Okay, I think we'll get started. Tom Stephan with Stifel. Excited to have Iridex with us today. Joining us, we have Dave Bruce, President and CEO. I said this yesterday, but I'll start with our least favorite acronym, the LCDs. Made a lot of noise in the MIGS industry. Dave, just your perspectives, can you start by providing your thoughts on just the broader impact it may have next year and longer term, and then maybe we'll get into the, the impact on the business? Sure, Tom. Thanks for having me, and thanks to Stifel for inviting us. The announcements that came out in the last two weeks or so were affecting Iridex, as well as the broader MIGS category of devices. And for those less familiar, Iridex products use a code called cyclophotocoagulation, and that code was one that was called out for coverage, but it was also significantly restricted in their new definition in the MAC area. So for our products, MACs are only a portion of the volume that we do across the country, and so we are very focused on addressing this, and we think there are some very important elements that we can challenge the restrictive ruling. But it's... Right now, it's educating clinicians, the portion that is subject to the MAC restrictions and minimize the impact for us. Perfect. And maybe to dig into the impacts on the business, you know, you mentioned CPC, encouragingly now covered, but the coverage criteria, I think- Right ... is what may be presenting the most uncertainty for your business and for MicroPulse. Can you elaborate on that a bit? Sort of educate us on what exactly is gonna be the limiting factor within the coverage criteria. Sure. The cyclophotocoagulation, CPC, has been around for 30 years, and it originally was released as a treatment for late stage. So its, its intent is to heat up ciliary body tissue and really suppress aqueous production. So to keep IOP down, most devices are targeted at enhancing outflow, and the original CPC was about reducing inflow. The code has been around for an extended period of time, and then subsequently, we introduced a product that was targeted more toward the mid stage, where we also enhanced outflow and actually didn't have as much suppression. So the LCD came out with a significant restriction based on a very old technology assessment that was done by a group under the auspices of the AAO, the American Academy of Ophthalmology, and it restricted to essentially very late stage, those where suppression of production was really appropriate. We think it was erroneous because they compounded quite a number of conditions that became requirements in the LCD restriction of our code. Sort of and instead of or? Is that kind of the- Yeah. So, you know, without getting too much into the technicals, you know, the paper that they referenced and the wording that they used was a series of attributes or characteristics, symptoms of patients. And in that document, they intended to say, "These patients, and, or these patients, or these patients, or these patients," and the LCD chose all those characteristics with and, so the patient had to exhibit all of those characteristics. Mm-hmm. We think that's a mistake. We have submitted an appeal to the five of seven MACs that administer this, and we'll pursue that. You know, and clinicians are doing the same. Actually, we're in contact with the author of one of the authors of the referenced paper, who is also submitting a comment to them, saying, "You know, you mistook our intent, and you should correct it. Got it. And so you guys have a strategy, hopefully, to attack this, and you're obviously being proactive here. Talk about how the physicians are reacting, what the customer conversations have been. Are your customers starting to work down inventory, maybe on the capital side? Are there some deferrals? What's the nature of the conversation over the last handful of weeks since the final LCDs have been published? Yeah. It's interesting. There's, number one, there's a certain amount of outrage over this restriction. For example, one of the requirements is that they have a patient has had to have had a trabeculectomy or tube shunt procedure, which is, you know, advanced glaucoma surgery. It's got a higher complication rate, it requires a lot of follow-up, lifestyle restrictions. And to require that a patient has undergone that before, a much less invasive and simple MicroPulse TLT procedure- Right ... or something like that is the first outrage. Secondly, it's, "How can I help get this overturned?" And some of the conversations around how will you conduct your offerings or pull back offering our procedures are around understanding whether they have the coverage, the right coverage- Mm-hmm ... or they don't have the right coverage. And, you know, their intent, their stated intent is to, you know, maximize their, their ability to use it. Right. In terms of whether they're pulling back on inventory or otherwise, it's really too early to tell. It's a fear that we have. We certainly are seeing some of the prospects who would otherwise be interested, and hopefully by the end of the year, purchasing new systems and starting to adopt the technology, pausing and considering what's the impact and should they go forward at this time? Got it. And so last night in Q&A, I kind of alluded to this, but setting aside Medicare, commercial, those buckets, can you break down your G6 volume in terms of moderate, severe, maybe even end stage? And then help us think about, in that context, what is- what percent is impacted by the LCDs, and then what actually might still be insulated? Yeah. I'll start with the end first. You know, when you do the math, and I'll go through it here in a second, the impact of what is specifically covered under the LCD, the new LCDs, is about 20% of our volume. End stage post tubes and shunts. No, that's everything that, you know, for example, we looked at all the states- Oh, including Medicare. ... and understood- Okay ... what's under these MACs that have changed their LCD, and it boils down to about 20% of our total US volume. In that 20%, we typically are, as the very late stage might be in the 20%-25% range of that. We've actually made great strides in driving adoption in the more moderate stage patients, and, you know, there's late-stage patients who have all these characteristics and will continue to be covered. You know, as we've had to dive into coverage and understanding all these factors, basically in the US, take 100% of the glaucoma patients, about a third of them are in traditional healthcare plans and continue to be covered. About two thirds of our base is in the Medicare side of the house, but Medicare is split between direct Medicare, which is managed by these MACs, and Medicare Advantage plans, which are like HMOs- Mm-hmm ... where Medicare pays to Aetna or Humana, UnitedHealthcare to cover patients. Obviously, the private pay hasn't changed, and the, the Medicare Advantage has not changed. No one has adjusted their coverage for our procedures, even as they've put out more restrictive coverage on the general MIGS category. So it gets us down to about that 20%, that are directly affected by the MACs. Okay, got it. And so you said, if we just think about glaucoma disease severity, 20% very late stage, that kind of would qualify under the coverage criteria. Between, I guess, severe would be before late stage? Yeah. Between severe and moderate, how does the remaining 80% kind of split? Or I guess the question would be moderate. What% of your volumes is that? I think we're probably in about the one-third range in that, you know, what our long-term target and where we believe MicroPulse Transscleral Laser Therapy really fits- Mm-hmm ... is that moderate, they've, patient has gone through the, you know, initial drops, maybe had a SLT, a laser-based procedure that is for mild stage patients. Maybe at some point they've reached their, you know, maximum medical therapy. They just can't tolerate- Right ... any more drops. They've had a cataract surgery, maybe concomitant with a MIGS, maybe not, and their pressures are rising, they have to do something. That is the sweet spot for MicroPulse TLT. There's a very large number of those patients out there. Mm-hmm. That's where our focus with comprehensive ophthalmologists who are doing those cataract procedures and managing that glaucoma down a pathway until they need to refer it for a more advanced surgery. Mm-hmm. So we're about one-third there, and then that, you know, more advanced stage, maybe they've had a trab or a tube shunt, and pressures are rising. 'Cause, you know, as- Yep ... as we know, the continuum of care requires that, you know, something that's done lasts a couple of years, then the next thing has to happen. So we're, you know, roughly a third, maybe a quarter at the end stage, and then, you know, kind of the balance in that, you know- 40% ... advanced moderate Yep ... advanced and moderate. Okay, so that middle ground not covered under the criteria, technically? You know, it depends on how a clinician determines. For example, is a trab or tube shunt, a failed trab or tube shunt mean they've had the surgery and now pressures are rising, or does it mean that they're, you know, not appropriate for that surgery? Right. These are physician interpretations that will come out as we go through this. Great segue into my next question. Kind of front ran me a little bit, but, you know, with the qualification criteria for CPC pretty strict, I think in practice, you just mentioned it, there's physician interpretation, it isn't usually black and white, and the doctors can kind of leverage a particular procedure if they feel it's clinically and medically reasonable and necessary. I think it, that's how Medicare- Yeah ... spells it out. We've heard this in our conversations with physicians recently, that they can maybe get through some of these coverage criteria if in the op notes or the EMR, they're able to explain why they're performing something. Do you think in practice, it's not going to be black and white, in that maybe for, you know, the non-moderate Iridex patient, they can still get the procedure done? ... as you're asking me to interpret how the broader set of these practitioners are going to write their patient records and otherwise, and it's, you know, it's difficult for us to say, and I don't wanna project for them. But we have heard a number comment that, you know, they, you know, for example, you know, go down that list of criteria, you know, failed trab or tube, you know, fail to qualify is a consideration. Poor vision- Mm-hmm ... that's an interpretation that they can make, high IOP. You know, they're only having the conversation because they have high IOP. So, you know, as they go down that list, they can find reasons to reflect in the patient record that a patient may qualify for that. As we understand it, the submissions don't require additional paperwork to to justify, like a pre-approval would. Mm-hmm. But you know, they, they have to be prepared in case they're audited or something like that. Makes sense. And maybe to finish here, you pulled guidance, I think it was early November, in the 8-K. Talk about that decision, the timing. I guess just to put numbers around it, my 2H glaucoma revenue estimate was around $8 million. If we think about half of that being U.S., that's $4 million, and under the most draconian scenario, I would say, for a 2H impact, maybe down 50%. So that's a $2 million hit on, you know, $55 million in sales. So the potential LCD impact, I think, in 2H, shouldn't be overly severe. So why pull guidance? I guess, were the LCDs that much of a swing factor potentially to the downside, that you just didn't feel comfortable providing a range? That's an interpretation. You know, we view, we give full year guidance, but essentially here in the Q4, we're giving Q4 guidance. And so, you know, our view was that there's a fair amount of uncertainty around how clinicians will react. Mm-hmm. I think, in our case, it's a little different than where the MIGS had been under the gun from the initial LCD proposed submission in the June timeframe. Mm-hmm. Ours, really, there was... Even though we were restricted at that time, this has happened before, and we- Right ... went through the comment period, and that restriction was pulled. Mm-hmm ... and coverage continued. So it really was a late development, and as we talked to clinicians and talked to our reimbursement advisors, they said, "This can have a real strong impact on us going forward if it's not changed. Right. And so, we saw it as very high volatility potential in the glaucoma piece of the business- Mm-hmm ... that you know, we aren't comfortable forecasting exactly how that's gonna come out. In the grand scheme of things, you're right, in a full year, it may not be that large a number- Mm-hmm ... but for the Q4, it is. Makes- So we chose to suspend that for the moment, and as we get clarity, you know, we intend to come back and provide guidance at an appropriate time. Got it. And so thinking about 2024, let's say these final LCDs are in place with the language, hopefully temporarily unchanged and, written as, as they were finalized. What's the thought in strategically, or I guess, from an operations perspective, how you'll balance resources between US glaucoma or maybe even pushing harder in OUS territories? I know you have a big prospective trial that- Right ... you're potentially embarking upon here in the US. Does the attention maybe shift a little away there? Just talk about how resources could be reallocated if this language remains in place. Yeah. So two-thirds of our volume is still covered, and so we find lots of opportunities to pursue continued adoption and try to drive a broader patient base for our particular practitioners. So we're trying to balance that opportunity against any reduction that might occur. Right. We do have a significant push in the glaucoma side of the business as a part of our spend, and we can balance the two as we see how things unfold. You know, hesitate to be dramatic at the- Yeah ... out of the chute because, you know, we still have a lot of opportunity to pursue. But if these impacts really start to affect our cash usage, then we'll have levers that we can pull. We're already, you know, significantly promoting outside the US, working- Yep ... through our distributors, and, and we see that that part continuing because that opportunity is unaffected. Perfect. Shifting a bit away from the LCDs, but sticking with glaucoma, over the past couple of years, I think building clinical support and evidence for MicroPulse has been just an increased area of focus. Mm-hmm. Historically, was that something that maybe was underinvested in, in the prior regime? And then, you know, talk about what the prospective trial you're hoping to enroll fairly soon, what could that mean for the business? Yeah. So we have seen in the last quarters, you know, a flattening out of our growth curve. And we talked a little bit about this in the Q2 call, where we went through some of the challenges and in adoption. But it really boils down to clinicians getting good outcomes on a high percentage of their patients with durability. That's very affected by the dosing that they use. And if you underdose, if you use the lower end of the range of dosing, and with the objective of minimizing the impact of potential complications, you may get lesser outcomes or shorter durability. We've supported, and the results are out now on what we call a dose escalation study that demonstrates significantly higher IOP reductions when you increase the dosing by slowing down the sweep speed, essentially. Mm-hmm ... heating up the tissue more. And it has maintained the same safety profile. So the ability to communicate that into the marketplace is the real opportunity to drive this. And the capper for adoption, we believe, was going to be, is going to be a prospective study, multicenter, statistically significant, with a good one and now two-year follow-up that will- Mm-hmm ... really support that, by the way, be a tool with the MAC to support going forward. So we think those are the drivers that help us. We think the evidence base that's very strong through our clinical trial is the thing that will get us there. And continued education and support with clinicians to make sure they understand number one, understand that the dosing, the slower sweep speed is- Mm-hmm ... is the key to outcomes, and then having them experience that, be satisfied, and broaden their usage on patient base. It's a big growth opportunity, and we see this reimbursement restriction as kind of a short-term- Right ... limitation to getting there. So, to push you a little bit on the different, you know, sweep speeds and dosing- Mm-hmm ... I think this was an initiative that started maybe late 2021, I think, at AAO, or it's kind of been out there for a little while now, and maybe adoption of it, as is working its way through. Those adopters of the new protocols, are you seeing better outcomes and higher utilization? We are seeing better outcomes. We're seeing much more satisfaction by the clinicians. I don't think we're seeing- you know, we haven't proven to ourselves that we are experiencing a, a broader use on their patient base yet. Mm-hmm. We are feeling the success we're having in adoption at the comprehensive ophthalmologist level is paying off. We looked at a sample of about 45 or so comprehensive ophthalmologists across the country, so a kind of a sampling from each territory, and we were finding that they were running about 40% higher volume than our average user base. So we feel like it's working where that success is occurring, and most of those would have come on with our recommendations to be in the more, say, more in the middle of that range of dosing, as opposed to starting at the bottom end of the dosing. Right. That's helpful. Perfect. Pivoting to Retina, I think we have about eight minutes. Solid quarter, you guys put up. Above my estimates, and a tough comp, but still, you know, I think solid sequential growth. Just talk about execution in that business. You have new products coming on. You know, what's going well in that business, and what do you think the long-term sustainable growth rate is for Retina? Yeah, the Retina business is solid for Iridex. We're a leader worldwide. We've been the leader both in systems placements and in installed base, and we feel like we are the, you know, the preferred provider, and we capitalize on that. We have just launched this year a new Iridex PASCAL, which has the leading engine for scanning lasers. We've added MicroPulse capability to it, which is a, you know, a key clinical advantage in treatment for Retina because it delivers all the clinical efficacy and is much less damaging on the Retina side. MicroPulse was first introduced into the marketplace by Iridex in the Retina side of the business. Mm-hmm ... and then subsequently came over to the glaucoma side of the business. So we're getting great response to that new product. It's a much smaller footprint, so it, it's appropriate in other areas, and it has a very broad range of capabilities that makes it a real useful tool. It even has a scanning SLT version that allows a faster treatment, so for multi practices, it has great uses. And then early next year, we'll be introducing a new platform on the single spot side of the business, where that is an update to the system. We have both improved the performance of the system and reduced the cost of that system, so we can be more price competitive and hopefully improve our margins as well- Yep ...going forward in the business. So we're quite optimistic for that. Now, that said, it's a mature segment of the marketplace, so as a whole worldwide, it's a slower, you know, single-digit, middle single-digit growth opportunity. Mm-hmm. -overall, and we think we can run at that rate or above that rate. For example, if we can really trigger a replacement cycle, for example- Right ... in the US, where there's a very large number of systems that are, you know, 5-7 years old and beyond. A number of PASCAL systems that actually are still in operation, but are past the end, even the end of service- Hmm ...point. So with a new platform, you know, you can, you trigger- Right ... you can trigger those, those capital cycles. Got it. So you mentioned margins with the new system. Currently in the Retina business today, what% of sales are capital, and then what% is kind of consumable recurring? I don't know if we've ever got that color. We've not been breaking down that side of the business. There's actually three sides to that business. There's the surgical level systems, which are, you know, lower price competitive, targeted at surgery centers and hospital surgeries. They're used in combination with EndoProbes- Right ... which are single-use probes that we offer. And then there's the scanning laser side, and, you know, medical Retina and the PASCAL business that are typically sold and used in the office- Mm-hmm ... to do treatments in the office. Okay. The follow-up was gonna be, you have such a large installed base. I feel like the opportunity might be to leverage that with greater recurring revenue, whatever that may look like. Is that something you're thinking about leveraging? Do the new platforms possibly bake that into the equation? Just your thoughts on raising recurring revenue and leveraging that large installed base. Yeah, the recurring revenue, excuse me, from the EndoProbe side of the business is quite a stable business. We have a preferred product as in that category as well. But we're not only used on Iridex systems, we're also used on some of the other big vendors of vitrectomy systems. It's primarily used in that category. So it's almost its own segment. They can use it with our systems, but almost most of that business is probably now being used on the other vendor systems that are integrated with the vitrectomy systems. Perfect. Before moving to the balance sheet, just to wrap it up kind of on the top line. Mm-hmm. Retina, you think can be a mid-single-digit, sustainable growth business. We do. Let's set aside the LCD stuff. You work through some of these clinical initiatives, and hopefully there's more traction and some sort of inflection. What do you think is the growth rate of glaucoma, longer term on a sustainable basis? Yeah. So we see the place for MicroPulse TLT as, let's call it the SLT for the moderate stage of the moderate stage patient. SLT is 20 years old, clinically mature, and, it's, anchored in that early, you know, phase of treatment for the mild stage patient. It's a... In fact, it, it's about 20% of all the mild stage patients- Mm-hmm ... annually. So, apply that same 20%, and whether it takes us 20 years or 10 years to get there, applying that to the moderate stage patient, where there's about 2 million- Mm-hmm ... is hundreds of thousands of procedures. Ours is also repeatable, so you can end up with, you know, say, an average of 1.5, 2, maybe even more. Our longest study was 6.5 years, with an average of 3.5 procedures, so every- Right ... 22 months. So, the time it takes to get to that very large, you know, 20-30 times what we're doing now, we're running about 30,000 probes a year in the US, is where this can go. In the short term, we have not been showing that growth. We're working through this, but we have focus on a number of areas, and we think our clinical study will be a key driver. So while we think we can potentially inch up, you know, LCDs aside, we can potentially get a single-digit or maybe into double-digit growth in the shorter term. We think as we transition to results from that study, we do some turns on the technology to make it easier to deliver that energy, less dependent on physician sweep speed, that those kinds of advancements can accelerate that growth rate. Makes sense. Helpful. Last 45 seconds, just wanted to touch on the strategic review of the business- Mm-hmm ... you announced in August. If you can just quickly update us- Yeah ... on the latest there- Yeah ... with what you're willing to share. So we announced this at the end of August, and basically, the board came to the point where we have great businesses. We're probably the strongest we've ever been, and yet market capitalization is almost the lowest it's ever been. You know, part of that is macro in the marketplace with microcap medical device companies. But the undervaluation is something that needs to be addressed. We're a public company, and we need to strive for optimizing shareholder value. Mm-hmm. So the decision was made to announce this process in order to garner the most interest and let people... essentially let people know we're receptive to- Right ... to that interest. So that's progressing. Mm-hmm. It's not something we're gonna comment on play by play- Mm-hmm ... as we go through this, but we certainly will announce when there's something that is appropriate to announce. Makes sense. I think we're at time. Dave, thank you so much. Pleasure. Thank you, Tom.