SANUWAVE Health Inc (SNWV) 2025 Q4 法說會逐字稿

Please stand by. Your meeting is about to begin. Hello and welcome everyone joining today's SANUWAVE earnings call. (Operator Instructions)

Please note this call is being recorded. We are standing by. If you should need any assistance.

It is now my pleasure to turn the meeting over to CEO, Morgan Frank. Please go ahead.

Thank you very much.

Morning, everyone. Welcome to the Sany wave fourth quarter and year-end 2025 earnings call. Our Form 10-K was filed with the SEC last night along with our earnings release, and our updated presentation was made available on our website in the investor section. Please refer to that during the presentation.

So joining me on the call is Peter Sorenson, our CFO, and after the presentation, we will open the call to Q&A. So, let me begin with the old popular forward-looking statements and other disclosures. This call may contain forward-looking statements such as statements relating to future financial results, production expectations, plans for future business development opportunities and expectations regarding the impact of changes in tariff rates. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the company's ability to control. Description of these risks and uncertainties and other factors that could affect our financial results is included in our SEC filing. Actual results may differ materially from those projected and forward-looking statements. The company undertakes no obligation to update any forward-looking statement.

Certain percentages discussed in this call are calculated in the underlying whole dollar amounts and therefore may not recalculate from the rounded numbers used for disclosure purposes.

As a reminder, our discussion today will include non-GAAP numbers, reconciliations between our GAAP and non-GAAP results can be found in our recently filed 100 for the period ended December 31, 2025.

Okay, so, let's prefaced, let's dig into what was a, good, if slightly complicated quarter. Q4 was an all-time record foranuwave with revenues of $13.4 million, up 30% versus the same quarter last year. And adjusted EBITDA of $4.8 million, up from $3.7 million in the prior year and comprising 36% of revenues.

Revs for the year were $44.1 million, up 35% versus 2024, and full year adjusted EBITDA rose to $13.6 million, up 89% versus $7.2 million the year before.

We sold 624 ltimate Systems in the year as compared to 374 in the prior year, and the 255 number in Q4 was by far the highest number in company history.

Beating our prior record, which is in Q3 by 100 systems, we sunset the Derma pace and profile product lines in Q4, and this, along with taking a reserve for sales and use taxes to certain customers resulted in some charges in Q4 that increased cost of goods sold in OpEx, which Peter will walk you through in a bit.

Okay, so that was 2025. Let's address the, pachyderm in the parlor, which is, so what about 2026?

Obviously the changes in CMS reimbursement for skin tubs and for allografts have had some pretty wide ranging effects, and I'm sure many of you have heard a number of the other companies in the space speak to that, seen the changes in estimates and the results they've announced, as we've discussed in the past, none of those changes to reimbursement pertain to Ultramist or to the 97,610 code. Which got a small, like a couple of dollar bump up from 2026, but no company is an island and anything that affects the practitioners in this space affects everyone. There seems to be a fair bit of confusion about exactly how this winds up impacting sine wave. So let me see if I can provide a little clarity here. The.

The reduction in reimbursement price for skin substitutes to around $127 a square centimeter was a 90% to 95% price cut in an approximately $15 billion category. Adding to that, the new CMS policy of you can only bill what you can apply what you apply, wastage is not covered. Just to put even more pressure on the modality and as I'm sure you can imagine, very few wounds are perfectly rectangular. So piled on top of this, CMS adopted a very aggressive stance on audits for practitioners using skin substitutes.

Seeking out improper billing, overuse, or use of products that were priced beyond what they deemed to have been medical necessity. A lot of the practitioners that use these products are also our customers. Soltius is a useful treatment in conjunction with allograft, so. The long and short of this is it put a lot of very intense pressure on the space. We've seen individual wound care providers get hit with nine-figure clawbacks on skin substitutes, and yes, really 9 figures as these pressures intensified, it took a fair few companies out of the space altogether and it left. Even those who were doing business, and who were doing everything right in fear of kind of ongoing audit and revenue loss, even if only from an insufficiency of documentation, rather than a misuse of anything or any sort of misbehavior, so this has affected both our overall customer count.

And the patient count within a number of our customers like we saw this in Q4, we've seen it in Q1, and this has affected our growth rate. Like this is the tide going out that we kind of discussed in the press release. I mean internally we've been discussing it as living in a fish pond where someone's grenade fishing, but H1stly I think a lot of the industry underestimated how sharp this shock would be and how deep these audits would go, so. I mean this obviously leads to sort of the question of, so what's the tide coming in and you know that tide is this, right, that the patients didn't go away, the wounds didn't go away and sort of life after the grenade is finding a way as Many of the other wound companies have said it looks like Q1 is sort of a shock bottom and from our own personal experience, kind of in amongst the upheaval, there's starting to be some real green shoots and some of the cus well where some of the customers are pulling back, we've seen others expanding to fill the spaces that the others left, like a significant number of mobile wound providers dissolved, but we're now seeing a number of new ones reform.

And this has added, a new customer category to kind of our internal taxonomy which we're describing as the baby elephants. Like we're seeing these new groups coalesce kind of often out of providers from multiple former groups, and, we're working with them to get them their first ultramate systems, build mistreatment into their patient treatment plans, into their practice flow. Like many of them are starting small, like they're doing like 3 to 5 practitioners, but have eyes on. To quote one of them, adding a zero to that by year end, hence the sort of baby elephant descriptor, with the period of high priced skin subs behind us, many of them feel a lot safer about 2026 billing than they did in 2025. Like the sort of industry disruption that we've seen has created what looks to be a really significant jump ball, and as you said, the patients and the wounds are still with us, and there is a land grab going on to see who gets to serve them. Land grabs are speed moves, and the best way to, the best way to adapt to this opportunity is to expand rapidly. So we've engaged with a number of resellers to kind of add to our feet on the street count and go get after, this current opportunity. So, what does that look like? .

Yeah, the partners we've chosen have deep wound care expertise. They have the strong customer relationships. They're very much the sort of folks that we have long been interested in working with, but who were really, who were too focused on the skin subspace, to really be. Interested in partnering, so we've been highly selective. We're working only with those who we see as being strong long-term partners who have excellent customer service culture and a real sort of presence purchasing sales strategy and our goal is to gear up here, move very quickly, and engage with the newly available white space in this industry, and you know nothing does that like adding feed to the street. Most of these. Partners are acting as resellers or stocking distributors so you know you will see that in the ASP figures as we sell products to them at a wholesale price rather than paying them a commission.

And selling it retail like this actually works out well for Sanuwave you know these sales don't carry any s Salesforce costs for us and they actually wind up being a bit higher in terms of operating margin than our W-2 sales so.

Obviously these sorts of systems always create this potential for inventory and channel issues, and that's something we've been really heavily focused on keeping manageable. We're trying to keep channel inventory down in the range of kind of 8 to 10 weeks, and that should decline as resellers ramp up with their selling effectiveness. We'll aim to drive that lower through kind of smaller frequent re-ups, particularly as we get our ERP systems better. Linked with the resellers, 32% of revenues in Q4 came through outside resellers and distributors. That was up from 26% in the prior quarter but still a little below the 2024 full year average of 36%. It's just worth noting back in 2024 those were all commission driven distributors, not resellers, so the wholesale pricing which began in Q3 is new.

One of the effects of this channel shift to stocking distributors and resellers is that you know it causes the units in the field number that we have been providing to kind of lose resolution right? Like that number is. How many systems have been shipped to people out in the field, but when you ship a system to a reseller and they have not yet resold it to an end customer, now it's kind of sitting on their shelf, right? And so it's no longer really a good metric for determining usage rates.

So in combination with the disruption to our customer base that's been going on, during the last sort of quarter and a half, this seemed like a good time to have like a hard first principles rethink on really how we think about that number, and to clean it up. And so the number we've arrived at, we're calling active systems and. This is defined as systems owned by customers who have ordered applicators within the last 6 months or within their expected ordering time frame. There are some customers who for whatever reason like to make bulk orders sort of annually. We then ran through this and called all the customers we know to have shut down and we removed them and their systems from the count even if they had ordered within the last 6 months. As that just seemed like good housekeeping and the most accurate way to look at the data, this resulted in an active system count of 1,292 for the end of Q4. This really doesn't map that well to the systems in the field figure which we've used in recent quarters. To give you some perspective, using this methodology in Q3 of 2025 would have resulted in 1,236 active systems.

So the active system count for Q for end of Q4 was up 56 systems or about 5% from the end of Q3. We took 168 systems out of that number during Q4 as discontinued, which gives you a sense of kind of the magnitude of the challenges in the wound care space right now.

So all in all, like, here we are, a lot of tide's gone out. A new tide is coming in, and ultimately the idea of wound care moving to, both evidence and cost effectiveness based standards looks like a good thing for us Sandy wave, right? Ultramist is a great product, real efficacy, clinical data, and value for money from a payer's standpoint. Healing wounds is a lot less expensive than living with them. And despite, or I mean, H1stly, maybe because of the current disruption. You know this market is pending in a direction that looks extremely favorable to us in sort of the medium and long-term. So with that, I'll turn you over to Peter Sorenson, our CFO, who can walk you through the financials in some detail.

Thank you, Morgan. We delivered a strong fourth quarter with revenue reaching a new all-time quarterly high and growing 30% year over year. This performance reflects continued execution of our commercial strategy and increase in demand for ultraus, particularly driven by higher consumable utilization and continued system placements. For the full year, revenue grew 35% to $44.1 million supported by a 24% increase in consumable volume and a 67% increase in system sales.

We also saw modest pricing strength in consumables while system pricing reflected a higher mix of reseller-driven placements which we view as an important lever to accelerate expansion of our install base as Morgan referenced.

Gross margins expanded year over year to 77% driven by pricing improvements in consumables and continued reductions in system cost of revenue partially offset by mix and pricing dynamics on the system side.

Before turning to the financials in more detail, I want to briefly address the restatement reflected in our 4 and 10k.

The restatement has been completed and primarily relates to previously unrecognized sales tax liabilities identified through a third-party nexus study, as well as an error in the allocation of revenue for certain extended warranty arrangements. From a quantitative standpoint, the revenue impact was not material, totaling approximately $300,000 across the first three quarters of 2025. The more significant impact was related to sales tax, resulting in approximately $1.6 million of additional general administrative expense and $0.1 million of interest expense in 2024. In 2025 we recognized approximately $1.6 million of incremental general administrative expenses and roughly $0.3 million of interest expense associated with these items.

As we move into the first quarter, we may incur some additional sales tax related expense as we complete remediation activities at the state and local level. We're actively working with third-party tax advisers to strengthen our processes and controls and ensure full compliance going forward.

As we look ahead, our focus remains on driving sustainable, profitable growth. We'll continuing to invest in key strategic priorities and expanding our active system base. With that, let's take a closer look at the financial results for the quarter.

Revenue for the three months ended December 31st, 2025 totaled $13.4 million an increase of 30% as compared to $10.3 million for the same period of 2024. This growth was in line of her guidance for the quarter of $13 million to $14 million.

Gross margin as a percentage of revenue for the three months ended December 31st, 2025 came in at 74.7%, a decrease of 320 basis points year over year, driven by a $486,000 write-off of pace inventory associated with the sun of that product line.

Absent this change, gross margin would have been 78.3%, which would have been an increase of 40 basis points year over year.

For the three months ended December 31st, 2025, operating income totaled $2 million which is flat compared to the same period last year, excluding the previously mentioned inventory write-off as well as the sales tax expense of $479,000 operating income would have been $3 million.

Operating expenses for the three months ended December 31, 2025 amounted to $8 million compared to $6 million for the same period last year, an increase of $2 million. The change in operating expenses was driven by several key factors. First, the reversal of director fees accruals and the shift from cash to stock-based compensation resulted in a net $1 million impact, with $943,000 reducing expense in 2024 on the accrual reversal and $103,000 increasing expense in 2025 from the stock-based comp.

Payroll and related headcount expenses were $358,000 higher in 2025 compared to 2024 due to increased headcount, and R&D non-personnel expenses increased by $483,000 reflecting investments and ongoing product development initiatives. Despite these expense increases, we remain focused on discipline cost management and expect operating leverage to improve as revenue scales in the coming quarters.

Net income for the three months ended December 31, 2025 was $7.7 million compared to net loss of $13.3 million for the same period in 2024, an increase of $21 million. The increase in net income was primarily driven by the change in fair value derivative liabilities, which resulted in a non-cash gain of $5.9 million in Q4 2025 versus a $13.8 million loss in Q4 2024, representing a $19.7 million year over year variance. With the majority of our warrants now exercised exchange or expired, we should see limited impact for the non-cash swing and the fair value derivative liabilities going forward. We also had lower interest expense of $2.1 million in Q4 2025, primarily due to lower interest expense on our senior debt that was refinanced at the end of Q3 2025 with JP Morgan.

EBITDA for the three months ended December 31, 2025 with $8.7 million. Adjusted EBITDA was $4.8 million versus $3.7 million for the same period last year, an improvement of $1.1 million year over year.

Total current assets amounted to $24.6 million as of December 31, 2025, versus $18.4 million as of December 31, 2024. Cash and cash equivalent totaled $12 million as of December 31, 2025.

We're grateful for the continued trust and support of our stakeholders. Q4 2025 is a strong finish to the year for Sanuwave, and we're pleased with the progress we've made across our business. As we move into 2026, we remain focused on executing the discipline, driving sustainable growth, and building a solid foundation for long-term value creation.

With that, I'll turn the call back over to Morgan.

Thanks Peter. Okay, so moving on to guidance, which I know has been sort of the bugbear of the space all earnings period, as we stated in our press release, we're guiding to $9.6 million to $10.3 million in Q1 revenues.

This is up 3% to 10% from the prior year, largely suppressed as a result of this sort of stutter step of industry impact from. CMS changes and you know the tide going out, but we expect this to get better going forward as the new tide keeps coming in and are as a result, providing a preliminary 2025 estimate range of 16% to 25% revenue growth for the year 2025 versus 2024. We're still in the early days of this new paradigm and obviously we're still collecting dots through which to draw meaningful lines.

But we're already seeing a larger amount of inbound interest from customers and partners than at any time in the company's history and the always useful kind of how big is the inbound resume file indicator is currently well off the charts. So, we'll keep that revenue estimate updated as the year goes on, after a quarter like this, especially and as ever. I want to express my gratitude to the Sandy Wave team for all the hard work and for the commitment and the trust. Like companies exist downstream of their culture. Culture lies downstream of the people, and that's what lets you adapt and thrive in, interesting times like these, so.

Well done, folks, and thank you all. So with that, we will open it up for questions.

Thank you. (Operator Instructions) Carl Burns, Northland

Thanks for the questions. You noted that you're seeing significant inbound interest and also, a number of inbound resumes as well, but with respect to the informer, can you speak a little bit in terms of your anticipation in terms of the selling cycle for those newbound interests? I know that they're going to fall in different buckets, but any sort of color you can give that would be great. And then I have a follow-up.

No, it's a good question. The. I mean, it seems like the industry has been, I mean, January, particularly January and then to a great extent February, there just seemed like there was a certain amount of kind of shock in the industry. I just think there were a fair few people who really didn't think that this price change was going to stick.

And so you know you've had some concern around that. I think it has stretched a selling cycle a little bit. The, we're starting to see some of that break loose, the, some of it also always, it's always really a function of what channel, to what channel are you selling the smaller practitioners tend to buy more rapidly, like ramping up with hospitals, IDNs, larger chains, tends to take longer.

So, yeah, I think we've definitely seen some stretch in the sales cycle, but it seems like perhaps that's starting to get better. It's a little early to say anything like too definitive.

Got it. That's helpful. And then, can you provide sort of any feel for what we can expect in terms of, even if it's a range for adjusted bit down for '26? Thanks.

We really haven't provided that guidance at this point, and I think trying to do it off the cuff on the call seems unwise. So, I think, we've provided some sort of guideposts in the past where, it looked like incremental revenue would probably drop, something on the order of 50% to the EBITDA line, so I think. That's still a fairly, that's still a fairly good kind of rule of thumb.

Great, got it. Thanks so much.

Thank you.

(Operator Instructions) Kyle Bowser, Roth Capital

Great, thanks for all the updates for taking my questions. Maybe just on guidance, so, for Q1, 3% to 10% increase, and then for the full year, 16% to 25%, I guess how should we think about, the growth rate, over the kind of balance of the year after Q1, I mean.

The full year number in terms of growth is, a decent amount above Q1. So when would we expect things to kind of flip and, start trending, towards or above that full year range to kind of get to that since the Q1 is below it.

Yeah, I mean, well, so I mean, obviously as you, as you've intuited from those numbers, we're expecting the rest of the year to be, on balance to be better than Q1.

I think, at this point it's a little premature for us to start kind of trying to break it down by quarter.

But, I think the, like many in the industry, I mean, it just seems like there's going to be, the, I mean, the back half of this year looks like it's going to be very promising, exactly where this hockey stick is.

I mean, hockey stick may be too aggressive a term, but where the inflection lies is sort of like we'll, I think we'll have a lot better ability to speak to that when we report Q1.

Like it just, it feels like there's a lot going on like right at this moment, and so I just, I think it's a little early for us to make that statement.

Yeah, no, that's fair enough, and can you talk a little bit about kind of the latest, commercial organization headcount numbers, yeah, you.

Talked about resellers and distributors contributing, 32%.

What is, what is the commercial organization look like and then how many, I don't know, relationships or 1099s do you have, associated with the non-W2.

Yeah, so I think we're at, 14 or 15 on internal sales force. H1stly I'd have to check and see exactly who said yes to some hiring. We might be a little above that.

We were definitely, we're pushing the internal sales force a little larger, and starting to fill it out with things like sales managers and adding some more kind of, key national account reps, as well as folks to manage the resellers. We've not published a how many resellers are you working with number, it's.

Certainly significantly more than we were in Q3, part of the, more so than the number of, I think more so than the number of resellers, is sort of the size of the resellers, and whereas, we've been working with people who were, smaller groups and had, a few reps, like some of the groups that we've begun to work with have. Kind of 50, 60, 70 people under them and that, as you get that ramped up like that adds a lot of potential, like exactly how long it takes these things to get, we've seen some promising early behavior from some of them. It's, exactly what the cycle is to get these folks kind of ramped up fully trained. You know firing on all cylinders and then you know for them to be able to to work through the sales cycle within their own networks is still something we're mapping like we're getting it you know we're getting it figured out but it's you know it's one of those kind of you have it's it's one of those sort of learn by doing things.

Yes, okay, I appreciate that. And then you talked a little bit about, the operating margin associated with those sales coming from resellers and distributors. How does that kind of, like, how does that compare with, yeah, you selling, internally the direct sales force?

Yeah, so, obviously when you're selling to someone at a wholesale price, right, that's going to affect ASP. So the wholesale price for, the whole sale price for a system or for a case of applicators will be lower than the retail price, right, because the resellers are making their money on the markup the.

However, there are no further costs below the line, right? So what we used to do is sell through distributors at retail and then pay a commission rate on the.

On the sales like this is the new system is pretty closely equivalent to that and obviously because we're not carrying the Salesforce costs of the reseller, not paying for, plane tickets and, lunches or whatever the.

The net effect on the operating line is actually a, it's actually a higher fallthrough margin.

That makes sense?

Okay, got it, yeah, I mean, is it a big effect, or, is it pretty similar at the end of.

The day? I mean, we really, I don't want to get into quantifying it here.

Yeah, okay, got it. And then just lastly, any updates on, pipeline, how you're thinking about potentially adding in, new products, etc.

Thank you.

Yeah, I mean, as you've probably noticed, we, you saw a, you saw some uptake in R&D. We're definitely working on some stuff. I think we'll probably have more to say about that on the Q1 call the.

From a kind of a sales pipeline standpoint, the.

The pipeline's interesting right now, like there are.

We've had a lot of inbound interest. There's, it's really there's really an educational sale going on where it's kind of like, well, talk to me about this. Like, does it really work? How can we, how do, how would we build this into our practice flow, how would it work? Where's the benefit for our patients? Like can our practitioners, how hard is this for our practitioners to learn and so, we have like the. We have a huge top of the pipeline right now, it's just, it's made a little complicated by the it's made a little complicated by the fact that obviously certain sectors of the wound care space are, having, are still grappling with the kind of clawbacks and the CMS issues. Others, I mean, we're seeing a lot of interest out of.

Wound centers, hospitals, surgical and post-surgical, we're actually exploring a couple of, non-wound applications that are potentially interesting, but, really early. So, you don't really, I wouldn't TRY to hang my hat on that just yet.

Okay, yeah, I appreciate that and thanks for taking the questions. I'll jump back and queue.

Thanks.

Thank you.

[Ian Castle with IFCM]

Yeah, I just have a couple questions. The first one, I mean, you sold 255 systems in Q4, which is just a huge number. Can you give us a sense of kind of where those systems were placed? Was it a couple of pigs in the python to use a phrase that you like to use, or, what really drove that number?

Yeah, so obviously like kind of complicated right? You sell 200 and we sell 255 systems, the actual active systems in the field rise by, about 5%, right? It's about 56% because we pulled 168 systems out due to, things.

Things not going well with certain customers, certain customers' businesses, and so, from that I think you can kind of intuit like where things went from a channel standpoint.

From a, individual customer standpoint, like there wasn't really like a, there wasn't really a pig in the python here, like there wasn't like an order that drove it. It was, there were a number of like there were an unusually large number of kind of, mid-sized orders.

Does that make sense?

Yeah, no, that's helpful.

Another question I had was, excuse me, in previous calls you spoke about, I believe, setting up a new manufacturing line for the applicators and that had the potential to increase gross margins, a few 100 basis points. Is there an update on that?

Yeah, so, there are two updates on that, one, our existing manufacturer, has very graciously, managed to reduce their prices as well. So, they're, they've taken, so we've, we're now experiencing better pricing on applicators, starting the beginning of Q1, we do this on a pool basis, so, it's we basically we use a blended average of our inventory, so, and we keep, 6 to 9 months of applicators on hand.

So it'll take a while for this to, it'll it'll trickle through gradually rather than you know be kind of a step function, with regard to the new line there were some delays in qualifying the mold it's just I.

Everybody is sort of looking at this and saying wow I've just never seen a mold this persnickety, but we seem to have it, we seem to be on top of it, and I think we're making progress. I am hopeful to see that ramp and I'm hopeful to see that hit in the next, I'm hopeful to see that start producing product in the next couple of months, but it's given the delays there, I'm just, I'm hesitant to put too firm a stake in the ground right now and say, this is the definitive timing.

Okay, no thank you.

Thank you. (Operator Instructions) Albert Hanser, Kestrel

Hi Morgan, a nice job communicating.

Changing landscape and all the cross currents. So well done on this turnaround. My question is simple and just as you kind of look to define yourself in a changing landscape and play offense by placing units, are there any kind of key industry events, trade shows, conferences that we should put in our calendar to either attend or kind of watch as you plant the flag and get out there more vocally with the customers?

Yeah, well, I mean, obviously one of the, and we'll be at a lot of shows, the sales force, the sales force does like to get around.

You obviously one of the industry bigs is SAWC. That's kicking off in Charlotte April 9

So if you're if you're looking for something to do in the next couple of weeks, that's a great wound show.

All righty, thank you.

Thank you.

Ethan Star, private investor.

Good morning. So the slide presentation noted that 168 ltram systems were determined to be discontinued in the fourth quarter, and I'm just wondering, aside from customers to shut down, what do you know about why these systems were discontinued?

My, a lot of, essentially we pulled most of the, so there are two ways they would have wound up in that bucket, right? The first is that a customer that we would have expected to order hadn't ordered for 6 months. Second is if we made a determination that the customer who owned those systems was no longer operating the business.

Okay, so generally they're.

But among those people who didn't order, I mean just they just stopped using them or you don't even know.

It's, I mean, maybe they want, it's difficult to say, right? I mean, people don't call you up and tell you why, the, I suspect that in many cases, there's always a certain, like, there's always a certain kind of low level of churn, kind of nothing like we've experienced in the last quarter or so, the.

I suspect that it's, I suspect it's financial distress for a lot of folks like the.

I mean, put yourself in the position of, you've done a large amount of, sort of allografting, and then you get a clawback nine months later for 90% of it.

How many of the, how many folks had the cash on hand to handle that? Like that seems like it's been sort of the meteor that people have been getting hit with.

Okay, so this, so Q4 is an unusually high number of discontinued systems for that reason sounds like.

Correct.

Okay, would it be at all feasible to acquire, TRY to acquire the discontinued ultimate systems, recondition them and sell them?

It's, Possibly, I don't want to, given some things going on, I don't want to talk in too much specificity about that, but, we've certainly had a similar thought.

Okay, that's helpful. Aside from the external factors mentioned in the press release, the customers tend to go through lterist consumables at a fairly steady rate or do they increase? Do you see them increasing uses of consumables as they become more familiar with the ltermi system?

That that sounds like one of those questions that's going to have a simple answer, but the reality is it depends a great deal on the customer type, right? So, if you sell a system to a mobile wound care provider who handles long-term care facilities, they will generally ramp up almost immediately, right? They'll take it on their rounds, they'll start doing treatments, you go from, 0 to 60, nothing flat, if you sell it into a.

Podiatry office, it tends to be a slower ramp as they kind of build the, if they do their marketing or kind of build a book of build a book of business that gets the.

That gets the product into more usage, like you know sell it into a nursing home or an assisted living facility, and you tend to get an early bolus as they run around and treat everyone who's got, everyone on, in the facility who's got wounds, and then it sort of backs off to a steady state, once you get the wounds in the facility more under control. And so, hospitals have a tendency to sort of start using. And then ramp up over time as kind of word gets around and people say, hey, you, this works really well on our thing you should TRY it on your thing and so the answer to that question is really complicated.

Okay, that's fair. I appreciate the answer and thank you very much.

Alright, thanks.

Thank you.

And at this time if there are no further questions in queue. I will now turn the meeting back to Mr. Frank for closing comments.

Well thank you guys. I appreciate everyone being here, first thing on a Friday morning and we'll speak to you soon, when we report Q1. Thanks again.

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.