BIO-Key International Inc (BKYI) 2021 Q2 法說會逐字稿

Good morning, ladies and gentlemen. And thank you for standing by, and welcome to BIO-key's International second quarter 2021 conference call. (Operator Instructions) As a reminder, this conference is being recorded today, Tuesday, August 17, 2021. (Operator Instructions)

I would now like to turn the call over to Ms. Kimberly Johnson, BIO-key's Vice President of Products. Please go ahead, ma'am.

Thank you and thank you for joining our call this morning. With me on today's call are BIO-key's Chairman and CEO, Mike Mike DePasquale; Chief Revenue Officer, Fred Corsentino; and our CFO, Ceci Welch.

I'd like to remind everyone that today's conference call and webcast may contain forward-looking statements that are subject to certain risks and uncertainties that may cause actual results to differ materially from those projected on the basis of these statements.

Words such as estimate, project, expect, anticipate, believe, think, plan, may, or will, or similar words typically identify and express forward-looking statements. Such forward-looking statements are made based on management's beliefs and assumptions made using information currently available pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

For a complete discussion of these and other risks factors that may affect the future performance of BIO-key, please see risk factors in the company's annual filed on Form 10-K and in other filings with the Securities and Exchange Commission.

Listeners are cautioned not to place undue reliance on forward-looking statements, which speak only as of today's date. The company undertakes no obligation to revise or disclose revisions to such forward-looking statements to reflect events or circumstances that occur after today.

With that, I will turn the call over to Mike DePasquale. Mike?

Thank you, Kim. And good morning and thanks to everyone for joining our call today. After my prepared remarks, I'll turn the call over to Fred to review some of our key initiatives, followed by Kim, and then Ceci will briefly review our financial results and solid balance sheet position.

In past calls, we've discussed the favorable work and study for many ware trends that have rapidly increased demand for the identity and access management solutions that we provide. We've also reviewed core capabilities that differentiate our solutions, including our industry-leading biometric capabilities and our support for a broad array of other identification factors that allow our solutions to easily integrate with most customers' existing infrastructure. These factors continue to support our optimistic growth outlook.

Through the first half of 2021, our performance is showing growth and progress we envisioned following last year's recapitalization and the strengthening of our team and our product offerings, including the acquisition of PortalGuard's parent company. In particular, we are seeing strength in demand for our PortalGuard IDaaS cloud offering, including migrating existing customers from our on-premise solutions to our cloud-based software-as-a-service, or what we call ID-as-a-Servic or IDaaS. We are also seeing strong interest in our Channel Alliance Partner program, which Fred will touch on.

In Q2, we expanded our reach to over 55 higher-ed customers in the California College System. And we continue to migrate other colleges and enterprises to our PortalGuard IDaaS offering. For example, Rio Hondo College selected our IDaaS platform to improve the security and user experience for its over 19,000 students, enabling them to securely and seamlessly access more than 20 of the school's enterprise-wide applications.

Regarding BIO-key Africa, after starting initial hardware shipments in Q1 to support our large-scale ID projects in Nigeria, the reemergence of COVID-19 challenges caused a suspension of activity, impacting Q2 shipments. Though we continue to expect a reacceleration of activity in these efforts, it's very difficult to predict the exact timing with certainty, though we do expect to recommence at some point in Q3 and through the remainder of 2021. As I've mentioned on each of our recent earnings calls, the challenge is balancing the equipment and services required with the availability of cash that is flowing through to our partners.

The good news is that we are now in process of receiving bank guarantees, so that BIO-key will be paid directly by the bank for what we deliver through to the partners and other service providers that are undertaking the mass enrollment and verification activities in Nigeria.

The World Bank is now pushing the funds down to the national Nigerian banks to accelerate the deployment process, much of which has been held up because of funding. This is a seminal event because it now means we have surety of payment as the contracts evolve, reducing or eliminating any risk on our part. Our Managing Director in Nigeria has been heavily engaged in this process over the last 30 days.

As for our financial performance in the quarter and year-to-date, we were able to increase Q2 revenue by 223%. And revenue for the first six months of 2021 is up 247% versus the year-ago periods. The performance keeps us on track to achieve our full-year revenue guidance of $8 million to $12 million. The midpoint of which would represent growth of 250% over 2020.

We continue to position BIO-key to achieve profitability within this revenue guidance range. However, that would depend on the mix of hardware and higher margin software revenues.

Given our strong balance sheet, expanding portfolio of solutions, building demand for our IDaaS cloud offering, and the substantial growth potential presented by our Africa initiatives we made, we remain very excited regarding our prospects for the balance of this year.

Let me now pass the call to Fred to highlight a few key business development highlights.

Thank you, Mike. As you have heard over the past several quarters, BIO-key is focused on building a sustainable, high margin, recurring revenue business, that leverages our technology's strength and the benefit of the Software-as-a-Service business model. We have started to see the benefit of this transition in our Q2 and six months revenue performance.

And now, I'll provide an update on the key initiatives that are driving this progress. First, our Channel Alliance Partner or CAP program continues to expand as we were able to add over 40 new partners in the first half of 2021 bringing our total to over 100. We expect this program, which substantially expand our sales and marketing reach on a global basis to be a key part of our long-term growth, particularly, as it cost-effectively expands our reach into new customers, new verticals, and geographies.

Earlier this year, we expanded the program beyond system integrators and value-added resellers to include managed service providers, MSPs, and managed security service providers, MSSPs, as they provide an ideal fit with our sales and marketing objectives. So we had less than $100,000 of revenue derived from this emerging program in Q2 2021.

We have built a pipeline of [$1.6 million] of opportunities targeted for the second half of 2021. This includes the anticipated revenue from a new agreement with a large Silicon Valley-based IT distributor that we expect to commence in Q3. As we work to further expand the scope of this core program, we expect to provide further updates on our progress.

Turning to our cloud-based PortalGuard solution launched in Q4, which we call PortalGuard IDaaS or Identity-as-a-Service, we are very encouraged by its progress as most customer prospects are interested in having their new IT investments in asset-light infrastructure with low upfront cost. We continue to see strong demand for PortalGuard IDaaS, particularly in high education and certain enterprise markets that are grappling with security challenges related to the sudden increase in remote access demands for critical data and applications from outside the enterprise firewall.

Our attractively priced cloud IAM solution support a wide variety of multi-factor authentication options, including BIO-key's core biometric and patented capabilities. Approximately, 10% of about 200 active PortalGuard on-premises' customers have been migrated to our cloud solution. And we expect this penetration to steadily increase in coming quarters, building a base of more predictable recurring revenue software subscription revenue.

Innovation and new product development remain a core element of our growth strategy. And during the second quarter, we launched our mobile app, BIO-key MobileAuth with PalmPositive, a touchless palm scanning technology for IOS and android mobile devices. This easy-to-use app requires no specialized hardware as it utilizes the device's camera to offer fast registration and enrollment while providing a very secure biometric factor to enable single sign-on solutions that streamline logins.

We plan to add other biometric modalities such as facial authentication and voice recognition to expand biometric and multi-factor authentication options.

In Q2, MobileAuth was selected as the winner of the 2021 Technology Innovation Award for Biometrics by Lucintel, a premier market research and management consulting firm. MobileAuth builds upon our substantial biometric offerings, and PalmPositive adds a touchless biometric capability to the 16 authentication factors already supported by our PortalGuard platform.

We also introduced our SSO Concierge product, which eliminates passwords of sick client applications, or applications that run from the client's side which security is dependent on the local server. And we were awarded the eighteenth patent for continuous biometric authentication further expanding our IP library and providing another new method of authentication.

Continuous biometric authentication is somewhat similar to behavioral recognition as it uses continuous biometric readings for more robust, ongoing authentication versus a single point of time, typically at the start of the computing session. We're excited about these next-generation capabilities and continue to focus on developing solutions that deliver great value to our customers and drive our continued top-line growth.

Now, I'll turn the call back to Kim Johnson to review some recent customer wins and other marketing-related updates.

Great. Thank you, Fred. As Mike mentioned, we had several significant customer announcements in Q2. We added another large, outsourced call center customer to implement biometric authentication with a 500 user pilot that could grow to 20,000 users. We increased our footprint in higher education to over 55 colleges within the foundation for California Community Colleges System with the addition of Mendocino College as a new customer.

The Rio Hondo College IT team selected PortalGuard in Q2 as well to improve their end-user experience by streamlining access to critical applications using PortalGuard's single sign-on capabilities, while also having the flexibility in security from the wide variety of multi-factor authentication options that our systems provide.

As Fred mentioned, we are also focused on migrating existing PortalGuard customers to our IDaaS software model. We are increasing our direct customer communications to drive such IDaaS migrations and have already seen at least five migrations due to this direct outreach, including Barstow Community College and Southeastern Illinois College.

We will be working to expand our IDaaS penetration in coming quarters. The benefit of the IDaaS solution is that it allows customers to move their IT off-premise and benefit from the reduced resources required to host and maintain a system. For BIO-key, it creates a new recurring revenue stream that will provide greater predictability to our business as the program builds.

In Q2, we added two technical associates to further expand our customer services team and support future growth in the business. We hired our first dedicated business development representative for lead development, and we executed several lead generation campaigns, which included multiple webinars, including a PortalGuard IDaaS virtual demo. And we were a proud sponsor for the EDUCAUSE cybersecurity showcase in order to build our brand visibility before key customer prospects.

We also hosted our first CAP program quarterly update webinar to our valued channel partners to increase awareness around BIO-key and our solutions.

In addition to webinars, we continue to create content such as the state of multi-factor authentication custom survey and eBook and a SAML single sign-on eBook, both released in Q2. We continue to optimize the ROI of our marketing efforts with defined quarterly goals and analysis. These efforts keep us focused on driving new business, customer retention, and brand awareness.

Our cyber-focused public relations partner, Matter Communications, continue to help build our brand recognition and credibility in the market by securing coverage in several publications during the second quarter. Through these initiatives, we believe we are making solid progress and positioning BIO-key for further growth and success.

At this time, I will hand off the call to Ceci Welch for a review of BIO-key's financial performance.

Thank you, Kim. Q2 2021 revenue increased $658,000 (sic - see press release, "$685,000"), or 223% to $922,000 (sic - see press release, "$992,000") from $307,000 in Q2 2020. The increase is primarily attributable to the $632,000 (sic - see press release, "$662,000") increase in license fee revenue, which included revenue from the PistolStar, PortalGuard acquisition that closed on June 30, 2020, and therefore, did not impact the year-ago second-quarter results.

The prior-year period was also somewhat negatively impacted by Covid-19 disruptions at the beginning of the pandemic. For the first six months of 2021, revenue increased 247% to $2.9 million from $830,000 in the first six months of 2020.

Q2 2021 gross profit increased to $753,000 from $159,000 in Q2 2020, principally reflecting an increase in higher margin license revenues, as well as an improved gross margin. Gross margin increased to 60 -- 76% in Q2 2021 as compared to 52% in Q2 2020 as license fees comprised of much larger proportion of revenue in the current year period.

For the first six months of 2021, gross profit grew 237% to $1.9 million from $557,000, primarily due to revenue growth.

Operating expenses increased 22% to $1.9 million in Q2 2021 from $1.5 million in Q2 2020, which was significantly lower than the growth in revenue. This increase in expenses is attributable to higher product development and engineering costs, as well as higher SG&A costs reflecting continued investments in sales and marketing and customer service, along with the inclusion of the PortalGuard operations in BIO-key's results.

BIO-key reported a reduced net loss available to common stockholders of $1.2 million, or $0.15 per share in Q2 2021 compared to a net loss of $1.6 million, or $0.60 per share in Q2 2020.

In the first six months of 2021, BIO-key's net loss to stockholders improved 60% to $2 million from $5.1 million during the first six months of 2021. Weighted average basic shares outstanding were approximately 7.8 million for Q2 2021 and the first six months of 2021, which compares to 2.6 million and 2.3 million for Q2 2020 and the first six months of 2020, respectively, with the increase primarily reflecting the shares issued in the company's successful fundraising in July 2020.

We ended 2021 with current assets of $17.3 million including $11.5 million of cash and cash equivalents, and no debt outstanding. This compares to current assets of $2.3 million and $2.7 million of notes payable outstanding at the end of Q2 2020, again, reflecting a July 2020 recapitalization.

We've also invested about $3.8 million in net working capital through the first six months of 2021, primarily in inventory and prepaid inventory as we prepare for the increased business volumes and manage through potential supply chain issues.

With that, we can now turn the call back to the operator for investor questions.

(Operator Instructions) Jack Vander Aarde, Maxim Group.

Great. Good morning, guys. Appreciate the quarterly update. Just a couple of questions from me. I'll start with a question for Michael on the Africa contracts in some of your comments that you mentioned in your prepared remarks.

First, can you provide -- can you revisit what you said -- restate what you said and then provide some additional color regarding your comments in terms of the change of how you are now being paid? Sounds like payments are more of a guarantee now with the World Bank and how you're being paid.

Just what has changed with that relationship exactly? I didn't quite catch that. And then, what does that mean going forward if we assume we move beyond COVID?

Yeah. Good morning, Jack, and thank you. I can add perhaps a little more color around that.

Fundamentally, what I said was that the reason -- one of the reasons, right? Obviously, there's been COVID-related issues and that kind of thing that have played with literally every country around the globe. But one of the other challenges is and has been that getting the money from the central repository down to the vendors at the street level that are actually doing the work, meaning, that are enrolling and creating the verification ecosystem has been slow.

In fact, so slow that the World Bank has stepped in and has put in place a system such that the local or national banks in Nigeria can now do equipment and service financing directly to the vendors so that they can get the process moving because only 16 million of the entire population has been enrolled to date. And there was a plan that originally said by the end of 2021, 80%-plus of the population would be enrolled in this system, which is a couple hundred million people.

So in order to remedy that and really start to get things moving, now, there is a process in place that will guarantee, for example, BIO-key is a vendor and there are other vendors, but guaranteed BIO-key payment for the products and the services that we provide directly from the bank. So vendors like BIO-key will get more aggressive in ensuring we have, for example, the inventory where we have the resources on the ground to be able to support these programs.

And then just a follow-up to that, does this mean the dynamic you are -- this chicken or the egg kind of scenario you had before in terms of like you don't want to ship hardware without being paid, does this now expedite? Or does that -- does this remove that friction altogether? And now, the only bottleneck to your hardware shipments are just the fact that the country is kind of re-closing down a bit or being more strict because of this Delta variant?

Absolutely. It absolutely means that. And compounding the financial scenario that I just described was of course, the chip shortage. So getting product has been challenging across the globe in virtually every industry and every sector within technology. But this absolutely alleviates that scenario because we'll now be more comfortable.

And as you can see, when you look at our financials, we do have a reasonable, or I'll call it sizable inventory of product ready to turn into shipment, into revenue, and obviously, into cash in the coming months. So we're in a really good position in that regard. And having the capital to be able to do that, especially at this time, was really critical for us. And I think it's going to serve us well going forward.

Great. I appreciate the color there. And then maybe just one more on the Africa contracts. In the first quarter, just looking to the 10-Qs, the first quarter, you had hardware sales over 600 -- almost $685,000. Looking at the second quarter here, well, you didn't have hardware shipments to Africa. You did generate, it looks like license fees within Africa of almost $250,000.

Is this related to -- or is this not related to [the few] contracts? Or is this tied to that initial hardware you delivered there, and this is the license revenue that's associated with that first quarter hardware deployment?

I don't believe that license revenue was associated with Africa. Ceci, maybe you could opine, but I believe that was license revenue associated with our PortalGuard business, and --

Yes.

Perhaps our biometric business as well, our international biometric business. So the Africa, for example, we have a large customer in South Africa, Capitec Bank that has purchased well over 7 million or 9 million user licenses from us for a bank verification identification -- identification or verification project. So the revenue associated with that perhaps might have been through the South African opportunity, but not the Nigerian or the Nigerian contracts that we have.

Yeah, that's exactly right.

Yeah.

Okay, great. Now, I appreciate the clarity. Just curious there. And then just switching gears, maybe a question for Fred on the Channel Alliance Program. Can you just remind me again of what you mentioned the revenue contribution was in the quarter? I think it was small, but just so I have as a baseline.

And then, if we assume you reach your target number of Channel Alliance Partners, how much revenue would you expect to generate on an annual basis? I know it's just the near-term target as well, but just -- so what was the revenue in the quarter from the Channel Alliance, and then what's your target if you had all your targets?

Yes. We said, I think it was less than $100,000, so it was close to that less than $100,000 last quarter. And we will see a growing percentage of our revenue and that will go on a ramp over the course of the remaining year and into next year.

And as we highlighted in the statements, we've recently signed on with a new distributor and are onboarding and training right now. And you'll see some information about that shortly. But that will dramatically increase the number of partners. So I don't have total handle on that yet, but that won't be a dramatic increase in the number of partners. So probably more information to come on that if that progresses.

Okay. Great. I appreciate the color there. And then just one more question for anyone, maybe Michael. In terms of the guidance, you maintained your guidance of $8 million to $12 million for the year for revenue. Just wondering, is there any more color you can provide in terms of -- it's a wide range, but just can you remind us again what factors are embedded in that guidance and why you remain confident that you are going to hit that target? What needs to happen, business as usual, or is there anything -- is there any aggressive targets taken to that? Thank you.

So I think there are three things. Fred just described the CAP program and the partner acceleration that we expect in the second half. It's always been planned for the second half. And so, we're encouraged that that's going to help us and contribute to -- significantly to our growth. That's number one.

Number two, we discussed Africa, obviously, with the guarantees and the finance flowing, which makes us feel pretty comfortable that we are going to achieve our objectives there. And then just in general, the growth and the migration to the cloud increases our ARR and increases our revenue for each installed base customer. So that's another factor that we expect to contribute to our growth.

So, all around, blended, we feel really good about growth in the second half and expect to achieve our objectives. And hey, whether we can overachieve our objectives, obviously, if things really fall into place, that may happen. But we're comfortable staying with the guidance we have right now.

Okay. Great. I appreciate the time, guys. I'm going to hop back in the queue. Thanks.

Richard Arnold, investor.

This is Richard Arnold. I appreciate the opportunity to speak to you. I'm impressed by the domestic side. My concern is totally in Africa. And I have really a three-part question. Has the $680,000 that was billed in the first quarter been paid?

Secondly, what part of the $8 million to $12 million projection -- and I understand that $8 million was in the previous conference, a breakeven point. What part of the $8 million to $12 million is dependent upon Africa?

And then thirdly, the prepaid expenses and investment went up by $3 million, which would account for the decrease in cash. What part of that was sent to Africa as well? I am concerned about Africa since that represents a big shot for the company to improve. Thanks.

Great. So let me knock down the questions one by one. The first was the payment from the first quarter shipments. That's in process right now. And again, with the change in the -- I'll call it process. Again, with the change in the payment process where the banks are going to pay us directly, we expect to see that cash very shortly. So that's the first.

The second is, you mentioned the inventory levels or cash reduction, i.e., turned into inventory levels. Obviously, a portion of that is clearly related to our Africa contract. But we're very careful not to get too far ahead of ourselves. But on the other hand, we had to take advantage of the opportunity to get the equipment with the chip shortages and the difficulty in -- that most manufacturers are having right now, we wanted to be sure that we got ahead of the curve.

The third component, or second component of that inventory position is our traditional products. We are working on some new and innovative technology that we are going to introduce in the second half. And so, there is some money associated with that development as well. So I think that addresses the inventory question.

The other question you had was around our guidance and how much of that is related to Africa. Well, if you look at the last two quarters, for example, and look at our PortalGuard business just in general at a steady state, if we didn't grow the business at all, it would represent probably about five -- and our biometric business, will probably represent about $5 million to $6 million independent of Africa.

So as you can see in our guidance, we don't have a tremendous reliance on Africa although clearly, we do see significant upside as the projects begin to roll out, because remember, there's tens of millions of dollars in opportunity there, not just millions or single-digit millions. So I hope that answers your question as well.

It does. I don't think it answers the question. If you look at the stock this morning, at least the last I saw it, it doesn't represent the confidence in what we're projecting. But I try to be confident, and I try to be positive, and I hope you do well. Thank you for answering my questions.

Thank you, Richard.

(Operator Instructions) [Dan Camus], investor.

Hi guys. It sounded like from your initial comments that the bank guarantees are not a done deal. Is that correct?

Yes, they are.

There are -- there's no other barriers you have to get over to actually get the guarantees?

There's always barriers in Africa.

So what does that mean that they're done, but there's still barriers?

No, no. I'm being a little precocious there. I mean, again, that process is in place. It's in place and ready to go. So that's the latest we have. We monitor this on -- almost on a daily basis. And that's the situation. But I'm precocious about there is always something in Africa. As Richard mentioned, the confidence in being able to deploy such a significant program is challenging.

But the funding is there. The requirement is there, especially again given that in order to really get the country, especially in Nigeria, out of the doldrums and to begin to build an ecosystem that could put people to work and can create an economy outside of the government, this is the only option. So it's a challenging business. But for those of us who -- I believe this; I very, very strongly believe this. For those of us who have invested and hang in here, there's going to be significant reward.

Okay. Can you say how much of the -- I don't know if it's $45 million or $75 million in contracts will get guaranteed?

I think it'll be iterative. So as things get deployed -- obviously, our goal is deploying all of the initial hardware to get things moving. And I think it'll be iterative over time. We're not going to get that. As I mentioned to Richard, we are not going to get too far ahead of ourselves.

We know we have to have the inventory in order to be able to immediately ship it. On the other hand, we don't want to be committing to huge amounts of product if in fact the payment is going to be there. So it's a balancing act. But the contracts are still of the magnitude that we discussed. Clearly, if they get fully deployed, it could represent near $100 million in business.

You will also see some -- as I mentioned before, you'll see some additional products that we're going to be introducing in the second half that will also have a significant impact on the revenue opportunity in Africa going forward.

Okay. Well, the last question on this. So will you at least, for 2021 or the next twelve months or something, get guarantees for the $4 million in inventory you've accumulated?

We believe so.

On the continuous biometric user authentication patent, a few years ago, there seem to be a lot of buzz about in-screen fingerprint sensors. But to my knowledge, they haven't come to fruition, I don't think. Are there issues with the technology? And are you going to be able to monetize that patent going forward tangibly?

Well, two things. In-screen fingerprint sensors, you're right. There was a very aggressive move at one point to get them embedded, in particular in mobile devices. And we haven't seen much innovation around that area recently. But the continuous biometric patent is not just associated with fingerprint scanners.

So keep in mind that continuous authentication across, perhaps facial biometric read or a behavioral biometric read can also apply to that patent. So it has a broader use and a broader perspective beyond just fingerprint scanners.

Okay. I got a question on the National Identity Management Commission. They've been putting out releases touting their increases of 10 million users in the last four months and increase of enrollment centers to 3,800 and what not. They have some -- they tout this much awaited android enrollment system is now ready for deployment. Does that have anything to do with your system? Or is that something else?

That absolutely does. We are very focused. So they are touting again up to 60 million enrollees with -- which is again only 20%, 25% of the total required enrollment over time. The centers that are set up are set up in the larger cities. Our vendors, the partners who we're working with are very, very focused on mobile enrollment.

And if you look at our Pocket10 fingerprint scanner, it's a very, very small device that does 4-4-2 scanning. And it's a device that is low power, very, very portable. And in order to get the country truly enrolled, there have to be mobile center set up and you have to actually go to the people to get them enrolled. And that's what we're very, very focused on.

So the majority of the enrollments are going to take place in a mobile venue over time, because it's going to be out in the remote areas that collecting that data and getting those people enrolled is going to be critical.

And then the verification services that are going to be provided above and beyond the initial enrollment create a whole new level of opportunity for us where -- for example, we'll be creating -- that was the whole initiative around creating 1 million new jobs within the Nigeria ecosystem for payments, payment processing, financial services. So that's where all of this comes together. It is a huge, huge opportunity.

And the end game also for us beyond providing the hardware is providing the identity management ecosystem the software and the service. Our IDaaS is perfect for remote authentication on these mobile devices. All of these mobile POS devices will have fingerprint capability, as well as cameras and barcode capability, all of those things. They'll have printers.

So that's where the real, I'll call it solid, high, high margin recurring revenue will come. And that will follow the initial equipment deployments, the enrollments, and then ultimately the verification services.

The thing I am not sure about is they were touting that -- these 60 million users each have about three to four SIM cards. And that's covers all the mobile devices in the country. So I thought they were well on their way. So I'm a little confused about, is it SIM cards or is it the actual people that they are trying to get covered or both. I'm just a little confused because it's --

Oh no, don't be. No, don't be confused. It's individuals. It's individuals. So it's citizens. That has nothing to do with SIM cards. It's individuals. It's people.

All right. That's all. And I'll go back in the queue. Let's see if anybody has got any more questions. Thank you very much.

You're welcome.

(Operator Instructions) [Frank Cilluffo, Cilluffo Associates].

Good morning, Michael, and nice to chat with you. And thank you for the up to date. I don't know if you're aware, but I've been still called gambler since 1961. You should know there is someone on the telephone call today who is trying to get the stock down to zero. You understand what I mean by that right?

I'm not so sure, but --

Well, what you should do, Michael, if you want to care for the shareholders, what you should do is call the SEC and tell them that there is someone fictitiously trying to destroy the company.

Okay. We'll certainly look into that.

(Operator Instructions) This concludes our question-and-answer session. I would like to turn the conference back over to Mike DePasquale for any closing remarks. Please go ahead, sir.

I just want to thank everyone for participating in today's call. We look forward to updating you on our third-quarter call, which will likely be in November. As always, we'll continue to provide interim news and updates in the meantime. Also, we plan to present at the Lytham Partners Fall Investor Conference, a virtual event held the first week of October. We'll put those details out when we have them.

Again, thank you all for your time today.

This conference has now concluded. Thank you for attending today's presentation. You may now disconnect.