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Presentation

Operator: Good morning, ladies and gentlemen. Welcome to Anika’s First Quarter Earnings Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] I will now turn the call over to Matt Hall, Director, Corporate Development and Investor Relations. Please proceed.

Matt Hall: Thank you. Good morning, and thank you for joining us for Anika’s first quarter 2025 conference call and webcast. I am Matt Hall, Anika’s Director of Corporate Development and Investor Relations. Our earnings press release was issued earlier this morning and is available on our Investor Relations website located at www.anika.com as are the supplementary PowerPoint slides that will be used for the discussion today. With me on the call today are Dr. Cheryl Blanchard, President and Chief Executive Officer; and Steve Griffin, Executive Vice President, Chief Financial Officer and Chief Operating Officer, who will present our first quarter 2025 financial results and business highlights. Please take a moment and open the slide presentation and refer to slide number two.

Before we begin, please understand that certain statements made during the call today constitute forward-looking statements as defined in the Securities Exchange Act of 1934. These statements are based on our current beliefs and expectations and are subject to certain risks and uncertainties. The company’s actual results could differ materially from any anticipated future results, performance or achievements. We make no obligation to update these statements should future financial data or events occur that differ from the forward-looking statements presented today. Please also see our most recent SEC filings for more information about risk factors that could affect our performance. In addition, during the call, we may refer to several adjusted or non-GAAP financial measures, which may include adjusted gross margin, adjusted EBITDA, adjusted net income for continuing operations and adjusted earnings per share from continuing operations, which are used in addition to the results presented in accordance with GAAP financial measures.

We believe that non-GAAP measures provide an additional way of viewing aspects of our operations and performance. But when considered with GAAP financial measures and the reconciliation of GAAP measures, they provide an even more complete understanding of our business. A reconciliation of these adjusted non-GAAP financial results to the most comparable GAAP measurements are available at the end of the presentation slide deck and our first quarter 2025 press release. And now I’d like to turn the call over to our President and CEO, Dr. Cheryl Blanchard. Cheryl?

Cheryl Blanchard: Thanks, Matt. Good morning everyone and thank you for joining us. Please turn to Slide 3. On balance, we’ve had a successful start to the year as we had continued strong performance in our commercial channel and advanced many of our key goals and objectives. Offsetting that, we have experienced ongoing pricing challenges in the domestic OA Pain Market and some short-term supply production yield issues with Monovisc, and Cingal that Steve will discuss in a moment. I’m pleased to report since our last call that we’ve made meaningful progress advancing our strategic initiatives within our refocused strategy. As we communicated, a key objective has been to focus our human and financial capital and on our most promising opportunities to create shareholder value leveraging our proprietary hyaluronic acid technologies.

Since announcing our strategic realignment, we have outperformed in our commercial channel where we control sales, marketing and pricing. We continue to see consistently strong growth within this channel, which is up 18% year-over-year and up 17% over the past three years. Additionally, our cost saving measures have yielded positive results with our operating expenses down 12% year-over-year. The foundation that we have laid positions us well to capitalize on our core HA products that provide us with the best value building opportunities. These include the Integrity Implant System and the anticipated U.S. Approvals of Hyalofast, and Cingal, which we continue to believe will be market-driving forces in the tendon and cartilage repair and next generation OA pain management markets.

I’ll start today by sharing our financial results for the quarter. Overall revenue in the first quarter was $26.2 million, down 10% compared to the same period in 2024, driven entirely by continued pricing pressure within our OEM channel in the US fiscal [ph] supplement market. Our commercial channel revenue was strong, up 18% in the quarter and driven by continued growth of Integrity and international OA pain management. During the quarter, we delivered 13% international OA pain management growth. Our efforts to penetrate new markets and strengthen our distribution networks have paid off and we are committed to further expanding our global reach. OEM channel revenue was down 23% in the quarter due to lower pricing for Monovisc and Orthovisc in the U.S. sold by our commercial partner J&J MedTech.

To date, the pricing volatility in the U.S. has not been fully offset by the measures J&J MedTech has implemented to stabilize pricing in the market. To further diversify our revenue base and grow our OEM channel outside of J&J, we’ve begun actively working on new product expansion programs, which would be sold by other partners. These efforts are primarily focused on leveraging our proprietary regenerative Hyaff fiber technology. We believe there is significant untapped potential in this space and our deep expertise positions us to support partners in delivering improved patient outcomes globally. This work is part of our long-term strategy to leverage our HA [ph] platform and build value. In our commercial channel, we executed on key objectives that drove strong growth in the first quarter, fueled by continued gains in our international OA pain management business and accelerated growth of Integrity.

We are advancing our strategy focused on HA based products and achieved important milestones in our commercial, regulatory and clinical trial goals in the quarter. During the quarter, Integrity continued to achieve sequential growth for the fourth consecutive quarter with more than 300 surgeries performed while expanding surgeon adoption each month. Year-over-year, we achieved 33% growth in our regenerative solutions portfolio globally driven by Integrity’s outperformance of the soft tissue augmentation market as we continue to exceed our initial launch expectations. This impressive growth is attributed to the superior regenerative properties and time zero mechanical strength of Integrity compared to collagen products. These key attributes of Integrity have resulted in a strong pull from surgeons, our sales force and new distributors we’ve brought on.

In February, we released a white paper summarizing the early clinical results from our first post market study of 29 patients with both partial and full thickness rotator cuff tears. The results showed significant and meaningful improvements in pain and strength at three months and further improvements in pain, range of motion and strength with no evidence of any retears at six months and no device related complications. Building upon our successful commercial launch capturing more than 1% of the 2024 U.S. soft tissue augmentation procedures, we’re on pace to more than double procedures in 2025. We believe Integrity will continue to drive significant commercial channel revenue, contributing to our long-term revenue targets and market expansion plans.

To further accelerate growth in our commercial channel, we continue to advance our Integrity platform to add additional near term regenerative solutions products to our pipeline. The new Integrity shapes, sizes and configurations, which were previously announced are intended for foot and ankle procedures. These new geometries have broad applicability across various tendon types and we view them as a strategic opportunity to accelerate platform growth and expand our market presence by addressing real unmet patient needs. Additionally, we advanced our prospective clinical study for Integrity in the first quarter. We previously announced enrollment of the first patient in February and active enrollment of patients across multiple sites continues with full activation of all sites targeted for the second half of this year.

This study will provide valuable real world evidence that will support expanding sales and marketing efforts and drive further commercial growth. We anticipate that the data from this study will reinforce the clinical benefits and safety profile of Integrity, further expanding its market position. Data from this study will also be used for submission to the EU for MDR approval and future European market launch. We continued to make significant regulatory and clinical progress in the quarter with our key pipeline programs Hyalofast and Cingal. With respect to Hyalofast as previously announced, we filed the second PMA module in January and we remain on track to file the third and final clinical module in the second half of this year and anticipate the U.S. launch of Hyalofast in 2026.

Hyalofast has shown continued market leading positions in geographies where it is sold and we’re excited about its potential to address significant unmet needs for cartilage repair patients in the U.S. as well as provide surgeons and payers a more cost effective off the shelf option to treat this patient population. Finally, we achieved a significant milestone for Cingal. I previously reported a productive Type C meeting with the FDA in February to help finalize the bioequivalence bridging study design. I am pleased to report that during the quarter we received formal written feedback from that meeting and confirming alignment of the bioequivalence bridging study design and the path to NDA filing. In addition, last month we entered into an agreement to secure access to the material required to complete that study.

The bioequivalence study anticipated to start by year’s end and the final toxicology testing that started in Q1 of this year remain the two final requirements to file the Cingal NDA. And with that, I’ll turn the call over to Steve for a detailed review of our financial results.

Steve Griffin: Thank you Cheryl. Let’s first start with the updates in the quarter. Please Refer to Slide 4 of the presentation. In the first quarter, Anika generated $26.2 million in total revenue, down 10% versus the same period in 2024. Revenue in the commercial channel, which includes our highly differentiated products sold globally through commercial leaders and independent distributors, was up 18% year-over-year to $11.3 million. Within this channel, sales of our OA pain products internationally were up 13% year-over-year. The remaining expansion in the commercial channel was fueled by regenerative solutions growth of 33% year-over-year. Our commercial team is laying a strong foundation for future growth, having surpassed our initial launch expectations for Integrity.

Notably, we have achieved sequential growth in Integrity sales for the fourth consecutive quarter. Revenue in the OEM channel, which includes our domestic OA pain and non-orthopedic products sold under long-term agreements decreased 23% in the first quarter to $14.9 million. The decline was primarily due to reduced U.S. sales driven by weaker end user pricing from J&J, which continues to face pressure in the competitive HA [ph] market. Monovisc and Orthovisc pricing was lower than anticipated due to the timing of J&J’s contractually obligated payer rebates which can fluctuate greatly from quarter-to-quarter as also experienced by other competitors in this market. We expect a modest pricing rebound in the second quarter. For the full year 2025 compared to our March outlook, we now anticipate lower pricing partially offset by higher volume.

Despite ongoing pricing pressure, Monovisc and Orthovisc continue to lead the U.S. market. Non-orthopedic revenue also declined in the quarter primarily due to the timing of customer orders. First quarter gross margin was 56%, down 9 percentage points from the same period last year. This decline was primarily driven by a $4 million year-over-year drop in Monovisc and Orthovisc sales to J&J, largely due to lower pricing both in transfer units and royalties, which directly impacted gross profit. These lower sales accounted for a five-point reduction in Anika’s overall margin. The remaining decline was due to higher manufacturing costs, specifically increased scrap and lower yields in the production of Monovisc and Cingal. These yield challenges stem from a change in raw material supplier following the exit of our previous supplier from the medical grade market.

Lower yields continued into the second quarter. However, we’ve since implemented manufacturing enhancements that are already showing positive results. While second quarter gross margins will still reflect the earlier inefficiencies, we expect first half-gross margins to be approximately 53%. Looking ahead, we anticipate gross margins in the second half of the year will improve to around 58% to 59% as we realize the benefits of these improvements. That said, the combined impact of the reduced high margin, J&J revenue and first half manufacturing challenges will result in lower overall gross margins for 2025. Turning to operating expenses, total first quarter OpEx was $19 million, down $2.5 million or 12% compared to the first quarter of 2024.

Selling, General and Administrative expenses declined 14% while research and development expenses were down just under 5%. These reductions were driven by cost savings measures and headcount reductions implemented in the last year. We’ve optimized our organizational structure to better align with the future needs of the business and remain focused on disciplined spending to ensure capital is deployed efficiently and delivers value to shareholders. Continuing operations generated $100,000 of adjusted EBITDA down $2.6 million compared to 2024, primarily as a result of lower high margin J&J revenue and higher manufacturing expenses offset by operating expense reductions. Now turning to cash and liquidity. In the quarter, we used $100,000 in operating cash flow flat to prior year.

We invested $2.8 million in new capital expenditures in the quarter, up $1 million versus 2024. This new equipment will support the higher production volumes expected out of our Massachusetts manufacturing facility in the fourth. In the first quarter, we purchased $4 million in common stock that completed the $15 million initial share repurchase initiated in mid-2024. We expect to provide further updates on the remaining share buyback commitments when we are in a position to do so. We ended the first quarter with $53 million in cash and no debt. Now on slide 5, I’ll review our full year financial outlook for 2025. For the full year, we continue to expect our commercial channel to generate between $47 million and $49.5 million in revenue, representing 12% to 18% growth in 2025.

Just a quick note on the pacing. Quarterly growth varies based on the timing of large international distribution orders. We are encouraged by our strong first quarter performance driven by Integrity market share gains and international OA pain management. That said, we expect more modest growth in the second quarter due to tougher comparisons with last year’s strong international OA pain performance. We anticipate accelerated year-over-year growth in the second half of this year. In our OEM channel, we are updating our revenue guidance to be in the range of $62 million to $65 million, a range of 16% to 20% decline versus 2024 at the midpoint of down 18%. This range incorporates higher volumes but lower pricing for J&J as compared to our March outlook.

Our new pricing assumptions include results from the first quarter and our expectations for the rest of the year. As a reminder, J&J has full control of sales, marketing and pricing activities for these products in the United States and Anika receives transfer unit revenue and royalties based on J&J’s end user pricing. Now, turning to profitability, we are updating our 2025 adjusted EBITDA guidance to a range of negative 3% to positive 3%, down from our previous range of 8% to 10%. This revision reflects several key factors. First, impacts from lower manufacturing yields and scrap for Monovisc and Cingal. While yields have stabilized in the second quarter, they will still negatively affect the first half results. This accounts for an approximate 4 to 5 point decline for the full year.

However, the pressure will be isolated to the first half. Second half of 2025 we expect to see improvements with gross margins stabilizing between 58% and 59%. Second, lower pricing from J&J for Monovisc and Orthovisc, including the shortfall we saw in the first quarter. This accounts for an approximate 2 to 3 point decline. Third, updated tariff rates on imported raw materials, which are now factored into our outlook which accounts for approximately a half a point. And finally, the 2025 costs associated with the Cingal bioequivalence study required for our NDA filing costs that weren’t known earlier in the year before our Type C meeting, which accounts for approximately half a point. We’ve taken several steps to reduce operating expenses to help offset the impacts of J&J pricing and to improve our overall cost structure.

However, these actions won’t fully counterbalance the more challenging pricing environment. As a reminder, our 2025 adjusted EBITDA guidance still includes approximately $14 million of investments in our regenerative solutions portfolio that grew 33% in the first quarter. The company remains well positioned to fund our near term product pipeline and prepare for the launches of Hyalofast and Cingal while continuing to gain share with integrity. Together, these three products are expected to significantly reshape Anika’s long-term trajectory and strengthen our ability to drive profitable growth beyond our legacy OEM agreements. With that, I will now turn the call back over to Cheryl.

Cheryl Blanchard: Thanks Steve. I’ll wrap up by summarizing the significant progress we’ve made by executing on key pipeline programs, including the on time filing of the second PMA module for Hyalofast and clearing the path to NDA filing for Cingal. While there continue to be opportunities to improve as we work to overcome manufacturing challenges that have impacted yields for Monovisc and Singal, I’m confident that our team will address these short term obstacles and return to historic production levels in the second half of this year, driving continued growth and profitability. I would like to thank the entire Anika team for all of their contributions over the last four months. Our teams have worked hard to ensure a smooth and effective transition of both the Arthrosurface and Parcus businesses.

They’ve met critical milestones on clinical efforts and regulatory filings for key products in our pipeline and continue to develop new adjacencies that will drive future Anika growth. And lastly, we have continued to demonstrate the success of our commercial channel where our collective organization has once again posted above market total growth, illustrating the opportunities that lie ahead as we continue to diversify into markets where we are closer to the customer. And with that, we’ll open up the line for questions. Operator, please proceed.

Operator: [Operator Instructions] With that, our first question comes from the line of Anderson Schock with B. Riley Securities. Please go ahead.

Anderson Schock: Hey, good morning. Thank you for taking our questions. So first, could you elaborate on the timeline and the investment needed for the Cingal bioequivalence study? And then with this in the toxicology study, when should we be expecting the NDA filing?

Cheryl Blanchard: Yes, it’s a great question. Thanks. So I mentioned that we expect to begin that study by the end of the year. We still have some process activities that we are working our way through. So until we get a little bit further along with those, we won’t be giving additional timeline updates. But we are excited to get that last study going, because that’s really the last task that we need to complete and finish before we get to NDA filing. So I look forward to give additional updates on kind of the overall timeline, but look for us to start that last study, that last bioequivalent study at the end of the year.

Steve Griffin: And then Anderson, just to the first part of your question, I embedded in my guidance here sort of about a half a point worth of expenses associated with the bioequivalence bridging study. So that’s just the 2025 impact we’ve built in, but that’s sort of an update that we just provided.

Anderson Schock: Okay, got it. Thank you. And then on your OEM guidance, so you’re now expecting this segment to be down 16% to 20%, which seems to imply some sequential growth from the first quarter. I guess, what do you see driving this improvement in OEM revenue through the year?

Steve Griffin: The sequential growth from 2Q versus 1Q would be primarily driven by price, so we are obviously quite sensitive to the final end user pricing, and we saw more sizable declines in end user pricing in the first quarter than we had anticipated. So we have some early indications of the pricing rebound in the second quarter. That said, for the full year, pricing is down more than we had initially anticipated, hence the update that we provided to the full year range and the EBITDA as well.

Anderson Schock: Okay, and then on the commercial revenue guidance, you kept it where it was. I guess what drove this decision with Integrity exceeding expectations and on track to double this year and then also continued growth in the international pain business?

Cheryl Blanchard: Yes, we are excited about kind of the overachievement on the Integrity side. The OUS business is really on task. We said we had a really strong Q1, but have a bit of a tougher comp in Q2, so we’re maintaining guidance and are excited to continue to drive the overachievement on that commercial side of our organization where we’re much closer to the customer.

Anderson Schock: Okay, got it. Thank you for taking our questions.

Cheryl Blanchard: Thanks.

Operator: Your next question comes from the line of Mike Petusky with Barrington Research. Please go ahead.

Mike Petusky: Hey. Good morning. Cheryl, in regards to the Hyalofast, the final module filing, obviously, big difference between, say, July 1 and December 31. Any guide in terms of, the timing of that, where it’s likely to be closer to the first half of the second half or towards the end?

Cheryl Blanchard: Yes. Thanks, Mike. Yes, we are working hard on that final Hyalofast module. We have been on time with the first two modules. We plan on being on time by filing that third module by the end of the year. I expect we will have some timing updates as we kind of approach or get to the next quarter earnings call. And we’re excited to just continue to do the work behind getting to that clinical module filing.

Mike Petusky: Okay. I mean, it goes well, is it likely to be towards the middle of the year or is there just no way to get it done until towards the end?

Cheryl Blanchard: Yes, I think you can expect us to give you an update kind of by the time we have our next earnings call.

Mike Petusky: Okay. All right. So in terms of the OA pain in the U.S. and the pricing deterioration. I mean, the conversations that you are having with your partner, I mean, do you have any visibility as to sort of where the bottom is in terms of pricing strategy? Or is this just sort of they give you an update on a quarterly basis, hey, this is where we are and no sort of sense of this is where we think we go?

Steve Griffin: I’m happy to take that one, Mike. We speak with them quite regularly, as you can probably imagine, at least weekly as part of discussions. And my impression on it is that there is some level of a floor based on the competitive dynamics in that market. Monovisc and Orthovisc have always been seen as market leaders with great clinical differentiation and as a result have always commanded a pricing premium. Some of that obviously has gone away over this last few months and quarters. We do expect that the updates we have in here for pricing reflect the right level for the year, and we also expect stabilization in 2026. So nothing has changed in that respect. It’s just a lower price point exiting this year.

Mike Petusky: Okay. So I’m almost certain I’m not going to get a sense of this on this call. But at one time when the Anika story was entirely focused basically on OA Pain, investors had a sense that, hey, this is a 35% or 40% margin business. I think it would be really a service to investors, particularly given the updated guidance today to consider giving some window into even with the updated pricing, whether it’s in a deck or with the next conference call to give investors a sense of how much value is still left in that even with the pricing updates. I’ll move on from the sermon. Integrity, Cheryl, is there any sense that you can give us in terms of, hey, we’re expanding the footprint with surgeons. We’ve moved from this many surgeons to that many surgeons, or we’re getting deeper with surgeons.

These surgeons were doing X amount of procedures three, four quarters ago. Now they are doing three times that many. Like, is there any sort of, I guess, additional detail you can give around the growth of that business?

Cheryl Blanchard: Yes. So I will tell you that, I mentioned that we did over 300 surgeries in the quarter that we anticipate doubling procedure growth in the year relative to last year. The way that that’s happening is both. We are both deepening, with existing surgeons as they begin to adopt. There’s an adoption pattern. Most of the surgeons are doing one or two cases and then waiting a number of months before they do their next one, which is fairly typical for a new technology in the Medtech space. But we’ve been in the market long enough now where we also have a number of surgeons who are really deepening their use of Integrity. We are also continuing to add new surgeons into the pipeline. So it’s really along that continuum and that is the strategy as we go forward to continue to grow Integrity.

We also, as I mentioned, have our initial, post market clinical data out, we have additional post market studies ongoing, and expect to see more of that kind of short-term data coming out, which will also continue to present opportunities for surgeons to learn about the use case and the clinical outcomes. And then of course, we’ve got the larger prospective study that will also begin to yield data in the future. So there’s a lot going on there. There’s a lot of training and education that’s happening and a lot of excitement and a lot of pull that we’re feeling from surgeons, from our sales team and from additional new distributors that we’ve brought on who are becoming productive.

Steve Griffin: And Mike, just one thing to add on to that. The Integrity progress is great. And the Integrity business fits within our regenerative solutions portfolio that I referenced during the call earlier. It’s about $14 million of investment they’re going be making this year. So going back to your prior question, the business, although it has a lower EBITDA profile in the aggregate, when you really back out that one time or not one time, but that investment as part of our regenerative solutions business, it’s still a very profitable business on top of the fact that we’re also investing in Cingal this year. So just trying to give you some clarity as to how to think about answering those questions, but I appreciate your feedback about providing more transparency in the future.

Mike Petusky: Okay. Cheryl, if I could just ask one more question around Integrity and sort of trying to get more traction among surgeons. I mean, what are sort of the if you are sort of ordering, how you sort of get the word out? I mean, it publications regarding study results? Is it industry events? Is it sort of just missionary, you’re going door to door and you’re telling the story? I mean, what are sort of the needle movers in terms of getting surgeons to try the product?

Cheryl Blanchard: Yes, I would tell you that we have a very comprehensive integrated sales approach that, I think you would find to mature. We are obviously very focused on getting data because data drives engagement. Many surgeons appropriately want to see some clinical data from the early usage, they want to see some early clinical outcomes. The surgeons understand the value proposition of the product that it is strong, much stronger at time zero than the collagen products. They also understand how easy it is to use. They get to that in just the training and education that they are doing. And then as they use it and they do their first couple of cases, they understand then the enhanced regenerative properties of Integrity relative to those collagen products.

There’s also a very integrated approach in terms of accessing new surgeons. And we’re doing that a number of different ways. We were holding a lot of training and education events, we are holding webinars, we are on the podium at various meetings. We obviously have our direct employees working with our distributors who are out having meetings with surgeons that we’re targeting that we know are operating in this space and who have an interest in a technology like this. There are a lot of surgeons who have abandoned the collagen products because they, for whatever reason, didn’t feel like they were giving them the outcomes that they wanted. And they’re very interested in Integrity because it presents a lot of options and features and benefits that those collagen products don’t.

So it’s really across the board, we then have a very comprehensive plan for follow-up relative to the surgeons have done a case or two, and we’re back following up checking in, how did it go? What are your questions? When do you see yourself moving on to your next cases? Most of the use has been in the shoulder, that’s where the instrumentation has been designed to really target But we’ve also had a lot of use across other tendons in the body. I also mentioned that we are launching yet this year, the additional shapes and sizes, those are really targeted and designed specifically to fit better in the foot and ankle, but they are also going to be used for other tendon applications. So it’s very comprehensive. We’re really, I think, doing a nice job of leveraging that technology platform and addressing a lot of unmet clinical needs.

And that’s really what’s driving the growth.

Mike Petusky: Allright, very good. Thanks.

Cheryl Blanchard: Thank you, Mike.

Operator: And your next question comes from the line of Jim Sidoti – Sidoti & Co. Please go ahead.

Jim Sidoti: Hi. Good morning. Thanks for taking the questions. You’ve been pretty clear about your distribution plans for Hyalofast. Once that gets into the market, you go through your own sales team. But what about Cingal? Have you thought about how you’ll distribute that product once it’s approved?

Cheryl Blanchard: Yes, thanks, Jim. We have and we have talked about the fact that we have been exploring where we think opportunities for distribution are. So more to come on that, is a there’s crossover to the call point, it has elements of that call point that are different. It’s typically a therapy that’s delivered in different setting. It’s not a surgical product. So more to come on that, but there’s a lot of thinking that’s been going into really the best way to distribute Cingal.

Jim Sidoti: Could that distribution deal, could that include some payments ahead of approval to help fund the approval process?

Cheryl Blanchard: So I think the opportunity there for driving value with Cingal, there are a number of ways that you could look at that, and you have to understand and know that we are looking at the best way to do that to drive shareholder value. Certainly there, if we partner, there are structures that would contain upfront payments, but really a lot of the value for Cingal will continue to be driven by certainty around that FDA process, which is where we’re focused right now. And we’ve made a lot of great progress on that and feel like we have a real understanding, mutual understanding with FDA on that path to NDA filing.

Jim Sidoti: Right. So you ended the quarter with about $53 million in cash. I assume it’s going to dip a little bit lower through the year. Can you give us a sense where you think cash bottoms out? And do you think you have sufficient cash to get through the regulatory process?

Steve Griffin: Thanks, Jim. To answer the second half of your question first, we absolutely have the cash necessary to get through the regulatory filings for both Hyalofast and Cingal. On the first part of your question, yes, we ended the quarter with $53 million in cash. Operating cash flow was roughly flat, but the first quarter always tends to be the heaviest usage of cash and we’d expect to see improvements in the second half of the year. So we’ll have some investments in our facilities. So net net, we could be a little lighter towards the end of the year, but not materially so. And I think the company remains very well suited to launch these products.

Jim Sidoti: All right. Thank you. A – Steve Griffin Thank you.

Operator: And there are no further questions at this time. I would like to turn it back to Ms. Cheryl Blanchard for closing remarks.

Cheryl Blanchard: Thanks, everybody, for joining the call. Have a great day.

Operator: Thank you, presenters. And ladies and gentlemen, this concludes today’s conference call. Thank you all for joining. You may now disconnect.