Identiv, Inc.
Q3 2015 Earnings Call Transcript

Published: 24 Nov 2015

[Operator:]

Welcome to the Identiv Conference Call. My name is Ethan and I will be your operator for today's call. This investor call may contain forward looking statements within in the mean of section 27A of the Securities Act of 1933 as amended and section 21E of the securities exchange act of 1934 as amended. Forward looking statements can be identified by words such as anticipate, believe, plans, will, intend, expect and similar references to the future. Example of such statements include without limitation, statements regarding our expectations for addition revenue from new sales partnership including but not limited to sales under our agreement with Cisco, our ability to establish a stable financial platform on which to execute our strategy to deliver trust solution, our expectations with respect to sale to government and multinational customers, our believe that we will exit 2015 stream lined, which will allow us to grow our business with a path to profitability in 2016. Our expectations from increased investments in sales, marketing and engineering and our ability to achieve the levels of revenues for which we have provided guidance, readers should not unduly relay on this forward looking statement which are not a guarantee of future performance and are subject to a number of risks and uncertainties, many of which are outside our control which could cause our actual business and operating results to differ. Factors that could cause actual results to differ materially from those in the forward looking statements include on ability to realize cost savings from the restructuring of our operations. Our ability to increase revenues through new sales and marketing programs and sales partnership, our ability to develop successfully and commercialize new products and solutions that satisfy the evolving and increasingly complex requirement to customers. Our ability to financially continue investments in technology, products and manufacturing capacity in order to develop products and solutions for our market, whether the markets in which we participate and target grow, converge or standardize at anticipated rate or at all, including the markets that we are targeting. Our ability to compete successfully in the market in which we participate or target, our ability to meet our sales forecast, our ability to meet financial covenants of our loan agreement, our ability to meet growing demand for our products and general global, call it, political and economical factors that are beyond our control but may unduly impact our markets and our business. For discussion of further risks and uncertainties related to our business please refer to our public company reports including our Annual form -- report on Form 10-K for the year ending December 31, 2014 and subsequent reports filed with the U.S. Securities and Exchange Commission. All forward looking statements are based on information available to us on the day here off and we assume no obligation to update such statements. At this time, all participants are in a listen-only mode. Later, we will be conducting a question-and-answer session. Please note that this conference is being recorded. On this call with me I have Steve Humphreys, CEO, Steve Finney, CFO, and Jim Ousley, Chairman of the Board. I’ll now turn the call over to Mr. Humphreys. Mr. Humphreys you may begin.

[Steve Humphreys:]

Alright thank you Ethan. And thank you all for joining and for your continued interest in the company. We will assume you’ve all had a chance to hear the earnings call and the business direction, we are focusing on going forward. As well as some of the issues we addressed in that call. For anyone who hasn’t has a chance the recording is up on are our Web site and we can recap anything you would like, but for now we focus on additional information and we will just go through a recap if there is a request. Today we would like to address some of the questions and thoughts we have heard through various sources and some we haven't heard but that we expect shareholders and other interested parties in the business would have. After going through these we will open it to questions interactively to go into more details, or to address things we haven't anticipated here. Additionally, as I think you‘re all aware in a couple of weeks we will be in Imperial Capital conference and on December 11th, we will holding another investor session, both in person and via webcast. This is all part of engaging in an ongoing communication process with investors which we’re committed to continuing so our investors can have the maximum possible information. As someone who participated with own cash when the equity raised, buying in at $15 a share. I personally truly believe in the opportunity here, but I also share the pain of the stock price that’s been brutal as we have been trying to execute and realize our opportunity. I’ll be working very hard with the rest of the team to change that direction and also to communicate out at every step of the way. Hopefully we can give some useful data today to support that process. So, jumping right in, we have a set of questions here we will go through and frankly we try to take them just as they came through, so the wording just is what it is, and we will be responding to imperially directly. So the first questions that’s certainly on everybody's mind is, what's going on with the NASDAQ listing, and in this case the press release had some pretty complete commentary. As a reminder the release noted that the staff had determined the company's non-compliant under rule 5250C1 and as a result the stock is subject to delisting unless the company requests a hearing before the NASDAQ hearings panel. In the release the company says that it intends to a timely request a hearing before the panel at which it will presents its plans to regain and therefore maintain compliance with all applicable listing requirements. The press release also noted that the company intends to request the stay of the suspension of trading and delisting of the company's common stock while appeals process is pending. The panel then will notify the company of its decision to allow the common stock to continue to trade on the NASDAQ capital market pending the panel's decision within 22 calendar days from the date of the staff's letter. We also noted the panel can provide a stay of the suspension for period of up to 360 days from the initial date of noncompliance which would extended it to May 2016. Then lastly the release points out that there can be no assurance the panel will grant the company's request for continued listing or stay the delisting of its common stock. So this continues to be a board process which is working with our external service providers, our auditors and lawyers to complete follow up on the special committee which was led by our Chairman Jim Ousley. From the company's operational perspective though we do have the data needed to file all the required reports. We have continued to do our quarterly closes and we've reported those results publically, all in an effort to do everything we can from an operational and informational perspective. We’re executing on an action plan and timeline as is laid out in the release that can keep as listed. That said, we're affected by others and can’t be 100% sure of the outcome and personally I'm doing everything I can work on this and I'll be very glad when we're past it, but this is the status right now. The second question is really core to the business and sorry the answer might be little bit longer, I think it's worth going into and that is, why have the projections been changed and is the company's strategy going to change, fundamentally, what is the company's strategy going forward. And this discussion is timely because we just had our quarterly all hands today and we’d like to say here now it’s going to be exactly what we discuss internally. Fundamentally, we believe our vision is correct. There is a substantial opportunity to provide key pieces of the infrastructure for the Internet of Things, IoT will enable us to access all the things we want transparently but securely with certainty that the right people are accessing the right things and places without effort and with security and trust. It's a big role changing vision. We think we've got a unique platform to win based on our technology strength in RF ID, our customer channel and product base and physical access and our high volume products and customers deploying RF ID connected devices at the tens of millions of volume scale. Now here's where there is an adjustment. Our strategy has been to deploy the framework for this whole vision, work with early adopting customers and used their insights to build out killer apps and expand into the mainstream market. Now the early adopters have been less fast moving and followers have been less consistent than we expected. Similarly, tactically our approach was to productize the early adopter platforms to make it available to the wider market. Now as we said on our earnings call, we're not changing our vision or direction of the company, we're focusing, executing on a focused leverage plan to achieve that same vision. Two aspects of the execution, build on our mainstream base and then solidify and expand from there. We're small and public, so we have to have a predictable business path and this is the best way to accomplish that. I mentioned on the earnings call that our focus is going to be on premises and transponders. Premises being the fastest growing and highest margin segment we have right now. So again from our third quarter premises grew 21% sequentially and 17% year-over-year and also it represented a 60% gross margin which is the highest gross margin segment in our company. So, when a new CEO is looking for the right focus and strategy often it's a difficult trade off, in this case it's not. The highest growth, highest margin, best base to build on still to realize that IoT vision is right there in front of us, so that's what we are going to do. So then in order to build on that base, we really have to focus on delivering truly excellent products, make them future ready but first and foremost be excellent at doing what customer want today. These days customers demand products that truly delight them throughout the product experienced from sales to acquisition to implementation to the experience itself to service upgrades and follow on, we need to nail the current needs of our customers and deliver future ready as an upside, never as a compromised with current requirements. Now often consumers are talked about, when we are talking about products this way, in fact the market requirement is exactly the same for our commercial customers as well as for consumer buyers. And I don't want to belabor this too much certainly don’t want to take too much of our times, we want to get to interact with questions also, but this path is well trodden in technology. The largest and the smallest companies have done it, Apple is probably the poster company for doing it properly, they've gone through the iMac, the iPad, the iPhone, the Apple watch iEverything [ph] is there vision but there execution is very disciplined, they started out focusing on their core market, the iMac, which these days seems old and boring, but that's where they started because that's their customers. Then their new products their iPad, they first sold into that iMac base in that early adopter cool kid market and then expanded their product out from the core. They have added beautiful products at every step, but most importantly they've been disciplined about product launches and making positive cash flow and building either on a current customer base with a new product or a new customer base with existing products, very disciplined and that's exactly how we have to execute this path and in fact that’s how every current revenue public company that still is going after a large market opportunity has to succeed. So, we're far away from anything like Apple and I’m reluctant even to mention them in the same word, in the same sentence, but their lessons are exactly the lessons we have to apply in our small business. So moving along to a related focus question, what are the three things that are keys to Identiv success and what are the three biggest risks to its success, and this is really at the core of the way we're operating, which is really focusing -- I mentioned in the earnings call several metrics that we're tracking the sales pipeline partner sales, card attach rate, reader to platform ratio, touch secured reader unit sales, sales to current customers, sales to new customers, transponder non-top customer sales, sales person productivity and developer days variances. Now that's a lot that we need to manage internally. Externally, priority is to be watching carefully, then we have it boiled down to four, I couldn't get all the way to three, but very simply in the same spirit; number one, sales into our current premises customers getting growth of that current base; number two, diversification of our transponder customer base; number three, delivering world beating products that delight customers and are future ready particularly the door readers and access platforms for government and through the Cisco partnership and we will be tracking unit sales in these areas specifically; and then number four, the reason I couldn't boil it down to three is, partner sales, are very critical too both our model and our growth going forward. The top risks that we're working on; number one is defocus we have to watch out getting sucked into sales to early adopters of non-core products. We have to stay focused on our products, our customers, build into them with depth and then expand out from that, and it's always tempting at a technology company because you can do more to go and do things that aren't going to be leveraged, aren't going to grow properly, aren’t going to be sufficient margin; number two, product delays or quality that's anything less than excellent, as soon as you deliver a great product and then really surprise them after you satisfied their basic needs, customers start to turn back to you for what else can I buy from these guys. As soon as you do the converse, make it hard to order, deliver a product that is anything less than their basic needs and doesn't have that upside the opposite happens. When next you try to sell them something, they're skeptical, your sales cycle becomes longer and more difficult and you got to prove it instead of walking in the door given the benefit of the doubt. So product quality is very-very important and then the third is partner performance. We have to support track and respond to our partners, but the fact is with partners they're great leveraged, it also means we are a step removed from customers so we can't control it completely, so we have to make them very successful. So focusing on our partners, our current customers and our products sounds very straightforward, delivering that mantra every day through the organizations is what we’ve got to do. Okay next question. What's driven the legal costs in the last two quarters? So like all public and private companies, we investigate in where appropriate defend any allegations that are brought forward. As most of you on this call know a special committee headed by our Chairman of the Board has been doing exactly that. The committee has been thorough and has had to follow guidance from its council, it’s taken a lot of time, and yes, it has been costly and I, along with shareholders hate these costs, but I do appreciate the Board's vigor having high ethical standards is a prerequisite for any business to succeed and the Board's determination to follow best practice is something we value. That said, we do have to drive that to a closure and we think we are on a path to do that. I’ll leave that for Jim to comment later if there are some questions on that. But the top priority of ensuring that we have ethical standards throughout company is something that I learned at GE and then I think we all know that can't flex. Next question. Why did the CFO change? So as many of you know, Brian helped lead the financial structured recovery in this business from 37 business units about 3 years ago and in a very difficult liquidity position including several quarters before Brian came on when Identiv had growing concerned reservations from their auditors back in 2013. Those concerns were removed as Brian and the team secured financing and sort out the balance sheet to the Company. The Company now has a need for some with his skill set to focus on cost optimization and efficiencies as well as business strategy alignment and focus as you've heard me talk quite a few times about it already. But Brian's personal needs also made moving to a less travel intensive road and the CFO personally necessary as well as a good fit for both him and the Company. Next question, a good balance sheet question, with 21 million in cash do you anticipate the need for any further dilution via a raise in the next 12 to 18 months. So we certainly believe our current cash position and available revolving facility with Opus provides the Company adequate funding going forward. So we don’t have any current plans for capital raising and our intention is to get the business cash positive. However we do have a debt holder and I’ve seen in our quarter's results we're not cash positive so we can't say unequivocally there won't be a need in the future. But from an operational perceptive we don’t need to do so and we’re certainly working hard to make sure that remains the case. Next question, another one that is certainly on people's minds. Is the Company going to look for a buyer? So this is one of those things that we can't comment specifically on, but we certainly can discuss the underlying questions. So first off by definition of public company as per se is treaded every day. To take a specific path of publicly looking for a buyer is really the best way to get valued for shareholders. A public company has its public price visible, so buyers are constrained by their own fairness analysis to some reasonable premium over market. For micro caps, weak premiums run in the 20% range and buyers who pay substantially beyond this range usually come from inbound interest, grounded in an unsolicited perception of the value of the business, not a company that’s decided to shop itself. Now any buyer can approach at any time and our Board is obligated to assess any such activity. We believe our best path to shareholder value is to develop the profitable growth business we think our market position makes available to us if we have the right strategy and execute aggressively. I will also add I’ve been in and around this industry for nearly two decades and many of the business leaders that are in it and that might be potential partners for this company are people I know well. We see each other at ASIS, ISC West, CES, investor conference, you name it, as you all know. It’s a fairly small industry and we all know each other. If there is specific interest it’s very easy for that to be raised and we would certainly be aware of it, but also channels into the Board are appropriate as well. Okay. So this is one that comes in many forms as next question and just to put it in its most blunt form, which forgive me for being that way is, when will the stock go up? So the conventional answer here of course is that we can’t control the stock market. But I can say a bit more about how management believes our actions contribute to stock appreciation. So you as shareholders can decide whether our approach to value creation aligns with your investment expectations. And we fundamentally believe that share price ultimately reflects the net present value of expected cash flows. So building a solid business we have been talking about, a customer serving, delightful product machine, establishing cash flows, driving growth into a large market and then communicating our opportunity and progress transparently to the investor community is the most effective contribution we can make to value creation, execute and communicate with metrics. So I can’t say when the stock will go up, but that’s certainly what we are doing to support that outcome. Next question. What is the contingency plan if you fail to keep your NASDAQ listing? And I will certainly say this very straight that we are focused on keeping the NASDAQ listing. We went through detailed process a few minutes ago as was outlined in the press release, it’s the exact same thing. It paths followed when companies off of and sometimes return to the name exchange can be seen in other examples, so there is plenty of information about what might happen. But we are really focused on keeping the current listing. Another one sort of related to the -- to when will the stock go up is, why should an investor feel confident in Identiv given its massive stock decline over the last 12 months? Again, as I said, we are just addressing these exactly as we get them. So of course we can’t suggest what investors do on a daily basis, but in the company we believe we’ve got a solid core business, a great expansion opportunity to be a pivotal provider in a world changing market. We’ve got a strong team and I will say that having just little over two months under my belt from day-to-day, very strong team. We have got sufficient capital resources and we have a refined plan to execute efficiently. Our goals continue to be executed, deliver profitable growth, entrenched within our customer base and grab the expansion opportunities. And that is I think the best visibility we can give to where confidence can come from. Slightly more tactical question and we are getting to the end here and then we’ll open it for interactive questions, slightly more tactical question, what changes are expected in the company’s sales model? And I’ve talked about this a little bit on the earnings call but I think it’s worth re-mentioning. Over the last quarters we have really strengthened our partnership base which we’d be looking to leverage even more. This includes channeling sales through our distribution partners as well as adding focus on the recently added technology and channel partners. So it’s pivotal, it’s worth focusing on a lot but I think it’s fairly straight forward, it really is partnership and tracking the metrics and that is one of our top three opportunities and our top three risks is certainly correct. Another one also slightly tactical, but one that we hear a lot and I would point you to some progress already done. The question is Identiv appears to have many business partners for example Cisco. Why are they not listed on your website? And we do have a very strong partnership base including Cisco as well as other technology channel and distribution partners. There is different ways those partners are communicated to the marketplace and largely based on their willingness. But certainly there are lots of them on the website. For example the partnership with Cisco is right on our homepage. Other partner and customer video testimonials are posted on the website and if you are looking for some that are of interest Identiv.com/community/videos are great, particularly if you look at the EVP from Dimension Data, his video gives is one of the best very specific and customer phrased positioning statements I have seen for Identiv and it’s coming from one of our partners. It really shows some of the alignment there and some of the reason I have some confidence in that channel. And there are several others that are very strong videos. Others partners have been reflected in press releases like 3M or PSA Security and these are also available on the press release portion of the website. Now beeping up the website with floating customer and partner logos, updating it overall is certainly important, I agree with that, we’ve just got to get on it as well. Okay last question about that all do proactively here and then we can go interactively, question of, can you provide details around participating in the upcoming New York City Investor Day? So this is part of begin transparent and engaging with our investors. All current investors and interested potential investors are welcomed to participate in the Investor Day. It will be held at the Wardrobe in New York from 10 am to 3 pm eastern time and will be interactive video webcast for anyone who cares to participate remotely. I’ve already heard from some out in California for example, we can't make to New York and will be participating very inactively in the webinar. We also by the way have several conferences B.Riley, Roth, a couple of others Americas Growth Capital, that are typically out in California and are accessible to people locally but they want to do it sooner participation in the webcast will work. So we will provide a short business update consistent with comments during the third quarter earnings announcement, we will address some pre-submitted questions and then just like here we’ll then interactively respond to questions and discuss the aspects of the business which can be publically shared. Now to clarify, we don’t want to be having one on one discussions with individual investors unless they are at sanctioned investor conference and events. As this is inappropriate for both the company and for the investor, certainly from my experience and perhaps some of my conservative training in GE, ensuring that investor conversation are all held in the open, multi latterly with full [indiscernible] discloser, that’s very important. But we are very commented to having an open communication channel with investors and open forms like this. Bringing out the questions, discussions, idea of answers and information about the company. Now in having a lot of open form like this I’ve have been warned that in this litigious society we’ve got, it might be hard to execute, but as a public microcap, it seems important that we have open information flow, so we are going to really work at it. Our business principle support complete transparency unless there is a contractual statutory or personal related thing we aren't allowed to communicate, everything else is fair game. So I am sorry these comments have been a little bit lengthy, but we still have well over half an hour for real time discussion, I did just want to share some of these prospective and some of this issues that we are dealing with on a daily basis in anyway and that we think would be on investor's mind anyway. So with that let’s open any follow up or other topics you would like to address. So Ethan you could open the questions, I do appreciate it.

[Operator:]

[Operator instruction]. And we do have a question from Dirk Terry [ph] who is a private investor. Dirk, please go ahead.

[Unidentified Analyst:]

Steve, Jim thanks for the call, I appreciate the ability to speak a little more to the company directly and hope that this is a positive trend in the future where you all speak more openly to investors. My first question really is we spend about $5 million recently in legal fees and this all comes -- stems from the law suits, what internal procedure did we have in place to catch this sort of things before they had to be brought up in a law suit, what type of oversight does the Board have and could have this been prevented by adding better internal procedures in place to prevent such an action happening in the future?

[Steve Humphreys:]

Thank Dirk. Jim do you want to take that or would you like me two?

[Jim Ousley:]

I can take the first shot at it, this is Jim Ousley Chairman of Board and Chairman of the Audit Community. Obviously, hindsight is a great teacher and the Special Committee and the Audit Committee have both been doing a lot of work around the complaint obviously, and the issues around the company and we have made -- the Special Committee throughout its process has made a lot recommendations with the help of our special council as well as other consultants as to improving the processes and procedures that were highlighted in some of the complaint issues. So we have done several -- we made several changes to policies, putting more definition into the policy where there is not so much discretion if you will, for example dealing with government employees, we don’t want any discretion per say as to what is allowed and what isn't allowed. So there were issues around discretion that we really tightly up. We have tried to make communication between senior company official particularly the CFO office and the Board of Directors and Audit Committee more formal, to that point we have change the reporting process or hard line reporting process to wherein the CFO now reports hard line to the Chairman of the Audit Committee, hopefully to open prior communications. So we've done a lot of things like that hopefully we'll solve and then we're also doing a lot of training of employees in the financial sector, and the section training of our sales organization around policies and procedures, so they fully understand the issues and the ramifications of not implementing and following those procedures.

[Unidentified Analyst:]

Thank you.

[Jim Ousley:]

Steve, do you have anything else to add?

[Steve Humphreys:]

No, I don't. I think you addressed it. Great, thank you.

[Operator:]

And our next question comes from Eric Johnson, Private Investor. Eric, please go ahead.

[Eric Johnson:]

For the past year, I've heard that [indiscernible] are not buying because of the blackout window, when are we going to see you guys step up and start doing some serious buying in that open market?

[Steve Humphreys:]

So, Eric I'll just speak for myself, as I said, I bought in at 15 that's the publically disclosed trading when I bought at the CMPO [ph] placement that several people did. I personally will invest as the opportunity presents itself and I've also got all my time in --.

[Eric Johnson:]

[Multiple speakers].

[Steve Humphreys:]

I'm sorry.

[Eric Johnson:]

That was over a year ago.

[Steve Humphreys:]

Yes, that's exactly right. That was when I bought in

[Eric Johnson:]

Obviously, that’s like the stock at $2.17 instead of 15.

[Steve Humphreys:]

So I can't speak for other insiders, I've just speaking for myself and as we get out of blackout periods, I’ll certainly be looking at it. But I can't make comments on what I think the value is, I have put my money where my mouth is at 15 and that's all I can really comment on the shareholder price.

[Operator:]

Alright. And it appears we have no further questions -- I take that back. We do have Dirk Terry [ph] with another question.

[Unidentified Analyst:]

Sorry about that, I got disconnected there, bad cell service. I do appreciate you clarifying a little more on this internal procedures. Actually, I had two additional questions one was in regards to the down revision of revenues over the past few quarters. We initially had a forecast of about 100 million in revenues for the year, it's been went down to low 60 million range and from the second quarter when Jason had given his presentation, it appeared a lot of those revenues were not actually failed-to-capture but actually pushed off into the future. Steve, could you speak a little more to, are those just deals that we failed to capture or are they indeed just deals that have been pushed off on the horizon in the future?

[Steve Humphreys:]

Yes, good question. I tried to address that when we were talking about predictability as well because I know it's a core question and it's a range, most -- the vast majority of them are still there as business. The challenge as I said is some of these are early adaptor implementations and so they can afford to say, let's do it next quarter versus this quarter. It's not mission critical, got to do it. Whereas our core physical access business transponder shipments all those are, got to do it right now, we need to buy it and go. So the vast majority of those deals are still there, the timing and the scale of them is what we've had trouble managing and that's really with the new strategy is trying very hard to address.

[Unidentified Analyst:]

Okay and I guess my final question is this, as you are going out and speaking to the investor community, trying the get the word out about Identiv nothing speaks more loudly than the confidence exhibited by a company's Board buying shares and we have not seen a single insider Board or Management buy a single share on the open markets and that gives an investor a second thought, if the company is felt to be saw undervalued by its Management or Board, why has the Board itself not publically bought shares?

[Steve Humphreys:]

Yes, I'll talk about that a little bit more again, just speaking for myself and without making specific commitments because I'm not my family's investment community, others including my spouse are a big part of that. We have a set of investments in our family that we do, I have a fair amount of my equity opportunity tied up in this business and doubling down on to do something, that is a long conversation every time, but I'm personally already invested. I've been frankly invested in this business for almost two decades when I took the predecessor company in the late 90s and I'll let other speak for themselves on that, but we certainly -- speaking for myself, certainly take advantage of participating when I can and when it's within my range of investment profile, okay and I am being urged to remind on the blackout period because that is the limitation, but frankly we have to buy whenever we can and those blackout periods are an impediment but not the only impediments. The other thing I would point out is the Company itself from a Board perspective has also participated in share buybacks. Steve, we've done roughly how much cash wise on the share buybacks, about $3.84 million in share buybacks. So we have been active in buying back our own stocks and un-diluting, but I understand the issue.

[Unidentified Analyst:]

Sure and I just to reiterate, I mean, and if you can get the word out to the rest of the Board members because I know we have some Board members with means to do so that nothing speaks more confidence about a company's position, especially when there has been some turmoil surrounding lawsuits and missing revenues. Nothing speaks more loudly than an insider purchasing and buying shares on the open market and that instills a lot of confidence in the investor community. Listen, we know maybe things have not executed as planned but this is a solid company, solid opportunity and we're speaking with our own money. And without that, there is a lot of heads in the sea amongst new investors because no one knows the deal better than an insider and when the blackout periods end, there is an available opportunity for those insiders to buy and that would be a great start to instilling confidence in the investor community.

[Jim Ousley:]

This is Jim, currently recent to the Board and I can say from myself and as Chairman of the Board now, I fully appreciate what you're saying and I would suggest that once we get through all this turmoil of the lawsuits and the blackouts and so on, that you will see activity because the Board does have confidence in the Company and the management team that we put in place and speaking for myself, almost since I’ve been here we've been in the state of dealing with this complaint in the special committee and so on and then blackouts associated with all that. So really I personally not have an ability to do so. But once this is cleaned up I think you'll see a change in that.

[Unidentified Analyst:]

I just want to thank you again for holding this conference, it’s a good step forward I think in the right direction. There has been a lot of difficulty in getting information and you've almost had to be a detective to figure out who some of these partners are and revenue streams because of the secrecy being a security company, we understand that, but being as transparent going forward, naming customers that will grant you guys the ability to be named and doing that on a timely basis will just be helpful to the investor community as we start to heal and move forward and hopefully grow again.

[Jim Ousley:]

Thanks for that comment. We'll keep working on it and we'll certainly have the investor communication going on ongoing basis.

[Operator:]

Thank you. And our next question comes from Dave Callan, a Private Investor. Dave, please go ahead. Dave your line is open please make sure you're not muted. And one last time, Dave, please make sure that your line is not muted. All right, and it appears that we have no further questions at this time.

[Steve Humphreys:]

Okay, thanks. Thanks Ethan. And thank you all for joining as I said we really want to have this be an ongoing conversation. We will be at the Imperial Conference in a few weeks. We will have our Investor Day after that a webinar and we look forward to keeping a transparent and continuous communication path going on with our investors. Thanks again. Have a good day and for those of you who are in the U.S. have a very good Thanksgiving this week.

[Operator:]

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.