COMSovereign Holding Corp (COMS) 2021 Q2 法說會逐字稿

Good afternoon, and welcome to the COMSovereign Holding Corp's second-quarter 2021 earnings conference call. (Operator Instructions) I would now like to turn the conference over to Steve Gersten. Please go ahead.

Thank you, operator. Good afternoon, and welcome to COMSovereign Holding Corp's 2021 second-quarter earnings call. My name is Steve Gersten, and I'm the Director of Investor Relations for COMSovereign. Joining us today is Dan Hodges, Chairman and CEO, who will provide prepared remarks, and then we will open the call up for questions.

Before we begin, I'd like to remind everyone that certain statements made during this call that are not historical facts but are forward-looking statements that reflect management's current expectations, assumptions, and estimates of future performance and economic conditions and involve risks and uncertainties that could cause actual results to differ materially from those anticipated by the statements made herein.

The forward-looking statements contained in this call are made as of the date of this call, and the company disclaims any intention or obligation other than imposed by law to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. We encourage you to review our publicly filed documents, including our SEC filings, news releases, and website for more information about the company.

With that, I'd like to turn it over the call to Dan.

Thank you, Steve. Good afternoon, everyone. Welcome to our second-quarter 2021 conference call. I'm going to run through the second-quarter financials and then move to the more relevant part of the call discussing the business more broadly and touching upon what we think are the important developments now occurring in our business.

After that, I'm going to open the call up for questions. Should you have any questions after this call or if you don't already receive our news releases and SEC filings, please contact Steve Gersten.

Looking at the second-quarter results, we can just now see the first early signs of a steady upward progress we're making in the business. This progress is the result of our initial investments to integrate our businesses and to fund increased production in early in the second quarter. It is this investment which is now showing up these past weeks in the third quarter.

Now I'm going to start with the customary overview of the quarterly financial results, and then move on, as I said, to discuss several more recent developments, including product shipment to T-Mobile and the pending closing of our acquisition of SAGUNA Networks. As for the quarterly results, for the three months ended June 30, 2021, total revenues were approximately $3,611,000, driven largely by sales at the company's Drone Aviation, DragonWave, and Sovereign Plastic business units.

Sequentially, the quarterly revenues increased more than 73% over the first quarter of 2021, reflecting the significant investments into inventory and production capacity made in the second quarter. It also includes the operations of Sky Sapience. I want to note, however, that revenue growth in the most recent quarter was impacted by several global factors, many of which we've communicated previously, and you've seen in the news, of course, these factors include the continued shortage of key components, which are end of life and tight supply chain conditions, especially related DragonWave radio production.

Additionally, during the quarter, we experienced temporary shipment delays of Fastback Radios as production and testing rank up. We're pleased to have substantially address this matter for investment and additional post-production test equipment, and as recently announced, commenced our first volume shipments of Fastback intelligent backhaul radios to T-Mobile because of this timing delay and as noted in the earnings release, revenues from these shipments were not recorded in the second quarter, lowering the topline results.

These sales as well as additional shipments will however contribute significantly to our third and fourth quarter. Gross profit for the three months ended June 30, 2021, stood at approximately $1.798 million, representing a gross margin of 50%. This is up from a gross margin of 48% reported in the year-ago period, an improvement from the 49% recorded in the first quarter of this year. This improvement was due to product mix, the contribution of services revenue, and increased manufacturing efficiencies at Sovereign Plastics.

Looking into the current quarter and the remainder of the year, we're quite confident that margins are going to continue to improve. Operating expenses in the quarter increased approximately $12,182,000 or roughly $850,000 from the levels reported in the first quarter of 2021.

This increase was expected due to the expanded size of the business, professional services, including engineering, accounting, legal, and staffing levels across the organization. Looking at our balance sheet as of June 30, 2021, the company ended the quarter with $4.9 million in cash and approximately $7.1 million invested in inventory and pre-planned production, which will be utilized for current production needs for the remainder of 2021.

So let me recap just a few of the milestones of the second quarter. We announced our intent to enter the 5G mobile edge compute cloud market with the acquisition of SAGUNA, which we anticipate closing this week. Edge compute is perhaps one of the most important technologies required for 5G. And in our view, SAGUNA is one of, if not the leading provider of this critical software.

The ability to push computing and data processing closer to the user, such as a personal IoT device in a smart city factory or power grid for an autonomous vehicle is the key for enabling new applications and reducing the latency that makes 5G such a powerful and capable pick. We are very excited by this technology and for the opportunity of working with SAGUNA's team and its growing list of impressive global partners bringing powerful new wireless network solutions to the market.

This excitement was also shared by Radisys or Radisys, as some would say, as part of our 5G partnership we announced in June. Radisys is one of the global leaders in open telecom software solutions serving public, private, and government customers around the globe. Through this partnership, Radisys is looking to integrate our Open RAN technology and SAGUNA's mobile edge computing technology into their worldwide offerings. This is going to result in current technologies being embedded in a large percentage, if not a majority of global 5G integrations. The potential impact of this on COMSovereign is very significant, and I don't think it was caught in the previous news releases.

During the second quarter, our Aerial platform business, consisting of Sky Sapience and Drone Aviation were busy supporting current customers, both domestically and internationally. Both operations were also gearing up production activities on new units and working with new partners in response to several contracting opportunities, which I'll elaborate on more in a minute.

In our radio business, we continue to invest heavily and approach productive capacity as well as raw material inventory. During the quarter, despite limitations on the availability of key components, DragonWave was able to continue shipments of its Harmony Enhanced MC units to customers.

At Fastback, ramp up activity is rapidly increasing. Thanks to the purchase and installation of additional test equipment, which is now enabling us to meet the demand we're seeing, including the recent Tier 1 delivery announced this morning. Also during the second quarter, Fastback was selected to support the city of Ann Arbor, Michigan as part of a combined wireless data link solution with several partners to enhance the performance and reliability of an existing smart city infrastructure.

With VNC, we announced the 5G Cooperative Research and Development Agreement or CRADA with the National Institute of Standards and Technology. As noted previously, this milestone is both an honor and a privilege as it provides us with unique opportunity to have our 5G technology evaluated and tested by the standard-setting body of the US government.

In June, VNC also took part in PATRIOT 2021, the National Guard emergency response preparation exercise. And we did so with our partner, Hughes and their SatCell Connect solution, which was recently highlighted in a published report by Huges that we shared with investors.

At this point, I'd like to turn your attention to some recent business updates, which provide a brief glimpse into the many activities underway at COMSovereign. The first thing I want to point out is that internally we have efficiently reorganized our corporate structure to better align the ops of our business in the three strategic unites: global telecom, Sky Sovereign, and power system.

So, let's go in that order. In our global telecom unit representing our collective radio and software divisions, including DragonWave, Fastback, VNC, RF Engineering, and the pending acquisition of SAGUNA. Some highlights include Fastback, as noted in our deliveries today. We've resumed volume production after addressing several challenges, including continued disruption of supply chains, limited availability of key components, including chips and printed circuit boards.

The delivery of the first 8.7 million end product to T-Mobile through the remainder of our year was only made possible because of the early commitment to sourcing of our aggressive investment in purchasing all of the key components you needed to make those [line] kits. In effect, we have pre-purchased what we knew we were going to have trouble obtaining later on this year. By securing that, we sell these line kits consisting of two radios and related cabling and non-accessories to our customers as they require replacements or upgrades to the networks.

Traditionally, these orders have flowed to us in a consistent and often predictable manner. This is why, as we've said in the past, we will sell what we produce as quick as we reproduce it. In Fastback's case alone, beyond the initial fulfillment of kits to the Tier-1 customer as we stand here today, we now know we have enough material on hand and increasing capacity to produce nearly 40 million in kits for delivery over the next 8 to 10 months.

We will need the supply and more to meet the demand we expect from our existing clients as well as from other Tier-1 customers, who've just recently purchased Fastback radios and are actively testing them in their networks prior to issuing POs. Ultimately, we believe that our present capability to produce and ship product will positively influence the size and pace of future orders.

At DragonWave, we're continuing to support customers with radios, as we discussed previously, increased production on the Harmony Enhanced model is constrained by end-of-life status on key components. However, we expect demand for DragonWave radios to remain high and to quickly solve the existing inventory and all of the Harmony multichannel radio gear we can produce.

This component end-of-life situation added to new technology enhancements from our engineering team are the reasons behind our decision to transition our customer base to the new Polaris product that we announced earlier this year. We are moving ahead speedily, as expected, with the final development of Polaris Gen 1 and the production and sale of these new units should occur in the fourth quarter.

Our expectation here is to have significant revenue contributions from Polaris Gen 1 in the first half of 2022. But to be clear, our goal is to have these already in the commercial networks this fiscal year. As noted, late last month, COMSovereign established a strategic partnership with George Mason University for ongoing 5G and above research. This looks like the development of 5G applications such as connected transport and smart infrastructure across both government and commercial sectors.

Academic partnerships such as this are very important in the development and commercialization of 5G technology and systems. It is one area we have always been very active in and are committed to. To that end, we are working on several other programs like this with other universities, which we will announce as soon as we are permitted to.

At RF engineering, we have been busy with multiple new product development activities, highlighted by the launch of the industry's first universal license microwave radio antenna serving 6-gig to 42-gig bands. This innovation solution supports over 10 different proprietary radio and interfaces, and for the first time in the industry, removes a major issue facing network operators by delivering a true plug-and-play experience.

Response for this product is already high from the existing base of customers. RFE is also about to launch its first IPTV set-top box targeted at content owners as well as communication service providers, who can now in partnership with leading streaming services launch their own branded devices. We expect to issue material news on that front throughout the remainder of 2021.

And the second major business unit, we call Sky Sovereign, representing our drone-based aerial platform business and the operations of RVision. Drone aviation recently completed a new command and control software integration as part of a communications program, working with the prime contractor for the US State Department and its agencies.

The team has also been working for support increased interest and activity from our customer on the southern border of the United States through a series of new flight training and operations efforts in Arizona, as well as recently completed flight demonstration in Jacksonville. Based on current activities and inquiries, we believe we will see new contracts in this business being executed well before the end of the calendar year.

At Sky Sapience this quarter, the team has been very busy with contracts and deliveries for new and existing customers globally. Last month, Sky Sapience also beginning final component testing of HoverMast lights, designed specifically for commercial and government customers here in the US. As I mentioned during my remarks at the annual shareholders meeting last month, the HoverMast light program is already benefiting from our vertically integrated supply chain.

For production of new plastic injection molded and metal [stand] parts are being produced in-house by our Sovereign Plastic unit. This significantly accelerated our time to market and reducing cost, becoming a clear competitive advantage for us, just like we thought it would. Our vision has been focused on converting legacy SD analog [cameras] to HD, a critical need as it moves its ruggedized government portfolio into the commercial market sector as well.

Testing is wrapping up now on Phase 1 and the unit expects to bring the first product currently online in September, while shipping current product to its existing customer base. This first phase applies to the Mini HP family of products and is already scheduled for an evaluation period with RVision integrator that is embedded with several law enforcement and first-responder entities in the southeastern United States. Phase 2 has been initiated, and it's focused on its dual training family of products known as the Dual HP and Carbide 16.

In our final business unit, power systems, represented by InduraPower and Sovereign Plastics, external demand for Sovereign Plastics' services is increasing as a myriad of manufacturers are looking for domestic suppliers for plastic injection molding and metal stand component. We expect revenues there to exceed $2.5 million for the second half of the year, rendering a projected 45% increase over last year's revenues.

At InduraPower, we are currently finishing development of two additional battery models, while manufacturing the 120 series model and working with an autonomous vehicle manufacturer to develop a custom-made power and battery pack based on our 31T model battery platform. We'll announce developments there when that customer is ready.

And finally, I want to briefly mention some of the exciting developments occurring in the R&D and technology development efforts. Lextrum has completed the initial over-the-air testing of its in-band full duplex technology and results of that confirm our hopes this technology roughly doubles the efficiency of wireless signals, and we are integrating it into our final Polaris line products.

Innovation Digital entered into a development demonstration contract with a major US government prime contractor for the customization testing and demonstration of three of its patented digital signal processing algorithms. It has also advanced a strategic alliance with a soon-to-be-named partner for beyond state-of-the-art wideband transceiver products with new architectures that enhance the capability of software-defined radios.

The significant -- It significantly simplifies future radio hardware designs, increases reliability, and improves performance. Innovation Digital was also recently granted its 18th US patent on these groundbreaking signal technologies.

V-E-O, our silicon photonics operation, has recently invented and patented a novel silicon-germanium photodiode for photonics receiver platforms. This invention's features are greater than two times optical power handling capability and reduce size for dramatic speed improvement. This is an ideal candidate for optical transceivers that require speed and linearity enhancements.

V-E-O also developed and patented a novel dielectric modulator, which dramatically outperforms existing (inaudible) phase modulators. In concert, this pair of inventions offers a leapfrog opportunity for silicon photonics in the future optical communication arena. We have completed our first chip tape-out with our Foundry partner and expect the second tape-out to complete next month. Similar to my reference to our Radisys' venture earlier, the deal brings us another significant and disruptive opportunity in the future communications market.

Finally, under the direction of Dr. Scott Velazquez, our new Chief Research Officer, we recently completed our first intellectual property audit. The results of this preliminary audit confirmed that collectively, we have 176 patents in total, including 140 issued, 32 pending, and 2 provisional. We've begun to actively leverage a significant IP portfolio to further differentiate our products in the market and ensure we maximize our value and revenue for the benefit of our shareholders.

At this point, I'd like to open for any questions. Operator?

(Operator Instructions) Jamie Halegoua, Delaware Street Capital.

Hi, Dan. I was wondering if you could give shareholders any additional color about the significance of the Fastback views today. I'm wondering what it means for T-Mobile, but more importantly, the read through for any potential Tier 1 customer that (inaudible) standard testing (inaudible).

Thanks, Jamie. Today's shipment news is tremendously important for us as a company and for our radio brands, including Fastback -- not just Fastback. In these, we've addressed the key issues which have delayed us thus far from getting product to the customers, including Tier 1 offers such as T-Mobile and many other regional operators.

As noted in the PR, we started to fill the initial 8.7 million, and we're going to complete that through the remainder of Q3 and into Q4 as we ramp up production. And I would like to point out these 8.7 million orders, not a one-time purchase as we expect additional orders from the Tier 1 customer.

Furthermore, nearly $40 million in revenue for just the Fastback IBRs, that we believe will flow over the next eight-plus months to other Tier ones, regional operators based on what we have on hand today for re-finalizing ways to increase that number significantly as well. This is going to be critical as we're working with other customers, both Tier ones, regional operators, and WISPs, which is wireless Internet service providers, who are not only testing the radios now, but have made indications of intent to order both here in the States and foreign.

Resuming volume production was an important signal both new and existing customers; delivery is even better. And that's what's underway. I should make it clear though, none of this includes revenue from DragonWave or VNC or from the addition of Polaris, all which will contribute significantly to radio revenue in the fourth quarter and beyond. I hope that answers that.

Yeah, thank you.

Theodore O'Neill, Litchfield Hills Research.

Thanks very much. Dan, the number of companies we cover having the same kind of issues in terms of delays in getting product delivered and building inventories, which I think you mentioned in your prepared remarks. Are you doing the similar thing to prevent this from happening as you come up with other product like the Polaris?

That's a great question. Thanks, Theodore. The -- there's two important things to remember. There are parts that you just cannot get anymore, no matter what the value. And there are other parts such as ones that we had for Enhanced, which were $0.80 at the time, which are now come for $7. You obviously cannot make money if you do that.

We're in business to make money, not just produce revenue. We want to make money off of it. So that's why Enhanced has been, as we say, tracking ahead and the G-1 is taking over. The G-1 has -- they're new components and are able to be procured easily and cheaply.

The second thing I'll tell you is, like the Fastback lines, we knew that was coming, so we were so anxious to get the offerings completed in January, February, and buy as much of those components as we could immediately because we knew the shortage was underway and the price is going to go up. So that's why we're excited.

When you think of cost of goods sold, and you go, wow, this is -- [comes as actually never thought]. We've got their cost of goods sold down here covered in the first and second quarters. So somebody will realize that that this $40 million that we have the ability to sell now will comes with hardly any increased cost of goods sold because we already have the components. That's an important issue to understand.

At Fastback, we do run out of those components. We are already presently not reinventing per se but putting the features with the Fastback Radio into the Polaris Gen-2 line, which will supplant and obviate the current designs of Fastback. So I hope that answers your question.

It does. Did these also comment on whether or not you had to pay extra to expedite shipping of Fastback to your customers?

Not so much that. No, you know that the current Tier 1 customer, which we let slip is -- and they actually pick it up. So it's FOB your location like (inaudible). So, that's nice. The added expense that we had was very minor, and that was as we changed from, what we call, paraboards to circuit boards before you attach all the components. Those had to be shifted from one source to another source. That slightly elevated the, but you're talking a few dollars. Other than that, we had our components agreed to on-purchase price and sitting in an escrow, if you will, while we're waiting on the offering to close. So, that's case.

Okay, thanks very much.

[Lee Harper], [Hermac].

Thanks for taking the question. I think you answered part of this, but during the global shortage with your key components, how do you think this is going to affect your revenue in the third and fourth quarters? And what would affect one unit more than the others?

Well, like so many other telecoms, just pick one. Component shortages are certainly a factor in our business. The other telecoms are having, I would say, not just as much but a worse time than we had because we planned a little better. But we expect the Polaris production, it's going to commence in quarter four with initial product for sale before the end of the year.

That's said, we've been fortunate enough to secure the component inventory, as I mentioned before, to produce themselves many Fastback units as manufacturing line could crank out between now and when they're replaced. In other parts of the business such as Sky Sovereign, we are capping our global network like Sky Sapience in Israel, RVision here in the US. We found supplies needed for these near-term system orders.

And to be clear, this is an issue that's ongoing, and we're focused on nearly every day and are getting out in front of. So the revenues in the third and fourth quarters for the Fastback line, you'll see a reduced cost of goods sold because we've already (inaudible). And you're going to see, I believe, a pretty big jump fourth quarter even with the Polaris Gen 1 line coming up aboard.

Okay, thanks.

David Lavigne, Trickle Research.

Hi, Dan. I have a little more conceptual question here. I'm sure you're looking at all the acquisitions and the brainpower, I guess, that all of those represent, which I think is indicative in the IT portfolio in the audit you referenced. And so I'm wondering, if I look at the acquisitions and I think about some of these people being, I think, at least somewhat entrepreneurial in nature.

And just kind of wondering how the integration of all of those people and personalities is going. And maybe then, just how important is the integration of that collective brain power to create synergies to the future of the company in terms of new products and new developments, some of those sorts of things.

Very interesting. I'm glad you picked up on that. I can say very succinctly, and that is a thing of beauty to watch when you have so many Type A personalities, you typically will have some conflict, a little struggle, if you will, here and there. No, I'm not saying we're not without that occasionally, but the vast majority of time and in nearly all cases, each of the individuals brought aboard have blended (inaudible) seamlessly.

And we bring in Dr. Scott Velazquez, (inaudible). He is the pioneer in digital pre-distortion and those types of technologies. Four advanced degrees out of MIT, you think there'd be a struggle there, but there's not. He stitched in work, I would say, a [pay cash] and the shovel just as hard as everybody else. And we've seen some great things coming out of it.

We're just so excited with this Radisys coming up in the mobile edge compute [is] technologies. One, we haven't even mentioned, the [tandem] technology combined with Innovation Digital's digital pre-distortion is going to just blow the sock off of the markets when they get wind of it, so all of these individuals have merged in help make a greater than the sum of its parts by far.

Great, thank you. from there.

[Larry Holub], [Holub Family Office].

Hi, Dan. Operating expenses jumped very high in second quarter and the company's current cash position relative to the cash burn is conserved. So how should we think about OpEx in the second half of 2021? And will the company have to raise additional capital, either equity or debt in the near term?

That's a great -- another great question. You guys are full in the day, and I would be lying, if I say that doesn't concern me as well. However, we believe clearly more expenses in the quarter related to our acquisitions and production ramp-up activities, as I mentioned, acquisition of the components.

So our costs are expected to grow, obviously in line with expanding operations in manufacturing and sales. We don't expect the pace of expense growth to continue, and that's witnessed by gross margin. Even as we have a loss for the quarter, the gross margins are still better, so expense is up [830] from the first quarter, yet up 73% from the first quarter in overall revenues. So we're actively working on our integration activities, which will positively impact cost for achieving economies of scales and process improvements.

It's also worth noting, as mentioned in our earnings PR, gross margins now stand at [50] as I said. We believe they'll continue to improve into 2022, driven by further sales of Fastback Radios with that lower cost of goods sold, sales of aerial platforms, and two new products being introduced by RF Engineering.

Now in terms of the cash and the need for more capital to fund production, as I've said before, our goal is not to issue equity at what we believe are very depressed levels here. In addition to converting our sizable investments of inventory and the revenue for continuing selectively explore financing options, such as that some lines of credit, which were proven provide the liquidity we need as revenues continue to grow.

[Michael Shaw], [Shaw Capital].

Good afternoon. I know that two of your analysts on this call but let me ask you a question. They currently have revenue targets of up to $56 million for 2021, are you comfortable with these estimates?

Thanks for that. We expect large growth driven both organically through new contracts and increased production across each of the business units. And we have a contribution of our newly acquired businesses coming online like RF Engineering and SAGUNA. And I'll repeat what I said at the end of my remarks right now, there are two comp analysts on the street with our own expectations. Based upon where we sit today, we have comfort in our ability to meet their annual targets. And I hope that answers that for you.

Thank you.

[Darren Shryger], Private Investor.

Yeah, thanks for taking my question. My question kind of centers around, in a short span of time, you announced the acquisition of SAGUNA network followed not long after by the partnership or the enhancement of the partnership with Radisys. Now you kind of touched on this a little bit earlier, but I just want to get any additional color you can provide regarding what this means to the strategic nature of what you're building here and how it could maybe set you up apart in the market, based on what those two things bring with mobile edge compute and so forth?

Thanks for that, genuinely. SAGUNA is a very exciting software technology. Mobile edge compute is a critical enabler for 5G. Even the largest telecoms right now are beginning to choose their partners now in this because too many are too late to the game to create internally. What mobile edge compute provides is bringing that compute power of 5G is up to the front edge and nearer to the user. And if you don't do that, you're not going to be able to reduce the latencies of 5G.

The acquisition for us has taken longer than expected as we navigate requirements of the Israeli law on acquisitions. But we do expect that to close this week, and we'll make that announcement. Our engineering and marketing teams have already begun working closely on a number of projects, including technology integration and feature development. Even our closing new business opportunities with some very large players in the market. And again, more details on this will be forthcoming as are warranted in [wise]. I hope that sufficiently answers your question.

Yeah. Just to confirm, you -- I believe you had an existing relationship with Radisys, but then the SAGUNA acquisition may have really opened their eyes potentially to wanting to have a more enhanced partnership. Would that be a fair way to say it?

Yeah. Radisys is -- it's been better than two-thirds of the world's 5G integration efforts right now. It's software stack. And they really like our O-RAN capability, and we're working with them to embed that. But mobile edge compute, something they have been wanting to locate and have been researching. And we actually went to them first and said, hey, we have this opportunity, do you have mobile edge compute? And they said, no, and if you find it, please let us know.

So we did more research and discovered -- I mean, frankly, SAGUNA is the backbone, if you will, of the fastest 5G deployment in the world right now in [Chungju], South Korea. So to us, the top player -- I mentioned earlier as one of the top, we believe it is (inaudible) and embedded back if it's going into the majority of the world's 5G coms will be. That is significant, and I hope people can dribble through that.

Great. Thanks for the color. I appreciate that.

This concludes our question-and-answer session. I would like to turn the conference back over to Dan Hodges for any closing remarks.

Thank you. This has, obviously, gone on 37 minutes. So I apologize, but I'd like to, as it's customary, conclude today's call with just a few remarks.

First, on behalf of the entire COMSovereign team, I'd love to welcome Mariam Sorond as the latest addition to our already impressive and accomplished advisory board. And for those who don't know Mariam, she is currently the Chief Research and Development Officer and Senior Vice President of CableLabs, the premier not-for-profit innovation, research, and development lab, which has cable and mobile network operators.

Her background is impressive and includes working with DISH, where she led the R&D effort for their innovative 5G network and positions at Nextel, ICO, PrimeCo, and Lucent Technologies, which is now Nokia. And we look forward to Mariam's valuable input and support as we continue to advance COM's strategic growth plans.

Second-quarter headwinds created by chip shortages and longer-than-ideal supply chains for select components, we do believe, as I think we've demonstrated today, we're very well-positioned and poised to execute, and in fact, are executing on the aggressive growth plans we've articulated publicly over the past six months. We remained very disciplined and focused on these challenges and are working each day to ensure we're executing as efficiently and effectively as possible.

As an example, this aggressive investment in the parts and production capability this year has proven to be a critical enabler of our ability to now manufacture and sell radios to these customers such as T-Mobile and couple of the other Tier ones, which we announced this morning and we'll be announcing in the near future as well.

Third, recently, research coverage of COMSovereign was published by two independent non-paid analysts, Litchfield Hills and Trickle; we've heard from both today. Thank you for logging in, you two. These reports -- they will provide a good look into the business, and I encourage you to read them. It will show the large opportunities where we are uniquely positioned to capitalize on.

And although, we can't comment specifically on the various financial models, nor expectations of the analysts, we do have comfort in our ability to meet their annual targets. We've been told that additional analyst reports are in the process, and we'll communicate information on those as soon as they made available.

And a final message, I'd like to leave you with this. The world's very early in the 5G revolution. This opportunity is already expanding for the most innovative and capable providers, especially those US-based ones like COMSovereign. In the past, we talked about the strategic importance of Made in America to both domestic and global operators of public and private networks. This effort is taking on even greater urgency now, thanks to new spending proposals for infrastructure, rural access, and federal purchasing. And based on what's underway here, we believe we're well-positioned to capture a decent portion of that enormous opportunity.

It's through the combination of these talented teams, Board of Directors, and advisors, and the commitment of investors, they are allowing us to deliver on these opportunities. While we are addressing a number of global challenges, we know the investments made over the past six months were the right ones. As evidenced from the announcement, the volume shipments and capabilities have led to our ability to produce an extra $40 million worth of cashback and closing back on radios alone over the next 8 to 10 months, in addition to our other regular radio line products.

It's a testament to the ability to adapt to these challenged, and we believe this development is credible proof. We can deliver against high expectations, which that for ourselves. I'd like to thank everyone and especially (inaudible) for joining us today. Have a great week.

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.