Earnings Call Transcript - KRMD Q2 2020

Operator, Operator

Greetings and welcome to the KORU Medical's Systems Second Quarter 2020 Financial Results Conference Call. As a reminder this conference is being recorded. It is now my pleasure to introduce to your host, Devin Sullivan, Senior Vice President of Equity Group. Thank you, Mr. Sullivan. You may now begin.

Devin Sullivan, Senior Vice President of Equity Group

Thank you, Mercel and good morning. Thank you all for joining us for KORU Medical Systems second quarter 2020 financial results conference call. Our speakers for today's call are Don Pettigrew, President and Chief Executive Officer and Karen Fisher, Chief Financial Officer. During this call, we will discuss our business outlook and make forward-looking statements. These comments are based on our predictions and expectations as of today. Actual events or results could differ materially due to several risks and uncertainties including those mentioned in the associated slide presentation and our most recent filings with the SEC, along with the associated press releases. We assume no obligation to update any forward-looking statements. The associated slide presentation is posted to the Investor Relations section of our website, www.korumedical.com today. I encourage listeners to have our press release in front of you, which includes our financial results, as well as commentary on the quarter. During the call, management will discuss certain non-GAAP financial measures. In our press release and slide presentation accompanying this webcast and our filings with the SEC, each of which are posted on our website, you will find additional disclosure regarding these non-GAAP measures, including reconciliations of these measures with comparable GAAP measures. Our strategic plan goals incorporate the trends that we've seen today and what we believe today to be appropriate assumptions. Our results are inherently unpredictable and may be materially affected by many factors, including the introduction of competitive products, the availability of insurance reimbursement, the success of our research and development efforts, acceptance of and demand for new and existing products, expanded market acceptance of the Freedom System, the cost duration and ultimate outcomes of litigation, general economic and business conditions in the United States and abroad, the impact of COVID-19 and other factors described in our filings with the SEC. Therefore, our actual results could differ materially from the goals set forth in our plan. For the benefit of those of you listening to the replay, this call was held and recorded on Wednesday, August 5th, 2020 at approximately 9 AM Eastern Time. Since then, the company may have made additional comments related to the topics discussed. Please reference the company's most recent press releases and filings with the SEC. With that said, I'd now like to turn the call over to Don Pettigrew, President and CEO of KORU Medical Systems. Don, please go ahead.

Don Pettigrew, President and CEO

Thank you, Devin. Good morning, everyone, and I appreciate you joining us today. Hopefully, most of you have power this morning. I want to start by acknowledging KORU Medical's production staff for their continuing commitment to our company. I'm very proud of our team and the remarkable fortitude they're demonstrating in helping us navigate through the COVID crisis while maintaining our manufacturing supply chain and serving the thousands of patients who rely on our products. I want to make sure you're aware of the safe harbor statement regarding forward-looking statements and non-GAAP financial measures on Slide 2, which I'll expand on in my remarks today. Now let's start with Slide 3. Before we begin discussing our results for the second quarter, I thought it would be helpful to provide a brief summary of our business so that our results and initiatives can be viewed with a deeper understanding and appropriate context. Our primary end market is Primary Immunodeficiency Diseases, or PIDD, which consist of more than 350 chronic disorders of the immune system. We've seen estimates regarding the undiagnosed PIDD patient population as high as 500,000 in the US. Currently, we estimate just 70,000 patients have been diagnosed and are receiving IG therapy. Of these, 40,000 are receiving therapy intravenously, which we refer to as IVIg, and 30,000 are receiving therapy subcutaneously, or SCIg. The majority of these SCIg patients are utilizing KORU Medical's Freedom Integrated Infusion System. We're also addressing patients suffering from CIDP, a neurological disorder, which is a smaller patient population than PIDD, with approximately 25,000 patients. CIDP has historically been treated with IVIg therapy, but that changed in 2018 with the approval of Hizentra for subcutaneous treatment. We see the CIDP market opportunity evolving similarly to PIDD, as such we're focused on supporting treatment conversions from IVIg therapy to subcu IG therapy. We believe that PIDD and CIDP offer significant growth opportunities—nearly 20 times our annual revenue in the US alone. We also recognize that our Freedom System is a platform technology with potentially broader applications and long-term growth prospects. To this end, we're pursuing partnerships with pharma manufacturers outside the IG space to support the increasing trend towards subcutaneous drug delivery for a variety of disease states. We also believe that COVID-19 has emphasized the benefits and perhaps the necessity of home healthcare to protect the most vulnerable among us. I like to use the analogy of the growing adoption of Telehealth when discussing the potential for at-home subcu IG. In a recent report by McKinsey & Company, it was stated that in 2019, just 11% of patients utilized Telehealth for cancelled or in-person healthcare visits. Today, that number has increased to 46% due to the pandemic. Physicians and other healthcare professionals are now seeing 50 to 175 times the number of patients via Telehealth than prior to the pandemic. This rapid adoption reflects how quickly behavior can change, and importantly, how some solutions to problems are often the hardest to identify. We continue to manage the business towards our strategic goals of achieving a $50 million run rate by year-end 2022, improving our operating efficiencies to reach a 70% gross margin, and generating 20% plus organic revenue growth annually. As previously discussed, we're focused on reducing COGS as a complement to rising sales to achieve greater manufacturing efficiencies. Our success is due in large part to an attractive economic model; most patients using the Freedom Integrated Infusion System manage chronic conditions. In other words, their therapy is required for the rest of their lives. We have experienced minimal patient churn—once a patient begins using the Freedom System, they typically continue with it because our products are used alongside prescribed drugs such as Hizentra and Xembify. Our sales and marketing expenditures are modest compared to other healthcare companies. On Slide 4, moving to the overview of the second quarter, we had a strong performance with increases across several key metrics. We completed a successful offering that generated net proceeds of nearly $27 million and settled longstanding litigation with a competitor. Our stock was also added to the Russell 3000 Index in June. Moving to Slide 5, our net sales of $7.7 million was a record for any quarter in our history, with increases across our product portfolio. Our baseline annual sales growth target is 20%, with potential upside from clinical trial sales and anticipated increasing adoption of subcu IG therapy. We certainly experienced both in the second quarter, along with continued contributions from clinical trial activity and sales growth that align with industry trends, both of which we expect will continue. A unique aspect of this quarter's sales was increased purchasing activity from specialty pharmacies, likely in anticipation of higher demand for at-home infusion therapy due to the pandemic. It is difficult to determine at what level this COVID-related buying activity will continue for the remainder of the year. However, we expect that our 2020 sales will meet our previously announced financial goals associated with our strategic plan. Gross profit rose by more than 41%. We also reported a net loss of $1.1 million, which is primarily due to a one-time non-cash litigation settlement with our competitor; excluding these costs, we operated profitably. Settling this matter has eliminated future litigation expenses—totaling $3.4 million in 2019—and allows us to allocate more of our resources to managing the business. Adjusted EBITDA rose more than 18% to $1.8 million. Slide 6 emphasizes that our Freedom Integrated Infusion System has provided us with first-mover advantages among chronically ill patients, allowing them to assume control over their lives and treatment of their disease while delivering improved patient compliance, enhanced outcomes, and tangible quality of life benefits. We view this as a unique value proposition in these challenging times. Our pumps are easy to use, cost-effective, low maintenance, and enable patients to self-administer their therapy at home. It takes just three simple steps to initiate an infusion. Our Precision Flow Rate Tubing is available in various configurations, and a wide array of HIgH-Flo Safety Needle Sets are safe, comfortable, and can promote faster infusions. Currently, several subcu IG products can be used with our Freedom System, including Hizentra from CSL Behring, Cuvitru from Takeda, and newer entrants such as Xembify from Grifols and Cutaquig from Octapharma. We're supporting each of these manufacturers in their commercialization activities via training, sales support, product support, and education. We expect to benefit as these products' sales increase, driven by treatment conversion from IVIg to subcu IG and anticipation from specialty pharmacies that the adoption of at-home infusion therapy will continue to gain traction among patients, physicians, and payers. A significant factor in this growing acceptance is the meaningful benefits that subcu IG offers patients when compared to IVIg. With respect to Xembify, launched in December 2019, we believe this product is still in its early stages of adoption and is expected to positively impact subcu IG availability. Slide 7 outlines our belief that the foundation we are creating will allow us to expand our commercial applications and drive our growth. We intend to meet the growing demand for subcu IG therapy for current indications in PIDD and CIDP, some of that driven by patient preference changes due to COVID-19. As we've pointed out in prior calls, Grifols is the market leader in the IVIg market. Their focus on subcu formulation validates the more widely preferred and prescribed modality of subcu infusion versus IV infusion. While we are aware of some plasma collection disruption due to COVID-19—especially regarding centers near college campuses—we're seeing a significant ramp-up of new collection centers, incentives for returning donors, and awareness campaigns. In the long term, Grifols, CSL Behring, and Takeda have articulated plans to increase their global plasma collection and manufacturing capacity over the next several years. Regarding awareness, just last week, President Trump issued a National Call to Action and hosted a roundtable at Red Cross headquarters to promote plasma collection, including convalescent plasma for treating COVID-19. The President stated that, with government-supported initiatives, nearly 50,000 COVID patients have been treated with convalescent plasma. Present at the roundtable was Paul Perreault, CEO of CSL Limited, which manufactures Hizentra. Mr. Perreault discussed the promise of hyperimmune plasma therapy, which involves isolated antibodies from individuals who have recovered from COVID-19. He also emphasized the importance of plasma donors, not only for COVID treatment but in general, as plasma is used to treat other rare diseases, including PIDD and CIDP. Mr. Perreault stated that, working jointly with the NIH, the major plasma manufacturers have designed a clinical trial that will enroll individuals in August to investigate the efficacy of hyperimmune therapy for treating COVID-19. We're very interested in supporting our drug manufacturing partners in whatever way we can to assist in these important initiatives. We will also pursue international expansion regarding PIDD and CIDP. International sales represented 16% of our total net sales in 2019. We believe that the simplicity of the FREEDOM60 offers an attractive alternative to legacy infusion devices popular in Europe. We expect growth outside the US to exhibit dynamics similar to those we've experienced in the US. To this end, we plan to leverage our relationships with pharma manufacturers to introduce our products alongside their sales efforts. Slide 8 indicates that we are focused on supporting drug development activities. Our Freedom System is currently involved in multiple clinical trials related to potential expansion of IG and development of subcutaneous therapies for other disease states. This includes a recently completed Phase III trial in hematology that met its primary efficacy endpoint, with an expected drug launch in 2021. While we cannot specify details for competitive reasons, our current development opportunities include drugs from over 100 companies across more than 10 therapeutic areas, with at least 10 future candidates that we believe have high potential. Beyond hematology, we've identified market opportunities in several other disease states, estimating these programs to have a total addressable market of approximately 40 million patients. Our Freedom System is a proven, simple, and cost-effective delivery device that positions KORU to be the partner of choice for certain drug manufacturers pursuing the development and commercialization of new therapies. Slide 9 highlights that, as we grow and evolve as a company, we also seek to hire and retain top talent for our organization. In July, we were excited to announce the appointment of Josh Bennett to the newly created position of Vice President, Global Commercialization. Josh brings 20 years of healthcare management and consulting experience, including a focus on product and market development for various medical devices, pharmaceuticals, and biologics at Baxter Healthcare. He has a broad and proven record in building marketing programs and creating new sales channels domestically and internationally through chronic development, commercialization, and M&A. He joined us at the perfect time as we accelerate our pursuit of identifying new and adjacent market opportunities, expanding the therapeutic and pharmaceutical applications of our Freedom Integrated Infusion System, and leveraging the significant advantages of self-administered at-home infusion therapy. I would now like to turn things over to Karen Fisher, our Chief Financial Officer, for a review of the quarter. Karen?

Karen Fisher, Chief Financial Officer

Thank you, Don. Good morning, everyone. Beginning on Slide 10, net sales rose 44.1% to $7.7 million in the second quarter from $5.3 million in last year's Q2, with growth across our infusion product line. We believe this is driven by continued demand increases, including clinical trials as well as increased purchasing to support the trends towards at-home infusion therapy and in response to the uncertainties created by COVID-19. Gross profit in Q2 rose 41.3% to $4.9 million from $3.5 million in Q2 2019, primarily due to increased sales volume. Gross margin was 63.7% in Q2 2020, compared to 65% in Q2 2019, mostly due to increased overtime costs related to COVID-19 absenteeism. Gross margin was 65.4% when adjusted for this overtime. Total operating expenses for Q2 2020 increased to $5.9 million from $3.4 million in last year's second quarter. Selling, general, and administrative expenses were $3.2 million, or 41.5% of net sales, compared to $2.1 million, or 38.3% of net sales in Q2 2019. This increase is primarily due to the impact of new hires in the second half of last year, severance, bonuses for employee service during the COVID-19 pandemic, increased consulting, distributor fees, and other miscellaneous administrative costs. These were partially offset by lower trade show and travel expenses due to COVID-19-related travel restrictions. Higher litigation costs in Q2 2020 consisted of a $2.2 million non-cash, stock-based expense associated with the negotiation of and entry into a litigation settlement agreement with a competitor in May 2020. We expect future expenses related to the competitor litigation to discontinue because of the settlement. Litigation expenses in Q2 2019 were $1.1 million. Our adjusted EBITDA rose 18.1% to $1.8 million from an adjusted EBITDA of $1.5 million in Q2. The net loss for Q2 2020 was $1.1 million, or $0.03 per share, and included the $2.2 million litigation settlement expense. In Q2 2019, there was a net income of $78,000, or $0.00 per diluted share. On Slide 11, moving to our balance sheet, we ended the quarter with $38.1 million in cash—a $32.2 million increase from December 31, 2019. All increases were due to $26.5 million in net proceeds from the recent capital raise along with a $3.5 million draw against the company line of credit. Cash provided by operations contributed $2.7 million, net of an increase in inventory to meet demand. We ended the quarter with 43.9 million basic shares outstanding and a diluted share count of 48.1 million. Here on Slide 12, you can see the reconciliation of net income to adjusted EBITDA along with the metrics that comprise the calculation. I'll now turn it back over to Don.

Don Pettigrew, President and CEO

Thank you, Karen. Thank you all again for your continuing interest in KORU Medical. We can now open the call for questions.

Operator, Operator

Your first question comes from Alex Nowak with Craig-Hallum Capital Group. Please go ahead.

Alex Nowak, Analyst

Don, I was just curious. How is the supply of IG for pharmacies? I mean it certainly seems like a lot of people are trying to switch to subcu IG right now. So is subcu IG drug supply all constrained within the quarter?

Don Pettigrew, President and CEO

So we hear that supply is as high as it has ever been, Alex. However, we're also hearing about some allocation going on at this point. My understanding is that specialty pharmacies are really trying to manage the transition from IV to subcu IG. For the most part, supply is as good as it has ever been and we feel that the addition of Xembify to the market has had a positive and profound impact on the total subcu supply.

Alex Nowak, Analyst

And staying on that, we've typically found that physicians and really patients, they typically don't switch from IV to subcu, especially if they're doing well on an IV therapy. But with COVID, are you hearing that more patients and physicians are now willing to actually switch a patient over?

Don Pettigrew, President and CEO

It's a good question. We are hearing that in many cases due to COVID, patients just can't get to an IV setting or an acute care center for their treatments. So they might not even have that option. We're aware of initiatives by specialty pharmacies to actively encourage and push patients from IVIg to subcu IG, and we’re also aware of the increased awareness from the patient perspective of this option for subcu therapy. Therefore, we're starting to hear more about patients actually requesting to move to subcu IG.

Alex Nowak, Analyst

Okay, understood. And then on the pipeline that you mentioned, it includes more than 10 high-potential future candidates. Are these all chronic diseases that would have economics for patients similar to the PIDD market, or are these more acute illnesses that will have different economic dynamics for patients?

Don Pettigrew, President and CEO

Yes, it’s a mix, but most of them have similar dynamics in terms of the razor/razorblade model. We feel most of these are chronic diseases and share similar dynamics to what we've experienced with PIDD and CIDP.

Alex Nowak, Analyst

Okay, got it. And just one last question from me on the clinical trial that you mentioned with Grifols, CSL, and Takeda for plasma to treat COVID. Is the FREEDOM60 pump being used in that trial?

Don Pettigrew, President and CEO

So the trial is being defined, and patients are being enrolled in August. To be clear, this is for convalescent plasma for the most severely ill COVID patients, typically treated in a hospital setting. While we don’t see this as an opportunity for our Freedom Integrated Infusion System, we believe the increased awareness and supply of IG will enhance the use of the Freedom System. We're also looking to support studies that consider subcu IG for treating COVID-19 as well.

Alex Nowak, Analyst

Okay, understood. Thank you. Congrats on the results.

Don Pettigrew, President and CEO

Thanks for the questions.

Operator, Operator

The next question comes from the line of Matthew O'Brien with Piper Sandler. Please go ahead.

Matthew O'Brien, Analyst

Just a quick question, Don, for a finer point around what you're seeing from a metric perspective. In terms of interest levels for subcu versus IVIg due to COVID. Can you talk about the number of inquiries versus what you typically see? The number of people that may be training virtually? Just help us illuminate the benefits that you've observed as a result of the virus.

Don Pettigrew, President and CEO

Thanks for the question, Matt. We're actively working with our specialty pharmacies to support them with education and training items. We're finding initiatives that promote remote training and to better educate patients to self-administer treatments at home. We see this as building long-term upside rather than immediate impact. We are committed to supporting our specialty pharmacies in that conversion.

Matthew O'Brien, Analyst

Okay and do you have any visibility into the number of patients? Maybe typically you know 100 in the funnel just given what's going on, you're at 110, 120 versus what you typically see? Is there a way to quantify that to give us visibility?

Don Pettigrew, President and CEO

What we see is, for example, CSL Behring and Hizentra, where a look at the percentage of their IG sales attributed to subcu IG has shown about a percent growth for that market quarter-over-quarter. That is a good metric to support the movement from IVIg to subcu IG.

Matthew O'Brien, Analyst

Got it. Okay. And then just to close on the plasma disruption commentary, what would have to occur for you to be impacted in terms of your ability to supply the market? That's often an x-factor that's difficult to gauge.

Don Pettigrew, President and CEO

What many may not be aware of is that the plasma supply historically has been very low compared to demand. If demand increases, specialty pharmacies will try to manage allocation between their IV products and subcu options. We see a significant increase in prescription rates for subcu IG. Notably, the supply of IG is better than ever, and since the manufacturing process takes from seven to twelve months, any major disruption would likely present a supply challenge in 2021. This assumes no ramp-up efforts, but we are actually observing the opposite regarding new collection centers and awareness campaigns.

Matthew O'Brien, Analyst

Okay, that's helpful. Just two more from me. I've got several distributors out there, and I think you mentioned in the last call that there were possibly some pull-forward buying, maybe in Q1. Are there any events for inventory levels in the channel or one-time purchases to call out in Q2 beyond what you're seeing on the clinical trial or demand side?

Don Pettigrew, President and CEO

The underlying fundamentals of our business remain steady, and if anything, we're seeing acceleration into the subcu business, which is good for us. But in terms of distribution, that's usually driven by the larger specialty pharmacies' demand. While we observe the continued underlying demand of over 20% growth, we anticipate the increase in the subcu IG patient population and that specialty pharmacies are preparing for that.

Matthew O'Brien, Analyst

Got it, okay. That's helpful. Last one from me. Don, I know you're limited in what you can disclose on the drug partnership side and you talked about hematology specifically. Can you provide some updates on how those partnerships are progressing? Are any nearing the point where you could talk about them, maybe later this year or into next year? Should we anticipate updates on new drugs later this year, or is it more of a 2021 event?

Don Pettigrew, President and CEO

I appreciate the question and understand the interest. Currently, we're engaged in clinical trials ranging from Phase I to Phase III in various stages, and as they approach Phase III and commercialization, we will communicate updates. However, there’s nothing else to report regarding expected upsides from clinical trials beyond what I've discussed concerning hematology.

Matthew O'Brien, Analyst

Got it. Thanks so much.

Don Pettigrew, President and CEO

Thank you, Matt.

Operator, Operator

Your next question comes from the line of H.C. Wainwright. Please go ahead.

Unidentified Participant, Analyst

This is dialing in for Ram Selvaraju. How are you doing?

Don Pettigrew, President and CEO

Good. How are you?

Unidentified Participant, Analyst

Yes, I'm doing great. Just a couple from me. What are your thoughts on the HIgH-Flo Super26 needle launch? Can you provide more clarity in terms of timeline, pricing, and whether this would cannibalize revenue from existing needle sets?

Don Pettigrew, President and CEO

Yes, we announced in 2019 the 5, 10-K clearance for our Super26 Safety Needle Set. This is really a product line extension in response to a growing preference for faster infusions. Our strategy has been to collect clinical trial data, which has faced some delays due to COVID-19. However, we still plan to launch in Q4 2020. This is a product line extension; we anticipate a small premium but don’t expect a material impact on our revenues.

Unidentified Participant, Analyst

Okay, that's really helpful. In terms of pricing, our understanding is that each PIDD patient brings recurring revenue of $750 per year for your company, and for CIDP, it's about $1,500. How should we be thinking about the revenue per patient in the new indications you're currently working on? Is there a chance for revenue per patient to exceed $1,500 in the new indications?

Don Pettigrew, President and CEO

It's an excellent question and hinges on the frequency of therapy. In the case of CIDP patients, they typically administer treatment two to three times a week, versus once a week for PIDD patients. Most therapies we're pursuing exhibit similar dynamics, with some having slightly lower frequency and others more frequent administration. Overall, we aim to maintain similar frequencies.

Unidentified Participant, Analyst

Okay. I think that's it from me. Thank you.

Don Pettigrew, President and CEO

Thanks for the questions.

Operator, Operator

Your next question comes from the line of Kyle Rose with Canaccord Genuity. Please go ahead.

Kyle Rose, Analyst

Great, thank you for squeezing me in here. A lot has been asked, Don, so I want to ask a more high-level question. You've obviously brought on a lot of talent focused on partnerships and future development. Help us frame out how your conversations with pharma manufacturers have trended over the last four to five months from a COVID perspective. There's a lot of focus on shifting to the subcu space in IG specifically. How have development priorities and timelines shifted from the pharma manufacturers' perspective in relation to the broader trend of subcu moving to home? Also, does COVID impact any of those development timelines, given the difficulties in running trials and analyzing data due to social distancing?

Don Pettigrew, President and CEO

Thanks, Kyle. For the most part, we have a net positive effect with our connections with these manufacturers. COVID-19 has increased our availability to support these manufacturers. We've spent considerable time on WebEx training and connecting with their sales and marketing teams, supporting our current business. There's also heightened interest in expanding these therapies beyond PIDD and CIDP, and we're engaged in discussions to support trial initiatives around these indication expansions. With that said, we’ve seen delays in certain initiatives, including some clinical trials that we're hopeful will accelerate again. But overall, we feel that the biggest impact from COVID-19 has been these delays.

Kyle Rose, Analyst

Okay, great. When considering the new drug launches in IG and particularly in subcu over the past 12 to 18 months, how do you perceive the overall market size? Is this driven by growth in the diagnosis rate of PIDD, or is it primarily a near-term share shift from IV to subcu?

Don Pettigrew, President and CEO

The answer is both. There was an existing trend towards the movement of IV to subcu patients, but we see an accelerated push driven by what should be obvious and logical solutions. Regarding the size of the subcu market and new entrants, we see Xembify from Grifols having an immediate and positive impact on the supply of IG. We believe the increased supply will promote awareness and prescriptions for subcu IG. Additionally, NIH estimates now indicate approximately 500,000 undiagnosed patients in the US, which is larger than previously communicated. Hence, we feel that the addressable market has increased based on new available information as well as better awareness on subcu IG.

Kyle Rose, Analyst

That's very helpful. Regarding the long-term targets you've established over time, how do you perceive your execution since setting these targets? What does that imply for the long-term growth rate? How do you regard your long-term guidance for 2023 revenue levels and the associated growth trajectory? What events might compel you to expand that guidance or provide a different long-term view?

Don Pettigrew, President and CEO

Yes, our guidance remains the same—achieving a $50 million run rate by the end of 2022, as well as reaching 70% margins and achieving year-over-year growth of 20% or more. Changes in that trajectory would stem from the introduction of new products, expanded indications, and adjacent market expansion. Overall, we maintain that this is an organic figure, and as we identify additional drug opportunities, that would most significantly impact the guidance we've provided.

Kyle Rose, Analyst

Okay, great. Thank you for taking my questions.

Don Pettigrew, President and CEO

You bet, thanks, Kyle.

Operator, Operator

There are no further questions at this time. I would like to turn the floor back over to management for closing comments. Thank you.

Don Pettigrew, President and CEO

Thanks, everybody for the questions. I want to close by thanking KORU Medical's production staff for their dedication and all our stakeholders for their support. We have several events planned for the fall and look forward to interacting with you. Next week, we will participate virtually in the Canaccord Growth Conference. Thank you again for your time and attention. I hope you all have a wonderful day.

Operator, Operator

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.