Welcome to the Sientra's Earnings Conference Call. My name is Hilda, and I will be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. During the question-and-answer session, if you have a question, please press zero one on your touchtone phone. As a reminder, the conference is being recorded. I will now like to turn the call over to Sientra's General Counsel, Chief Compliance Officer, Oliver Bennett. You may begin. Thanks, operator. Good afternoon, and welcome to the Sientra second quarter 2022 earnings conference call. I would like to remind everyone that in our remarks today, we will include statements that are considered forward-looking statements within the meaning of United States securities laws. In addition, management may make additional forward-looking statements in response to your questions. Forward-looking statements are based on management's current assumptions and expectations of future events and trends, which may affect the company's business, strategy, operations, or financial performance. Actual results may differ materially from those expressed in or implied by the forward-looking statements. The company undertakes no obligation to update or review any estimate, projection, or forward-looking statement. A detailed discussion of the risks and uncertainties that the company faces is contained in its previously filed annual report on Form 10-K, its previously filed quarterly report on Form 10-Q, and its quarterly report on Form 10-Q for the second quarter that ended June 30, 2022, to be filed with the SEC and available on the company's website and at sec.gov. I would also like to note that Sientra uses its investor relations website to publish important information about the company, including information that may be deemed material to investors. Financial and other information about Sientra is routinely posted and is accessible on the company's investor relations website at www.sientra.com. Today on our call, we have Ron Menezes, Sientra's President and Chief Executive Officer, and Andy Schmidt, Sientra's Chief Financial Officer. I will now turn the call over to Ron. Ron? Thanks, Oliver, and hello, everyone. Our eighth consecutive quarter of growth was fueled by record high reconstruction performance, continued strong commercial execution, and new product launches. This result was a validation of our strategy to focus on the reconstruction market with long-term contracts, higher margins, and price stability. Despite the headwinds that the medical device sector saw in Q2 2021, 2022, we were able to achieve several key milestones this quarter. We had revenue of $21.5 million, a 7% increase over second quarter 2021. Sales on our reconstruction channel grew over 23% year-over-year, far outpacing the overall market growth, and we also added 140 new hospital accounts. We'll continue to see high reorder rates in our top volume accounts at a rate higher than 80%, which gives us high confidence in driving performance in the second half of 2022. We're also growing our augmentation market share despite a challenging market, reaching a record high market share of 13% in the first half of the year. We were able to accelerate the pace of adding new augmentation accounts in Q2 2022, adding close to 160 new accounts. Combined with our reconstruction gains, this led to the addition of close to 300 new accounts in a quarter, which is a record for Sientra. We executed our new product launch strategy that was discussed at the R&D Day back in spring. In the second quarter, we launched our new six-tab DermaSpan tissue expander, which gives Sientra an additional product to bundle with hospital decision-makers. We also received FDA approval for a Low Plus Profile breast implant, making Sientra the first and only U.S. manufacturer to provide 80 and 110 cc shell implants. The approval provides surgeons and patients with more choices to fit their aesthetic needs. The pandemic caused quite a boom in the plastic surgery market, with augmentation being no exception, seeing record high procedural volume in 2021. In the second quarter of 2022, the market has returned to 2020 levels. The Sientra team, though, has done an excellent job navigating through this environment. As a matter of fact, second quarter 2022 revenues were approximately 92% higher than Q2 2019 prior to the pandemic. With our advanced technology, industry-leading safety profile, and innovative partnership programs with our pro- plastic surgery customers, we have been able to dramatically outperform the market and continue to grow our market share. One of the factors behind our success has been our ability to partner with plastic surgeons. We have helped drive patients to their practice through initiatives such as Sientra Academy, which has been proven to grow annual revenue by 50% within accounts that attend the program. We've also doubled our consumer brand awareness for the past tw years, growing at the highest rate in the category and putting us in the number two position amongst all brands. In reconstruction, we have seen an acceleration of orders by high volume hospital accounts and the addition of new hospitals. The acceleration we saw in the second quarter was a result of investments we made back in the second half of 2021, and revenue per account grew by 10% when compared to the first quarter of 2022. We also added close to 140 new hospital accounts this quarter, which positions us well for a strong second half and beyond in reconstruction. The launch of DermaSpan six-tab tissue expander, the continued clinical advantages of AlloX2 tissue expander are the foundation for our strong reconstruction performance. In addition, our sales team have done a great job focusing on spending more time within their reconstruction accounts to bolster the great access that our products have in every major GPO in the U.S. We're also seeing growing interest in fat graft in the plastic surgery market, validating the decision to acquire a novel fat grafting technology at the end of last year. In our recent market research we conducted with 100 plastic surgeons, over 70% of them expressed dissatisfaction with the current systems in the market. Most of them are looking for a system with the clinical advantages that our fat grafting technology provides. Importantly, over 80% of those who participated in the market research survey indicated that they would intend to try our innovative technology. We expect the launch of our novel fat transfer technology next year should expand our TAM by at least 25%. It'll offer surgeons unique benefits to obtain safe, natural, predictable, and reliable outcomes. We are extremely excited about Sientra's near and long-term future as we build the foundation for the upcoming years. I will now turn the call over to Andy for financial information. Hey, thanks, Ron. Reviewing our Q2 2022 financial results. Sientra posted revenues of $21.5 million as compared to $20.1 million in Q2 of 2021, an increase of 7%. Of note, we continue to see very strong performance from our reconstruction sector, which represented approximately 54% of current period revenue. Year-to-date 2022 revenue of $42.9 million compares to $38.4 million for 2021, an increase of 11.7%. Gross margin for Q2 2022 was 59.2%, which is a strong performance as compared to 56% for the same period last year. The key driver for gross margins is product and channel mix. Q2 2022 gross margins benefited from the continued expansion of our reconstruction business in the realization of our distribution center efficiencies now that we have completed our distribution center move integration. Our Q2 2022 period included a write-off of expired legacy DermaSpan product. Without the write-off, which is a non-cash event, gross margins would have been 61% for the current period. Finally, throughout 2021 and 2022, we experienced price stability across our entire product line. Switching to operating expense. Total GAAP operating expense for Q2 2022 was $28.7 million, as compared to $20.4 million in Q2 of 2021. Our Q2 2022 GAAP operating expense included approximately $2.9 million of non-recurring severance and legal expenses and $3.5 million of other non-cash expenses. Taking these items into account, total non-GAAP operating expense for Q2 2022 was $22.3 million, as compared to $17 million in Q2 of 2021. The increase is primarily investment in sales and marketing initiatives to support our future new product launches, which includes our fat grafting product. In addition, G&A expense increased due to the prior year completion of our ERP implementation, which now shifts information system expenses from the balance sheet to the income statement in 2022. Our current period non-GAAP operating expense of $22.3 million is significantly lower than our Q1 of 2022 non-GAAP expense of $24.8 million and puts us within our non-GAAP yearly operating expense guidance of $90-$94 million. We expect to see continued improvement in non-GAAP operating expense performance going forward as we realize efficiencies and begin leveraging our infrastructure. Year-to-date 2022 GAAP operating expense of $57.6 million compares to $42.3 million in 2021. Year-to-date 2022 non-GAAP operating expense of $47.1 million compares to $35 million for 2021, and again is attributed to current year investment in commercial activities to support new product launches and the shift in accounting treatment of our information systems expense. Total GAAP loss from continuing operations for Q2 2022 was $18.2 million, as compared to an $18.5 million loss for the previous year period. Adjusted EBITDA for Q2 2022 was a $9.2 million loss, as compared to a $5.1 million loss for Q2 of 2021, again attributed to our investment in our sales and marketing initiatives. As revenues continue to increase, we expect to see improvements in our adjusted EBITDA as we realize operating efficiencies. 2022 year-to-date adjusted EBITDA was a $20.7 million loss, as compared to a 2021 year-to-date loss of $12.4 million. Switching to key balance sheet items. From an operational perspective, we continue to see improvements in our operating cash flow. Q2 2022 cash used in continuing operations of $13 million compares to $17.9 million used in Q1 of 2022. The $5 million or 27% sequential quarter improvement is largely attributed to improvements in our working capital accounts. Notably, decreases in accounts receivable of $3 million, reduction in inventories of $1.4 million, and an increase in customer deposits of $2.9 million. We expect to see a continued improvement in our working capital accounts, driven by focused efforts to decrease accounts receivable days outstanding and by optimizing our inventory months on hand. Cash at the end of Q2 2022 was $25 million, and total debt before any adjustments for discounts and issuance costs was approximately $83.4 million. Turning to guidance. Macro headwinds have worsened through 2022 and continues to have a broad impact on overall consumer spending as recession concerns loom. The aesthetics market has seen some impact in the first half of the year. It's difficult to say how long these trends will persist at this time. We continue to gain share in our respective markets and have done a good job navigating in a difficult economic environment. Given these headwinds, we are taking a more cautious stance. We are adjusting our full year revenue guidance to a range of $90 million-$95 million, down from prior guidance of $93 million-$97 million. The new guidance reflects growth of 11%-18% as compared to sales of $80.7 million in 2021. That concludes my prepared remarks. At this time, I'll turn the call back to the operator for Q&A. Operator? Thank you. We will now begin the question-and-answer session. If you have a question, please press zero one using your touchtone phone. If you wish to be removed from the question queue, please press zero two. If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, please press star and then one using your touchtone phone. We have a question from Alex Nowak from Craig-Hallum. Please go ahead. Great. Good afternoon, everyone. Ron, when we met in San Diego at the end of April, and also we spoke on the Q1 earnings call in May, I think macro wasn't a factor. It really wasn't even considered a concern at the time. It was also thought that the pandemic boom would continue into August. I'm just curious, when in the quarter did this thought process change? When did it ultimately, the macro concerns that we see every day in the headlines, when did that start to impact sales? Was it real late in the quarter? Just help me out there. Thanks, Alex. It was in the beginning of the quarter. We started seeing some things in, probably late April, in really softening. The first quarter this year was lower than the first quarter last year. We didn't see anything crazy. Then acceleration of softening on augmentation, late April through May and June, and a really slow down at that time. I mean, really major slowdown. Now, keep in mind, Alex, a lot of the A accounts and B accounts that we have are still very busy. What we've seen is the middle-of-the-road accounts are really drop in volume. The overall market then is back to 2020 levels from the market's perspective. Okay. Understood. Then the other big priority for the company is improvement to profitability. If I go back and look at 2021 OpEx compared to this year, it looks like this year OpEx has expanded almost $20 million or 30% growth. Now, I know there's a couple one-time items in there and some add backs, but now sales is coming closer to a ten to fifteen percent growth range. Maybe help us bridge to the profitability, which I think is the key metric everyone's looking for. Sure. Let me jump in. Yeah, let me jump in on that one. Let's think in terms of the model in terms of how we're put together. One of the key elements, obviously, you know, we've got revenue, but then we have gross margin. Gross margins are now looking in low 60% in terms of our mix versus 55% last year. Going forward, we expect to see continued strong performance in the low 60s. As we get into 2023 with the launch of fat grafting, we expect fat grafting, especially performing in the recon space, to perform at 70% plus gross margins, similar to our tissue expander, BIOCORNEUM, et cetera. That's gonna be a big plus, so we're gonna expect to see upward pressure in gross margins into 2023, moving from low 60s to mid-60s. A key is operating expense. As we've discussed previously, we went through quite a bit of expansion in terms of 2021, a lot of infrastructure work, the distribution center move, ERP upgrade and so on, where we had higher expenses exiting 2021 than earlier 2021. It commented that the first half of 2022, we'd have quite a bit of one-time expense and so on. As per my prepared remarks, we've dropped our cash-based operating expense from $25 million to $22 million in one quarter. That $22 million annualized obviously is $88 million, which is below our non-GAAP operating guidance of $90-$94 million. We expect to go into 2023 at $80 million or less, possibly $86 million next year as we move past these one-time, not repeatable expenses and start optimizing our sales force. As we said before, we have the right commercial team in place to handle what we wanna do in 2023. We don't expect to see ads. We expect to see some very good performance next year. As we said before, our magic number to get to cash flow neutral, cash flow breakeven plus is $135 million revenues. And how we're gonna get there, it's not just gonna be our current product offering, it's gonna be the launch in the fat grafting in Q1 of 2023. We will continue to add new products as we've talked about in terms of product launches this year and other products we can bring in similar to a BIOCORNEUM product that's performing between $5-$10 million in terms of annual revenue at 70% gross margins, which is actually a distribution product. We feel we have a pretty strong path to that $135, but that's the magic number to get us to cash flow breakeven. Okay. That's helpful, Andy. Thank you. Then maybe speak to how to get to the rev, the new revenue guidance. I know Q2 is typically the best seasonality quarter out there. Q3 comes in at the lowest, Q4 somewhere in the middle. So maybe speak to the cadence of the next two quarters here and what you're thinking, especially given the macro backdrop. Yeah. I'll share the market, Alex. The market is really weird in the second quarter, but right now the market looks at least from the first month looks flattish versus second quarter. Usually, I think you all know that third quarter is always the lowest market. The market drops in the second quarter, it stays flat, or it looks like at least from the month of July for the market. The market is acting very, very different. The great thing is, and I try to mention that on my prepared remarks, is that we've had extremely high reorder rates from our current customers. Our current customers drive, and I break them into A through E, drive over 95% of our revenue, and they are reordering over 80% for both recon and augmentation right now. Now, what's happening, those in the Cs and Ds are really ordering less as they drop their volume because they have less demand for the augmentation, not the recon. If you actually look at recon, looking just compared to the first quarter this year, is actually up 10%. They've ordered 10% higher volume in just one quarter, and then the augmentation is down 7%. We're seeing that, you know, within our current structure, we have not lost customers. You heard me say we added more customers. It's just the augmentation side is slow. That's why this quarter, our split between aug and recon was 54-46. Recon was 54%. Okay. Understood. Thank you. Thank you. Our next question comes from Brandon Vazquez, from William Blair. Please go ahead. Hi, everyone. Thanks for taking the question. I wanted to first focus on some of your macro commentary and try to get a little bit more detail there to understand what's going on. Can you talk about where you're kind of seeing the slowdown? More specifically, is it patients that are kind of pushing back and they're not comfortable with the cost of the procedure anymore, so they're in the funnel or are the patients just not even coming in the funnel anymore? Just trying to understand kind of where the headwind is coming from a macro perspective to understand maybe when some of that can get resolved. Yeah. Patients are coming in, patients are getting calls, they're just not executing. If you look before the pandemic, before 2020, it used to take 40-44 months for a patient to go from thinking about breast augmentation to actually getting surgery. Last year it went to 20 months, and now we're seeing this is going backwards to thinking, patients call the office, meet with the doctor, think about it. I think the patient, like a lot of us, are thinking, "What's gonna happen in the next 6-8 months, from a, you know, possible recession?" That's what it is. They're really delaying putting down the decision on that. Now, I wanna be very clear. Our A and B accounts that drive quite a bit of our volume, they did not go down. They are going as a flat versus first quarter and flat versus Q4. It's just the one that the surgeons are having middle-of-the-road. Again, it's augmentation. Reconstruction, very different story. Acceleration of the market, acceleration of more surgeries, patients really coming back, and a lot of 100% offices are open for reconstruction. Great. Thanks. In terms of the new accounts, you guys obviously are making great traction there, which is encouraging. Can you just remind us how long does it usually take one of these new accounts to open? Trying to get a better sense of what kind of contributions you can expect. Maybe it's a little difficult in this macro environment, but what would you usually expect? You opened almost 300 new accounts here or over 300 new accounts. When do you think they can start to ramp and really meaningfully contribute to the top line growth? Yeah, Brandon, let's break the two apart. 140 new reconstruction accounts. As I stated before, it takes about four to six months. All the accounts we added, the 140 recon accounts that we had in the second quarter, will probably be Q4 when we'll start seeing really the revenue coming in. All the accounts we saw in second quarter were really from the latter part of 2021. It takes four to six months. That's why the acceleration of adding new accounts is critical. For augmentation, the cosmetic side of the business, we had 116 new accounts. That was the best second quarter ever. Think about that. It's a challenging market. We had 116 new accounts. We're actually accelerating our share. We're teetering on 14% share by the end of, I'm sorry, the last month of the quarter. We're accelerating share growth. What we don't have is the wind at our back this year, which you had last year. We continue to add new accounts. Now, there's been a drop in the volume, the amount of the first order from those accounts because they're reflecting what's happening in the marketplace. In the meantime, the reconstruction side, the new accounts are coming in 24% higher than old accounts from the new accounts in 2021, and the new accounts for augmentation are lower. We're doing exactly what we need to do is add new accounts. Same-store sales are down because of the market. In the meantime, the only way to combat that is add new accounts, and that's where our commercial team is doing extremely well in the last three or four months. Got it. Thank you very much. Thank you. Our next question comes from Jonathan Block from Stifel. Please go ahead. Great. Hey, guys. Good evening. Maybe the first one, and I know this has been asked maybe a couple times, but I just wanna circle back so I'm clear. Yeah, I think there were sort of a bunch of yellow lights or flashing signs on the augmentation market throughout the quarter, the second quarter, I know from our checks, but, you know, the lowering of the guidance, is that all attributable to augmentation, or did recon maybe get a little choppy, you know, with some of the COVID surges we saw towards the latter part of the quarter in June, et cetera? I'm not expecting, you know, an exact dollar amount, but maybe if you could just talk about the slightly lower guidance in the context of, you know, what's attributable to aug or aug and recon. Yeah, Jon, it was really all blame in augmentation. Reconstruction is accelerating. Reconstruction, the market, the first quarter, we don't have the second quarter data yet, but we've got IQVIA data coming up in the next two weeks. We've seen acceleration as we speak today, a couple of major networks came on board with Sientra. It's happening daily. And it's not just a hospital, one or two hospitals. A network of hospitals are coming on board with Sientra. That is not the case. Reconstruction market's healthy. We're more than double plus of performance in reconstruction. It is augmentation. I don't think in any forecast, in any prediction, I think you've heard me say in the last 6 months, I see the market augmentation going back to normal growth, 1%-3% single digit growth versus last year. We did not think it would go backwards to 2020. Now, keep in mind, 2020 was not a horrible year. There was about a month and a half of 2020 when not much was going on because of March, April pandemic, but it snapped back going crazy in Q3 and Q4. Q3 of 2020, the market went crazy, so it did Q4. We're right back on that year to date versus 2020. Augmentation that drove us to assess our guidance for the next, I know, four or five months. We need to know where the market's gonna go. Is the market gonna go back? We outperformed by far the market. The market's negative 30-43%, you know, 30% plus. Our Q2 revenue was negative low single-digit numbers. We've completely outperformed the market. Obviously, if you follow our two main competitors, they had major negative numbers in the U.S. revenue numbers in the U.S. for second quarter. In the meantime, we had a positive 7, not exactly number one, and that's due to augmentation. Reconstruction's gonna do well, and as you heard from Andy, it's really gonna help drive our margins, drive cash generation here the next five to six months, get us ready for the launch of our novel fat grafting technology, that we have extremely high expectations. We've seen some beautiful things and great data already on some of the clinical data. Then we're ready to manufacture. I was in Wisconsin yesterday. We're ready to go, starting manufacturing within the next 60 days, and we'll be ready to roll it out in the beginning of 2023. Got it. Perfect. Very helpful. Actually, Ron, your answer touched on a couple of areas that, where I wanted to go. It'll ask a two-parter with the next question. Clearly, you took share in augmentation year-over-year. You just gave some stats there, market down 30%. You guys down low single digits. The share sequentially seemed up, but maybe flattening out a little bit. You know, would love your long-term thoughts on where you can go augmentation share-wise. Again, I think you said 13% in 2018. You know, where can that go longer term? Then, Andy, you gave some really helpful statistics on the GM for fat grafting. I think you said accretive to corporate maybe around 70%. Maybe just help us break that down the P&L. In other words, you're gonna be leveraging the sales force or just the contribution margin from fat grafting, even out of the gate in 2023 should still be pretty darn healthy when we think about, you know, leveraging the current infrastructure. Maybe if you could just bless if I'm thinking about that correctly. Thanks, guys. Yeah, Jon, I will first and pass it over to Andy. Yeah, right now as of the first month, this last month of this quarter, we've got close to 14% share for augmentation. We have not seen the data yet, like I said, for recon. It should be coming out in the next two weeks. We expect to finish the year at least mid-teens in aug, with a little above mid-teens and higher than that in reconstruction because of the acceleration we've seen with our new hospitals being added as we speak. That, that's kind of the goal at the end of the year, above mid-teens in aug and well above mid-teens in reconstruction. Sure. Just adding to the question here. You have it exactly right. When we look at products like fat grafting, these are the type of products that we're gonna put in the basket. The gross margin 70% plus. As Ron said, we're getting ready to go. We are working to final assembly in Franklin, Wisconsin. We built that site for capacity, where we have capacity to grow our implant business well into 2025, but also take on a product such as this to you know, the work final assembly on site in Wisconsin. So that's not any net increase in expense from the perspective of facilities or CapEx really. In terms of incremental labor to do so, much less expensive to actually work that through out of Wisconsin than the third party. It's still gonna net north of 70% gross margins. Now, as you leverage into operating expense, the exact same sales team will be putting this in their basket in terms of calling on the same recon accounts. We're not adding heads from a sales perspective. In terms of regulatory, et cetera, this is already FDA cleared. The work we're doing this year in 2022 in terms of additional studies is to support our commercial side, to support additional papers, to support our marketing efforts. We will really leverage what we see in gross margins in 2023 is gonna drop down the contribution margin. That's gonna be a big adder for us. You should expect the same from other products that we actually bring into our wheelhouse. Perfect. Very helpful. Thanks, guys. Thank you. Once again, for any questions, please press zero one. The next question comes from Chris Cooley from Stephens. Please go ahead. Good afternoon, and thanks for taking the questions. Maybe just a two-part P&L question for Andy first, and then a bigger picture question for Ron. Andy, I'd appreciate it if, you know, you called out the early completion of the distribution center integration and in the first quarter, and that we were gonna see the lift here in 2Q. You know, ex the issues there a little bit north of 61% in the quarter, which is a step up sequentially, obviously versus the 1Q. I was hoping you could, one, help us take a look at that and parse out mix versus the improved cost structure. Really just trying to get at kinda that baseline of the cost structure as we go into the second half and hopefully start to see some volume pick up. Very similarly, through the middle of the P&L, looking at it now, it looks like you have about $2-ish million left in the non-recurring $8.5 million-$9 million that you were targeting for the year. Should we just think about that ratably over the back half, or is that more skewed to one of the quarters? I've got a bigger picture question thereafter. Thanks for the clarity. All right. Let me start with the gross margins. Where we sit today, we feel very good in terms of our distribution center cost. We started in Santa Barbara back with about a 6% expense effect on cost of goods sold, call it 6% hit. We saw that increase somewhat as we worked through integration in the back half of 2021. Into Q1 of 2022, we really started seeing the pickup. Where we sit today right now, we've taken two to three points out of gross margin just on distribution center from worst case of second half of 2021, and we're sitting where we expect to be right now in terms of efficiencies. We've now flushed them through. When we look at 61%, that's representative of our current mix of 54% reconstruction, 46% augmentation. Depending on how that mix goes forward will determine where 61% goes, where it's 61, 62 or 61 down to 60 if augmentation resurges again. As we go into 2023, the addition of fat grafting and so on is gonna be upward pressure again to take it to the next level, let's say low 60s to mid-60s. That's that part. Second part of the question, remind me again. Just the non-recurring expenses through the middle of the P&L. Yeah. through OpEx. I think you had targeted about $8 million-$9 million for the year. It looks like you've got about $2 million, if I'm doing the math right, left approximately. I just was curious if that's- Yeah. one quarter or if that's ratably through the back half of the year. Yeah. That $2 million remaining will be, I would say, evenly mixed in the next two quarters. That you're gonna see on our P&L in terms of our commercial and study work we're doing on fat grafting. That's really gonna hit the $2 million Q3 and into Q4, arguably, you know, ratably, and we won't pro forma those out. We'll consider those part of the activity of launching the product. We're down to just that part. We flushed through the balance of outstanding items. I appreciate that. Then maybe if I can just squeeze one other quick one in here. You know, Ron, you talk about, and Andy both, you both are talking about the fat graft offering, obviously helping kind of reposition the company and provide an incremental growth driver as you look ahead into 2023 and beyond. Clearly, those procedures are accretive to margin. Just curious, though, if we are seeing an economic slowdown slowing down the augmentation market right now, your thoughts on a premium type procedure, on a price point in terms of just consumer receptivity to that type of an offering as we come into next year. I guess, you know, maybe a little bit less subtly, are you comfortable that that will really be a driver next year and enable you to hit your cash flow targets as you think about accelerating the growth in the margin profile? Yeah, Chris, if you look at this, where is the biggest use of fat grafting right now? It's reconstruction. 60%-80% of surgeons that are reconstruction use fat grafting. There's one product. It's the leading product, and there's less than 30% satisfaction with that product. We'll be able to penetrate that market. We're ready in the hospitals as our team are ready promoting, and we're gonna go straight. The first place we're gonna go is a hospital account that we already have access. We're already in negotiations with GPOs about our fat grafting system. The second part is augmentation. 1/3 of surgeons that do breast augmentation use fat grafting, and a lot of times they use fat grafting 'cause they're not. They're only using 30%. They're not happy with the current systems. Again, we'll be able to go into those accounts and talk about our fat grafting. The other part that will start happening throughout next year, it's still growing very, very fast, is the use of fat grafting in the body. Obviously, it's taking fat from parts of your body you don't want and using the parts of the body you want. For example, buttocks enhancement, that's still a very fast-growing area. The other part is using as a facial filler. If you look at the ASPS data, more and more surgeons growing extremely rapid, they use the fat grafting as a facial filler. Now, that's a humongous market for us to get in sometime next year, but they'll be the third or fourth market we'll be getting in 'cause that would give us time to get more clinical data to support our product. Not just support, the product already has broad indication to use anywhere in the body you need fat grafting. It's just to be able to talk to those surgeons and discuss, "Here's the data, here's the clinical data." The area that we're gonna enter first, reconstruction, is growing fast. The area we're gonna go last are areas that you may have that concern, but remember, the price point right now is lower than a breast augmentation. We're not talking about $8,000-$9,000, you know, is whatever a surgeon charges the patient. Then within reconstruction, it's reimbursed. That's kind of where we're seeing the next two years for our fat grafting technology. Thanks. Appreciate the additional color. Thank you. As a reminder, if you have any questions, please press zero one. The next question comes from Mr. Kyle Bauser from Lake Street Capital Markets. Please go ahead. Great. Thanks for taking my questions on all the updates here. Maybe I'll just ask both my questions up front. Just juggling a couple calls here. Given the evolving product portfolio, best in class warranty, et cetera, have you seen increased pricing pressure or heightened competitive dynamics from your peers out there? What's the latest headcount for sales reps, and how do you anticipate this evolving over the next, I guess, couple years as you continue to launch new products and expand your reach within the plastic surgery suite? Thank you. Kyle, our average ASP has gone up for both augmentation and reconstruction. We've done a lot of great innovative programs to accelerate the addition of new accounts. As I said it before, we had 160 new aug accounts. That's a best ever quarter for our team, adding new accounts. We actually have even higher expectations for the team the next six months. We see within our own data, our ASPs going up for both aug and recon. We also heard one of our competitors has increased pricing, so the prices are not going down. They're going up. One of our competitors increased pricing double digits, and that is creating a lot of upset customers, going from zero increase in the last two, three years to double-digit increase. Actually has opened incredible doors for us to walk in and have a conversation with those customers. We have flipped several accounts because of those conversations. That's where we're actually no price downwards. The prices are going up for us without an official price increase, and our competitors are really taking a huge price increase, which actually is a benefit for us right now. To your question about sales team, as Andy stated, next year with fat grafting, and that's where we upgraded and expanded our sales and marketing team this year. That was in preparation not just for the launch of our Low Plus Profile, one more tissue expander, DermaSpan six-tab. It's really all about getting ready for next year. We did analysis. What do we need in the next 24 months? You have the relationships, you have people in place, so fat grafting launches are ready to go. I see us being flat to slightly down in regards to overall budget for commercial. It depends on what kind of other products we'll have in the next two years. From where we have right now, the launch of fat grafting next year, the launch of AlloX2 Pro. Remember, we're awaiting FDA approval for AlloX2 Pro. That would be also most likely end of this year or beginning of next year. That would be the same sales team. Really no changes in that group for 2023. Looking at 56 sales representatives and seven reconstruction managers, plus seven sales managers. Got it. Really great color here. Congrats on all the success, and I'll jump back into queue here. Thank you. Thank you. At this moment, we have reached the end of the question and answer session. Do you have any closing remarks? I just wanna say thank you for everyone. I appreciate it. We have an incredible opportunity for Sientra for the next six to 12 months from leveraging our higher margin, higher opportunity reconstruction to the launch of products next year. Two critical products that will really take Sientra in a different area from expanding use within the OR with fat grafting and obviously with AlloX2 Pro, really improving patient care and patient outcomes next year. Thank you, everyone. Appreciate it. Have a good afternoon. Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for participating. You may now disconnect.