Sigma Labs, Inc.
Q4 2015 Earnings Call Transcript

Published: 16 Mar 2016

[Operator:]

Good morning and welcome to the Sigma Labs Fourth Quarter and Full Year 2015 Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Mr. Chris Witty of Investor Relations. Please go ahead.

[Chris Witty:]

Good day ladies and gentlemen, and welcome to the Sigma Labs fourth quarter conference call. Following management's prepared remarks, today we'll hold a Q&A session. With me today is Mark Cola, the company's President and CEO. I would now like to provide a brief Safe Harbor statement which is also shown on Slide 2 of our fourth quarter presentation which is being webcast. This conference call may include forward-looking statements that represent the company's expectations and beliefs concerning future events that involve risks and uncertainties and may cause the company's actual results or performance to be materially different from the performance indicated or implied by such statements. All statements other than statements of historical facts included in this conference call are forward-looking statements. Although the company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the company's expectations are disclosed in this conference call and in the company's Annual Report and Form 10-K for the fiscal year ended December 31, 2014. All subsequent written and oral forward-looking statements are attributable to the company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements. Unless otherwise required by law, the company undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise after the date of this conference call. Please turn to Slide 3 of the presentation and I'd now like to turn the call over to the CEO, Mark Cola. Mark?

[Mark Cola:]

Thank you Chris, good morning ladies and gentlemen. I'm delighted to be able to speak with you today about our fourth quarter highlights and if you'd all turn to Page 3 of the presentation, I'd like to walk you through some of the highlights of 2015 and sort of discuss the year a bit and some other matters. So specifically we finished the year on quite an up note and we're very pleased with our performance in terms of revenue, as you can see we posted record revenues, as well as had gross profits of over a $1 million for the year. I'm very pleased with that performance and that of our staff here. We had several new orders in 2015 that we were delighted to earn business from GE, General Electric, as well as Honeywell. Aerojet Rocketdyne is a new customer and client of ours and we're very pleased to have them using our PrintRite3D Technology and in the service bureau space we threw our early adaptor program, gained the interest and support of Spartacus3D in France that is providing services to the aero industry in Europe. And also we continue to work with and are delighted again to be partnering with Additive Industries, the start-up OEM manufacturer of AM Printing Equipment, a photograph of which is shown on the first page of the slide and they are receiving a good reception for their equipment and we're looking forward to our continuing involvement as we - as they roll out their product and we begin incorporate and embed our product into their solutions base. Sigma Labs also participated in numerous industry events, a particular note was the Annual Fall meeting for the Edison Welding Institute's out of their manufacturing consortium. We hosted that meeting here in Santa Fe, New Mexico and it was well attended by industry end users and OEMs, Original Equipment Manufacturers. We had approximately 50-60 attendees at our fall meeting. It gave us a great opportunity to showcase our technology as well as our facility and capabilities during the two day event here in Santa Fe. As I partly mentioned earlier, we, during the course of last year, launched two programs to incentivize and accelerate customer adoption of our PrintRite3D Technology, the first of which was geared towards all the doctors of the likes I mentioned Spartacus 3D and we currently have expressed interest from other end users as well OEM supplying parts to customers about joining our early adopted program. So, then that's received good attention and we are very pleased with the response. The OEM partner program which we also launched last year is designed specifically to that, the OEMs that are making the machined tools such as Additive Industries and others. So we are currently in discussions or negotiations with several others to join the OEM partner program and we are looking forward to accelerate growth in that area as 2016 progresses. The other point of note which we will talk about in more detail in a second is Sigma Labs believes it's the appropriate time to affect a reverse stock split and that will take place tomorrow March 17. And as we look into 2016, we expect the revenue growth to accelerate as the adopted programs and OEM programs gain momentum. And so if you turn to Slide 4, I wanted to talk a bit more specifically about the reverse stock split, why now? And so the momentum for us with the adoption of some of our technologies as I mentioned just previously, it appears to be a message for us to move to a broader exchange which allows us to tell our story if you will to a more relevant and attractive institutional base which up until now we have been limited in our ability to reach out to the institutional investors which as you can all imagine gives us a greater visibility and provides us a pathway to start getting proper sort of research side analyst coverage for us which we know will help us tell the story and broaden the awareness for our technology and out stock. And so at this point the growth acceleration we are experiencing this year, seems that the timing is right and so we put the ball in play if you will and are looking forward to a positive response from the market. If you would move to Slide 5, I would like to talk more specifically about the business components as we look into 2016 and I am going to break this down into topic and headings you see there. Specifically we spent some time last year re-organizing internally here so that we could sufficiently address the two operating divisions that we have put in place. Specifically we have the PrintRite3D quality assurance division which is keenly focused on the adoption and propagation if you will of our PrintRite3D Technology into not only the installed base of metal printing but also into the future products that are being offered by the OEMs. And so we have seen the earlier adopter programs have provided a nice active pipeline of companies looking into licensing the technology from us, the PrintRite Technology as well as in the OEM program space, additive industries and as I think we have announced previously other German OEM manufacturer has installed our PrintRite Technology for evaluation and test purposes. And lastly, of course we continue to receive additional revenue from our marquee customers GE Aviation and Honeywell Aerospace as we continue to perform on programs of record, federally funded programs of record that is, to America Makes and DARPA as well as other opportunities are coming up in the very near future. Moving on to our other operating division that we have put in place and is the contract AM side. We are specifically now, actively I should say pursuing revenue opportunities for prototyping work as we move into 2016. We spent the year 2015 becoming familiar with equipment and how best to utilize it and we of course were able to generate revenues using our contract AM Space but again it wasn't an active effort in 2015. We see some tires on the sales side and are now begin to actively pursue that opportunity space which we believe is quite right the opportunity for the service bureau side of the business. Lot of M&A activity in the industry has effectively in some respects reduced to the service bureau providers opportunities out there and so there is a good market space for Sigma Labs to join that. So I also wanted to mention just briefly on some future developments here in the company. We are as a result of our internal re-organization and establishment of our operating division we are now implementing a full ERP system which will be rolled out over the next 30-60 days and that will help us better anticipate and respond to our customers so we are looking forward to that. The further traction that we are seeing from some industry interactions has resulted in recent announcement with 3DSIM LLC. 3DSIM is a startup organization out of Park City, Utah that has a unique modelling software package that they are rolling out and we see that as a unique opportunity to collaborate with them, to jointly develop and bring to market some additional software technology that would help with the 3D metal printing space and so we are very interested and very pleased to be working with Dr. Brent Stucker and his team at 3DSIM. And lastly, I wanted to mention is that we are paying attention to the internal things and we are keeping a close watch on the developments. A lot of discussion at the moment as internet of things sort of congeals if you will, a lot of consortium activities both here in the States, mostly abroad and Europe and we are keeping an eye on that as we further develop our products and customize them we want to be able to show that we are fully compatible with these emerging industry trends, so we keep an eye to those sort of technologies. If you move to Slide 6, I will speak a little more directly at our financial position update and outlook. As I mentioned earlier we ended the fourth quarter 2015 with approximately $1.5 million in cash and equivalents that equate to approximately 2.7 million in stock holder equity. We continue to maintain no debt. Our gross profits are increasing as you see faster than our revenues and we continue to expect that to continue as we move into 2016. Regarding our path to profitability if you will for 2016, we appear to be on track for higher sales expectations. The business pipeline is quite busy as you know we brought business development people last year as well as have added now to salesforce this year and we are looking forward to those - the result of increases to higher sales, both on the PrintRite3D through our two programs I mentioned, as well as through direct sales for our contract AM services. Lastly, I think it's fair to say that we continue to be a major player and an industry leader with unique products and strong partnerships, and we seem to be well positioned with the emerging and evolving AM space as more and more end users adopt this technology and begin to move towards future serial or mass production opportunity space. So with that I think I'd like to just say thank you very much and I'd be happy to take any questions you might have.

[Operator:]

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Aaron Tilden [ph], private investor. Please go ahead.

[Unidentified Analyst:]

Good morning, Mark.

[Mark Cola:]

Good morning, Aaron.

[Unidentified Analyst:]

Most recently HP is releasing a new MultiJet Fusion 3D printer, and I was wondering if your PrintRite3D will be able to perform ink process for the assurance with that MultiJet Fusion Technology?

[Mark Cola:]

Yes, great question Aaron, thanks so much. So we fully expect that our technology would be compatible. We've not had an opportunity to evaluate that entirely, but there is no reason that our underlying technology would not be compatible with what HP's offering.

[Unidentified Analyst:]

Okay, thanks Mark. I got another question.

[Mark Cola:]

Sure.

[Unidentified Analyst:]

I was wondering, do you still anticipate PrintRite3D production run contracts of GE and Honeywell as you indicated in the second quarter 2015 conference call? And if so what is the anticipated timeline to receive those production run contracts?

[Mark Cola:]

So production run contracts with OEMs such as GE, Honeywell and others are all continuing to evolve, and at this point in time they're moving, they're either in initial low rate production activities or moving into full rate production activity. So we continue to work with them and remain in lock step in anticipation of their full production needs. Timing-wise, that's not always exactly clear to us, but it looks like over the next 12 months we'll be anticipating further involvement with those entities you mentioned.

[Unidentified Analyst:]

Okay, all right. Thanks.

[Mark Cola:]

Sure.

[Unidentified Analyst:]

What about the 3D PrintRite integration with Materialise, Streamyx. Are we still good on a timeline for that, or?

[Mark Cola:]

So great question about Materialise, I made no mention of them here. However, in 2015 we successfully concluded our proof of concept activities with Materialise and demonstrated the ability of our technology to be embedded into their Streamyx product offering. And at this point in time I can tell you that we've met with Materialise and began initial discussions on the next base of work to basically begin to make the product robust and look towards commercialization opportunities.

[Unidentified Analyst:]

Okay, that's very good. Thank you.

[Mark Cola:]

Sure.

[Unidentified Analyst:]

Another question about your DARPA phase 2 with Honeywell. I know it's starting to end in mid-2016. I was wondering if the progress is looking good for potential phase 3 with that.

[Mark Cola:]

Yes, there is a great question. So we're actually doing quite well. We had a good review session with DARPA in the middle of February. DARPA remains pleased with the progress of Honeywell as the prime and its subcontractors, and things looked favorable for further opportunity with DARPA.

[Unidentified Analyst:]

Okay. And I noticed on some slides that Honeywell seems to be placed in your RPQA Technology, kind of in the middle of that ICME framework. And I was wondering if you consider that to be a possible source of revenue should ACM framework continue adoption of course the AM industry, I've noticed things like GE, ICME, and places like Alcoha [ph] have adopted ICME. So I just wonder what your thoughts were on that.

[Mark Cola:]

Yes, another good question. And so the ICME approach is quite a valuable approach. It's a bit more long term and again we remain lockstep with Honeywell and their ICME activities, specifically through the DARPA funded and sponsored program, and that's partly why we are partnering if you will with 3DSIM and others because we know that there is certain aspects of all these that modeling plays a very important role. Long-term modeling would effectively be able to reduce cycle times to do process development for all of these OEM sort of customers. Ultimately, at the end of the day, that reduces time and of course cost. And so that's why we're working with modeling folks such 3DSIM and remain closely integrated with the DARPA team and their activities. There is a lot of other programs that are on the horizon that all play to this ICME space because they recognize the value of it. So back to your initial question, does it represent revenue opportunity for us? Yes, on all of the fronts. From involvement with these federally funded programs and ultimately downstream as they begin to adopt this technology, our technology, be rolled into their methodology and approach.

[Unidentified Analyst:]

Excellent, thanks. Do you have time for a couple more questions?

[Mark Cola:]

I think we'd like to offer to some others?

[Unidentified Analyst:]

Okay.

[Mark Cola:]

Perhaps one more if you like.

[Unidentified Analyst:]

Is there any status on the BAM or dental implants technology? Is that still in play?

[Mark Cola:]

So regarding BAM and dental technologies, we maintain the intellectual property rights on those technologies as we previously announced. We've licensed the BAM technologies out and the dental technologies we have marketing agreements with other entities. But at the moment we are not actively pursuing any of those opportunity spaces and principally focusing our activities into the two divisional areas that I mentioned the PrintRite3D QA and the contract AM space. We believe those pay us higher dividends if you will by focusing on those at the moment.

[Unidentified Analyst:]

Thanks so much, Mark.

[Mark Cola:]

You bet. Thank you, Aaron.

[Operator:]

Our next question comes from Mark Rupe [ph], a private investor. Please go ahead.

[Unidentified Analyst:]

Good morning, Mark. Congratulations on the 2015 efforts beginning to bear fruit. I've got four quick questions.

[Mark Cola:]

Sure.

[Unidentified Analyst:]

Is Dr. Dave now completely gone from Sigma Labs?

[Mark Cola:]

No, he's not. Dr. Dave is still and has been a consultant with the company for many years, and he remains a consultant.

[Unidentified Analyst:]

Okay. What would you say is a ballpark estimate of the revenue amount that you currently have in the sales process pipeline, just a ballpark?

[Mark Cola:]

I don't have that on the top of my head, but I can tell you that we have sufficient cash and contracts on hand that if we got nothing new today, which of course we don't expect that to be the case, we're comfortable for the next 12 plus months. We would finish 2016 on a positive note.

[Unidentified Analyst:]

Okay. So it does appear that our in-situ sensor-based inspection for printing machines is going to be the way that things go. What current protection do your patents that you currently hold provide for competition that is definitely coming from printer manufacturer's own effort along those same lines, and what is your plan for competing against the printer manufacturers with in-situ sensor-based systems?

[Mark Cola:]

Yes, great question. And so everyone in that brotherhood now wants to have some sort of offering in the area you said of in either sensing or monitoring. And we continue to hold our position in terms of, everyone wants to collect data and everyone does collect data but what sets us apart and makes our PrintRite3D Technology unique is the ability to make the data we collect actionable for the end users. So at the end of the day it comes down to do you just collect data or you doing something with it? And in our case we are doing something in providing value to the customer in such that they can make a actionable decision on the printer build they just made and tell you whether it's acceptable of unacceptable and will meet their requirements and they can continue to put value added into those parts of they can set them aside in sort of a discriminator fashion. And so that's the unique opportunities base for us, others including the competitors which is great. I am glad we have competitors because it tells us we continue to be in the right space but in the same time what we find to our competitive analysis is generally when you scratch the surface there does not seem a lot of information underneath the pretty pictures that are displayed. Pretty pictures are important but at the end of the day if the information is not used in an actionable fashion to buy and accept product then it really is the difference between looking and seeing. Everybody is looking at the process but Sigma Labs is seeing what's going on in there and to that extent we have retained the services of the international law firm Kilpatrick Townsend to help us strengthen our portfolio of patents and through two approaches. One, to continue to give us the freedom to operate and two, to have sufficient blocking strategies in place to keep competitors from stopping us from working in this space. I hope that helps.

[Unidentified Analyst:]

Yes, for sure. And so you know in some instances some of these sensor based systems are being touted as solutions and in comparison to what you just said it implies that they are not solutions. Are they end users of the machines who ultimately are going to have to be happy with us, are they aware of the differences between behind the pretty pictures reality of the system?

[Mark Cola:]

To answer your question they certainly are, they are obviously very savvy and technically savvy people and they understand they can do the same homework we do when they scratch the surface they find out that they are, that underneath there's not a lot there in terms of the analytic engine but however, that presents our unique opportunity space for us because we have that analytics engine and can provide that and hence we have launched the OEM adopter program and are in discussions with several OEMs at the moment because they recognize the unique opportunity to work with us to get that analytics engine behind it. I mean, at the end of the day it's all going to come down to organizations that are going to identify the space that the end-user is going to need to work with in because their compliance organizations are going to require, the regulatory agencies are all going to require some sort of compliance to back the design. Unless they can get those stepping stones or breadcrumbs in place which we can help them with they are going to have a hard time selling that to their ultimate customer. Now, they are quite savvy Mark, so they understand what's there and what's not. And at the end of the day let me just offer one more point, regarding our competitors that are touting a lot of these offerings, for the most part, we don't know that any of them are actually commercially available and on the street. Ours is commercially available and are installed on bases now and by the end of the month it will be over 10 systems which is a modest start but nonetheless it's larger than our competitors.

[Unidentified Analyst:]

Yes, you got to start somewhere. So, last question in regard to the reverse split. The factor of one hundred on this, where did that come from? Are you not concerned that that is going to yield a share pool that is now too tight and then we will see a very high volatility in day to day trading?

[Mark Cola:]

The answer to your question, where did that come from is we were absolutely trying to make the math easy for folks. The math when you do a 100 to 1 is, you can do that in your head and we are trying to get the share price in our range that allows us the opportunity to move to a broader exchange. There are requirements to get on these exchanges, we have an eye to those and this was one of the key enabling steps for us.

[Unidentified Analyst:]

Okay.

[Mark Cola:]

With that Mark I would like to open it up for others in the queue, if you have more questions?

[Unidentified Analyst:]

No, that was it. Thank you very much.

[Mark Cola:]

Thank you, Mark.

[Operator:]

Our next question comes from Kevin May [ph], a private investor. Please go ahead.

[Unidentified Analyst:]

Hi Mark, my question was also regarding the reverse split. With the timing of it, are you guys in talks with institutional investors or does your revenue plan to take up technically which company with about a million in cash at this time? Do you guys have any near term plan to up your revenues or is there any discussion with these investors?

[Mark Cola:]

Yes, Kevin. You are breaking up a bit there Kevin but I believe the question was do we have plans to up our revenue. So a couple of things, one, just to go back to the reverse split. I mean again, in order to get on a broader exchange we know that our specific requirements depending on the exchange we would move to and we have an eye to that and we are actively monitoring if you will those requirements, how best we can meet those. Regarding upping our revenues, we are of course always interested in increase in our revenues and as I mentioned in one of my slides here today we have quite an active pipeline of opportunities for us on multiple fronts in terms of the PrintRite QA technology, so we are very excited about that and are looking forward to speaking to you in future quarters here about the, about those activities as they begin to mature.

[Unidentified Analyst:]

Yes, I understand that. My main concern was just with the evaluation at approximately $37 million at the moment and the cash on hand is about $1 million. These individual investors, institutional investors rather usually they see a better balance sheet. Do you guys plan on utilizing your S3 in the near-term?

[Mark Cola:]

We certainly have interest in exploring that as opportunities present themselves so yes, we are keenly aware of that and that's why we put it in place and the opportunity presents itself, we will look into that.

[Unidentified Analyst:]

All right, that's all I have. Thank you.

[Mark Cola:]

Thank you, Kevin.

[Operator:]

[Operator Instructions] Okay, we have one more question coming from Tim House [ph], a private investor. Please go ahead.

[Unidentified Analyst:]

Hey Mark, thanks for the call. I just had a question about Arete. Is that producing any fruit, is there any revenue or pipeline or anything like that that's filling up with those guys and your machine that you have it in house?

[Mark Cola:]

Yes, so great question. Arete Innovative Solutions and our resulting joint venture Arete Sigma was an opportunity for us to explore the contract AM side of it. We continue to remain active with Arete. Majority of the interest, and again this is more reflective of the state of the industry at the moment, the majority of that activity seems to be on the design frame in front right now, and so it hasn't resulted in contract AM revenues for us yet, but we anticipate that the changes we move through 2016.

[Unidentified Analyst:]

Mark, could you tell us a little bit about how these sales happen? Is it subscription? Are these one timers? And for companies like GE and Honeywell that you're working with government contract, are there any non-government contract revenues that you're producing through those two?

[Mark Cola:]

Good question. Interesting, Tim. So on the revenue side for PrintRite3D, and I'll break it down by our operating division. On the PrintRite3D side, at the end of last year, in the fourth quarter, the majority actually all of those PrintRite sales were for, you asked the question how does that work, it includes both a hardware aspect and a software license aspect. The hardware sale side of that is a one-time fee and on the software side it's one time upfront fee with a 22% annual maintenance and license agreement associated with that. So all of those system we sold at the end of last year were sold in that manner. And so they all have a recurring revenue component to them on the software side. And regarding the GE Aviations and Honeywell government-sponsored programs, both of those entities have purchased systems and they're being specifically used and licensed for the use under those contracts. GE Aviation with America Makes and Honeywell through the DARPA effort. Hopefully that sheds a bit of light on how that works.

[Unidentified Analyst:]

Yes, it does. The only thing I would wonder too is the future revenues. When the DARPA money goes away do you anticipate still having revenue coming in from GE and Honeywell?

[Mark Cola:]

I do.

[Unidentified Analyst:]

Okay. And last question. I'm just wondering, employees.

[Mark Cola:]

Yes.

[Unidentified Analyst:]

Non-contract full-time employees, how many do you have?

[Mark Cola:]

So we have - actually this week we have now 10 employees full-time, non-contract employees working with Sigma.

[Unidentified Analyst:]

And do you see that going up?

[Mark Cola:]

I do, absolutely.

[Unidentified Analyst:]

Okay, excellent. Thanks for taking the time, Mark.

[Mark Cola:]

Thank you, Tim.

[Operator:]

Our next question comes from Charles Weivler [ph], a private investor. Please go ahead.

[Unidentified Analyst:]

Yes. Good morning, Mark. Congratulations on your good year last year. My question, I'm going back to the reverse split. Normally reverse splits are viewed as a negative. I understand you're doing it to get into a better exchange. What is your timeline for getting into this exchange? I mean, just to do a reverse split and then not go for the new exchange would be seriously detrimental to the company and the shareholders.

[Mark Cola:]

Sure, sure. The company's timing is of course key to some of the requirements that these exchanges put forward, and without going into too much detail your pricing has to trade above a certain level for a certain period of time, x number of consecutive days, so on and so forth. And so we're keenly aware of that and are actively monitoring that. And yeah, I think I'll leave at that right now. We're not going to let this languish, and there were specific motivations to do that at this time as I have mentioned earlier.

[Unidentified Analyst:]

Okay. Well, thank you Mark.

[Mark Cola:]

Thank you, Charles.

[Operator:]

We have a follow-up question from Aaron Tilden [ph], a private investor. Please go ahead.

[Unidentified Analyst:]

Hey, Mark. I'm back again.

[Mark Cola:]

Hi, Aaron.

[Unidentified Analyst:]

Just real quick, and I do want to say congratulations on what I believe to be a successful year, and suddenly step up for a long-term success. I really do appreciate all your hard work and effort.

[Mark Cola:]

Thank you.

[Unidentified Analyst:]

So the next question is, I noticed earlier this quarter Lloyds and TWA release some AM guidance notes for metallic parts. And I was wondering will you work with people such as Lloyd's and TWA into getting in process quality insurance into some of those guidance notes and standardization?

[Mark Cola:]

A really good question, and so it's quite appropriate. We've recently been actively engaged with the MTC, Manufacturing Technology Center, outside of I think it's Coventry or Birmingham, England, UK, and we are in active discussions with them about exactly that, joining the standards technologies organizations there to provide our insight and guidance as they begin to mature their industry standards. Now, quite timely question, we're certainly keenly aware of that and actively involved.

[Unidentified Analyst:]

Okay, thank you. Another question, I noticed with Honeywell and Arcam recently, Honeywell presented at Arcam's Investor Call and last year Vivek was expressing the PrintRite3D does work with EMAP technology. Do you know if you guys are currently been invited on Arcam printer this time?

[Mark Cola:]

We are not currently or actively working in the electron beam space. However, again such as the earlier question was asked, there is no reason that our technology will not work with the electron beam technology. It just requires the appropriate sensors to be deployed, and once that's done we feel confident that we could add value there. We're just not actively engaged with anyone that's using Electron Beam Technology although we are in discussions with some, and I'll leave it at that.

[Unidentified Analyst:]

Okay, all right. Thanks, Mark. Another quick question, recently there was the DOD solicitation for our PQA solution for AM parts, and I was wondering if you're actively looking into clients or such solicitations from limits [ph] and whatnot?

[Mark Cola:]

Great question. Yes, I did see that call. We did evaluate that opportunity space that was in SPIR call. Typically those programs unless they're what's known as a direct to phase two, are generally reasonably small tools of money made available for SPIR phase one. Generally they are $100,000 or less. It's a lot of work of 100K particularly for a small business like us. And so we decided that that was not the right opportunity for us. But to that point, last July, there was an industry event that was held by the Office of Naval Research where they're looking in the next year or so to come out with a much, much larger call, sort of on the order of DARPA sort of related program, that sort of funding level where we've not actively engaged with multiple primes to be considered for teaming opportunities there. So we're generally again focused on opportunities to get us to where we need to be faster than if we could do it on our own, and the one that you mentioned was not going to do that for us. Other opportunities as the one I mentioned, O&R, the upcoming O&R, it’s called Quality Made, might be an opportunity for us and we're evaluating that. But generally, our business models are aligned with stay focused on getting these operating divisions up and running and producing revenue recurring for us, and then look at these other sort of space. But again, back to if it makes sense and it gets us to where we need to be faster than we can do on our own, then absolutely we're all in. But, the one you mentioned didn't provide that opportunity for us.

[Unidentified Analyst:]

All right, thanks again so much, Mark, for all your hard work and answering the questions.

[Mark Cola:]

Thank you, Aaron. Thank you for all your support.

[Unidentified Analyst:]

All right, bye.

[Operator:]

There are no further Mr. Cola, so I will turn the call back over to you.

[Mark Cola:]

All right. Well, thank you very much and thank you to all our enthusiastic shareholders and investors, and we look forward to talking to you next quarter. Have a wonderful day.

[Operator:]

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