Q4 2024 Aytu BioPharma Inc Earnings Call

Speaker Change: Episode 2

Operator: Welcome to the Aytu BioFarmer of fiscal 2024 Q4 earnings call. At this time, all participants are in a listening mode. A question and answer session will follow the formal presentation.

Speaker Change: Greetings. Welcome to the A2 BioFarmor Fiscal 2024 Q4 earnings call. At this time, all participants are not listening mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.

Operator: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question Q. You may press star two if you'd like to remove your question from the Q.

Speaker Change: If you would like to ask a question, please press star one on your telephone keybed. The confirmation to indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue.

Operator: Please note, this conference is being recorded.

Robert Blum: I will now turn the conference over to your host, Robert Blum, with William Partners. You may begin.

Speaker Change: Please note this conference is being recorded. Now turn the conference over to your host, Robert Blum with Wilson Partners. You may begin.

Robert Blum: All right. Thank you very much.

Robert Blum: Good afternoon, everyone, and thank you for joining us for, as the operator indicated, Aytu BioPharma's fiscal 2024 full year and fourth quarter operational and financial results conference call for the period ended June 30, 2024. Joining us on today's call is Aytu's Chief Executive Officer, Josh Disbrow, and the company's Chief Financial Officer, Mark Oki. At the conclusion of today's preparator marks, we will open the call for a question-and-answer session. I'd like to remind everyone that today's call is being recorded. A replay of today's call will be available by using the telephone numbers and conference ID provided in the press release issued earlier today, or by utilizing the link on the company's website under Events and Presentations.

Robert Blum: All right, thank you very much. Good afternoon everyone and thank you for joining us for as the operator indicated A2 BioFarmus Fiscal 2024 full year and fourth quarter operational and financial results conference call for the period ended June 30, 2024.

Robert Blum: Joining us on today's call is A2's chief executive officer, Josh Disbrow, and the company's chief financial officer, Mark Oki. As the conclusion of today's prepare-to-mark, we will open the call for a question and answer session.

Speaker Change: I'd like to remind everyone that today's call is being recorded, a replay of today's call will be available by using the telephone numbers and conference ID provided in the press release issued earlier today or by utilizing the link on the company's website under events and presentations.

Robert Blum: Finally, I'd also like to call your attention to customary state-parbole disclosures regarding for looking information. The conference call today will contain certain forward-looking statements, including statements regarding the goals, strategies, beliefs, expectations, and future potential operating results of Aytu BioPharma. Although management believes these statements are reasonable, based on estimates, assumptions, and projections as of today, these statements are not guarantees of future performance. Time-sensitive information may no longer be accurate at the time of any telephonic or webcast replay. Actual results may differ materially as a result of risks, uncertainties, and other factors, including but not limited to the factors set forth in the company's filings with the SEC.

Speaker Change: Finally, I'd also like to call your attention, customary, safe harbor disclosures regarding forward-looking information.

Speaker Change: The conference call today will contain certain foreign-looking statements, including statements regarding the goals, strategies, beliefs, expectations, and future potential operating results of A2 biopharma.

Speaker Change: Although management believes these statements are reasonable based on estimates, assumptions, and projections, as of today, these statements are not guarantees of future performance.

Speaker Change: Time-sensitive information may no longer be accurate at the time of any telephonic or webcast replay.

Speaker Change: Action Results may differ materially as a result of risks on certainties and other factors, including, but not limited to the factors set forth in the company's filings with the SEC.

Robert Blum: A-200 takes no obligation to update or revise any of these forward-looking statements.

Speaker Change: A2 undertakes no obligation to update or revise any of these forward-looking statements.

Joshua Disbrow: With that said, let me turn the call over to Josh Dizbro, Chief Executive Officer of Aytu BioFarmer. Josh, the Mike is yours.

Speaker Change: with that said, let me turn the call over to Josh Disbrow, chief executive officer of A2 BioFarma. Josh, the Mike is yours.

Joshua Disbrow: Thank you, Robert, and welcome everyone. There in fiscal 2024, we successfully repositioned A2 as a growing specialty pharmaceutical company focused exclusively on commercializing our novel prescription therapeutics, consisting of our ADHD and pediatric portfolios. Since this repositioning commenced, which included indefinitely suspending our clinical development programs in 2022 and winding down our consumer health business, which was completed in July of this year, and both of which were drains on cash flows, we have positively transformed the operating profile of A2. For fiscal 24, adjusted EBITDA improved 162 percent to 9.2 million compared to 3.5 million in fiscal 23.

Josh Disbrow: Thank you, Robert. Welcome, everyone. They're in fiscal 2024. We successfully repositioned A2 as a growing specialty pharmaceutical company, focused exclusively on commercializing or novel prescription therapeutics, consisting of our ADHD and pediatric portfolios.

Speaker Change: Since this reposition and commenced, which included and definitely suspending our clinical development programs in 2022, and winding down our consumer health business, which was completed in July of this year, and both of which were drained on cash flows, we have positively transformed the operating profile of A2.

Speaker Change: For fiscal 24, adjusted EBITDA improved 162% to 9.2 million, compared to 3.5 million in fiscal 23.

Joshua Disbrow: And when you look back at fiscal 22, our adjusted EBITDA was a negative $21.5 million. So, over a two-year span, we've achieved a more than $30 million positive swing in our operating results; quite an achievement by the entire A2 team, and I thank them all for their efforts to get us to this point. As mentioned, in June of '23, we announced that we would wind down our consumer health business, which in the previous year had revenue of $33.6 million but did not generate positive operating cash flows. We tasked our consumer health team this past year to sell off remaining inventory and minimize expenses associated with this business, with the goal to have minimal impact to the bottom line.

Speaker Change: And when you look back at fiscal 22, our adjusted EBITDA was a negative $21.5 million. So over a two-year span, we've achieved a more than $30 million positive swing in our operating results.

Speaker Change: Quite an achievement by the entire A2 team and I thank them all for their efforts to get us to this point.

Speaker Change: As mentioned, in June of 23, we announced that we would wind down our consumer health business, which in the previous year had revenue of $33.6 million, but did not generate positive operating cash flows.

Speaker Change: We tasked our consumer health team this past year to sell off remaining inventory and minimize expenses associated with this business with the goal to have minimal impact to the bottom line. And those goals were indeed achieved.

Joshua Disbrow: And those goals were indeed achieved. While we were selling through some final inventory in the first quarter of fiscal 25 to minimize disruption costs, the consumer health business has been effectively shut down as of the end of fiscal 24. Further, we looked at ways to monetize the remaining consumer health assets. Again, this goal was achieved when we entered into an agreement to divest our consumer health business to a private e-commerce-focused company. As part of the agreement, A2 will receive up to a half a million dollars of revenue-based royalty payments on future sales of the now former consumer health business products.

Speaker Change: While we were selling through some final inventory in the first quarter of fiscal 25 to minimize disruption costs, the consumer health business has been effectively shut down as of the end of fiscal 24.

Speaker Change: Further, we looked at ways to monetize the remaining consumer health assets. Again, this goal was achieved when we entered into an agreement to divest our consumer health business to a private e-commerce focus company.

Speaker Change: As part of the agreement, A tool received up to a half a million dollars of revenue-based royalty payments on future sales of the now former consumer health business products.

Joshua Disbrow: As we close the loop in the wind down of the consumer health business, we believe the company's operating profile will be made clearly visible to the market and to those investors that screen for growth, margin expansion, and profitability. We believe this could lead to a re-rating of our corporate valuation going forward. Another key aspect of our strategic pivot to drive efficiencies across the organization has been the closure of our Grand Prairie, Texas, manufacturing facility, which was acquired as part of the neosacquisition and was much larger than what we needed. It was therefore a source of large-ticks overhead expenses and a driver of increased cost.

Speaker Change: As we close the loop and the wind down of the consumer health business, we believe the company's operating profile will be made clearly visible to the market and to those investors at screen for growth, margin expansion and profitability. We believe this could lead to a re-rating of our corporate valuation going forward.

Speaker Change: Another key aspect of our strategic pivot to drive efficiencies across the organization has been the closure of our brand for a Texas Manufacturing Facility, which was acquired as part of the neosacquisition and was much larger than what we needed. It was therefore source of large fixed overhead expenses in a driver of increased cogs.

Joshua Disbrow: We started the process about 36 months ago, initially with the identification of a U.S.-based third-party manufacturer that could meet the requirements to manufacture our ADHD product line. We then successfully received approval from the FDA to commence the transfer, and have worked diligently since to ensure a consistent and orderly transition of production to this third-party manufacturer. We completed our final in-house production run in June and have ceased using the facility for all intents and purposes, but we will continue to incur some costs related to the manufacturing facility through calendar 24 as we prepare to return the facility to the landlord.

Speaker Change: We started the process about 36 months ago, initially with the identification of a US-based third-party manufacturer that could meet the requirements to manufacture our ADHD product line.

Speaker Change: We then successfully received approval from the FDA to commence the transfer and have worked diligently since to ensure a consistent and orderly transition of production to this third party manufacturer.

Speaker Change: We completed our final in-house production run in June, and have ceased using the facility for all intents and purposes, but we will continue to encourage some costs related to the Manufacture Facility through calendar 24 as we prepare to return the facility to the landlord.

Joshua Disbrow: The end result has been the gradual improvement of the past year and our gross margins. Our ex-gross margins during fiscal 24 were 75% compared to 71% last year, and we believe it is realistic to see that margin more or less maintained depending on the product mix between ADHD and pediatric products and following the old inventory getting sold through the channel. This has been an intense and time-consuming process led by our operations leadership team. I want to thank everyone involved in the Grand Prairie Wine Down as we move A2 into this next important phase of the company, particularly impressed that through this challenging tech transfer process, the team maintained production levels and have gotten all products to inventory levels among the highest in our brand's respective histories.

Speaker Change: The end result has been the gradual improvement of the past year and our gross margins. Our X-growth margins during fiscal 24 or 75% compared to 71% last year. And we believe it is realistic to see that margin more or less maintained, depending on the product mix between ADHD and pediatric products and following.

Speaker Change: The Old Inventory Getting Sold Through the Channel.

Speaker Change: This has been an intense and time-consuming process led by our operations leadership team. I want to thank everyone involved in the Grand Prairie Wine Down as we move A2 into this next important phase of the company.

Speaker Change: On particularly impressed at through this challenging tech transfer process, the team maintained production levels and have gotten all products to inventory levels among the highest in our brand's respective histories.

Joshua Disbrow: The aforementioned focus on driving towards profitability put us in a position to pay down a portion of our term loan and refinance our term loan on more favorable terms to A2. In mid-June, we announced that we entered into a new $13 million secured, amortizing term loan with Eclipse, which replaces our previous $15 million secured term note. Importantly, at the time of refinancing, this represented an approximate of 350 basis point reduction in the interest rate, which results in potential savings of $1.3 million in interest expense. Additionally, the previous note had become a current liability as it matured in 2025. January of '25, it now matures in June of '28, four years from now.

Speaker Change: The aforementioned focus on driving towards profitability, put us in a position to pay down a portion of our term loan and refinance our term loan on more favorable terms to A2.

Speaker Change: In mid-June, we announced that we entered into a new $13 million secured, amortizing term loan with the clips, which replaces our previous $15 million secured term note.

Speaker Change: Importantly, at the time of refinancing, this represented an approximate 350 basis point reduction in the interest rate, which results in potential savings of $1.3 million in interest expense.

Speaker Change: Additionally, the previous note had become a current liability as it matured in 2025, a January 25. It now matures in June of 28, four years from now.

Joshua Disbrow: So the refinancing improves our balance sheet by reclassifying most of the term loan from current to long-term liabilities and decreases our overall indebtedness, helping improve key financial ratios. This refinancing, along with our improving operating results, has resulted in the removal of the going-concern language from our periodic filings. Concurrently with the term note, we also extended the maturity date of a revolving credit facility agreement with Eclipse to June of 2028, with the amendment providing for a potential increase in borrowing capacity, along with other terms more advantageous to the company. So when I take a step back and look at our balance sheet, a few key points I think help summarize our improvement.

Speaker Change: So, the refinancing improves our balance sheet by reclassifying most of the turn-blown from current to long-term liabilities and decreases our overall indebtedness, helping improve key financial ratios.

Speaker Change: This rich refinancing, along with our proving operating results, has resulted in the removal of the going concern language from our periodic violence.

Speaker Change: Concurrently with the term note, we also extend the maturity date of a revolving credit facility agreement with the clips to June of 2028, with the amendment providing for a potential increase in borrowing capacity along with other terms more advantageous to the company.

Speaker Change: So when I take a step back and look at our balance sheet, a few key points I think help summarize our improvements.

Joshua Disbrow: First, our cast position of $20 million is consistent with the March and December quarters. Second, the current portion of our long-term debt decreased from $15 million in March to less than $2 million at the end of June. Third, we have decreased our total debt by $2.4 million from March. And finally, we have decreased the interest rate associated with our term loan, which will provide for potential savings of $1.3 million in interest expense. All of these improvements could not have been possible without the strategic moves we made to significantly enhance the operating and financial profile of the business.

Speaker Change: First, our cast position of 20 million dollars is consistent with the March and December quarters. Second, the current portion of our long-term debt decrease from 15 million dollars in March to less than 2 million dollars at the end of June.

Speaker Change: Third, we have decreased our total debt by $2.4 million from March. And finally, we have decreased the interest rate associated with our term loan, which will provide for potential savings of $1.3 million in interest expense.

Speaker Change: All of these improvements could not have been possible, but that's the strategic moves we made to significantly enhance the operating and financial profile of the business.

Joshua Disbrow: My sincere thanks to everyone on the A2 team for that. Also, I want to personally thank the team at Avenue Capital for their support and collaboration with us over the last few years and share my excitement to expand the relationship with Eclipse and the collaboration that we continue to build. With the business in a dramatically improved position compared to two years ago, our focus is on continuing to drive revenue growth and efficiencies in our core prescription business, while also leveraging the unique capabilities of our RX Connect program, which provides tremendous benefits to patients and prescribers through transparent and consistent pricing.

Speaker Change: My sincere thanks to everyone on the A2 team for that. Also, I want to personally thank the team and avenue capital for their support and collaboration with us over the last few years and share my excitement to expand the relationship with Eclipse and the collaboration that we continue to build.

Speaker Change: With the business in a dramatically improved position compared to two years ago, our focus is on continuing to drive revenue growth and efficiencies in our core prescription business. While also leveraging the unique capabilities of our RX Connect program, which provides tremendous benefits to patients and prescribers through transparent and consistent pricing.

Joshua Disbrow: RX Connect is innovative and is also highly leverageable to enable scale for our current products and future products that we believe can be added to the promotional mix in the future. For the year, net revenue from our ADHD portfolio increased 23% year-over-year and experienced an 8% year-over-year increase when comparing the second half of the fiscal year with that same period in 2023. Given the significant revenue fluctuations we experienced in last year's second half, driven by the dramatic albeit temporary effects related to a payer issue in the March quarter, impacting our growth to net and judgments that has since been corrected, by the way.

Speaker Change: RS Connect is innovative and is also highly leverageable to enable scale for our current products and future products that we believe can be added to the promotional mix in the future.

Speaker Change: For the year, Net revenue from our ADHD portfolio increased 23% year over year, and experience an 8% year over year increase when comparing the second half of the fiscal year with that same period in 2023.

Speaker Change: Given the significant revenue fluctuations we experienced in last year's second half, driven by the dramatic, albeit temporary, effects related to a payer issue in the March quarter.

Joshua Disbrow: It's best to view the ADHD trends by looking at the January through June timeframes. So again, that growth rate when looking at fiscal second half to fiscal second half was 8%. We're extremely pleased with this 8% revenue growth as we achieved this growth over the time frame last year when the adder-all shortage was peaking, and thus it zenith scripts for way up over prior time periods. The temporary positive benefit we experienced from the supply shortages across most of the industry, from which we benefited from last year, but have since normalized. And even with that normalization, haven't taken place, we're still up 8% year-over-year on a half-year comparative basis.

Speaker Change: Impacting our gross-to-net-in-judged set of since been corrected, by the way. It's best to view the ADHD trends by looking at the January through June timeframes. So again, that growth rate when looking at fiscal second half to fiscal second half was eight percent.

Speaker Change: We're extremely pleased with this 8% revenue growth, as we achieved this growth over the time frame last year when the at our all shortage was peaking and thus it's in a script for way up over prior time periods.

Speaker Change: The temporary positive benefit we experienced from the supply shortages across most of the industry from which we benefited from last year, but have since normalized and even with that normalization haven't taken place, we're still up 8% year over year on a half year comparative basis.

Joshua Disbrow: And when looking at the current unit sales trajectory in this quarter, ADHD ship units are up an impressive 26% from July 1 through yesterday, September 25th. Importantly, what we believe to be a more normalized level today is a significant step change from a few years ago before the stimulant shortages occurred. To put this in perspective, in fiscal 21, there were 352,000 scripts written for ADHD brands. That number stepped up to 376,000 in fiscal 22. 433,000 in Fiscal 23. It was up again to 438,000 in fiscal 24. So the trend line from 2021 to 2024 is an increase of about 25% and at an all-time high.

Speaker Change: and when looking at the current unit sales trajectory in this quarter, ADHD ship units are up an impressive 26% from July 1st through yesterday September 25th.

Speaker Change: Importantly, what we believe to be a more normalized level today is a significant step change from a few years ago before the stimulant shortages occur.

Speaker Change: To put this in perspective in fiscal 21, there were 352,000 scripts written for ADHD brands.

Speaker Change: That number stepped up to 376,000 in fiscal 22, 433,000 in fiscal 23, it was up again to 438,000 in fiscal 24.

Speaker Change: So the trend line from 2021 to 2024 is an increase of about 25% and at an all-time high. We've reset the baseline to well above free shortage levels, which is very exciting to say the least.

Joshua Disbrow: We've reset the baseline to well above free shortage levels, which is very exciting to say the least. Something I touched upon last quarter that I wanted to expand upon again was the impact from the cyber attack that impacted United Healthcare's subsidiary Change Healthcare. For those not familiar, Change Healthcare, among other things, enables branded manufacturers, co-pay programs, savings programs, buy-downs, to be processed through what is essentially a switchboard that interacts with pharmacy dispensing and reimbursement systems. It also interacts with physician billing and reimbursement systems that get physician offices paid for their services. Among many other things, the cyber attack created havoc across the healthcare ecosystem and resulted in many pharma companies' coupon programs not working effectively for extended periods of time.

Speaker Change: Something I touched upon last quarter that I wanted to expand upon, again, was the impact from the cyber attack that the impacted United Healthcare subsidiary change healthcare. For those not familiar, change healthcare, among other things, enables branded manufacturers co-pay programs, savings programs, buy downs, et cetera.

Speaker Change: To be processed through what is essentially a switchboard that interacts with pharmacy dispensing and reimbursement systems. It also interacts with physician-building, billing, and reimbursement systems that get physician offices paid for their services.

Speaker Change: Among many other things, this cyber attack created havoc across the health care ecosystem and resulted in many farm accompanies coupon programs not working effectively for extended periods of time.

Joshua Disbrow: This in turn significantly impacted pricing and patient access to our products and often resulted in prescriptions going unfilled. I mentioned last quarter that we felt an impact from the cyber attack, albeit much less than many others in the industry. In particular, one of our largest grocery chain customers, when it was unable to make some system changes to process our co-pay cards, such that our co-pays were higher than the traditional $50. The net effect is likely in the range of a 15% sequential decrease in that chain's prescription dispensing. So we would consider this to have had a temporary negative impact on our business.

Speaker Change: This in turn significantly impacted pricing and patient access to RX products and often resulted in prescriptions going unfilf.

Speaker Change: I mentioned last quarter that we felt an impact from the cyber attack, albeit much less than many others in the industry.

Speaker Change: In particular, one of our largest grocery chain customers was unable to make some system changes to process our co-pay cards such that our co-pays were higher than the traditional $50.

Speaker Change: The net effect is likely in the range of a 15% sequential decrease in that chain's prescription dispensing, so we would consider this to have had a temporary negative impact on our business.

Joshua Disbrow: Capitalist. Couple that with additional ordering issues; this customer experience and Q4 were surely negatively impacted. Fortunately, and finally, that issue is now fixed, and they're back to processing $50 max copay for commercial patients and are back to more normalized product ordering as well. Looking to the future of it, based on a preliminary read of the data with a couple of business days still to go, it is our expectation that we will see ADHD script growth as our unit sales volumes are up, as I said, 26% from July 1 through yesterday, September 25th. Now, let me caveat that this is unit growth, so this doesn't always mirror revenue growth due to growth to net variations and the timing of shipments to distributors.

Speaker Change: Coupled out with additional ordering issues this customer experience and Q4 was surely negatively impacted. Fortunately, finally, that issue is now fixed and they're back to processing $50 Max Co. Pay for commercial patients and are back to more normalized product order as well.

Speaker Change: Looking to the future a bit, based on a preliminary read of the data, with a couple of business days still to go.

Speaker Change: It is our expectation that we will see ADHD script growth as our unit sales volumes are up as I said 26% from July 1st through yesterday September 25th

Speaker Change: Now, let me caveat that this is unit growth, so this doesn't always mirror revenue growth due to growth and at variations in the timing of shipments to distributors. That said, we're very pleased with our trends here as we round out fiscal Q1.

Joshua Disbrow: That said, we're very pleased with our trends here as we round out fiscal Q1. On the pediatric front, our pediatric portfolio continues to be impacted by a pair of changes that occurred back in September of '23. However, we are seeing very promising signs of recovery here in the first quarter. I'll touch on those numbers shortly. On the whole, pediatric scripts during fiscal 24 were $58,000 compared to $131,000 in fiscal 23. This resulted in that revenue during fiscal 24 decreasing to $7.3 million compared to $25.4 million. In the fourth quarter, revenue indeed drifted further sequentially. However, I do believe, and I know I've said this before, that we have bottomed out at these levels and can grow from here, from here.

Speaker Change: On the pediatric front, our pediatric portfolio continues to be impacted by a pair changes that occurred back in September of 23. However, we are seeing very promising signs of recovery here in the first quarter.

Speaker Change: I'll touch on those numbers shortly. On the whole, pediatric scripts during fiscal 24 or 58,000 compared to 131,000 in fiscal 23. This resulted in net revenue during fiscal 24 decreasing to $7.3 million, compared to $25.4 million.

Speaker Change: In the fourth quarter, revenue indeed drifted further sequentially. However, I do believe, and I know I've said this before, that we have bottomed out at these levels and can grow for here.

Joshua Disbrow: It's taken us more time than anticipated to get the channel and pay our issues back on track, but we remain optimistic about the pediatric product's growth prospects. We've implemented a number of commercial initiatives that give us confidence that we can get back to growth across the pediatric portfolio, with some early signs during the first three months of fiscal 25. The pediatric products unit shipments are up 115% from July 1 through yesterday, which is very encouraging, to say the least. We've put numerous initiatives in place around securing improved reimbursement for both carbon oxamine and the multivitamin franchise, and we've seen a significant increase in covered lives as a result of those efforts.

Speaker Change: from here. Let's take it as more time than anticipated to get the channel and pay our issues back on track, but we remain optimistic about the pediatric products growth prospects.

Speaker Change: We've implemented a number of commercial initiatives that give us confidence that we can get back to growth across the Pediatric portfolio with some early signs during the first three months of fiscal 25. The Pediatric Products, Unit shipments are up 115% from July 1st through yesterday, which is very encouraging to say the least.

Speaker Change: We've put numerous initiatives in place around securing improved reimbursement for both carbon-oxamine and the multivitamin franchise and we've seen a significant increase in covered lives as a result of those efforts.

Joshua Disbrow: As such, we're materially increasing our pediatric product's promotion with our sales force, as we're already seeing good early traction by way of both customer ordering, physician prescribing, and pharmacy dispensing and reordering. We've increased our covered lives in areas that were previously lost due to the pair changes we've discussed, so we're resourcing those areas via direct promotion to regain and grow share as we realize significant coverage improvements. Also, in areas where we didn't previously have coverage, we have had some very exciting pair wins, and we're also now beginning to resource those areas. I continue to be very confident in our collectivabilities to win again with the pediatric portfolio.

Speaker Change: As such, we're materially increasing our pediatric products promotion with our sales force as we're already seeing good early traction by way of both customer ordering, physician prescribing and pharmacy dispensing and reordering.

Speaker Change: We have increased our cover lives in areas that were previously lost due to the pair changes we've discussed. So we're resourcing those areas via direct promotion to regain and grow share as we realize significant coverage improvements.

Speaker Change: Also

Speaker Change: In areas where we didn't previously have coverage, we have had some very exciting pair of winds and we are also now beginning to resource those areas.

Speaker Change: I continue to be very confident in our collectivabilities to win again with the pediatric portfolio. We acknowledge we have a long way to go to get those back to the levels we once at, but believe we can get those products growing and back to the point of being meaningful revenue contributors for the company. For now though, we're excited about the impact our rebuilding efforts are having.

Joshua Disbrow: We acknowledge we have a long way to go and get those back to the levels we once were, but believe we can get those products growing and back to the point of being meaningful revenue contributors for the company. For now, though, we're excited about the impact our rebuilding efforts are having. Much of the success we've achieved during the past few years has been a result of our commercial efforts, and an important part of that is our RX Connect platform, which we believe is the best-in-class patient support program. Our provider and patient-centric access program through which we both clear and guarantee pain no more than pricing for our brands.

Speaker Change: Much of the success, we've achieved during the past few years has been a result of our commercial efforts, and an important part of that is our RX Connect platform.

Speaker Change: which we believe is the best-in-class patient support program. Our provider and patient-centric access program through which we boast clear and guarantee pain or more than pricing for our brands.

Joshua Disbrow: It works directly through our 1,000-plus partner pharmacies nationwide to deliver our brands, ensuring predictability of out-of-pocket costs for the patients who need our treatments and significantly reduce hassles for our prescribing customers. Looking forward, we will continue to evaluate ways we can leverage the unique capabilities of our commercial infrastructure and RFS Connect platform to drive growth as we go forward.

Speaker Change: It works directly through our 1,000-plus partner pharmacies nationwide to deliver our brands ensuring predictability of adapocket costs for the patients who need our treatments and significantly reduce parcels for our prescribing customers.

Speaker Change: Looking forward, we will continue to evaluate ways we can leverage the unique capabilities of our commercial infrastructure and our disconnect platform to drive growth as we go forward.

Joshua Disbrow: To wrap things up before I turn it over to Mark, it's been our objective to improve the financial profile of A2 over the past few years. We've done just that, and I couldn't be more pleased. We transitioned to business that had a negative $21.5 million in adjusted EBITDA in fiscal 22, with one with positive $9.2 million this year. Our cash balance over this time has remained steady, with over $20 million on hand at the end of June, while we've also paid down our term loan from $15 million down to $13 million and refinanced it on terms more favorable to the company.

Speaker Change: To wrap things up before I turn it over to Mark, it's been our objective to improve the financial profile of A2 over the past few years. We've done just that and I couldn't be more pleased.

Speaker Change: We transitioned the business that had a negative $21.5 million in a justice-eva dot fiscal $22, with one with positive $9.2 million this year.

Speaker Change: Our cash balance over this time is remain steady, with over 20 million dollars on hand at the end of June. While we've also paid down our term loan from 15 million dollars down to 13 million dollars, and refinanced it on terms more favorable to the company.

Joshua Disbrow: Our ADHD portfolio has had a significant positive step change over pre-shortage levels, with script growth up about 17% from fiscal 22. While the impact from the pediatric portfolio flowed through the bottom line, which negatively impacted our adjusted EBITDA on a year-over-year basis, we're beginning to show progress through the first three months of fiscal 25 with shift units up sequentially, 115% through yesterday, which is providing us with a high level of optimism as we go forward. I'm confident in our plans and in our progress, and as indicated in our release earlier, we fully expect to achieve growth over our current EBITDA and net revenue levels in fiscal 2025.

Speaker Change: Our ADHD portfolio has had a significant positive step change over free shortage levels, with script growth up about 17% from fiscal 22.

Speaker Change: While the impact from the pediatric portfolio flowed through the bottom line, which negatively impacted or adjusted EBITDA on a year over your basis, we're beginning to show progress through the first three months of fiscal 25 with shift units up sequentially, 115% through yesterday, which is deriding us with a high level of optimism as we go forward.

Speaker Change: I'm confident in our plans and in our progress and as indicated in our release earlier we fully expect to achieve growth over our current EBITDA and net revenue levels in fiscal 2025. Let me turn the call over to Mark and I'll then come back to wrap things up briefly before turning it over to questions. Mark?

Mark Oki: Let me turn the call over to Mark, and I'll then come back to wrap things up briefly before turning it over to questions. Mark.

Mark Oki: Thanks, Josh, and welcome to everyone joining on this call to help us review and acknowledge the operational turnaround at A2. As a reminder, our full-year and fourth quarter financial results are detailed in our financial results press release in our Form 10-K that were released and filed earlier today. So let me focus my comments today on a few key areas, providing some added color where I can. First, let's look at revenue. For the 2024 fiscal year, net revenue was $81 million compared to $107.4 million for the prior year. Bringing it down, net revenue from our RF segment for the full year was $65.2 million compared to $73.8 million in fiscal 2023, a decrease of $8.6 million.

Mark Oki: Thanks, Josh, and welcome to everyone joining some of this call to help us review and acknowledge the operational turnaround at A2.

Mark Oki: As a reminder, our full year in fourth quarter financial results are detailed and our financial results press release in our form 10K that we released and filed earlier today.

Speaker Change: So let me focus my comments today on a few key areas providing some added color where I can.

Mark Oki: First, let's look at Revenue.

Mark Oki: For the 2024 fiscal year, net revenue was $81 million compared to $107.4 million for the prior year.

Speaker Change: Bring it down, net revenue from our RX segment for the full year with $65.2 million compared to $73.8 million in fiscal 2023.

Mark Oki: Within RF, we saw growth in our ADHD products of 8% in the second half of the fiscal year. For the full year, our ADHD portfolio, which comprised 89% of RF net revenue, saw a 23% increase to $57.8 million compared to the prior year period of $46.9 million. The growth in ADHD was offset by a decrease in our pediatric portfolio, with full net year revenue coming in at $7.3 million compared to $25.4 million last year, a decrease of $18.1 million. As Josh indicated, the pediatric changes did the payer changes that impacted prescriptions, which we have communicated in detail over the past few quarters.

Speaker Change: A decrease of $8.6 million

Speaker Change: Within our ads, we saw growth in our ADHD products of 8% in the second half of the fiscal year.

Speaker Change: For the full year, our ADHD portfolio, which comprised 89% of RS net revenues, so a 23% increase to 57.8 million compared to the prior year period of 46.9 million dollars.

Speaker Change: The growth in ADHD was offset by a decrease in our pediatric portfolio with full in that year revenue coming in at 7.3 million compared to $25.4 million last year, a decrease of $18.1 million.

Speaker Change: As Josh indicated, the pediatric changes do the pair changes, the impacted prescriptions, which we have communicated in detail over the past few quarters.

Mark Oki: And as Josh also pointed out, we are now starting to see signs of improvement. Looking specifically at the fourth quarter, our excitement revenue was $14.6 million compared to $23.3 million in Q4 of last year. The change was primarily due to a decrease in pediatric sales mentioned, and to a lesser extent, the decrease in ADHD net revenues. As the ADHD grossed to net adjustments reflected a more normal status in the fourth quarter of 2024 as compared to 2023. We are seeing growth of both the ADHD portfolio and pediatric portfolio as we have entered fiscal 25 and are optimistic that we will continue to see a return to growth for our pediatric products.

Speaker Change: and Josh also pointed out we are now starting to see signs of improvement.

Speaker Change: Looking specifically at the fourth quarter, our excitement revenue was $14.6 million compared to $23.3 million in Q4 of last year.

Speaker Change: The change was primarily due to a decrease in pediatric sales mentioned into a lesser extent the decrease in ADHD net revenues.

Speaker Change: As the ADHD grossed in it, adjustments reflected a more normal status in the fourth quarter of 2024 as compared to 2023.

Speaker Change: We are seeing growth of both the ADHD portfolio and pediatric portfolio as we have entered fiscal 25 and are optimistic that we will continue to see a return to growth for our pediatric products.

Mark Oki: And again, we are guiding to our RHS revenue and adjusted to EBITDA in fiscal 2025 ahead of fiscal 2024 numbers.

Speaker Change: And again, we're guiding to our arts revenue and adjusted the EVIDA in fiscal 2025 ahead of fiscal 2024 numbers.

Mark Oki: Over a year ago, we initiated the plan to wind down our consumer health business. Part of the plan was to self-remain inventory this year and minimize expenses associated with those operations. As previously communicated, this resulted in a decline in declining revenue from the consumer health business in fiscal 2024. All told, net revenue for consumer health was 15.8 million for the 2024 fiscal year and 3.4 million for the fourth quarter. In July 2024, as outlined in our prior announcement, this business was wound down and divested. The absence of the consumer health business should highlight the strength of the RHS business and improve adjusted EBITDA going forward.

Speaker Change: Over a year ago, we initiated the plan to wind down our consumer health business. Part of the plan was to sell remaining inventory this year and minimize expenses associated with those operations.

Speaker Change: As previously communicated, this resulted in a decline in declining revenue from the Consumer Health Business in fiscal 2024.

Speaker Change: All told that revenue for consumer health was 15.8 million for the 2024 fiscal year and 3.4 million for the fourth quarter.

Speaker Change: in July 2024 is outlined in our prior announcement. This business was blown down and divested.

Speaker Change: The absence of the consumer health business should highlight the strength of the arts business and prove adjusted Eva Dough going forward.

Mark Oki: Starting in the first quarter of fiscal 2025, historical activity related to the consumer health business will be reflected as discontinued operations in our financial statements. Turning to gross margins, company-wide gross margins improved to 67% for full year 2024 compared to 62% in fiscal 2023. For the quarter, this improvement was once again highlighted with Q4 gross margins coming at 66% from 60% for the quarter last year. The improvement is a reflection of the evolving midst of our business towards the RX segment, given the wind down of the consumer health business coupled with efficiency improvements made across our RX segment.

Speaker Change: Starting in the first quarter of fiscal 2025, historical activity related to the consumer health business will be reflected as discontinued operations in our financial statements.

Speaker Change: Turning to gross margins, company-wide gross margins improved to 67% for full-year 2024 compared to 62% in fiscal 2023.

Speaker Change: For the quarter, this improvement was once again highlighted with Q4 gross margins coming at 66% from 60% for the quarter last year.

Speaker Change: The improvement is reflection of the evolving myths of our business towards the RX segment, given the wind down of the consumer health business, coupled with efficiency improvements made across our RX segment.

Mark Oki: To help everyone get a better picture of what this business will look like going forward, gross profit margin for the RX business was 75% in 2024 compared to 71% in the prior year. Let's turn to OPEX, operating expenses, excluding amortization of intangible assets, restructuring costs, impairment expense, and game from contingent consideration for $52.3 million for fiscal 2024 compared to $74.2 million in the prior year. For the fourth quarter, this suggested OPEX number was $12.1 million in 2024 compared to $14.6 million in the same period a year ago. The decreases were a result of reduced consumer health spending and improved operational efficiencies.

Speaker Change: To help everyone get a better picture of what this business will look like going forward. Gross profit margin for the RX business was 75% in 2024 compared to 71% in the prior year.

Speaker Change: Let's turn to objects, operating expenses, excluding amortization of intangible assets, restructuring costs, impairment expense, and gain from contingent consideration, or $52.3 million for fiscal 2024 compared to $74.2 million in the prior year.

Speaker Change: For the fourth quarter, this adjusted the OPEX number was $12.1 million, in 2024 compared to $14.6 million in the same period of year ago. The decreases were a result of reduced consumer health spending in improved operational efficiencies.

Mark Oki: Within research and development, for the year, R&D expenses were $2.8 million versus $4.1 million last year. For the quarter, R&D was $1.1 million compared to $1.5 million in the corresponding 2023 quarter. I want to call out that we had a $1.5 million fee recognized in the fourth quarter of 2024 pertaining to the final closeout of AR-101 activities with our CRO. Those of you that have reviewed our press release or 10-K will note that we incurred $2.4 million in restructuring charges for the year, the majority of which were incurred in the fourth quarter and are related to the closure of our Grand Prix Manufacturing Facility and the consumer health business wind down.

Speaker Change: Within research and development for the year, R&D expenses were $2.8 million versus $4.1 million last year. For the quarter, R&D was $1 million compared to half a million dollars in the corresponding 2023 quarter.

Speaker Change: I want to call out that we had a one time half a million dollar fee recognized in the fourth quarter of 2024, pertaining to the final close-out of AR101 activities with our CRO.

Speaker Change: Those of you that have reviewed our press release or 10K will note that we incurred $2.4 million in restructuring charges for the year.

Speaker Change: The majority of which were incurred in the fourth quarter, and are related to the closure of our grant parade manufacturing facility, and the consumer health business wind down. We also had a $700,000 inventory impairment associated with the consumer health business wind down recorded to cost of sales.

Mark Oki: We also had a $700,000 inventory impairment associated with the consumer health business wind down recorded to cost of sale. We specifically highlight these items to provide a better understanding of our core expenses on a go-forward basis. Net loss for fiscal 2024 was $15.8 million, or $2.86 per share, versus a $17.1 million net loss, or $5.11 per share, in fiscal 2023. For the fourth quarter, we incurred a $4.6 million net loss or $0.82 cents per share versus last year's $2.5 million net loss or $0.59 cents loss per share. Loss from operations for the year improved from a loss of $17.1 million in 2023 to only a loss of $5.3 million in 2024.

Speaker Change: We specifically highlight these items to provide a better understanding of our core expenses on a GoFourWorz basis.

Speaker Change: Net loss for fiscal 2024 was $15.8 million or $2.86 per share versus a $17.1 million net loss or $5.11 per share in fiscal 2023.

Speaker Change: For the fourth quarter, we've heard a $4.6 million net loss, or 82 cents per share, versus last year's $2.5 million net loss, or 59 cents. Lops per share.

Speaker Change: Last from Operations for the Year of Pruned, from a loss of 17.1 million in 2023 to only a loss of 5.3 million in 2024.

Mark Oki: For the fiscal 2024 year, consolidated adjusted EBITDA was $9.2 million, contrasted to fiscal 2023's $3.5 million, a $5.7 million increase. Adjusted EBITDA for the RS business was $10.8 million for the fiscal 2024 year compared to $9.7 million in the prior year period. For the quarter, our consolidated adjusted EBITDA was $1.5 million against last year's quarter of $7.7 million. Looking at just the RX core business, adjusted EBITDA was $2 million in the fourth quarter of fiscal 2024 compared to $8.3 million in the prior year period. The change here is primarily due to the full vac in the fourth quarter due to the pediatric portfolio and, to the lesser extent, the normalization of the ADHD business.

Speaker Change: For the fiscal 20-24 year, consolidated, adjusted, even though was $9.2 million, contrasted to fiscal 2023, $3.5 million, a $5.7 million increase.

Speaker Change: I just didn't even doubt for the RS Business was $10.8 million for the fiscal 2020-24-year compared to $9.7 million in the prior year period.

Speaker Change: For the quarter, our consolidated justice EBITDA was $1.5 million against last year's quarter of $7.7 million.

Speaker Change: and looking at just the RX Corbusiness adjusted even though it was $2.2 million in the fourth quarter of fiscal 2024 compared to $8.3 million in the prior year period.

Speaker Change: The change here is primarily due to the full back in the fourth quarter due to the pediatric portfolio into the lesser extent the normalization of the ADHD business.

Mark Oki: A full reconciliation of net loss to adjusted EBITDA is available in the press release issued earlier today. Turning now to the balance sheet, cash and cash equivalents of June 30, 2024, were $20 million compared to $19.8 million as of March 31, 2024.

Speaker Change: A four reconciliation of net last to adjusted Eva Dough is available in the press release issued earlier today.

Speaker Change: Turning now to the bouncy, Gaston Keshe Quivlet of June 30, 2024, we're $20 million, compared to a $19.8 million, as of March 31, 2024.

Mark Oki: It's just touched on since our last conference call; the biggest change in the balance sheet is refinancing of our debt and its consolidation into one lender to Clips. As an aside, I too would like to thank the folks at Avenue Capital, who are two partners in help to achieve our goals and move forward over the last few years. With the old loans maturing in 2025, we reported a going concern note in our financials and in the auditor's opinion. We are pleased that, with the extended maturing over debt and other operational improvements, the going concern language has been removed from our fiscal 2024-10K.

Speaker Change: has just touched on since our last conference goal, the biggest change in the balance sheet is refinancing over debt and its consolidation into one lender, the clips.

Speaker Change: As an aside, I too would like to thank the folks that have new capital who are true partners in helping to achieve our goals and move forward over the last few years.

Speaker Change: With the old loans maturing in 2025, we reported a going concern note in our financials and in the auditor's opinion. We're pleased that with the extended maturities of our debt and other operational improvements, the going concern language has been removed from our fiscal 2024-10K.

Mark Oki: Again, as we look into fiscal 2025, we are pleased with our progress. We have refinanced and extended our debt, credit, and credit facility, exited our consumer health business, completed ADHD production shift to our U.S.-based outside contract manufacturer, are finalizing our exit from our Texas manufacturing facility, and are seeing a rebound in our pediatric portfolio. These accomplishments should improve our growth margins, reduce our interest expense, and allow us to focus on generating free cash flow and positive net income.

Speaker Change: Again, as we look in the fiscal 2025, we are pleased with our progress.

Speaker Change: We have refinanced and extended our debt credit and credit facility, exited our consumer health business.

Speaker Change: completed ADHD production shift to our US-based outside contract manufacturer.

Speaker Change: are finalizing our exit from our Texas Manufacturing facility and are seeing a rebound in our pediatric portfolio. These accomplishments to improve our gross margins reduce our interest expense and allow us to focus on generating free cash flow in positive net income.

Mark Oki: One thing to note before I hand it back to Josh, along with the filing of our 10-K today, we also filed an S-3 shelf registration statement. Our previous shelf was set to expire in October, and as a corporate housekeeping matter, we filed to have an active shelf from the next three years, providing us with financial flexibility in the future.

Speaker Change: One thing to note, before I hand it back to Josh, along with the filing of our 10K today. We also filed.

Speaker Change: and S3 shelf registration statement. Our previous shelf was set to expire not October and as a corporate housekeeping matter, we followed to have an active shelf in the next three years, providing us with financial flexibility in the future. With that, let me turn it back over to Josh.

Joshua Disbrow: With that, let me turn it back over to Josh. Thanks, Mark. My excitement for the opportunity A2 represents remains very high. We have completely transformed the outlook for this company from what it was just two years ago. Our balance sheet remains strong; our operating profile is dramatically improved, and the core infrastructure of this business allows for significant leverage potential. As always, I want to thank the entire team at A2 for their hard work and dedication to delivering for both patients and stockholders. We look forward to fiscal 25, which is off to a very nice start.

Speaker Change: Thanks, Mark. My excitement for the opportunity A2 represents remains very high.

Speaker Change: We have completely grants, transformed the outlook for this company from what it was just two years ago. Our balance sheet remains strong, our operating profiles dramatically improved, and the core infrastructure of this business allows for significant leverage potential. As always, I want to thank the entire team in A2 for their hard work and dedication to delivering for both patients and stockholders.

Joshua Disbrow: Thank you to everyone participating in today's call.

Speaker Change: We look forward to fiscal 25, which is off to a very nice start. Thank you everyone for participating in today's call. I'll now be happy to answer any questions.

Joshua Disbrow: I'll now be happy to answer any questions.

Operator: Thank you.

Operator: At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Once again, please press star one if you have a question or a comment.

Speaker Change: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone, indicate your line is in the question queue. You may press star two to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: One moment please, when we pull for questions.

Speaker Change: Once again, please press star one if you have a question or a comment.

Nazibur Rahman: First question comes from Nas Rahman with Maxim Group. Please proceed.

Speaker Change: First question comes from Naz Rahman with Maxim Groove, please proceed.

Nazibur Rahman: Hi, everyone. Congrats on the progress. And thanks for taking my questions. I have a few if you don't mind. First, I just want to start on your ADHD franchise and the sales this quarter. So I know you said that in this, if you just take the second half, you're over your number; you're seeing growth. But the 4Q numbers were weaker than last year's 4Q. And if you look at 4Q of last year, 4Q of 23, first you have 24; second you have 24. You were based around 15 to 16 million dollars.

Speaker Change: Hi everyone, congrats on the progress and thanks for taking my questions, I have a few feet on my mind. First I just want to start on your ADHD franchise and the sales is quarter. So I know you said that if you just take the second half year over year number you're seeing growth.

Speaker Change #100: But the 4Q numbers were weaker than last year's 4Q, and if you look at 4Q of the last year, 4Q of 23, first year of 24 and second year of 24, you're a base around 16 million dollars.

Joshua Disbrow: What gives you confidence that you can start to get back to those levels, or do you question Nas? So, as we described, and I think we'll try to make a little bit clearer here, Q3 and Q4, there was some snapping back, if you will, that was really in response to a payer change that occurred in the March quarter. And that snapback basically occurred in Q4.

Speaker Change #101: What gives you confidence that you start to get back to those loves or do you expect to get back to those levels going forward?

Speaker Change #101: Yeah, good question now, so as we described and you know, I think we'll try to make a little bit clearer here.

Speaker Change #102: Q3 and Q4, there was some snapping back, if you will, that was really in response to a pair.

Speaker Change #102: Change that occurred in the March quarter.

Speaker Change #103: and that snapback basically occurred in Q4. We came into the new year and unexpectedly had a essential utilization management mandate put on our products by one of the one of the pairs of pairs that we actually have a commercial contract with. That was done in error. It was caught very early.

Joshua Disbrow: We came into the new year and unexpectedly had a central utilization management mandate put on our products by one of the payers, the payer that we actually have a commercial contract with. That was done in error. It was caught very early. And that payer acknowledged the error, rather. And then put the products, remove the products from utilization management list and essentially normalize the coverage. That, in turn, enabled us to essentially reverse that damage, that change from our fiscal Q3 to our Q4. So, in some ways it boosted Q4 revenues. But really what's most important to look at is if you look at sort of just raw units and if you look at prescription demand, and again you smooth out sort of that abnormally low Q3 and then that sort of adjusted Q4, we have a high level of confidence based on just the core demand, core prescription strength, the stabilization of the gross tenets that have actually improved fairly materially, particularly since that March quarter.

Speaker Change #104: and that pair acknowledged the area, their error rather, and then put that, put the products, remove the products from utilization management list and essentially normalize the coverage.

Speaker Change #104: that in turn enabled us to essentially sort of reverse that damage that change from our fiscal Q3 to our Q24.

Speaker Change #105: So, in some ways, it boosted Q4 Revenues.

Speaker Change #106: But it really what's most important to look at is if you look at sort of just raw units and if you look at prescription demand and you, again, you smooth out sort of that abnormally low q3 and then that sort of adjusted q4, we have a high level of confidence based on just the core demand, core prescription strain, the stabilization of the gross tenets.

Joshua Disbrow: And so at the end of the day, it's all about physicians prescribing, and we're seeing obviously higher levels of prescription year over year, having reset the baseline, as I mentioned, significantly higher even from the higher that was predicated off of some of the shortages that were happening, particularly in the infetamine category. And so when you look at raw demand, it's up and up significantly, particularly over pre-shortage levels. And again, because of this normalization that occurred in Q4, it did, to some degree, boost that revenue number higher than it really should have been. So we're really back to normal cadence, normal gross tenets, and ultimately feel very comfortable with the fundamental demand that's there via prescribing.

Speaker Change #107: that have actually improved fairly materially, particularly since that March quarter. And so at the end of the day, it's all about physicians prescribing and we're seeing, obviously, higher levels of prescription, you over year having reset the baseline, as I mentioned, significantly higher even from the high that was predicated off of some of the shortages that were happening, happening, particularly in the end, fedamine categories. And so when you look at all demand, it's up and up significantly, particularly over pre-shortage levels. And again, because of this normalization that occurred in Q4, it did to some degree boost that, boost that revenue number higher than it really should have been. So we're really back to normal, a normal cadence, normal growth in that, and ultimately feel very comfortable with the fundamental demand that's there via prescribing.

Nazibur Rahman: Foundation. Got it.

Joshua Disbrow: Have your thoughts on contracting and reimbursement and essentially the entire managed care, gains, are changed, going to physical 25 as you're now at a higher level of demand and sales? You know, Nazibur will always be open to considering contracts with payers. They're going to have to work for both sides; in some cases, they don't, in which case we wouldn't entertain those. I'll say we remain active in discussions and are always going to be open to contracting if it's something that can be favorable for our products. Obviously, we'll ensure as many covered lives as possible; we can only do that on terms that make sense for the company.

Speaker Change #108: Thoughts on contracting and reimbursement, and essentially an entire managed care game search changed. Going fiscal 25, you're now at a higher level of demand and sales.

Speaker Change #109: You know now's will always be open to considering

Speaker Change #110: Contracts with payers, they're going to have to work for both sides, in some cases they don't, in which in case we wouldn't entertain those. I'll say we remain active in discussions and are always going to be open to contracting if it's something that can be favorable for our products. Obviously, we'll ensure as many covered lives as possible.

Joshua Disbrow: So at this point, remain open. We'll not commit to any one thing other than to say, look, we have the ability to navigate to pay or landscape irrespective of any contracts we have or don't have. Arx Connect gives us a high level of leverage and enables us to work through any reimbursement landscape that presents itself. And it really, the ultimate for patients, is just knowing that they've got coverage one way or another, and we can assure that obviously to these commercially insured patients by virtue of a guaranteed pay no more than $50 copay for commercially insured patients.

Speaker Change #111: Well, we can only do that on terms that makes sense for the company. So, at this point, Remain Open will not commit to any one thing other than to say, Look, we have the ability to navigate the pair landscape irrespective of any contracts we have or don't have. Arts Connect gives us a high level of leverage and enables us to work through any reimbursement landscape that presents itself. And it really, the ultimate for patients is just knowing that they've got coverage one way or another and we can assure that, Obviously, to these commercially insured patients by virtue of a guaranteed pain or more than $50 copay for commercially insured patients.

Joshua Disbrow: That having been said, open to discussions, open to contracting with payers, but it'll have to be on terms that make sense for us. So a bit of a non-answer, but to say, we never say never, but we would also never say always. You have to be flexible. I think you've got to be forward-looking.

Speaker Change #112: That having been said, open to discussions, open to contracting with payers, but it'll have to be on terms that make sense for us. So, a bit of a non-answer, but to say we never say never, but we would also never say always, you have to be flexible. I think you've got to be forward-looking, you've got to, and you've got to also keep in mind that we do have a mechanism in place where irrespective of any coverage. We've got the ability to give patients the peace of mind, knowing that their products is going to be covered at no more than 50 bucks.

Joshua Disbrow: And you've got to also keep in mind that we do have a mechanism in place where, irrespective of any coverage, we've got the ability to give patients the piece of mind knowing that their product is going to be covered at no more than $50 bucks.

Nazibur Rahman: I've got to thank you; that was awful. Recently, the DEA increased the amount of annual H.I. quota for vivans or generic vivans by roughly 24%. I know you've talked about a little bit, that some of the shortages are normalizing. How much of an impact do you think that increase in H.I. quota for generic vivans or vivans may impact a two-nature if at all. I think I'll have minimal of any impact on us. We don't directly compete with Vivans with Adzenis in particular, while obviously Vivans was a large brand and actually remains still a large brand, even despite the generics.

Speaker Change #112: I'd like to thank you all for all of them.

Speaker Change #113: Recycling it.

Speaker Change #114: The D.A. increased the amount of annual ATI quota for 5 answers, and they are advised by roughly 24%.

Speaker Change #114: I'm going to talk about a little bit, that's a somewhat short, just are normalizing. How much of an impact do you think that increasing an KI chlorofergenetic guidance or guidance may impact a two-nature fat all?

Speaker Change #114: I think I'll have minimal with any impact on us. We don't directly compete with by-vance with...

Speaker Change #114: with the zenison particular, while obviously by advance was a large brand and actually remains still a large brand get even despite the generic.

Joshua Disbrow: We compete in an ecosystem of many products, vivans included, inclusive of generic Adderall XR, inclusive of any stimulant, particularly the extended release stimulants, and frankly, Commander relatively share the market. So relatively small share of the market, that is. So irrespective of any quota changes, whether those are increased or decreased, our goal is to grow from less than 1% of the market to over 1, 2, 3, 4% of the market in the short term. And the impact of a vivans quota won't have very much impact on how we think about it. The day we're going to doctors with a message of certainty, clarity, predictability, and that's something that even Vivans can offer with the number of generics that have been approved.

Speaker Change #114: We compete in an ecosystem of many products by vans included, inclusive of generic agarolics are, inclusive of any stimulant, particularly the extent of release stimulants. And frankly, command a relatively share of the market. So relatively small share of the market that is. So irrespective of any quota changes, whether those.

Speaker Change #115: are increased or decreased, you know, our goal is to grow from less than 1% of the market to over 1 to 3% of the market in the short term. And you know, the impact of a Vibance quote, will not have very much impact on how we think about it. The end of the day, we're going to doctors with a message of certainty, clarity, predictability, and that's something that even Vibance can offer with the number of generics that have been approved.

Joshua Disbrow: And the mess that's been created in that specific market or molecule category, we can go in and be, I think, a real asset to our physician customers and their office staff by saying, look, if you're looking for a product that's the same every time that's predictable from both an availability perspective, as well as from a patient experience and an economic perspective, prescribe its NSXR, or in the case of Bethlehem and a prescribed quota template XR. And so, irrespective of sort of the macro events that are happening, whether it relates to DEA quotas or some of the large brands or larger generics, we can do just fine growing our products, sort of irrespective of any of those changes.

Speaker Change #115: and the mess that's been created in that specific market or molecule category.

Speaker Change #115: We can go in and be, I think, a real asset to our physician customers and their office staff by saying, look, if you're looking for product, that's the same every time that's predictable from both an availability perspective as well as from a patient experience and an economic perspective.

Speaker Change #116: Prescrivits NSXR, or in the case of Bethlehem Fennel-Apriscribe could temple XR, and so irrespective of sort of the macro events that are happening, whether it relates to DEA quotas or some of the large brands or larger generics. We can do just fine growing our products, sort of irrespective of any of those changes.

Nazibur Rahman: on the pediatric business. I know you mentioned that the volume for the business is increasing, but just due to differences in gross enough fluctuations. How much of that do you think really translates to material revenue?

Speaker Change #117: Thank you. On the day, I actually did this. I know you mentioned that.

Speaker Change #118: the volume for the business is increasing, but just do the differences in gross and efflossarations.

Speaker Change #119: How much is that? Do you think we'll translate?

Nazibur Rahman: And the bigger point of every question I have is, strategically, what do you think about the pediatric business in terms of normalizing the revenue? Is there a certain level you want to return to? Or I guess better yet, is there a certain level of sales you want to see before you start thinking about strategically maybe the investing or monetizing that business?

Speaker Change #120: to material revenue and I end up bigger.

Speaker Change #121: Pointing at Berg Course I have is...

Speaker Change #121: Certidically, what do you think about the pediatric business in terms of normalizing the revenue? Is there a certain level you want to return to?

Speaker Change #122: I guess that is there a certain level of sales you want to see before you start thinking about strategic weed, maybe the existing or mom sizing that business.

Joshua Disbrow: I'll take the last one first, which is we view the pediatric business as still a very core to our business and would not consider monetizing those. Obviously, if there were a scenario where someone came and described large value to them, it's something that we'd have to think about. But as we think about it today, the pediatric business is very important to us. And we think we can get it back to a meaningful level such that it represents material revenue. And we don't necessarily have it modeled such that it would get back to the levels that it was, say, coming out of fiscal 23. That having been said, we think carbon all ER can be a really nice product for us.

Speaker Change #123: I'll take the last one first, which is we view the pediatric business to still a very quarter of our business and would not consider.

Speaker Change #123: Monetizing those, obviously if there were a scenario where someone came and described large value to them, it's something that we'd have to think about, but as we think about it today, the pediatric business is very important to us, and we think we can get it back to a meaningful level such that it represents material revenue. And we don't necessarily have it modeled such that it would get back to the levels that it was, say, and coming out of fiscal 23, that having been said we think carbon all ER can be a really nice product for us, and we do think the multi-bidemons can get back up to the be a reasonable contributor. I want to put a specific number in it, but what we have said is look, we are sort of comfortable guiding to overall prescription revenue higher than it was last year. A big chunk of that growth is going to be a return to the pediatric products.

Joshua Disbrow: And we do think the multivitamins can get back up to be a reasonable contributor. I don't want to put a specific number in it. What we have said is, look, we are sort of comfortable guiding to overall prescription revenue higher than it was last year. A big chunk of that growth is going to be a return of the pediatric products. And we feel confident saying that to your initial part of the question around gross tenets. The gross tenets of the pediatric products, while they are variable, they have been a little bit more consistent than we've seen in the cases of, for example, the ADHD brands that have been said, there may be some normalization and sort of moving around GTNs as we get those products back up and running through some of the programs we have going.

Speaker Change #123: and we feel confident saying that to your initial part of the question around gross denets. The gross denets are the pediatric products, while they are variable. They have been a little bit more consistent than...

Speaker Change #123: and we've seen in the cases of, for example, the ADHD brands that have been said, there may be some normalization and sort of movement around GTNs as we get those products back up and running through some of the programs we have have going. But to bottom line it, the pediatric business can be meaningful. They can be, you know, I think a significant chunk of our revenue. And I think that'll help obviously adds to giving it value. If we could just bring them back up to even a third and maybe even more optimistically maybe halfway to where they had been. And I'm not talking next quarter, even the quarter there after.

Joshua Disbrow: But to bottom line it, the pediatric business can be meaningful. They can be, you know, I think a significant chunk of our revenue. And I think that'll help; obviously, adds to giving it value. If we could just bring them back up to even a third, and maybe even more optimistically, maybe halfway to where they had been. And I'm not talking next quarter; even the quarter thereafter. That's meaningful. If you think about really our EBITDAW number for this quarter of, you know, call it, you know, a million, a half just under two million bucks as you think about the RX segment.

Speaker Change #123: That's meaningful, if you think about really our EBITDA number for this quarter of, you know, call it, you know, a million, a half just under two million bucks, as you think about the RX segment, that flows straight through to the bottom line, and obviously has direct impact on improving our EBITDA, and also getting us to operating cash flow. And that's the expectation with the pediatric price, so we can get them back to growth, we can get them back to the meaningful contributors, such that they are dropping meaningful...

Joshua Disbrow: That flows straight through to the bottom line. And obviously has direct impact on improving our EBITDAW. And also getting us to operating cash flow. And that's the expectation with the pediatric products. We can get them back to growth. We can get them back to be meaningful contributors such that they are dropping meaningful cash flow from operations in EBITDAW.

Speaker Change #123: Casplo from Operations in Ibita.

Nazibur Rahman: Got it.

Nazibur Rahman: That was awful.

Nazibur Rahman: And I just have one last question. And just a high level question here. So obviously your RRX business is growing in terms of revenue. And you are generating better margins and just generating more and more cash.

Speaker Change #123: Got it, that was all full, and I just wanted to allow this question, and just a high level question here.

Speaker Change #123: So obviously, your, um, your, uh, our business is growing in terms of revenue.

Joshua Disbrow: But long term, what are you sort of thinking about A2 strategically in terms of expanding beyond what's the majority of the ADHD business and not like how to expand or accelerate A2's growth. We think about it in two ways; now is one of which is obviously continuing to capitalize on the leverage that we gain through RRX Connect. And that can be through by virtue of adding additional products, irrespective of the therapeutic areas. And we're always on the hunt and have recently launched a smallish product that is in the very early stages of launch. But it's really an RRX Connect play such that we think we can leverage the pharmacy network.

Speaker Change #123: and you are generating better margins and just generating more and more cash. But long term, what are you sort of thinking about A to a strategically in terms of?

Speaker Change #124: Expanding beyond what's majority the ADHD business and I like how to expand or accelerate A2's growth.

Speaker Change #124: We think about it in two ways now, it's one of which is obviously continuing to...

Speaker Change #125: capitalized on the levers that we gained through RS Connect, and that can be through by virtue of adding additional products irrespective of the therapeutic areas.

Speaker Change #125: and we're always on the hunt and have recently launched a small-ish product that is...

Speaker Change #125: In the early stages of launch, but it's really an arsenic play such that we think we can leverage the pharmacy network, we can leverage the fact that this product is a brand that we're bringing back to enable some familiarity for patients that are prescribed this brand. And so we think we can tuck in a handful of smaller things without any significant added infrastructure and really any expense beyond variable expenses.

Joshua Disbrow: We can leverage the fact that this product is a brand that we're bringing back to enable some familiarity for patients that are prescribed this brand. And so we think we can tuck in a handful of smaller things without any significant added infrastructure and really any expense beyond variable expenses. And then we do think about things that would align therapeutically, understanding that we call on psychiatrists and pediatricians primarily. We also have a smattering of prescribers in primary care, general practice, and sort of a smattering of others. So we do have some ability to look for things that are aligned that align with the call point, whether it be psychiatry or pediatrics.

Speaker Change #125: And then we do think about things that would align their aputically understanding that we call on psychiatrists and pediatricians primarily. We also have a smattering of...

Speaker Change #126: of prescribers in primary care, general practice, and sort of a smattering of others. So we do have some ability to look for things that are aligned that align with the call point, whether it be psychiatry or pediatrics.

Joshua Disbrow: And the hunt is always on for things that are commercial stage, near commercial stage, and launch ready. But nothing that we envision would take a material amount of cash off the balance sheet because we've got leverage. We've got leverage with the sales force that can put additional products into the bag and can be sold to our prescribing customer base. And then we've got leverage afforded by the RRX Connect network and enables us to bolt additional assets on that can drive incremental revenue that would pretty naturally flow to the bottom line. So we've got flexibility and leverage through both of those mechanisms. So we're actively on the hunt and strategically look.

Speaker Change #127: and the hunt is always on for things that are commercial stage, near a commercial stage and launch ready. But nothing that we envision would take a material amount of cash off the balance sheet. Because we've got leverage with the sales force that can put additional products into the bag and can be sold to our prescribing customer base. And then we've got leverage afforded by the RS Connect network and enables us to bolt additional assets on that can drive incremental.

Speaker Change #128: Revenue that would pretty naturally flow to the bottom line, so we've got flexibility and leverage through both of those mechanisms, so we're actively on the hunt. And strategically, look, I think we can be a company that has materially more.

Joshua Disbrow: I think we can be a company that has materially more revenue, and once we're to the point of generating free cash flow, obviously that opens us up for bigger opportunities. But at this point, we want to make sure that we are being disciplined, focusing on driving cash flow from operations and ultimately put ourselves in a position that generate real cash sets that down the road. We can bring in free and additional assets that take revenues to even higher levels.

Speaker Change #128: More revenue and one foot of the point of generating free cash flow, obviously that opens us up for bigger opportunities.

Speaker Change #128: But at this point, we want to make sure that we are being disciplined, focusing on driving cash flow from operations and ultimately put ourselves in a position that generates real cash, that's down the road we can bring in additional assets that take revenues to even our level.

Nazibur Rahman: Thank you. That was very helpful. Thanks a lot for taking my questions. I know I have a few in there.

Speaker Change #128: Thank you. That was very helpful. Thanks a lot for taking my questions. I know I had a few on there.

Nazibur Rahman: Thanks, Nazibur.

Robert Blum: Once again, if there are any remaining questions or comments, please indicate so by pressing star one on your touch-tone phone.

Speaker Change #128: Thanks, Miles. Thanks, Miles. Thanks, Miles.

Speaker Change #129: Once again, if there are any remaining questions or comments, please indicate so by pressing star 1 on your touch tone phone.

Robert Blum: You know, hey, Josh and Mark, here, this is Robert. We had a couple of offline questions. Now they actually touched on most of them here, but there was one that I was hoping maybe you could expand upon, which is to provide a little more detail on some of the initiatives you've implemented to get the pediatric products back to sort of the growth given sort of these recent would appear to be very positive trends in sales in Q1 here.

Speaker Change #130: You know, I hate Josh and Mark Oki at this Robert. I wait a couple of offline questions now that actually touched on on most of them here, but there was one that I was hoping maybe you could expand upon.

Speaker Change #131: which is to provide a little more detail on some of the initiatives you've implemented to get the pediatric's products back to sort of the growth given sort of these recent what appear to be very positive trends in sales in Q1 here.

Joshua Disbrow: Yeah, thanks, Robert, for passing that on. I'll take it in two buckets, really, by product in the pediatric category here in the pediatric portfolios. First of all, it relates to carbon. All you are. What I'll say first and foremost is that we've significantly broadened our geographic spread to further diversify sales from areas where carbon all prescriptions had historically been written. And that's largely being driven by the ability for us to capitalize on some of the recently improved payer coverage. That's largely being driven by some key states' Medicaid plans that have actually picked up coverage. Previously, carbon all you are sales were concentrated in a handful of states. Most product sales and prescriptions actually came from two or three states where Medicaid coverage was favorable.

Speaker Change #132: Yeah, thanks Robert for passing that on. I'll take it in two buckets really by product.

Speaker Change #132: in the pediatric category here, in the pediatric portfolios. First of all, it relates to carbonol yarn. What I'll say, first and foremost, is that we've significantly brought in our geographic spread.

Speaker Change #132: to further diversify sales from areas where carbon-offerscriptions had historically been written. And that's largely being driven by the ability for us to capitalize on some of the recently improved payer coverage. That's largely being driven by some ski states, Medicaid plans that have actually picked up coverage.

Speaker Change #133: Previously, Carbon All-E-R sales were concentrated in a handful of states, most of the products sales and subscriptions actually came from two or three states where Medicaid coverage was favorable. We're now able to resource and deploy sales and actually have sales.

Joshua Disbrow: We're now able to resource and deploy sales and actually have sales specialists in excess of ten states. So, while it's still not selling it everywhere, understanding where a small company, we can't be everywhere. Once that's significantly broader geographic coverage. And we're seeing very good early update just by putting sales representatives representatives and it's our current ADHD sales force by the way that we're adding responsibility while still enabling them to focus on their ADHD targets. So seeing really good coverage in some states and even in places in particular where we had lost some coverage, and just given some changes and some new strategies around how we're pursuing coverage, particularly at the state levels.

Speaker Change #134: Specialist in excess of 10 states, so while it's still not selling it everywhere, understanding where a small company we can't be everywhere. Once that's significantly broader geographic coverage and we're seeing very good early uptake just by putting sales representatives and it's a current ADHD sales force, by the way, that we're adding responsibility while still enabling them to focus on their ADHD target.

Speaker Change #134: Seeing really good coverage in some states and even in places in particular where

Speaker Change #134: We had Lawsome coverage and just given some changes in some new strategies around how we're pursuing coverage, particularly at the state levels, we're really seeing good uptake. So we're getting good coverage in old states that had drop coverage, which was really the big.

Joshua Disbrow: We're really seeing good uptake, so we're getting good coverage in old states that had dropped coverage, which was really the big reason that we had lost a fair amount of prescribing in for carbon on particular. We're seeing that come back. And then we've got new states that previously didn't cover carbon oxygen that are covering it. So we've actually now got a majority of our sales force, a big chunk of our sales force, in one way, shape, or form, with some responsibility for promoting carbon. All you are, of course, along with the ADHD brands, being very targeted, very judicious, very efficient. You know, previously we had just a handful of sales representatives covering the pediatric products.

Speaker Change #135: Reason that we had lost a fair amount of prescribing in, for carbon on particular, we're seeing that come back and then we've got new states that previously didn't cover carbon oxamine that are covering it.

Speaker Change #135: So we've actually now got a majority of our sales force, a big chunk of our sales force, and one way shape or form of some responsibility for promoting carbonol AR, of course, along with the ADHD brands being very targeted, very judicious.

Speaker Change #135: Very efficient. You know previously we had just a handful of sales representatives covering the pediatric products and so now we've got most of the sales force Getting heavily incentivized to sell carbon only are along with the ADHD brands So excited about really just having some extra promotional emphasis, having some IC behind it instead of compensation And getting some coverage picked up in some other states. We've also got some new distribution partners that were starting to see some really promising things from and Open up some other areas and excited to see what some of those can do to help augment our internal efforts.

Joshua Disbrow: And so now we've got most of the sales force getting heavily incentivized to sell carbon only, are along with the ADHD brands of so excited about really just having some extra promotional emphasis, having some IC behind it, incentive compensation, and getting some coverage picked up in some other states. We've also got some new distribution partners that we're starting to see some really promising things from and have opened up some other areas, and excited to see what some of those can do to help augment our internal efforts.

Joshua Disbrow: You know, with the multivitamins, you know, look, I'm, I'll certainly acknowledge that it has taken some time. But I'm really happy to say that we have gotten our largest historical dispensing pharmacy back online. There was a significant sort of inventory slacking issue. That needed to get unslacked, and you know, and while I can't say we absolutely anticipate the level of dispensing that that particular customer. Had done previously we we've at least gotten their supply chain slack issue resolve such that they are back to ordering the multivitamins, so that's extremely encouraging. You know we've also gotten some good pockets of improved coverage for the multivitamins in various places, so you know we're selectively selectively directing sales reps and putting.

Speaker Change #135: You know, with the multivitemons, I'll certainly acknowledge that it has taken some time, but I'm really happy to say that we have gotten our largest historical dispensing pharmacy back on mine. There was a significant sort of inventory, slacking issue that needed to get unslacked and, you know...

Speaker Change #135: And while I can't say we absolutely anticipate the level of dispensing that that particular customer

Speaker Change #135: had done previously with at least gotten their supply chain slack issue resolved so that they are back to ordering the multivitamin so that's extremely encouraging.

Speaker Change #135: We've also gotten some good pockets of improved coverage for the multivitemins in various places, so we're selectively directing sales reps and putting some other commercial resources against in some of those areas where we've gotten some improved coverage, so that's encouraging to see it in some big states with big populations and big areas of market opportunity for studying forehead supplements.

Joshua Disbrow: Some other commercial resources against in some of those areas where we've gotten some improved coverage, so that's encouraging to see in some big states with big populations and big areas of. Market opportunity for sodium fluoride supplements, and we also have some of these new distributors working on the multivitamins and starting to see some good ordering patterns. I am optimistic that we can. Pick up some some improved sales in areas that we hadn't previously had had much going on. Again, small company, limited resources; we're not going to go out and. Blast everywhere once just because that's that would be spending ahead but as we're seeing opportunities present themselves, we're diverting resources, we're putting incremental resources in place, doing it with the sales force we have in place, doing it with the distributors that we've recently aligned with, and excited about what we're seeing. So this is all to say high level of comfort that we are going to get some pickup in real time. We're seeing sales orders increase from July to August to September as it looks as you look at both carbon all as well as the multivitamins franchise. So excited about what we can.

Speaker Change #135: and we also have some of these new distributors working on the multi vitamins and starting to see some good ordering patterns and optimistic that we can pick up some improved sales in areas that we hadn't previously had much going on. Again, small company, limited resources, we're not going to go out and blast everywhere at once just because that would be spending ahead. But as we're seeing opportunities present themselves, we're diverting resources, we're putting incremental resources in place, doing it with the sales force. We have in place doing it with the distributors that we've recently lined with and excited about what we're seeing. So this is all to say, high level of comfort that we are going to get some pick up in real time. We're seeing sales orders increase from July to August to September as it looks.

Speaker Change #135: As you look at both carbonol as well as the multi-bottom in franchise so excited about what we can put together going forward. It's going to thanks a little time. May not get back to where we were, but frankly, if we can get back to even partially where we were, the pediatric products become meaningful revenue contributors again.

Joshua Disbrow: Put together, going forward, it's going to take a little time. We may not get back to where we were, but frankly, if we can get back to even partially where we were, the pediatric products become meaningful revenue contributors again.

Robert Blum: All right, very good. That's the only other question we had offline here.

Robert Blum: So, John, I guess I'll turn it back over to you for any of their live questions, sir. We have new further questions in queue.

Speaker Change #135: All right, very good. That's the only other question we had offline here. So, John, I guess I'll turn it back over to you for any other live questions here.

Joshua Disbrow: I'd like to turn the floor back to management for closing remarks. Well, thanks very much again. As always, thank you all for participating in the call. Thanks to the entire A2 team for their hard work and dedication and delivering to patients and to our stockholders. We look forward to what we view as a very exciting, very productive, and very growth-oriented fiscal 25. It's also a very nice start, as I've just referenced. So, thanks to everyone for participating and look forward to sharing news on our fiscal Q1 here later this year. It'll be in November when we report out our 10-Q for our September quarter.

John: We have new for their questions in queue. I'd like to turn the floor back to management for closing remarks.

Speaker Change #137: Well, thanks very much again, as always. Thank you all for participating in the call. Thanks for the entire A2 team for the hard work and dedication and delivering to for patients.

Speaker Change #137: to our stockholders. We look forward to what we view as a very exciting, very productive and very growth oriented fiscal 25.

Speaker Change #137: is off to a very nice start as I've just referenced. So thanks everyone for participating and look forward to sharing news on our fiscal Q1 here later this year. It'll be in November when we report out our 10 Q4, our September quarter. Until such time we look forward to continuing to drive the business. Thanks for your time. Thanks for your interest in A2 and I wish you all very good evening.

Operator: Until such time, we look forward to continuing to drive the business. Thanks for your time. Thanks for your interest in A2, and I wish you all a very good evening. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.