LiveOne, Inc. Q1 FY2022 Earnings Call

Good afternoon and welcome to the LiveXLive Media, Inc., Q1 Fiscal 2022 Financial Results and Business Update Conference Call. All participants will be in a listen-only mode. Please note this event is being recorded. I would now like to turn the conference over to Mike Quartieri, Executive Vice President and Chief Financial Officer. Please go ahead.

Thank you, Danial. Good afternoon and welcome to LiveXLive Media’s business update and financial results conference call for the company's first quarter ended June 30, 2021. Presenting on today's call are Rob Ellin, CEO and Chairman; Dermot McCormack, President; and myself, Mike Quartieri, the company's Chief Financial Officer. I would like to remind you that some of the statements made on today's call are forward-looking and are based on current expectations, forecasts, and assumptions that involve various risks and uncertainties. These statements include, but are not limited to, statements regarding the future performance of the company, including expected future financial results and expected future growth of the business. Actual results may differ materially from those discussed on this call for a variety of reasons. Please refer to the company's filings with the SEC for information about factors which could cause the company’s actual results to differ materially from these forward-looking statements. The following discussion including responses to your questions contains time-sensitive information reflecting management's view as of the date of this call, August 12th. The company does not undertake any obligation to update or revise this information after the date of this call. I would like to highlight to investors that this call is being recorded. The company is making it available to investors and the media via webcast and a replay will be available on its website in the Investor Relations section shortly following the conclusion of the call. Additionally, it is the property of the company and any redistribution, retransmission, or rebroadcast of the call or the webcast in any form without the company’s expressed written consent is strictly prohibited. Now let me turn the call over to LiveXLive CEO, Rob Ellin.

Thank you, Mike. Good afternoon everyone and thank you for joining us today for fiscal 2022 first quarter business update. We continue to focus on the long-term objective of building and owning sustainable valuable franchises, IP, and transformative technologies. Three years ago we took the company public with $7 million in revenues. I'm proud to say my team has delivered for the 13th straight quarter record revenues of $38.8 million, by far the biggest quarter in history. Amazingly, we now have six TAMs each with multi-billion dollar upsides and are all growing together, a perfect storm. We are building brand recognition using music subscription, live events, live streams, OTT, merchandise both digital and hoard, and podcasts to drive our flywheel. Today LiveXLive has grown and evolved into the leading talent-first platform focused on their super talents. Almost $39 million in revenues with none of our live events other than social ones. We had to push back our main event, Spring Awakening, due to COVID to October as well as our 40 to 50 live events, and we're seeing telltale signs that this is starting to open up. As we're getting close to the end of COVID and the opening of events, we were able to use our first live event to prove a flywheel. Our first in-person and global live screening pay-per-view event post-COVID-19, Social Gloves, battle platforms cemented our flywheel as a true zygote of modern media fan interaction. Listen, watch, attend, engage, and transact. Social Gloves reached over 3.5 billion engagements, and it continues to grow by the day. LiveXLive's social media platforms garnered a triple-digit year-over-year increase with total engagements over 671% and average engagements post up 1493%. Social Gloves is a landmark 136,000 pay-per-views, that's equivalent to selling out Madison Square Garden six times. That's a tremendous feat for some of that. This, in addition to the thousands of fans who attended Hard Rock Stadium. In addition, Social Gloves drove a staggering 9,300 new paid subscribers for the night, which represents a conversion rate of nearly 7%. That bodes very well for us as live events return. We're very proud of the phenomenal music lineup featuring some of the biggest names in hip hop: Lotto, DJ Khaled, Fat Joe, Amigos, and Lil Baby. Music is in our DNA, bringing together these explosive performers with pop culture stars. We are showcasing a new form of entertainment connecting sports, music, social media, as well as NFTs, proving our model showcased from selling merchandise in the stadium, packaging NFTs, pay-per-view live streaming. Having our podcasts in town of the event and bringing our key franchises to life, LiveXLive presents LiveZone, Music Lives, and Self Made is all about us leveraging events to build long-term franchises. Partnerships grew with two multi-year multi-million dollar deals with Hard Rock International and NFT leader Sabbatino. The strategic partnership with Hard Rock International will provide us with a new platform to bring exclusive and original wide pop culture events together. We can amplify and distribute these pay-per-view events to select integrated resorts and Hard Rock Cafe properties nationwide. The new alliance will directly tap into LiveXLive’s flywheel business. Again, listen, watch, attend, engage, and transact now with a global partner like Hard Rock. Our wholly-owned subsidiary PodcastOne had over 2.38 billion podcast downloads in the trailing 12-month period ending June 30th, and its franchise of exclusive shows has grown to more than 235, with 35 new podcasts in production, leading to more than 300 podcast episodes per week. There are a series of acquisitions both buy and build. We have created and improved our flywheel of wholly-owned businesses that work together in a complementary and synergistic fashion. In subscription radio, we have our Slacker Radio, live streaming, LiveXLive through our incredibly robust platform. LiveXLive events act entertaining podcasting with PodcastOne, merchandise as custom personalized solutions, and a growing roster of original content franchises that are distributed through LiveXLive's 24-hour OTT channel that now reaches about 294 million people a month. As we describe, our audience can listen, watch, attend, engage, and transact. I’m pleased to report that for the first quarter ended June 30, 2021, revenue increased 269% to a record $38.8 million, while it marks our 13th consecutive quarter of record revenues, along with a 175% increase in contribution margin, which is a record $7.8 million. Given the momentum we see in nearly all of our business verticals, we are excited to increase our previous revenue guidance for the current fiscal year ending March 31, to between $115 million and $125 million, and an increase of $5 million for our adjusted operating income guidance for our operations segment to between $6 million and $12 million. As of June 30, 2021, our cash and cash equivalents was the highest in the history of the company at $24.7 million. Over the past 12 months, we de-risked the business by diversifying our revenue streams with the launch of pay-per-view, the addition of substantial advertising sponsored revenue components as a result of acquiring PodcastOne and the acquisition of e-commerce company CPS and our acquisition in early 2020 of a live music event business, React Presents. In fact, in the past year, we have successfully diversified our revenue streams and reduced our concentration of subscription revenue from 84% to just 23% of our revenue in this quarter. We recently announced one of the most iconic live music events, the Spring Awakening Music Festival, which is the Midwest's largest all-electronic music festival, scheduled to return in Chicago on October 2nd and 3rd. The festival will feature 70-plus artists across unique stages. The event is already officially sold out for the first year of both general admission and VIP, with only limited quantities of tier 2 tickets still available. We will expand this Spring Awakening franchise to four events this year. LiveXLive Reacts Presents returned to live events and currently includes a fully stocked lineup of over 100-plus live shows, featuring over 200 artists performing over the course of fiscal 2022. Through our distribution and partnerships, including our nine-year partnership with Tesla Cars, we are able to grow our paid subscribers to 1.196 million, just under 1.2 million active monthly users. The acquisition of PodcastOne in July continues to be meaningful and accretive to LiveXLive. PodcastOne was ramped up as an IP development and production with its recent partnership with award-winning top creators such as Patrick Wachsberger’s Picture Perfect Federation, the producer of some of the biggest movies in the world; Dylan Howard's Empire Media Group; Barbara Schroeder; Melissa McCarthy; and Kelly McLear. PodcastOne continues to broaden its platform offerings with scripted and non-scripted content across multiple genres, with an eye toward packaging and resulting audio IP for television, film, and streaming platforms. PodcastOne's entire network of podcasts probably is one of the most exclusive streaming selections of podcasts being made available for the first time. We had the Facebook app in the United States. Additionally, we are planning to bring our podcasts into the realm of live events, which celebrated social influencers and PodcastOne's talent Jordyn Jones. Since launching our pay-per-view platform in May 2020, LiveXLive has now generated $21 million in pay-per-view sponsorship and merch sales. LiveXLive has produced over a hundred pay-per-view events and its recently announced K-pop's Joy Ruckus Club 4, the largest global Asian Music Festival, establishing LiveXLive as a premier destination for K-pop. LiveXLive pay-per-views continue to drive new revenue-sharing models for both artists and LiveXLive, including digital ticket sales and tipping, digital meet and greets, merchandise sales, and NFTs, enabling artists to go directly to consumers using LiveXLive's platform. In our last call, I spoke about a significant investment commitment to original programming content. I would now like to introduce my partner and president of the company, Dermot McCormack, to provide a few more details on original programming efforts.

Thank you, Rob. And I'd like to thank you for your continued leadership and congratulate the team on what has been established. I would say that this quarter we brought home the vision of LiveXLive that I joined. We enhanced our flywheel, and we brought it to life with groundbreaking live events. We are building a portfolio of brands that all complement each other with synergies and originals, not unlike what I saw in the early days of managing Viacom's digital portfolio. We are on a path to become a true media conglomerate, built for realities and the opportunities that exist in today's ever-changing landscape. One of the things I'm most excited about is the evolution of our original content IP and production capabilities. We are doubling down on our own proprietary events and franchises specifically, and in this quarter we invested $15.5 million in developing and implementing new IP and content, which drove revenues in the current quarter and will contribute to future revenues. Over the past year, we have launched shows that we believe have the chance to become valuable franchises going forward, including Self Made, a new online talent competition, and this month we launched a Self-Made podcast edition and audio competition to find the next big podcast star for PodcastOne. The competition will be driven by fans and PodcastOne's panel of judges as they listen to see who will take the top prize, a podcasting contract with PodcastOne and a total package worth over $100,000, including promotion across the network. We've also launched the LockDown Awards, our celebration of live music, and coming this fall we have a new edition called the Breakout Awards. We've also brought the world of The Snubbys, a tongue-in-cheek look at the artists, actors, and nominees. Now that award shows are back, from the Grammys to the Oscars, it is hosted by the roast master himself, Jeffrey Ross. We continue to grow our digital festival, Music Lives, with two iterations in the last 18 months and another installment coming in September live from Las Vegas. A live music series, Music Lives On, and Life I Like Presents continue to expand and have been a really big hit with advertisers. We are one of the few companies during COVID that broadcast and produced everything from a live music concert in an artist's basement to a game-changing sports and music mega event at an NFL Stadium. In my experience in my career, it is rare in a media company that you get to invent a new format, but we really feel the social music and boxing event we produced in Miami last quarter was a watershed moment creatively. Everyone took notice. Last quarter was a watershed moment creatively; everyone took notice. We brought together influencers, music, sports in a way not seen before, and we feel we have set the stage to continue to lead in how this type of entertainment evolves. We have already announced the female version of the new format called Self Made Knockout, a pay-per-view event that will feature a boxing AIPA headlined by women from social media, music, sports, technology, and fashion, with the winners vying for over $1 million in prizes. We expect to be announcing a date and location for this event soon, which we believe will be in the fourth quarter of the current calendar year. We have been excited to see how these pinfall pay-per-view events supercharge our flywheel from digital and physical ticket sales to sponsorship to subscriptions and merchandise sales. Stay tuned for more of these unique hybrid events to be added in the coming weeks and months. Of significant importance is the exclusive partnership we have with Tesla; through that arrangement, a LiveXLive subscription is pre-installed as the default radio service in every new Tesla car sold in America and LiveXLive is paid directly by Tesla for those subscriptions. The LiveXLive app is also pre-installed in 85 other automobiles as well as across major carriers Horizon, Sprint, and T-Mobile, which allows Slacker subscribers to listen in their cars and on their mobile devices. Previously mentioned that we see a significant opportunity to expand LiveXLive and Slacker Radio's subscription business into Europe and compete for the opportunity to become the default radio service for a number of European automakers. Our licensing dialog with music labels continues, and we hope to have some news on that front before the end of the year. Lastly, tied to this unique and honorable original content, we are extremely happy to see the combination of our advertising and sales forces close more $1 million deals than at any other time in our history, as RFTs continue to grow in size.

Thanks, Dermot. Let me spend a few minutes to provide a brief overview of our fiscal 2022 Q1 results. Consolidated revenue was a record $38.8 million, up 269% year-over-year from $10.5 million in Q1 prior year. This increase in revenue is due to our successful acquisitions of PodcastOne and CPS, coupled with increases in pay-per-view and sponsorship revenue related to the Social Gloves pay-per-view event, as well as our revenue associated with the production of the event. We ended Q1 with 1.162 million paid subscribers. Please note that included in the total number as of June 30 are certain subscribers which are subject to a contractual dispute, of which we are currently not recognizing revenue. This is the first quarter since the dispute arose in Q2 last year that our subscription revenue is up on a year-over-year basis. The acquisitions of PodcastOne and CPS were accretive to our operating results, enhanced our working capital position, and provided diversification to our revenue base. In Q1, our revenue was comprised of 23% subscription and 77% advertising, sponsorship, merchandising, pay-per-view, ticketing, and events, compared to 84% subscription and 16% in sponsorship, licensing, advertising, and pay-per-view tickets over our prior year. Contribution margin in the quarter was a record $7.8 million, up 175% year-over-year from $2.8 million. The year-over-year improvement was driven by our live event and related sponsorship revenue and the additions of PodcastOne and CPS, which resulted in a $5.7 million increase year-over-year. This improvement was partially offset by a $700,000 charge for additional music royalty as a result of a multi-year audit by one of the labels. The adjusted operating loss in Q1 was $1.75 million, compared to $55,000 in the prior year. Note, the prior year quarter includes the benefit of various cost-saving measures totaling $1.3 million that were implemented by the company during the height of the COVID-19 pandemic, which were not in effect during this quarter. Adjusted operating income for our operations segment was $1.2 million, essentially flat year-over-year, as the benefit of the increased revenue from our live events and related sponsorship revenue was offset by the charge noted above related to the multi-year music royalty audit, adjusted operating losses related to CPS due to the seasonal nature of their business, and the investments in content and marketing within PodcastOne and our live streaming business units, which totaled $2.2 million in the quarter. Adjusted operating loss for corporate was $2.9 million, an increase of $1.7 million, which is primarily attributable to the prior year’s austerity measures, higher personnel, and other public company costs, given the expansion of the company's operations on a year-over-year basis, along with payroll taxes related to stock-based compensation. Even though we've passed the one-year anniversary of PodcastOne acquisition and the six-month anniversary of the CPS acquisition, we continue to look for areas of efficiencies and consolidation. Back in March, we announced the completion of our integrations of PodcastOne, CPS, and React, which we expected to generate over $3.4 million in annual savings. We have just implemented a series of additional measures that are expected to generate an additional $2.2 million in annual savings, bringing the total annual savings up to $5.6 million, of which approximately $800,000 has been realized prior to June 30, with the remainder to flow through in future periods. Turning to the balance sheet, we ended Q1 with cash of $24.7 million including restricted cash of $135,000, up from the $18.8 million we had a year ago. The year-over-year increase was largely driven by net cash proceeds from financing activities of $6.2 million and $800,000 from net cash inflows from operations, offset by investing activities of approximately $1.1 million during the quarter. Our net working capital deficit improved by $3.6 million during the quarter, resulting from the forgiveness of $2.5 million of PPP loans received in the prior year and continued efforts to improve working capital efficiency of the remaining $1.1 million. Our cash position as of August 11 was $18.6 million. Lastly, in June, we entered into a revolving line of credit facility with East West Bank with a borrowing capacity of up to $7 million and an interest rate of prime plus 0.5%. In connection with this credit facility, the holders of the company's senior secured convertible notes agreed to extend the maturity date of their notes and subordinated their security interest in all the company's assets. And with that, let me hand it back over to Rob.

Yes, thank you, guys, and obviously a terrific quarter, but one more to come and really the excitement that Dermot was articulating with the record labels. We extended our contracts with Sony Records. Our balance sheet now is strong, and it's now time to expand globally. It's now time to expand with other car companies. We’re now in over 80 cars, and it's time to do more white label type deals like Tesla. This is a really exciting time for the company. We're looking forward to our live events really starting to take off in October. As you see, over 100 live events, it is a special time for us as we lost substantial revenues for almost 18 months. Now as we return to adding live music, I want to thank everyone for being supportive and sticking with the company through COVID. I’m really proud of my team and my management and really everyone, all the way down the line, for what they have accomplished and built. To think we've gone from a $7 million company to now doing $38 million in a quarter is really exciting. So thank you, everyone. I look forward to questions.

The first question comes from Barry Sine of Spartan Capital Securities. Please go ahead.

Question on Social Gloves, so presumably that drove a big surge in a lot of the revenue that we saw. If you can give us a little bit more breakdown on how that revenue occurred. And then I guess we'll see some of this in the Q later on. But what are the costs that go with an event like that? And the reason I ask is you just reiterated that you have the fall event I guess it would be called Self Made Knockout? And then you also have Spring Awakening Equinox. If we look at Social Gloves and analyze that, will those upcoming events be comparable? Are we looking at two more major events coming later on in the fiscal year that would be similar to what you just reported?

Yes, so Spring Awakening has always been React's trophy property, right? And does anywhere from $6 million to $10 million in revenues, and we've just expanded it and brought it back into the city of Chicago. I fully expect it there. And then we've already announced the second one. So the second one will be a female version of Social Gloves and so far we've seen the traction is absolutely spectacular, a very similar reaction, if not a stronger reaction, to the audience and the potential buyers of this. And then you know, we fully expect there are going to be many more social events like this. Boxing is only one component of it. What we've built here is a franchise, and as we go out now, we will actually own the IP. And this will be IP of LiveXLive. So we couldn’t be more excited about it, and we expect it to be extremely profitable. A lot of the hard work was done in the first event.

And if you could help us understand, looking at the consolidated numbers, how much of that was driven by Social Gloves? What's the profitability in an event like that? And again, the reason I ask is so I can have some basis to forecast the upcoming events that you have?

Yes, so we’re not breaking down the exact numbers, but I would say that you can kind of adopt, right? Mike, if you want to jump in here. Yes, we said it’s 136,000 tickets, assume it’s around $50 a ticket, right? Add some sponsorship, add some money from Hard Rock, and you could basically come to very close to the numbers and really start thinking about the future success of this event, the likely success as this IP goes forward, right? And how much of that hard work was done already in building the first one because the production came out spectacularly, and yes, so we're really excited for the next one. Do you want to add anything to that, Mike?

Yes, I think one of the things just to kind of point out - especially like this one, you want to get back to the profitability of it and we want to make sure we're very careful not to comment on any specific items. But one of the important things is that it proved out the capabilities of our team and of our tech stack. So when Rob says this thing went off flawlessly, if you can imagine 136,000 tickets being sold. The vast majority and I mean the very vast majority of those, all took place probably within the last eight hours before that event took place, with a good portion of that taking place within the last couple of hours. The fact that we were able to handle that volume flawlessly is a testament to the team and also to the investment that we made in that tech stack as part of this event. Therefore I think it's a little unfair to comment on profitability for this one item when we were using it to really prove out the capabilities of the team and the process itself.

Okay. And I guess there will be a little more visibility when the Q comes out; you'll do a little breakout there as well.

There'll be some. Yes.

The next question comes from Brian Kinstlinger from Alliance Global Partners. Please go ahead.

Clearly the revenue is fantastic with Social Gloves and I agree it was groundbreaking, but I guess given the low gross margin and the adjusted EBITDA loss, which I don't think I would have expected with $38 million of revenue? What are the lessons learned that you can take away so that you become profitable when these events happen in the future and you put up these high-water mark revenue numbers? And what drove that gross margin to be maybe lower than it looks like the street would have thought?

Mike, you want to take that?

Yes, well, let me kind of talk through kind of and maybe what I'll do is I'll talk a bit on a year-over-year basis and maybe look at it also quarter sequentially, from just a consolidated overall operating income perspective. So for the year, just when we look back at this quarter, we overcame a couple of things. One, you have the addition of CPS and PodcastOne; the combination of those results were about $1 million in negative operating loss. And that's really kind of geared towards the seasonal nature of their business and plus the investments that we've been making as we've commented before about $2.2 million in content and marketing on top of that, to really drive the back half of the year and into the future of fiscal 2023, when it comes to those units. CPS, especially given it’s a retailer, has a huge seasonal impact on their results. You expect an operating loss in what would be this Q1 and Q2 with a huge profit margin to come through in Q3, which is the calendar year end, which is the holiday sales period. In addition, we had the royalty audit, which hit us for about $700,000, which was completely unexpected. And we had to overcome the year-over-year $1.3 million in austerity measures that we implemented last year, which was primarily around 50% pay cuts taken by all employees. Those 50% pay cuts weren't in effect during this quarter. So there is some headwind versus year-over-year. Plus we picked up some just as a result of the operations from a CPS and PodcastOne perspective. But if you look at that, you could really get back to what would have been, in my eyes, and I don't want to do performer math for a whole lot of people to get in myself with a FD Reg issue, but you could get back to a more reasonable same-store model, which would have given you profitability well north of $3 million.

Okay, and then my only follow-up is the $2.2 million in content and marketing spend. Sounds like those are expenses that ran through the P&L in the first quarter. Are those recurring, and will you have $2 million plus of quarterly increased expenses? Or maybe what you would assume at the beginning of the year, just how did that play out? Thank you.

I would tell you that that’s a slight increase quarter sequentially in Q1. We had about $1.2 million of those expenses. Remember, this is no different than any other media company at this point in time. Viacom, if you listen to their earnings, has a similar story; Comcast: the world is starting to reopen back up and people are investing back in content. We want to make sure that where they’re front in line to be able to maintain the growth of this company accordingly. That's why we wanted to make sure Dermot joined this call, as he is responsible for all of our content.

And Mike, let me just jump in on the question, which is, from my background of working at places like the VMAs and huge tadpoles and corporations that drive year-round business. When you do an inaugural event, especially when no one in the world has ever done this before, nobody has ever even attempted this at the level we've done a lot. You asked what did we learn? We learned as a production efficiencies and marketing. We will apply next, and why we lead the way now is because we're the first ones to do those learnings. This was a lot about learnings, and we're going to apply them in key areas as we go forward.

The next question comes from Jeremy Lieu of D.A. Davidson. Please go ahead.

So I have one question and one follow-up. First question from your vantage point, what percentage of festivals are expected to return to having a live event in 2021 and 2022 versus 2019?

I mean we can't - we can't. It's a very tricky question, obviously the variant is kicking back in, which is scary. AEG just came out with today that you must be vaccinated to go in. But the exciting part is that in the United States, half the country's been vaccinated and this could be way higher soon right? So I don't think they’re going to shut them down. Very few are going to get shut down. I think they're just going to implement rules in place that are going to protect people, making it a safer environment. So we don't see a lot of telltale signs. In fact, we're on the phone with leading government officials in Chicago and they have no intentions of shutting the current events down in Chicago. As you know, Lollapalooza just happened, which is the biggest event in Chicago. So we're pretty excited about it. There are going to be some costs that occur with COVID, and as you know, we pushed Spring Awakening to October. So you're going to have to be smart about it and handle it in a unique way, but I couldn’t tell you exactly what percentage I don’t think many in the United States are going to get shutdown.

Okay thanks, and then Rob, you were early in understanding that consumers would rebundle the content rather than limit themselves to one to three streaming services. So what are the implications of this rebundling for LiveXLive?

Well, as you know, we hired JPMorgan as our bankers to explore all options for the company. There have been a lot of people circling around right? We have a lot of interesting TAMs within this company. You have six of them that any one of them could be a potential candidate to either be acquired or see us spin out a division, right. I think we're right in the center of the storm. My team has just done a brilliant job of surviving and building right to where Live is coming back. I just think Live is going to really enhance that flywheel and give us the opportunity to prove, just like sports did 30 years ago, it's really not that we're that smart. We just started this early and built it around curation. When you build around curation and everyone had an opportunity to watch what we did with Social Gloves and what we've done at Rock in Rio for years, it's the best production in the world. When you're doing that, everybody in content is looking for content. Our average cost for content is still under $20,000 an hour. At that cost per hour we’re really compelling partners to distribute our content, as you can see by our new Facebook deals, two of them: one Facebook to stream all of our pay-per-view events, and number two for Facebook to take on our podcasts as they build their audio platform. They announced our podcast across Samsung, but we had to keep growing at a 294 million number across many platforms around the globe.

Great, thanks for taking my questions.

Thank you, everyone. As a final thought, I recall when I started at a company that surpassed $100 million in revenues; this change attracted significant institutional interest. At that time, we ended up selling the company to Barry Diller as InterActiveCorp. A similar situation occurred with Digital Terminal and Intuit when revenues exceeded $100 million, and it reached a valuation close to $8 billion. I believe this scenario is unfolding again. Our momentum is increasing, and we have an exceptional team and management, along with a remarkable board of professionals who have created companies worth tens of billions. This is the most exciting and enjoyable company I have ever been part of. I’m fortunate to have great partners and a fantastic team. As many of you saw yesterday, Kris Wright, who just joined the board, has been appointed head of all of Michael Jordan's brands at Nike. We will continue to attract top talent. If we maintain this growth, in five years we could have over 10 million subscribers and exceed $1 billion in revenue. Thank you all for your time, and I appreciate your support.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.