SANUWAVE Health, Inc. Q4 FY2025 Earnings Call

Morning, everyone. Welcome to the San U.A. of the 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 Sorensen, our CFO. And after the presentation, we will open the call to Q&A. So we'll begin with the always 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, changes, and 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 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 file. Actual results may differ materially from those projected in 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 gap and non-gap results can be found in our recently filed 10k for the period ended december 31st 2025 okay so thus prefaced uh let's dig into what was a uh good if slightly complicated quarter uh q4 was an all-time record for sanuev with revenues of 13.4 million up 30 percent 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 Ultramis systems in a 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 was in Q3, by 100 systems. We sunset the dermapace 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 you for that increased cost of goods sold in opex which peter will walk you through in a bit okay so that was 2025 um let's address the uh pachyderm in the parlor which is so what about 2026 um 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 this space speak to that seeing 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 Ultramast or to the 97-610 code which got a small like a couple 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 SanuAve. So let me see if I can provide a little clarity here. 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 apply, wastage is not covered. This has 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 deem to have been medical necessity. A lot of the practitioners that use these products are also our customers. So Ultimis is a useful treatment in conjunction with allografts. 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, nine figures. As these pressures intensified, you know, 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, you know, 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 came 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 honestly, 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, right, 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, you know, kind of in amongst the upheaval, there's starting to be some real green shoots. And some of the – well, where some of the customers are pulling back, you know, we've seen others expanding to fill the spaces as 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, you know, a new customer category to kind of our internal taxonomy, which we're describing as the baby elephant. Like we're seeing these new groups coalesce kind of off and out of providers from multiple former groups. And, you know, we're working with them to get them their first ultramass systems, build mistreatment into their patient treatment plans, you know, into their practice flow. Many of them are starting small. They're only three to five 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. The sort of industry disruption that we've seen has created what looks to be a really significant jump ball. And, you know, 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, you know, the best way to adapt to this opportunity is to expand rapidly. So we have engaged with a number of resellers to kind of add to our feet on the street count and go get after, you know, this current opportunity. So, you know, what does that look like? the partners we've chosen have deep wound care expertise. They have strong customer relationships. They're very much the sort of folks that we have long been interested in working with, but 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. Our goal is to gear up here, move very quickly, and engage with the newly available white space in this industry. And nothing does that like adding feet 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 SanyWave. You know, these sales don't carry any sales force costs for us, and they actually wind up being a bit higher in terms of operating margin than our W-2 sales. So, you know, 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 synced with the resellers. 32% of revenues in Q4 came through outside resellers and distributors. That was up to 26% in the prior quarter, but still a little below the 2024 full-year average of 36%. You know, it's just worth noting back in 2024, those were all commission-driven distributors, not resellers. So, you know, the wholesale pricing, which began in Q3, is new. one of the effects of this channel shift to stocking distributors and resellers is that 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 you know during the last sort of quarter and a half um this seemed like a good time to have like a hard first principles rethink on really how we think about that number you know 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 six months or within their expected ordering time frame there are some customers who for whatever reason like to make bulk orders sort of annually um 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 account even if they had ordered within the last six 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. You know, 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 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, you know, 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, you know, both evidence and cost-effectiveness-based standards looks like a good thing for us anyway, right? Ultramist is a great product with 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, honestly, 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 Sorensen, 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 Ultramis, particularly driven by higher consumables utilization and continued system placements. For the full year, revenue grew 35% to $44.1 million, supported by a 24% increase in consumables 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 the expansion of our installed 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 Form 10-K. The restatement has been completed and primarily relates to previously unrecognized sales tax viabilities 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 recognize 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 are actively working with third-party tax advisors to strengthen our processes and controls and ensure full compliance going forward. As we look ahead, our focus remains on driving sustainable, profitable growth while 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 our guidance for the quarter of $13 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 paid inventory associated with the sun setting 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 previous mentioned inventory write-off, as well as a sales tax expense of $479,000, operating income would have been $3 million. Operating expenses for the three months ended December 31st, 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's 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 increase in expense in 2025 from the stock base count. 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 in 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. The net income for the three months ended December 31st, 2025 with $7.7 million, compared to the 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 the $19.7 million year-over-year variance. With the majority of our warrants now exercised, exchanged, or expired, we should see limited impacts of the non-cash swing and the fair value of 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 31st, 2025, versus $18.4 million as of December 31st, 2024. Cash and cash equivalents totaled $12 million as of December 31st, 2025. We're grateful for the continued trust and support of our stakeholders. Q4 2025 is a strong finish to the year for San U.A. 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 solid foundation for long-term value creation with that i'll turn the call back over to morgan thanks peter um okay so moving on to guidance which i know has been sort of the bugbear of this space all earnings period um as we stated in our press release we're guiding to 9.6 to 10.3 million in q1 revenues uh this is up three to ten percent 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. 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. You know, 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 are 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 pile indicator is currently well off the charts. So, you know, we'll keep that revenue estimate updated as the year goes on. You know, after a quarter like this, especially, and as ever, you know, 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, and culture lies downstream of the people. And, you know, that's what lets you adapt and thrive in, you know, interesting times like these. So, well done, folks, and, you know, thank you all. So, with that, we will open it up for questions.

Thank you, and if you would like to ask a question, please press star 1 on your keypad. To leave the queue at any time, press star 2. Once again, that is star and 1 to ask a question. I will pause for a moment to allow everyone a chance to join the queue. I will take our first question from Carl Burns with Northland. Please go ahead, your line is open.

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 former, can you speak a little bit in terms of your anticipation, in terms of the selling cycle for those new bound interests? I know that they're going to fall in different buckets, but, you know, any sort of color you can give there 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 selling cycle a little bit. the you know we're starting to see you know we're starting to see some of that break loose the some of it also always you know it's always really a function of what channel you know to what channel are you selling the you know smaller practitioners tend to buy more rapidly like ramping up with hospitals you know idns larger chains you know tends to take longer so you know 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, too definitive.

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

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, you know, I think, you know, we've provided some sort of guideposts in the past where, you know, it looks like incremental revenue would probably drop, you know, 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. And once again, that is star N1 on your telephone keypad. If you would like to join the queue, we will move next with Kyle Bowser with Roth Capital. Please go ahead, your line is open.

Great. Thanks for all the updates and for taking my questions. Maybe just on guidance, so for Q1, 3 to 10 percent increase and then for the full year, 15 to 25 percent, 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, you know, a decent amount above Q1. So when would we expect things to kind of flip and, you know, start trending, you know, towards or above that four-year range to kind of get to that since the Q1 is below it?

Yeah, I mean, well, so, I mean, obviously, as you've intuited from those numbers, we're expecting the rest of the year to be, you know, on balance to be better than Q1. I think, you know, at this point, it's a little premature for us to start kind of trying to break it down by quarter. But, you know, I think the – like many in the industry, I mean, it just seems like there's going to be – 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, you know, 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, fair enough.

And can you talk a little bit about kind of the latest commercial organization headcount numbers? You talked about resellers and distributors contributing, you know, 32%. What does the commercial organization look like? And then how many, I don't know, relationships or 1099s do you have, you know, associated with the non-W tool?

Yeah, so I think we're at, you know, 14 or 15 on internal Salesforce. um honestly i'd have to check and see exactly who said yes to some uh who said yes to some hiring we might be a little we might be a little above that um we were definitely we're pushing the we're pushing the internal sales force a little larger you know and starting to fill it out with uh with things like sales managers and adding some more kind of you know key national account reps you know as well as folks to manage the resellers we've not published a how many resellers are you working with number um it's you know certainly significantly more than we were in q3 you know 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 you know we've been working with people who were smaller groups and had you know a few reps like some of the groups that we've begun to work with have you know kind of 50 60 70 people under them and that you know as you get that ramped up like that adds a lot of potential like exactly how long it takes these things to get you know we've seen some we've seen some promising early behavior from some of them it's you know 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 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 one of those sort of learn by doing Yep.

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

So, you know, obviously when you're selling to someone at a wholesale price, right, that's you know, that's going to affect ASP. So the wholesale price for, you know, the wholesale price for a system or for a case of applicators will be, you know, will be lower than the retail price, right, because the resellers are, you know, the resellers are making their money on the markup. The, you know, 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, you know, on the sales. Like, this is – the new system is pretty closely equivalent to that, and obviously because we're not carrying the sales force costs of the reseller, you know, and not paying for, you know, plane tickets and, you know, lunches or whatever, the net effect on the, you know, on the operating line is actually a – it's actually a higher fall-through margin.

Does that make 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, you know, how you're thinking about potentially adding in new products, et cetera? yeah um i mean as you probably noticed we you know you saw a um you know you saw some uptick in r&d we're definitely uh we're definitely working on some stuff i think we'll probably have more to say about that on the q1 call the you know from a kind of a sales pipeline standpoint the um the pipeline's interesting right now like there are we've had a lot of inbound interest there's you know it's really there's really an educational sale going on where it's kind of like well you know talk to me about this like does it really work how can we you know how do how would we build this into our practice flow you know how would it work where's the where's the benefit for our patients like how our practitioners you know how hard is this for our practitioners to learn and so you know we have like the we have a we have a value we have a huge top of the pipe one right now um you know it's just it's made a little 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 you know having are you know are still grappling with the kind of clawbacks and cms issues um others i mean we're seeing a lot of interest out of um you know wound centers hospital surgical and post-surgical we're actually exploring a couple of you know non-wound applications that are potentially interesting but you know really really early so you don't really I wouldn't I wouldn't try to hang my hat on that just yet okay yeah appreciate that and thanks for taking the question So I'll jump back to you.

Thanks, Kyle.

Thank you. We will move next with Ian Cazell with IFCM. Please go ahead. Your line is open.

I mean, you sold 200. Can you give us a playthrough of that number?

Yeah. So, you know, obviously, like, kind of complicated, right? You sell 200 – we sell 255 systems. you know, the actual active systems in the field rise by about 5%, right, so about 56, because we pulled 168 systems out due to, you know, things not going well with certain customers, you know, certain customers' businesses. And so, you know, from that, I think you can kind of intuit, like, where things went from a channel standpoint. um you know from a you know individual customer standpoint like there wasn't really like a there wasn't really a pig in the python here right there wasn't like an order that drove it it was um you know there were a number like there were an unusually large number of kind of you know mid-sized orders does that make sense yeah in previous calls you spoke on that So there are two updates on that. You know, one, our existing manufacturer has very, very graciously managed to reduce their prices as well. So, you know, they've taken – so we're now experiencing better pricing on applicators, you know, starting the beginning of Q1. You know, we do this on a pool basis. So, you know, it's – we basically – we use a blended average of our inventories, so we keep, you know, six to nine months of applicators on hand. So it'll take a while for this to – you know, it'll trickle through gradually rather than, you know, be kind of a step function. You know, 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 year 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 you know this is the definitive timing thank you thank you And once again, if you would like to ask a question, please press star 1 on your keypad now. We will move next with Albert Hanser with Kestrel.

Please go ahead. Your line is open.

Hi, Morgan. Nice job communicating, you know, changing landscape in 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 does like to get around. Obviously, one of the industry bigs is SEWC. That's kicking off in Charlotte, April 9th. So if you're looking for something to do in the next couple of weeks, that's a great wound show.

All right.

Thank you. We will move next with Ethan Starr, private investor. Please go ahead. Your line is open.

Good morning. So the slide presentation noted that 168 Ultraman 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 – you know, 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 six months. The second is if we made a determination that the customer who owned the systems was no longer operating the business.

So generally, but among those people who didn't order, I mean, they just stopped using them or you don't even know? It's, you know, I mean, maybe they would.

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, you know, there's always a certain, like, you know, 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, you know, I suspect that it's, you know, I suspect it's financial distress for a lot of folks. Like the, I mean, you know, put yourself in the position of, you know, you've done a large amount of, you know, sort of allografting, and then you get a clawback nine months later for 90% of it. you know 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 you know the meteor that people been getting hit with okay so this is so Q4 is an unusually high number of discontinued systems for that reason it sounds like okay would it be at all feasible to acquire try to acquire the discontinued ultimate systems recondition them and sell them um it's you know possibly um i don't want to given given some things going on i don't want to talk in too much specificity about that but uh we've certainly had a similar thought okay that's helpful um aside from the external factors mentioned in the press release do customers tend to go through ultimis consumables at a fairly steady rate or they do they increase do you see the see them increasing uses of consumables as they become more familiar with the Ultimis system um that that sounds like one of those questions that's going to have a simple answer but the the reality is it depends a great deal on the customer type right so you know 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 know you you go from you know zero to 60 nothing flat um if you sell it into a you know podiatry office it tends to be a slower ramp as they kind of build the you know if they do their marketing or kind of build a book of build a book of business that gets the uh you know that gets the product into more usage like either 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 you know everyone on you know in the facility who's got wounds and then it sort of backs off to a steady state you know once you get the wounds in the facility more under control and so you know 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 know you this worked 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 all right thanks thank you and at this time there are no further questions in queue I will now turn the meeting back to Mr. Frank for closing comments well thank you guys uh I appreciate everyone being here uh first thing on Friday morning and uh we'll speak to you soon uh when we report uh 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.