Hello and welcome to the Sensus Healthcare Third Quarter 2022 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Kim Golodetz with LHA Investor Relations. Please go ahead, ma’am.

Thank you. This is Kim Golodetz with LHA. Thank you all for participating in today’s call. Joining me from Sensus Healthcare are Joe Sardano, Chairman and Chief Executive Officer; Michael Sardano, President and General Counsel; and Javier Rampolla, Chief Financial Officer. As a reminder, some of the matters that will be discussed during today’s call contain forward-looking statements within the meaning of federal securities laws. All statements other than historical facts that address activities Sensus Healthcare assumes, plans, expects, believes, intends or anticipates and other similar expressions will, should or may occur in the future are forward-looking statements. The forward-looking statements are management’s beliefs based on currently available information as of the date of this conference call, November 3, 2022. Sensus Healthcare undertakes no application to revise or update any forward-looking statements except as required by law. All forward-looking statements are subject to risks and uncertainties, including the continuation of severity of the COVID-19 pandemic and its impact on sales and marketing, as described in the company’s Forms 10-K and 10-Q. During today’s conference call, references will be made to certain non-GAAP financial measures. Sensus believes these measures provide useful information for investors that they should not be considered as a substitute for GAAP nor should they be viewed as a substitute for operating results determined in accordance with GAAP. A reconciliation of non-GAAP to GAAP results is included in today’s financial results press release. With that said, I’d like to turn the call over to Joe Sardano. Joe?

Thank you, Kim, and good afternoon, everyone. I am delighted to be reporting continued excellent execution of our growth strategy, strong financial performance evidenced by our very good year-over-year revenue growth and continued profitability. Our revenue of $9 million was up 64% over last year. In addition, we posted diluted earnings per share of $0.11 compared with $0.01 a year ago. Despite some economic uncertainty and the impact of Hurricane Ian on many of our customers, we’re optimistic the fourth quarter will be profitable as well. As you know, last January, our SRT therapy received improved reimbursement from the Centers for Medicare and Medicaid Services, or CMS, when they revalued our main code upwards by 66% for a course of SRT in non-melanoma skin cancer. In addition, ancillary codes received a double-digit boost. Of note, most surgery reimbursement went down. These actions have been game changers for SRT. We have capitalized on these reimbursement changes throughout the pandemic and beyond. As patient volumes at customer sites remain robust and more and more practitioners recognize SRT as a best practice for the noninvasive treatment of non-melanoma skin cancer. Our rigorous physician education program, highlighting the improved return on investment for SRT is ongoing, especially at dermatology conferences and trade shows. The fair market value lease program we launched earlier this year has supported the purchase of our premium featured and premium-priced SRT-100 Vision systems. More than half of SRT system sales are now for the Vision system and we expect this percentage to increase with the introduction of significant technology upgrade this past quarter. Note that the interest rates have not yet dampened demand for the Vision systems as return on investment is still robust for physicians, but of course, a bit lower than it was before the Fed began raising…

Thanks, Joe. It’s a pleasure to be speaking with all of you this afternoon. As Joe mentioned, our revenues for the third quarter of 2022 were $9 million, and this compares with revenues of $5.5 million for the third quarter of 2021, which was still impacted by the COVID-19 pandemic. Revenues for the 2022 quarter reflects a higher number of units sold, including 4 AR100 systems that were shipped to Asia, along with service contract revenue and sales of our transdermal infusion system. Gross profit for the third quarter of 2022 was $5.9 million or 65.6% of revenues, and this compares favorably with $3.2 million or 57.9% of revenue for the third quarter of 2021. The increases were mostly driven by a higher number of units sold in 2022, service revenue on installed units and the impact of COVID-19 on the 2021 quarter. Selling and marketing expense for the third quarter of 2022 was $1.8 million, up from $1.2 million for the third quarter of 2021. The increase was mostly attributable to higher tradeshow and advertising expenses. General and administrative expense for the third quarter of 2022 was $1.2 million compared with $1.1 million for the third quarter of 2021. This slight increase was mostly due to higher professional fees. Research and development expense for the second quarter of 2022 was $0.7 million, unchanged from the prior year quarter. We recorded a provision for income tax in the third quarter of 2022 of $0.5 million, and we had no such provision in the third quarter of last year. Net income for the third quarter of 2022 was $1.8 million or $0.11 per diluted share, and this compares with net income of $0.2 million or $0.01 per share for the third quarter of 2021. Adjusted EBITDA, which we define as earnings…

Thank you, Javier. I’d like to stress once again, how proud I am of our entire Sensus team and their dedication to our patients. Our financial results continue to reflect that dedication. Our SRT systems are well positioned in a large and largely untapped market consisting of 14,000 dermatologists and 1,000 more surgeons in the U.S., representing more than 8,500 offices, not to mention a further 6,500 plastic surgeons and 5,500 radiation oncologists. Our system provides a compelling alternative to surgery for millions of patients and arguably the only solution to prevent the recurrence of keloids following surgical excision. Before we open the call for questions, I want to mention that we will be available for in-person meetings in New York City at the Craig-Hallum Alpha Select Conference on November 17. Please contact Craig-Hallum if you would like a meeting. We also will be available in person meetings during the JPMorgan Health Conference in San Francisco, which is taking place January 9 through the 12. Our IR firm, LHA, will be scheduling the meeting. So please contact them if you’d like to meet. With those comments, I thank you for your time and attention and now operator, we’re ready to take questions.

Yes, thank you. [Operator Instructions] The first question comes from Alex Nowak with Craig-Hallum Capital Group.

Hey, Joe and team. This is Jason for Alex. Just starting off from us, we were all pretty excited around Q2 and I think we were thinking about potential for sequential growth into Q3. Macro has certainly changed but can you speak a little bit more specifically on the dynamics that changed in the quarter? Was it predominantly the macro-environment causing some pause from clinicians? Then going into Q4, I know you’re not giving guidance, but where do you think SRT placements can go? And is there still a chance that year-over-year growth can continue into Q4 as well? Thanks.

Thanks for being on, and thanks for the question. As far as Q3, I don’t think we ever represented that Q3 was going to be bigger or better than any of the other quarters. As a matter of fact, there is seasonality in Q3, and I think we made that clear after the Q2 call based on the fact that after 2 years of COVID, our doctors for many of them took extended vacations with their families and went on some extravagant vacations, which I think they deserved after having 2 years of not being able to go anywhere with their family. So, we fully expected Q3 to be seasonal as we had projected. And to that point, I think one of the reasons why Q2 was so good in recognition of having that kind of vision, we really worked extra hard in Q2 to try to bring a lot of orders into Q2 versus waiting for Q3 because we thought of that. So, I think it was one of the reasons why we had the exceptional Q2 of $12 million plus in revenue, and we made that statement during our calls with our analysts at that time. So the other thing that may have impacted some of our revenues, we know for a fact that it impacted some of our revenues, is during the week of Hurricane Ian coming closer and closer to Florida and not knowing exactly where it was going to hit but understanding exactly where it would end up hitting. We closed our offices for 3 days because we were suffering quite a bit of storm damage with a lot of rain and a lot of wind in our area. So we sent our employees home to make sure that their homes were secure and that they were able to get home rather than waiting for the last minute not being able to get home with flood. So I can assure you that our employee safety is of upmost interest to us, and we wanted to make sure that we kept with that theme. So therefore, a lot of things that could have been shipped and maybe one or two to some of the areas that ended up getting hit were impacted in not shipping some things. So all of those things combined, I think, resulted in a phenomenal quarter for us with great results in spite of the fact that we had major storms, and we were facing seasonality, and we had a successful Q2 as well. Regarding Q4, there is no question in our mind that we’re going to remain profitable for the balance of the year and that we have a sufficient backlog to have a successful Q4. So we’re excited for the future and for every quarter here on in.

Yes. No, certainly, you had some message to that and I hope the team is all safe down there and good thing you took those measures.

I thank you for doing that and you’re right, everybody was safe. Everybody was able to secure their places. Some damage was incurred by some households, but other than that, everybody remained safe, and we’re fine. Thank you.

Good, good. Concerning the backlog, any more color you can give us there? Did it grow from Q2 or are we starting to fill a little bit of that backlog potentially? Any more color you can give us there would be helpful.

Yes. I think that we had some backlog coming into Q4 caused by some of the things that happened in Q3. So we do have some backlog and I think that the backlog from Q4 will probably grow greater into the backlog for Q1 of next year. So all of that still continues. We also have the IRS Code 179, which is going to impact our Q4 with a lot of doctors wanting to take advantage of that tax relief, if you will, based on the, what I would consider, exceptional revenues that they are experiencing right now. But you have to remember that in the world of dermatology and aesthetics, the economy has a huge impact on dermatology who rely heavily on aesthetic practices, the cash business. So we will see where the economy goes. The inflation rate is impacting it, we know that already in speaking to some of our doctors but we’re hopeful that everything will continue because one thing is for sure, inflation doesn’t stop skin cancer. So it’s something that needs to be continued to be treated and patients continue to need to be treated. So we will keep pushing forward. We expect a good Q4.

Yes, absolutely. Thanks for the color. And then last from us. You’re generating a fair amount of profit now, balance sheet is looking like you can go on offense a bit here. What are the capital allocation priorities between buybacks, further sales force investments and M&A? Maybe on the M&A front, how are you thinking about potential additions there? Is it more capital products? Is it procedural volume linked products? I mean, any sort of strategic thoughts would be helpful.

Yes. We’re being very aggressive in our pursuit of technology. We want to have very unique, opportunistic technology that we can add to our portfolio, and we want to give our salespeople as much technology as possible so that our doctors who are single decision makers and a lot of their practices with several influencers throughout, can have the opportunity to decide on a bundle of products that we might be able to offer them. So for instance, the TDI product is very unique in that it offers patients a pain-free experience without having to experience needles. And needles, we know is very excessive for hyperhidrosis for the sweat glands, those needles are injected into the arm pits. This now deletes the need for having to do that. Dr. Nestor’s paper that was presented, the last two shows that we were present at, highly indicated that and generating a lot of interest. I can tell you that we don’t have the supply to meet the demand at this point, and we’re pushing like crazy to increase our resources for manufacturing. So that’s a big opportunity for us. The new product that we just added, which is for hair removal, the fact that it has multiple laser capabilities in one unique form provides and that’s able to treat multiple skin of color is a huge opportunity for us. The fact that it’s mobile and compact, those are features that are exclusive to the product, so again, providing unique features to products that nobody else has. We continue to look for those products and we have to be very careful because we found ourselves probably window shopping, if you will, looking at opportunities, and we made ourselves avoid the fact that we’re going to potentially bite off more than we can show. One of the things that we cherish is the fact that we do not have any debt. And going into this period of, I would say, questionable finances with inflation rates and things like that, I don’t think it would be very wise for us to incur any major kind of debt to make an acquisition regardless of how good that acquisition may be. I think that we have to make sure that we live within our means and that we continue to work with technologies that we can afford and that we know we can provide a good ROI to our customers as well as to our investors because I don’t think our investors would be too happy if we had a high debt going into this inflation period.

Yes, noted there. Thanks, again, Joe. I appreciate the question.

No, thank you. Appreciate it.

Thank you. And the next question comes from Scott Henry with Roth Capital.

Thank you and good afternoon, Joe, you certainly picked a good time to put cash on the balance sheet when you can make a return on it, at least. A couple of questions. First, did you mention how many units, SRT units, were sold in the quarter? I didn’t seem to catch that.

Yes. We actually, Scott, we shipped 27 systems. Out of them, 17 were regions and 10 SRT-100.

Okay. When you say you shipped, you booked revenues on 27?

Correct.

Okay and as we start to get more sources of revenue, are you going to disclose the revenue for different products? I guess maybe another way to ask it is what percent of the revenues in the quarter were from SRT Vision or 100?

You have to remember, Scott, that the TDI product is a very low-cost product. Average selling price is somewhere around $28,000. So we didn’t ship 10 systems and to identify that as that kind of revenue, it’s pretty small. So the vision overall was the biggest number at $5.5 million revenue, and then you’re looking at approximately $1.6 million in service revenue. So that generates pretty much the majority of the revenue that we have totaling the $9 million. So, I think that it’s going to be appropriate someday when we have significant numbers to reflect what each one of those units have if we’re going to be over $0.5 million or over $1 million on a quarterly basis with TDI or with the aesthetic product or the laser product. I think that, that will be appropriate. Right now, just launching the new laser product, the mobile laser product and TDI is pretty early, and I don’t see the numbers as being that significant. But we will get there. We will make it significant.

Okay. Great. Then I know there was some discussion on the fourth quarter outlook. I guess, a little less clear, given the hurricane. Is it fair to say that you would expect sequential growth from Q3 to Q4?

That’s what we’re driving for. I mean there is no question that, that’s our objective but the fourth quarter has always proved to be the best quarter of the year. So we’re continuing to anticipate that. We see activities towards that for sure.

Okay. Alright. That’s great. That is perfect. Now gross margins, I think, according to my first pass numbers were 68%, 69% in the last two quarters, in the first and second quarter, about 65% in the third quarter. Would you expect them to bounce back a little or I guess, is it just a volume thing?

Scott, it’s all about the mix. It’s all about the mix of the visions and the SRT-100 and the deals and things like that. We have always experienced margins in the mid-60s, and I expect that to maintain. When we have higher than the mid-60s, it’s because, I mean, we were able to make some close deals with significant higher margins than normally but I think the mid-60s is the number that we should be looking into.

Okay. Great and final question, you’ve mentioned a little bit about the backlog. Could you talk about how we should think about the backlog at the current time versus a couple of quarters ago? Just trying to get a sense of the magnitude of the backlog and how to think about that relative to quarterly revenues.

Again, because Q4 has always been the best quarter for us, it seems like our prospect base as well as backlog grows pretty good during the course of the quarter. As I had mentioned to everybody after the last quarter, when they asked me what are my observations, what am I thinking, I think we identified the fact that doctors were going to take extensive vacations in Q3, which could cause us to see the seasonality above it. Then I also mentioned the fact that because we were going into an election year, and again, irregardless of whether it’s midterms or for presidential elections, there always seems to be a holding pattern with all decision-making as people keep their hands in their pocket until after a decision is made or after the results are made final. So we have another week to go and so we’ve seen decision-making being held true to that where people are waiting for those types of things to happen. Then again, after that, I see the floodgates opening up and everybody is going to be very, very busy. I can see the activity already starting to grow. I know that a lot of us are going to be on the road between now and the end of the year, and I’m hoping that everybody makes it home by Christmas Eve.

Okay. Alright. Great, thank you for taking the question.

Thanks, Scott. Appreciate it.

Thank you. And the next question comes from Yi Chen with H.C. Wainwright.

Thank you for taking my question, Just to clarify that you would expect the fourth quarter to be the best quarter of 2022, given the negative impact from the hurricane and the general economy, correct?

Yes.

Okay. And regarding the SRT Vision systems being shipped, are they all equipped with the new Ultrasound Pro?

Everything that’s being shipped now is with the new ultrasound.

Does the price increase?

The price has increased, yes.

Okay, thank you. So if the general economy is recession persists throughout 2023, would it be reasonable to say that it could have a pretty significant impact on the number of new orders for the transdermal infusion systems but not necessarily impact the number of SRT systems. Is that correct?

Say that again. I’m not sure I understood what you said.

If the recession persists throughout 2023, would it be reasonable to say it could have a significant negative impact on the number of orders for TDI systems, but not necessarily the SRT systems?

I think that it might be a little bit the other way around because you have to remember that as we introduce the new fair market value lease, since it’s based on what the interest rates are and the government has decided to have its third raise of interest this year. Those interest rates continue to go up. So although there is still an excellent ROI, it’s still going to be a little less than it was before each time that there is a raise. So we’re hoping that it’s not going to impact that much, but I think that we have to expect that it will.

So, you are saying because people purchase SRT systems was a loan that would have a negative impact on the order number?

I am just saying that it could. I don’t think that it’s going to have a negative impact on the products that they purchase. So, if you look at the mix, for instance, that Scott had asked before, where we had 17 Visions and 10 SRT-100s that were shipped. If you look at the quarter before, we had many more Visions being shipped versus SRT-100s. So, we are still going to sell the SRT technology, but now we are going to still push towards the Vision, and we will still have many more orders for Vision. But I think that we are going to sell more SRTs because it’s going to have a better ROI because of the lower cost. And so, when you look at what our numbers were from Q2 to Q3, we had 27 units totally sold. I think if you go back to Q2, it was about 36 units that were sold. So, there is not that many units in difference and compared to what the headwinds were with the hurricane as well as the vacation time for the doctors, eight units was not a big number. It was very, very small. And I think that there is two or three numbers in there that were delayed because of Hurricane Ian that are going to be shipped in the next quarter. So, it gives us a head start on a few things.

Okay. I mean the press release mentioned that a recession could affect aesthetic procedures. So, I mean if the recession persists, then that means there may not be that many patients who would like to pay for aesthetic procedure and that could negatively impact the order for TDI systems as well, right?

Yes. I don’t think it’s going to impact TDI systems only because it’s such a small amount of money that the doctor has to pay for this. And it makes sense for them to purchase a TDI system because it provides their patients, who are going to go through the procedures no matter what, a much better experience because there is no pain involved, no needles involved. So, it’s an enhancement that will help the doctors in a lot of cases that doesn’t cost a whole lot of money. So, although there might be fewer aesthetic procedures, I don’t see it happening in the area that it’s going to impact TDI, okay. So, I think where it’s going to impact on the aesthetics is people that are going to have microneedling for facial rejuvenation or some of those other things. But we are going to be impacting hyperhidrosis. It’s almost a medical condition that people have to have needles stuck into their arm pits, which is extremely painful, for excessive sweating and things. Then you have hair restoration. Somebody who wants their hair restored, this helps the doctor cut the pain, cut the cost and the cuts of the time. So, I think it’s going to attract more patients to their table. Everything that we are doing, again, is to enhance the patient experience in the treatment and I think this allows the physicians to see that they can draw more patients into their practice. I think all these doctors are going to be looking for that kind of a solution during this kind of a period. So, we are not in the same vein as the other aesthetics, as I mentioned, with facial restoration instead of a patient going every four months now that will go maybe over every six months. So, that’s 2x a year versus 3x a year. That’s a big cut. That’s a 33% cut in their expenditure and in the doctor’s revenue. But I don’t think that TDI is going to have that kind of an impact.

Got it. Thank you.

Just also to answer that, to your point, I think that we will sell more as time goes on of TDI. I just need more manufacturing.

Got it. Thank you.

Thank you. And the next question comes from Benjamin Haynor with Alliance Global Partners.

Hello gentlemen. Thanks for taking the questions. Just wanted to kind of hit on the product updates and the launch of the Silk. You mentioned that the Silk lasers – you mentioned that there is an updated disposable with the Vision. Is that something that could be a meaningful revenue opportunity, or is it still mostly the revenue that you see from these units mostly going to be due to the capital purchase?

Well, on the Vision, there is a recurring revenue piece because there is a cap that goes with the transducer that they use for ultrasound. So, that cap is something that’s needed. It’s a very low cost item. It’s a plastic piece that goes over the transducer and it keeps the actual transducer from touching the patient’s skin. So, it’s something that’s required for sanitation and things like that. But that is something that we have gotten, I think that, that will be sold on a regular basis. I don’t think that is going to impact into the hundreds of thousands or millions of dollars for us. But it’s definitely a revenue source for us. As far as the new Silk product, what our doctors have been asking us for is they don’t like to have consumables sold with those products. They want low-cost lasers with no consumables. And so that’s exactly what this does. It has literally no consumables. We will have a service component, which will create a revenue source for us. But what we try to bring to the market is something that’s extremely reliable, something that’s productive and something that’s cost-effective for our customers as well as providing the best outcomes for patients with the best experience. So, that’s a theme that we are going to keep moving along because that seems what the doctors want.

Okay. That makes sense and you kind of anticipated my question there, and that does a tougher aesthetic market benefit you guys in the sense that the doctors want to get away from consumables? I know some of the vendors out there in this market have gotten maybe a little bit aggressive in shoehorning unneeded consumables into the laser products they offer. So, I guess do you think you get more consideration with the low cost and kind of no disposable type laser as the market maybe gets a little bit tougher in its way, almost a more ideal market to introduce it into?

Yes. I think you hit it right on the head. That’s our goal with our products is to bring something that, first of all, a physician can say, this is a unique technology. Number two, it’s easy to acquire, and I don’t have to worry about keeping my shelves full with all of these consumable products. And without those consumables, they don’t have to charge the patient as much or they want to charge the patient as much, they make more money themselves. So, there is a larger margin for it. So, I would think that there would be a favorable decision for our products over somebody else’s. And that’s what we want to do is we want to have an advantage over selling our products versus somebody else.

Excellent. And then just back the Vision improvements in the workflow or set up the time improvements that you have. I know it’s definitely a shorter procedure than most surgery, but how much of a needle mover are these kind of improved workflow elements that you have with the update to the Vision?

Well, again, a good point. First of all, there is less prep for the patient because the patient usually has to get prep to have an ultrasound. I mean if any of us have any experience with our wives or significant others going for birth and things like that, we know what the ultrasound process is and how the patient preps for that ultrasound. Now, we eliminate that prep and all that goo and stuff that’s added to the patient’s body in order to apply the transducer isn’t necessary for these. And so – and on top of that, the resolution that we have for the position and for the imaging piece, it’s much more productive for the treater or the physician who is going to treat the patient because they don’t have to apply all that stuff. They don’t have the same time to apply for the patient prep. The other thing is the importance of the transducer itself and the image quality that it gives you because now they can see very clearly the dermis part of the skin, which is very evident, so that when we are identifying skin cancer to put together treatment planning, this makes it very, very beneficial to the doc. We have to keep in mind that SRT is recession-proof in any way because, again, skin cancer patients want their skin cancer treated, doctors want to treat them.

Makes sense. Then lastly for me, just on the digital advertising, television advertising front, I think you have mentioned that the returns, the level of interest that you had gotten on the Q2 call from these efforts. Any updates there in terms of like calls per day or inquiries per day or however you kind of measure it internally?

Yes. No. Thanks for bringing that up because the fact of the matter is that we see our patient inquiries continue to grow. I would say that we are in excess of 30 a day in answering those questions and providing feedback to the physicians and setting up times with physicians so that their practices are getting these patients, and they are very appreciative of it. It’s funny. I just got one today from one of the plastic surgeons in Orlando, who is very adept at doing keloids and we have had a bunch of people from the islands, for instance, who have keloids. He referred our system to one of the doctors in Jamaica, who I am in contact now, who wants to buy a system because we have got five or six patients on a regular basis from the islands looking for treatment of keloids. And so, it’s funny how this thing transitions. But I think it bodes pretty well for what we are doing and how the patients are responding. The interesting point about it is, like you and I or anybody else, how we get on the Internet in the evenings or on weekends when we have less to do away from our work, we are getting a ton load of patients. We come into the morning, Monday morning, and we have got 20 or 30 that are just waiting for us from the weekend, from patients inquiring on the weekend. And then every night, we have got a backlog. And when we start first thing in the morning from 5 to 10, and that continues to grow. So, we are excited for it. Now, we are going to grow our SEO compatibility and working on Google and everything else to even draw it even higher.

Okay. Great. Well, thanks for all the color, gentlemen, and taking the questions. And that’s it for me. Thank you.

Thanks Ben.

Thank you. And we have time for one more question. And that comes from Anthony Vendetti with Maxim Group.

Thanks. Hi Joe.

Hi Anthony, how are you?

Good. How are you? Good. And Javier, just a quick follow-up to the TDI, so the 10 systems sold this quarter, you said the ASP is around 28,000 or for this parent enhancement centers. I know it could be used for other transdermal techniques you mentioned people with I guess, hyperhidrosis is one area. Is it being sold in the U.S. by Sensus for anything else at this point, or is that what’s out there in the pipeline? And do you expect sales outside of parent enhancement centers in the fourth quarter or early next year?

Yes. Good question. I will tell you that we have sold several systems just for the facial rejuvenation portion. So, we are seeing a lot of activity there. But it seems like there is a significant activity because of the need for hyperhidrosis because that’s a real problem for those patients that are going through that. And then hair restoration, if you understand that market and we are learning from our doctors as we go. Tremendous pain and blood involved with using needles through the scalp, thousands of needles to rejuvenate hair follicles and things like that to get that growing. Not having to go through that pain with the multiple needles and the blood involved is making physicians drool over the opportunity to have more patients go through the procedures because it’s usually the patients that stop the procedure after two or three times. They say, I can’t stand it anymore. I don’t want to go any further. So, to enhance that experience for that patient is great. I think that we had one of our personnel who came back from witnessing the hyperhidrosis one and the patient literally said, “Man, bring it on. This is exactly what we need,” because they couldn’t stand having the needles injected into their armpits. I mean just thinking about it is beyond acceptable to me. But I would rather sweat, that would make me sweat just to think about it. I think that we are seeing a whole lot of more applications coming about and the doctors are using it wherever patients have a problem with needles. One thing I want to bring up is an experience that I had in the past is when I first introduced MRIs to the market back in 1980, it was assumed that in the U.S. market that there was about 3% of the people that were definitely afraid of very close spaces and they couldn’t take it. Since MRI has come in, it’s grown to over 20% of people that are afraid of those closed-in spaces. And that’s the reason why you are seeing open MRIs today that expand more to the patient’s needs and to provide a better experience. I think we are seeing that experience going to renew with TDI, where there is more patients that are going to be more afraid of needles and the fact that they have got a choice now. Those doctors are going to reap the rewards of having more patients walk through their doors just like SRT versus most.

Right. Okay. No, that’s helpful. Lastly, on the new SRT Vision system, solid-state, high-frequency ultrasound and a better view of the epidermis. Are the older systems eligible for an upgrade, or is this just incrementally better and therefore not worth doing upgrades for and this is more for the newer sales, or do you have an upgrade program in place?

It’s not something that we are going to be able to do by retrofitting existing units in the field. So, it’s like any other evolution of technology, there is going to be advancements. This is something that our customers were asking for. So, they have to buy the new equipment at the higher cost due to the capabilities of the ultrasound, but it’s just that’s the way it is but I think it’s a huge advantage for them and their patients.

Okay. So, there isn’t really an upgrade program. If they want the new Vision system, they would have to purchase it like anyone else as a new purchase?

Yes, correct.

That’s what I thought. Okay. Good. I was just checking. Alright. I think that’s all I have for now. I appreciate it.

Thank you, Anthony.

Thank you. And this concludes our question-and-answer session. I would like to return the conference back to management for any closing comments.

Okay. Thank you once again for your time this afternoon and for your interest in Sensus Healthcare. We look forward to our next financial results and conference call when we report our fourth quarter results in late February or early March. So, thank you everyone for your interest and be well. We will talk to you soon. Thanks.

Thank you. The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect your lines.