All right, we're gonna get started here. I'm Jason Bednar. I cover MedTech here at Piper. Next Fireside Chat is with Sonendo. Very happy to have with us today, Sonendo's CEO, Bjarne Bergheim. You know, thanks a lot for making the trip across the country. I know we talked earlier this week at Greater New York, but still really happy to have you here at the conference today. It's great to be here. Thank you. Yeah. So we'll get right into Q&A. You know, there's a lot I'd like to cover here in, you know, 25 minutes. And you know, why don't we maybe first address some of the pieces of the most recent news? So, you know, I guess first you did have, you know, the delisting announcement just recently- Yep. and you're moving over to the, you know, kind of the over-the-counter market. So give us a, you know, kind of an idea of, you know, what transpired, what led to, you know, where we're at today with the, with the listing situation. Is there any way out of it to get back up listed? Just kind of what... Yeah, latest thoughts. Yeah. So NYSE and Nasdaq have different rules on this. If we were on Nasdaq, we would not have had this issue. This is something specific to NYSE. So NYSE has this, you know, they're actually just looking. They're looking at outstanding shares. They're not looking at the pre-funded warrants that we have. And so as long as. You know, so that's what they're using. They're using the outstanding shares to calculate the their market cap. And as long as that, when that moves below $50 million over a 30-day period, then that's what causes the delisting. So what we're gonna do is, we think obviously there's a significant dislocation of value. There's a lot more value inherent to the company than what the stock is actually trading at right now, in our opinion. So we're gonna appeal the delisting, you know. That's step one. And then, you know, we also have other options that we can explore to either get back in the NYSE, but also to get back and potentially add to back to Nasdaq. An option. Okay. So what’s the timeline that we’re looking at here on the appeal process, and then how everything transpires? Yeah, we haven't given out any timelines on this. The key thing for us, what we're gonna focus on, is the key elements of the business. You know, we're gonna do what's... That's the most important thing for us right now. We see the dislocation of value. We're gonna focus on really driving the important things that I think shareholders want us to do. Okay. Do you think we need to see you know, a response from the stock? Like, does... Will, I guess, that appeals process will go a certain way, but does the stock need to react in a certain way in order for NYSE to say: "You know what? Yeah, you can come back on, like, you know, whatever terms." But I would assume the stock has to be at a certain level, right? Stock has to be at a certain level for NYSE to accept us back in- Okay. - NYSE. Exactly. Okay. All right. Other piece of the 8-K was your Chief Commercial Officer, Michael Smith. I think he had, you know, voluntarily resigned. So I guess, what else are you able to share about the resignation? I mean, was this a little bit of a, you know, not necessarily voluntary, but a cost move? Was there something else, an opportunity that popped up for Michael? You know, just any other color there would be really helpful, just given the situation. Yeah, I think. First of all, you know, I really like Michael. Michael is a great guy. You know, so he, you know, he's just been a great person to work with. I think for where we are right now, the most important thing for us right now is to become much more cost-effective on sales and marketing. You know, Michael put in place a lot of different things. We're gonna be very acutely focused on, you know, managing cash across the organization. We're also going to be doing a couple different things on the sales and marketing side that I think is gonna make us much more effective, cost-effective in terms of sales. You know, we've had basically the opportunity to build this business over the last couple of years, and we have a lot of metrics and inputs on what works well and what doesn't work so well. You know, from where we are right now, you know, we just need to get ourselves back to basics. And we know exactly what we've seen in the past that works well in terms of placing consoles. We know exactly what works well in terms of driving utilization, and that's what we're gonna be focused on. Okay. Okay. When you say more cost-effective, I mean, what, what does that entail? I mean, are we talking about, you know, cost actions that you're planning to take in addition beyond what we've already seen? Does that at all include, like, you know, part of your sales force that you've built out? So we're gonna be protective of our sales force. We're really proud of the sales force that we have. The capital reps that we have have done a good job, and the most important thing we're gonna do right now is, you know, help them get more effective. So we're working... Last night, I had dinner with the area vice presidents across the country, and you know, we're putting together some very great plans to drive this going forward. And I think the team is really, really excited about the opportunities ahead. But to... Just to be clear, the sales reps that we have are great, and we're gonna continue to work with them going forward. All right. Great. So you and I caught up a little bit at the Greater New York meeting earlier this week. You know, we chatted about, you know, Sonendo's presence and the importance of that meeting and as well as other, you know, future GP-focused meetings, because this is part of the strategy on selling into GPs, selling new capital into GPs. That was a new part of the strategy this year. But it's also important to build awareness because GPs are also your main referral network out to your endos, the specialists. So maybe I'm like, you know, prefacing all of this, and you're just gonna nod and answer yes, but I mean, how is this an important part of the strategy? Is this crucial, the GP-focused part of the strategy, in order for, you know, Sonendo to be where it wants to be in the next two, three years? Yeah. So short answer is yes, but let me explain. Yeah. So obviously, the most important customers that we have in terms of value for the business right now is continuing to be all over the endodontist. You know, we the majority of customers up until this point have been endodontist and will continue to be endodontist going forward. You know, 75% of root canals are done in the GP space, so that is an important code for us to crack. Now, the way we think about this is, in very simple terms, is we need to educate the GPs about GentleWave, such that a, will restart referring to GentleWave practices, or they're saying, "Hey, this is something that's valuable for my own practice. I'm gonna, I'm gonna buy the console myself." If you were to call 100 GPs today, very few of them have heard about GentleWave, and the ones that have heard about GentleWave, very few of them actually recognize and understand what this is all about. So it's incumbent on us to educate the GPs about what this is all about, not just for the end of, you know, root canal opportunity, but we—I mean, we can talk about the cavity opportunity here later on. But if a GP knows about GentleWave, we think for a lot of good reasons, they will start referring to GentleWave practices, and that will change demand dynamics on the endodontic side as well. We're supporting the endodontists that obviously are on board with us, and roughly right now, we have about 20% of endodontists that have access to GentleWave and are using GentleWave. Okay. Have you noticed any channel conflict the more you've been, you know, really starting to drum up in capital interest with GPs? Have endos responded in any, you know, with any backlash of like, "Hey, you're eating into our referral network," or just, you know, taking offense to the fact that you're no longer focused exclusively on the specialty category? Short answer is no. Okay. I think what's unique with where we are is if you look at the GPs that we're targeting when it comes to actually selling consoles to, those are the GPs that are keeping the majority of the cases in-house. So whereas the endodontist, they're getting referrals from GPs that are obviously referring outpatients. So what's unique with where we are, from a channel conflict, from a perspective, that we can have a conversation about what we're doing when there are both endodontist and GPs in the room, and we can be very transparent about what that is all about. And I think that's something both endodontists and GPs will appreciate. From a market structure standpoint, when a GP is referring a patient out, are they typically referring a patient out to multiple different endos, or are they referring out to singular endo that they've been referring people to for five, 10, 15 years? They're actually referring to multiples. They will have a couple different referrals. And the same thing on the endodontic side, obviously, the endodontists are gonna have multiple GPs referring patients to them. So that's exactly, I think, where we're going, right? We can start impacting that referral structure. And you know, what GPs want is that they want to have a patient that is treated, they come back as quickly as possible without any post-op pain, without any failures, etc., and where they can place the crown on that patient as soon as possible. That's what you can do with GentleWave. And when they realize and see those opportunities, they will want to refer to a GentleWave provider. Now, a lot of GPs are saying, "Hey, wait a second, I'm doing a lot of endos, so I can actually do a GentleWave case, and then I can actually have the crown be placed on the patient in the same visit." Now, if you look at that procedure, which is, you know, if they're following our protocol and driving speed and efficiency in the procedure, and then immediately doing a same-day crown, you can do a 1.5- or two-hour procedure. And if you look at the what they can charge for that procedure, it's actually becoming one of the most lucrative procedures that a GP can do. And then once, so once those GPs realize that, they realize, "How? Hey, wait a second, I really want to keep those patients in-house." And they see those opportunities that provides. Okay. I guess maybe to summarize just on this topic, you're saying that those GPs that are referring out, they're referring to multiple endos, you want to direct that GP to be referring to a GentleWave endo because that's a happier patient, the doc, and then that GP has basically fewer headaches to deal with on that patient when they come back? Follow up. Okay. Exactly. Okay, yep. Let's move over to the macro. You know, we've got, you know, about half, halfway through or half of our time left. Yet the demand environment is tough, and it's not-- that's not a Sonendo comment. I mean, we're seeing it all over the place with manufacturers and distributors side. Also today with the distributor that was reporting. You know, I guess, what's the feedback when you get that you get when doctors say no to GentleWave? When they're saying, you know, is it a, "No, I don't want it," or is it a, "No, I can't afford it," "No, my practice," I guess, "the economics don't work for my practice." What's the underlying rationale for a no? So it's interesting. What we hear a lot of is that when a non-GentleWave user, meaning a non-GentleWave endodontist, needs a root canal, where do they go for their root canal? They will frequently actually go, and very commonly will go actually get a GentleWave procedure. So I think more and more and more endodontists realize that this is by far the best way to do a root canal procedure out there. I think if you look at the patient flow and how this works, is that the customer of an endodontist is the GP. And the endodontist, to a very large degree, is going to listen to what their GPs want. So if a GP starts saying, "Hey, I want you to do a GentleWave procedure," the endodontist will do that. So right now, if you look at failure rates, if there's a failure with a traditional root canal procedure, a lot of those failures actually don't come back to that original endodontist. So the two key things that will really drive and change that demand dynamics more than anything else is when the GP says, "Hey, I want you to do a GentleWave procedure," or the patient comes in and say, "Hey, I've heard about this. My friend told me about this, I read about this on the internet," et cetera, "and, hey, I want to have a GentleWave procedure." That changes the demand quite, quite significantly. Also, the other thing that happens is that if there is additional patients flowing into an endodontist practice, they're gonna be forced to become more efficient, and that will also force them to actually move to GentleWave because, hey, now they can drive more efficiency in their practice. Okay. To what extent have you, you and the, the commercial team, really evaluated and embraced other ownership models, be it, you know, leasing or, you know, bridge to buy, lease to own, revenue sharing models, you know, in or as, as a means to bypass or, you know, have an end around with respect to the capital, the straight capital purchase, which is, again, a little bit tougher in this environment? Yeah, we're looking at a couple of different things. Obviously, we offer third-party financing. That is helping. So the doctors can finance this. We collect the revenue upfront. We're also looking at a couple of different other opportunities where, you know, the doctor gets a chance to trial. We give some doctors the opportunity to trial the unit. Mm-hmm. That's another way to sell this. We're also looking at different ways of working with DSOs. We're looking at a couple different ways. And, you know, we don't offer leasing at this point in time, but that is something that we're thinking through. I think the way we look at it in broad terms is that we recognize it's a tough macro, and we need to figure out a more efficient way to actually sell in this macro. We can't make an assumption, and we will not make an assumption that the macro is going to get better. We're gonna build the business and continue to operate the business, assuming that the macro is gonna continue the way it is. Okay. Okay. Is that, that leasing evaluation, is that something we could expect to see in near term or, like, different, different ownership models? Yeah, we'll get back to you on that. Okay. Yeah. Maybe shifting over to system pricing. I know, like, when, when Sonendo IPO, you know, part of the, part of the model was, hey, like, you know, the capital piece, you could have pricing escalate over time. And I think we saw, you know, one of the levers to that potentially being the, the G4 launch. But it seems like the ASP is still hovering around the same level. So are you finding it... Maybe it's tough timing just with the macro, but are you finding it tough to, you know, garner that higher ASP on the new capital? Or is this a function of, "Hey, we dropped price on our older generation, and it's a mix issue? So first of all, I think some of the ASP that we're reporting out is also slightly a function of the fact that we have been selling our old generation systems at a lower price. So the average, obviously, has been, it gives the appearance that the average is lower than it actually is on G4s. But listen, I mean, actually, we're, you know, I think we made the right move to move to a G4. This is a really nice workhorse for endodontists. Reliability profile, the profile now for the G4s is nothing but exceptional. And so if you compare now the reliability profile of our G4s to mature capital equipment or mature consoles out there in other industries, we're actually way ahead on, you know, on those reliability metrics. You know, that's gonna help us on, you know, less warranty, less service, et cetera, in the field. I think the other thing is that, you know, little by little, I think people are realizing the reliability metrics. They're realizing how valuable it is to move to that next generation platform. I think that's gonna help actually, going forward from just, not just from an ASP perspective, but also from just a demand perspective. Okay. Maybe if we flip over to the PIs and utilization. I've always wondered, like, I'm trying to put myself in the seat of an endo. There's some out there that they acquire GentleWave, and they shift all of their procedures over to GentleWave. But there's a good number out there, and it just shows in the data and what you report on, that, you know, the average endo is only using it for a fraction of the cases. Mm-hmm. So why, why is that? Again, if I was the endo, I'd be like: "I want to use my toy," but that's not happening. So what's the reason why they're not using it? Well, multiple, multiple reasons, but I think, you know. You're more, much more conscious of the business side than perhaps others. You know, I think the opportunity for an endodontist, right, is their, their opportunity is to charge more. Patients we know will want to pay more for a GentleWave procedure because of a better procedure, and only half of our doctors are doing that. You know, so and, and, the using this from an efficiency, driving efficiency in the practice, right? That is also something we need to educate the doctors on. And, you know, some, some doctors are, you know, for better or for worse, have been actually, because of some of the disruption techniques that we've used actually to sell in local markets, they've bought a GentleWave, such that they can say that they have a GentleWave. And that means that now all of a sudden, you know, because if they didn't have a GentleWave, they would actually, in certain areas, they would lose out on referrals. And they use that opportunity also to get listed on GentleWave.com, such that they get more referrals. One of the things that we've changed now in GentleWave.com is that we are actually listing the high volume users first in a region, as opposed to just listing it from, you know, the center of a ZIP code. Meaning that if you're closest to the center of a ZIP code, you get the highest ranking on the doc locator. Now, you have to perform, you have to be. So the more cases you do, you're gonna get more patients, you know, coming into your practice. I think that's, you know, it's a small, small change, but something that's really going to help. So if you're not using your GentleWave console, now you're gonna be in the bottom of the list. Okay. Okay. Going back to the most recent quarter, I know one of the things that popped up was, you know, some patient deferrals. Patients that were asymptomatic, that weren't moving forward with treatment, 'cause it is, it is costly. It's there is an out-of-pocket component. When do you think those patients come back in, or do you, do you think these patients are, you know, end up coming back in, but go to, say, you know, just a file-based treatment that doesn't have the added cost for those doctors that do pass along a higher fee? Yeah. So like we said before, the majority of these procedures are non-elective. And, you know, we don't have good numbers here, but we estimate that roughly about 90%, you know, maybe 85%, I don't know exactly what the number is, of them are non-elective, so they're gonna get their procedures right away. But like we talked about in our, in our call, is that there's a certain number of these cases, maybe 10%, 15% or so percent, that because of, you know, they don't feel pain, or for, or for cost reasons, et cetera, they're deciding to delay their, their treatment. That we have seen is happening all across the board. It isn't specific for GentleWave. That's something that's happening across the board and, you know, those patients will eventually get treated, because if they are asymptomatic, they will most likely, in the future, need to have a root canal procedure, so they're just probably gonna be pushed out in time. That's what we think the dynamic is. Okay. All right. I wanna shift over to the pipeline, new product flow. It's been pretty impressive, and, you know, included in this, at least I wanna talk about. You just recently submitted for, you know, a cavity indication. I know we've been talking about this for a while as, like, potentially like unearthing the real holy grail for, you know, hitting into that GP population. Yep. So, I guess when you look at it, you know, do you think that this is what you need for GPs to start buying, or do GPs start buying even without the cavity indication? We think it's gonna be the biggest inflection point of the business. Because if you look at this from a shared numbers perspective, there is roughly about 10 times you know, as many cavities as there are root canals. Right. And if this is what we think it is, all you know, overnight, we're gonna have effectively all our GPs are gonna be just as valuable to us from a customer acquisition target, as compared to an endodontist. So I think it's gonna be. There's a lot of opportunities there. And the way we're looking at this is, you know, when people think about cavities, they think about, "Okay, hey, I have a black dot on my tooth. I have something that shows up on my X-ray." And that's one, that's obviously one opportunity. But we think there's a bigger opportunity in moving cavities to a preventative basis, because these cavities, they start when they're, call it, a hundredth or a fiftieth the diameter of a human hair. They're microscopic in nature. There are tools and technologies today to identify those cavities, and what we're viewing is an opportunity to actually every time you have a hygienic appointment, you will come in and patients will get their teeth hygienically clean. Then the hygienist, for example, can scan their teeth, and the hygienist can potentially also actually do preventative therapy for those micro cavities that you have. If we do that, there's a possibility here in the future that you can actually get to a point where patients will never get cavities again. So as long as you come in on a regular basis to get your procedures, then you won't get cavities. And if that's the case, that we view as a huge opportunity. Removes a huge, you know, economic flow for the dentist, though, too, right? Well, I mean, so- I half joke, but- So, yes and no, in the sense that, you know, if you look at... You know, so, you know, I think the GPs can continue to, you know, if they want to drill and fill and bill, like they're doing right now- Yeah ... sure, they can continue to do that. But then the other side of the house, there's a hygienist that is maybe driving $100 worth of revenue to the practice an hour. So if there's an opportunity for that hygienist to actually start doing, you know, hygienic sort of preventative cavity procedures, or for the GPs to start doing preventative cavity procedures. The beauty here is that there's so many cavities. There are hundreds of millions of cavities every single year. Mm-hmm. So there's more than plenty, cavities to take from. So I don't think a GP is gonna be concerned quite yet that they're gonna be cannibalizing their own- I know ... procedures. I half joke. Well, last question, and we got 10 seconds left. But the Street's modeling, I think something like double-digit revenue growth in 2024, actually an acceleration off of that into 2025. Does that look out of place to you? Do you feel comfortable with where the Street's at right now, when you look out the next couple of years? I'm excited about the business and the things that we're doing, but let us get back to you with more detailed numbers, as we kind of report out the projections later on. Okay, fair enough. All right. Well, thanks so much, Bjarne, for being with us. Please join me in thanking Bjarne as well for the time today. Thank you.