Q4 2024 NEXGEL Inc Earnings Call
No.
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Valter Pinto: Good afternoon, I will be your conference operator today at this time I would like to welcome everyone to Nextgen <unk> fourth quarter and full year 2024 earnings Conference call I will now turn the call over to Valter Pinto managing director of K C. S. A strategic communications for introductions. Please go ahead.
Operator: Good afternoon. I will be your conference operator today. At this time, I'd like to welcome everyone to Nexgel's fourth quarter and full year 2024 earnings conference call.
Valter Pinto: I will now turn the call over to Valter Pinto, Managing Director of KCSA Strategic Communications, for introductions. Please go ahead. Thank you, operator. Good afternoon and welcome everyone to Nexgel's fourth quarter and full year 2024 financial results conference.
Speaker Change: Yeah.
Speaker Change: Thank you operator, good afternoon, and welcome everyone to <unk> fourth quarter and full year 2024 financial results Conference call I'm joined today by Adam Levy, Chief Executive Officer, and Joe Mcguire, Chief Financial Officer.
Valter Pinto: I'm joined today by Adam Levy, Chief Executive Officer, and Joe McGuire, Chief Financial Before we begin, I'd like to remind everyone that statements made during today's conference call may be deemed forward-looking statements within the meaning of the safe harbor of the Private Securities Litigation Reform Act of 1995, and actual results may differ materially due to a variety of risks, uncertainties, and other factors. For a detailed discussion of some of the ongoing risks and uncertainties in the company's business, I refer you to the press release issued this evening and filed with the SEC on Form 8K, as well as the company's reports filed periodically with the SEC.
Speaker Change: Four we begin I'd like to remind everyone that statements made during today's conference call maybe deemed forward looking statements within the meaning of the safe Harbor of the private Securities Litigation Reform Act of 1995.
Speaker Change: Results may differ materially due to a variety of risks uncertainties and other factors for a detailed discussion of some of the ongoing risks and uncertainties in the company's business I refer you to the press release issued this evening and filed with the SEC on form 8-K, as well as the company's reports filed periodically with the SEC.
Valter Pinto: The coming disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless otherwise required by law.
Speaker Change: The company disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information future events or otherwise unless otherwise required by law also during the course of today's call, we'll refer to certain non-GAAP financial measures reconciliation of non-GAAP to GAAP financial measures and certain additional information.
Valter Pinto: Also, during the course of today's call, we'll refer to certain non-GAAP financial measures. Reconciliation of non-GAAP to GAAP financial measures and certain additional information are also included in today's press release.
Speaker Change: Also included in today's press release with that it's my pleasure to turn the call over to Mr. Adam Levy Adam. Please go ahead.
Adam Levy: With that, it's my pleasure to turn the call over to Mr. Adam Levy. Adam, please go ahead. Thank you, Valter. And thank you, everyone, for joining us today to discuss our fourth quarter and full year 2024 financial and operating results.
Adam Levy: Thank you Walter and thank you everyone for joining us today to discuss our fourth quarter and full year 2024 financial and operating results.
Adam Levy: 2024 was a watershed year for <unk>, our fourth quarter and full year, 2024, where yet again record periods across all financial measures, notably we successfully grew full year and fourth quarter 2020 for revenue over 100% for the third consecutive year.
Adam Levy: 2024 was a watershed year for Nexgel. Our fourth quarter and full year 2024 were yet again record periods across all financial measures. Notably, we successfully grew full year and fourth quarter 2024 revenue over 100% for the third consecutive year. Gross margins for the fourth quarter were 37% as compared to 43.6% in the third quarter. The gross profit margin in Q4 was negatively affected by a reclassification of Amazon sales commissions from selling costs to COGS. Since Amazon commissions are directly linked to sales, and given the DTC sales have an overly large positive impact on gross margins, management feels this will provide a more stable number for investors going forward.
Adam Levy: Gross margins for the fourth quarter with 37% as compared to 43, 6% in the third quarter.
Adam Levy: The gross profit margin in Q4 was negatively affected by a reclassification of Amazon sales commissions from selling cost to Cogs.
Adam Levy: Since Amazon commissions are directly linked to sales and given the D. T. C sales have an overly large positive impact on gross margins management feels this will provide a more stable number for investors going forward Amazon charges, a commission of approximately 15% on all of our sales.
Adam Levy: Amazon charges a commission of approximately 15% on all of our sales. EBITDA and adjusted EBITDA loss was $726,000 and $621,000 for the fourth quarter. Of note, our fourth quarter net loss includes two inventory write-offs totaling $243,000 that are one-time in nature. One write off of $197,000 related to high minimum order quantity purchase of 2020 in 2022 for Silver Seal and TurfCard. High MOQs were a significant challenge to launching new products back then, and were one of the motivating factors for our Q1 2023 joint venture with CEG Converting and Packaging. Since March of 2023, we have been in complete control of the manufacturing process and as a result, we do not expect any future write-offs of this type.
Adam Levy: EBITA and adjusted EBITA loss was 726006 hundred 21000 for the fourth quarter.
Adam Levy: Of note our fourth quarter net loss includes two inventory write offs totaling 243000 that are onetime in nature.
Adam Levy: One write off of 197000 related to high minimum order quantity purchase of 2020 in 2022 for Silversea and turf Guard.
Adam Levy: M O Qs were a significant challenge to launching new products back then and we're one of the motivating factors for our Q1 2023 joint venture with CG converting in packaging.
Adam Levy: Since March of 2023, we have been in complete control of the manufacturing process and as a result, we do not expect any future write offs at this type the second write off is for $46000 for additional excess and obsolete inventory.
Adam Levy: The second write-off is for $46,000 for additional excess and obsolete inventory. Again, this is inventory purchased back in 2022, is one time in nature, and we do not expect to have any other extraordinary write-offs in the foreseeable future. Without this one-time write-off, our net loss EBITDA and adjusted EBITDA performance would have been improved by $243,000. Year-over-year growth was driven by consistent performance each quarter in both branded consumer products and contract manufacturing.
Adam Levy: Again. This is inventory purchased back in 2022 is onetime in nature and we do not expect to have any other extraordinary write offs in the foreseeable future.
Adam Levy: Without this one time write off our net loss EBITDA and adjusted EBITDA performance would have been improved by $243000.
Year over year growth was driven by consistent performance each quarter in both branded consumer products and contract manufacturing.
Adam Levy: Contract manufacturing played a pivotal role in our growth in 2024 led by increased demand from existing customers and the successful onboarding of several new global corporations, such as Cintas and Owens <unk> minor.
Adam Levy: Contract manufacturing played a pivotal role in our growth in 2024, led by increased demand from existing customers and a successful onboarding of several new global corporations, such as Sintas and Owens & Minor. During the second quarter of 2024, we announced a supply agreement with Sintas, a leading provider of corporate identity uniforms, first aid, and safety products, and services to over 1 million businesses across North America to include our flagship hospital-grade hydrogel dressing for wounds and burns, Silver Seal, in their first aid kits and cabinets. During the fourth quarter, we began shipping SilverSeal to Cintas. Cintas customers utilize SilverSeal to treat minor burns and injuries.
Adam Levy: During the second quarter of 2024, we announced a supply agreement with Cintas, a leading provider of corporate identity uniforms first aid and safety products and services to over 1 million businesses across North America to include our flagship hospital grade hydrogel dressing for wounds and Burns Silversea in their first aid kits in cabin.
Adam Levy: That's.
Adam Levy: During the fourth quarter, we began shipping silversea oldest cintas.
Adam Levy: <unk> customers utilized silversea the treat minor burns and injuries. We are pleased with initial sales in Q4 and have already received additional orders that will ship in Q1 and Q2.
Adam Levy: We are pleased with initial sales in Q4 and have already received additional orders that will ship in Q1 and Q2. This partnership is not only great for our revenue growth, but we expect it to also result in increased brand awareness for silver.
Adam Levy: Partnership is not only great for our revenue growth, but we expect it to also result in increased brand awareness for Silversea.
Adam Levy: Looking ahead, we have a healthy pipeline of potential new customers for 2025.
Adam Levy: Looking ahead, we have a healthy pipeline of potential new customers for 2025.
Adam Levy: In July, we announced the launch of an institutional review board study conducted in accordance with the FDA guidelines, funded by Innovative Options. This 30-patient human trial, conducted at the Florida Clinical Research Center, studies the efficacy of hydrogel applied to patients prior to laser hair removal treatment. The primary outcome measure is the reduction of harmful carcinogenic plume generated by laser hair removal into the air during these procedures. Our high-water content hydrogel may potentially offer a long-needed industry-wide solution for absorbing and capturing this plume during laser hair removal. when applied to the surface of the skin before the procedure begins.
Adam Levy: In July we announced the launch of an institutional review Board study conducted in accordance with the FDA guidelines funded by innovative optics. This 30 patient human trial conducted at the Florida Clinical Research Center studies, the efficacy of hydrogel applied to patients prior to laser hair removal treatment.
Adam Levy: The primary outcome measure is the reduction or reduction of harmful carcinogenic plume generated by laser hair removal into the air during these procedures.
Adam Levy: Our high water content hydrogel may potentially offer a long needed industry wide solution for absorbing in capturing this plume during laser hair removal.
Adam Levy: When applied to the surface of the skin before the procedure begins. In addition, the application of Hydrogel may also allow for more effective laser hair removal and to reduce the amount of pain experienced by the patient during treatment.
Adam Levy: In addition, the application of hydrogel may also allow for more effective laser hair removal and or reduce the amount of pain experienced by the patient during treatment. These additional benefits add to the potential practical solution for regulatory compliance and safety. We anticipate data publication from the study shortly, and if we meet the endpoint, we can launch commercially with a very strong value proposition into the large and growing laser hair removal market. Well over a dozen states have enacted legislation mandating the use of plume evacuation systems in order to mitigate the hazards and risks of exposure to this plume.
Adam Levy: These additional benefits added the potential practical solutions for regulatory compliance and safety.
Adam Levy: We anticipate data publication from the studies shortly and if we meet the endpoint we can launch commercially with a very strong value proposition into the large and growing laser hair removal market well.
Adam Levy: Well over a dozen states have enacted legislation mandating the use of Cleveland evacuation systems in order to mitigate the hazards and risks of exposure to this plume.
Adam Levy: Potential partners are frequently presenting other applicable uses for our hydrogel to us, which we will continue to pursue we expect contract manufacturing and white label to continue being a major driver of our expansion and success going forward and this segment represents some of the largest opportunity that we have in our pipeline.
Adam Levy: Potential partners are frequently presenting other applicable uses for our hydrogels to us, which we will continue to pursue. We expect contract manufacturing and white label to continue being a major driver of our expansion and success going forward. And this segment represents some of the largest opportunities that we have in our pipeline.
Adam Levy: Turning our attention now to consumer products, our entire portfolio saw strong expansion in 2024, driven by the continued success of our brands meta gel Kenkel derm and Philly George each having several growth levers for 2025.
Adam Levy: Turning our attention now to consumer products, our entire portfolio saw strong expansion in 2024, driven by the continued success of our brands, Medijel, Cancoderm, and Silly George, each having several growth levers for 2025. This year, MetaGel will expand its product line with the anticipated launch of several new offerings, including a silver seal burn and wound kit and our moist burn pad. Similarly, Cancoderm will double the size of its product portfolio in the third quarter of 2025 with the launch of new products. Cancoderm is an established brand that provides its customer with high-quality skincare products to relieve the symptoms of psoriasis.
Adam Levy: This year meta gel will expand its product line with the anticipated launch of several new offerings, including our Silversea burn and wound kit and our moist burn pads.
Adam Levy: Similarly, Kenkel Durham will double the size of its product portfolio in the third quarter of 2025 with the launch of new products. Canco Derm is an established brand that provides the customer with high quality skincare products to relieve the symptoms of psoriasis, the new products will expand into skin care products for eczema relief another long.
Adam Levy: The new products will expand into skincare products for eczema relief, another large market opportunity for the brand. Cancoderm will be leveraging its strong reputation as a leader in solutions for sensitive skin.
Adam Levy: <unk> market opportunity for the brand.
Adam Levy: <unk> will be leveraging its strong reputation as a leader in solutions for sensitive skin.
Adam Levy: After acquiring silly George in May of 2024, we quickly integrated the brand into our platform. As a result, we saw growth from its initial $2 million annual revenue run rate to over $5 million and we continue to build this brand we have several exciting new silly George products you'd be launching in 2025, we will have new lashes as <unk>.
Adam Levy: After acquiring Silly George in May of 2024, we quickly integrated the brand into our platform. As a result, we saw growth from its initial $2 million annual revenue run rate to over $5 million, and we continue to build this brand. We have several exciting new Silly George products we'll be launching in 2025. We will have new lashes, as expected, but we will also be launching complementary beauty products, such as five shades of lip gloss, a hydrating lip mask, and under-eye patches that utilize our own hydrogel technology. We are making the transition from a, quote, Lash brand to a true beauty product company with multiple offerings and solutions for our loyal customers.
Adam Levy: <unk> well, we will also be launching complementary beauty products, such as five shades of lip gloss hydrating lip mask and under Eyepatches that utilize our own hydrogel technology.
Adam Levy: We are making the transition from a quote last brand to a true beauty product company with multiple offerings and solutions for our loyal customers.
Adam Levy: Lastly, our partnership with startup is progressing extraordinarily well our first product has to solve is exceeding projections and showed continued revenue growth in each month of Q4.
Adam Levy: Lastly, our partnership with Stata is progressing extraordinarily well. Our first product, Hystasol, is exceeding projections and showed continued revenue growth in each month of Q4. We recently signed an amendment to our contract with Stata to expand our relationship beyond Hystasol. We expect to launch another product in Q4 of 2025 and several more are planned for 2026, starting in Q1. There are many other applications for our high-water content hydrogels and our aspirational medical device products, which provide our shareholders with significant upside potential. With that being said, R&D exploration to each of these opportunities will be done thoughtfully and strategically, managing cash appropriately and not overextending our resources, pursuing paths that will not yield high ROI or be core to our vision of the company future.
Adam Levy: We recently signed an amendment to our contract with <unk> to expand our relationship beyond his to solve we expect to launch another product in Q4 of 2025 and several more planned for 2026 starting in Q1.
Adam Levy: There are many other applications for our high water content hydro gels, and our aspirational medical device products, which provide our shareholders with significant upside potential with.
Adam Levy: With that being said R&D exploration to each of these opportunities will be done thoughtfully and strategically managing cash appropriately and not overextending, our resources pursuing pads that will not yield high ROI or be core to our vision of the company future.
Adam Levy: As we look into the first quarter of 2025, which is seasonally our weakest quarter of the year, we expect revenue to be at least $2 $75 million in 2025, we expect to generate at least $13 million in revenue continuing our strong growth and to achieve positive EBITDA during the year.
Adam Levy: As we look into the first quarter of 2025, which is seasonally our weakest quarter of the year, we expect revenue to be at least $2.75 million. In 2025, we expect to generate at least $13 million in revenue, continuing our strong growth, and to achieve positive EBITDA during the year. As we continue to drive innovation and growth across our key business segments, our focus remains firmly on delivering long-term value for our shareholders.
Adam Levy: As we continue to drive innovation and growth across our key business segments. Our focus remains firmly on delivering long term value for our shareholders 2024 was a great year for us with a strong foundation and significant opportunities on the horizon. We believe the 2025 will be an even greater landmark year.
Adam Levy: 2024 was a great year for us, but with a strong foundation and significant opportunities on the horizon, we believe that 2025 will be an even greater landmark year. We sincerely thank our shareholders for their trust and confidence, which are crucial to our continued success and growth as we work towards realizing our shared vision.
We sincerely thank our shareholders for their trust and confidence which are crucial to our continued success and growth as we work towards realizing our shared vision.
Joe Mcguire: I would now like to turn the call over to Joe McGuire, our Chief Financial Officer, Joe. Thank you, Adam. Today, I'll review financial highlights of our fourth quarter and full year 2024 results. For the fourth quarter of 2024, revenue total $3.04 million. increase of 181% as compared to 1.08 million for the fourth quarter of 2023. Revenue for the full year 2024 totaled $8.69 million, an increase of 112% as compared to $4.09 million in 2023.
Adam Levy: I would now like to turn the call over to Joe Mcguire, Our Chief Financial Officer Joe.
Adam Levy: Okay.
Joe Mcguire: Thank you Adam.
Speaker Change: Today, I'll review financial highlights of our fourth quarter and full year 2024 result.
Speaker Change: For the fourth quarter of 2024 revenue totaled 3.04 million, an increase of 181% as compared to 1.08 million for the fourth quarter of 2023.
Speaker Change: Revenue for the full year 2024 totaled $8 six 9 million, an increase of 112% as compared to 4.09 million in 2023.
Joe Mcguire: to increase year-over-year and overall revenue during both primarily due to the sales growth in branded consumer products and contract manufacturing. Cost of revenues totaled $1.91 million in the fourth quarter 2024 as compared to $0.99 million for the fourth quarter 2023. Cost of revenues in 2024 totaled $5.94 million as compared to $3.72 million in 2023. The increase in cost of revenues is primarily aligned with sales of branded consumer products as both Silly George and Cancaderm were acquired after the comparable 2023 period. Gross profit totaled $1.13 million for the fourth quarter of 2024 as compared to a gross profit of $0.09 million for the fourth quarter of 2023.
Speaker Change: The increase year over year and over in our overall revenue during both periods.
Speaker Change: Primarily due to the sales growth in branded consumer products and contract manufacturing.
Speaker Change: Cost of revenues totaled $1 nine 1 million in the fourth quarter of 2024 as compared to 0.9 9 million for the fourth quarter 2023.
Speaker Change: Cost of revenues in 2024 totaled $5 $94 million as compared to $3 $72 million in 2023.
Speaker Change: The increase in cost of revenues is primarily aligned with sales of branded consumer products as both silly, George and tanker derm, where quite after the comparable 2023 period.
Speaker Change: Gross profit totaled $1 3 million for the fourth quarter of 2024 as compared to gross profit of 0.0 9 million for the fourth quarter of 2023.
Joe Mcguire: Gross profit margin for the fourth quarter 2024 was 37.2 as compared to 8.7 for the fourth quarter 2023. Gross profit for 24 total $2.75 million as compared to $0.37 million in 2023. Gross profit margin for 2024 was 31.6% as compared to 9.2% in 2023. The increase of $2.38 million in 2024 was primarily due to an increase in branded consumer products. selling general and administrative expenses sold 1.97 million for the fourth quarter 2024 as compared to 1.3 million for the fourth quarter 2023. selling general and administrative expenses totaled $6.2 million for 2024 as compared to $3.75 million in 2022.
Speaker Change: Gross profit margin for the fourth quarter 2024 was 37.2 as compared to $8 seven for the fourth quarter 2023.
Speaker Change: Gross profit for 24 totaled $2 $75 million as compared to 0.3 7 million in 2023.
Speaker Change: Profit margin for 2024, with 31, 6% as compared to nine point too in 2023.
Speaker Change: The increase of 238 million in 2024 was primarily due to an increase in branded consumer products.
Speaker Change: Selling general and administrative expenses totaled 1.9 dollars 7 million for the fourth quarter 2024, as compared to $1 3 million for the fourth quarter 2023.
Speaker Change: Selling general and administrative expenses totaled $6 2 million for 2024 as compared to $3 $75 million in 2023.
Joe Mcguire: The increase year-over-year was attributable to increases in compensation and benefits, share-based compensation, advertising, marketing, Amazon fees, professional and consulting fees, and other expenses.
Speaker Change: The increase year over year was attributable to increases in compensation and benefit share based compensation advertising marketing Amazon fees.
Speaker Change: All in consulting fees and other expenses.
Joe Mcguire: which were offset by decreases in investor and shareholder services, franchise taxes, and corporate insurance.
Speaker Change: Which were offset by decreases in investor and shareholder services franchise taxes and cooperating Sean.
Speaker Change: EBITDA.
Joe Mcguire: a non-GAAP financial. totaled a negative 0.73 million for the fourth quarter of 2024 as compared to a negative 0.97. million and fourth quarter of 2023. Ibada for 2024 totaled a negative $2.76 million as compared to a negative $2.92 million in 2020. Adjusted A non-GAAP financial measure totaled a negative $0.62 million for the fourth quarter 2024 as compared to a negative $0.88 million for the fourth quarter of 2020. Adjusted EBITDA for 2024 totaled a negative 2.43 million. as compared to a negative $2.8 million for 2023. Net loss for the fourth quarter of 2024 was $0.85 million as compared to a net loss of $1.1 million for the fourth quarter of 2020.
Speaker Change: non-GAAP financial measure totaled a negative 0.7 3 million for the fourth quarter of 2024 as compared to a negative <unk> 97.
Speaker Change: Million in fourth quarter of 2023.
Speaker Change: EBITDA for 2024 totaled a negative $2 $76 million as compared to a negative $2 $92 million in 2023.
Speaker Change: Adjusted EBITDA, a non-GAAP financial measure totaled a negative 0.6 2 million for the fourth quarter 2024, as compared to a negative 0.8 8 million for the fourth quarter of 2023.
Speaker Change: Adjusted EBITDA for 2024 totaled a negative $2 four 3 million as compared to a negative $2 8 million for 2023.
Speaker Change: Net loss for the fourth quarter of 2024 was 0.8 5 million as compared to a net loss of $1 1 million for the fourth quarter of 2023.
Joe Mcguire: Net loss for 2024 totaled $3.28 million as compared to a net loss of $3.16 million in 2023.
Speaker Change: Net loss for 2024 totaled 328 million as compared to a net loss of $3, one 6 million in 2023.
Joe Mcguire: Unknown Attendee, Nazibur Rahman, Adam Drapczuk, Adam Levy, Valter Pinto, Nexgel As Mr. Levy previously mentioned, our fourth quarter net loss includes two inventory write-offs totaling $243,000 that are one-time and native. One of the write-offs, $197,000 related to the High Minimum Order Quantity Inventory Purchases in 2022 for Silverseal and Turfguard 2x3. High minimum order quantities were a significant challenge. to launching new products. And one of the motivating for our Q1 2023 joint venture with CG Converting and Packaging, which now allows us to control the manufacturing process, and as a result, we do not expect any future write-offs of this The secondary, the second inventory write-off is for 46,000 for additional excess and obsolete As of December 31, the company had a cash balance of $1.81 million.
Speaker Change: Of note.
Speaker Change: As Mr. Li previously mentioned, our fourth quarter net loss includes two inventory write offs totaling 243000 that are onetime in nature.
One of the write offs of 197000 related to the high minimum order quantity inventory purchases in 2022.
Speaker Change: Silver seal and tariff thought two by three.
Speaker Change: Hi, minimum order quantities, where a significant challenge to launching new product and one of the motivating factors.
Speaker Change: For our Q1 2023 joint venture with C G converting and packaging, which now allows us to control the manufacturing process and as a result, we do not expect any future write offs of this nature.
Speaker Change: The secondary second inventory write off.
Speaker Change: 46000 for additional excess and obsolete inventory.
Speaker Change: As of December 31, the company had a cash balance of 1.81 million.
Joe Mcguire: And as of today, March 24, 2025, Nexgel had 7,654,038 shares of common stock outstanding.
Speaker Change: And as of today March 24, 2025, Nextgen, all had $7 million 654038 shares of common stock outstanding.
Operator: I'd like to thank Valter today for hosting us and I'd like to open it up for questions. Operator. Thank you. Perfect. At this time, if you'd like to ask a question, please press the star 1 on your telephone keypad. You may move yourself from the queue at any time by pressing the star 2 key. And once again, that is star 1 to ask a question.
Speaker Change: I'd like to thank volcker today for hosting us and I'd like to open it up for questions.
Speaker Change: Operator.
Speaker Change: At this time, if you'd like to ask a question. Please press star one on your telephone keypad, you may well move yourself from the queue at any time by pressing the star <unk> and once again that is star one to ask a question while the queue builds we'll take our first question from <unk> Rama with Maxim. Please go ahead.
Nazibur Rahman: While the queue builds, we'll take our first question from Naz Raman with Maxent. Please go ahead. Hi, everyone. Congrats on the progress. And thanks for taking my questions. I have a few if you don't mind.
Rama: Hi, everyone.
Rama: That's on the progress and thanks for taking my questions. I have asked you. If you don't mind. My first one is just on the guidance, but really just your adjusted EBITDA comment. So obviously, you're seeing growing sales.
Nazibur Rahman: The first one is just on the guidance, but really just you're just an even a comment. So obviously, you're seeing growing sales. And I'm guessing you're expecting sales to grow quarterly. but I guess, what do you expect in terms of cadence to get to positive adjusted EBITDA? I guess at this point, based on all the contracts you have and what you're sort of seeing in the market, at which point do you sort of expect to reach a break-even or a cash flow positive? So, on an adjusted EBITDA basis, which is, you know, the measure of actual cash going out the door, you know, we're going to get there pretty quickly.
Rama: I'm guessing you're expecting sales to grow quarterly.
Rama: But I guess, what do you expect in terms of the cadence to get to positive adjusted EBITDA.
Rama: I guess at this point based on all the.
Rama: Contracts, you have and what you're sort of seeing the market at what point do you sort of expect to each.
Rama: Breakeven on a cash flow positive.
Rama: Yeah.
Rama: So on an adjusted EBITA basis, which is the measure of actual cash going out the door.
Rama: We're going to get there pretty quickly.
Adam Levy: I was, we had that, you know, $240,000 one-time event in Q4, but we see nothing but growth. Q1 is traditionally our weakest quarter, and even that is going to be pretty good. We think we're going to improve on our adjusted EBITDA in Q1 over Q4 and Q3.
Rama: We have that $240000 onetime events in Q4, but we see nothing but growth Q1 is traditionally our weakest quarter and even that is going to be pretty good. We think we're going to improve on our adjusted EBITDA in Q1 over Q4 in Q3.
Nazibur Rahman: And then Q2 is where we should really start to see that the new customers coming in and really, you know, kind of ramping us up to get there. That was helpful.
Rama: Q2 is where we should really start to see that the.
Rama: New customers coming in and really you know kind of ramping us up to get there.
Speaker Change: Got it that's helpful and I guess on that point, you mentioned that you have a pipeline of new customers could you provide more context and color on I.
Nazibur Rahman: And I guess on that point, too, you mentioned that you have a pipeline of new customers. Could you provide more context and color on, I guess, how large that pipeline and also the breadth of that pipeline in terms of what industry or applications you could be, or I guess they could be essentially looking at for your products or technology? Sure. So we're usually working on, and this is the only negative of having one accelerator and there only being two in the world, we're usually working on four or five large opportunities at a given time. Currently, I think we'd say, I'd say we have four that seem to be progressing really nicely.
Speaker Change: I guess, how large that pipeline and also the breadth of the pipeline in terms of what industry you're applications could be alright, yes, they could be potentially looking at for your.
Speaker Change: Products or technology.
Speaker Change: Sure. So we're usually working on and then this is the this is the only negative of having one accelerator I mean, there are only being two in the world.
Speaker Change: We're usually working on four or five large opportunities at a given time currently I think we'd say I'd say, we have four that seem to be progressing really nicely.
Adam Levy: As we've talked about in previous calls, you know, that's a long onboarding process, right? There's lots of iterations, lots of design adjustments, lots of testing, then we do validation runs. So some of these have been in the pipeline for a year or so. Some are relatively new in three or four months. Some, for example, like the innovative optics can get to market very quickly because once you have the data to sell, the device itself is very simple. Others are more complicated. Some of them are used in diagnostics and the consistency and the performance of the gel and exactly the conductivity, the outline content, all of those things, they're constantly experimenting with to optimize whatever performance that particular company is trying to achieve.
Speaker Change: As we've talked about in previous calls.
Speaker Change: That's a long onboarding process right, there's lots of iterations lots of design adjustments lots of testing and we do validation runs. So some of these have been in the pipeline for a year or so some are relatively new in three or four months. Some for example, like the innovative optics can get to market very quickly.
Speaker Change: Because once you have the data to sell the device itself is very simple.
Speaker Change: Others are more complicated some of them are used in diagnostics and the consistency in the performance of the gel in exactly the conductivity the outline content all of those things theyre constantly experimenting with to optimize whatever performance that particular company is trying to achieve so those take longer.
Adam Levy: So those take longer to develop. And then those, of course, are 5, 10 Ks, which take time to get cleared.
Speaker Change: Develop.
Speaker Change: And then those of course are 500, 10-K, which take time to get cleared, but it's a process, but we have a pretty good pipeline.
Nazibur Rahman: But, you know, it's a process, but we have a pretty good pipeline. That was very helpful.
Speaker Change: That was very helpful and also on that point innovative optics could you provide.
Adam Levy: And also on that point, Innovative Optics, could you provide more context as to how big that market opportunity is for laser removal? And also, if the data is positive, what is your promotional strategy here? Do you plan like onboarding with Salesforce or like, and what do you plan on selling products? Or how do you plan on selling products? So we're actually partnering with Innovative Optics, who have relationships with all of the very large laser hair removal companies around the country, as well as accessibility to key opinion leaders. I've met with several dermatologists and I want to say laser cosmetic practitioners, and they seem to be very excited about this product and additional products that we might be able to sell through that sort of a channel, including something as simple, which I'm surprised by how good the response has been, as a simple cooling mask for post-procedure.
Speaker Change: Provide more context as to how big that market opportunity is.
Speaker Change: Later, well and also if the data is positive what is your promotional strategy or do you plan on like Onboarding Salesforce are like and what do you plan on selling product or how do you plan on selling products.
Speaker Change: So we're actually partnering with innovative optics, who have relationships with all of the very large laser hair removal companies.
Speaker Change: Round the country as well as.
Speaker Change: The accessibility to key opinion leaders I've met with several dermatologists and and I want to say laser cosmetic practitioners and there seem to be very excited about this product and additional products that we might be able to sell through that sort of the channel.
Speaker Change: Including something as simple, which I'm surprised by how good. The response has been as a simple cooling mask for post procedure. So if you do micro needling or you do some of these laser procedures youre faces in a lot of pain and on fire for a few days so our products masks thats very cooling sterile general to the skin high wall.
Nazibur Rahman: So if you do microneedling or you do some of these laser procedures, your face is in a lot of pain and on fire for a few days. So a product mask that's very cooling, sterile, gentle to the skin, high water content that you could take home with you could be something that doctors could sell in their offices, as well as something that practitioners will use post-procedure. Got it.
Speaker Change: Content that you could take home with you could be something that doctors could sell in their offices as well as something that practitioners will use post procedure.
Speaker Change: Got it.
Adam Levy: When do you, I mean, if data's positive, when do you expect to start selling products? So we think we're going to start selling product on that right around mid-year. This is not a heavy regulatory lift, so as long as we have a good value proposition to go out, we expect to see this be accreted for us, you know, definitely in 2025.
Speaker Change: When do you I mean, if data is positive what do you expect to start selling product.
Speaker Change: So we think we're gonna start selling product on that.
Right around mid year.
We this is not a heavy regulatory lift so as long as we have a good value proposition to go out we expect to see this be accretive for us definitely in 2025.
Speaker Change: And one last question if I may did you provide.
Adam Levy: And one last question, if I may, could you provide some updates on the AVI resounding device and how that launch is going? Do you have any potential metrics you can provide us? And how do you see that? Sorry. Yeah, so AbbVie is pretty much, you know, on the schedule that we've always talked about. We'll be shipping them product in Q2 on their initial orders. That is the anticipated plan. We got we're receiving orders in Q1. That is part of the plan, how their actual launch is going. It hasn't started yet. I believe they have a good plan.
Speaker Change: Update on the AB Sonic device and how that launch is going to have any potential metrics you could provide us.
Speaker Change: And how do you see that.
Speaker Change: Alright.
Speaker Change: Yes, so abbvie is pretty much on the schedule that we've always talked about we will be shipping them product in Q2 on their initial orders that is the anticipated plan. We got we're receiving orders in Q1 that is part of the plan.
Speaker Change: How theyre actual launches going it hasn't started yet I believe they have a good plan, but again they don't they don't bring me into every one of their meetings for how they're going to market the product.
Nazibur Rahman: But again, they don't they don't bring me into every one of their meetings for how they're going to market the product. We just have to be ready to supply them with product according to their schedule. Got it. That was very helpful. Thanks for taking my question. Thank you. And as a reminder, ladies and gentlemen, that is star one for a question. We'll pause for a moment.
Speaker Change: Just have to be ready to supply them with product according to the schedule.
Speaker Change: Got it that's very helpful. Thanks for taking my questions.
Speaker Change: Sure. Thanks, Dan Thank you and as a reminder, ladies and gentlemen that is star one for a question, we'll pause for a moment.
Speaker Change: Okay.
Operator: And at this time, we have no further questions.
Speaker Change: And at this time, we have no further questions I'd like to turn the call back over to Adam Levi for any closing or additional remarks.
Adam Levy: I'd like to turn the call back over to Adam Levy for any closing or additional remarks. Thank you, operator. And just we have a very bright future in front of us. Thank you so much to all of our shareholders for supporting the company. And I look forward to seeing you with hopefully more great results in the next quarter. Thank you. Thank you and this does conclude today's program. Thank you for your participation. You may disconnect at any time.
Speaker Change: Thank you operator, and just we have a very bright future in front of us. Thank you. So much to all of our shareholders for supporting the company and I look forward to seeing you with hopefully more great results in the next quarter. Thank you.
Speaker Change: Thank you and this does conclude today's program. Thank you for your participation you may disconnect at any time.
Speaker Change: Mhm.
Speaker Change: Hum.
Unknown Attendee: Unknown Attendee, Adam Drapczuk, Adam Levy, Valter Pinto, Nexgel, Levy, Levy, Levy,
Speaker Change: Hum.
Speaker Change: Uh-huh.
Speaker Change: Yes.