Good day, everyone, and welcome to Vivos Therapeutics Fourth Quarter and Full Year 2023 Conference Call. At this time, participants are in a listen-only mode. A question-and-answer session will follow management's remarks.

This conference is being recorded, and a replay of today's call will be available on the Investor Relations section of Vivos' website and will remain posted there for the next 30 days. I will now hand over the call to Julie Gannon, Vivos' Investor Relations Officer for introductions and reading of the safe harbor statement. Please go ahead..

Thank you, operator. Hello, everyone, and welcome to our conference call. A copy of our earnings press release is available on the Investor Relations section of our website at www.vivos.com. With us on today's call are Kirk Huntsman, Vivos' Chairman and Chief Executive Officer; and Brad Amman, Chief Financial Officer.

Today, we'll review the highlights and financial results for the fourth quarter and full year 2023 as well as more recent developments and Vivos plans for 2024. Following these formal remarks, we will be happy to take questions.

I would also like to remind everyone that today's call will contain certain forward-looking statements from our management made within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities and Exchange Act of 1934 as amended, concerning future events.

Words such as aim, may, could, should, projects, expects, intends, plans, believes, anticipates, hopes, estimates, goal, and variations of such words and similar expressions are intended to identify forward-looking statements.

These statements involve significant known and unknown risks and are based upon a number of assumptions and estimates, which are inherently subject to significant risks, uncertainties and contingencies and many of which are beyond the company's control.

Actual results, including without limitation, the results of Vivos' growth strategies, operational plans, including sales, marketing, product acquisition and integration, research and development, regulatory initiatives, cost-saving plans and plans to generate revenue as well as future potential results of operations or operating metrics such as the potential for Vivos to achieve future positive cash flows and other matters to be addressed by Vivos' management in this conference call may differ materially and adversely from those expressed or implied by such forward-looking statements.

Factors that could cause actual results to differ materially include, but are not limited to, the risk factors described and other disclosures contained in Vivos' filings with the Securities and Exchange Commission, including the risk factors and other disclosures in our Form 10-K for the year ended December 31, 2023, which was filed with the SEC today and our other filings with the SEC, all of which are or will be accessible on the Investor Relations section of the Vivos' website as well as the SEC's website.

Except to the extent required by law, Vivos assumes no obligation to update statements as circumstances change. Finally, please be aware that the U.S. Food and Drug Administration has given certain Vivos appliance's 510(k) clearance to treat mild to severe OSA.

With the FDA clearance for severe last November, treatment of patients with severe OSA is no longer needed to be performed off-label at the clinical discretion of the treating doctor and is now an integral part of the treatment protocol for Vivos. Now at this time, it is my pleasure to introduce Kirk Huntsman, Chairman and CEO of Vivos.

Kirk, please go ahead..

Thank you, Julie. I want to thank you all for joining us on today's conference call. In a moment, I'll turn the call over to our Chief Financial Officer, Brad Amman, who will walk you through the highlights of our fourth quarter and full year 2023 financial and operating results. After that, we'll be happy to take your questions.

But before I do that, I'll offer some brief remarks on industry events and our progress throughout the past year. 2023 began with a flurry brought on by a milestone FDA regulatory clearance in January for Vivos and ended in November with an even larger and unprecedented clearance to treat severe OSA in patients.

Each of these hugely important achievements garnered a higher level of visibility, respect and overall interest in Vivos, both in the public markets as well as within the sleep medicine world.

Meanwhile other separate market forces and events created challenges across the dental sleep oral appliance space and we battled hard for every dollar of revenue throughout the year. Only after our latest FDA clearance in late Q4 did we start to see sales stabilize and began to trend positively again.

Throughout 2023, we accelerated our cost-cutting and expense reduction efforts that began in 2022 and took many actions to adjust to the changing market conditions by implementing new revenue stimulating activities. Here in 2024, we are now beginning to see the benefits of these initiatives.

In 2023, our full year operating expenses declined by 27% on a year-over-year basis and our net operating loss was down 57% year-over-year. That is a considerable achievement and it speaks to the tremendous efforts and dedication of our entire team here at Vivos. Also let me be clear that these are not onetime cost reductions.

Our full year results reflect ongoing operational cost reductions and efficiencies that we have been able to implement throughout our entire organization. Complementing this we took further steps to strengthen our regulatory approvals enhance our liquidity position and shore up our capital structure.

For example, early last fall shareholders approved and we effected a 1-for-25 reverse stock split. In November 2023, we closed a $4 million private placement priced at the market.

More recently just this past February, the investor in the November private placement exercise 50% of the warrants issued in the November transaction at an exercise price of $4.02 per share, which generated about $4 million in gross proceeds for Vivos.

We believe these actions in combination with our cost-cutting measures over the last year have given us a much improved financial foundation to support our revenue growth initiatives in the coming year.

While we will need to raise additional capital to enhance our revenue performance and boost our stockholders' equity for NASDAQ purposes, we continue to anticipate that our revenue side initiatives will bear fruit, which could lead us to becoming cash flow positive from operations by the end of this year.

When I reflect on this incredible Vivos journey, I'm extremely grateful and proud of our accomplishments. Our singular vision to provide the best patient care for those experiencing breathing and sleep disorders including obstructive sleep apnea or OSA is being realized more and more each and every day.

As I mentioned earlier at the beginning of last year and for the first time ever, the FDA cleared a Vivos' oral medical device that does not include mandibular advancement to treat mild to moderate OSA.

More recently and in yet another unprecedented achievement, Vivos received FDA 510(k) clearance for our CARE line of oral medical devices to treat severe sleep apnea in adults. These clearances not only validated our tireless work and investment but also gave us an amazing paradigm shift that points to a bright future.

Two other things happened during 2023 that are both noteworthy and potentially game changing. The first is a clinical breakthrough and the second is an important tweak to our overarching go-to-market strategy.

On the clinical front, we pushed the boundaries of our understanding of how to impact both the form and function of the human airway to new heights. Then we've leveraged that information to acquire, develop and refine an entirely new set of interdisciplinary treatments and protocols.

This gives Vivos a full line of OSA treatment options across a range of price points for patients and represents an entire paradigm shift in the treatment of breathing and sleep disorders.

When applied to patients with varied degrees of breathing and sleep disorders we are seeing new breakthroughs and greater levels of success in achieving dramatic clinical improvements. Much work remains and further testing is already underway, but we are extremely encouraged by what we've seen thus far.

The second 2023 potential game changer is that we discovered what we now believe is the key to scaling our business in a way that will allow our technology to have a broad and significant impact across the entire health care spectrum.

This discovery came about as we look closely at several highly successful independent Vivos VIP practices across the country and then identified the common traits behind how they had achieved their success. These systems and best practices have been tried and tested in actual operating clinical practices across the country.

In the near future, we will report on our field execution of these important and potentially game-changing tweaks to both our clinical diagnostic and treatment protocols to our business model.

Suffice to say for now that coupled with our recent regulatory victories and not to mention those that are still pending, we believe we are well positioned operationally to competitively and competitively to deliver on the promise our technology holds. Other important and very positive market developments came about in late 2023 and early 2024.

The first was the announcement by a leading CPAP manufacturer that they were suspending CPAP shipments into the US pursuant to an ongoing recall and consent decree with the FDA. Since 2021, millions of CPAP units have been recalled by the FDA due to serious safety and health concerns.

This caused a great deal of alarm and concern among both providers and patients that led many to seek alternative treatments such as oral appliance therapy. The second important development came in an early 2024 announcement by UnitedHealthcare of their new policy guidelines for OSA.

Effective March 1 of this year UnitedHealthcare now mandates a regimen of oral appliance therapy as a crucial first step before considering surgical placement of neurostimulation implants for adult patients diagnosed with moderate to severe OSA.

Many in the sleep medicine community believe that other insurance carriers will soon follow United's lead on this issue, thus sending many thousands of prospective implant patients to first seek treatment at their dentist.

A large portion and perhaps a majority of such patients have severe OSA, for which the only FDA-cleared solution is with Vivos CARE oral medical devices.

We believe these two market developments will likely serve to stimulate demand for all forms of oral appliance therapy especially now that Vivos' CARE oral medical devices are now an integral and prominent part of moderate to severe OSA treatment. In summary, as we move forward in 2024 and beyond, we are extremely optimistic about the future.

Our expectations are bolstered by all that I have just mentioned. But most of all by the reception and interest, our products and technology are garnering throughout the medical field. Vivos is no longer a story about a novel oral appliance directed at dentists.

Today, it is about the world's first real medical alternative to the treatment of severe OSA, and the only treatment that can offer all OSA patients a glimmer of hope that they may someday become free of their CPAP machines. I want to thank you all for joining us on today's conference call.

Now let me turn the call over to our Chief Financial Officer Brad Amman to review our financial results. Brad please go ahead..

Thank you, Kirk, and good afternoon, everyone. Today, I'll review the highlights of our financial results for the fourth quarter and full year 2023.

For further information on our results for the three and 12-month periods ended December 31, 2023, I'll refer you to our earnings release, which was distributed earlier today and our annual report on Form 10-K which is available on the SEC filings portion of the Investor Relations section of the Vivos website at vivos.com/investor-relations.

Today, we reported fourth quarter 2023 total revenue of $3.2 million compared to $4 million for the fourth quarter of 2022.

The quarter-over-quarter decrease was due to lower revenue generated from appliance sales and VIP enrollments particularly and partially offset by increased home sleep testing service revenue and seminars conducted at the Vivos Institute here in Denver.

During the fourth quarter of 2023, we enrolled 40 VIPs and recognized VIP revenue of approximately $700,000 compared to 50 VIPs for a total of approximately $1.2 million in revenue during the same period last year. Revenue was impacted by the lower number of enrollments and the addition of new entry levels into the VIP program at lower price points.

We sold 1,979 oral appliance arches during the fourth quarter of 2023 for a total of approximately $1.4 million compared to 2,938 during the fourth quarter of 2022 for $2 million. During the fourth quarter of 2023 and 2022, we recognized approximately $200,000 of billing intelligence service revenue.

We also recognized $200,000 in myofunctional therapy service revenue, compared to $300,000 during the same period last year and $300,000 in sponsorship, seminar and other revenue compared with none in the prior year. Lastly, during the fourth quarters of 2023 and 2022, we recognized $200,000 in revenue from our home sleep testing ring lease program.

For the full year 2023, revenue was $13.8 million, compared to $16 million for the full year 2022. The decrease was attributable to the same factors I just mentioned. During 2023, we enrolled 150 VIPs for revenue of $3.9 million, compared to 196 VIPs and revenue of $4.8 million in 2022.

In addition to lower enrollment revenue, revenue growth in 2023 was impacted by increases in estimated VIP customer lives, which are calculated separately each year and estimated to be 23 months in 2023, an increase of 28% compared to 18 months in 2022.

This impacts the amortization of revenue to be spread over a longer period of time, thus decreasing the revenue that is recognized over the same period when compared to 2022.

Although, this negatively impacts our revenue recognition, it is a result of customers staying active for a longer period of time, thus increasing our customer retention year-over-year.

The average VIP enrollment contract during the period decreased from approximately 31,500 during the year ended December 31, 2022 to approximately 26,200 during the year ended December 31, 2023.

Additionally, our revenue was impacted by new entry levels into the VIP program ranging from 2,500 to 50,000 and adding the $8,000 pediatric program, which was received positively by our providers. However, it has also results in lower revenue per contract. This coupled with fewer enrollments resulted in lower revenue for 2023.

During the full year 2023, we sold 8,240 oral appliance arches for a total of approximately $6.1 million, a 22% decrease, compared to 12,281 oral appliance arches for a total of $7.8 million.

We attribute the decrease in product sales in part to a negative CBS news report that came out in March 2023 regarding an unrelated oral device called the AGGA that was not cleared for use by the FDA and was being used off-label.

Although Vivos' CARE devices are cleared by the FDA based upon our continuing discussions with our dentist customers, we believe that some practitioners pause purchases until they learn more about the issue.

Additionally, for the full year 2023, we recognized $1.2 million in home sleep testing service revenue, which is 100% increase compared to $600,000 for the full year of 2022. For the full year 2023, we recognized $900,000 in myofunctional therapy revenue, essentially flat with the prior year.

For the full year 2023, we had $900,000 in billing intelligence service revenue compared to $1.2 million in the prior year. Lastly, we recognized $200,000 in Center product revenue compared to $600,000 for the full year of 2022.

Gross profit was $2.1 million for the fourth quarter of 2023, compared to gross profit of $2.4 million for the comparable period in 2022. Gross margin was 64% and 60% for the fourth quarters 2023 and 2022, respectively. Gross profit for the full year 2023 was $8.3 million, compared to $10 million for the full year 2022.

Gross margin for the full year of 2023 was 60% compared to 63% for the full year 2022, due to lower revenue. Sales and marketing expenses were once again lower quarter-over-quarter and year-over-year. Expenses were $600,000 for the fourth quarter of 2023 compared to $1.3 million for the fourth quarter of 2022.

For the full year ended December 31, 2023, sales and marketing expense was approximately $2.5 million compared to $5.3 million for the year ended 12/31 2022.

The lower spend reflects website development for both vivos.com and vivosinstitute.com that occurred in 2022 and lower sales commissions and sales-related expenses in 2023 commensurate with lower VIP enrollments. We continue to see significant reduction in general and administrative expenses as well.

For the fourth quarter of 2023, general and administrative expenses decreased by $1.5 million or 21% to $5.4 million compared to $6.9 million for the fourth quarter of last year. This year-over-year decrease reflects substantial impact, our previously announced cost-cutting efforts are making.

We continue to believe these efforts will reduce our cash burn, as we look to ramp revenues and move toward cash flow positive operations. For the full year of 2023, general and administrative expenses decreased $6.6 million or 23% to about $22.5 million compared to $29 million for the full year of 2022.

The primary driver of this decrease was a change in personnel and related compensation of approximately $3.7 million. Total operating expenses for the fourth quarter of 2023 decreased by a significant amount, $2.2 million or 26% versus the fourth quarter of 2022 also reflecting Vivos' cost-cutting initiatives.

For the full year 2023, operating expenses decreased by $9.5 million or 27% compared to the full year of 2022. Operating loss was approximately $4.3 million and $17.3 million for the three and 12 months ended December 31, 2023 compared to $6.1 million and $25 million for the comparable periods last year.

This decrease year-over-year and operating loss was primarily from lower G&A due to expense cuts and the other factors I just discussed. Our cost-cutting initiatives also led to significant year-over-year reductions of net loss of $10.3 million or 43% reduction and a $1.8 million or 30% reduction for the fourth quarter, respectively.

Vivos' plans to utilize its cost-cutting reductions to help achieve cash flow positive operations by the end of 2024, should revenue increase as planned. Turning to our statement of cash flows. Cash burn from operations for the year ended December 31, 2023 was $11.9 million, a decrease of $7.7 million compared to $19.6 million during the prior year.

This further is evidence of the positive impact of our expense reduction initiatives.

For the year ended December 31, 2023 net cash used in investing activities of $900,000 consisted of capital expenditures for software, related to the development of VIP ordering software for internal use, which is expected to be placed in service in 2024 as well as a purchase of patents and other intellectual property in February of 2023.

This similarly compares to net cash used in investing activities of $900,000 in the comparable 2022 period, arising from the same capital expenditures for internally developed ordering software.

For the year ended December 31, 2023, net cash provided from financing activities of $10.9 million related to our January and November 2023 private placements. As of December 31st, 2023, we had $1.6 million in cash and cash equivalents compared to $3.5 million as of December 31st, 2022.

As previously announced, following the end of the year, in February of 2024, Vivos entered into an agreement for the exercise of an outstanding common stock purchase warrant held by an institutional investor to purchase an aggregate of 980,393 shares of Vivos' common stock for gross proceeds to the company of approximately $4 million to augment its liquidity position and stockholders' equity.

The transaction closed in February 2024. As Kirk mentioned earlier our goal remains to become cash flow positive from operations by the end of the year. Back to you Kirk..

So, that concludes our prepared remarks. Now, we'll be happy to take questions.

Operator?.

Thank you. Ladies and gentlemen, we will now conduct a question-and-answer session. [Operator Instructions] Your first question comes from Scott Henry from AGP. Your line is now open..

Thank you and good afternoon.

I guess for starters now that we're into 2024, do you have any guidance for the year or how we should think about revenues? And within that, obviously, first quarter is just a couple of days from being complete, maybe how we should think about first quarter relative to the just completed fourth quarter?.

Well, Scott, we've got a long a long history of not providing guidance simply because everything is constantly evolving around here. And I think that will become clear over the course of the next few weeks. As further progresses made and further announcements are made with respect to some of our current and pending initiatives.

So, I would say that our model for how we're doing things at Vivos is going to evolve rather dramatically and rather importantly over the course of 2024. And I think it will reposition us to garner important new revenue streams and also to develop greater profitability and higher levels of revenue.

So, it seems -- I know that my answer probably doesn't help you, but it is the absolute correct answer at this time. We're making some important -- as I mentioned in my prepared remarks, we're making some very important and dramatic changes and pivots in our business model and we expect those to bear fruit through the course of 2024.

Again, we have -- we continue to maintain that as these things come about and as they develop further that they will begin to reflect in our actual performance both on the top line and in our profitability and cash flow..

Okay. Yes and I appreciate the color. Perhaps just asking it a little different with a little just different spend on it.

First quarter because a lot of these initiatives are going to take time, should we expect first quarter of 2024 to look similar to fourth quarter 2023? And also as you mentioned the goal of profitability I guess in fourth quarter what sort of quarterly revenue number do you need to get to profitability? Thank you..

So, I think the answer to your first quarter consecutive quarters I would say at this point in time are likely to be fairly comparable. I would say that the uptick that we are expecting here would begin in Q2 and then really accelerate in Q3 and Q4.

And as far as -- what was the last part of your question, I don't recall?.

What quarterly revenue number would you need to reach cash flow breakeven from operations..

So, about 6 -- between $6 million and $7 million is going to get us there. I think that's going to be pretty close.

We're -- that number is changing a little bit as we continue to reduce overhead, but if you think about revenue in the $25 million to $30 million range that gets us really close to -- on an annual basis that gets us to -- so what we're saying here is that, we would expect on a run rate basis to be cash flow positive by the end of this year..

Okay.

So not necessarily the quarter, but maybe the last month of the year is that what you're saying?.

Something -- we expect -- depending on how things go here, we've got some important things that are pending and we'll be making some announcements as they come to fruition. But I think probably in Q4, you'll start to see a full measure -- the full measure of the impact of these things that we're working on, so..

Okay. Great. And then the fourth quarter is always the hardest to figure out because you got to kind of back it out of the other three quarters from the 10-K. But it looks like the sleep testing services ticked up in a material way in fourth quarter.

Am I interpreting that correct? And would you expect it to continue at these higher levels? Or was that kind of a onetime event?.

We're doing a lot more with -- I think it's pretty well known that we use sleep image and there cardiopulmonary coupling technology that's delivered through a ring that's worn on your finger. That -- our doctors and those that are out there in the field are using that at an ever-increasing utilization rate.

And so we would -- yes, we would expect that to continue. We're pleased with what's happening there. We're helping our doctors today convert those testing results and the patients who test positive into actual cases. That's our -- that's one of our important initiatives that we have..

Okay. Great. Thanks for taking my questions..

You bet..

Your next question comes from Lucas Ward from Ascendiant. Your line is now open..

Thank you. Good afternoon gentlemen and congratulations on the tremendous progress that you're making in the business..

Thank you, Luke..

You are welcome. So I mean, it's just an amazing situation with the Philips recall. And at the same time you get this 510(k) clearance for the oral appliances for severe sleep apnea. It just -- so in theory there's millions of people that would be looking for an alternative, but we don't really see any sign of it yet in the financials.

And I'm sure it's frustrating to you as well. I guess as an analyst, I'm just trying to understand like what is the scale of the opportunity? And what is the timing in terms of seeing the wave of people coming over let's say from CPAP to Vivos..

That's an excellent question. And here's what I would say. The scale of the opportunity as you phrased it I think is and always has been extremely large. I think all of us who have been involved in this journey have always believed in the dramatic impact that this technology can have on the population that suffers from sleep apnea.

Now that we've added the severe segment of that population, it's even more powerful and more important. The challenge has been that up until now the channel, the primary channel that Vivos has had for the application of this technology and the distribution of this technology has been through the dental community, almost exclusively.

And that is what we hope to change. That is what we are already in the process of doing. And I hesitate to get into too much detail about that just yet because we'd like to make sure that we've got all of our ducks in a row with some of the strategic changes that we're making.

But suffice to say that there are -- the full realization of the potential of this technology will only be realized once we get this technology through other channels which are the focal point of our efforts today and the new initiatives that we've referred to.

So I think that you're spot on with all the confluence of events that I highlighted in my remarks, the things we're seeing in the marketplace, there is a strong undercurrent of things coming our way and we are repositioning assets and resources. We've already begun that process.

And so there are things that we will be announcing and we will be addressing here and making public over the next few weeks and months that we'll continue to just sort of put meat on the bones of what I just said there.

But the opportunity is tremendous and we are refocusing and repositioning this company to be able to put it in a position to really reach its full potential..

Okay. I guess related to that then some of the specific initiatives you announced the partnerships, you've got Ormco and Noum, Lincare, DEKA.

Could you give us an update on some of those external partnerships and what you see happening in 2024?.

I would say that we're very pleased with the progress of most of those relationships. I think we're a little frustrated with the Lincare relationship at this point in time in terms of where we're at. And we'd hope to be a lot further along.

I think there's some logistical things that have happened out there that have made that progress go a little bit slower than what we had hoped but we continue to push through and we hope that that continues to evolve in a positive way. The other relationships that you mentioned are exciting and moving forward.

And – they're going to take a little bit of time, although the Ormco relationship and all that is actually taking off very, very well. We're very excited about that and the kind of synergistic response we're getting.

So it's – no, I think all of those things are starting to bear fruit and it just takes a little bit of time to get it over the hump here. But what we're starting to see that – one that you did not mention, we're starting to see I think probably two years ago maybe more we mentioned the entree that Vivos had into the DSO business.

And after just slogging it out for the last couple of years, we finally have the attention of the DSO community. And I think we're fielding more calls and inquiries and have more DSO practices in some stage of early development.

And I don't want to call it testing but just basically early adopters within the DSO community that we're very, very excited about it. We have doctors in all of the – I'd say all of them I think most of the major DSO companies and the results that they're getting and the progress that they've made has really caught the eye of senior management.

And I think finally, we're starting to see some traction in the DSO business. I've always said that that would be a low – sort of a slow boil but it starts – it feels like here, especially since we got our latest clearance. It feels like the interest level and the interactions have become much more productive, much more encouraging to our entire team.

So that's – that's an area that we see that will also continue to grow throughout the years ahead. So very encouraged by that..

Wonderful. If I may, I was wondering about the AFD acquisition sort of nine months on, whatever it is I guess maybe it's almost a year. How is that going from a revenue standpoint? Obviously, you don't break it out but are you – is it – are you as pleased with it now as you were at the beginning..

Yes. It's actually still a very, very important void in our product line. And also it gives us a piece of technology that we have found and discovered to have some incredible potential and some incredible and powerful impact.

I mentioned in my prepared remarks that there were some significant advances that we've made internally around here on treatment protocols and whatnot. And that technology was referred to as The Unilateral BiteBlock Technology and other things that we're doing are actually bearing great amounts of fruit.

That line of products is the fastest-growing line in our entire product line today. So we're very excited about that. The future is really strong. It's everything that we thought it was going to be when we acquired it and more, so, very excited about that. Thanks for asking about that. I haven't referenced that earlier..

Sure. Okay. One more question. On the expense side, it looks like we're -- it was about $6.1 million in operating expenses for Q4. I'm just wondering, where you see that bottoming out. Can that continue to go down? Or are we kind of at bottom already with total operating expenses on a quarterly basis..

Brad, do you want to take that?.

Sure. Sure. We made some very significant cost cutting throughout 2023. And we've cut pretty much down to the bone in terms of personnel costs. We have raised some capital and then also had some additional professional fees that in terms of relating to some of the capital raises -- that we've had and so forth.

So in terms of professional fees I'd say that component would -- could still fall. But -- and then we'll get a full year in 2024 of those cost-cutting -- the cost-cutting decreases that we initiated in 2023 we'll have a full year in 2024. So that will help us in terms of the full year. And first quarter.

over first quarter should experience the same thing in 2024. So we'll have it for about half the year. We'll see some additional reductions year-over-year. And then, the second half of the year should be on par with last year..

So I think just to put a fine ….

Okay. So….

Just to put a fine point on that let me just add to what Brad, just said there. In Q3, we actually had about $800,000 lower costs on an operating SG&A basis right? And I think it was -- as Brad mentioned, the increase in Q4 was due to several things related to professional fees that went up and whatnot.

But we -- that's not going to be part of our run rate. I think a steady state run rate would be more like Q3.

Would you agree with that Brad?.

Yeah..

More like Q3. Yeah. So I think I would look at that as a proxy for what we're going to see in 2024. And as I mentioned, as Brad and I both mentioned, our cost-cutting initiatives continue. So we are extraordinarily conscious of every dime that we're spending and where it's going and the ROI on every dollar spent.

So we would expect to see that continue as far as just either flattening out or continuing to drop as we move forward throughout the year. As some of these new revenue initiatives take hold then obviously we hope that the losses begin to -- we would expect to see the losses begin to diminish. So..

Okay. Kirk thanks. Thank you, Brad. I'm good..

There are no further ….

Thank you..

…questions at this time. Mr. Huntsman, please proceed with your closing remarks..

Well. Thank you everyone. We appreciate the time that you've spent with us here this afternoon. We appreciate the support that we received from our investors and the investment community.

We realize that this has been a long journey and that we are -- there's a lot of things that we have had to do and had to put into place to get to a point where we can say that we are very, very close to getting to cash flow breakeven and profitability.

As we roll forward in the future we expect to see many, many good things continue to happen, more regulatory approvals, more initiatives that will begin to enhance our revenue. And we will reposition this company and allow ourselves to evolve until we get to that point.

And so we look forward to sharing our continued progress with you, as we continue to execute on our plans throughout this year of 2024. So thank you. And have a great evening and a great holiday..

Ladies and gentlemen, this concludes today's conference call. Thank you for joining. You may now disconnect..