its own in that moderate-stage patient. And one of the key opportunities, and we're seeing more usage in this area, for example, is post-catterac with or without a mixed procedure. Two or three years out, pressures start to rise again, and something needs to be done.

David Bruce: Yeah, thanks for the question, Tom. Yes, I think the unique aspect of a non-incisional treatment that's repeatable, doesn't preclude other procedures is...

David Bruce: going to continue to be in a category of its own in that moderate stage patient. And one of the one of the key opportunities, and we're seeing more usage in this area, for example, is post cataract with or without a MIGS procedure.

David Bruce: Two or three years out, pressures start to rise again and something needs to be done. And the question becomes, do you go to additional incisional procedures? Or do you buy some non-incisional runway as we call it?

David Bruce: through a treatment or a sequence of treatments with micropulse TLT, for example, that brings pressures under control and extends that runway before you have to start using up space.

David Bruce: both real estate and you know a lot of these are one or one and done so you know we think that uniqueness continues to carry on.

David Bruce: The Belkin system is really in the early stage patient. It's basically an automated SLT style procedure.

David Bruce: And so we don't really see that as competition in the more moderate stage patient where they've gone through SLT already, they've experienced one or multiple drops and it's kind of run out of that ability to control pressures.

David Bruce: ... Ability to Control Pressures

Thomas Stephan: Got it. That's a great caller.

Thomas Stephan: Thanks, Dave. Um, and then my second question is just on the strategic review process. I believe that's gone on for maybe close to a year now.

Thomas Stephan: Got it. That's great, Collier. Thanks, Dave.

Speaker Change: And then my second question is just.

Speaker Change: on the strategic review process. I believe that's gone on for maybe close to a year now. Dave, are you able to talk about what the limiting factors have been or some of the key hurdles, just when you look, you know, at the business?

Thomas Stephan: Dave, are you able to talk about what the limiting factors have been, or some of the key hurdles, just when you look at the business? And then I believe you said you're prioritizing getting a deal done by the end of the fiscal year. There anything that informs that timing, is that balance sheet related, so too part or there? Just on hurdles and limited factors and then timing. Yep, sure. Yeah, so we announced the end of August last.

Speaker Change: And then I believe you said you're prioritizing getting a deal done by the end of the fiscal year. Is there anything that informs that timing? Is that balance sheet related? So two-parter there, just on hurdles and limiting factors and then timing. Thanks.

David Bruce: Yeah, sure. Yeah, so we announced the end of August last year. So we contemplated and began the process, hired a banker, started putting together presentations and reaching out, you know, the process that occurs in those times. I'll give you my own opinions.

David Bruce: Yeah, sure.

David Bruce: Yeah, so we announced the end of August last year, so we, we,

David Bruce: had contemplated and began the process, hired a banker, started putting together presentations and reaching out, you know, the process that occurs in those times.

David Bruce: I think last year was a pretty difficult M&A environment in the micro-cap space in particular. Things have started to improve this year. We've had conversations. Earlier this year, we did comment on one of our calls that we expected a transaction to occur soon, and that transaction turned out not to occur. So that's the risk of kind of giving a prognosis on what will come and when.

David Bruce: I'll give you my own opinions. I think last year was a pretty difficult M&A environment in the microcap space in particular.

David Bruce: Things have started to improve this year.

David Bruce: We've had conversations. Earlier this year, we did comment on one of our calls that we expected a transaction to occur soon, and that transaction turned out not to occur. So, that's the risk of

David Bruce: Kind of giving a prognosis on what will come and when we are.

David Bruce: We are still targeting something in this calendar year. And as you know, the process is long until announcement. You have conversations with people, you go through diligence processes and negotiation of Purchase Agreements and Transition Agreements and all those kinds of things to get to a signature, and that's when you announce it. It can take a long time to execute on these things, and then there's a period of discussions across a number of parties. You know, it takes a while, and we're not necessarily trying to necessarily rush through the process at the same time. You know, we keep reiterating, we're serious about... Finding Value Enhancing Transactions, and I'm comfortable that we're at the stage of discussions where we think it's a realistic target to get something this fiscal year.

David Bruce: Still targeting something in this calendar year, and as you know, the process is long until announcement. You have conversations with people. You go through diligence processes and negotiation of

David Bruce: Purchase agreements and and transition agreements and all those kinds of things to get to a signature and that's when you announce so It can take a long time to execute on these things and then there's a that period of discussions across a number of parties

David Bruce: You know, it takes a while and, you know, we're not trying to necessarily rush through the process. At the same time, you know, we keep reiterating, we're serious about

David Bruce: finding value-enhancing transactions, and I'm comfortable we're at the stage of discussions where we think it's a realistic target to get something.

David Bruce: Dispiscal Year.

Speaker Change: Got it. Thanks, Dave.

Speaker Change: Episode 2

David Bruce: [inaudible]

Operator: There are no further questions at this time, Mr. David Bruce, a triangle that is over to you.

Operator: There are no further questions at this time. Mr. David Bruce, I turn the call back over to you.

David Bruce: Thank you, operator. Thank you all for joining the call; we'll have to add up. Solid performance this quarter, and we're looking forward to building on that and reporting in quarters to come. Thank you all.

Operator: This concludes this fun friend skull; you may now disconnect.

Operator: Thank you, operator. Thank you all for joining the call.

Operator: Solid performance this quarter and we look forward to building on that and reporting in quarters to come. Thank you all.

Operator: This concludes today's phone friends call. You may now disconnect.

David Bruce: And the question becomes, do you go to additional incisional procedures, or do you buy some non-incisional runway, as we call it, through a treatment or a sequence of treatments with micropostealty, for example, that keeps pressures under control and extends that runway before you have to start using up space, both real estate, and a lot of these are one or one and done. So, you know, we think that uniqueness continues to carry on.

Tripp Taylor: Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meeting of federal securities logs, which are made pursuant to the safe harbor provisions of the private securities litigation reform act of 1995. Any statements made during this call that are not statements of historical fact, including but not limited to statements concerning our strategic goals and priorities, product development matters, sales trends, and the markets in which we operate.

David Bruce: The Belkin system is really for the early stage patient. It's basically an automated SLT-style procedure. And so we don't really see that as competition for the more moderate stage patient where they've gone through SLT already, they've experienced one or multiple drops and have kind of run out of that.