Sanara MedTech Inc.

Good day and welcome to the Sonara MedTech fourth quarter and full year 2024 earnings conference call. Please note that this conference call is being recorded and a replay will be available on the investor relations page of the company's website shortly. The company issued its earnings release earlier today. Before we begin, I would like to remind everyone that certain statements on today's call include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For more information about the risks and uncertainties involving forward-looking statements and factors that could cause actual results to differ materially from those projected or implied by the forward-looking statements, please see the risk factors set forth in the company's most recent annual report on Form 10-K. This call will also include references to certain non-GAAP measures. Reconciliations of those non-GAAP financial measures to the most comparable measures calculated and presented in accordance with GAAP are available in the earnings materials available on the investor relations portion of our website. Today's call will be hosted by Ron Nixon, Executive Chairman and CEO, and feature additional remarks from Elizabeth Taylor, Chief Financial Officer, Seth Yon, President of Commercial, Tyler Palmer, Chief Corporate Development and Strategy Officer, and Sam Mapala, who leads Tissue Health Plus. I would now like to turn the call over to Mr. Nixon. Please go ahead, sir.

Thanks, Operator, and welcome everyone to our fourth quarter and full year 2024 earnings call. Let me provide a quick agenda for today's call. I'll start with a high level overview, our full year financial results and key operational highlights in 2024. Seth will review our fourth quarter revenue performance and the commercial progress made in our scenario surgical segment in 2024. Sam will discuss the progress made in our tissue health plus segment in 2024 and our priorities for 2025. Tyler will then provide an overview of our recent announcement agreement with Biomimetic Innovations. And Elizabeth will cover our fourth quarter financial results in full further detail before opening the calls for questions. Well, that is the backdrop. Let's begin with an overview of our full year 2020 with four financial highlights. I'd like to thank our entire team for this tremendous effort this past year, which made our strong financial performance and progress possible. The company generated net revenue of 86.7 million for the full year 2024, representing growth of 33% year-over-year. Our net revenue growth in 2024 was largely driven by strong sales of our soft tissue products, which increased 39% year-over-year to 76.1 million, along with contributions from our sale of bone fusion products, which increased 6% year-over-year to 10.5 million. We generated positive adjusted EBITDA in 2024, generating 2.7 million of adjusted EBITDA, an increase of 2.6 million compared to 2023. Importantly, this performance reflected significant profitability improvements within our scenarios surgical segment. Scenarios surgical generated segment adjusted EBITDA of 9.1 million in 2024, an increase of 3.9 million or 73% year over year. This performance was offset partially by our Tissue Health Plus segment as we continue to invest in our THP platform and infrastructure to prepare for commercialization. Lastly, we were essentially breakeven in terms of net cash used in operating activities in 2024 with approximately 24,000 of cash used compared to 3.2 million of cash used in 2023. As of December 31st, 2024, there was $15.9 million of cash on hand and $24.5 million available for future borrowings under the facility. In addition to our strong financial performance this past year, we made significant progress across multiple areas of our strategy. In our scenario surgical segment, our team delivered impressive execution with respect to our commercial strategy, expanding our sales coverage and penetrating hospitals across the U.S. and facilitating surgeon awareness and adoption of our products. In our Tissue Health Plus segment, we continue to establish our team and develop the technology, capabilities, and infrastructure required to bring this innovative value-based wound care program to market. We continue to evaluate and pursue new partnerships and acquisitions, culminating in two exclusive distribution agreements and minority investments for innovative products, including the ChemoMouthpiece and Ostick. We also made progress in developing our intellectual property portfolio, submitting 11 provisional patent applications in 2024, covering innovations in proprietary antimicrobial technologies and hydrolyzed collagen. Lastly, we secured a new debt facility for up to $55 million of potential borrowings to enhance our balance sheet and provide increased financial flexibility in the form of non-dilutive capital as we pursue our growth strategies. In summary, we're proud of our financial results and operational progress made possible by our team in 2024. As we continue to advance our strategy in surgical chronic wound and skin markets, I want to deliver a special thanks to our customers and investors for their support. Looking ahead to 2025, we expect to further enhance our sales coverage and increase our penetration of the market, driving greater surge in adoption of our Senera Surgical segment products in both new and existing accounts. We also expect to see a variety of new clinical manuscripts submitted for publication, further strengthening our portfolio of clinical evidence. In our Tissue Health Plus segment, we will continue to invest in preparation for the planned launch of our first pilot with a wound care provider group during the second quarter. Additionally, we continue to evaluate and pursue partnerships and other opportunities to enhance our capabilities and further our long-term strategy in each of our two segments. As our recent performance demonstrates, we remain focused on empowering physicians and clinicians to improve patient outcomes at a lower cost to the healthcare system, while positioning Senera to deliver long-term growth and value to our shareholders. I'll now turn it over to Seth to discuss our fourth quarter revenue performance and commercial execution.

Thanks, Ron. Our team delivered strong commercial execution in the fourth quarter, culminating in net revenue growth of 49% year-over-year to $26.3 million. Our net revenue performance was largely fueled by sales of our soft tissue repair products, which increased 56% year-over-year to $23.5 million, reflecting strong sales of our Celerate RX surgical and Viasurge products. Sales of our bone fusion products increased 8% year-over-year to $2.8 million, driven by balanced growth across multiple products. As discussed in our preliminary result press release on January 21st, fourth quarter Biosurge sales were driven in part by increased demand following the disruption caused by Hurricane Helene last fall, which caused industry shortages of IV fluids and saline solutions. Setting aside the approximate 1.8 million we saw related to this unique dynamic, we remain pleased with our net revenue performance in the quarter. Turning to an update on commercial strategy and execution in the Senara surgical segment. At year end, our commercial team included 40 field sales reps compared to 39 at the end of 2023. Our sales performance in 2024 primarily reflected strong commercial execution in three key areas. First, we continue to increase our sales coverage and presence in the US by selectively expanding our distributor network. Our team made significant progress on this core element of our commercial strategy, identifying and securing new selling agreements with additional distributor partners in key areas. We ultimately increased our distributor network to include selling agreements with over 350 distributor partners by year end, up from more than 250 at the end of 2023, demonstrating our continued momentum and strengthening our sales coverage. As a reminder, our distributors do not stock inventory. beyond some limited trunk stock in the event that additional product is needed during a procedure. Our field sales reps are responsible for managing the relationship with our distributor partners inside their respective territories, providing them with training, assistance, and technical support needed to educate prospective surgeon customers about our products. Second, we increased our surgeon customer base by driving adoption of our technologies in both existing and new facilities. Third, we continue to grow our number of approved facilities, adding new accounts for our team to sell into each year. At year end, our products were sold in over 1,300 facilities, up from more than 1,000 at the end of 2023. This growth was primarily driven by gaining VAC approvals at new hospitals where we had not previously sold our products. Despite our progress in recent years, we remain in the early innings of our commercialization effort. with a significant greenfield opportunity to expand our customer base. In 2025, we aim to build on our recent commercial traction by leveraging and expanding our independent sales coverage of the U.S. market and raising awareness of our products with surging customers in both existing and new facilities. We look forward to getting our products into the hands of new surge in customers who remain unaware of the benefits that they bring. With that, I'll turn it over to Sam to provide an update on Tissue Health Plus.