Earnings Call Transcript - VRME Q4 2023

Operator, Operator

Good day, and welcome to the VerifyMe Year-End 2023 Financial Results Conference Call. Please note that today's event is being recorded. I would now like to turn the conference over to Nancy Meyers, CFO of VerifyMe. Please go ahead.

Nancy Meyers, CFO

Thank you. Good morning, everyone, and thank you for joining us today for our earnings call presentation. On the call today, I'm joined by Adam Stedham, CEO and President, who will give an operations and strategic update. Following our management presentation, we will have a Q&A session. I would like to bring your attention to the note on forward-looking statements on Slide 3. Today's presentation and the answers to questions include forward-looking statements. It should be understood that actual results could differ materially from those projected due to a number of factors, including those described under the forward-looking statements caption and on the Risk Factors of the company's annual report on Form 10-K and quarterly reports on Form 10-Q. I will now turn the call over to Adam Stedham for some opening remarks.

Adam Stedham, CEO

Thank you, Nancy, and welcome, everyone. We recently had an extensive strategy call. So I anticipate this particular earnings call will be a little shorter than typical. During that strategy call, we stated that we expected to finish 2023 with more than $25 million in revenue and better than breakeven adjusted EBITDA. We finished 2023 with $25.3 million in revenue and $0.4 million in adjusted EBITDA, which was supported by very healthy profits in Q4, and Nancy will discuss those details more. Now during the strategy call, we also indicated that we anticipate double-digit revenue growth in 2024. I reaffirm the expectation for double-digit revenue growth in 2024. Now I do anticipate our H2 growth rate to exceed our H1 growth rate. The company had positive cash flow from operations in 2023, as for Q4, our ending total cash was $3.1 million. Our current maturities of long-term debt was $0.5 million, and our total debt was $2.5 million. So as a result, we had cash net of debt of $0.6 million compared to a negative $0.1 million at the end of September 2023. This net cash position includes proceeds from convertible notes of $1.1 million, and the company anticipates the majority of these notes will be converted as opposed to repaid with cash at maturity. In summary, as a company, we're generating cash, and we anticipate we will continue to generate cash throughout 2024. So at this point, I'd like to discuss our capital strategy a little bit. In Q4 of 2023, the company announced a share buyback program. Since putting that plan in place and entering a trading blackout, the share price has primarily traded above the short-term buyback price that we established. We continue to have our announced buyback program in place and we'll continue to evaluate our strategy around repurchasing shares. Throughout 2024, we'll monitor all available options to utilize our capital to maximize shareholder value. So at this point, let's shift the conversation to our two operating segments. During 2023, we primarily focused on creating the foundation for the company. We focused on operational efficiency and our go-to-market strategy for our PeriShip business and Precision Logistics. We completed the Trust Codes acquisition for the Authentication segment and we vertically integrated the Trust Code technology stack with all of our existing customers. In addition, we defined a strategy to integrate this technology platform into commercial relationships across specific target industries. The Precision Logistics segment completed 2023 with $24.7 million in revenue versus a pro forma fiscal 2022 revenue of $24 million. During 2023, we significantly improved the gross margin for Precision Logistics. Our Q1 2023 gross margin was 29%, and the average gross margin across quarters 2, 3, and 4 was 36%. A small contributing factor to this improvement was the discontinued relationship with some lower-margin customers, which did impact our Q4 2023 revenue in this segment. The Precision Logistics segment generated $8.6 million in revenue in Q4 2023. The net result for 2023 was that the Precision Logistics segment experienced organic growth over our pro forma 2022 numbers and a significant increase in gross margin dollars in 2023 compared to 2024, including in Q4 2023 as compared to Q4 2022. Now let me shift to our authentication segment. The segment generated approximately $150,000 in revenue in Q4. We pointed out in our strategy call that the APAC portion of this segment had been experiencing challenges associated with difficult market conditions. We also discussed that we're seeing those conditions improve, and we anticipate they will contribute to our organic growth in 2024. This continues to be our feeling, our experience, and our expectation for 2024. Additionally, we've added three sales associates to the team within this segment to accelerate our growth by increasing awareness of our industry-leading technology stack. During our technology or strategy call where we discussed our technology, we stated that we now have all of our existing customers transitioned onto the Trust Codes technology platform. Hopefully, you saw our press release indicating our technology platform is now integrated into Amazon's Transparency Program. We're excited by this recent development, and we're pleased that Amazon's review of our platform has confirmed our belief about the significant value it delivers. In addition to that, we believe that we can provide meaningful support for Amazon's efforts to combat counterfeit products in the marketplace. This support will benefit Amazon, the brands sold in the Amazon marketplace, consumers, and it should be very beneficial for VerifyMe shareholders. I look forward to sharing more information about that relationship as it continues to develop. At this point, I'll turn the call back over to Nancy Meyers, our CFO, and she'll provide a more detailed financial report.

Nancy Meyers, CFO

Thank you, Adam. For today's call, I will touch on the financial highlights for the fiscal year and the fourth quarter. Fiscal 2023 revenue increased by 29% to $25.3 million versus prior year of $19.6 million due to the acquisition of PeriShip in April of 2022. On a pro forma basis, our Precision Logistics revenue increased by $0.6 million in '23 compared to 2022. During the fourth quarter, revenue decreased in our Precision Logistics segment by $0.3 million from $8.9 million to $8.6 million due to the discontinued relationship with some lower-margin customers in our proactive service revenue, partially offset by an increase in our premium service revenue. Revenue in our authentication segment decreased from $1.4 million to $0.7 million for the fiscal year and from $0.8 million to $0.1 million in Q4 2023 due to a large order in Q4 2022 that did not recur in 2023. However, we continue to work with this customer and anticipate additional orders in 2024. Gross profit increased by $2.5 million to $9 million in fiscal 2023 versus $6.5 million in fiscal 2022. As a percentage of revenue, gross profit increased to 36% versus 33% in 2022. For the fourth quarter, even with the revenue decrease, our gross margin increased by $0.3 million to $3.1 million in Q4 2023 versus $2.8 million in Q4 of 2022. The year-over-year increase is mainly due to the shift in customer mix and service offerings in our Precision Logistics segment, as well as process improvements the company has made. You can expect some variability in gross margin in the Precision Logistics segment as shifts in customer mix and service offerings occur. General and administrative expenses for the fiscal year increased by $2.2 million from $10.6 million to $8.4 million in 2022. For the fourth quarter, general and administrative expenses increased by $0.5 million to $2.7 million in 2023 versus $2.2 million in 2022. The increases relate primarily to the acquisition of PeriShip Global in April of 2022, Trust Codes Global in March of 2023, severance expense for the year of $0.6 million, and additional stock compensation. Sales and marketing expenses for the fiscal year decreased to $1.6 million versus $1.7 million in 2022. And for the fourth quarter, they decreased by $0.2 million to $0.3 million versus $0.5 million in 2022. The decrease is primarily related to a reduction in employees and consultants, partially offset by additional travel expenses in the Authentication segment. Our net income for the quarter was less than $0.1 million versus $0.1 million in 2022. However, our results for 2023 included $0.1 million of loss on equity investment and $0.2 million of impairments of long-lived assets. In Q2, we discussed our efforts to optimize overhead expenses to improve adjusted EBITDA going forward. As a result, our adjusted EBITDA increased by $1.2 million to a positive $0.4 million for the fiscal year 2023 versus a loss of $0.8 million for fiscal year 2022, and an increase by $0.4 million for the fourth quarter of 2023 to $1.1 million compared to $0.7 million for the fourth quarter of 2022. 2023 also resulted in our first fiscal year with cash provided by operating activities of $0.2 million for the year and $0.8 million for Q4 2023. On the last slide is our balance sheet as of December 31, 2023. Our cash as of December 31 is $3.1 million, a decrease of $0.3 million from the $3.4 million we had on December 31, 2022. However, through the 12 months of 2023, we had a capital raise of $1.1 million through the sale of convertible notes, repaid $0.5 million on our loan, paid severance expense of $0.4 million, and the acquisition of Trust Codes for $0.6 million. As of December 31, 2023, we have no borrowings under our line of credit and have $1 million available to us. With that, I would like to turn the call back to Adam.

Adam Stedham, CEO

Thank you, Nancy. I don't want to repeat the information we recently covered in our strategy presentation. But suffice it to say we're optimistic about the new developments we're seeing in both our authentication and Precision Logistics segments. I'm confident our strategy of integrating our authentication platform into the go-to-market strategy of key industry leaders will generate value. Additionally, I believe our Precision Logistics business is transforming into an efficient operation with a clear value proposition and a defined target market. So I'll simply conclude by saying, I'm excited. I'm excited about the opportunity the company has and our shareholders have in 2024. We are a company with cash to fund our operations, we generate cash, and we have a proven tech stack that solves real problems that consumers and companies face in today's environment. I look forward to sharing more information with you as the year unfolds, but at this point, we'll open up the call for questions.

Operator, Operator

Today's first question comes from Mike Petusky with Barrington Research.

Mike Petusky, Analyst

So Adam, I guess on your comment about the second half potentially being stronger. I'm assuming that you still expect some growth in the first half. Is that a fair assumption that it's not really swung towards the second half? So you do expect at least mid-single-digit growth, something along those lines in the first half?

Adam Stedham, CEO

Yes. We definitely expect organic growth in the first half and second half. We just feel that our H2 will show more growth than our H1, but there will be growth in both halves.

Mike Petusky, Analyst

And then I guess I'm trying to understand because I sort of expected that you would really, as I was thinking, not just '24, but over time, I've sort of been under the impression that more of the leverage would sort of come on G&A and maybe some of the expense items rather than gross margin. I'm wondering if gross margin actually expands going forward? Because I really assumed that as Precision Logistics became a bigger part of the business, that most likely that would continue to decline at least slightly. Can you just sort of speak to how you see this playing out both in '24 and through your longer-term plan?

Adam Stedham, CEO

Sure. The gross margin improvement has primarily been an effort of managing pricing and driving efficiency into the business. There hasn't been any leverage contributing to the gross margin improvement. I completely agree with you that we should be able to generate leverage on the G&A side as revenue grows. We haven't experienced the revenue growth in 2023 that enabled that. However, I would absolutely expect that our revenue can scale without a proportional increase in G&A, so G&A as a percentage of revenue should decrease.

Mike Petusky, Analyst

Is there any chance that number, as an absolute number, can go down in '24? Or will that show some level of growth in G&A?

Adam Stedham, CEO

I don't see it going down in 2024.

Mike Petusky, Analyst

This one is for Nancy. The number I think I heard was $0.7 million for fiscal '23 for authentication, and that would equate to, what, $246 for the Precision Logistics?

Nancy Meyers, CFO

Yes.

Mike Petusky, Analyst

Okay. And do you, by any chance, have the number for Precision Logistics for '22, including the time they weren't part of your company, like pre-acquisition? Do you have that full year number by any chance handy?

Nancy Meyers, CFO

Yes, that was $24 million.

Mike Petusky, Analyst

Okay. So the business did grow.

Operator, Operator

The next question comes from Jack Vander Aarde with Maxim Group.

Jack Vander Aarde, Analyst

Congrats on the strong finish to the year. You definitely hit on all your points, I think, from the Investor Day as well. So no real surprises, all good stuff. I guess I'll follow-up with a question just on — I had a question about the revenue guidance, obviously, but I think that was kind of covered. Gross margin, I just want to touch on this again as well. So the fourth quarter — a very strong record third quarter gross margin, obviously. And I was expecting the fourth quarter gross margin to come down, but it held up — it was much stronger than I thought as well. And it doesn't really seem to be driven by the authentication segment yet. So just — do you have a sense of a gross margin floor on any given quarter going forward?

Adam Stedham, CEO

I think our current gross margin is a sustainable level going forward. Depending—and as you pointed out, as our authentication business begins to grow, it runs at a substantially higher gross margin than our Precision Logistics business; therefore, the gross margin could increase. The larger the percentage of our revenue mix that's associated with authentication would have an upward impact on our gross margins. We don't think this is a one-off. We're confident we're at a sustainable level that could potentially go up with a favorable product mix.

Jack Vander Aarde, Analyst

Okay. Great. That's helpful color. And — let's see, I guess I'll switch gears here. Precision Logistics segment itself in terms of revenue mix and the actual types of revenue or customer relationships you have, it makes sense that the fourth quarter kind of down year-over-year just given that particular customer was a proactive services customer. I think that proactive services was about 80% of your historical mix. Do you have any sort of goal as to what you expect just from that mix or end goal as you exit 2024? Just to get an idea of the pace at which you'll be focusing more on these premium customers.

Adam Stedham, CEO

No, we don't really have a goal. The go-to-market strategy of these two lines of business is very different. One, we support the largest air freight company in the world in their efforts to service their customers. The growth of that business is tied to their go-to-market strategy. The other is more direct selling into the marketplace for us, which would be the proactive business. We don't really have a target mix because the two go-to-market strategies operate somewhat independently of each other, and it's not a situation where we allocate specific resources to achieve a specific mix.

Jack Vander Aarde, Analyst

Got you. That makes sense. And then just maybe one more question for me. I think you mentioned you hired three sales associates in the Authentication segment. Can you just provide an update on your overall headcount plans and sales and marketing headcount strategy and goals in 2024 and kind of just where we are in your plan?

Adam Stedham, CEO

So we've hired three sales associates, two of them are in the U.S. and one is in New Zealand for the APAC area. We continue to — as we're seeing market conditions improve in the APAC region, we wanted to add capacity to take advantage of those more favorable conditions. The primary marketplace and the largest marketplace for what we do is the U.S., so that's why we added two resources in the U.S. We could see us continuing to add to that before the end of the year. We believe that the business operates in a way that it will reach a tipping point. This is not a business that is just slow strategic year-over-year growth. This is a business that is going to reach a tipping point and have quite the inflection. Therefore, we want to make sure that we have the sales capacity available that's trained and ready to address the market as it becomes more receptive to what we do.

Jack Vander Aarde, Analyst

Understood. Well, again, congrats on the strong finish and look forward to Q1. Thanks.

Adam Stedham, CEO

All right. Thank you.

Operator, Operator

The next question comes from Fred Breaker, Private Investor.

Unidentified Analyst, Analyst

I'd like to add my congratulations on your huge improvement over the past. Can you help me understand the significance of your recent press release on Manuka and Amazon and how this will impact the future?

Adam Stedham, CEO

Sure, absolutely. So first off, I would say — and thanks for the question, Fred. First off, I'd say we're excited and pleased to support our customers as well as Amazon's efforts to combat counterfeit. Currently, there are over 33,000 brands that participate in the Amazon Transparency program, and that's been growing at a rate of about 50% a year over the last three years. Our platform ideally targets customers who want to protect their brands in both online and offline environments. Our sweet spot includes brands that sell more than 5 million units per year in total. This includes their sales both on the Amazon marketplace and other distribution channels. Each new brand that adopts our platform for traceability and Amazon Transparency participation would generate an average of about $50,000 a year in annual recurring revenue for VerifyMe. So applying the math and looking at the impact, if we're successful, as we believe we will be in adding these brands, it could have a significant impact on our run rate annual recurring revenue going forward. I look forward to providing more updates on our sales efforts, but hopefully, that gives you a feel for why we think it's significant.

Unidentified Analyst, Analyst

Do you develop these brands as far as acquiring their business? Or did the salesman do that? Or does it come from Amazon? Or how do you acquire these?

Adam Stedham, CEO

Our salespeople are responsible for direct selling. We were just at a trade show last week doing that. Additionally, we work with Amazon, and there's a specific segment of the marketplace that Amazon and VerifyMe are discussing targeting that is ideally suited for our services. So it will be a combination of everything you mentioned.

Operator, Operator

Our next question comes from Jeff Porter with Porter Capital Management.

Jeff Porter, Analyst

Just got one question. Yes, sort of thinking out loud here as we're trying to develop the authentication business, and you mentioned you hired three salespeople. I'm just wondering if there are potentially strategic partners out there that have pretty big sales and marketing reach that touch our prospective customers that we might be able to do some kind of joint venture with or get them to sort of white label our product and really turbocharge our growth in that area. Does that make sense from a strategic point of view?

Adam Stedham, CEO

It does make sense, and it accurately describes part of our go-to-market strategy. When we talk about integrating our platform into industry-leading brands, we refer to a movement. There’s a U.S. and global movement toward smart packaging. We are working with one of the largest canning companies in the world as they look to integrate our tech stack into their product sold to their customers. We’re engaged with the largest packaging company to integrate ours as well. We've discussed the Amazon Marketplace. We’re working with the leading producer of equipment for packaging leafy greens and infant nutrition. So precisely what you're describing is exactly what we're doing; we're collaborating with these companies. Our goal is to have our technology inside and empower their offerings.

Jeff Porter, Analyst

And I would imagine that the gross margins on that type of business are orders of magnitude above where our gross margins are now? Is it more like a software gross margin?

Adam Stedham, CEO

Yes.

Jeff Porter, Analyst

Okay. So hopefully, if we can drive the revenue there, and it becomes a greater percentage of our revenue mix, we could really see the gross margin expand going forward?

Adam Stedham, CEO

Absolutely. I think our current gross margin is sustainable, and it reflects the ongoing run rate gross margin of the company given our proportion of revenue from authentication and Precision Logistics. If the revenue from authentication increases relative to Precision Logistics, it will naturally drive the gross margin up. You're exactly right.

Jeff Porter, Analyst

And last question, in terms of our technology stack, are there any — not holes in it, but are there any additional things that customers are saying, 'Geez, if you could add this feature, that would really enhance the value proposition?' Or do you think that our technology development is pretty much where we need to be?

Adam Stedham, CEO

Right now, I believe our technology stack is ahead of the market. The level of GS1 integration we have provides more functionality and capability than the average consumer realizes they want, particularly in the U.S. market. Therefore, I don't see any gaps at this point. However, as the market evolves, we will continue to develop the technology.

Jeff Porter, Analyst

That's very exciting going forward because I think from an investor viewpoint, the way the company can be viewed is rather than a freight forwarder/logistics company as a value-added technology company in authentication. I think that's got a lot of potential, and it would be very attractive to investors because of the growth prospects. So great job, and I'll look forward to following your progress.

Adam Stedham, CEO

Great. Thank you very much.

Operator, Operator

The next question comes from Richard Greulich with REG Capital Advisors.

Richard Greulich, Analyst

A couple of quick questions and then a couple of comments. First of all, the question: you had spoken during the Investor Day, and you kind of alluded to it again today. You're trying to achieve higher integration with FedEx, working with some of their sales forces. Has that actually started?

Adam Stedham, CEO

No, it has not actually started at this point. We're continuing to work with them around models. This is a very challenging environment. The major freight companies are forecasting a tough year in 2024, and a lot of attention is focused on that. We continue to believe in the strategy, but it hasn't progressed significantly thus far.

Richard Greulich, Analyst

Okay. Number two, while I know you wisely didn't want to rehash everything you did just 1.5 months ago, for those investors who didn't watch that, I would just point out that you mentioned during that presentation that, over a 5-year outlook, you thought $50 million to $60 million in revenues and 15% to 20% adjusted EBITDA margin. I assume in the last 6 weeks that far-out thinking hasn't changed much.

Adam Stedham, CEO

No, it hasn't changed. And I would add that predicting our product mix five years out is very difficult, but the EBITDA margins could be significantly higher or the same or lower depending upon our product mix and the amount of revenue associated with authentication versus Precision Logistics. We haven't changed our 5-year outlook at this point.

Richard Greulich, Analyst

Yes. So the implication I'm getting when you're discussing gross margin earlier is that if you achieve what you think you'd like to do, that adjusted EBITDA margin would be higher.

Adam Stedham, CEO

Yes, if our authentication business grows more rapidly than we currently have modeled in our 5-year plan, it would positively impact our EBITDA percentage.

Richard Greulich, Analyst

Yes. Third, you mentioned your sweet spot is that 5 million units per year, distribution, those kinds of customers might yield an ARR of about $50,000 a year for VerifyMe. But as I recall during the presentation, that $50,000 was kind of the low end of what could be accomplished with customers with more than $5 million.

Adam Stedham, CEO

Completely agree. That could be the low end, and when we look at averages, we think that’s a reasonable figure to expect. But you're correct; our product is ideally suited for customers that operate between 5 million to 100 million units a year. If you have 100 million units per year, that results in a very different ARR for that customer than with 5 million.

Richard Greulich, Analyst

And just — this is just my comment: I very much appreciate the way you're approaching the share repurchase alternative for use of capital. Far too many companies just go out and start buying stock without a disciplined approach. My true sense is that the overall market is very widely overvalued, which is why I look at companies like you during periods when you're not overvalued, but give a simple regression to the mean of overall market valuation, may give you an opportunity, even though your company will be doing well, an opportunity to repurchase stock at a really attractive price. So I appreciate the way you're shepherding your cash in that regard.

Adam Stedham, CEO

Thank you.

Operator, Operator

Our next question comes from Daniel Orla with indiscernible Street.

Unidentified Analyst, Analyst

I think everything was pretty much covered at this point. I'm trying to get a sense of how you think about the pipeline? How lumpy is it? Does it end up becoming like how far are some of these conversations along, so that you can have greater clarity over the course of the year? And then in the context of that, just to reflect on the prior question in terms of share repurchase, how does that then come back and reinforce your ideas around capital management? What is the appropriate price for the shares? I mean if you were to look out and say, well, you're running $50 million to $60 million in revenue in 5 years out. In theory, you should be buying back every share you could today. Obviously, that's not necessarily the balance of risk that you want to maintain.

Adam Stedham, CEO

Right. Let me answer — so from a pipeline perspective: on the authentication side, there's two stages to this pipeline. Stage 1 entails having your technology stack or platform tested, integrated, and coming up with the go-to-market strategy for integrating your technology into partners who will use it with smart packaging or Amazon transparency-related programs designed to empower consumers with confidence and knowledge. We're very far along on that stage. We feel good about our progress, as shown in our recent press releases around Amazon and Amkor. Stage 2 is ensuring we have business development and sales resources to support those customers and help them finalize sales. We are seeing opportunities develop, so we feel confident in our pipeline. That’s on the authentication side. For Precision Logistics, we’re currently focused on understanding the proactive customer base and their value proposition. We believe our current pipeline is considerably less than needed to drive more growth on that side. We are making efforts to increase that pipeline. As I said, this ties back to our capital strategy, and we're focused on preparing for opportunities as they unfold. I believe we have a company at a tipping point, and we need sufficient capital and resources ready without missing out on prospects. We're continually evaluating whether it’s better for us to invest in shares or to hire salespeople based on which will provide the most shareholder value. Right now, we have certain prices in mind for share purchases that we feel grossly miss our actual value. Outside of those, we are strategically looking at multiple options on how to use our capital for the best shareholder outcome.

Unidentified Analyst, Analyst

Fair enough. Look, it’s not a crystal ball. You have to sort of navigate your way. Is it appropriate to think about EPS on a guidance basis, but on a range basis at this point? If we’re thinking about sort of double digits, would that be around $2.5 million, with some higher number of incremental revenue at current gross margin? Is that the right way to think through share count?

Adam Stedham, CEO

You're looking at—are you saying you want a 1-year modeling, or 5-year modeling, what timeframe you are...

Unidentified Analyst, Analyst

I'm trying to think about for 2.5-year modeling. I don’t think it's incorrect, just because if you're at a tipping point, it happens when it happens over the course of the year. I don't think anyone can clarify that. But I am trying to understand if you're thinking about organic growth out for $50 million, you have to be at a certain range of steady-state compounding. Therefore, over the next 2 years, could we say that would be an incremental $5 million at a 35% margin, and therefore, it's trading at X? I'm just trying to understand what we’re discussing here, and this isn't directed to you. It’s about if the stock is intrinsically undervalued; it’s about the revenue base, so what does it take to trade at revenues and well in the earnings? How does that unfold in your mind and part of what we're talking about here is, and this isn't directed to you at all. It's just sort of if the stock is intrinsically undervalued, and it’s undervalued probably on a revenue basis; it's trading at about half of revenues. So what does it take to get it to trade at revenues and well in the earnings? So how does that unfold in your mind, and part of what we're talking about here is we've grounded our outlook and are working through the timing because we don’t believe that we’re constrained in the longer framework with sharing that information.

Adam Stedham, CEO

Absolutely agree. So I get where you're going, and I don't really have a model for you, nothing we’ve shared publicly or that I’d be prepared to share here. What I would say is this is the reality we are in and a lot of technology companies face: There’s a certain level of organic growth you need to demonstrate consistently to start generating credit with your annual recurring revenue, which will help create investor value. Given that we don’t have the track record of organic growth, we're not getting any benefit of that in our share price calculation. I do believe that throughout this year, if we deliver the organic growth we expect, then that coupled with anticipated growth in 2025 should start leading our share price to reflect this organic growth and adding value in terms of EPS over time. However, I don't have a crystal ball, that’s just my best view.

Unidentified Analyst, Analyst

No, no, no. I appreciate your forthrightness on this. It’s hard to set expectations when your primary objective is to properly rebuild the company in many ways. So bringing it to the tipping point should be congratulations for that. But I’m curious about how you look down the road.

Adam Stedham, CEO

I understand completely.

Operator, Operator

At this time, we are showing no further questioners in the queue, and this does conclude our question-and-answer session. I would now like to turn the conference back over to Adam Stedham for any closing remarks.

Adam Stedham, CEO

Thank you. Well, thank you, everybody, for attending. This is an interesting time of year because closing out a year takes a little longer than closing out a quarter. Not too far away, we'll be on another call with you, and I look forward to that and providing more updates as we address questions about the value of our latest press release, and continued progress of the business in Q1. Thank you for attending, and I look forward to talking to you again.

Operator, Operator

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