LightPath Technologies Inc (LPTH) 2023 Q2 法說會逐字稿

Good afternoon, and welcome to the Lightpath Technologies fiscal second-quarter 2023 financial results conference call. (Operator Instructions) Please also note today's event is being recorded. I would now like to turn the conference over to Albert Miranda, Chief Financial Officer. Please go ahead.

Thank you. Good afternoon, everyone. Before we get started, I'd like to remind you that during the course of this conference call, the company will be making a number of forward-looking statements that are based on current expectations, involve various risks and uncertainties, as discussed in its periodic SEC filings. Although the company believes that the assumptions underlying these statements are reasonable, any of them can be proven to be inaccurate and there can be no assurances that the projected results would be realized.

In addition, references may be made to certain financial measures that are not in accordance with generally accepted accounting principles, or GAAP. We refer to these as non-GAAP financial measures. Please refer to our SEC report and certain of our press releases, which include reconciliations of non-GAAP financial measures that we utilize with the related GAAP financial measures and associated disclaimers.

Sam will begin today's call with an overview of the business and recent developments for the company. I will then review financial results for the quarter. Following our prepared remarks, there will be a formal question-and-answer session. I would now like to turn the conference over to Sam Rubin, LightPath's President and Chief Executive Officer.

Thank you, Al. Good afternoon to everyone, and welcome to Lightpath Technologies' fiscal 2023 second-quarter financial results conference call. Our financial results' press release was issued after the market close today and posted on our corporate website.

The second fiscal quarter of 2023 proved to be eventful for Lightpath Technologies. In prior quarterly calls, we have touched on the fact that LightPath is evolving from a component manufacturer to a complete solutions provider. Evidence of this evolution sprouted up throughout the quarter. They will spend a large part of our time today discussing these important events.

Additionally, I will discuss what we see as our three pillars of growth going forward: the solutions business, defense business, and the new high-volume applications for infrared imaging.

Starting with the first pillar of growth, the solutions business. The most important item I'd like to discuss here is our company's first ever new system level product, Mantis. Mantis is an advanced infrared camera that allows the users to record images across both midwave and long wave infrared spectrum, and without the need for cryogenic cooling. This camera is significant for LightPath, and that it is the first stand-alone finished product LightPath has produced in many years, and it serves as a proof statement for our capabilities.

I want to delve deeper into the significance of Mantis. Our plan to evolve into a solutions provider depends on Lightpath's explained two key capabilities: value-added system development and proprietary differentiators, such as, in this case, our Black Diamond glass. With proprietary differentiators, we can design and deliver solutions that are better than otherwise available, while at the same time, capture more of the value created versus only producing its components.

Developing Mantis puts our capabilities on display. The production of this unique camera represents a leap forward from manufacturing individual components to producing stand-alone systems. Design wise, our Black Diamond glasses are what enable the ability of the camera to image across that entire range, that is 2 micrometers to 12 micrometers for midwave and long wave bands without the need to refocus the camera when imaging different bands.

For the user, this means that instead of having two separate cameras, and focusing and pointing each camera separately, they can now do this with one camera, not only reducing the upfront costs substantially, but also improving significantly the operation and total cost of ownership. This also means we can now use existing technologies that have an uncooled microbolometer and deliver a camera system that can also image in the midwave without the expensive cooling mechanisms that today are needed for the existing midwave camera technology. We expect this in turn to open up new markets and applications, which until now, found midwave imaging to be cost prohibitive.

We are already working with customers on specific opportunities in defense, industrial, and safety application -- safety institutes. The optical performance of this camera across such a wide range of wavelengths cannot be achieved with traditional crystalline optics. It is really enabled by the unique properties of our materials. Chief among those, or chief among them are the ones licensed exclusively from Naval Research Lab. Besides the technical advancements visible in the camera, the camera also provides customers with a vision of the value Lightpath can bring to any partnership by providing complete solutions.

Additionally, during the last quarter, we also announced other exciting developments on the product front related to our second pillar of growth. That is the defense business. Our BD6 glass was qualified by the European Space Agency for use in space, placing BD6 and Lightpath at the forefront of optics in extreme conditions. This project will specifically initiated by European Space Agency to develop and qualify an alternative, specifically to germanium, for use in space.

Our BD6 glass was tested side by side with germanium to show and prove that it would send the exact same conditions and performs at least as well as germanium. Having been an advocate for the need to -- and potential to replace germanium with materials like ours, we are happy to see customers not only driving towards that direction, but also willing to finance the efforts needed for their applications.

Substituting the BD6 for germanium continues to be a primary focus of LightPath and other stakeholders in the industry, and in particular, in the defense and aerospace industries. The growing awareness amongst the DoD and other government agencies for germaniums, potential supply chain issues or liabilities is beginning to fuel demand to get more of our BD6 materials qualified and designed into systems.

We can [face] being that last quarter we announced that Lightpath reached a backlog of $31 million in mid-December, our highest backlog in many years, which beat our previous high watermark of $24 million set last August. Much of the growth for this backlog is driven by new defense contracts for which our products are being qualified and for which we received associated orders. With those contracts, we are beginning to see BD6 take center stage, while germanium, is in some cases, being phased out completely or avoided.

One of those recent awards represents a new program, which is one of the several new products we have been discussing in recent quarterly calls. This program is anticipated to become a new 10% customer for us over the next few years. And while backlog fluctuates over time, we do believe that they are a reliable indicator of future revenue. At the end of the quarter, our backlog remained at historically high level for quarter end of $29 million. As mentioned on several recent occasions, the backlog is skewed more towards defense and commercial customers in the US and Europe than it has ever been.

Additionally, around 20% of the backlog remains comprised of solutions-oriented orders, which is significant. We see both those developments being solution mix in the backlog and the European-US dominance of the backlog as positive indicators that our strategy is working. This strategy focusing more on value-added solutions and less on components also naturally leads us further away from the commoditized components that had historically driven our sales in Asia.

Regarding our third pillar of growth, new high-volume applications for infrared imaging. We're beginning to see a potential of new significant implementations for thermal imaging in the commercial world. More specifically, we're working with several companies in the automotive space to explore adding thermal imaging to their automatic braking systems in new cars.

The Institute for Highway Safety published a report that includes that automatic braking systems are four times less effective at night compared to daytime. One solution for this problem, which we're seeing as potentially being implemented is adding a thermal camera as another sensor input to the automatic braking system. This implementation, while far less sophisticated than some of the LiDAR solutions out there, is also far less risky and much simpler and lower cost for the automotive companies to implement.

To date, we have been in various phases with four different automotive customers, with one of the assemblies having passed field qualification with one customer. The potential average sales price we are seeing for those assemblies varies between $20 to $50 a unit, depending on how much of a camera solution we are providing. As the automotive implementations takes time and there is always some inherent uncertainty, we believe that such new implementations and applications could act as our third pillar of growth for the next few years.

Lastly but certainly not least, after the quarter end, and to support this growth that we are beginning to experience, we raised a gross of $10 million in a secondary common stock offering. Among other things, this additional capital will be used to expand our manufacturing capabilities and significant increase in production capacity, in particular in the US and Latvia.

One of the largest impediments to our ability to fulfill larger orders was limited production capacity, in particular, in the defense business. We believe that the investment in our Orlando facility and our facility in Latvia will drive higher order volumes. We also intend to use a portion of the funds to pay down and restructure our debt, further strengthening our financial standing and reducing our quarterly debt repayments and interest expense.

Before ending, I'd like to thank our employees and stakeholders who have continued to work diligently through the various transitions and hurdles we have endured. We see a bright future and a growing company because of their dedication and hard work.

I will now turn the call over back to our CFO, Al Miranda, to review our first-quarter financial results. Al?

Thank you, Sam. I'd like to remind everyone that much of the information we're discussing during this call is also included in our press release issued earlier today and in the 10-Q. I encourage you to visit our website at lightpath.com to access these documents. I will discuss some of the primary financial performance metrics and provide additional color on them to better assist investors.

On a consolidated basis, revenues for fiscal second quarter were $8.5 million compared to $9.2 million in the year-ago period. Sales of infrared products were $4 million or 47% of the company's consolidated revenue on the second quarter. Revenue from precision molded optics or PMO products were $3.9 million or 46% of consolidated revenue. And revenue from specialty products was $0.6 million or 7% of total company revenue.

Revenue generated by infrared products was approximately $4 million in the second quarter of fiscal 2023 compared to approximately $5.1 million in the same period of the prior fiscal year. The decrease in infrared product sales are due largely to timing issues related to our renewed large annual contract.

Sales from PMO product was $3.9 million compared to $3.8 million in the same period of the prior fiscal year. The increase in revenue is primarily attributed to increased sales in defense, industrial, and medical customers, somewhat offset by decreased sales to telecommunication customers.

Sales from specialty products was $0.6 million compared to $0.5 million (sic - see press release, "$0.4 million") in the same period of the prior fiscal year. The increase was primarily driven by increased demand for collimator assemblies.

Gross margin in the second quarter of fiscal 2023 was approximately $3.2 million, an increase of 15% as compared to approximately $2.8 million in the same period of the prior fiscal year. Total cost of sales was approximately $5.2 million for the second quarter of fiscal 2023 compared to approximately $6.4 million the same period of the prior fiscal year.

Gross margin as a percentage of revenue was 38% for the second quarter of fiscal 2023 compared to 30% for the same period of the prior fiscal year. The increase in gross margin as a percentage of revenue is partially due to mix of products sold in each respective period. PMO products, which typically have higher margins than infrared, comprised 46% of revenue for the second quarter of fiscal 2023 as compared to 41% of the revenue for second quarter of fiscal 2022.

In addition, within our infrared product group, sales for the second quarter of fiscal 2023 were more heavily weighted toward molded infrared products than in the same quarter of the prior fiscal year. Molded infrared products typically have higher margins than non-molded infrared products.

SG&A costs were approximately $3 million for the second quarter of fiscal 2023, an increase of approximately $84,000, or 3% as compared to approximately $2.9 million in the same period of the prior fiscal year. The increase in SG&A costs is primarily due to an increase in stock compensation, partially due to director retirements that occurred during the quarter, as well as increases in other personnel-related costs.

SG&A cost for the second quarter of fiscal 2023 also included approximately $45,000 in fees paid to BankUnited associated with our term loan. These increases are partially offset by decreased fees and taxes associated with our Chinese subsidiaries.

Net loss for the second quarter of fiscal 2023 was approximately $694,000, or $0.03 basic and diluted loss per share, compared to $1.1 million, or $0.04 basic and diluted loss per share for the same quarter of the prior fiscal year. The decrease in net loss for the second quarter of fiscal 2023 as compared to the same period of the prior fiscal year was primarily attributable to higher gross margin despite the decrease in revenue.

We believe EBITDA, a non-GAAP financial measure, is helpful for investors to better understand our underlying business operations. Our EBITDA for the quarter ended December 31, 2022 was approximately $207,000 compared to a loss of $41,000 the same period of the prior fiscal year. The increase in EBITDA in the second quarter of fiscal 2023 was again, primarily attributable to higher gross margin.

As of December 31, 2022, we had working capital of approximately $9.6 million and total cash and cash equivalents of approximately $3.8 million, of which greater than 50% of our cash and cash equivalents was held by our foreign subsidiaries.

Cash used in operations was approximately $752,000 for the second quarter of fiscal 2023 compared to approximately $157,000 for the same period of the prior fiscal year. Cash used in operations for the first half of fiscal 2023 are largely driven by a decrease in accounts payable and accrued liabilities, including the payment of severance related to the previously disclosed employee terminations that occurred at our Chinese subsidiaries, for which that liability had been accrued in June of 2021.

The increase in backlog during the first half of fiscal 2023 -- excuse me, was primarily due to several large orders, majority of orders received from customers in the US and Europe for several long-term projects, which we are currently working on. Shipments on these large orders will begin the next quarter in the following 12 to 18 months.

Going forward, we're cautiously optimistic about a recession over the next six to nine months in Europe and the US. China is clearly in a recession, but there have been some recent signs that recovery may occur in that market sooner than expected. Our cautious optimism doesn't mean that we will work to continue to keep costs down, continue to look for more opportunities to improve production efficiencies.

We did achieve 38% gross margin in Q2. I want to caution everyone not to extrapolate that forward. We felt in advance that Q2 had the right mix to create a good level of margin. In Q3 and Q4, we will start delivering on existing higher volume contracts with favorable pricing to customers. At the same time, we will ship new products under contract with more value added and consequently better margins. The mix, while positive in dollars, would want to result in lower gross margins as a percentage.

With this review, our financial highlights and recent developments concluded. I'll now turn the call over to the operator to begin the question-and-answer session.

(Operator Instructions) Scott Buck, H.C. Wainwright.

Hi. Good afternoon, guys. Thank you for taking my questions. First one, Sam and Al, I was wondering if you could put some dollar figure around what that China headwind is maybe versus a year ago. And how much of that business do you think you can reasonably expect to earn back over time?

Yeah. I don't know if I would call it headwind, Scott. I think the expectation is that the -- it's my expectation that they've hit bottom, right? That was not clear, let's say, three months ago. But the opening up from COVID looks like it's having a positive effect, particularly in the service sector of the economy and definitely in the consumer purchasing. Eventually, that will have to trickle down to the rest of the manufacturing supply chain, right?

So we're still cautiously optimistic in terms -- we're cautiously pessimistic in terms of casting our revenue and earnings out of that organization. But I do think it might not be as long as we thought it would be.

But we don't believe it will go back to the levels it was two, three years ago. That's still going to be significantly lower than, I'd say, 2020 or so.

Right. Okay. That's helpful. And then, Sam, I'm curious, is there anything on the acquisition front that could help accelerate some of the scaling into whether it's defense or some other piece of business that might make sense for you guys?

Yeah. I think, currently we're more focused on expanding capacity and growing. We're seeing great signs of growth. We're even seeing customers saying they would give us more work of some existing projects if we would add capacity. Historically, the company relied a lot on capacity in China. Now, with defense work, we need to shift capacity, or setup different type of capacity in the US and Europe. Europe, getting its own defense license for our Latvia facility, which we believe will bring more growth.

I think that as we progress on the engineered solutions and products like Mantis, so great examples and reference designs for that, we would be looking to add technologies and continue to focus on differentiating technologies to supplement that.

Great. That's helpful. And then last one for me. I'm just curious on your US and European manufacturing facilities. What is the timeline on getting some of this work done to ease any kind of capacity constraints?

Yeah. So I'll start with the review because that's the easier one. If you recall, about two years ago, we made a pretty significant investment in our European facility to add optical coating, and that will set up in a way that -- so we really staged it toward adding more capacity easily later. And now, with the monies that we raised, we're starting to do that. Some equipment is pretty fast right now very surprisingly, and we can get some pieces of equipment in matter of weeks, some are a matter of half a year, some are still a matter of 12-month fleet time. So in Latvia, it's purely equipment.

In Orlando, we've been already renovating and expanding our facility. As a reminder, we've signed actually a lease for the expansion. Just haven't started using that space yet. Last week, we finished moving the optical coating into that space. Here in Orlando, it was in a separate building. That will streamline our operations significantly. And we're now going to start also investing in more equipment and capacity in Orlando. And lead times vary considerably, but I'd say, to be safe, they would be typically six to 12 months on adding capacity.

Great. That's helpful, Sam. Thanks for the additional color, guys.

Absolutely. Thank you, Scott.

Thanks, Scott.

Gene Inger, ingerletter.com.

Hi, Sam and Al. I thank you both for your leadership and the tough effort, which is ongoing in turning the company around. I'm just curious about a couple of things. I agree the headwinds from China, by the way, are probably turning into tailwinds. But I don't know --

We lost Gene. Was the call [called], or we just lost Gene's?

It appears we only lost Gene. (Operator Instructions) Aaron Martin, AIGH Investment Partners.

Hi, guys. Sam, I think you mentioned four different automotive customers that you're engaged with on the advanced automatic braking system with. Can you give a little more color around that process, or where you are with the different automotive customers?

Yeah, absolutely. I'd say that all of this fairly fresh. We have some of the customers but moving surprisingly fast compared to the automotive industry. We have one customer that has already field tested our system extensively. We've been working for, say, 1.5 years, maybe even close to two years.

And with that customer, what we provide is actually more than just an optical assembly. We also do some of the electronics related to the system. Let's say that that customer, we're most advanced with. And if everything goes well, they would probably start taking deliveries within the next 1.5 years, and gearing up and scaling up as they have a timeline of five years.

This customer, I'd say, is the most advance that we know of in terms of actually testing systems in the field, on cars, and so on. Other customers during different stages somewhat are just exploring the area, taking some general samples from us to play around with thermal imaging. Others are well established companies that know exactly what they want to invest and have very, very clear specifications, but their timeline sometimes vary and change.

So I'd say, with the automotive industry being where it is and the swings between no inventory to over inventory and so on, I'd be a bit cautious about when we would see this go ahead. But at least, with one customer, signs of a positive.

And for this customer, are you dependent upon them specking in a new system, or really just adding your solution to the existing solution?

Well, I'd say, the base systems that they are adding this in, meaning this automatic braking system, it exists. And so, they know how to handle the input from those systems, and they have already a platform for it. What we're doing is working with them to add another sensor, another input into that system, which is why I feel comfortable enough talking about it.

It's not a pie in the sky as requiring the customer to learn a whole new system and a whole new set of data. It's something they're familiar with and can deal with it. However, they're not going to retrofit it. As far as I know, not going to retrofit into existing cars. This is into new models that would hit production and that timeframe.

Okay. And then on the gross margin, obviously, a great quarter there. I heard the caution a little bit in the short term. As we think longer term, and hopefully, with revenue growth, where should we be thinking on the gross margin side medium to longer term?

I think the positive thing I'm taking from the gross margin, and hopefully, other's noticing too, is a consistent improvement and no longer the big swings that the company had experienced in the past. So I see us continuing to improve. We're not divesting back and feeling that 38% is good and we can kick back and open a beer or something.

There's more for us to improve there. And we expect over the next few quarters as really, we're starting to see revenue scale; we're starting to see a lot of the improvements we did. Often in cost of goods sold and in SG&A take more and more plays, we have a positive effect, what we would be seeing.

Okay. Thank you. Congratulations on the progress. Look forward to speaking to you.

Thank you, Aaron.

Gene Inger, ingerletter.com.

Hi, Sam and Al. The call dropped just as I started to ask about how many employees you have in China. Maybe there was a balloon over Orlando.

You've been reading too much news, Gene. I don't know the exact number, Gene. It's around 70 in terms of head count.

And what is the headcount, if I may ask, roughly in Riga, and as well Orlando? And did you mention something about the Philippines?

No. No, I didn't mention it. Riga is creeping up on 100. They're just a shy of 100. We're about 120 here in Orlando.

Okay. Well, first of all, I think you guys are working hard and doing a good job. I know it's tough. I got back on the call. I don't know what happened. And I heard the word automotive. And I assume you were talking about the braking aspect that Sam has alluded to rather than infrared nice driving, or some of which are products that BMW and others discontinued for reasons you might know. I don't know why, because it seems like a pretty good idea, or maybe this is all replaced by LiDAR.

Yeah. We're definitely talking about the braking system. And I was trying to say in my comments, I think we're feeling far more confident talking about that than any conversation we had about LiDAR, for example, in the past, simply because it's a known beast or understandable for the automotive company. It's much easier.

It's not a computer that now downloads enormous amount of data that you need to figure out how to use it and what to do. It's not giving the customer, the driver any sophisticated display that might be confusing or might be positive. It is simply adding another yes-no sensor like black and white kind of tools.

The automatic braking systems have been already field implemented for years. So pretty well known, I think most new cars have them. So we think that would be something that has a much higher potential of actually rolling out into production.

I can appreciate that having just been rear-ended as a month ago, and my product did not defend against getting hit.

Sorry to hear.

Thank you. Speaking of computing, you have Mr. quantum computer and LiDAR as your Chairman of the Board now. And I wonder whether -- since Scott served, as one of his role, has to deal with the startup of quantum computing company, whether there is a linkage between all three of these areas: LiDAR, quantum computing, and your infrared work and so on.

Yeah, absolutely. All of them share a commonality of being really photonics technologies, most of all. Without photonics, they would not happen. Quantum, many part of the quantum, whether computing or quantum sensor or so on, is essentially optics. So it's very interesting that as we talk about optics taking more of its center stage, enabling more applications, enabling more industries, those are two great examples of that.

But I also want to touch on something you briefly mentioned and Scott becoming the Chairman of the Board. Last quarter, we went through, I think, the completion of a transition on our Board of Directors, scaling down the board to a size that is much more -- matches much better the company's strategy and direction. The Board of Directors now are six people: five independent and myself.

We have a new Chairman of the Board, Scott Faris, who, exactly as you mentioned, really, is very active in the industry, has built and done quite a few companies and very successfully. And we feel this is a significant part of, again, the alignment of the company.

Over the last three years that I've been here, nearly three years, we've gone through many different aspects of that. And now, we can safely and comfortably say we've really gone through all aspects of this, from the very top of the Board of Directors through the structure and strategic focus and operation.

I think you make a good team, all three of you, by the way. I am curious, other than what you can't discuss, you're involved with products that are used in defense, battle management, and that involves AI. I know that's the buzzword of the moment. But artificial intelligence, don't you have a role in all of these applications and products, or many other?

Yeah. A product like Mantis really lends itself to be used together with artificial intelligence, simply because it brings so much more data to really make best use of that. And especially if you put it on drones, hovering around collecting data, you have to have some artificial intelligence to identify and signal to you when something important is happening. You can't anymore have soldiers sitting there and looking at the goggles all the time or looking at screens trying to decipher all of that.

So I think artificial intelligence, just like in LiDAR, it's really the power of AI has really enabled a lot of great things in LiDAR. I think the power of AI can enable things like our Mantis to really be deployed in much larger scale than ever before.

Could you touch for a moment on the state-based aspect of what you're doing? I realize that a lot of that is classified, and even corporations don't want to talk because -- like Donnelly and its competitors become competitive as time goes on. And I wonder, because you've talked of new cellular systems, they won't need a cellphone. Any cell phone can use without specialized satellite linkage. And I wonder whether you're involved in that type of infrared linkage between these global encircling bird that would be involved.

I'd say, to some degree, yes. But of course, as you can imagine, with the type of companies involved where we signed or would be signed on, a powerful NDA prevents us from being able to talk too much about it. But I would say that I believe optical communication and infrared in particular is playing a major role at enabling the satellite-based infrared.

I think it's underappreciated is why I brought it up. And I might mention, if I might add, when you did the secondary, which I thought is there at the time was a wonderful entry, not exit opportunity to get into the stock, was it essentially oversubscribed, hence the run-up after people couldn't get enough shares? And were the buyers that you know of, that were in the offering, were they restricted as to when they can sell, or can they roll out stock anytime they want?

Yeah. So first of all, thanks for bringing it up. We didn't talk too much about it. We see the offering is extremely successful, both because it was oversubscribed, and because in spite of everything going on in the market and roll out of offerings that we saw in micro caps, we did not need to provide any warrants or any financial incentives like that to be able to do an offering like that.

I believe the offering created a lot of interest. That probably played a role in the run-up of the stock and continues to do. As you see, our volumes have also improved after a few months of pretty low volumes with starting to garner the interest we should be getting again. And I believe, as you say, the market really signals through that going up 40% day after the offering and continuing to go up after that. The market definitely signaled we did the right thing.

Great. Glad to hear. I'll let you go. Thank you, guys. And I appreciate your leadership. I'm curious what we can anticipate this spring. And hopefully, it's not merely another progression of an earnings report.

Thank you, Gene. Good luck with your call.

Thank you.

Shervin Zand, Alliance Global Partners.

Hey there. Brian was having trouble hopping in the queue. Just have a couple of questions. When adding capacity in Orlando and Latvia facilities, could yields be impacted in the short term?

That's a good question. I think, as of now, we're not adding any capacity that has new capabilities, in a way that we would expect that there'll be a learning curve. And where all the capacity being added, it's an existing facility. Never say never, but I would be surprised if yields would be gravely impacted by it.

That makes sense. Thank you. And then for Mantis, can you help investors understand when revenue will ramp? For how long before partners integrate your technology and then how long before sales ramp?

Yeah. So we expect to see in the short term single unit sales. I think the price we're selling them for single-unit evaluation is about $15,000 a piece, [$15 thousand].

We're starting already to work with some partners on possible integration. There are a lot of, I'd say, application and use test -- use cases that we're testing them for, together with partners, some here, some at other sites. And I'd say that typically, the cycle time for a partner to integrate it would be, as a minimum, six months would be my guess.

All right. Great. Thank you so much. That's all I have.

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

Thank you everyone for taking the time today to follow Lightpath Technologies and listening to the call. As hopefully, all gathering from the remarks and from our enthusiasm about this, we really feel that we are at a strong point and turning into a great company that will now hit the steady and good growth rate.

We appreciate the trust placed in us by stakeholders and look forward to future calls when we further discuss the fruits of our efforts to retool this business and move the company forward. Thank you.

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