Agile Therapeutics, Inc. (AGRX) on Q3 2022 Results - Earnings Call Transcript
Operator: Good afternoon, and welcome to the Agile Therapeutics Third Quarter 2022 Financial Results Conference Call. Please note that todayâs event is being recorded. I would now like to turn the conference over to Matt Riley, Head of Investor Relations.
Matthew Riley: Hello, everyone, and welcome to todayâs conference call to discuss our third quarter 2022 financial results and corporate update. Before we start, let me remind you that todayâs call will include forward-looking statements based on our current expectations, including statements concerning our financial outlook and financing prospects for the future, our outlook for the fourth quarter of 2022, managementâs expectations for our future financial and operational performance, including our expectations regarding the market growth of Twirla and our operating expenses, our business strategy, our partnership with Afaxys and its ability to promote growth, our product supply agreement with Nurx and its ability to educate patients about Twirla, our connected TV campaign and its ability to promote growth and our assessment of the combined hormonal contraceptive market generally, among other statements regarding our plans, prospects and expectations. Such statements represent our judgments as of today, are not promises or guarantees and may involve risks and uncertainties that may cause actual results to differ from the results discussed in the forward-looking statements. Please refer to our filings with the SEC, which are available through the Investor Relations section of our website for information concerning risk factors that may affect the Company. We undertake no obligation to update forward-looking statements except as required by law. The information on todayâs call is not intended for promotional purposes and not sufficient for prescribing decisions. Joining me on todayâs call are Al Altomari, Agile Therapeuticsâ Chairman and Chief Executive Officer; and Amy Welsh, Chief Commercial Officer. Following our prepared remarks, we will open the call to your questions. I will now turn the call over to Al.
Alfred Altomari: Thank you very much, Matt, and thank you all for joining us for the quarter, share with you how the financial results for the third quarter 2022 exceeded even our expectations. I will provide detail on the growth metrics that have us excited. And then Amy Welsh, our recently appointed Chief Commercial Officer, will provide insight into why we achieved significant growth in the third quarter and how we intend to deliver more positive results in the fourth quarter 2022 and beyond. The third quarter is the quarter we have anticipated as the potential breakout quarter for the company and the brand and we believe we are starting to see that breakout. Letâs review the metrics we are tracking and those we believe are most critical in helping us achieve our goals of growing Twirla and generating positive cash flow. I will start with reviewing our net revenue for the third quarter, which is $3 million. This is an increase of 43% from the second quarter of 2022, the largest quarter-over-quarter increase our company has achieved since launch. Compared to the third quarter of 2021, net revenue increased $1.7 million or 131%. Our net revenue reflects improvements in the following key areas. Twirla demand for the third quarter as reported by Symphony was 28, 450 cycles, a 35% increase from the second quarter of 2022. Compared to the third quarter of 2021, our total demand for Twirla grew by 18,706 total cycles or 192%. Twirlaâs factory sales for the third quarter, as reported by our wholesalers, was 33,282 two total cycles, a 54% increase from the second quarter of 2022. Compared to the third quarter of 2021, our factory sales for Twirla grew by 22,632 total cycles or 212%. You may notice the difference in the growth of our demand cycles versus our factory sales. We believe this is a result of the fact that not all the prescription demand in the non-retail channel is reported into third parties like Symphony Health or IQVIA. The demand numbers we received from our wholesalers do include the sales to the non-retail channel. And therefore, we believe that factory sales more closely represents the total demand for Twirla across all the channels. Operating expenses now. As you can see from the accompanying slides, this quarter, we are providing comparisons against the third quarter non-GAAP operating expenses because we had a onetime non-cash charge associated with the transfer of our equipment to Corium in the third quarter and we believe excluding this charge represents a more useful comparison of the results from the operations in the period discussed, which prior periods did not include a similar charge. GAAP operating expenses, or OpEx, were $20.3 million in the third quarter of 2022. Non-GAAP operating expenses for the third quarter, which excludes the onetime only non-cash $11.1 million associated with the transfer of equipment to Corium were $9.2 million. Non-GAAP OpEx in the third quarter 2022 represents a 19% decrease from the $11.3 million reported in the second quarter of 2022. Compared to the third quarter of 2021, non-GAAP OpEx decreased by $5.2 million or 36%. Additionally, compared to the first nine-months of 2021, we reduced non-GAAP OpEx by $10 million or 22%. In the fourth quarter of 2022, we expect quarterly OpEx to be in the range of $10.5 million to $11.5 million. Our stated plan has been to effectively manage expenses while continually growing Twirlaâs sales and demand. And this is the third consecutive quarter we have increased Twirlaâs sales and demand while simultaneously decreasing the Companyâs OpEx, excluding the non-cash onetime charge incurred this quarter. As you can see on the accompanying slides, which compares year-to-date results for 2022 and compared to the first nine-months of 2021, we believe that these trends we are seeing tell us that we have a credible business plan in place that is performing. We are excited to share these encouraging numbers with you today, but we are not done. We are working and have been working to identify and implement strategies and exclude opportunities that will continue to further the growth. I will now turn it over to my colleague, Amy, the primary architect of this plan, to discuss how we are able to sell more products while maintaining a lower burn and why we believe we can continue trend into the fourth quarter of 2022 and into 2023. Over to you, Amy.
Amy Welsh: Thank you, Al, and hello to all of you joining us today. As you heard from Al, we are excited about the third quarter performance, but we are not surprised. Our strategic business plan quite simply is working. An important contributor to third quarter growth was our partnership with Afaxys, which drove volume in the non-retail channel. In the second quarter of 2022, 1404 non-retail cycles of Twirla were purchased and that number surged 36 1% in the third quarter to 6479 non-retail cycles. Again, we are not surprised by this. This is the product of the efforts being made by Afaxys to penetrate the Planned Parenthood network. In the third quarter, we began to see conversion of Planned Parenthood accounts in California, which drove significant sales and growth for the quarter and we believe this represents a sustainable customer base for future periods. Not only did we see significant increase in the growth in volume of non-retail channel, our retail channel growth performance was in-line with our expectation as well. In the second quarter of 2022, 19,679 retail cycles were dispensed. And in the third quarter of 2022, that number grew 12% to 21,971. Our targeted digital media efforts remain focused on the five states with the strongest Twirla reimbursement. And as we have said in the past, by focusing on these five states, it is estimated that we can reach 45% of U.S. women between the ages of 18 to 24. In the future, we expect the retail channel to continue to grow. And let me explain why because it is important that I provide insight into why we are confident that the business plan we can deliver additional upside for in both fourth quarter of 2022 and into 2023. Letâs start with what drives growth in our retail business. First, our direct-to-consumer connected we plan to run the CTV commercial through the end of the year and constantly believe that we can Twirla awareness, trial and adoption as we believe it did during its initial one that launched in April of 2022. Also, telehealth. Last quarter, we announced our collaboration with female telemedicine leader Nurx that is expected to make Twirla an available option to Nurx patients. The full launch of this collaboration is planned to occur in the fourth quarter and we expect to see the impact of Nurx on the retail channel in 2023. As a reminder, Nurx is the leader in female-focused digital health care amongst our target audience and offers patient access to its telehealth platform and expert medical providers that have prescribed contraception to more than one million patients. By combining Twirla with Nurx broad reach, we believe this initiative will help further engage patients and increase awareness of and access to Twirla. Additionally, on Nurx we are planning to roll out a shared initiative that will start with us adding a reference to Nurx in the CTV commercial in several of our target states that says Twirla is now available on Nurx. Nurx is also planning to raise Twirla awareness to its large contraceptive patient network through its own marketing efforts. This is another example of how we are constantly challenging ourselves and our partners to be as efficient as possible with our dollars while still making every effort to grow the brand. And finally, Afaxys. While we saw 36 1% non-retail growth in the third quarter of 2022, we believe we can continue the momentum from both new and returning orders in the fourth quarter of 2022. There is even more upside to the non-retail channel based on the Afaxys customer network, which includes Planned Parenthood and student health centers and we plan on capturing that. Additionally, we believe we will start to see what we call the spillover effect. This means that as physicians who work at Planned Parenthood and gain more clinical experience with Twirla, we believe when they go back to their individual and group practices, they will be more confident prescribing Twirla in those settings, too. Before I hand the call back over to Al, I want to reiterate that we are confident in our business plan because it is producing results as demonstrated throughout 2022 and we believe there is even more upside on the table for the future. Al, back to you.
Alfred Altomari: Thank you, Amy. I would like to take a moment to provide you some additional context on our financial results for the third quarter before opening it up for Q& A. Our cost of product revenues totaled $1.4 million, which consists of direct and indirect costs relating to manufacturing of Twirla sold during the third quarter of 2022 compared to $2.7 million in the third quarter of 2021. The decrease reflects the fact that we had no inventory obsolescence reserve charges in the current period, which we had in the third quarter of 2021. Also, as a result of the one-time non-cash $11.1 million charge associated with equipment transfer up to Corium, we saw a $340,000 decrease in COGS related to the depreciation expense. And moving forward, this will be a reduction of approximately $500,000 per quarter in our COGS. In the third quarter 2022, non-retail sales primarily associated with the Afaxys partnership significantly accelerated. As a reminder, non-retail channels experienced higher gross to net discounting compared to the retail channel and the overall gross to net discount increased as a percentage of gross revenue in the third quarter to an average of 52% from 44% in the second quarter of 2022, which was in-line with our expectations. Gross to net discount for the third quarter of 2021 averaged approximately 30%. We ended the third quarter of 2022 with $6.1 million cash on hand and in addition to the (Ph) at the market or ATM arrangement. We will continue to evaluate all available options to finance the company and continue to explore opportunities that could potentially accelerate our time line to generating cash flow positive, including exploring business development opportunities. We closed out the third quarter of 2022 with a net loss of $19.7 million or $0.53 per share compared to a net loss of $16.8 million or $7.20 per share for comparable period in 2021. The one-time non-cash $11.1 million charge associated with the transfer of the equipment to Corium in the third quarter is reflected in the net loss for the third quarter of 2022. We believe our results for the quarter demonstrates that we are making good progress on achieving our goals of establishing Agile in the contraceptive market by growing Twirla and moving closer to generating positive cash flow. We would now like to give our covering analysts the opportunity to ask us questions. Operator, you may now open the line for Q&A.
Operator: Our first question comes from Oren Livnat with H.C. Wainwright. Your line is open.
Oren Livnat: Thanks. I have a few questions. Congrats on a pretty impressive revenue jump this quarter. I would really like to focus first on this non-retail channel, which is clearly the upside surprise this quarter. You talked about growing going forward. First of all, just near-term, I understand it is maybe a lumpier business. So just to clarify, should we expect that to be at least as big in fourth quarter or could that dip before growing again with reorders in early 2023 and can you just put in context that volume you saw this quarter versus the overall opportunity in the non-retail channel as you see it regarding the Afaxys network size and where that is likely to be taken up? Then I have a follow-up.
Alfred Altomari: Great, Oren. So I think your questions were, what can you expect in the fourth quarter in the non-retail and trying to dimensionalize going forward, how big the channel is, I think is your question. So I will turn it over to Amy. Why donât you say how you feel about the fourth quarter non-retail?
Amy Welsh: Yes. Thanks for the question, Oren. We expect to continue to grow. Well, will it be at the same, I think this quarter, we saw a little over 50% growth. I think that we should be around there. We are confident that from the accounts that we won that we are able to show the growth in third quarter. Now that they are going to continue to normalize, we will see that in the fourth quarter and we expect to see some new accounts as well. So I think that this is sort of a new story for us and you are going to see that this should be consistent growth.
Alfred Altomari: Yes Oren, we donât expect it to backslide. I mean yes, when we first set up an account, we get the benefit of kind of, I donât know, they buy a couple of weeksâ worth of inventory, not much, really not much and then we see some pretty consistent growth. So I think Amy is right. I mean we see it as kind of the new floor. As we add new accounts on, it should grow. But we donât see it as we sit here today, regressing in any way or going backwards we are going to keep growing.
Amy Welsh: Did we answer all your questions, Oren? You had a couple.
Oren Livnat: I got plenty. But just with regards to that opportunity, can you just put into context, you know we know how many prescriptions at least IQVIA captures, which is not clearly is not including much, if any, of the non-retail channel. But how big do you characterize that opportunity overall, whether it is in dollars or total cycles? How big is Planned Parenthood as cycles per year for patches or contraceptives overall nationwide? What do you see in that channel?
Alfred Altomari: Yes. So maybe I will take a bit of a chance to kind of walk through kind of what we were explaining demand and on. What happens, Oren, when an account buys off - this is not peculiar to Agile or Twirla. This is just kind of industry. So if somebody buys drug like from one of the big three wholesalers, they get that - the big three wholesalers provide that data to IQVIA and Symphony. It is just that simple. Planned Parenthood and the institutions, a lot of times, will buy from smaller or regional wholesalers. They have chosen not to sell that data in effect or turn that data over to IQVIA and Symphony. So what happens, Oren, depending on where they buy it from, so we - but they turn over to data to us. And we could say, okay, what flowed through and that is why we could say with confidence our demand. Just to point out what Amy was saying in this quarter, that was basically one big account in California that had multiple Planned Parenthood sites. So that is why we are so bullish on kind of there is a lot more coming. Unlike IQVIA or Symphony where you could look at the defined market, we canât either. We can go back to wholesalers and saying how much business flows through there and we still think there is a lot of upside, Oren. And so as we land new accounts, we think they are going to continue to grow. So that was really on the back of - we call them a big account, supplemented by a number of smaller ones around the country. We are starting to get business besides Planned Parenthood from some state and county organizations around the country. So Afaxys is really delivering a lot of volume in different sources. So we are pretty bullish on that. So just to give you an idea, we are nowhere close to peaking out the potential of this market at all. There is a lot more growth ahead of us.
Oren Livnat: And you did mention, and I appreciate the incremental gross to net evolution as you grow in that channel. Assuming you do grow a lot more in the non-retail channel, should we assume, first of all, that, that gross to net is at least stable, if lower than your - gross to net? Is that number predictable? Is that pricing stable or does that potentially evolve over time as you grow into more Planned Parenthood or institutional channels?
Alfred Altomari: Yes. So Jason Butch, our Chief Accounting Officer, is here. So I will take a shot at it and correct me if Iâm wrong but this is a quarter that really that the Afaxys became a much bigger part of our mix, if you will. We signaled we knew that was happening. So as a percent of our business, we donât see it being that materially different in the upcoming couple of quarters. Maybe we will lose a couple more points but this was the big quarter, if you will, and kind of adjusting us. And then I think it is kind of - as we -- our commercial business starts kicking in and becoming more important, again, I think we grow out of it again in the 2023. Is that fair, Jason?
Jason Butch: Yes. I think that is alright.
Alfred Altomari: So it is maybe a couple of more points, Oren, in the short-term. And then I think we kind of had us flattening out. And then I think we grow as our commercial business continues to grow. And some of the good things Amyâs working on in the commercial side, as commercial becomes more part of our mix, we grow out of it. But we are not ashamed of it, by the way. So I donât want to make it sound like we are not happy. I mean we are always liking more profitability or more margin. But we still think this is a solid deliverance, what we gave you this quarter.
Oren Livnat: Sure, of course. And on the Corium transfer, I know you had already projected that non-cash charge months ago and we saw it this quarter. And I guess there is some corresponding improvement in reported COGS, which if I understood correctly, it was just a reduction in depreciation expense that you are booking. Are there any other benefits going forward with regards to the relationship with Corium in terms of maybe actual cash economics or gross margins for this business or other minimum cash payments or generally terms going forward that can benefit you?
Alfred Altomari: Yes, a couple of things. The answer is yes, Oren. I will walk you through it as best I can. And Jason, again, I will see if he can rescue me if I go too far on my skis. Number one, that equipment was purchased well before we went public. This was funded when both companies were private. So the equipment was sitting on our books and the cash has been out the door for 10-years. So because it was our equipment, we would appreciate it. So yes, you are right. We will pick up some non-cash through the margin, run through COGS. But from a practical perspective, we are going to carry insurance on that. We had to pay maintenance costs for that, software upgrades - with our equipment. So we pick up a few bucks there, honestly, which is great. But I think the biggest thing for investors is that our agreement with Corium predated our launch by a long time including COVID. And we got - as we all know, the brands werenât taking off as fast. So we traded an affect that asset for minimums. But we have got a couple of years to grow into this business. And based on what we just did in this quarter, it looks like we are heading there. Like so we bought our - so we gave a non-cash transfer of the equipment. We save a few bucks of cash or maintenance cost And a little bit here and there and insurance, a little bit through the margin and non-cash. But the bigger picture gives us breathing room on COGS for a couple of critical years. And if Amy keeps going, we are back to where we started, which is great, I think.
Oren Livnat: I appreciate it. And just lastly, just so I can understand, where do you stand on debt at the moment, remaining I think if I looked at your press release, maybe - did you possibly pay down more than I even than you had previously guided to? Where does that stand and what obligations do you have remaining?
Alfred Altomari: Yes. We are looking forward to the day that we are leveraged free. We appreciate our partnership with our friends at Perceptive. We paid off $17 million originally, kind of in a bolus from the proceeds we raised off our ATM. And then we go pro rata. We pay a monthly charge. So I believe we are $2.7 million, $2.6 million or so. We are about $2.6 million, Oren. So we are kind of working off on a monthly basis. So we have a goal to be leverage free. We think it is important. But I think clearing that much leverage off our stock, I think, was money well spent. It just gives us a lot more flexibility in what we are doing. So yes, we are slightly better than - but on the margins, we are just paying - making a small payment per month.
Oren Livnat: Alright. I appreciate it all. Good luck. Look forward to watching some scripts. And I guess let us know if there is a big retail bolus that we are not seeing in IQVIA going forward.
Alfred Altomari: We will try, Oren. We will try.
Operator: Our next question comes from Naz Rahman with Maxim Group. Your line is open.
Nazibur Rahman: Thanks for taking my question and congrats on the quarter. I just have a few, now that you are starting to see larger and larger non-retail orders and Afaxys and these Planned Parenthood accounts are becoming more used to - or in Twirla, have you I mean secured any form of like a recurring or like subscription-type orders from these accounts? Like were you like ship x-number of units every month, every quarter or something like that?
Alfred Altomari: Yes. Naz that is a great question. Yes, it is weekly. It is weekly. This is the gift that keeps giving every week. I mean it is fantastic. I mean it doesnât - that was mentioned to your colleague, Oren. I mean we - they buy a couple of weeks in the beginning from us or through our wholesalers. They kind of work it down a little bit. And then we get repeat orders on a weekly basis. It is a nice business model, which actually helps us from a kind of a planning and cash flow point of view. It is a bit of an annuity for us - these big accounts. Some of the smaller ones donât quite like that but the big fish come in like that weekly.
Nazibur Rahman: Great. And on that point, we now know wholesalers donât really carry much inventory. But do these accounts carry some inventory or, I guess, like larger amounts of inventory than general wholesalers on a relative basis, I guess.
Alfred Altomari: I will take a shot, then I will turn it over to Amy. I think they are on a different bind just about. I mean they donât carry much. Is that correct?
Amy Welsh: Yes. No, I would agree. I think that they are bringing to order - and speaking more, not for the larger ones. We are seeing it weekly, so they are moving it. They are moving it. But some of these accounts have 38 locations, nine locations, 15 locations. So it is moving pretty fast. They donât hold a lot.
Alfred Altomari: No, we donât think now at any one point, there is - I donât know. I will speculate that maybe there is a couple of weeks, maybe at the most, I think, in the whole channel. So Jason, I think you believe it is the max a month?
Jason Butch: Yes, maximum a month.
Alfred Altomari: Yes. I mean we are looking at very little bit of inventory exposure at all. It turns. We like that.
Nazibur Rahman: So you guys commented on the Planned Parenthood penetration in California. Could you sort of give more color on that like how many of the target Planned Parenthood accounts in California have you reached or I guess like how much is there left to reach?
Alfred Altomari: I think I will take a shot, Amy. I think from what you showed me like are the top five Planned Parenthood in the country, four of them in California, I believe, we have got one ordering at a pretty good clip. We think we are going to get the rest of the fall pretty quickly. That is nationwide now four of the five are sitting in California. I mean it is just remarkable how big these are. And I think that the reason besides California being our biggest state, they seem to be organized by affiliates. So in other words, they group purchase. Number of the affiliates buy from one buyer effect. So in other smaller Planned Parenthood on the East Coast, they buy one at a time from us. Is that fair?
Amy Welsh: Yes. You got it. Does that answer your question?
Nazibur Rahman: Yes, it does. It does. And in these non-retail channels, what kind of feedback have you been getting from prescribers on Twirla and has that been like any different than any feedback you got from like retail or private practice physicians?
Alfred Altomari: I will tell you that - go ahead, Amy. This has been stellar.
Amy Welsh: Yes. I was going to say it is not different at all. It has been very, very positive. In fact, one of our - the larger account that we have been talking about, one of the people from that specific Planned Parenthood has been so happy with Twirla that she has been talking to a lot of her colleagues throughout the state and through a couple of the local states and trying to champion the brand because she has just been so impressed. So that has been very, very good. And I talked a little bit about this strategic spillover effect that we are seeing. It is early days but non-retail is a bridge for us. And what we need to be able to do is see that is spilling over into the retail and we are starting to see that that is happening as well. So as OBs are sort of donating or generously giving their time to a local Planned Parenthood, we are also seeing in California that is lifting our growth in the state overall.
Alfred Altomari: We draw a little 10-mile circles around these places and saying that our market share in those circles going up faster as outside the circle. And the answer is very early days is yes, so that these physicians take that love and feeling back into their personal clinics. And so we - that is where we think - going forward, that is where we think the retail is going to kick in. This spillover effect adds directly into our retail channel, which Oren asking about gross from that, which is a different margin, which is great. So this is where one and one equals three for us. That is the synergy between - while we talk about them as being two different channels, we think they overlap and they kind of play off each other.
Amy Welsh: Yes.
Nazibur Rahman: Right. Also in terms of writing though, has the non-retail channel or the prescribing non-retail channel have an easier or more difficult time prescribing scripts. I know you guys done quite a bit - Twirla has done quite a bit of pushback over time. Has that process like any more difficult or easier in these non-retail channels?
Alfred Altomari: Shockingly easy. Remember, this is when a woman goes to the Planned Parenthood, there is three basic things. A lot of times, they are cash paying or they get the drug at very, very cheap prices underwritten by Planned Parenthood. So there is no friction there. So that is the bulk of their scripts. Another phenomena is Medi-Cal. They are Medicaid scripts that flow through there. And we are on a preferred position, as you remember, in California. And then much, much, much less, their commercial plans. They run through commercial plans. And we saw pretty good coverage in California. That has why Amyâs put so much effort in California. So to answer your question, we get virtually no friction, none that Iâm aware about it at all versus the retail channel, where we have insurance companies and their PBMs intervening. There is nothing like that there, that is why we love this channel because it just once they make a decision to take our drug on as one of their preferred drugs, munis fly, they fly, which is great. No friction.
Nazibur Rahman: That is great. Just one last question. On the Nurx partnership, so you commented that you are going to advertise Nurx available Nurx in your CTV campaign. But is Nurx also planning their own initiative to promote the availability of Twirla and if they are, when does the initiative start?
Alfred Altomari: Go ahead, Amy.
Amy Welsh: Yes, they are. So the fast answer is yes, we are doing it on our CTV ads and they are doing a mix. They do have some digital promotion going on banner ads, Facebook Marketplace, Google. And then also, they have a customer relationship program that is pretty impressive for their existing customers. And so they are going to make sure that their existing customer base is educated about Twirla. And then we offer everything from our co-pay card coupon and just awareness through there. So yes. And what we like about it is we are sort of helping each other putting any kind of exchange of expenses. The more I do, the more they are able to do. I think I said this too already, but that is one million of our patients that they have right there that we have a captive audience with. So yes, it is a true co-promote, where we are helping each other through marketing efforts on both sides.
Alfred Altomari: What I love about what Amy has done is two people are trying to help each other, right. So there is no money changing hands - Iâm giving you X amount of dollars of advertising. And they say, "We will give you a Y amount in return for it." And if one and one equals they get a new customer, we get a new customer and vice versa, we think it is a pretty cool idea. We should just emphasize it is just getting started. So really, we expect this to be benefiting later in the year and into 2023. But it is a really cooperative relationship. We like these folks a lot. And it is not often you get a chance to work with some of their customers or your customers. It is almost 90% overlap with them, something like that and over one million patients with - that kind of progress and contraception for us.
Nazibur Rahman: Alright. That definitely answers my question. And once again, congrats on the quarter.
Alfred Altomari: Thanks Naz, I appreciate it.
Amy Welsh: Thank you.
Operator: Iâm not showing any further questions at this time. I would like to turn the call back over to Al for any closing remarks.
Alfred Altomari: Yes. Well, thanks for the questions from Naz and Oren. Hopefully, you can feel our excitement. This has been a breakout quarter. We have been expecting it. Really we started giving some previews of this earlier in the quarter. But quite frankly, it is better than we expected. So we ended the quarter with really great growth. We delivered 43% of net revenue but we still work with it. We are still going to keep growing into some of the spirit of some of the questions. I mean this is by no means the end. It is really the beginning of an acceleration we see in our business. We want more growth in the fourth quarter and a good launching off point for 2023. The Number 1 objective for the company continues to be we want to generate positive cash flow for having this business. We are exploring different ways to do that, both organically and our business model, as you have heard Amy described but also looking at business development and saying, can we add another product or another offering in our bag to leverage our cost even more. We come to work to control what we can control. We can control the demand. We can control the factory sales and we can manage our OpEx. So that is the one, two, threes that we are focused on. And everything else in the external environment, we try to be mindful of it. But at this point, we control what we can do. And what we can do best is execute on our business plan that Amy has laid out for us. So we are excited about this quarter. We are looking forward to the next quarter and give hopefully more good news as we continue to grow the business. So thank you all for joining us tonight.
Operator: Ladies and gentlemen, this does conclude todayâs presentation. You may now disconnect, and have a wonderful day.
