Oblong Inc (OBLG) 2007 Q3 法說會逐字稿

Good afternoon, everyone.

Welcome to the Glowpoint third quarter 2007 results conference call.

Before we begin, I would like to remind listeners that this call is being webcast live over the Internet, and that a webcast replay will also be available on the Company's website, www.glowpoint.com, following the call.

The call is being hosted by the Company's President and CEO, Michael Brandofino.

(OPERATOR INSTRUCTIONS)

I would now like to introduce Glowpoint's CFO, Ed Heinen, who will review the Safe Harbor information with you now.

Please proceed.

Thank you very much.

The statements contained herein, other than historical information, are or may be deemed to be forward-looking statements and involve factors, risks and uncertainties that may cause actual results in future periods to differ materially from such statements.

These factors, risks and uncertainties include market acceptance and availability of new video communication services; rapid technological change affecting demand for our services; competition from other video communication service providers; and the availability of sufficient financial resources to enable us to expand our operations, as well as other risks detailed from time to time in our filings with the Securities and Exchange Commission.

Today's call and webcast may include non-GAAP financial measures within the meaning of SEC Regulation G.

Thanks, Ed.

Hello, everyone.

I'm Mike Brandofino, President and CEO for Glowpoint.

Thank you for joining us.

Our plan over the last five quarters has been to bring Glowpoint through a series of phases, each with its own priorities and focus.

We spent much of 2006 in a restructuring phase, focused on rightsizing the business, getting costs as low as they can be, and reestablishing our relationship with partners.

Early in 2007 we moved into a phase of trying to finalize our restatement and putting the history behind us.

As part of this phase, we identified some key objectives, and they included getting our financials current, getting onto the Bulletin Board, restructuring the outstanding convertible notes and raising some additional capital.

We succeeded in accomplishing these goals during the third quarter and have finally put to bed some historical issues that we believe had hindered our progress.

As we move into our next phase, which is all about growth, it is important that we clearly define what Glowpoint's business is, how we fit into the video industry and what our expectations are as we proceed into 2008.

Our mission is to improve the ease of use, cost effectiveness, functionality and quality of video communications in order to make it an integral and ubiquitous part of everyday business and personal communications.

Glowpoint has clearly been a first mover in providing a fully managed solution for video communications that delivers on this mission.

The fact that there are still no apples-to-apples competitors has at times made it difficult for people to really understand what we do.

I have found that a simple way to articulate what Glowpoint provides is to point to a very successful communications model -- the cell phone industry.

When you buy a cell phone, regardless of the manufacturer or model, you need to select a service provider.

You select that service provider based on price, reliability, network performance and features.

It doesn't matter if your cell phone supports text messaging if your service doesn't.

You can't use that feature.

It doesn't matter if your cell phone has the latest high-speed chips.

If the network is bad, you're going to drop calls.

And it doesn't matter to Sprint, AT&T or Verizon if Motorola comes out with a great new phone, because it still needs to be connected to a network.

In the video communication space, the same concept applies.

Regardless of the video equipment you select, you must make a decision on the service.

We believe Glowpoint provides the only comprehensive managed video service offering that provides quality, reliability, interoperability and unique video features for one monthly subscription fee.

And it doesn't matter to Glowpoint if Cisco, Polycom or Tandberg introduces a great new video system.

It still needs to be connected to a network.

As a frontrunner in providing a managed video service offering, we have developed features and services that are only now being acknowledged as critical to the success of video communications.

While it has taken some time for others in our industry to recognize the need for a service like Glowpoint, recent high-profile wins, like Carnegie Mellon, Philip Morris and Big Ten TV are getting us attention.

Companies traditionally thought of as competitors are now looking to partner with us on opportunities.

For example, in the last quarter, we have been asked to provide joint bids with both AT&T and Verizon.

These companies have the quality network, but they don't have a comparable managed video service offering, and partnering with Glowpoint helps fill the gaps in their solution.

As we continue to leverage our unique solutions to drive new business and establish relationships with new partners, it is important that we set some expectations and reiterate some things that we have discussed on prior conference calls.

We use the term "managed video solutions provider" to describe the suite of services we provide.

The core services that comprise the bulk of our revenue are subscription services and multipoint bridging.

Our monthly subscription packages usually include network, and we sign customers to a minimum 12-month contract.

This is the recurring revenue stream that makes up about 70% of our revenue.

Our multipoint bridging services make up about 20% of our revenue.

Multipoint bridging is a usage-based service, and though recurring in nature is not committed month to month and varies according to how much customers use our services each month.

This portion of our business is subject to seasonality, with usage and revenue dropping during the summer months and during the Thanksgiving and Christmas holiday seasons.

Another revenue source is event revenue, which is received from one-time nonrecurring events.

Events like the NFL and NBA drafts contribute to this revenue and are normally done at good margin.

However, this year we were asked to perform a number of integration projects for the broadcast customers, and they were done at low margin.

These integration projects set the stage for the higher margin subscription growth we have seen in the broadcast sector and helped us solidify our relationship with a number of customers.

We will be looking to minimize these low-margin projects as we progress through 2008, or if we must do them, build in more margin.

A fourth source of revenue is from our ISDN resell business.

We purchased NuVision, an ISDN long distance reselling business, in 2003 from Tandberg.

The original concept was to leverage this base of customers to convert them to Glowpoint's IT-based managed video services.

While we have had some success in doing so, nearly half of that ISDN resell revenue is attributable to Tandberg, and as part of our purchase agreement we were limited to only 10% margin on services sold to them.

This line of business represents about 10% of our total revenue, and with a combined margin of only 25% it has been a drain on our overall gross margin.

The ISDN resell revenue is usage based, and like our multipoint bridging services, it is subject to seasonality.

I'm taking this opportunity to outline these sources of revenue so that as we move forward investors can distinguish between the type of revenue we will focus on versus what we are intentionally going to eliminate.

Given the extremely low margin of sourcing for the Tandberg portion of the ISDN resell revenue, we have been actively looking to eliminate this revenue.

It is our anticipation that we will complete the transfer of Tandberg's circuits to them by year's end or soon thereafter, and beginning in the first quarter we will lower the ISDN resell revenue by about $80,000 per month, and of course eliminate the associate network costs.

It is our belief, even though this lowers top line revenue temporarily, it will ultimately be replaced by higher margin business from our core services.

As Ed provides some color on the results we announced today, please bear in mind the areas I said we'd be focusing on, areas impacted by seasonality and areas we are looking to minimize or eliminate all together.

Ed?

Thanks, Mike.

We announced today that we have achieved revenues of $17.3 million through the first three quarters of 2007.

This represents a 19% growth over the same period in 2006.

As Mike was explaining earlier, subscription revenue is the type of revenue we want to see grow, because it is predictable and drives a higher margin than other services we offer.

Subscription-related revenues increased $.7 million, or 20.9%, in the 2007 quarter, to $3.8 million, from $3.1 million in the 2006 quarter.

For the year to date, subscription-related revenue has increased $1.4 million, or 14.8%, in the 2007 period, to $11 million, from $9.6 million in the 2006 period.

In addition, multipoint bridging services increased $.4 million, or 19.9%, in the 2007 period, to $2.4 million, from $2 million in the 2006 period.

As we have often discussed, our intent is to focus on key vertical markets, and this focus remains a key driver in the growth of our core services.

Broadcast continues to be a growth sector for us, with an impressive 70% growth in revenue in the 2007 period over the 2006 period.

Though there can be no assurance, we anticipate the revenue for this sector to continue to grow as new installations for Big Ten TV, ESPN, Fox Sports and NASCAR continue to come online and become billable.

During the conference call in August, we introduced banking and finance as a new area we would target for growth, primarily because of the launch of our Customer Connect product, currently being used at a major bank.

This sector has grown over 59% in the 2007 period as compared to the 2006 period.

We introduced on our last call the growth in closed contracts for the quarter.

In the three months ended June 30, 2007, we signed contracts valued at $90,000 in monthly recurring subscription revenue, with an annualized value of $1.1 million.

For the three months ending September 30, we signed contracts valued at $138,000 in monthly recurring subscription revenue, with an annualized value of $1.6 million.

While some of this revenue replaces churn, we believe this growth in our core revenue shows we are building momentum.

Gross margin for the 2007 period increased $1.2 million, or 26%, to $5.6 million, from $4.4 million in the 2006 period.

Our gross margin increased 32.2% in the 2007 period, from 30.4% in the 2006 period.

If we exclude the low margin broadcast customer integration transactions, our gross margin percentage is actually 33.9% in the 2007 period.

We mentioned on our previous calls that one of the factors affecting gross margin was that we were paying double sales taxes and regulatory fees since the creation of GP Communications in late 2006.

While we have transitioned to collecting and paying taxes directly, it has taken time to modify all our contracts with our network vendors and get them to remove the charges from our invoices.

We have completed notifying and receiving acknowledgement from all vendors and have begun to receive credits from vendors for previously paid taxes and are beginning the process of taking credits on our tax returns.

We anticipate that the double taxation will cease during the fourth quarter, and as a result there should be a positive impact on gross margin.

Our loss from operations improved $4.7 million, to $3.3 million in the 2007 period, from $8 million in the 2006 period.

In addition, our net cash used in operations has decreased by $2.9 million, to $1.4 million in the 2007 period, from $4.3 million in the 2006 period.

Our net loss attributable to common stockholders grew to $11.8 million for the 2007 period, from $9.8 million in the 2006 period.

This change was primarily a result of an increase in our common stock price to $0.75 per share at September 30, 2007, from $0.39 at September 30, 2006, which caused a $5.3 million increase in derivative liabilities.

In addition, a full nine months of noncash costs related to the convertible notes issued March and April 2006 increased the loss.

These increases were partially offset by the gain on the redemption of the preferred stock and the $4.7 million improvement in our net loss from operations.

These derivative liability transactions have a huge noncash impact on our statement of operations, our working capital and our liabilities.

We have provided a very detailed explanation of the derivative liabilities in our management's discussion and analysis section of our September 2007 Form 10-Q, in particular, Item 3, which explains the significant noncash impact of a $0.25 increase or decrease of our stock price on our financial statement.

In short, as our stock price increases, derivative liabilities increase and we recognize a noncash expense.

As the stock price decreases, we recognize noncash income, and the derivative liabilities decrease.

Therefore, it is important to understand that the volatility for these derivative liabilities will be a part of our financial statements for as long as the convertible notes and associated warrants are outstanding.

Finally, before I pass it back to Mike, I would like to update everyone on another item that is pretty prominent in our financial statements.

We have allocated a large accrual of approximately $4 million to the potential liability for sales and use taxes and regulatory fees for prior years.

We have been diligently working with a number of states to determine exactly what, if any, payments are due.

While there are no assurances at the outcome, our conversations with various states have gone well, and we continue to be optimistic that no further accruals for taxes will be required.

We continue to be encouraged by growth in sales and margin improvement.

We still have a number of projects underway that will have a positive impact on gross margin, and we continue to see momentum building for growth in revenue from our sales forces as well as our partnerships.

I'll pass it back to Mike, who has some good news about our progress in the telepresence space and a new relationship we feel will have an impact as we move into 2008.

Thanks, Ed.

We purposely spent time today to reacquaint you with the Glowpoint business model, clear any misconceptions you may have about our revenue stream and clearly state our intentions as it relates to where we will focus for growth and where will we be intentionally eliminating revenue.

And the area of potential growth I haven't touched on yet represents one of the exciting new recent developments for us.

On my last call I introduced the concept of Glowpoint's positioning in the telepresence space and explained that we created an offering specifically tailored to support the high demands of telepresence rooms, called video network operation services, or VNOC services, for short.

I also explained that I believe Glowpoint is well positioned to deliver these services and can support any manufacturer's telepresence rooms.

We have already been involved in a number of proposals, and we expected that VNOC revenue will become a part of our revenue stream as we move into 2008.

Clearly, if Glowpoint could be recognized by one of the primary manufacturers of telepresence solutions, this would confirm my statements and could establish VNOC services as a key growth area for us.

I am very pleased to announce that Glowpoint has been selected as a global provider of a branded Polycom VNOC service offering.

The anticipation is that once an agreement is completed Glowpoint will be providing the underlying VNOC services for Polycom telepresence rooms sold through Polycom's resale partners around the globe.

The selection of Glowpoint by Polycom was the result of an extensive evaluation process, and we believe is an acknowledgement that Glowpoint has already developed many of the features and services now required to support telepresence and confirms my belief that Glowpoint is in a prime position to take advantage of the growing demand for telepresence solutions.

Let me briefly provide a glimpse of how the VNOC model could impact Glowpoint as we move through 2008.

Our goal is to be fully prepared to begin supporting Polycom by January 1.

The anticipation is that we will begin getting involved in opportunities in January, with initial revenue beginning in Q2 2008.

The nice thing about the VNOC services is that we provide it with the same team that currently supports our network operations center and our managed bridging services.

Since network is not included in the VNOC solutions, we are free to introduce customers to the Glowpoint network services if they cannot support the telepresence rooms on their own network.

This is not an exclusive relationship, and Glowpoint will continue to be involved in opportunities to provide services for telepresence rooms that are based on equipment from other telepresence manufacturers.

We cannot predict what volume and how quickly this revenue will grow, since Polycom hasn't publicly stated how many units they expect to sell over the next few years.

But if, for example, we assume that the Glowpoint VNOC services are sold with 200 rooms during the next two years, and a portion of these rooms also include our network services, we would hope to drive perhaps as much as $3 million to $4 million in new annual revenue.

This relationship is another example of how the foundation we have been laying for growth in Glowpoint's participation in the telepresence space looks to be paying off.

By improving our relationships and establishing new ones, we have been able to grow our core revenue by almost 21% year over year.

We believe that improving this to 30% growth as we move through 2008, although challenging, is not an unreasonable expectation, and there are some trends that are Glowpoint-specific and ones that are industry driven that support our belief that we can accelerate growth.

The first positive trend to look at is the fact that since this -- since the first full quarter this management team took over we've had five consecutive quarters of positive growth in subscription revenue, and we have shown positive trends for continued growth in 2007 and beyond.

Another trend we can point to is in new contracts closed per quarter.

New closed contracts based on monthly revenue value have grown significantly over the prior year.

Q1 2007 was 69% higher than Q1 2006.

Q2 2007 was 73% higher than Q2 '06.

And Q3 2007 was 121% higher than Q3 2006.

Looking at this from an annualized revenue perspective, it means we signed $4 million -- over $4 million in new annualized revenue contracts during the first three quarters of 2007.

This revenue comes online over time, and some of it does replace churn, but what these numbers indicate is that we are closing more new revenue per quarter than we have ever done in the past.

And, as we have seen, it is starting to show up as a consistent growth in our recurring revenue.

The remarkable thing about the improvements in our sales is we have been able to accomplish this with essentially the same size sales force as we did in 2006.

Much of this is due to the fact that we have improved productivity from our channel partners, who have provided about 40% of the deals so far in 2007.

We are working on enhancing our sales team and expand our coverage in key geographic areas.

Texas and the Midwest, especially Chicago, have proven to be areas of the country where adoption of video communications has been high, and we have productive channel partners in Dallas and Chicago, so we recently added a salesperson in each region to work closely with these partners.

We also (inaudible) a large account specialist here in the Northeast.

Growing revenue from our existing customers was one of our stated goals from earlier this year.

We have a solid base of large customers, and we have been doing a good job of driving new revenue from them, with approximately 48% of new locations ordered so far this year coming from existing customers.

From an industry perspective, we have seen a general increase in adoption, with many companies expanding their deployment and use of video communications in response to demands that they implement green initiatives.

Green initiatives are programs designed to reduce carbon emissions, and many companies are leveraging video communications as a tool to be green.

In fact, there are now tools available on the Internet that let companies calculate how much they are reducing carbon emissions by not driving or flying to meetings.

HD technology has really ignited a demand for video communications and for Glowpoint services.

A number of expansion projects for our existing customers were driven by the desire to upgrade to HD, and most new contracts are to support the higher bandwidth requirements for HD.

And this higher adoption rate and demand has been confirmed, with Tandberg recently announcing they had a 53% increase in shipments for Q3.

In a white paper published by Cisco about the telepresence initiative, they predicted that network services revenue would reach approximately $4 billion by 2010.

This prediction by Cisco, coupled with our recent selection by Polycom as a provider of service for their telepresence rooms, is a clear indication that the manufacturers of telepresence equipment understand the crucial part service providers play in the success of their products.

Between the trends Glowpoint has seen based on our own efforts and the supporting data from other key players in the video industry, there is little doubt the opportunity for growth exists.

The key for us is execution.

We need to continue to manage and nurture our existing channel partners, establish and grow new partnerships and focus on higher margin revenue, while eliminating lower margin business as much as possible in our efforts to improve gross margin and achieve positive EBITDA and positive cash flow in 2008.

It is certainly an exciting time in the video communications space and for Glowpoint.

We are solidly in the thick of opportunities with a number of new partners and see ourselves continuing to be viewed as the frontrunner in providing the most comprehensive managed video solutions on a global basis.

Thank you for your continued support and for joining us today.

Moderator, would you please open it up for questions?

Certainly.

(OPERATOR INSTRUCTIONS)

The first question comes from Howard [Myerson], with Merrill Lynch.

Please proceed.

Hi, Mike, how you doing?

Hey, Howard, how you doing?

Good.

Congratulations on your -- and thank you for your continued efforts and good work.

Thanks.

Could you spend a few minutes talking about the -- your Customer Connect program with the banking industry and how that's going?

Sure.

We currently have it in production at a major bank.

We also have been working with a number of other banks and will have it in a lab shortly.

I won't say pilot, but we'll have it in a lab looking at it.

And we're working with a number of our partners, specifically the Whitlock Group, who has been very successful with us, and will be doing a road show shortly to invite banks and retailers to view the Customer Connect product.

We have (inaudible) this product with a language translation service as well that we're working on, where banks are looking at potentially using the combination of Customer Connect and translation services with a partner of ours to do language translation in Mandarin, Chinese, Korean at various banks.

So it's -- we're really focusing on lining up opportunities and getting some pilots engaged as we move through the next quarter or so.

Thank you.

The next question comes from Joseph [Badaruso].

Please proceed.

Hey, Joe.

Yes, Mike, how are you?

All right.

Congratulations on the increase, but I have some concerns here.

Sure.

I don't know if I heard correctly, but you know there's a lot of warrants outstanding, and I thought I heard that as the stock price goes up it's detrimental to our bottom line.

We've been sitting here since you came in about 17 months ago at around $0.58, $0.59 range.

That's exactly where you came in.

And I know we have a lot of residue that we deal with, the approximately $5 million in charges of taxes left over that weren't paid by prior management, but we seem to have a lot of skeletons in the closet.

I want a little more clarity on how we're going to out of this continual cycle.

Because when you came in, I understood your back was against the wall and you had to do a deal with Burnham Hill Partners that was [necessary] to keep us going till you got to this point.

And --

Let me jump in there, and there's a couple of things.

Number one, I want to clarify that we're not -- we did not say that the prior management team didn't pay taxes.

We are saying that there is a possibility that we didn't understand which ones may have applied.

So we set an accrual and are talking to the states.

In many cases we've gone back to states and the states say, "Oh," are agreeing with us that some of our services were not taxable.

So I don't want you to think that it was a de facto standard that the prior management team didn't pay taxes.

Okay?

No, but I want to get past the taxes, and, okay, that's fine.

And so --

I want to get past the taxes.

I want to get to the point --

Let's talk about the derivative liability.

What he said was that the cost of -- as a matter of fact, I'll have Ed -- Ed can talk about this a little bit, but essentially what we said in the -- on the call today was that because of the rulings and how you have to report this, the -- an increase in the stock price creates a noncash liability on the books and will be there until we either pay off the notes, do something else to get rid of the notes, or they convert.

So it's just a thing that'll be on our books and is affected by the changes in the stock price.

But it is not a cash event.

Ed, do you want to clarify?

Yes, Joe, what we have -- effectively what it's saying is -- example would be, we have the notes for approximately $10 million of convertible notes.

If they want to convert, we give them shares of stock.

What this derivative liability is, is if there was a possibility that we didn't have shares of stock available, then we would have to give them cash for what it is worth if they converted their notes into stock.

But when they convert, it's my understanding that we pull money into the Company.

Yes, if they convert then we don't have to put money out.

Again, this is -- it's this possibility that we don't have shares of stock available to give them.

The probability of that may not --

I don't see how we can't have stock available when we just increased --

Correct.

Joe, you hit the point, but part of what GAAP accounting requires is if there is that possibility, you have to accrue for that potential liability, and that's what the derivative liability is, is if we don't have the stock as you think, you don't see how we couldn't, if we don't have it available, because maybe we don't have an effective registration statement --

Didn't we just register 40 million shares?

You're right.

But still, for GAAP purposes we have to accrue that.

And this last quarter it was almost $5 million because the stock went up a quarter.

If the stock goes up another quarter, I'm going to have another approximately $8 million liability I'm going to accrue.

Will I have to pay it out?

No, we'll give them shares of stock at that point.

But, again, there's the potential that it could be, and therefore I have to accrue it.

It was my understanding that that $8 million was going into Company coffers.

Now you're saying it's a liability.

I'm a little puzzled.

It's a liability, Joe, that if we then turn around and give the holders the shares of stock that we have available, the entry is to transfer that $8 million or $10 million liability to equity at that point.

So as we expense it to the P&L, if we issue the shares of stock, then the liability will go back into equity at that point.

All right, let's get to the ISDN, this Tandberg business.

Okay.

We're being warned about the fourth quarter with the possible loss of that 10% of revenue.

Okay, I was just reading in the November 12 issue of Fortune Magazine how Cisco was introduced to three of our major meat-and-potato customers -- NASCAR, NFL and NBA -- and they made it a point stating in that article they were going to go after that particular business.

How does that affect us?

In what way?

Is it a positive, a negative?

Okay, you combined a couple of different things, and then once I answer this, Joe, I'd like to give some other people an opportunity.

So first of all you combined the Tandberg revenue.

The Tandberg revenue, as we stated, is -- the Tandberg revenue isn't 10% of our revenue.

The overall resell -- ISDN resell business is 10% of our revenue.

Tandberg is 50% of that.

And so the reason to get rid of that is it's just not a good business for us.

It's not something we want to be in.

And those are -- some of those are circuits that just are being used by Tandberg internally and just not something that we want to support.

So that's a business we're intentionally moving off.

We gave everybody notice about that a couple quarters ago and we're just working through that.

The Cisco going after our customers, number one, NBA isn't a customer of ours, has never been a customer of ours.

NASCAR certainly has.

And NASCAR has a three-year agreement with us.

So I'm not necessarily saying that Cisco's not going to go in there and try and sell them their products.

But remember what I said earlier in this call.

It doesn't matter what equipment is sold into these accounts, it has to go on a network.

And if we've proven ourselves and have gotten these broadcast customers to sign multiyear agreements with us, I don't care if they're using a Sony HD system or a Polycom HD system or Cisco's telepresence solution, it could still run on Glowpoint.

So absolutely we pay attention to those types of releases.

But the fact that I have multiyear agreements should be something that you guys should consider when you see those releases.

And then the other thing that you should consider is that it doesn't matter if they're selling equipment, because Cisco does not sell network services.

They sell equipment.

It can still run on Glowpoint.

So we're moving along with the technology to upgrade to the Cisco and going to a new -- a new platform, from what I understand.

We're moving right along with them?

We support all of the Cisco solutions.

Okay.

Thank you.

All right.

Let's let someone else get a call -- get a question.

Thanks.

(OPERATOR INSTRUCTIONS)

We have no further questions -- we do have a question from Peter [Jacovani], with [Barrigan] Company.

Please proceed.

Hi, Mike, it's Peter Jacovani.

Hey, Peter, how you doing?

Boy, he butchered that name.

Great call so far.

Quick question on the Polycom deal.

Is that a -- are those fees one-time fees per room setup, or do we get -- is it ongoing?

That's a monthly recurring fee.

So once we bring on those rooms -- it's basically -- it's a version of our service that doesn't include the network by default.

So it's a managed service offering that includes multipoint bridging and reporting and hand holding, if you will, of all of those rooms.

Network is something that we think will be a pull-through, but it all is monthly recurrent.

Okay.

Okay, great.

All right, great job so far, Mike.

Thank you.

Thanks.

Next question comes from Jack Gilbert.

Please proceed.

Hi, Jack.

Hi, how are you?

This is -- I know we just hired a new PR firm, and I was very pleased to hear about Polycom.

Are we going to make some kind of public announcement tomorrow on what you just talked about?

No.

And I know this is frustrating to you guys, and it's very frustrating to me, and the reason is, as part of our discussions with Polycom, the fact that we're providing this service is something that we were allowed to talk about on the conference call, but they don't want to do a press release.

And the reason is that these services are going to be sold by Polycom.

It's going to be in their price book.

Their resellers can sell it.

However, some of their resellers will also offer their own VNOC service.

Okay.

And so they're just -- their feeling is, "Listen, let's not kind of rub it in their faces.

You are -- we're going to be promoting you in our price book.

Our resellers can sell you if they want to.

But there are going to be some that aren't." And so to just kind of not create an issue, a conflict, they didn't want us to do a press release about it.

The -- I mean, I -- I can understand all that, and I think that's -- I totally understand it.

But if we're going to get our stock price up, we're going to have to have other people find out about our company.

And if you can't put out announcements about the bank, and we can't put announcements about Polycom, I mean, you can tell by the people that are asking you questions, we get the same people, and you see the volume of our stock keeps going down, down, down, and we have one major seller, and we can never get going because there's not a lot of new people knowing about it.

And one way to get new people knowing about it is putting out announcements.

And so I'm hoping we have some other announcements that you can --

Yes, and, Jack, that's why we hired Hayden.

We are meeting with them, and I think one of the challenges that we face is we are limited in resources.

The management team does everything from sales to --

Right.

-- management.

And clearly that is not our core competency.

So bringing Hayden on, and we think -- we thought now was the right time.

We have good news to talk about.

We have -- we feel that the revenue that we're selling, as you saw, in the third quarter we sold a nice amount of revenue, and that's been coming on.

Right.

We've got some real good announcements.

I hope we just keep --

So we are working on that, and that's why we hired Hayden, to help us and give us some better ideas and maybe help us navigate through and convince some of our customers that it's good for them, too, to talk about some of these things.

That was -- okay, that was kind of my question.

How can we do that?

Great.

Right.

Okay.

All right?

Yes.

(OPERATOR INSTRUCTIONS)

We have no further questions at this time.

I'll turn the call back over to Michael for any closing remarks.

Okay.

Thank you, everybody, for joining the call.

We've made some significant progress, and we feel that we will continue to do so, and we look forward to talking to you for the year-end call.

Thank you.

Bye.

Thank you, ladies and gentlemen, for your participation in today's conference.

This concludes the event.

You may all now disconnect.

Have a great day.