Q2 2025 Strata Skin Sciences Inc Earnings Call and Business Update
And corporate update conference call.
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Yeah.
Speaker #1: Ladies and gentlemen, thank you for standing by. Good afternoon and welcome to the STRATA Skin Sciences second quarter 2025 financial results and corporate update conference call.
I would like to turn the call over to Julie Brown of Cole II.
The company's investor relation firm Pease go ahead Sir.
Yeah.
Thank you Steve Good afternoon, and thank you all for participating in today's conference call earlier. This afternoon. The company released its financial results for the quarter ended June 32025.
Speaker #1: At this time, all participants are in the listen-only mode. Should you need assistance, please signal a conference specialist by pressing the STRATA key followed by zero.
Copy of that press release can be found on the company's website at www Dot strata skin sciences dot com under the investors tab.
Speaker #1: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press STRATA then 1 on your telephone keypad.
Joining me on today's earnings call from strata skin Sciences management team, our Doctor dollar of Rock Alley, Chief Executive Officer, and Jon Gilligan, Vice President Finance during.
Speaker #1: To withdraw your question, please press STRATA then two. Participants of this call are advised that the audio of this conference call is being broadcast live over the internet and is also being recorded for playback purposes.
During this call management will be making forward looking statements, including statements that address strata skin sciences expectations for future performance or operational results forward looking statements involve risks and other factors that may cause actual results to differ materially from those statements for more information about these risks please refer to the risk.
Speaker #1: A webcast replay of the call will be available approximately one hour after the end of the call through February 13, 2026. I would like to turn the call over to Jules Abraham of Q4, the company's investor relations firm.
Jules Abraham: I would like to turn the call over to Jules Abraham of CoreIR, the company's investor relations firm. Please go ahead, sir.
Factors described in strata skin Sciences. Most recently filed annual reports on Form 10-K, and subsequent periodic reports filed with the SEC and strata skin Sciences press release that accompanies this call, particularly the cautionary statements Manhattan.
Speaker #1: Please go ahead, sir.
Speaker #3: Thank you, Steve. Good afternoon, and thank you all for participating. In today's conference call, earlier this afternoon, the company released its financial results for the quarter ended June 30, 2025.
Steve (CORE IR): Thank you, Steve. Good afternoon, and thank you all for participating in today's conference call. Earlier this afternoon, the company released its financial results for the quarter ended June 30, 2025. A copy of that press release can be found on the company's website at www.strataskin-sciences.com under the Investors tab. Joining me on today's earnings call from Strataskin Sciences' management team are Dr. Dolev Rafaeli, Chief Executive Officer, and John Gillings, Vice President of Finance. During this call, management will be making forward-looking statements, including statements that address Strataskin Sciences' expectations for future performance or operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements.
The contents of this call contains time sensitive information that is accurate only as of today August 13, 2025, and except as required by law strata skin sciences disclaims any obligation to publicly update or revise any information to reflect events or circumstances Medicare after this call.
Speaker #3: A copy of that press release can be found on the company's website at www.strataskinsciences.com, under the Investors tab. Joining me on today's earnings call from the Strataskin Sciences Management Team are Dr. Dolev Rafaeli, Chief Executive Officer, and John Gillings, Vice President of Finance.
It is now my pleasure to turn the call over to CEO, Dr. Dolan Raphael at Dulles.
Speaker #3: During this call, management will be making forward-looking statements, including statements that address Strataskins Sciences' expectations for future performance or operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements.
Thank you Jos and good afternoon to everyone on the call.
The second quarter of 2025 saw pivotal development.
Recently, our business for future growth and less new shareholder value creation.
Speaker #3: For more information about these risks, please refer to the risk factors described in Strataskin Sciences' most recently filed annual report on Form 10-K and subsequent periodic reports filed with the SEC, as well as Strataskin Sciences' press release that accompanies this call, particularly the cautionary statements within.
Steve (CORE IR): For more information about these risks, please refer to the risk factors described in Strataskin Sciences' most recently filed annual report on Form 10-K and subsequent periodic reports filed with the SEC and Strataskin Sciences' press release that accompanies this call, particularly the cautionary statements within. The contents of this call contain time-sensitive information that is accurate only as of today, August 13, 2025, and except as required by law, Strataskin Sciences disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It's now my pleasure to turn the call over to CEO Dr. Dolev Rafaeli. Dolev.
We're especially heartened by the American Medical Association CPT editorial panel was historic expansion of CPT codes, where stratas extra clear white nanometer excimer laser in may of this year.
The revision of these codes.
<unk> reimbursement eligibility for excimer laser treatments to include multiple inflammatory and autoimmune skin conditions beyond their original psoriasis indication, enabling coverage for conditions, such as been long ago atopic dermatitis.
Speaker #3: The contents of this call contains time-sensitive information that is accurate only as of today, August 13th, 2025. And except as required by law, Strataskins Sciences disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call.
My closest <unk> like and planners on the PCR Yonker and cutaneous T cell lymphoma, better known as cities seal among approximately 30 indications.
Speaker #3: It's now my pleasure to turn the call over to CEO Dr. Dolev Rafaeli. Dolev.
Speaker #4: Thank you, Jules, and good afternoon to everyone on the call. The second quarter of 2025 saw pivotal developments positioning our business for future growth and lasting shareholder value creation.
Dolev Rafaeli: Thank you, Jules, and good afternoon to everyone on the call. The second quarter of 2025 saw pivotal developments positioning our business for future growth and lasting shareholder value creation. We're especially heartened by the American Medical Association, the AMA, CPT editorial panel's historic expansion of CPT codes for Strata's XTRAX-08 nanometer Excimer Laser in May of this year. The revision of these codes expands reimbursement eligibility for Excimer Laser treatments to include multiple inflammatory and autoimmune skin conditions beyond their original psoriasis indication, enabling coverage for conditions such as vitiligo, atopic dermatitis, mycosis fungoids, lichen planus, alopecia areata, and cutaneous T-cell lymphoma, better known as CTCL, among approximately 30 indications. The implications of these changes could not be more dramatic for us and our providers.
Implications of these changes could not be more dramatic for us and our providers.
The revisions are set to go into effect on January one 2027, we have come.
Speaker #4: We're especially heartened by the American Medical Association (the AMA) and the CPT Editorial Panel's historic expansion of CPT codes for Stratas Extract 308 nanometer excimer laser in May of this year.
Commenced the process to accelerate access to these revised codes through temporary J codes, assuming successful implementation of the temporary J codes into the 2026 reimbursement period, we have the potential to pull forward revenue.
Speaker #4: The revision of these codes expands reimbursement eligibility for excimer laser treatments to include multiple inflammatory and autoimmune skin conditions beyond their original psoriasis indication, enabling coverage for conditions such as vitiligo, atopic dermatitis, mycosis fungoides, lichen planus, alopecia areata, and cutaneous T-cell lymphoma, better known as CTC.
Two entities by one year as we expand into new indications.
These developments open our addressable market to 30 million patients expanding our total available market Tam threefold. In addition, we have submitted economic data to support a potential increase in the reimbursement rates for each of our codes.
Speaker #4: Among approximately 30 indications, the implications of these changes could not be more dramatic for us and our providers. While the revisions are set to go into effect on January 1st, 2027, we have commenced the process to accelerate access to these revised codes through temporary G-codes.
Should rates increase.
Be approved we could be headed into a period, where both the number of patients eligible for treatment and the revenue per patient procedure are increasing simultaneously.
Dolev Rafaeli: While the revisions are set to go into effect on January 1st, 2027, we have commenced the process to accelerate access to these revised codes through temporary G codes. Assuming successful implementation of the temporary G codes into the 2026 reimbursement period, we have the potential to pull forward revenue opportunities by one year as we expand into new indications. These developments open our addressable market to 30 million patients, expanding our total available market, SAM, threefold. In addition, we have submitted economic data to support a potential increase in the reimbursement rates for each of our codes. Should rates increase, be approved, we could be headed into a period where both the number of patients eligible for the treatments and the revenue per patient procedure are increasing simultaneously. We've also continued to strengthen our practice partners through our Elevate360 consulting model and our innovative DTC campaigns.
We've also continued to strengthen our practice partners through our Lv 360 consulting model and our innovative DTC campaigns now let me 360 focuses on improving revenue for both clinics and straddle by supporting the implementation.
Speaker #4: Assuming successful implementation of the temporary G-codes into the 2026 reimbursement period, we have the potential to pull forward revenue opportunities by one year as we expand into new indications.
<unk> of best practices to drive.
Speaker #4: These developments open our addressable market to 30 million patients, expanding our total available market, FAM, threefold in addition we have submitted economic data to support a potential increase in the reimbursement rates for each of our codes.
Optimal use of the extra lasers by providing deeper analytics, we help physicians understand the financial opportunities associated with the patients they already see in their clinics and those they have prescribed but did not follow through with extra scheduling.
Speaker #4: Should rates increase, be approved, we could be headed into a period where both the number of patients eligible for the treatments and the revenue per patient procedure are increasing simultaneously.
Having these best practices in place lays the groundwork for effectively managing and benefiting from the dramatic increase in patients eligibility for reimbursement under the extended CPT codes I mentioned previously.
Speaker #4: We've also continued to strengthen our practice partners through our Elevate 360 consulting model and our innovative DTC campaigns. Elevate 360 focuses on improving revenue for both clinics and Stratas by supporting the implementation of best practices to drive optimal use of the extract lasers.
Optimizing extra devices placement in physician's practices and facilitates more procedures.
Opportunity.
Dolev Rafaeli: Elevate360 focuses on improving revenue for both clinics and Strata by supporting the implementation of best practices to drive optimal use of the XTRAX lasers. By providing deeper analytics, we help physicians understand the financial opportunities associated with the patients they already see in their clinics and those they have prescribed but did not follow through with extra scheduling. Having these best practices in place lays the groundwork for effectively managing and benefiting from the dramatic increase in patients' eligibility for reimbursement under the expanded CPT codes I mentioned previously. Optimizing extra devices placement in physicians' practices facilitates more procedures and opportunity utilizes the resources we provide. Further, simultaneously expanding our direct-to-consumer marketing campaign increases extra device utilization and recurring revenue per device across our domestic installed base.
Opportunity.
Opportunity that utilizes the resources, we provide further simultaneously extending our direct to consumer marketing campaign increases extra device utilization and recurring revenue per device across our domestic installed base.
Speaker #4: By providing deeper analytics we help physicians understand the financial opportunities associated with the patients they already see in their clinics and those they have prescribed but did not follow through with extract scheduling.
We ended the second quarter with 844 units placed with partners clinics in the U S. Down-home 846 at the end of the first quarter.
Speaker #4: Having these best practices in place lays the groundwork for effectively managing and benefiting from the dramatic increase in patients eligibility for reimbursement under the Expanded CPT codes I mentioned previously.
While we continue to seek optimized optimization of the installed base the activity behind the numbers paint a more complete picture.
During the second quarter, we removed 21 devices from suboptimal partners in place 19 devices with new accounts that are interested in growing with US importantly, these 19 placements represent the higher the highest number of placements in the United.
Speaker #4: Optimizing extract devices placement in physicians' practices facilitates more procedures and opportunity to utilize the resources we provide. Further, simultaneously expanding our direct-to-consumer marketing campaign increases extract device utilization and recurrent revenue per device across our domestic installed base.
In the last six quarters, which we view as a positive leading indicator for future revenue growth.
Given these initiatives.
These growth driving.
Driving codes developments.
We continue to believe that the opportunity to increase utilization for our extra devices is significant and we continue to see positive results.
Speaker #4: We ended the second quarter with 844 units placed with partners' clinics in the U.S., down from 846 at the end of the first quarter.
Dolev Rafaeli: We ended the second quarter with 844 units placed with partners' clinics in the US, down from 846 at the end of the first quarter. While we continue to seek optimization of the installed base, the activity behind the numbers paints a more complete picture. During the second quarter, we removed 21 devices from suboptimal partners and placed 19 devices with new accounts that are interested in growing with us. Importantly, these 19 placements represent the highest number of placements in the United States in the last six quarters, which we view as a positive leading indicator for the future revenue growth. Given these initiatives and these growth-driving codes' developments, we continue to believe that the opportunity to increase utilization for our extra devices is significant, and we continue to see positive results from the refocus of our DTC strategy.
Speaker #4: While we continue to seek optimized optimization of the installed base, the activity behind the numbers paints a more complete picture. During the second quarter, we removed 21 devices from suboptimal partners and placed 19 devices with new accounts that are interested in growing with us.
From the refocus of our DTC strategy.
We generated roughly 1100, BTC driven patient appointments in the second quarter with a 61%. Shortly in addition, our proprietary rdx system handled benefits score approximately 5100 patients in the second quarter.
Of these patients roughly 1000, where acne patients with our therapy or ex partner clinics and about 2500, where psoriasis patients the balance of patients where other indications treated by X track that would have generally involve extra effort.
Speaker #4: Importantly, these 19 placements represent the highest number of placements in the United States in the last six quarters, which we view as a positive leading indicator for the future revenue growth.
Speaker #4: Given these initiatives and these growth-driving code developments, we continue to believe that the opportunity to increase utilization for our extract devices is significant, and we continue to see positive results from the refocus of our DTC strategy.
And preapprovals illustrating the strong demand for excimer laser therapy. Among these patients who will soon be more easily covered under the updated CPT codes.
Turning briefly to <unk>, we reached an installed base of 161 therapy or <unk> devices in the U S and at the end of the second quarter up from 117 devices at the end of Q2 2024 therapy Rex continues to be a small but growing portion of our revenue.
Speaker #4: We generated roughly 1,100 DTC-driven patient appointments in the second quarter, with a 61% show rate. In addition, our proprietary RDX system handled benefits for approximately 5,100 patients in the second quarter.
Dolev Rafaeli: We generated roughly 1,100 DTC-driven patient appointments in the second quarter with a 61% show rate. In addition, our proprietary RDX system handled benefits for approximately 5,100 patients in the second quarter. Of these patients, roughly 1,000 were acne patients with our TherapyRx partner clinics, and about 2,500 were psoriasis patients. The balance of patients were other indications treated by XTRAX that would have generally involved extra effort and pre-approvals, illustrating the strong demand for Excimer Laser therapy among these patients who will soon be more easily covered under the updated CPT codes. Turning briefly to TherapyRx, we reached an installed base of 161 TherapyRx devices in the US at the end of the second quarter, up from 117 devices at the end of Q2 2024. TherapyRx continues to be a small but growing portion of our revenue.
On the first quarter call in May we highlighted the potential impact of tariffs on our international business.
Speaker #4: Of these patients, roughly 1,000 were acne patients, with our therapy X partner clinics, and about 2,500 were psoriasis patients. The balance of patients were other indications, treated by extract, that would have generally involved extra effort and pre-approvals illustrating the strong demand for excimer laser therapy among these patients who will soon be more easily covered under the updated CPT codes.
While we were able to completely to complete some sales in China. During the 90 day pair of pause the uncertainty about the future. They have caused has created a temporary drag on our international business, where we generated international revenue of two.
$6 million in the second quarter, which declined 15% compared to the prior year period International equipment sales were significantly affected by leading trade disruption in China and distributor challenges in Korea, we continue to see.
Speaker #4: Turning briefly to Therapy X, we reached an installed base of 161 Therapy X devices in the U.S. at the end of the second quarter.
Speaker #4: Up from 117 devices at the end of Q2 2024. Therapy X continues to be a small but growing portion of our revenue. On the first quarter call, in May, we highlighted the potential impact of the tariffs on our international business.
Strong underlying demand in these markets and expect these geographies to return to growth once the once the things.
Things stabilize.
Dolev Rafaeli: On the first quarter call in May, we highlighted the potential impact of the tariffs on our international business. While we were able to complete some sales in China during the 90-day tariff pause, the uncertainty about the future they have caused has created a temporary drag on our international business. We generated international revenue of 2.6 million in the second quarter, which declined 15% compared to the prior year period. International equipment sales were significantly affected by lingering trade disruption in China and distributor challenges in Korea. We continue to see strong underlying demand in these markets and expect these geographies to return to growth once things stabilize.
While we will continue navigating the CS.
Seasonality of our business, specifically, a slower first and second quarters as we turn to the second half of 2025, we continue to anticipate normal seasonality gaining positive momentum heading into the year and with the caveat that that tariff still represents a.
Speaker #4: While we were able to completely to complete some sales in China during the 90-day tariff pause, the uncertainty about the future they have caused has created a temporary drag on our international business.
Unknown.
Speaker #4: We generated international revenue of $2.6 million in the second quarter, which declined 15% compared to the prior year period. International equipment sales were significantly affected by lingering trade disruptions in China and distributor challenges in Korea.
In 2026, we look forward to the potential positive impact of our ongoing discussions with the centers of Medicare and Medicaid services or CMS to obtain temporary codes that would accelerate access to our recently expanded reimbursement for extracts.
Notably we have secured strong support from members of the legislature pay.
Speaker #4: We continue to see strong underlying demand in these markets and expect these geographies to return to growth once things stabilize. While we will continue navigating the seasonality of our business, specifically a slower first and second quarters as we turn to the second half of 2025, we continue to anticipate normal seasonality gaining positive momentum heading into the year-end, with the caveat that tariffs still represent a significant unknown.
Patient advocacy groups and leading academic key opinion leaders. We are further encouraged by the growing body of peer reviewed publicly.
Dolev Rafaeli: While we will continue navigating the seasonality of our business, specifically a slower first and second quarters as we turn to the second half of 2025, we continue to anticipate normal seasonality gaining positive momentum heading into the year-end, with the caveat that tariffs still represent a significant unknown. In 2026, we look forward to the potential positive impact of our ongoing discussions with the Centers of Medicare and Medicaid Services, or CMS, to obtain temporary codes that would accelerate access to our recently expanded reimbursement for XTRAX. Notably, we have secured strong support from members of the legislature, patient advocacy groups, and leading academic key opinion leaders. We are further encouraged by the growing body of peer-reviewed, publicly available clinical studies supporting Excimer Laser therapy, which points to the new and enhanced application, adding to the hundreds of other studies published over the years.
Publicly available.
Available clinical study supporting excimer laser therapy, which points to the new and enhanced application, adding to the hundreds of other studies published over the years.
Last Thursday, we published a press release.
Reimbursement and clinical updates that we would point to you point out to you if you have not already rented.
Speaker #4: In 2026, we look forward to the potential positive impacts of our ongoing discussions with the Centers for Medicare and Medicaid Services, or CMS, to obtain temporary codes that would accelerate access to our recently expanded reimbursement for extract.
In addition, this press release offer a brief update on our litigation against laser optic regarding its use of false and misleading statements in its marketing.
We believe we are strongly positioned in this suite and have the potential to be awarded significant damages.
Speaker #4: Notably, we have secured strong support from members of the legislature, patient advocacy groups, and leading academic key opinion leaders; we are further encouraged by the growing body of peer-reviewed publicly available clinical study supporting excimer laser therapy, which points to the new and enhanced application adding to the hundreds of other studies published over the years.
We are pleased that the court agreed with our position that laser optic Korea.
Parent of laser optic America should be added as a defendant. In addition, see Dalton LLC the entity that represented laser optic Korea.
Interest in the United States has been added as a defendant. These are important developments and help ensure that should damages be awarded.
Speaker #4: Last Thursday, we published a press release with reimbursement and clinical updates that we would like to point out to you if you have not already read it.
Dolev Rafaeli: Last Thursday, we published a press release with reimbursement and clinical updates that we would point out to you if you have not already read it. In addition, this press release offered a brief update on our litigation against Laser Optics regarding its use of false and misleading statements in its marketing. We believe we are strongly positioned in this suit and have the potential to be awarded significant damages. We are pleased that the court agreed with our position that Laser Optic Korea, the parent of Laser Optic America, should be added as a defendant. In addition, C. Dalton LLC, the entity that represented Laser Optic Korea's interests in the United States, has been added as a defendant. These are important developments and help ensure that should damages be awarded, these responsible will not be able to shield themselves behind other legal entities.
These are responsible will not be able to shield themselves behind other legal entities.
Speaker #4: In addition, this press release offered a brief update on our litigation against Laser Optic regarding its use of false and misleading statements in its marketing.
Before turning the call over to John for our financial discussion, let me take a moment to discuss the three recent publications that support excimer laser in vitiligo and atopic dermatitis, expanding the potential use of extra.
Speaker #4: We believe we are strongly positioned in this suit and have the potential to be awarded significant damages; we are pleased that the court agreed with our position that laser optic Korea parent of laser optic America should be added as a defendant.
In a peer reviewed study features in the international Journal of Dermatology, a multicenter randomized controlled trial evaluated the efficacy and safety of <unk> nanometer excimer laser therapy.
Speaker #4: In addition, C. Dalton, LLC, the entity that represented Laser Optic Korea's interests in the United States, has been added as a defendant. These are important developments and help ensure that should damages be awarded, those responsible will not be able to shield themselves behind other legal entities.
In combination with oral JAK inhibitors oral JAK inhibitors is a novel class of immune modulating drugs.
A total of 240 adult patients were enrolled and monitored over the 52 week periods. The study demonstrated superior re pigmentation in combination therapy with patients receiving three nanometer excimer laser combined with the JAK inhibitor.
Speaker #4: Before turning the call over to John, for our financial discussion, let me take a moment to discuss the three recent publications that support excimer laser and vitiligo and atopic dermatitis, expanding the potential use of extract.
Dolev Rafaeli: Before turning the call over to John for our financial discussion, let me take a moment to discuss the three recent publications that support Excimer Laser in vitiligo and atopic dermatitis, expanding the potential use of XTRAX. In a peer-reviewed study featured in the International Journal of Dermatology, a multicenter, randomized controlled trial evaluated the efficacy and safety of 308 nanometer Excimer Laser therapy in combination with oral JAK inhibitors. Oral JAK inhibitors are a novel class of immune-modulating drugs. A total of 240 adult patients were enrolled and monitored over the 52-week period. The study demonstrated superior repigmentation in combination therapy, with patients receiving 308 nanometer Excimer Laser combined with the JAK inhibitor reporting 100% overall response rate and 96% pigment stability, indicating a durable response. Further, the study showed that treatment was well tolerated across all groups with no serious adverse events reported over the 52-week trial.
Our reporting 100% overall response rate and 96% pigments stability, indicating a durable response further the study showed that treatment was well tolerated across all groups with no serious adverse events reported over the <unk>.
Speaker #4: In the peer-reviewed study, featured in the International Journal of Dermatology, a multi-center randomized controlled trial evaluated the efficacy and safety of 308 nanometer excimer laser therapy in combination with oral JAK inhibitors.
52 week trial it.
It is noteworthy to point out that there is no other technology that is enabling such results and that the additional the addition of <unk> as they covered indication will open the door for somewhere between three and $4 million existing patients.
Speaker #4: Oral JAK inhibitors is a novel class of immune-modulating drugs. A total of 240 adult patients were enrolled and monitored over the 52-week period. The study demonstrated superior repigmentation in combination therapy with patients receiving 308 nanometer excimer laser combined with the JAK inhibitor reporting 100% overall response rate and 96% pigment stability indicating a durable response.
Seeking not only temporary remission.
Gains from the pharmaceuticals, but full re pigmentation.
A second study published in human vaccine and and and.
Immunotherapy.
Delights conjunctive conjunctive use of excimer laser with the JAK inhibitor on a patient that has developed.
Mental vitiligo one week after her third HPV vaccine.
Speaker #4: Further, the study showed that treatment was well tolerated across all groups, with no serious adverse events reported over the 52-week trial. It is noteworthy to point out that there is no other technology that is enabling such results, and that the additional vitiligo indication will open the door for somewhere between three and four million existing patients seeking not only temporary remission gains from pharmaceuticals, but full repigmentation.
Achieving approximately 70% re pigmentation.
Further a third study published in dermatology therapy evaluated the safety and efficacy of <unk> nanometer excimer laser therapy in conjunction with JAK inhibitors for treatment of refractory vitiligo in patients complicated by moderate to severe atopic derma.
Dolev Rafaeli: It is noteworthy to point out that there is no other technology that is enabling such results and that the addition of vitiligo as a covered indication will open the door for somewhere between 3 and 4 million existing patients seeking not only temporary remission gained from the pharmaceuticals but full repigmentation. A second study published in Human Vaccine and Immunotherapy highlights conjunctive use of Excimer Laser with JAK inhibitor on a patient that has developed segmental vitiligo one week after her third HPV vaccine, achieving approximately 70% repigmentation. Further, a third study published in Dermatology Therapy evaluated the safety and efficacy of 308 nanometer Excimer Laser therapy in conjunction with JAK inhibitors for treatment of refractory vitiligo in patients complicated by moderate to severe atopic dermatitis. The trial involved 19 patients who had not responded to conventional therapy.
Right.
The trial involved 19 patients who had not responded to conventional therapy.
Patients showing a median.
55% <unk> improvement.
With facial and neck areas risk.
Speaker #4: A second study, published in Human Vaccine and Immunotherapy, highlights conjunctive use of excimer laser with JAK inhibitor on a patient that has developed segmental vitiligo one week after her third HPV vaccine achieving approximately 70% repigmentation.
Responding.
First with greater than 70% improvement importantly, the 55% means as the improvement in these challenging patients.
Compared to 39% improvement with the JAK inhibitor alone, suggesting a strong synergy.
Synergistic mechanism.
Speaker #4: Further, a third study published in Dermatology Therapy evaluated the safety and efficacy of 308 nanometer excimer laser therapy in conjunction with JAK inhibitors for treatment of refractory vitiligo in patients complicated by moderate to severe atopic dermatitis.
Domestic.
The domestic market has approximately $18 million.
Atopic dermatitis patients.
Importantly, straddle has been.
Preparing for the potential expansion into combined therapy.
<unk> owns.
Patents that were granted recently for the methods of combining systemic biologics and JAK inhibitor medication with excimer laser.
Speaker #4: The trial involved 19 patients who had not responded to conventional therapy. Patients showing a mean 55% vase improvement with facial and neck areas responding best with greater than 70% improvement.
Dolev Rafaeli: Patients showing a mean 55% VASI improvement, with facial and neck areas responding best with greater than 70% improvement. Importantly, the 55% mean VASI improvement in these challenging patients compared to 39% improvement with the JAK inhibitor alone, suggesting a strong synergistic mechanism. The domestic market has approximately 18 million atopic dermatitis patients. Importantly, Strata has been preparing for the potential expansion into combined therapy and owns patents that were granted recently for the methods of combining systemic, biologic, and JAK inhibitor medication with Excimer Laser dosimetry-controlled treatments. This positions us well for the potential market expansion associated with combination treatment for more challenging patients. With that, I'd like to turn the call over to John, who will review our financial results in more detail. John?
Cemetery controlled treatments.
This positions us well for the potential market expansion.
Associated with combination treatment for more challenging patients with that I'd like to turn the call over to John who will review our financial results in more detail John.
Speaker #4: Importantly, the 55% mean VASI improvement in these challenging patients compares to a 39% improvement with the JAK inhibitor alone. This suggests a strong synergistic mechanism. The domestic market has approximately 18 million atopic dermatitis patients.
Thank you.
Our total revenue for the second quarter of 2025 was $7 7 million down 9% compared to Q2 of 2024. This was driven primarily by the challenging international environment don't described.
Speaker #4: Importantly, Strata has been preparing for the potential expansion into combined therapy and owns patents that were granted recently for the methods of combining systemic biologic and JAK inhibitor medication with excimer laser dosimetry-controlled treatments.
Global recurring revenue for the second quarter of 2025 was $5 1 million down 4% versus the prior year period.
Turning to the U S. Excluding deferred billings and other GAAP adjustments extract gross domestic recurring billings were $4 7 million in the second quarter of 2025, a decline of 2% versus the prior year period.
Moving to the equipment business revenue was $2 5 million in the second quarter of 2025 down 18% versus the second quarter of 2024. This was due primarily to challenges in specific international markets with lingering trade disputations in China and supplier challenges in Korea grow.
Speaker #4: This positions us to well for the potential market expansion associated with combination treatment for more challenging patients. With that, I'd like to turn the call over to John, who will review our financial results in more detail.
Speaker #4: John?
<unk> profit of $4 3 million or <unk>, 56% of revenue for the three months ended June 32025 declined from $5 million. During the same period in 2020 for the reduction in gross profit was driven primarily by lower sales with increases in manufacturing overhead contributing.
Speaker #1: Thank you, Dolev. Our total revenue for the second quarter of 2025 was $7.7 million. Down 9% compared to Q2 of 2024. This was driven primarily by the challenging international environment Dolev described.
John Gillings: Thank you, Dolev. Our total revenue for the second quarter of 2025 was 7.7 million, down 9% compared to Q2 of 2024. This was driven primarily by the challenging international environment Dolev described. Global recurring revenue for the second quarter of 2025 was 5.1 million, down 4% versus the prior year period. Turning to the US, excluding deferred billings and other gap adjustments, XTRAX gross domestic recurring billings were 4.7 million in the second quarter of 2025, a decline of 2% versus the prior year period. Moving to the equipment business, revenue was 2.5 million in the second quarter of 2025, down 18% versus the second quarter of 2024. This was due primarily to challenges in specific international markets, with lingering trade disputations in China and supplier challenges in Korea.
Speaker #1: Global recurring revenue for the second quarter of 2025 was $5.1 million, down 4% versus the prior year period. Turning to the US, excluding deferred billings and other gap adjustments, extract gross domestic recurring billings were $4.7 million in the second quarter of 2025, a decline of 2% versus the prior year period.
Total operating expenses were $6 5 million in the second quarter of 2025 up roughly $1 million versus $5 5 million in the prior year period engineering and product development was down 57% year over year, selling and marketing increased 16% versus the prior year due primarily to increases in head count.
In the sales and call center.
Speaker #1: Moving to the equipment business, revenue was $2.5 million in the second quarter of 2025, down 18% versus the second quarter of 2024. This was due primarily to challenges in specific international markets, with lingering trade disputations in China, and supplier challenges in Korea.
An increase in DTC spending.
G&A expense increased roughly 700000 versus the prior year period.
Of this roughly 340000 is due to litigation that we have chosen to pursue primarily against laser optic in.
In addition to this G&A expense in the second quarter of 2025 as compared to an abnormally low quarter in the prior year. The second quarter of 2024 had the lowest G&A expense of the year coming in 500000 below Q1 of 2024, which was the next lowest quarter of the year.
Speaker #1: Gross profit of $4.3 million or 56% of revenue for the three months ended June 30th, 2025, declined from $5 million during the same period in 2024.
John Gillings: Gross profit of 4.3 million, or 56% of revenue for the three months ended June 30, 2025, declined from 5 million during the same period in 2024. The reduction in gross profit was driven primarily by lower sales, with increases in manufacturing overhead contributing. Total operating expenses were 6.5 million in the second quarter of 2025, up roughly 1 million versus 5.5 million in the prior year period. Engineering and product development was down 57% year over year. Selling and marketing increased 16% versus the prior year, due primarily to increases in headcount in the sales and call center and increase in DTC spending. G&A expense increased roughly 700,000 versus the prior year period. Of this, roughly 340,000 is due to litigation that we have chosen to pursue, primarily against Laser Optic.
Speaker #1: The reduction in gross profit was driven primarily by lower sales, with increases in manufacturing overhead contributing. Total operating expenses were $6.5 million in the second quarter of 2025, up roughly $1 million compared to $5.5 million in the prior year period.
Adjusted EBITDA for the second quarter was a loss of 762000.
Turning to the cash flow statement cash used in operations was $1 9 million in the second quarter of this $1 3 million represents a payment of restricted cash to the state of New York related to the sales tax accrual that we took in the third quarter of 2024.
Speaker #1: Engineering and product development was down 57% year over year, selling and marketing increased 16% versus the prior year, due primarily to increases in headcount in the sales and call center, and increase in DTC spending.
The remaining 600000, roughly 340000 relates to the legal expenses I described previously we exited Q2 2025 with cash and equivalents of $6 million.
Speaker #1: G&A expense increased roughly $700,000 versus the prior year period. Of this, roughly $340,000 is due to litigation that we have chosen to pursue, primarily against laser optic.
As of June 32025, the company had $4 million 171161 common shares outstanding.
Speaker #1: In addition to this, G&A expense in the second quarter of 2025 is compared to an abnormally low quarter in the prior year. The second quarter of 2024 had the lowest G&A expense of the year, coming in $500,000 below Q1 of 2024, which was the next lowest quarter of the year.
John Gillings: In addition to this, G&A expense in the second quarter of 2025 is compared to an abnormally low quarter in the prior year. The second quarter of 2024 had the lowest G&A expense of the year, coming in 500,000 below Q1 of 2024, which was the next lowest quarter of the year. Adjusted EBITDA for the second quarter was a loss of 762,000. Turning to the cash flow statement, cash used in operations was 1.9 million in the second quarter. Of this, 1.3 million represents a payment of restricted cash to the state of New York related to the sales tax accrual that we took in the third quarter of 2024. Of the remaining 600,000, roughly 340,000 relates to the legal expenses I described previously. We exited Q2 2025 with cash and equivalents of 6 million. As of June 30, 2025, the company had 4,171,161 common shares outstanding.
That concludes my prepared remarks, and I'd like to turn the call back over to dollars for any remaining comments.
Thank you John in summary, our team is extremely passionate about our business and laser focused on driving growth. We are excited about the.
Speaker #1: Adjusted EBITDA for the second quarter was a loss of $762,000. Turning to the cash flow statement, cash used in operations was $1.9 million in the second quarter.
What lies ahead, including seasonality stronger second half of 2025 as well as a potential tripling of our patient population with expanded indications for use of our excimer laser given favorable reimbursement beginning in 2026 using temporary J codes.
Speaker #1: Of this, $1.3 million represents a payment of restricted cash to the State of New York, related to the sales tax accrual that we took in the third quarter of 2024.
Speaker #1: Of the remaining $600,000, roughly $340,000 relates to the legal expenses I described previously. We exited Q2 2025 with cash and equivalents of $6 million.
That said, we believe it is important caution to caution investors about the potential impact of tariffs.
On our international business.
While it has no meaningful impact on our business in the first quarter, we saw some weakening in China in the second quarter, we hope to move past these issues and hope to be able to offer greater clarity on the third quarter call, which we are.
Speaker #1: As of June 30th, 2025, the company had $4 million 171,161 common shares outstanding. That concludes my prepared remarks, and I'd like to turn the call back over to Dolev for any remaining comments.
John Gillings: That concludes my prepared remarks, and I'd like to turn the call back over to Dolev for any remaining comments.
Speaker #4: Thank you, John. In summary, our team is extremely passionate about our business and laser-focused on driving growth. We are excited about what lies ahead, including a seasonally stronger second half of 2025, as well as a potential tripling of our patient population with expanded indications for the use of our excimer laser, given favorable reimbursement beginning in 2026 using temporary G-codes.
Dolev Rafaeli: Thank you, John. In summary, our team is extremely passionate about our business and laser-focused on driving growth. We are excited about what lies ahead, including a seasonality stronger second half of 2025, as well as a potential tripling of our patient population with expanded indications for use of our Excimer Laser, given favorable reimbursement beginning in 2026 using temporary G codes. That said, we believe it is important to caution investors about the potential impact of tariffs on our international business. While it is no meaningful impact on our business in the first quarter, we saw some weakening in China in the second quarter. We hope to move past these issues and hope to be able to offer greater clarity on the third quarter call, which we expect to hold in mid-November.
Expect to hold in mid November now I'd like to turn the call over to the operator, so that we can begin the question and answer session operator.
Thank you.
We'll now begin the question and answer session.
To ask a question you May press star.
Then one on your Touchtone phone.
If youre using a speakerphone please pick up your handset before pressing the keys.
In fact, ending anytime your question has been addressed I now would like to withdraw your question. Please press Star then two.
Speaker #4: That said, we believe it is important caution to caution investors about the potential impact of tariffs on our international business, while it is no meaningful impact on our business in the first quarter, we saw some weakening in China in the second quarter, we hope to move past these issues and hope to be able to offer greater clarity on the third quarter call, which we expect to hold in mid-November.
At this time, we will pause momentarily to assemble in Austin.
First question comes from Jeffrey Cohen.
Please go ahead.
Hey, Good afternoon July rent John couple of questions from our end. So can you give us a sense on the.
Speaker #4: Now I'd like to turn the call over to the operator so that we can begin the question and answer session. Operator?
Dolev Rafaeli: Now I'd like to turn the call over to the operator so that we can begin the question and answer session. Operator?
When your back half of the year expectation as far as your international business, just recap with US what was there in Q2 and.
Speaker #1: Thank you. We will now begin the question and answer session. To ask a question, you may press STRATA then one on your touchtone phone.
Perhaps what we should anticipate for the back half.
Jules Abraham: Thank you. We will now begin the question and answer session. To ask a question, you may press STAR, then 1 on your touchstone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time a question has been addressed and you would like to withdraw your question, please press STAR, then 2. At this time, we will pause momentarily to assemble a rush now. First question comes from Jeffrey Cohen with Lautenberg Thalman. Please go ahead.
Hi, Jeff.
Happy to hear you on the call.
Speaker #1: If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press STRATA then two.
John is going to give the specific numbers our expectation of the second half of the year is to be not.
Not much different than last year, but having said that we need to caution that these expectations or are still up in the air as it comes to tariffs, we don't know what's going to happen in China as you know the administration just extended.
Speaker #1: At this time, we will pause momentarily to assemble our roster. First question comes from Jeffrey Cohen, with Luttenberg Thalman. Please go ahead.
The window.
And things are changing from day to day.
Other than that we anticipate the business to be business as usual and then you can look at you can look at the prior year progression from the first half to the second half in the international business, John do you mind coming in on the on the specific numbers because I can do just resulted in the margin.
Speaker #5: Hey, good afternoon, Julev and John. Couple questions from our end. So, can you give us a sense on the, what your back half of the year expectation is as far as the international business?
Jeffrey Cohen: Hey, good afternoon. It's Dolev and John. A couple of questions from our end. So can you give us a sense on what your back half of the year expectation is as far as the international business? Just recap with us what was in Q2 and perhaps what we should anticipate for the back half.
Speaker #5: Just recap with us what was in Q2 and, perhaps, what we should anticipate for the back half.
Yeah.
Oh I was just I was just going to say you know, we haven't given specific guidance versus the second half but.
Speaker #4: hi Jeff and, happy to hear you on the call. John's gonna give the specific numbers, our expectation of the second half of the year is to be, not much different than last year, but having said that, we need to caution that these expectations are, are still up in the air as it comes to, to tariffs.
Dolev Rafaeli: Hi, Jeff, and happy to hear you on the call. John is going to give the specific numbers. Our expectation of the second half of the year is to be not much different than last year. But having said that, we need to caution that these expectations are still up in the air as it comes to tariffs. We don't know what's going to happen in China. As you know, the administration just extended the window, and things are changing from day to day. Other than that, we anticipate the business to be business as usual. And you can look at the prior year progression from the first half to the second half in the international business. John, do you want to mind commenting on the specific numbers because I think you just restarted them in your portion?
I think those gave you a good indication that our our initial expectations were for it to be roughly similar to the prior year.
But we do have to give that caution that depending on what happens with the tariffs.
We could see any given quarter moved fairly significantly.
Speaker #4: We don't know what's going to happen in China. As you know, the administration just extended the window, and things are changing from day to day.
You now had it not been for the 90 day pause in the second quarter.
Our international revenue could have been impacted considerably more so until that calmed down and it's hard to give anything really more concrete than that.
Speaker #4: other than that, we, we anticipate the, the business to be, business as usual, and you can look at, you can look at the prior year progression from the first half to the second half in, in the international business.
Okay. Thanks, that's helpful. And then could you jump over to the lawsuit as far as I can share the costs from Q.
Two can you give us a sense of cost for the back half of the year.
Speaker #4: John, do you mind coming in on the specific numbers? 'Cause I think you just recited them in your portion.
When you are after with the other three on that is as far as monetary damages and remind us of the.
Speaker #3: Yeah, so oh, I was, I was just, I was just gonna say, you know, we, we, we haven't given specific guidance versus the second half, but, you know, I think Dolev gave you a good indication that our, our initial expectations were for it to be roughly similar to the prior year.
John Gillings: Yeah. So, oh, I was just going to say, you know, we haven't given specific guidance versus the second half, but you know I think Dolev gave you a good indication that our initial expectations were for it to be roughly similar to the prior year. But we do have to give that caution that depending on what happens with the tariffs, we could see any given quarter move fairly significantly. You know, had it not been for the 90-day pause in the second quarter, our international revenue could have been impacted considerably more. So until that calms down, it's hard to give anything really more concrete than that.
Stay or the share of wherever handling the cares.
CT system. Thank you.
So.
Good question I'll start with the I'll start with the.
Expected damages.
Speaker #3: but we do have to, to give that caution that depending on what happens with, the tariffs, we could see any given quarter, move fairly significantly.
The entry of <unk>.
And NTT like laser optics.
<unk> to us.
Also misleading advertisement both in conjunction with the reimburse ability of their devices, which those devices are not reimbursable codes are very specific.
Speaker #3: You know, had it not been for the 90-day pause in the second quarter, our international revenue could have been impacted considerably more. So until that calms down, it's hard to give anything really more concrete than that.
The the <unk>.
<unk> from the American Medical Association, and the American Academy of Dermatology as well as Ddos specific code descriptors dating all the way back to 2012 or specific.
Speaker #5: Okay, thanks. That's helpful. And then could you jump over to the last year? As far as I can see the cost from Q2, can you give us a sense of cost for the back half of the year and what you're after with the three entities as far as monetary damages? And remind us of the state or the ICC or whatever's handling the case?
Jeffrey Cohen: Okay. Thanks. That's helpful. And then could you jump over to the last year as far as I can see the cost from Q2? Can you give us a sense of cost for the back half of the year and what you're after with the three entities as far as monetary damages and remind us of the state or the ICC or whoever's handling the case, the court system? Thank you.
And say that the.
Providers can only use.
Excimer lasers.
Then the represented their devices.
Superior technologically win win.
Not going to go through the whole case now but.
I just mentioned.
Speaker #5: The court system. Thank you.
There.
Speaker #4: So, so, so, good question. I'll, I'll start with the, I'll start with the, expected damages. the, the entry of, of an entity like laser optic that chose to use, false and misleading advertisement both in, in conjunction with the, reimbursability of their devices, which, their devices are not reimbursable, the, the codes are very specific, the, the, the guidelines from the American Medical Association and the American Academy of Dermatology, as well as the, specific code descriptors dating all the way back to 2012 are specific and, and, and say that the, providers can only use, excimer lasers, then they represented their devices as superior technologically when, when, and I'm, I'm not gonna go through the whole case now, but, I'll just mention that, their, even their FDA filings compared their devices to, devices that Strata is no longer, no longer selling, no longer offering, and that, that had their, their, their devices they compared to are, have not been in this market for over 10 years.
Dolev Rafaeli: So, good question. I'll start with the expected damages. The entry of an entity like Laser Optic that chose to use false and misleading advertisement, both in conjunction with the reimbursability of their devices, which their devices are not reimbursable. The codes are very specific. The guidelines from the American Medical Association and the American Academy of Dermatology, as well as the specific code descriptors dating all the way back to 2012, are specific and say that the providers can only use Excimer Lasers. Then they represented their devices as superior technologically when, and I'm not going to go through the whole case now, but I'll just mention that even their FDA filings compared their devices to devices that Strata is no longer selling, no longer offering, and that had their devices they compared to have not been in this market for over 10 years.
Even the FDA filings.
Compared to their devices to <unk> devices. The strata is no longer no.
Longer selling no more no longer offering and that had there.
The.
Devices compared to or have not been in this market for over 10 years.
So the combination of them coming to the market with.
Full statements on the Reimbursable appeal to these license as well as.
Claims about technical superiority in clinical availability.
Or devices that.
Frankly, do not have any clinical studies commercialized is not even one.
And not not in their original country of origin Korea, nor in the U S and.
And that compares to hundreds of peer reviewed published clinical studies or extra.
When we when we approach them to stock what they do.
Reward us and that is what started the litigation.
I'm not going to go again into the details of the back and forth, but very fast.
We filed the litigation in August and very fast by November and the court has issued.
And order the bars them from.
Speaker #4: So, in the combination of them coming to the market with false statements on the reimbursability of the devices, as well as claims about technical superiority and clinical availability for devices that, frankly, do not have any clinical studies for psoriasis—not even one.
Dolev Rafaeli: So the combination of them coming to the market with false statements on the reimbursability of the devices, as well as claims about technical superiority and clinical availability for devices that, frankly, do not have any clinical studies for psoriasis, not even one, and not in their original country of origin, Korea, nor in the US, and that compares to hundreds of peer-reviewed published clinical studies for XTRAX. When we approached them to stop what they do, they ignored us, and that is what started the litigation. I'm not going to go again into the details of the back and forth, but very fast, we filed the litigation in August, and very fast, by November, the court has issued an order that bars them from continuing to claim that their devices can be reimbursed and use the comparative advertisement claims.
Continuing to claim that their devices can be reimbursed in that.
And use the comparative advertisement claims, but having said that in the.
Approximately four years that they were in the market they were able to.
Two.
Get.
Speaker #4: and not, not in their original country of origin, Korea, nor in the U.S., and that compares to hundreds of peer-reviewed published clinical studies for extract.
Accountant.
Or had existing <unk> users and existing either extract or steroids devices. Both RF devices owned by <unk> or they were able to.
Speaker #4: when, when we, when we approached them to stop what they do, they ignored us and that, that is what started the, the litigation. the, I'm not gonna go again into the details of the back and forth, but very fast, we, we filed the litigation in August.
Convert previous accounts into users.
Of their device.
As a side note since then at least with most of these the bigger accounts, we were able to.
Speaker #4: And very fast, by November, the court has issued, an order that bars them from, continuing to, claim that their devices can be reimbursed and that, and, and use the, comparative advertisement, claims.
Take them back however that cost stride on not only the immediate revenue loss from these.
Accounts.
That moved over to two laser optic devices, but also potential future revenue because.
Speaker #4: Having said that, in the, approximately four years that they were in the market, they were able to, to, either get, accounts that, that, that, had existing excimer users or existing either extract or sterile devices, both are devices owned by, by Strata or they were able to, convert previous accounts into users, of, of their device.
Dolev Rafaeli: Having said that, in the approximately four years that they were in the market, they were able to either get accounts that had existing Excimer users or existing either XTRAX or steroids devices, both are devices owned by by Strata, or they were able to convert previous accounts into users of their device. As a side note, since then, at least with most of these the bigger accounts, we were able to take them back. However, that has cost Strata not only the immediate revenue loss from these accounts that moved over to Laser Optic devices, but also potential future revenue because when conflicting and confusing and more accurately described by the judge as fraudulent information is disseminated in the market, that creates confusion with the customers. Now, I'm not going to go into the specific damages, but these damages are in the eight-digit range when it comes to calculation.
When conflicting and confusing.
More more accurately described by the judge is fraudulent information is disseminated in the markets that creates confusion would be with the customers now I'm not going to go into the specific vintages, but.
These damages are a.
Or in the eights.
Eight digit range.
When it comes to two calculation.
The damages experts have come up with the relevant theories.
Speaker #4: as a side note, since then, at least with most of these, the, the, the bigger accounts, we were able to, take them back. However, that has cost Strata not only the immediate revenue loss from these, these, accounts that moved over to, to laser optic devices, but also potential future revenue because, when conflicting and, and confusing and, and more accurately described by the judge as fraudulent information, is disseminated in the market, that creates confusion with the, with the customers.
Scott is going to pursue this.
To the end if needed.
As you know in these in these cases companies meet and find a way to settle several.
The dispute.
Before the case goes all the way.
Uh huh.
Maybe it should be pointed out and I did mentioned this in my prepared remarks.
One of the things that the nasal uptick has done is they were hiding between behind entities that didn't exist. So for some time since we started the suit in August of 'twenty.
24.
Speaker #4: Now, I'm, I'm not gonna go into the specific damages, but, but these damages are a, are in the eight, eight-digit range. when it comes to, to calculation, the, the damages experts have, have, come up with, with the relevant theories.
They claim that all the relevant parties were present. However, we just recently found out that the laser optic America was actually not an entity. It was it was it was.
Doing business as DBA, but it was another company that they did not present in the company I mentioned, which is C. Dalton International LLC.
Dolev Rafaeli: The damages experts have come up with the relevant theories, and Strata is going to pursue this to the end if needed, unless, as you know, in these cases, companies meet and find a way to settle the dispute before the case goes all the way. As maybe should be pointed out, and I did mention this in my prepared remarks, one of the things that Laser Optic has done is they were hiding behind entities that didn't exist. So for some time since we started this suit in August of 2024, they claimed that all the relevant parties were present. However, we just recently found out that the Laser Optic America was actually not an entity. It was doing business as DBA, but it was another company that they did not present, and that is the company I mentioned, which is C. Dalton International LLC.
Speaker #4: And, Strata is gonna pursue this, to the end if needed. Unless, as you know, in these, in these cases, companies meet and find a way to settle, settle, the, the dispute in, before the case goes all the way.
They also represented themselves as representatives of Korea, which they are not or at least they claim they are not.
The judge in his.
Recent remarks to the parties in the case.
Speaker #4: as a, maybe should be pointed out, and I, I did mention this in my prepared remarks, one of the things that, that laser optic has done is they were hiding between, behind entities that didn't exist.
<unk> mentioned is the dissatisfaction with.
The way they have conducted their business.
Over two two to your specific question.
We are our legal expenses are most of our legal expenses are behind US now we're in the.
Speaker #4: So, for some time since we started this suit, in August of 2024, they claimed that all the relevant parties were present. However, we just recently found out that the laser optic America was actually not an entity.
Hum.
Towards the end of our second discovery and.
What is going to extend the case somewhat is the inclusion of these two new descendants. However, these two new defendants are.
Speaker #4: It was, it was, it was, doing business as DBA, but it was another company that they did not present and that it is the company I mentioned, which is, C.
Not going to come up with anything we don't know.
The laser optic in their legal practice.
Speaker #4: Dalton International, LLC, they also represented themselves as representatives of, of Korea, which they are not, or at least they claim they're not. the, the judge in his, recent remarks to the, the parties in the case, mentioned his dissatisfaction with, the way they have, conducted their business.
To Mark most of their documents attorney's eyes, only which made our work as a company harder to understand what the damages are but but I gave you a framework of where we think it is.
Dolev Rafaeli: They also represented themselves as representatives of Korea, which they're not, or at least they claim they're not. The judge, in his recent remarks to the parties in the case, mentioned his dissatisfaction with the way they have conducted their business. However, to your specific question, our legal expenses are most of our legal expenses are behind us. Now we're towards the end of SEC discovery, and what is going to extend the case somewhat is the inclusion of these two new defendants. However, these two new defendants are not going to come up with anything we don't know. The Laser Optic, in their legal practice, has chosen to mark most of their documents attorney's eyes only, which made our work as a company harder to understand what the damages are. But I gave you a framework of what we think it is.
It is.
Important to understand that laser optic is a publicly traded company they have assets.
And we will be able to recoup our damages.
Speaker #4: However, to, to, to your specific question, we are, are, are, are legal expenses are most of our legal expenses are behind us. Now we're in the, in the towards the end of effect discovery.
Awarded by the court or whatever we agreed to in a in a settlement discussion.
The parties in the case.
Now that we know that we can get to every one of the parties relevant.
Speaker #4: And, what is gonna extend the case somewhat is the inclusion of these two new descendants. However, these two new descendants are not gonna come up with anything we don't know.
And there are significant in size of considering the accounts we lost.
And the reasons for why these accounts when last I hope that answers the question if not please.
Ask for more clarification.
Speaker #4: the, laser optic in their legal practice have chosen to mark most of their documents, attorney's eyes only, which make, made our work as a company harder to understand what the damages are.
Just one more can you give us a sense of how many units during this period.
Waste out there.
Marketplace.
How many units were placed by laser optics.
Speaker #4: But, but I gave you a framework of where we think it is. It is important to understand that Laser Optic is a publicly traded company.
Yes.
I cannot give you a number because that number.
Dolev Rafaeli: It is important to understand that Laser Optic is a publicly traded company. They have assets, and we will be able to recoup our damages awarded by the court or whatever we agree to in a settlement discussion from the parties in the case now that we know that we can get to every one of the parties' relevance. And they're significant in size considering the accounts we lost and the reasons for why these accounts were lost. I hope that answers the question. If not, please ask for more clarification.
As part of their legal practice was.
Speaker #4: They have assets, and we will be able to recoup our damages, awarded by the court or whatever we agree to in a, in a settlement discussion.
<unk> was hidden away from US we have are our estimates we have the accounts we know about.
It is.
It does complicate these accounts and we did.
Slide to make this clear not only to us but directly from us, but also indirectly from the American Academy of dermatology because.
Speaker #4: From the parties in the case, now that we know that we can get to every one of the parties relevant. and there are significant in size, considering the, the accounts we lost and the reasons for why these accounts were lost.
Or a provider or to use the device and build the codes.
When the Cobra, specifically, saying excimer laser that towards the provider.
Speaker #4: I hope that answers the question. If not, please ask for more clarification.
In at risk.
Being charged with.
Speaker #5: Yeah, just one more. Could you give us a sense of how many, units during this period that were placed out there? In the marketplace?
Jeffrey Cohen: Yeah. Just one more. Could you give us a sense of how many units during this period that were placed out there in the marketplace?
Roger and charges too.
Two to CMS.
Deaths when it happens results in very heavy fines and.
Speaker #4: How many units were placed by Laser Optic?
Dolev Rafaeli: How many units were placed by Laser Optic?
Garnishing of all the all the revenue to be made and it also puts them into other high risk and reputation and so on so they know that that's part of the reason why.
Speaker #5: Yes.
Jeffrey Cohen: Yes.
Speaker #4: I, I cannot give you a number because that number, as part of their legal practice was, was hidden away from us. We have our estimates, we have the accounts we know about, it, it, it does complicate these accounts and, and we did, try to make this clear.
Dolev Rafaeli: I cannot give you a number because that number, as part of their legal practice, was hidden away from us. We have our estimates. We have the accounts we know about. It does complicate these accounts, and we did try to make this clear not only through us, but directly from us, but also indirectly from the American Academy of Dermatology because for a provider to use a device and build the codes, when the codes are specifically saying Excimer Laser, that puts the provider at risk of being charged with fraudulent charges to CMS. That, when it happens, results in very heavy fines and garnishing of all the revenue they made. And it also puts them at a high risk of reputation and so on. So they know that. And that's part of the reason why some of the accounts that they have taken have come back to us.
Some of the accounts that were that they have taken.
Has come back to us.
And the reasons are that these devices actually do not technically work, even close to what the extra it goes in as they had.
Speaker #4: Not only through us, but directly from us, but also indirectly from the, American Academy of Dermatology because for a, provider to use a device and build the codes, when the codes are specifically saying excimer laser, that puts the provider in, in, in at risk of, of being charged with, fraudulent charges to, to, to CMS.
They have the.
Substantiation to say that these devices are or same or superior.
I would assume they would have done one clinical study at least they haven't done even one night in my prepared remarks I went through three studies more abstracts that were published in in the last months.
And one of them had 240 patients and less than 52 weeks.
So it's these are things that in August and.
Speaker #4: that when it happens, results in very heavy fines and, garnishing of all the, all the revenue they made. It also puts them at a, , at a high risk of reputation and so on.
<unk>.
<unk>.
Goods market player would do I would add one more thing as part of the.
As part of the litigation was part of the discovery and the litigation we found.
Speaker #4: So they know that. And that's, that's part of the reason why, some of the accounts that were, that they have taken have, have come back to us.
That nasal optic had a practice of.
Approaching.
Individuals within the organization.
Speaker #4: Other reasons are that these devices actually do not technically work anywhere close to what the extract does. And had they had the substantiation to say that these devices are the same or superior, I would assume they would have done at least one clinical study.
Dolev Rafaeli: Other reasons are that these devices actually do not technically work even close to what the XTRAX does. And had they had the substantiation to say that these devices are same or superior, I would assume they would have done one clinical study at least. They haven't done even one. And in my prepared remarks, I went through three studies for XTRAX that were published in the last month. And one of them had 240 patients in less than 52 weeks. So these are things that an honest and good market player would do. I would add one more thing. As part of the litigation, as part of the discovery in the litigation, we found that Laser Optic had a practice of approaching individuals within the organization that drafted the changes to the CPT codes. And they took part in making changes to these codes.
That's drafted the changes to the.
To the CPT codes and they took part in.
Making changes to these codes.
That's when we found out was a big surprise for both ourselves and of course as well as the American Medical Association that is responsible for these things and it has a very strict policy of non-intervention of outside parties.
Speaker #4: They haven't done even one. And I, in my prepared remarks, I went through three studies for extract that were published in, in the last month.
Speaker #4: and one of them had 240 patients and less than 52 weeks. So it's a, these are things that an honest and, and, good market player would do.
And I think it also painted.
Their activities with the courts the way it should have which is they are bad players.
And as bad players.
Speaker #4: I would add one more thing as, as part of the, as part of the litigation, as part of the discovery in the litigation, we found that, laser optic had a practice of, approaching, individuals within, the organization that, that drafted the changes to the, to the CPT codes.
They will end up.
And that's why we highlighted the things because we we believe pursuing at UBM.
Would be would be a good practice.
Jeff I believe you were covering other companies in the.
Medical device dermatology space in the past and there have been things like that in the past.
Speaker #4: And they took part in, making changes to these codes. that when we found that was a big surprise for both ourselves, of course, as well as the, American Medical Association that is responsible for these things, that has a very strict policy of, non-intervention of, outside parties.
I don't think there could be things as.
Black and white as this one.
Those are very specific excimer laser.
Dolev Rafaeli: That, when we found that, was a big surprise for both ourselves, of course, as well as the American Medical Association that is responsible for these things, that has a very strict policy of non-intervention of outside parties. And I think it also painted their activities with the court the way it should have, which is they're bad players. And as bad players, they will end up paying. And that's why we highlighted the case because we believe pursuing it to the end would be a good practice. Now, Jeff, I believe you were covering other companies in the medical device dermatology space in the past, and there have been things like that in the past. I don't think there have been things as black and white as this one. The codes are very specific. Excimer Laser and the guidance have been in place since 2012.
The guidance have been in place since 2012.
And then going around and representing themselves or rather employees.
And then trying to flip accounts.
It is going to end up costing the knot, but thank you for the question.
Speaker #4: And I think it also painted their activities with the court the way it should have, which is that they are bad players. As bad players, they will end up paying.
Super Thanks for taking my question goal.
Sure.
The next question comes from Jeremy Pearlman with Maxim Group. Please go ahead.
Speaker #4: And that's why we highlighted the case 'cause we, we believe pursuing it to the end, would be a, would be a good practice. Now, Jeff, I, I believe you were, covering other companies in the, in the, medical device dermatology space.
Thank you for taking my question first one related to the temporary J codes is there anything else on year and that has to be done or has the review process has already begun and in what timeframe can we expect in our response.
Thank you for the question.
We expanded a little bit.
Speaker #4: In the past, and, and there have been things like that in the past. I don't think there have been things as, black and white as this one.
So when when we found that nasal.
Laser optic was actively.
Manipulating things within the AMIA and as a results impacting.
Speaker #4: The, the, the codes are very specific. Excimer laser and, and the guidance have been in place since 2012, and then going around and representing themselves as Strata employees, and then trying to flip accounts.
Impacting things that happened in the market.
Dolev Rafaeli: And them going around and representing themselves as Strata employees and then trying to flip accounts is going to end up costing them a lot. But thank you for the question.
We approach CMS and this is before the 2025 low making cycle.
Speaker #4: It's gonna end up costing them a lot. But thank you for the question.
For the.
For 2025, which is in effect now and.
Speaker #5: Super. Thanks for taking our question, Dolev.
Jeffrey Cohen: Super. Thanks for taking the question, Dolev.
We asked.
Speaker #4: Sure.
Dolev Rafaeli: Sure.
CMS to make changes.
Speaker #1: The next question comes from Jeremy Pearlman with Maxim Group. Please go ahead.
Jules Abraham: The next question comes from Jeremy Perlman with Maxim Group. Please go ahead.
Based on three things one.
The.
Uh huh.
Speaker #6: Thank you for taking the question. First one related to these temporary G-codes. Is there anything else on your end that has to be done, or has the review process already begun?
Jeremy Pearlman: Thank you for taking the question. First one related to these temporary G codes. Is there anything else on your end that has to be done, or has the review process already begun? And in what timeframe could we expect a response?
Specific change of the coal that happens that took us took effect on one one.
24 narrowed.
Speaker #6: And then what timeframe can we expect, in a response?
The language of the code and made it very specific to psoriasis in that.
Speaker #4: thank you for the question. I'll, I'll, I'll, I'll expand a little bit. So when, when we found that, laser optic was actively, manipulating things within the AMA and as a result, impacting things that happen in the market, we, approached CMS, and this is before the 2025 lawmaking cycle for the, for, for 2025, which is in effect now.
Dolev Rafaeli: Thank you for the question. I'll expand a little bit. So when we found that Laser Optic was actively manipulating things within the AMA and, as a result, impacting things that happened in the market, we approached CMS. And this is before the 2025 law-making cycle for 2025, which is in effect now. And we asked CMS to make changes based on three things. One, the specific change of the code that happened that took effect on 1/1/24 narrowed the language of the code and made it very specific to psoriasis. And that caused limitation to the applicability of the codes to other patients. Now, as I covered in my prepared remarks, we still see about 30 to 40 percent of our codes being used for non-psoriasis patients, but that takes a lot of effort on our side.
Cause.
Limitation to.
The applicability of the codes to other patients now as I as I cover the microcode remarks, we still see about 30% to 40% of our codes being used for non psoriasis patients, but that takes a lot of efforts on our sites.
We.
Yeah.
Help our providers by taking every one of these patients through a preauthorization or pre determination or pre approval process to make sure that they can be treated. So you can you can go back into my prepared remarks, and you can see the ratio out of.
Speaker #4: And, we asked, CMS to make changes based on three things. One, the, the, specific change of the code that happens that took a, took effect on 1120, 24 narrowed the, the language of the code and made it very specific to psoriasis.
5100 patients 2500, West Alliance and its 1000 were happening about 3500 and about 1500 were.
Non psoriasis patients being treated by buying extra.
Bye.
Expanding the codes, which is going to take effect.
Right now in 127 that is going to alleviate the need to take these patients one by one and take them through the pre approval process.
Speaker #4: And that caused, Ed, limitation to the applicability of the codes to other patients. Now, as I covered in my prepared remarks, we still see about 30% to 40% of our codes being used for non-psoriasis patients, but that takes a lot of effort on our side.
Having said that.
So we started with the discussion would CMS back in.
And before the rule, making process of 2025.
Speaker #4: So we, we, we help our providers by taking every one of these patients through a pre-authorization or pre-determination or pre-approval process to make sure that they can be treated.
Dolev Rafaeli: So we help our providers by taking every one of these patients through a pre-authorization or predetermination or pre-approval process to make sure that they can be treated. So you can go back into my prepared remarks, and you can see the ratio. Out of 5,100 patients, 2,500 were psoriasis, 1,000 were acne, that's 3,500, and about 1,500 were non-psoriasis patients being treated by XTRAX. By expanding the codes, which is going to take effect right now in 1/1/27, that is going to alleviate the need to take these patients one by one and take them through the pre-approval process. Having said that, so we started the discussion with CMS back in before the rulemaking process of 2025. And their response, and their response comes out in November when the final rule is presented.
And their response.
And the response comes out in November when the final rule is presented.
Their response was.
Speaker #4: So you can, you can go back into my prepared remarks and you can see the ratio. out of, out of 5,100 patients, 2,500 were psoriasis, 1,000 were acne.
We one we do not have sufficient data to make the decision on our own we need that the American Medical Association to opine on the expansion of the codes. So we went ahead and.
Speaker #4: That's 3,500. And about 1,500 were non-psoriasis patients being treated by, by extract. by expanding the codes, which is gonna take effect, right now in 1127, that is gonna alleviate the need to take these patients one by one and take them through the pre-approval process.
And.
Petitions with the <unk> or made an application for a code change at school, it's called the code change application CCA.
Which resulted in the expansion of the code descriptor as it was.
As it happened in May and was discussed in our previous call in and.
Speaker #4: having, having said that, we, so we, we, we started the, the discussion with, with CMS back in, before the rulemaking process of 2025. And their response, and, and the response comes out in, in November when, when the, the final rule is presented.
In press releases.
That's code is going to go bye Bye Bye design, a new co descriptor goes into effect not immediately but has to go through a.
The review by the Rock Committee not committee is another part of that takes care of these codes.
Speaker #4: their response was, we, one, we do not have sufficient data to make the decision on our own. We need the American Medical Association to opine on the expansion of the codes.
Dolev Rafaeli: Their response was, one, we do not have sufficient data to make the decision on our own. We need the American Medical Association to opine on the expansion of the codes. So we went ahead and petitioned with the AMA or made an application for a code change. It's called a code change application, CCA, which resulted in the expansion of the code descriptor as it happened in May and was discussed by us in our previous call and in press releases. That code is going to go by design. A new code descriptor goes into effect not immediately, but has to go through a review by the RUC committee. The RUC committee is another part that takes care of these codes. And they look at the values associated.
They look at the values associated so they need to opine on whether.
There is more cost associated with this or less cost associated with treating other conditions such as the July go atopic dermatitis and so on.
Speaker #4: So we went ahead and petitioned with the AMA or made an application for a code change. It's called a code change application (CCA).
That process is.
Right now happening and there was a survey sent out by the rock committee to providers.
The company has not evolved in this process, but the outcome of that is going to decide where they are.
Speaker #4: which resulted in the expansion of the code descriptor as it was, as it happened in May and, and was, was, discussed by us in, in the, in our previous call and, and, in, in press releases.
The time component in the code is going to is going to change we believe it should go up.
Speaker #4: That code is going to go by, by design, and the new code descriptor goes into effect not immediately, but has to go through a review by the RUC committee.
And we have very detailed backing into that so that's one part the video part has to do with that.
The components of the.
Reimbursement code that is called <unk> practice expense.
Speaker #4: The RUC committee is, is, is another part of that takes care of these codes. And they look at the, at the values associated. So they need to opine on whether there is more cost associated with this or less cost associated with treating other conditions, such as vitiligo, atopic dermatitis, and so on.
And that component includes among other things among the cost of gloves and if needed local anesthesia and then so on it includes the cost of the <unk>.
Dolev Rafaeli: So they need to opine on whether there is more cost associated with this or less cost associated with treating other conditions, such as vitiligo, atopic dermatitis, and so on. That process is right now happening. And there was a survey sent out by the RUC committee to providers. The company is not involved in this process, but the outcome of that is going to decide whether the time component in the code is going to change. We believe it should go up, and we have very detailed backing to that. So that's one part. The bigger part had to do with the components of the reimbursement code that is called PE, Practice Expense. And that component includes, among other things, among the cost of gloves and, if needed, local anesthesia and so on. It includes the cost of the equipment.
The equipment.
Is it as it stands out.
American Academy of Dermatology.
Speaker #4: that process is right now happening. And there was a survey, sent out by the RUC committee to providers, we, the company is not involved in this process, but the outcome of that is gonna decide whether the, the time component in the code is gonna, is gonna change.
Came to.
To the HMA in 2023.
And requested a higher value for that practice expense so for reference.
Workloads reimburse in the range of $160 per procedure.
<unk> $22 today.
Are attributed to the cost of the device.
Speaker #4: We believe it should go up, and we, and we have very detailed backing to that. So that's one part. The bigger part had to do with the, what the, the components of the, reimbursement code that is called PE, practice extents.
What the American Academy of Dermatology in 2023 said and.
Explain to the HMA was that that component should not be $22. It should be closer to $80 and they provided their reasoning. However in 2023.
Speaker #4: And that component includes among other things, among the, the cost of, of gloves and, and if needed, local anesthesia and, and, and, and so on.
<unk> been very cautious about the budget said.
Thank you the American Academy of Dermatology for asking for this but you did not provide any data to support that.
Speaker #4: It includes the, the cost of the, of the equipment. as it, as it stands out, the American Academy of Dermatology, came to, to the AMA in 2023.
So our application to CMS now includes three components, one has to do with the time and I cover that.
Dolev Rafaeli: As it stands out, the American Academy of Dermatology came to the AMA in 2023 and requested a higher value for that practice expense. So for reference, our codes reimburse in the range of $160 per procedure. About $22 today are attributed to the cost of the device. What the American Academy of Dermatology in 2023 said and explained to the AMA was that that component should not be $22. It should be closer to $80. And they provided their reasoning. However, in 2023, CMS, being very cautious about the budget, said, "Thank you, the American Academy of Dermatology, for asking for this, but you did not provide any data to support that." So our application to CMS now includes three components. One has to do with the time, and I covered that. The second one has to do with the device or the utilization of the device.
Speaker #4: And requested a higher value for that practice expense. So for reference, our codes reimburse in the range of $160 per procedure. About $22 today are attributed to the cost of the device.
The second one has to do with the <unk>.
Device or the utilization of the device.
And we are showing the.
We are showing CMS backed by data.
And the data we show them as is.
Over the span of.
Speaker #4: what the American Academy of Dermatology in 2023 said and explained to the AMA was that that component should not be $22. It should be closer to $80.
2018 until today.
There were 1300 providers using 1300 devices use a 1300 clinics using the devices and there is a combination of our partner clinics.
Speaker #4: And they provided their reasoning. However, in 2023, CMS, being very cautious about the budget, said, "Thank you, the American Academy of Dermatology, for asking for this, but you did not provide any data to support that."
Clinics that have purchased the device the laws in place that have purchased the wireless device Lamar from Army medical which which we acquired the business from them in 2021. So there are 1300 individual clinics.
Speaker #4: So our application to CMS now includes three components. One, has to do with the time. And I covered that. The second one has to do with the, device or the utilization of the device.
Use of the device since we have insight into the utilization of every one of these devices we are providing.
With data covering 1300 devices going all the way back to 2018 showing them that.
Speaker #4: And we are showing the, we are showing CMS backed by data. and, and, and the data we show them i-is, is, over the span of 2018 until today, there were 1,300 providers using or 1,300 devices used or 1,300 clinics using the devices.
Dolev Rafaeli: And we are showing CMS bets by data. And the data we show them is over the span of 2018 until today, there were 1,300 providers using or 1,300 devices used or 1,300 clinics using the devices. And that is a combination of our partner clinics, clinics that have purchased the device from us, and clinics that have purchased the steroids device from RA Medical, which we acquired that business from them in 2021. So there are 1,300 individual clinics using the device. Since we have insight into the utilization of every one of these devices, we are providing CMS with data covering 1,300 devices going all the way back to 2018, showing them that that component, the cost of the device in the code, should be approximately four and a half times. So it should be about $95.
<unk>.
That that component the cost of the device in the court.
Should be approximately four and a half times so it should be about $95.
If that happens then or.
Our reimbursement is going to go our average reimbursement is going to go up from $160.
About $70, it's going to go up to 230, that's that's kind of the maximum and that's just based on the practice expense components.
Speaker #4: And that is a, a combination of our partner clinics clinics that have purchased the device from us and clinics that have purchased the sterile device from our, from RA Medical, which, which we, we, we acquired that, that business from them in 2021.
If the time component also extend that's going to push the reimbursement even further up.
The third.
Speaker #4: So there, there are 1,300 individual clinics using the device. Since we have insight into the utilization of every one of these devices, we are providing CMS with data covering 1,300 devices going all the way back to 2018, showing them that the, that, that component, the, the cost of the device in the code should be approximately four and a half times.
Requests from.
CMS is to provide temporary J codes now their response back in 2020 November 2024 for the for the 2025.
Fiscal year.
<unk>.
We appreciate you asking for this but there is no code we can provide G codes for because at that point in time.
Speaker #4: So it should be about $95. if that happens, then our reimbursement is gonna go, our average reimbursement is gonna go up from $160 up about $70 so it's gonna go up to $230.
We're saying only horizon. So they said we can't give you a G code score the other indications.
Dolev Rafaeli: If that happens, then our reimbursement is going to go, our average reimbursement is going to go up from $160 up to about $70. So it's going to go up to $230. That's kind of the maximum. And that's just based on the practice expense component. If the time component also expands, that's going to push the reimbursement even further up. The third request from CMS is to provide temporary G codes. Now, their response back in November 2024 for the 2025 fiscal year was, "We appreciate you asking for this, but there is no code we can provide G codes for." Because at that point in time, the code was saying only psoriasis.
Since the code only says so alliances so what we have now is we have an expanded cold.
That they can.
Attributes the G codes to we have the data to rely on for the extended practice expanse and time to expand the value of the.
Speaker #4: That's kind of the maximum, and that's just based on the practice expense component. If the time component also expands, that's going to push the reimbursement even further up.
Of the of these codes.
Speaker #4: The third request from CMS is to provide temporary G-codes. Now, their response back in November 2024 for the 2025 fiscal year was, "We appreciate you asking for this, but there is no code we can provide G-codes for."
And we have the backing of and I mentioned this to my my prepared.
<unk>, we have the backing of.
Everybody involved starting from key opinion leaders.
And we already are treating patients and have been treating patients with these conditions since.
2003, but most importantly in the last few years.
From the patient advocacy groups the global the legal foundation, the GBS and others that say, we represent we represent hundreds of thousands or millions of patients and.
Speaker #4: Because at that point in time, the code was saying only psoriasis. So they said, "We can't give you G-codes for the other indications since the code only says psoriasis."
Dolev Rafaeli: So they said, "We can't give you G codes for the other indications since the code only says psoriasis." So what we have now is we have an expanded code that they can attribute the G.Codes
This is a very important.
Speaker #4: So what we have now is we have an expanded code that they can attribute the G-codes to. We have the data to rely on for the expanded practice expense and time, to expand the value of the of the, of these codes.
Modality for them to be treated.
Comments that are being submitted to CMS for from a big provider groups. So private equity backed provider groups that are supporting this request.
Dolev Rafaeli: too. We have the data to rely on for the expanded practice expanse and time to expand the value of the, of the, of these codes. And we have the backing of, and I I mentioned this through my my prepared remarks, we have the backing of, everybody involved, starting from key opinion leaders, saying we already are treating patients and have been treating patients in these conditions since, 2003, but most importantly, in the last few years, from the, patient advocacy groups, the, Global Delahoussaye Foundation, the GVF, and and and others that say we we represent we represent hundreds of thousands or millions of patients, and, this is a very important, modality for them to be treated. we have comments that are being submitted to CMS for from, big provider groups, so private equity-backed provider groups that are supporting this request. you asked about timeline.
You asked about timelines, so CMS issued their draft rule for 2026, approximately three weeks ago.
Speaker #4: And we have the backing of, and I mentioned this through my prepared remarks, we have the backing of everybody involved, starting from key opinion leaders, saying we already are treating patients and have been treating patients in these conditions since 2003.
And the.
The period for comments and the second week of September.
And then there's going to be an open or not open hearing about the topic. So theres going to be hearing maybe they will include us maybe not and and.
And we anticipate the final rules to come out in November I hope that helps explaining.
<unk>.
Yes. It does thank you very much.
On the last earnings call you mentioned that roughly 100 clinics are currently undergoing that elevate III 60 consulting services are there any metrics you could share how that has impacted those clinics.
I did not prepare for this in this cycle, but we will share this in in future.
The disclosures from the company, however, I can say that.
Dolev Rafaeli: So, CMS issued their draft rule for 2026 approximately three weeks ago. And, the, the period for comments ends the second week of September. And then there's going to be an open, or not open hearing about the the topic. So there's going to be a hearing. Maybe they will include us, maybe not. And, and we anticipate the final rule to come out in November. I hope that that helps explaining, the timeline.
All of the clinics that have went through the whole process and I will describe the process. Shortly have shown higher revenue in Q2 as compared to Q2.
Previous year.
And in some cases very significant growth. So let me let me outline the process. What we do is we go in and we.
Provide the owner or.
The key person in the clinic, so it depends on whether it's an individual clinic or or it's a group of clinics, we provide them with insights to what's happening as it comes to these codes and I will use one specific example, a clinic.
Operator: Yeah, it does. Thank you very much. And then, on the last earnings call, you mentioned roughly 100 clinics were currently undergoing that Elevate360 consulting services. Are there any metrics you could share how that has impacted those clinics?
One individual clinic that is.
In Florida that in 2022 and 2023.
Dolev Rafaeli: I did not prepare for this in this cycle, but we will share this in in in future, just disclosures from the company. However, I can say that all of the clinics that have went through the full process, and I will describe the process shortly, have shown higher revenue in Q2 as compared to Q2 previous year. And, in in some cases, a very significant growth. So let me let me outline the process. What we do is we go in and we, provide the owner or the the key person in the clinic. So it depends on whether it's an individual clinic or or it's a group of clinics. We provide them with insights to what's happening as it comes to these codes.
It was a very productive clinic for us it was in the range of 40 to $50000 a year for us which means that they were doing approximately $100000 for them.
And then it started declining and in the in October of 2024, we started the process with them. What we found is that they had in the prior 12 months, they had 886 relevant patients or patients with the relevant indications.
They have some.
Submitted into our RPX portal.
<unk> hundred 60.
Patients. So they thought that there are 160 about 20% of their relevant patient population.
That are relevant for their treatment we have.
We have secured preauthorization or pre determination. So we we have secured approvals from the insurance company for 132 patients.
Dolev Rafaeli: And and I will use one specific example, a clinic, one individual clinic that is, in in Florida that in, 2022 and 2023, was a very productive clinic for us. It was, in the range of $40,000 to $50,000 a year for us, which means that they were doing approximately $100,000 for them. And then it started declining. And in the the in October of 2024, we started the process with them. What we found is that they had, in the prior 12 months, they had 886 relevant patients, so patients with the relevant indications. They have submitted into our RDX portal 160, patients. So they thought that there are 160, about 20% of their relevant patient population, that are relevant for the treatment. We have we have secured pre-authorization or predetermination.
They have only started treatment on six of them.
So specifically for that permit the falloff happened between the person that manages.
The reimbursement.
The person that scheduled patients it's that person in probably the front desk that needs to pick up the phone and.
And call the patient and say, we have contact with your insurance and reinsurance is going to cover. This for these 132 patients now to put this in perspective every one of these patients is worth about $3000 for the clinic and it's worth about $1000 loss. So had they done this causes to the.
Extent of 132 patients than they would be generating about $400000, we would be generating about $100000 from that clinic.
We started the process in October of 2024 by the end of Q1 2025 knots.
Dolev Rafaeli: So we we have secured, approvals from the insurance company for 132 patients, and they have only started treatment on six of them. So specifically for that clinic, the falloff happens between the person that manages the reimbursement and the person that schedules patients. It's it's that person in probably the front desk that needs to pick up the phone and call the patient and say, "We've contacted your insurance, and your insurance is going to cover this for these 132 patients." Now, to put this in perspective, every one of these patients is worth about $3,000 for the clinic, and it's worth about $1,000 for us. So had they done this process to the extent of 132 patients, then they would be generating about $400,000, and we would be generating about $100,000 from that clinic. we started the process in October of 2024.
Not only we had that clinic clicking at I would say about 25% of them. So about 25 patients who are in treatment not only that.
But within the same owner.
Oh.
Clinics, we expanded from one.
Two nine clinics.
And all of them are now producing so that that became a centre of excellence.
For the northern part of Florida, now I can use examples on other clinics, but I think what you were looking for our <unk>.
<unk> are going to cross the 100 accounts and I will we will be sure to provide that through either a press release or our next call.
Okay, great. Thank you and just last question related to the Sarasota devices. It seemed like the installed base was flat quarter over quarter are you going through the same review process.
You are in the extracted install.
Dolev Rafaeli: By the end of Q1 2025, not only we had that clinic clicking at, I would say, about 25% of them, so about 25 patients were in treatment. Not only that, but within the same owner of clinics, we expanded from one to nine clinics, and all of them are now producing. So that that became a center of excellence for the northern part of Florida. Now, I can use examples on other clinics, but I think what you are looking for are, metrics that go across the 100 accounts. And I will we will be sure to provide that through, either a press release or our next call.
Installed base on Santa Clara or are you, just leaving what's out there and hopefully a recurring revenue will grow a little bit but the main focus is still on the extra especially with all these CPT potential.
Well first of all definitely the main focus is on the astral devices. They represent the highest upside that we have.
Approximately 850 devices in the market.
Every $1000 of increase in productivity per per account is going to take us.
$860000 up in the revenue.
And there is ample.
Outside in terms of the patients already in the clinics that were prescribed and not being put into into treatment now.
Just as an add on to the answered the previous question.
Do the same thing with groups with groups. It's it's a it's a little bit more complicated because everything is centralized so they're scheduling a centralized and their business is centralized and they're there.
Operator: Okay. Great. Thank you. And just last question related to the Theraclear devices. It seemed like the install base was flat quarter over quarter. Are you going through the same review process as you are in the extract install base on the Theraclear, or are you just leaving what's out there and, you know, hopefully recurring revenue will grow a little bit, but you know the main focus is still on the extract, and especially with all these CPT codes and potential?
Regulatory oversight is centralized.
But we see the same the same upside then again, we will provide more statistics too.
Allow you insight into that now in terms of currency you are kind of like the installed base is growing it's not growing as fast as.
Dolev Rafaeli: Well, first of all, definitely, the main focus is on the extract devices. They represent the highest upside. We have approximately 850 devices in the market. And every $1,000 of increase in productivity per per account is going to take us $860,000 up in the revenue. And there's there's ample upside in terms of the patients already in the clinics that were prescribed and not being put into into treatment. Now, just as an as an add-on to the answer to the previous question, we do the same thing with groups. With groups, it's a it's a little bit more complicated because everything is centralized. So their their scheduling is centralized, and their business is centralized, and their their regulatory oversight is centralized. But but we we see the same the same upside. And again, we will provide more statistics to to allow you insight into that.
The extra could grow and and we told you.
In prior call that we anticipate to be closer to 200 devices by the end of <unk>.
<unk> 25, and we still think we will be at that range. However, if you recall when the therapy was launched back in.
Second half of 2023.
Company strategy at the time was to approach clinics that treat patients seeking cash pay.
<unk>.
And we changed that in the beginning of 2020 for realizing that.
That's the cash paying patients is harder to convert and the clinical not very good about and know about one half of our clinics are billing codes and growing accordingly, so our revenue.
Dolev Rafaeli: Now, in terms of TheraclearX, you are kind of right. The the install base is growing. It's not growing as fast as as the extract could grow. And and we told you in in prior call that we anticipate to be closer to 200 devices by the end of, 2025. And we still think we will be at that range. however, if you recall, when the Theraclear was launched back in, the, second half of 2023, the company's strategy at the time was to approach, clinics that treat patients, seeking cash pay. And, and we changed that in the beginning of 2024, realizing that, that the, cash-paying patient is harder to convert, and the clinics are not very good at that. And and now about one-half of our clinics are billing codes and growing accordingly. So our our revenue for Theraclear is growing.
For therapy is growing but as I as I said in our prepared remarks. It is it is growing but it is small so providing metrics for that I think is less important than showing success with extra which is a huge upside will be not only the expanded reimbursement, but higher <unk>.
Higher payment for the codes and.
And more adult patient base.
Based on real World clinical studies.
Okay understood. Thank you for taking my questions and I'll hop back in the queue.
Thank you.
Yes.
This concludes our question and answer session I would like to turn the conference back over to a dollar of affinity for closing remarks.
Thank you everyone for showing up with this call I appreciate your interest in the company, we will be presenting again.
In the middle of November presenting our third quarter results.
Thank you very much.
Dolev Rafaeli: But as I as I said in our prepared remarks, it is it is growing, but it is it is small. So, providing metrics for that, I think, is less important than showing success with with extract, which has a huge upside with the not only the expended reimbursement but higher, higher payment for the codes and, and more adaptation, based on on real-world clinical studies.
Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Thank you.
Operator: Okay. Understood. Thank you for taking my questions. I'll stop back in the queue.
Dolev Rafaeli: Absolutely. Thank you.
Jules Abraham: Thank you. This concludes our question and answer session. I would like to turn the conference back over to Dolev Rafaeli for closing remarks.
Dolev Rafaeli: Thank you, everyone, for showing up for this call. I appreciate your interest in the company. We will be presenting again, in the middle of November, presenting our third-quarter results. thank you very much.
Jules Abraham: Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Thank you.
Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Thank you.
Okay.
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