John Beaver: No, your assumption is correct. While many of our customers obviously did not have accounts at SVB, I think the general market feeling from that banking crisis hurt some cells that were imminent, and they put the brakes on, pulling the trigger on those laser sales. That’s the reason we’re confident that they’ll pick back up in the second quarter.
Frank Takkinen: Okay. And then last one for me. I wanted to follow up on the comment about the four DSOs currently evaluating the technology. Could you maybe speak to when we could hear back from those DSOs evaluating the technology and what kind of impact we could see from them?
John Beaver: Frank, that’s a multimillion dollar question and one that I would be very reticent to answer because we do not control, unfortunately, the timing of how fast the DSOs move. I am surprised that we’re sitting here in 2023, for instance, with Heartland, where we are, I thought we’d be further along to be frank with you. And so it’s one of those things that in our internal forecast and our guidance, we expect gradual growth someday, we’re going to wake up and get a big order. I just can’t ever predict when that’s going to be. And so I don’t try to.
Frank Takkinen: Okay. Fair enough. That’s good color. Thanks for taking the questions.
John Beaver: Thanks Frank.
Operator: Next, we have Anthony Vendetti with Maxim Group. Anthony, please proceed.
Anthony Vendetti: Thanks. Hi, John. Hi, Jennifer. How’re you?
John Beaver: Doing well.
Jennifer Bright: Great.
Anthony Vendetti: Hi. So the first question I have is on the Waterlase Exclusive Trial Program. So you did a lot of those I guess, back in the second quarter, I think it was around 150 educational events. How many did you do in fourth quarter? And it seems like that’s going to slow down in ’23. Is that because you’ve covered all the territories you need to cover? Or is there another reason for that?
John Beaver: No. We did about 35 of those last year in 2022, and we’ll have the same amount this year in 2023. The difference between those two years really is we should and we are planning on getting more participants into each one. We average about five participants in 2023 into each program. And this year, we’re expecting to have six or seven, and we’re seeing that early on this year. In addition, we had almost 50% success rate last year, we anticipate 60% success rate this year. And we’ve already, so far, is early in the year, but are exceeding that in average, if you will. What we talked about earlier was how we’re — and where we are having these programs. So when we first started this initiative, we basically had these programs all over the country in hotel rooms.
We have now identified not only our own training facility that will be open next month, but also training facilities across the country that we can actually provide a better experience for the dentists who are attending, but just as importantly, more cost-effective experience. And the other big change over when we started the program is when we started it, we had to go out to our trainers, our key opinion leaders and pay them on a one-off basis. They weren’t BIOLASE employees to train during those two days and the mentoring over the 45 days. By adding a number of dentists on to our staff over the last 1.5 years, we now have four dentists that are full-time BIOLASE employees and the ability to reduce cost around the training is very significant there.
And so this will be — 2023 will be our first year — full year with having all four on board. So I’m excited about that.
Anthony Vendetti: Okay. And you said that the conversion rate has increased. Did you say to 60%?
John Beaver: Yes. So just going back in history a little bit, when we started this back in 2019, it was around 30%. In 2021, 40%, 2022, we almost got to 50%. And in 2023, we’re projecting 60% and what I said was, so far this year, we’re above that.
Anthony Vendetti: Okay. Great. And then since I’ve been following esthetic laser for a long time, I think it’s interesting that you’re looking at fractional skin resurfacing. What has been the reception so far to the handpiece, how much extra does that cost above and beyond your Waterlase system? Maybe just talk a little bit about the reception, the pricing behind that and for the dentists that have purchased it, how are they pricing it?
John Beaver: Yes. So the reception has been good. We’ve had a lot of our U.S. dentists really asking for this fractional handpiece, which has been available in Europe for a number of years for quite a while. We weren’t going to introduce this into the U.S. market until we receive the FDA clearance and really rolled it out in the right way with the right training and so forth. And that started in March. So this month, literally, we have begun shipping the hand pieces, and we’re developing the training program. Now we’re teaming up with American Academy of Facial Esthetics to help train. We have a large training for kind of train to trainer scheduled for early May. And then our first national event scheduled in August. So all that’s going, I think, extremely well.
In terms of the pricing, I never want to get too much into pricing. But it is the hand pieces are from a revenue standpoint as opposed to the cost of Waterlase, not insignificant, I would say, meaningful. I don’t want to give you the price just from a competitive standpoint. I see for now, for the most part, it’s dentists that have been looking to do this, they already have a Waterlase that are purchasing in the hand piece. But I will tell you that we’re starting to get some inquiries from non-Waterlase owners about the hand piece. And obviously, they’d have to buy Waterlase with it, right, to make it work. And so that’s very interesting. There’s, I think, a tremendous amount of upside there as well. In terms of how much it cost, I mean, anywhere from I’ve heard $500 to $1,000 in terms of what the dentist is charging or even more than that.
I think from a dentist standpoint, the nice thing is that while this provides great clinical efficacy and results to the patient and does it in a really noninvasive, almost pain-free way, it’s — it doesn’t last forever. So it’s a recurring revenue stream for them as well. Just like BOTOX, they may have patients coming in on a three-month, six-month or one-year type schedule and it’s kind of like an annuity for them, which is really nice.
Anthony Vendetti: Okay. Great. And then last question is on EdgeEndo. How is that going — how is that business going with them?
John Beaver: Yes, still going well. I think we were off to a great start in 2022. We expect to sell more units to them in 2023. And so I would say, so far so good, we’re proceeding as planned.
Anthony Vendetti: Okay. Thanks. I’ll hop back in the queue. Appreciate it.
John Beaver: Thanks Anthony.
Operator: The next question is coming from Ed Woo with Ascendiant Capital. Please proceed.
