Sensus Healthcare, Inc.
Q1 2018 Earnings Call Transcript

Published: 6 May 2018

[Operator:]

Good afternoon, and welcome to the Sensus Healthcare First Quarter Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation there’ll be an opportunity to ask questions. [Operator Instructions] Please note, today’s event is being recorded. I would now like to turn the conference over to Kim Golodetz. Please go ahead, ma’am.

[Kim Golodetz:]

Thank you. This is Kim Golodetz with LHA. Thank you all for participating in today’s call. Joining me from Sensus Healthcare are Joe Sardano, Chief Executive Officer; and Arthur Levine, Chief Financial Officer. As a reminder, some of the matters that will be discussed on today’s call are forward-looking statements within the meaning of the federal securities laws. All statements other than historical facts that address activities Sensus Healthcare assumes, plans, expects, believes, intends or anticipates and other similar expressions will, should or may occur in the future are forward-looking statements. The forward-looking statements are management’s beliefs based on currently available information. Sensus Healthcare undertakes no obligation to update or revise any forward-looking statements, except as required by law. All forward-looking statements are subject to risks and uncertainties, including those risk factors described in the company’s forms 10-K and 10-Q as filed with the SEC. During today’s call, there will also be reference to certain non-GAAP financial measures. Sensus believes these measures provide useful information for investors yet should not be considered a substitute for GAAP nor should they be viewed as a substitute for operating results determined in accordance with GAAP. A reconciliation of non-GAAP to GAAP results included in today’s financial results press release. With that said, I’d like to turn the call over to Joe Sardano. Joe?

[Joe Sardano:]

Thank you, Kim, and many thanks to each of you for joining us this afternoon. And again, I’m happy to announce that our business momentum continued during the first quarter of 2018, and I’m very pleased to report our 10th consecutive quarter of double-digit year-over-year revenue growth. We achieved revenues of $6 million in the first quarter, which is up 37% over last year’s first quarter. Note that the revenues included continued strong sales of our featured-rich, premium-priced SRT-100 Vision system for the treatment of non-melanoma skin cancer and keloids. In all, we sold 21 systems, of which more than half, or 12, were SRT-100 Vision systems. The contribution of Vision systems resulted in an increase in gross margin to 66.2%, up from 65.6% a year ago. As I’ve said in the past, growing demand for the SRT-100 Vision with image guidance using ultrasound to facilitate treatment planning is reflective of the dedication of our physician customers to bring the best possible technologies to their patients. We are pleased that growing numbers have recognized the capabilities of the Vision and we are willing to invest in these premium systems. Our results also include the sale of four laser units in our first month, offering these units to our market since our March 1st launch at the South Beach Symposium. We are offering three laser products under the Sensus Laser System brand. Specifically, we are offering a fractional CO2 laser used for surgical applications that require ablation, vaporization, excision, incision, coagulation of soft tissue; an IPL laser for hair removal, skin rejuvenation, vascular and pigmented lesions; and a Q-Switched ND

[Arthur Levine:]

Thanks, Joe. It’s a pleasure to be speaking to all of you today. As Joe mentioned, revenues for the first quarter of 2018 increased 37% year-over-year to $6 million. The increase is attributable to a higher number of units sold, in particular the SRT-100 Vision, which has a higher average selling price. Gross profit for the first quarter of 2018 was $3.9 million or 66.2% of revenue, up from $2.9 million or 65.6% of revenue for the first quarter. The higher gross profit margin was mainly due to sales mix favoring the SRT-100 Vision. Selling and marketing expense for the first quarter of 2018 was $2.2 million, marginally lower as compared with $2.3 million for the first quarter of 2017. General and administrative expense for the first quarter of 2018 was $1.3 million, up from $1 million for the first quarter of 2017. The increase was due to stock compensation expense of $0.5 million during the 2018 quarter. Excluding this noncash expense, G&A decreased by $0.1 million. From the second quarter, our stock compensation expense will be approximately $150,000 per quarter. Research and development expense for the first quarter of 2018 was $1.5 million compared with $1.1 million for the first quarter of 2017. The increase is due to the ongoing IORT project, along with additional development of new products. The net loss for the first quarter of 2018 was $1.1 million or $0.08 per share. This compares with a net loss of $1.6 million or $0.12 per share for the first quarter of 2017. Adjusted EBITDA, which we define as earnings before depreciation, amortization, income taxes, interest and stock compensation expense, was a negative 0.5 million for the first quarter of 2018 compared with a negative 1.4 million for the first quarter of 2017. As Joe mentioned, we made significant investments starting 2017 in selling, marketing and R&D, which continued in the first quarter of 2018. Although we have started to benefit from the expanded sales force, we expect a larger impact to revenue and the bottom line in the latter part of 2018 and beyond. We continued to have strong balance sheet with cash, cash equivalents and investments of 9.5 million as of March 31, 2018, and no long-term debt. At quarter end, we also had 4.2 million outstanding under our revolving credit facility, which, if you recall, has increased to 5 million during the fourth quarter of 2017 to give us additional flexibility as we continue to grow our business. With that, I’ll turn the call back over to Joe.

[Joe Sardano:]

Thanks, Arthur. Looking ahead for the rest of 2018, we’re very excited about the double-digit revenue growth we expect, along with the new products and geographies that will drive this growth. Before we take your questions, I just wanted to flag a few upcoming investment conferences that we’ll be presenting at. On June 5, we’ll be in Los Angeles at the LD Micro Invitational Conference and on June 19, we’ll be in New York at the Cantor Fitzgerald Dermatology Summit. I hope to see some of you there. So with those comments, operator, we’re ready to take questions.

[Operator:]

[Operator Instructions] Today’s first question comes from Anthony Vendetti of Maxim Group. Please go ahead.

[Anthony Vendetti:]

So, Joe, I was wondering if you can talk a little bit about the four systems that you sold. Obviously, up and running quickly on the new laser systems. I know you mentioned yet three different lasers. Out of the four that were sold, do you have a breakout of which ones they were? And were those all manufactured in Israel? Or is that where the development is done and they’re manufactured elsewhere?

[Joe Sardano:]

Thanks, Anthony, for the questions. Out of the four, three were CO2 lasers. That seems to be the most popular laser. The other one was a YAG laser. So that was the composition of those four lasers. I’m hoping that at some point in the very near future, I’m not going to able to tell to you which laser was which because we’re selling too many of them, but that’s what I know right now. And that happened within the first month of introduction. So we’re excited for the quick response that we got. These units are being developed by Sensus Healthcare. Kal Fishman, our CTO, is working diligently with his team of engineers as well as the team that we’ve comprised in Israel as well as here in headquarters to be working on those. They are assembled here at our headquarters and then shipped out to our customers from here. So that’s where the products are pretty much confined. The components come from all over the world, quite frankly, and we try to access the best components at the best prices that we possibly can in order to provide our customers with the best value for these lasers.

[Anthony Vendetti:]

Okay. And final assembly and quality control is done at your headquarters in Florida?

[Joe Sardano:]

Correct.

[Anthony Vendetti:]

And then just lastly on the SRT Vision. So right now, you’re expecting, as best you can tell, a CFDA approval in China by the end of this year?

[Joe Sardano:]

Yes, that’s what our vision is. Hopefully, we’ll make that happen.

[Anthony Vendetti:]

And then for IORT, that -- when you said launch by end of year 2018, does that mean you’re going to start getting out of the KOLs or commercially launch, and therefore expecting approval before the end of year from the FDA since this is already in process or has been submitted?

[Joe Sardano:]

We’re anticipating clearance by the FDA before the end of the year. But we are working with several KOLs or luminary sites from around the world that have expressed interest in accessing the technologies prior to FDA clearance so that they can use it under an IRB, whether it be in this country. And, of course, wherever there’s nonregulation of FDA, those luminary sites are ongoing with us as well. So from an anticipatory side, we would like to see a network of multiple luminary accounts from around the world working together and putting a lot of the data together for a lot of the information that’s going to come from using the equipment itself. I think this is going to drive tremendous value for the technology itself if we can make this thing happen.

[Operator:]

And our next question comes from Andrew D’Silva of B. Riley FBR.

[Andrew D’Silva:]

Congrats on getting up the new product line, with the lasers and everything. On that, could you maybe give a little sense of how we should think about that line going forward? Is this just an opportunity to get better utilization out of your existing sales team? And then are the margins fairly comparable to what we’ve seen historically with the 100 and the Vision, are they lower or higher? And then maybe just a brief rough idea of what the price point would be in ASP?

[Joe Sardano:]

I’ll go in reverse order. The margins will probably be less, but the volumes could be much higher because it is much more of a commodity in today’s market space. It’s clearly is an indication that customers have asked us to provide them with additional offerings from Sensus Healthcare. They enjoy working with the company. They appreciate the company. And quite frankly, we absolutely love the customers that we have. So I think this is an opportunity for our sales people to have more product in their bag so that they can offer our customers -- same customers who are making the decisions on the SRT to have the same opportunities to make those decisions on lasers as well. As far as progressing with lasers, we’re walking into this market cautiously, but strategically. We’re looking at opportunities on how we want to capture this market. We are looking at opportunities on how to provide offerings that no one else has. Lasers have been pretty much lasers for the last 50 years with not a whole lot of new indications that have come about, but we’re trying to bring out something that perhaps we’ve done with the SRT product line, but that is not quite comparable in the laser space that we can bring to and differentiate ourselves from that. So that’s the reason why we’re working very closely with the powers that be in Israel as well as other parts of the country and all led by our CTO, Kal Fishman. So I think that everything is being strategic, and I think that we’re looking to make an impact with good quality products that are going to last a long time and be beneficial to the entire practice of dermatology.

[Andrew D’Silva:]

Okay. And getting back to the envelope pricing, is what, between $25,000 and $50,000 per laser roughly?

[Joe Sardano:]

It’s going to be on the upper ends of that and maybe even more in the future as we continue to develop the technology and bring new things, new features and benefits to that technology.

[Andrew D’Silva:]

And as far as pricing with the SRT-100 and the SRT Vision, just kind of back of the envelope assuming about $100,000 to $200,000 laser sales would imply that their prices are between like $150,000 for the SRT-100 and like $370,000 for the Vision roughly. Is that in the ballpark, the prices have kind of stayed around that range, does that seem about accurate for this quarter?

[Joe Sardano:]

No. The average selling price has been consistent for the last two to three years when it comes to the SRT-100. We’ve been in and around the $200,000 range for the SRT-100, while the SRT-100 Vision is closer to $400,000.

[Andrew D’Silva:]

And just a couple of quick questions to add on to that. I know in the past, at least another copy I’ve looked at in the dermatology space, sales teams or sales members within the teams have been very fluid as far as moving from company to company, have they fill up sales with their existing client base with the product of the company that they work for has, then they tend to move on. Is that anything that you’re seeing right now? Or is that a trend within an industry kind of passed in recent years?

[Joe Sardano:]

Well, I couldn’t say for what everybody else is doing. I think that for the most part when you’re looking at the laser business, for instance, you’re seeing -- I mean, this is almost like selling cars. You’re going to have car salesmen move from one dealership to another and that’s what we’ve seen. We think that we’re kind of unique. We’ve got people that have been started with us in the sales side that have been promoted into sales management and they’ve been with us since we started with the company. So we’re really excited for the growth of the personnel that we have, the people that have remained loyal to us, who’ve consistently provided us with above-average performance, they’re the ones who got moved into the management position. And then the folks that are the sales reps, we enjoy their company as well. We’ve got a lot of people that have been with us for a long period of time that have been consistent performers. So we like to develop our salespeople and help them make sales versus working in a different direction. So I think that we’ve got a very, very solid staff of sales people who understand what their mission is, understand what their expectations are and we live it every day. So we’re excited for the sales force that we have, and I know we’re going to be bringing on more salespeople in the near future, and we’re excited for that opportunity as well.

[Andrew D’Silva:]

From a revenue concentration standpoint, if I recall correctly, last year, you had one customer that was pretty heavy. What was concentration like for the first quarter? And do you have any expectation of what it should shape out for the whole year?

[Joe Sardano:]

Well, yes. I mean, we have one great customer that identifies -- where we got many great customers, let me just say that. Everyone of them are great customers. The size of those customers vary from anywhere from one unit to dermatology practices that has as many as a dozen units. And then we have other customers that -- or another customer that we would consider the first corporate account in the dermatology space. We’re very proud to have worked with this company. They’re an excellent company. They know exactly what they’re doing. And quite frankly, we want them to grow because if they grow, we grow. And so we’re excited for that opportunity. We expect it to continue to grow as the dermatology practice grows and as our business grows, I think that they will grow as well. So all that bodes well for what we’re doing. I remember the days when we’re at General Electric and other companies like Siemens and Toshiba, our corporate accounts divisions accounted for better than 50% of the market that we enjoyed and the revenues that we enjoyed. So they’re great partners to have in the business as they help us penetrate the market and continue to develop our strategies with our technologies in that market. So that’s an exciting part of the business that we’re in right now.

[Andrew D’Silva:]

Okay. Perfect. Was there [indiscernible] concentration in the quarter as far as -- it was [indiscernible] last year’s pretty similar?

[Joe Sardano:]

Yes, it’s pretty -- it’s going along the same, and it sort of fluctuated, I think, from quarter-to-quarter, but I think it’s going to be -- you’re to see consistent growth from both sides.

[Operator:]

And our next question today comes from Suraj Kalia of Northland Capital.

[Unidentified Analyst:]

It’s is Mike Patujha [ph] on for Suraj. First, can you just describe any utilization metrics on SRT Vision versus SRT units in the U.S.?

[Joe Sardano:]

Well, I think that the utilization is pretty much the same. There might be higher volumes with the SRT-100 Vision. I think one of the reasons why the Vision is so well utilized is because of the added features and benefits that it provides, and that’s obvious to the customer and the physician who’s using it is they probably have more complicated cases as a result of seeing more skin cancers in their practice. So they’re looking to have as much products as they possibly can have to help them treat those skin cancers. So I would say that the Vision product does generate a lot more volume because of the physician type who is buying the product.

[Unidentified Analyst:]

Got it. And then on Israel, can you talk about the contribution from that subsidiary in the quarter? And then maybe a little more color around the rationale for the relationship and how it’s brought under the Sensus umbrella and maybe a collaboration opportunity there?

[Joe Sardano:]

Sure. Well, the reason why we opened up the office in Israel, the main purpose for that office opening was to access the brilliant minds that exist in Israel for the development of medical equipment, medical products, biopharm and everything else that has to do with medicine. It seems like all the major developments in healthcare are happening and coming out of Israel. So we wanted to be as close as to that brain thrust as we possibly could to access the best we could to help us -- to help ourselves benefit in our technologies and any technology developments that we could be looking at. We also had a distribution partner in Israel who we decided to part ways with and the top sales person that we had stayed on with us who is going to be working directly for Rick Golin managing the international business, and who’s going to handle as a country manager, if you will, or as the European manager as well as the Middle Eastern manager for sales force. So we might as well have that person work out at the same office since everybody is in Tel Aviv. So we’re excited for that opportunity. We think that we’re going to grow that business. We’re excited for the reception that the SRT-100 Vision has had in Israel. We expect that product line to grow in Israel. And we also expect IORT to be well-received in Israel as well. It’s a product that’s needed. It’s a product that is wanted. And I think that we’re going to develop a whole lot of great things in Israel and in the Middle East, in general, and all over Europe.

[Unidentified Analyst:]

All right. That’s helpful. And then lastly, if we’re just thinking about total installed base by year-end of around 400, then are we right thinking that we’re looking at least an incremental 50 million-or-so revenues, the remaining three quarters, do you use an average ASP between the SRT and SRT Vision?

[Joe Sardano:]

Yes. Well, keep in mind, when I say 400, I didn’t say 400. I said more than 400, will be over 400 by the end of the year. So I think that you’re right on. As far as your revenue estimation, probably a little more.

[Operator:]

And our next question comes from Scott Billeadeau of Walrus Partners. Please go ahead.

[Scott Billeadeau:]

Just a question on the sales force. You mentioned, you got Rick focused on international and you’ve hired Rita. Maybe could you -- is Rita going to pluck a few people to focus on oncology, hire new, what’s the strategy that you’re developing there for IORT?

[Joe Sardano:]

Number one, with regard to Rick, it’s clear that we’re developing a much larger footprint throughout the international market with our expansion into other countries as we mentioned during the call. So just from three months ago when we had the call at the end of the year, we’ve expanded into three or four new countries, and I would say from a year ago, we’re probably in eight new countries as we continue to go through the regulatory process with them and gain access to them. So we have an opportunity to expand our sales and revenues in those countries. And with the size that it is and the management that we need, we need full focus, and so Rick is going to be focusing 100% of his attention to grow that business so that it becomes a significant part of our revenues. Bringing in Rita for us was extremely strategic and extremely opportune for us. Rita is a special talent. I am very, very excited to have her on our team. I’ve worked with Rita before when we were together at General Electric. She’s a seasoned professional. And the fact that she’s been involved in the radiation oncology space directly. The type of person that she is in developing relationships, strong, long-lasting relationship that she’s done throughout her career. And yes, do we plan on accessing those relationships? Absolutely. She wants to bring those relationships and help them learn more about what SRT can do and certainly, with regard to what IORT can do as well. So we’re excited to have such a business leader join our team and to direct our team in that area. And will she be able to pluck other people? I certainly hope so. I’m sure that she will. So we’re excited, and that requires full attention as well. So that’s a big part of our business and our revenue strengths for the future as well.

[Scott Billeadeau:]

So Rick, is he is going to be primarily developing country distributors? I mean, is the model to go a little more indirect international, is that what you’re doing now like [indiscernible] pardon me if [indiscernible].

[Joe Sardano:]

Again -- you’re right. I mean, we do have a very important contract that we signed with a company called Cellmark, C-E-L-L-M-A-R-K. They’re a company out of Scandinavia. If you look them up, I think that you’ll see they’re multibillion-dollar corporation that one of their divisions happens to be in healthcare. So we’ve worked -- we’re working with them to open up these various countries where they register as our distribution partner. In other areas where they might not be so strong, we will get the strongest possible partner that we possibly can get in those areas, which we will do, and an example is in Mexico where we have a different partner who helped us get the clearances in Mexico so that we can sell SRT in Mexico. So Cellmark is a great partner that is working with us in various parts of the world. They have a huge group of people that work with them. They’re extremely professional. They’re a great organization to be working with. We’re excited and we’re proud for the opportunity of working with them. And then, of course, in China, I think we’re dealing with one of the biggest organizations in all of China, Fosun Chindex, which is their distribution partner -- our distribution partner, and that relationship continues to grow and do very, very well. But in other parts of Asia, we’ve also expanded into areas like Taiwan, Korea, Thailand, all those areas. And we’ll get into Vietnam and a few other places as well. So we’re excited for all those opportunities, and I think that it brings more attention, they require more attention so that we can get the revenues that we wanted to get out of those areas.

[Scott Billeadeau:]

And Joe is the IORT business, is that a little more of a hospital-based business? Will that be? Or...

[Joe Sardano:]

I would tell you, Scott, that it’s going to be all hospital or radiation oncology. And of course, there’s a lot of independent radiation oncology offices. There’s a lot of groups like U.S. Oncology that’s owned by McKesson that has about 120 cancer centers. You’ve got HCA, which has about 50 or 60 cancer centers. You have Alliance Oncology, which also has another 70 or 80 cancer centers. And then, of course, all the hospitals that exist that have cancer centers of some kind. That’s going to be the main focus. These are longer selling cycles. But this is a product that’s going to help them adapt with breast cancer, with head and neck cancers, colorectal and vaginal cancers. All the cancers that are going to require some sort of surgical process prior to any kind of treatment. I think this is going to be an important part of their offering, and it’s going to help them bring more patients into their hospitals because those patients don’t want to be exposed to the 4 to 10 weeks or 6 to 10 weeks of radiation therapy that they have to go under and the collateral damage that it causes to their bodies by going through those. To have a one treatment type of process for breast cancer is massive, it’s great. This is what people have been looking for, and so this is a big advantage.

[Operator:]

[Operator Instructions] Today’s next question comes from James Terwilliger of Paulson Investment Company.

[James Terwilliger:]

Three quick questions. Most of mine have been answered. First for the balance sheet. The accounts receivable popped up just a little bit here and I know you’re growing your revenue -- your top line very nicely, but any comment on the increase in the AR?

[Joe Sardano:]

Well, I think that this is a natural progress on some business as you continue to grow. We’re going to accept very rarely some additional conditions on the course of sales and terms of sales. But in areas where your business is growing and you wanted to continue to grow, these are some of other terms that you’re going to accept on a limited basis, but with a very good customer that is trustworthy that you can work with. So I think that this might be a one-time type of situation that we have, but I think that it was an exceptional opportunity for both us and the customer to take advantage of and that’s what we did. But I expect our accounts receivables to be a lot lower in the future, but on the other hand, I think that we’re going to continue strategically do whatever we have to do in order to promote our business.

[James Terwilliger:]

Okay. I’ll understand the nature of your business. Second question, as you know, I’m a big fan of the IORT and the breast application. Can you give us any more clarity on the 510(k) in terms of the date it was sent? Any response from the FDA yet?

[Joe Sardano:]

Yes, I mean, it’s very, very difficult for me to speak on behalf of the government. I’m not sure that I would do it justice. But we submitted before the end of the year, on the 29th, as we reported on our call in January. So it was submitted then. We did receive recognition that it was submitted. We got our number and they did come back to us after about a month with a series of questions, which we are now fulfilling. Now when you get those questions, the clock stops. So the clock stops until we answer them. Now the questions that we have are not deterring questions. They’re not questions that are going to stop us from moving forward to 510(k), but they are clarifications. And you have to be careful, you have to make sure that everything is done right when you respond to those. So we’re going to take our time and we’re going to respond properly and make sure that they have a full understanding of what the technology is all about, keeping in mind that we do have a robotic arm that goes with this. So this is the first time that they’re seeing something along those lines, but we also have to remind them that the robotic arm has already been FDA cleared to be treating with patient at bedside. So this is the only robotic arm that has that FDA clearance, but we have to give them explanation as to why and how and when. So these are the things that we’re going through and we’re making sure that meticulously we return and answer every question that they have and then the clock will start and be on their behalf. And I don’t expect this to be the end of their questions. This is the beginning. This is a very, very unique technology that’s going to be breakthrough technology. So I think that they want to be cautious, they want to make sure that they have all of their T’s crossed and their I’s dotted and so do we.

[James Terwilliger:]

Perfect. No, I mean, hopefully, they move faster rather than slower. When you look at this market for breast, and I don’t want to get into a modeling question, but at 30,000 feet, what -- versus your core business, how should we think about the movement in ASPs gross margins? And does this potential 510(k) approval, does this double your current available market, addressable market? How should we think of that?

[Joe Sardano:]

Good question. First of all, we anticipate to have a retail price on the equipment of well over $1 million. It should be somewhere around $1.1 million to $1.2 million. Average selling price, I have no idea where that is at the moment, but I’m sure that we’ll get clarification as we get closer to a market and as we talk to more and more customers. Keep in mind that as we’re going through the FDA clearance, we’re not allowed to market the product. We’re not allowed to sell the product. We can talk to companies or to hospitals if they’re interested, but they have to be under an IRB, an Investigational Review Board. And there’s not a whole lot of marketing that we can put in writing or anything. We can’t do any of that. So it has to be one on one basis and we have to pick and choose who we’re dealing with. So we’ll have a better understanding of where that all happens in the near future. But does it grow our market? Absolutely. It grows our market exponentially because this is going to be pure oncology. It’s going to be in the hospital market. It’s one of the reasons why we brought Rita Gable on board. That where she’s been for the last 15 years, and imagine she’s been selling products at $50 million. So if you think that was tough, I mean, she’s looking at this and saying, I can’t wait to get to this. But this is something that’s unique. This is something that’s specialized. This is something that really is going to have an impact on women’s health and how they’re treated with breast cancer, and how other folks are treated with head and neck cancers, vaginal cancers and rectal cancers. So this is going to be a very unique product that has a very unique design with a very unique delivery system of its x-ray and radiation and so we’re excited for that opportunity. And, of course, it’s going to expand our market exponentially. But now, you have to look at the market, how big is that market? And when you look at our company, if we sold 10 of these units, you’re looking at maybe $10 million in revenue. That’s a lot of revenue for a company like this. We don’t have to sell 100, although we want to sell 100, and we’ll do everything we possibly can to sell 100. But if we sold 10 units, that’s a big deal for us. So we’re going to walk before we run. We might have to crawl before we walk, but we’ll see where we start off. We’re going to try to hit the pavement running.

[James Terwilliger:]

Okay. And then the last question. So right now, I mean, you’ve been extremely laser focused, you’ve done what you’ve said you’re going to do in terms of the top line growth, but you’re going -- you’ve got this other application or some of this laser technology. How are you managing the transition of your sales and marketing organization?

[Joe Sardano:]

Well, I don’t think, James, that it’s a transition. I think that it’s a continuation. Our -- we are focused. Our laser focus is on our customer. Our customer is our biggest priority. It’s also our biggest asset. We have great customers. And it’s our customers who have asked this, we wish we could buy more product from you. What else can you sell us? Well, in dermatology and aesthetic world, there’s only two other technologies other than SRT, and that’s radiofrequency and lasers. So those are the technologies that we want to get to so that if you come to the American Academy of Dermatology, we’re exclusive on superficial radiation therapy. Imagine if we had those other technologies too, we’d be the only company on that floor that has all three technologies. So it’s a one-stop shop for all of our customers. You want to buy radiofrequency, you want to buy lasers, you want to buy SRT, you come to Sensus Healthcare. Everybody’s going to know that. So I don’t think that it’s a deviation of our focus. I think it’s a continuation of our focus because our focus is on our customers and what they need, because it’s the same person who has to say yes or no on all of those devices.

[Operator:]

And this concludes our question-and-answer session. I’d like to turn the conference back over to the management team for any closing remarks.

[Joe Sardano:]

Well, appreciate it. Everybody, thank you so much. In closing, I want to thank everybody for their time this afternoon and for their continued interest in Sensus Healthcare. We really appreciate your support and your continued support for the future. We’re looking forward to updating you all on our activity when we report Q2 results in early August. And with that, I want to wish everyone a great day. Thank you so much.

[Operator:]

And thank you, sir. Today’s conference has now concluded, and we thank you all for attending today’s presentation. You may now disconnect your lines, and have a wonderful day.