Earnings Call Transcript - VRME Q4 2022

Operator, Operator

Good morning, and welcome to the VerifyMe Year-End 2022 Financial Results Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded today. I would now like to turn the conference over to Nancy Meyers, Vice President and Investor Relations. Please go ahead.

Nancy Meyers, Vice President, Investor Relations

Good morning, everyone, and thank you for joining us today for our earnings call presentation. On the call today, we have Scott Greenberg, Interim CEO and Executive Chairman; Keith Goldstein, President and Chief Operating Officer; Margaret Gezerlis, CFO; and Curt Kole, Executive Vice President, Sales and Global Strategy, to give you an update on our fourth quarter 2022 results. 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 three. 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 Scott Greenberg for some opening remarks.

Scott Greenberg, Interim CEO and Executive Chairman

Thank you, Nancy. Thanks for participating in the fourth quarter of 2022 earnings call. We believe the company is developing a unique platform, both organically and through the acquisitions completed. In 2023, our goal is to further integrate our acquisitions to enhance the company's platform. The fourth quarter of 2022 results and the opportunities being pursued lead us to a positive future outlook. I believe the presentations today will demonstrate that the company is at an inflection point, and for 2023, the company forecasts positive adjusted EBITDA and increased revenue for the year with a strong balance sheet. We believe that the VerifyMe, PeriShip, and Trust Codes brands are important both individually and as a combined strategy for future growth. In addition, I'd like to thank Patrick White for his contributions in the past for being the company CEO. That being said, I believe we have put together an experienced management team and Board of Directors that are poised for success. Just a little bit about the financial and equity snapshot. Our stock price today is roughly about $1.60, and our shares outstanding is 9.4 million, which gives us a market cap closing in on $15 million. Our cash balance as of December 31st, 2022, was $3.4 million, and that's socially consistent with our June balance, so our cash has been holding up and roughly staying equal over the six months. Our debt is $1.9 million as of December 31, 2022. On a positive note, our debt is normal bank debt with PNC Bank. Our revenues for fiscal 2022 is $19.6 million, and as you will see in our projection later on, we should grow revenue both organically and through acquisitions by over 40% in 2023. And our inside beneficial ownership is approximately 17%. With that being said, I would now like to turn over the call to Keith Goldstein.

Keith Goldstein, President and Chief Operating Officer

Great. Thank you, Scott. For those of you who don't know me, I've been the Chief Operating Officer of VerifyMe for approximately four and a half years, and the President and Chief Operating Officer for just over a year. It's a pleasure to speak with you today about VerifyMe. As Scott mentioned, we had a record fourth quarter with revenue coming in at $9.7 million. The fourth quarter is historically the strongest quarter for PeriShip due to holiday shipments. In addition, our sales opportunity pipeline for the brand protection business continues to be robust, and with the acquisition of PeriShip last April, we now have a strong sales opportunity pipeline in our information logistics business as well. Last month, we acquired the assets of Trust Codes, a New Zealand-based software-as-a-service company. Trust Codes is in the brand protection space, connecting a brand to the consumer with store retailing, data transparency, and visibility of the journey for each and every item in the supply chain. We view the acquisition of Trust Codes as strategic for the company. Combining Trust Codes unit level traceability solutions with PeriShip's information logistics platform, we now have a unified software offering that allows us to provide end-to-end security and trust in the supply chain from the point of a product's manufacturer all the way through to the proof of delivery. I'll share more about the benefits from the Trust Codes acquisition when we move to the next slide. We entered into a five-year extension on our agreement with our strategic partner, HP Indigo. For anyone that may be new to VerifyMe, HP Indigo manufactures and sells offset quality digital printing presses. We provide our covert pigment to HP Indigo. They convert it into an ink for the Indigo presses, which we market and sell as VerifyMe Inc. The five-year extension with HP Indigo also offers new financial incentives for them to promote all of our brand protection solutions. We've added PeriShip services to our social media marketing campaign as a first for the company, and it's starting to gain traction. With the addition of Trust Codes, we'll begin promoting unified messaging around our ability to provide supply chain security and trust. We've also developed a mobile PeriShip app that will be rolling out to customers in Q2. The company has demonstrated effective internal controls. This is a great achievement for a company our size and puts us in a very strong position to build off of as we continue to grow the company organically and inorganically. Now I'm going to speak about the benefits from the Trust Codes acquisition. As I mentioned earlier, the Trust Codes acquisition is strategic for the company, and I'm going to spend a few minutes sharing the key benefits that we see resulting from it. Until the acquisition, the cloud-based brand protection solution that we sold was a white-labeled solution from a third party. It allowed us to build the VerifyMe brand and go-to-market with a covert authentication solution with minimal investment. We reached a point in our growth cycle where it made sense to have greater control and flexibility in the software development cycle. The Trust Codes solution is our own. With our own software developers, we can continually enhance it as a best-in-class offering and modify it for specific customer requirements. It also reduces our product costs, increases our margins, and allows us to be more competitive when needed. We consider it to be a proven, highly scalable platform, having over 700 million products marked in the field for more than 500 companies with product scans in 141 countries. Most of Trust Codes' current customers are in the food and nutrition space, which is a natural tie-in to PeriShip's customer base and core competencies. The software platform uses the same programming language and development tools as the PeriShip solutions, allowing for system interoperability and resource sharing. Lastly, the acquisition gives us a foothold into Australasia and a peek into China. So, to reiterate, the combination of VerifyMe's covert solutions, Trust Codes' unit-level product traceability, and PeriShip's last-mile information logistics solution allows us to provide end-to-end supply chain security and trust from the point of manufacturing all the way to proof of delivery, creating a truly unique software logistics offering. I'll now turn it over to Curt Kole to discuss our initiatives to drive new business and revenue by market sector.

Curt Kole, Executive Vice President, Sales and Global Strategy

This is Curt Kole, and thank you, Keith. I'm going to spend a few minutes talking about some of the initiatives that we've embarked on post-acquisition, some of the things we're going to do in the future that we believe are going to drive new business. We are so enthusiastic about the recent acquisition that we've embarked on a total rebranding, including logo, website, messaging that encompasses all the blended services. We believe that the acquisition builds out the brand in a way that we have not previously. We are looking at selling propositions to all aspects of the enterprise, inclusive of PeriShip, VerifyMe, as well as Trust Codes. We've embarked on a full-scale digital marketing campaign to include social media, paid search, email marketing content, and content development. In addition to our sales efforts that we have embarked on originally, we believe that this is going to enhance our opportunity to inform the market and position us uniquely in this space. As Scott and Keith mentioned, we are in the info logistics business. We handle no product. We manage the information associated with that, and we believe that value increases daily, given that it's about data, about data, and about data. We're fortunate enough to be aligned with folks in our organization who understand that, who understand the value of it, and how to translate that into new opportunities and revenues. We also engaged a third-party lead generation organization to cast a wider net. Given the addition of our new organization, we believe we're positioned uniquely and want to ensure that we're touching all the folks out there that could have a need for our services and the unique nature of what we deliver from a logistics perspective. One of the recent developments is putting our tools in the customer's hand. We've always had a very robust customer portal. We believe we are going to translate that into a handheld device so that they can understand the nature of their shipments, the status of all their shipments in transit without having to open their computer or reach out to us directly. The upselling opportunities presented as a result of the Trust Codes, VerifyMe, PeriShip collaboration have opened up areas for us that we have not been able to address before. They come to the table with a great tech skillset. We look forward to working with them. We've had the opportunity to engage with them already. They're in the States this week, and uniquely, we are meeting with a single customer that currently does business with PeriShip and VerifyMe because they have a strong interest in the serialization aspects that Trust Codes bring to the table. We're enthusiastic, we're excited, and we look forward to the next year ahead. This is a segment of our business that shows not much change from previously. We believe that the largest portion of that pie will continue to grow. We also believe that the health and personal care, health and beauty, however you choose to term it, presents huge opportunities with regard to Trust Codes in the technology that they deliver. We expect that we will be able to grow the apparel business as a result of this acquisition, which is a small segment of our business, and we look forward to pursuing that opportunity this week as I mentioned in the meetings that we have scheduled. And with that, I will pass the baton, and I appreciate your time and your interest.

Keith Goldstein, President and Chief Operating Officer

Thanks, Curt. Just to quickly provide the 2023 outlook, we are projecting revenue to be at $28 million or better for 2023, which is slightly better than the guidance that we've previously provided. We expect the gross margin to be consistent with 2022 or better, which was at 33%. As Scott mentioned, we are projecting positive adjusted EBITDA. And with that, I'll turn the presentation over to our CFO, Margaret Gezerlis, to touch upon the financials in greater detail.

Margaret Gezerlis, CFO

Thanks, Keith. Good morning, everyone. Thank you for joining us. As you heard from Scott and Keith, we continue showing record results and have a positive outlook for the upcoming fiscal year. Our Q4 revenue was $9.7 million, an increase of 86% over the third quarter revenue. The gross profit margin was affected by a technical difficulty. Lower gross margin was in line with our seasonal shift in product mix between proactive and premium revenue streams. We had a net income of $0.1 million in Q4 2022 compared to a net loss from a technical difficulty in the third quarter 2022, and a net loss of $1 million in the fourth quarter of 2021. In this slide, you can see the improvement of our financial results. We remain consistent quarter-over-quarter. Our adjusted EBITDA is a positive $0.7 million in the fourth quarter, an increase of $0.9 million or approximately 500% when compared to the third quarter adjusted EBITDA loss of $0.2 million. Our business is seasonal with the fourth quarter showing the strongest performance. Our first quarter is lower performing in comparison, however, we do expect a positive outlook for the fiscal year 2023 as mentioned previously. The next slide illustrates the dramatic increase in revenue and gross profit in 2022, which includes the acquisition of the PeriShip business starting on April 22nd, 2022. We expect to maintain or improve our gross profit margin for the fiscal year 2023. Our cash as of December 31st, 2022, is $3.4 million, a decrease of $6 million from $9.4 million on December 31st, 2021. Since the acquisition of the PeriShip business in April 2022, we required an initial cash outlay of $7.5 million and a repayment of debt in Q3 of $1.9 million. Our cash has remained steady. If you look at comparison to September as Scott previously mentioned. As for year-end, we have working capital of $4 million, $10.4 million of intangible assets and goodwill related to the acquisition of PeriShip, and a four-year term loan with PNC of $1.9 million. We also have a $1 million revolving line of credit with PNC, of which no amount has been withdrawn as of December 31st, 2022. We continue to believe that we have sufficient cash to cover our operations for the foreseeable future as our business starts to generate cash. We believe the acquisitions of the Trust Codes assets in Q1 2023 allows us to provide a comprehensive solution to our customers that will improve our results. We continue to grow the business organically but are always looking for opportunities to increase our shareholders' value. With that, I'd like to thank you for your participation and open the floor to any questions you might have.

Operator, Operator

We will now begin the question-and-answer session. Our first question here will come from Jack Vander Aarde with Maxim Group. Please go ahead.

Jack Vander Aarde, Analyst

Okay. Great. Good morning guys. I appreciate the update. Thanks for taking my questions. Scott, good to see the strong finish of 2022 with strong fourth quarter revenue. Obviously, the bulk of that was PeriShip. And I think in the preliminary announcement I saw that the core VerifyMe business seemed to be up 60%, which was ahead of your 50% year-over-year growth guide.

Scott Greenberg, Interim CEO and Executive Chairman

Yes.

Jack Vander Aarde, Analyst

So, how does the new revenue guidance of $28 million for 2023 fit into the picture? How should we consider the core VerifyMe business? Do you still see it growing at that 50% rate? Any insights would be appreciated.

Scott Greenberg, Interim CEO and Executive Chairman

Yes. I mean, the positive aspect of the VerifyMe business is twofold. One, the incremental gross profit is typically over 60%. So, as we improve VerifyMe, it has the high margin business. We do expect the VerifyMe business again to grow in excess of 50%. That was taken into consideration for our ability to raise the guidance from an excess of $25 million to an excess of $28 million. So, the answer to your question is good news. The answer is yes. And why we feel positive is you could see all the additions we've made to the technology and the features of the technology and mobile apps to generate additional revenue. These are the things that the company never had before, and we're starting to make significant progress in those areas. So, we are optimistic for both VerifyMe technology, PeriShip technology, and Trust Codes, all showing organic revenue growth in 2023.

Jack Vander Aarde, Analyst

Okay. Great. And then, since the PeriShip acquisition did close in April, and just circling back to your new guidance for 2023, $28 million at least, I guess I'm trying to get a better sense of what you expect for a true or a net revenue growth going forward. And I know you're not providing 2024 guidance by any means. But is there sort of a normalized growth rate you think beyond 2023 once the dust settles from the integration?

Scott Greenberg, Interim CEO and Executive Chairman

Yeah, that's why I call it an inflection year. We expect growth this year, but in order to continue significant growth, which we believe we will, we have to succeed in what we're doing, we have to execute. I believe we'll execute, and the growth rate will continue. But this is going to be the inflection year, and we feel comfortable that we will have continued revenue growth, organic growth, and significant growth beyond 2023.

Jack Vander Aarde, Analyst

Okay. Great. And then maybe just one more for me, and I'll hop back in the queue. But Scott, you obviously took over as Interim CEO after Patrick White. I thought Patrick White did a great job helping you guys get to this point. So, kudos to him for that. Just maybe an update on your CEO search process or what you're expecting or looking for.

Scott Greenberg, Interim CEO and Executive Chairman

Well, right now, we wanted to have the team focus on executing. We believe we have all the key people in place to execute. We did not want any distractions from achieving our goals in 2023. So, since I was already Executive Chairman, we all believed that the best approach currently would be for me to continue on as Interim CEO. I don't believe there's any rush in making changes, but we will evaluate that. The number one goal is to not disrupt the company. I believe the way we reorganized the management team provides everyone with a clear focus and agenda, and the Board thought it was the best way to approach it.

Jack Vander Aarde, Analyst

Understood. Okay. That's it for me. Congrats on the increased outlook and strong results. I'll hop back in the queue.

Scott Greenberg, Interim CEO and Executive Chairman

All right. Thank you.

Operator, Operator

Our next question will come from Mike Petusky with Barrington Research. Please go ahead.

Michael Petusky, Analyst

Good morning. Thank you for the question. One thing I'm curious about, which I haven’t noticed, is whether PeriShip grew or shrank in Q4 compared to the previous Q4, given that it wasn’t part of the business last year. Thank you.

Scott Greenberg, Interim CEO and Executive Chairman

Margaret?

Margaret Gezerlis, CFO

Yeah. So, PeriShip, generally for the full year, came in lower than it was in the prior year, and that related to some business that was lost, primarily in Alaska. So, the Q4 actually remained steady because we had a record Q4, and it was a higher percentage of the total revenue. Last year, the Q4 came to roughly 33%. We were expecting the same kind of percentage this year, but it landed at 37%. So, it was a very strong Q4.

Scott Greenberg, Interim CEO and Executive Chairman

But yeah, what happened is, looking at it, Q4 was relatively flat compared to Q4 last year.

Michael Petusky, Analyst

But was it $9.7? Can you just give me the number so I can compare to that?

Scott Greenberg, Interim CEO and Executive Chairman

Yeah. Margaret, do you have the number for Q4 in the prior year of PeriShip?

Margaret Gezerlis, CFO

Yeah. So, the number was around $9.5 million.

Michael Petusky, Analyst

Okay.

Margaret Gezerlis, CFO

And then this quarter was $8.9 million.

Scott Greenberg, Interim CEO and Executive Chairman

So, basically, looking at it, we've added a lot of accounts, and even though it was down slightly the same from last year, the prospects look good. We expect to have organic growth again. A lot of accounts were added. You saw all the new things we put into place, so we're optimistic that PeriShip will start having organic growth back under our domain.

Michael Petusky, Analyst

Sorry, I may have misheard. Was it 9.9 or 9.5 for the year-ago Q4?

Margaret Gezerlis, CFO

9.5.

Michael Petusky, Analyst

Okay. So, it did grow, or I'm sorry it didn't grow because it was 8.9 is the comp. Okay. Got it.

Scott Greenberg, Interim CEO and Executive Chairman

Our overall revenue grew, but the PeriShip, because of the VerifyMe business. So, we did have organic revenue growth in the fourth quarter, but it was primarily attributable to the huge growth of the VerifyMe technology.

Michael Petusky, Analyst

Okay. Sure. If you look at the slide showing revenue by market sector for the quarter, how do you see that changing over the next year and the next three years? I'm assuming healthcare will make up a larger percentage, but I was wondering if you could elaborate on that.

Scott Greenberg, Interim CEO and Executive Chairman

Well, I think the percentages will switch slightly, but it'll be on an increasing revenue base, which means that unit's growing. So, I would say overall that Trust Codes brings us into a lot of things, like baby formulas and those types of products. We're also looking for ways to expand our pharmaceutical sector. So, I would say while we have other industries, the food and beverage and the healthcare should go up as percentages, but there are such a big percentage now that they will be slightly bigger on a much larger, hopefully much larger revenue to grow.

Michael Petusky, Analyst

Okay. And then just shifting to the actual Q4 result, was there any unusual items, either positive or negative, that would've impacted PeriShip margins or revenue in the quarter? Like, was there anything unusual as I think about how to model next year?

Scott Greenberg, Interim CEO and Executive Chairman

Well, the one thing that does happen is in the high revenue quarter. We have what's called premium and proactive. The premium business does not have pass-throughs. The proactive does. Basically, in the fourth quarter, a lot of the revenue is shipped for Christmas, and the higher percentage is proactive. So, it's just due to the mix of product lines in Q4, not due to any change in our gross margin of our deliverables.

Michael Petusky, Analyst

Okay. But that will repeat at least in next year's Q4?

Scott Greenberg, Interim CEO and Executive Chairman

That would probably repeat. But all I'm saying is that's the only thing that changed the margin. There was nothing unusual, and no one-time adjustments or adjustments that impacted the business in Q4 other than the normal product mix.

Michael Petusky, Analyst

Okay. Is there likely to be a positive adjusted EBITDA quarter after next year's fourth quarter? Are you likely to find a quarter during that time to show positive adjusted EBITDA?

Scott Greenberg, Interim CEO and Executive Chairman

Well, the answer is that if you look at Q3 and Q2, they were close to being positive as well. I mean, they were negative $300,000, I believe, in one quarter. So, going from negative $300,000 to a positive quarter is not out of the question. It's actually probably not out of the question at all.

Michael Petusky, Analyst

Okay. All right. Thank you so much. I appreciate it.

Scott Greenberg, Interim CEO and Executive Chairman

All right. Thank you.

Operator, Operator

Our next question will come from Daniel Orla, a private investor. Please go ahead.

Scott Greenberg, Interim CEO and Executive Chairman

Yes, Daniel. Just so you know, we're limiting it to two questions. I'm trying to get you the two best questions, but go ahead.

Unidentified Analyst, Analyst

Okay. Sir, what are you guiding to on operating margin?

Scott Greenberg, Interim CEO and Executive Chairman

We didn't guide operating margin. What we did is guide overall adjusted EBITDA for the year, which we expect to be positive. We did say that we expected our gross margin to be the same or better than the prior year. So, we expect our overall gross margin to increase. We expect our operating profit to obviously be adjusted EBITDA positive, but as for the dollar value for operating margin, we did not provide guidance on that.

Unidentified Analyst, Analyst

What cost reductions can you see effectuating, given the brand-new branding that you're proposing? You're obviously changing the business model, changing the business mix. Is the current Salesforce at VerifyMe, which I recall being not particularly candidly, not having produced much in the last several years, is that a source of rededicating capital so that we can look for higher expected growth given the new brand proposition and marketing?

Scott Greenberg, Interim CEO and Executive Chairman

Well, if you look at it, a few things happen. One is, we now have the management team on Trust Codes in the mix, and they have a sales and marketing person. The thing to realize, and I tried saying this before, that we believe each brand is still important. That being said, we now have the overall strategy of the three brands. We are using some of that incremental profit to do things. As Curt and Keith discussed, we are improving the product. So, a lot of what we've done is improving the product. And as for sales and marketing, we're spending a lot more time at trade shows, reintroducing the product. We were just at a seafood show as well. We are relying on our distributors across the world. One of our three salespeople is also helping out with Trust Codes at the VerifyMe division. We're reallocating time to get them involved with other projects. But overall, we're not reducing the sales expense going into 2023. We think sales and marketing are essential on our increased revenue basis and important for our success next year.

Unidentified Analyst, Analyst

Okay. So, just as a half question then, as a correlated to that, is HP a self-sufficient Salesforce, and with that relationship developed, do you think more aggressively over the course of the year? I mean, how do you see HP unfolding on a legacy opportunity?

Keith Goldstein, President and Chief Operating Officer

Sure. With the new agreement with HP, there are now incentives that did not exist before for their solution architects and their sales teams to more proactively promote the VerifyMe solutions. Those two things, I think, will help to grow and spur additional sales through the HP Indigo global sales team and solution architects.

Scott Greenberg, Interim CEO and Executive Chairman

Thank you, Keith.

Keith Goldstein, President and Chief Operating Officer

Yes.

Scott Greenberg, Interim CEO and Executive Chairman

Thanks, Daniel. Moderator, why don't we switch to the next caller at this point? So, everyone can participate.

Operator, Operator

Our next question will come from Russ Barnes with EPS. Please go ahead.

Unidentified Analyst, Analyst

Hello folks. Good morning. Thank you for taking my call. So, what can I do as an individual investor? I know that there is LinkedIn and I talk up the company, particularly VerifyMe. I don't know about the other companies. But what can I do as an individual to help make this thing grow? I mean, it's fantastic. When I first learned about it from Norman, fantastic product. I'm just surprised that thing hasn't been scooped up by every country in the world. I think it's great, but like I said, I'm one individual. I own a heating and air conditioning company here in the Washington DC marketplace. Can this thing squeeze onto a dollar bill? Can we go after the government in terms of putting your mark on a hundred-dollar bill? What can I do to help out increase sales?

Scott Greenberg, Interim CEO and Executive Chairman

Well, Russ, thanks for the question. I think the first thing is we have to help ourselves, and we have to execute ourselves. I understand it's been a long history and a long road. But if you looked at where we are today, the product is much more enhanced with many more features than it was two or three years ago. Three years ago, while there were a lot of hopes and prospects, the company needed these features in order to be successful. It needed all the things we've put together now. And that's why you're seeing the revenue growth. I know it's not up to the level that was promised many years ago, but I think now you have a nice developing company with a solid foundation. When you say help, any introductions to customers at the highest levels, relationships shareholders have, relationships anybody has that we could have the ability to get a meeting set up to demonstrate what we have, would be greatly appreciated.

Unidentified Analyst, Analyst

Okay. Thank you very much. Have a good day.

Scott Greenberg, Interim CEO and Executive Chairman

Thank you.

Operator, Operator

Our next question will come from Jeff Porter with Porter Capital. Please go ahead.

Unidentified Analyst, Analyst

Hi guys. Could you give us a sense of the employee compensation structure, sort of what percentage of compensation is in options or restricted stock units and how those vest over time? Just like to get a sense of, are we all pulling together from the same team here, and are the employees motivated to help get the stock price up?

Scott Greenberg, Interim CEO and Executive Chairman

Thank you, Jeff. One of the things that we've put in place in the last year or two was a similar approach that we had in my former company, GP Strategies, which is basically to align the stockholders with the executive team and employees of the company. The Board of Directors has historically taken all their compensation in restricted stock of the company and have not pulled out any significant cash or working capital. So, the Board is aligned with the investors. A second plan that we put in place for the executive team, including myself, is that people receive restricted stock grants, but the stock vests when the price hits certain levels for a period of time. This is what we used in my former company. Basically, in order to earn your shares, the company has to approve, so the shareholders and employees are aligned. Last year, the executive team received between 50% and 70% of their base salary in these types of shares, but they only earn the shares if there is a significant increase in the stock price, and it can't be for one day; it has to be over, let's say, a 20-day period. I think that aligns the investors, the shareholders, and the executive team.

Unidentified Analyst, Analyst

Makes sense to me. Thanks.

Operator, Operator

Moderator, do we have any other questions at this point? There are no remaining questions at this time. At this time, we will conclude the question-and-answer session. I'd like to turn the conference back over to Scott Greenberg for any closing remarks.

Scott Greenberg, Interim CEO and Executive Chairman

Thank you, moderator. Thanks for participating. As you can see, you have a company today that is finally starting to achieve revenue with the margin associated with it. You have a company that, as you've heard from our management today, has a strong management team. You have a company that is Sarbanes-Oxley compliant, so you can feel confident in that. For a small company, that's an accomplishment. You have a company that has a strong balance sheet compared to where it was. We look forward to the future down the road with our investors. Thank you for participating.

Operator, Operator

The conference has now concluded. Thank you very much for attending today's presentation. You may now disconnect your lines.