Q4 2019 Earnings Call
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Welcome to the remark holdings fiscal year 19 financial results Conference call. My name is code you know operator for today.
Acuity.
This conference is being recorded I.
I would now like to turn the call over to Mr., Brian Harvey Director of capital markets and Investor Relations. Please go ahead Sir.
Thank you Cody good afternoon.
You everyone for your patience as we call together.
Walking me to remark Holdings' fiscal 2019 financial results Conference call Adobe indicated on Brian Harvey I'm, the director of capital markets and Investor Relations for remark.
He called me. This afternoon is catching trial remarks, chairman and Chief Executive Officer.
And just a moment search how will provide an update on our business and I will recap our fiscal 2019 financial results. Following those remarks, we will open the call to questions, but before I turn the call over to Mr., Todd I would like to take this opportunity to remind you that some of the statements made today maybe forward looking.
These statements involve risks uncertainties and other factors that could come up that could cause actual results to differ materially from those expressed or implied by these forward looking statements.
Any forward looking statements reflect remark holden's current views and remark holding expressly disclaims any obligation to update or revise its people looking statements. After the date zero.
The disclaimer is only a summary of remark holding statutory forward looking statements disclaimer, which is included in its filing with the FCC.
Now I'd like to turn the called over to remarks, Chairman and Chief Executive Officer Mr. child. So he can provide additional color on the marks businesses and recent developments Shane.
Thank you.
Thank you everyone. So taking the time to join US on this call I Hope you and your loved ones are safe and healthy during this time.
New York when it was just about the shutdown and coming back to Vegas was almost 15 years, Justin just shutting down has certainly been a shock to us and the rest of the world.
The only Baldwin mine walking down the surreal empty Las Vegas strip every day over the last few months was how kind of America reopened what kind of American Tech company headquartered out of Las Vegas.
I knew you have to technologies, but we'll just called it might be biased to the spark the fondly woken they'll go up.
Well I mean, it seems that we transformed overnight.
Just to get your hubs chicken seven years.
Over the last seven years, yet still one of the world's most comprehensive platforms, the breadth and depth of our technology.
Not only by the different industries, we could be done, but also by the number of different applications, we could apply to it.
It took up the first five years to be collected data.
<unk> algorithms and build the odds platform.
First itself in artificial intelligence and more specifically in computer vision.
For example in 2019, we want CV PR and I see see causes otherwise known as the computer vision problems recognition and international conference on computer vision.
And it is widely considered to be the most prestigious confidence in computers is an excellent. It's helpful to be the leader in real time object tracking individual segmentation spaces [noise].
These advanced computer vision technologies.
Are now being you know new products and showing great values to our customers.
Do you think told us that.
Number one we did not have a strong balance sheet.
And to the long sale cycles to adopt the I technology.
And do you feel.
Pioneering takes time.
We are happy to announce that we place both of those issues behind us as a we've worked hard hard gets more senior lenders, which will now allow us to focus on energy building on the momentum that has been created by our award winning platform going into the second half the 20 Twond.
Absolutely into say, so called the banking bars.
Well, the cold and Nike bars, and certainly as much of the world economies.
Three dramatic Sachin remark YOD platform that we have built over the last seven years have allowed us to be position favorably against a terrible situation.
As they say you never let the good quite just go to waste.
We have very strong demand in our experience in quick closes on systems to manage CD 19 issues.
While we are under strict and engage with our customers in terms of disclosing who they are.
I can assure you that they are the best in class in their industry and in fact, they are our biggest sales lead generators. We are engaged with the best in the hospitality.
Horsemen medical sports thanks.
And we are closing on average one to two large deals a week and we expect that you accelerate as America reopens.
Most importantly, they are uncompromising division and dedication to bolt projecting their employees and of course the customers.
The basic need plus systems, what's the body temperature skin.
Our body Scana better because it provides number one.
Occurs to surplus three wider and more flexible reporting.
For a you are that makes managing crowds much easier.
It is important to note the other body scanning competitors a once in probably the only do body temperature skin.
While body scanning the tip of this fear that GAAP installations going quickly.
Is that it's a very small parts of our solution less than 3% of our total capabilities.
What is exciting.
Add on services that bar.
Itself by the body scan clients.
For example on top of body temperature scanning amongst other applications. We also are P. P E detection personal protection equipment detection.
People County, which include virtual upon parts on big locations like construction sites.
Yeah, Hey, you're tracking.
Wood handling which covers food handling shoplifting suspicious aggressive.
Bargain smoke protection, which is also protect people running falling detection for public safety.
Social distances and basket that that's the attention.
And intrusion detection, which also means grid and virtual electric defenses.
Well it took up the first flies a seven years to build our technology. It took the next two years to take this award winning proprietary technology to commercialize it two different industries like retail sake surveillance construction and agriculture.
The breadth of our old departure.
Patients is why who then that's we had one major contracts with China mobile.
The world's largest telekom Austria.
Subscribers.
Yeah, I would be transforming their 17000 plus stores nationwide.
Mark stores to allow them to compete with real time analytics.
Their online competitors.
It's what she'd be group one of the world's largest conglomerates, where we are working on solid.
And to help with the biopsies and other big ones help combat the African swine disease.
29 team one of the key projects remark.
Well as with the education bureaus several major city.
Many schools are required to check children's medical goodness Delhi, along we'll be attending.
The avoid long lives in human errors, we were caused by the city to use of smart canton system to handle these issues.
By the start of the summer and 20 like you we successfully launched smart Kansas product in China, which is a city was 12 million people were Ali Baba themselves.
Our smart Kansas system scans every student deals for their confirmed attendance and temperature showed no one entres, which I will get a temperature.
And funding at the end of the day, we make sure students are properly shut out of school it picked up by the parents or rifle Garden.
With daily helped trucks, becoming a new norm.
To be mandated in school campuses you have now expanded to two other major cities in China.
Switching incident.
It had been deploying our system.
50 school per month rate and with more schools now open we're expecting to see greater opportunity in the market a little hundred 60000, plus.
Got it through a good schools and tried.
That's more to the end of 2019, when the first signs of close in making the China hospitals in Shanghai and hung zones that were aware of our solution I suppose to use the technology would be the first wanted to some of them.
Because we build our algorithms on the ground up.
Two quick we report was the products to meet the needs of the hospitals.
We sue launch remark body temperature scanning solutions to meet these needs.
Hi solutions accomplish three primary objectives.
Hey to be but first line of defensible Hobbs before the medical professionals didn't reach the hospitals are tricky authorized taxes and elevated body parts of temperature.
Once within the hospital solutions will use not only to continually chip each medical professionals for access and elevated temperature, but they were used to be called thickness central axis.
The doors required gift from security clearances, I emphasized contactless and as you know being contact with a lot lower chances of transmitting lives.
C and for the fourth of the house are not scanning solution, which has the ability to scan over 120 people mint is used to not only truck the temperature, but also has the ability to perform contact translating into someone comes in with an elevated temperature.
In addition, hallmark YOD platform allows for for other applications that are now being required to the reopening of each country's because.
Like people count you TPV detection or social distance.
The fact that we had a working lives solution that we launched in early 2019 has allowed us to stand up father to other parts of the world.
Looking for US it was about to.
Lives and scale.
In early 2020 weeks, then I'll, probably going to Japan with one of Japan's largest technology conglomerates interest and E commerce to travel to telecom.
By this past spring, we continued the expansion of our solutions into the United States.
We first started off with the Las Vegas mentioned believes that there were looking for subs accurate solution to help their own offices as well as the spot subsets and current business into system.
This is a relationship that we built over the last five years and through trust and of course rigorous testing became our first customer in the U.S. using our solutions.
Las Vegas management believes it's one of the largest law enforcement agencies in the U.S. and to support in vision of this your husband and valuable for the launch of the Mark.
Yes.
Since coming on board with extended our U.S. customer base to include shopping centers amusement parks casinos hotels and sports franchises.
Most recently, we handled the body temperature scanning for the lobbied medical central Southern Nevada, We're screening 4000 patients a day for the next month as the employees of the various casinos are coming back to work.
In addition, our <unk>, let's see true in the welcome back video for the world's most luxurious casino operator.
Our customers or appetite.
And most importantly, not compromise on their employees and customers though.
Because they are the leaders are their respected industries, we are experiencing strong unsolicited demands from companies aspire to be like that.
At the Companys generally opening that under 25% capacity.
Confident we will continue to grow our orders with them as they understand the lives of OLED hose reels and.
And gradually open up the business, that's where it was just a few months ago.
We can safely say as the world has been paralyze like holding my team, we didn't count the days, we need the days counts.
To be clear, we're not a one trick pony with only having the ability to scan temperatures and sucked a remark body temperature scanning solution. It's only a small talk about overall it's awesome.
Can do we are winning contracts against much smarter and better fight against competitors not just due to outperformance, but because of the versatility and other remark applications into that.
With the reopening of America. There are many operational pulled in called mandates in order to reopen.
For example, there's a limit to how many people can be in the room to the ocwen, but weren't certain PBB likeness.
Amongst other applications that we own built from the ground up.
You can automate people come to automate the monitoring of P.P. weird and look for suspicious <unk>. This is what excites us about the future of a marquee.
Body temperature scan is just the people the iceberg for the growth of the company.
The U.S. adoption of applications have started which speaks directly to our strengths that we have shown time and time again, because regardless of what part of operate.
The ability to continue to upsells to our customer remark.
Allocations to their existing camera infrastructure and or the setup. We have built for them allows us to continue our growth trajectory, even when the current pandemic subsides.
This is mutually beneficial as our solutions allow customers to continue to drive growth.
Lowering costs, which has always said the whole purpose of artificial intelligence.
Our strength.
Hi software capabilities.
Our competitors hardware specialists.
Confident but it is R&D I keep the abilities that that's our products apart.
For instance, with body temperature scamming thermal technology is not yet has been around for a long time.
However, what is new science and brains behind the thermal technology.
Therefore buying a thermal camera, it's just not enough in general useless, especially when you're performing that's good for large groups of people.
Without the brought this up intelligence, you'll meet someone trying to look at thermal imaging. This leads to additional human cost in or.
With remark I were able to simplify and intelligently read thermal images for the customer.
Yeah. It helps to quickly differentiate the different people and the temperatures I've just seen globs right.
Are they are able to quickly discern the difference between human and Nonhumans cheap imaging objects.
And because of our accomplishments in the field computer vision, we're able to quickly tracking season, when the guest walks through the door. It quickly sizeable you're spot on that seems to take the temperature.
For example, take the temperature of your lips.
That's very different from the area between what's your docs in terms of axis.
And the estimate of sliding current cold and making pandemic you have not only developed a high precision that says that she AI models, but also upgraded our facial recognition with mass to 96% accuracy.
This exceed most other competitors numbers in the market.
In addition, we have also developed proprietary social distancing algorithm at 98% Packers.
And our proprietary people gesture recognition and people Celtic algorithm with over 99% accessing which has been tested at various scenarios and locations around the world.
To get ready for the reopening of the businesses, we have developed our mabs temperature scanning soccer and products at 99% axis and over 120 people per minute plus candidly.
In addition to address any concerns regarding customer data privacy, we are conducting external GDPR audits on all the Mark Fox, which by the floor is the most strict guidelines on data and privacy protection in the world.
And we'll talk briefly regarding up products in other projects.
Mark has with these two called at 19 prevention.
Remote kit and thermal pad version 1.0.
Okay, and not thermal pad with third party hardware has been released in deployed in early April.
We also are very pleased to announce version 2.0, the kit and pad as remark aaas own proprietary hardware to will soon be or at least in early June.
Let me give you a brief overview products.
Mark.
Okay designed from that temperature skins websites and decision on temperature trucks with Woodmark chaos proprietary sushil detection, not detection assays tracking and saves angle correction algorithms, combining with fly to thermal based temperature detection device. The thermal kids was up touchless accurate and stuff temperature either.
At 120 person for a minute rates, while people just walk through seamless.
Yeah.
Well Mark thermal pad is designed for automated one by one temperature skin that optional nothing pension and facial recognition features is perfect for and then get an entrance control where people lined up and go in that one by one whether its indoors for outdoors.
With high accuracy on temperature truck with or without that you can check 30 to 60 people per minute and the entry locked into connected to very good punch line cards it becomes.
I mentioned before these events products have been widely deployed in hotels casinos shopping malls government agencies sports stadiums restaurants in cold and like Intouch sensors.
Remark they all have turned into a to how to dragon, where we're able to capitalize now both Asia and be less.
Let me now give you an update on how other be marquee I'd projects.
You know we want a hard fought victory in securing the phase one contract with China mobile back in the summer 2019.
This was a long and arduous process as we competed gets much larger competitors.
End of 2019, we the beach deployed smarts <unk> products and over 2000, China mobile stores as part of the phase one smart storage contract.
With remarks, AI people killed being solution VIP recognition institutional identification, our smart self service kiosk that's started transforming.
China Mobiles retail operation into automated data driven businesses.
Well go we're seeking some delays and deployment due to cold and maintenance shutdown in China. We are projecting over 5000 sports deployment and the rest of 20 point in over 10000 stores in 2021.
We're looking forward to expanding our partnership with China mobile into seems to have the.
We are confident are smart store platform wins, the stage two bidding process.
Platform provides in store real please.
Seth Yeager monetary sliders smoked detection and virtual security patrol.
The goal to connect all 17000 club stores to the platform in the next two years.
Contract value is expected to be the mid to high seven figures.
The U.S. dollarsmillion dollars in software recurring income.
As I work with trying to mobile has gotten off to a favorable start over the last year.
Confident that we'll be working with them for the men seeks to calm and take years to follow.
We're also pleased to launch our first.
Cattle vial CP system with CP group conduct African swine.
The African swine flu has been a disaster for the pork supply over the last few years I did is legal and spread quickly.
Our system performed real time video analysis on top of existing surveillance cameras installed into California.
It identifies biopsy hobbies and forbidden behaviors based on which produced early warnings and enforcement of the bio safety procedures to the lasted a detail.
The system includes the following major functions to to enforce the find bio safety rules.
Personal access management.
So you can gesture recognition, but system authorized access to the important facility, but the telephone.
On the system onto stop activity to make sure they follow biases and protocols such such as all the like walking past to avoid cross contamination between dirty and clean there.
The club the shower flat screen time deals or PBM protocols.
Your cold decontamination monitoring which automatically analyzes.
Small steps of the star forming Sam sampling.
Hi, Washington, and trying to determine whether they follow biopsy protocols such as constant on car watching the dry property puts it in tools used in place and proper uniform ups and p. worn during the procedure.
Articles disinfection monitor and the process of different section of articles that stuff activities are detected track and monitor to forcing people to call such as crossing of infectious and Noninfectious flows.
Finally, wise or dead cattle transportation monitoring and lives or dead Sea transportation operation the system monitors the steps behavior and triggers alerts when bio seats, we will have a violent.
Example, authorized personnel and transport.
Well intrinsic doors being open that cattle in the transfer of for too long.
And et cetera.
The first AI biopsy.
System in the market that helps the flooding cattle disease with proven value by the current capital farms, we have great opportunity to deployment of 40 to 50, California your globally.
Lastly, as we advised me now cleared out our debt with our senior lenders, we are able to the enjoys a full potential of a monetization of shared kit.
The digital health industry public companies like Loveland Teladoc.
Then explosive and it looks to continue to be strong as America reopens, we will be carefully monitoring the progress it looks to monetize or state when the timing is appropriate.
In conclusion.
We are now have complete first China steps forward to building a solid balance sheet.
We have great traction on body temperature skin.
We have a suite of exciting out on features that will increase our 80 argue.
He's had on also very profitable and weaker.
We currently so hardware solely as a means to get our software into the marketplace.
Our goal long term is to remain.
Software as a service company and to provide the likes of our Mark <unk> software technology for recurring monthly.
Her registered user in the system.
Every producer of thermal scanners and cameras in the world.
We believe we focus on what we currently do that.
To enable Taco solutions and camera manufacturers focus on what they pass which is producing distributing and maintaining complicated hardware solutions everybody wins.
To this then we will be announcing the addition of new executive level business development leadership and partners in the coming weeks, who can help them navigate these relationships. While we continue to focus on the incredible influx of inquiries and opportunities we have it here.
We are honored to do to be doing a small part to help reopen America, whether it is for large or small office or not.
Yeah.
We are excited.
So what may be the new norm post close it era.
As we all become more cognizant of being responsible to others by helping to keep everyone safe and healthy.
We have a lot of new shareholders on this call.
Or continuing to build your trust in us and grow our business long term together.
Finally, I Hope America opens up soon and all of you can compete card, although reopening of business go Vegas readers.
I think using I will now provide a brief overview of our financial results for the fiscal year ended December 31st 2019, and I'm going to look the Rangers long ago.
Revenue from continuing operations for fiscal 2019 was 5.0 billion down from 10.1 billion during 2018.
Many are you a vote, our where regulatory changes in Chinese financial services market participants to discontinue our fin tech business in 2018, resulting in no fintech revenue into 2019 after reporting 3.7 in the prior year.
Our advertising base business showed its fine dropping from 2 million in fiscal 2018 to 1.4 million in fiscal 19.
On the E Commerce front, the TV Dot com showed a slight growth in fiscal 2019 in the prospects are but you need dot com look positive in 2020 <unk> online shopping has expanded due to the cobot crisis and recently several major department stores have declared bankruptcy.
Our AI based products and services revenue declined to 3.6 million from 4.3 million as revenues were constrained by ongoing working capital issues that kept us from purchasing equipment.
The higher revenue.
Implementation, it's underway to convert China mobile stores into smart stores as Jim noted during fiscal 2019 over 2000 storable mutations work the gun.
We expect the pace to accelerate in the second half of 2020 to over 5000.
Locked down to the east across China.
Before we also completed and kind of several proof of concept test on projects at the beginning of deployment implementation phases on other projects.
Total Ics cost and expense for fiscal 2019 was 27.8 million a decrease from the 54.6 million reported in fiscal 2018. The decrease was primarily attributable to decreases in cost of sales.
As a result of the good continuance of the Big Tech services.
Decreasing consulting fees and payroll and related costs as a result of headcount reductions.
Our operating loss declined to 22.8 million in 2019 from 44.5 million in 2018 commensurate with the cost and expense declines.
Our net loss from continuing operations totaled 23 million or 52 cents per diluted share into fiscal year ended December 31st 2019, compared to a net loss from continuing operation of $18 million or 46% per diluted share in the prior fiscal year.
At December 31st 2019, our cash and cash equivalents balance was 272000 compared to a cash position of 1.4 million at December 30, Onest 2018 cash decreased primarily due to ongoing operating losses that were offset by the issuance of stock.
Coty, we'd now like to open the conference call to questions. We encourage cause with questions. The Q off with the operator as soon as possible. So that there will be minimal lag time between each caller what he could you. Please instruct the callers how to keep up with your question.
Absolutely if you'd like to ask a question, placing by pressing star one on your telephone keypad.
If you are using speakerphone. Please make sure your mute function is turned off to a lot of your signal to reach our equipment.
Operator may pull your line probably to request additional information.
Once again that is star one if you'd like to ask a question.
Plus for just a few moments to allow everyone an opportunity to sing.
Well take our first question from Steve Allen. Please go ahead Sir.
Yes, sharing a couple of questions.
Obviously been very active on the social media fraud mentioning companies.
Simon in Las Vegas, Please Fortunately strategy behind the tweet change that are press releases and what's your strategy of using social media <unk> press releases.
Thanks, Steve I think that are just to be clear you know when we we try to keep our investors and form.
What's happening with the company and Ah. So that's what we do and blend, but certainly as I mentioned in the comments that there are a strict and be ace ER that that'll put in place sometimes you know well many of the kinds of done after I make the post.
Or not so.
Got it your two it but we certainly feel bad it's our job to not used up just use the social media as a way to keep investors updated so we use it that's the way that keep potential customers like they did we get many leads for people that fall, our social media, but just you know Twitter, but really all across.
The board ER and it's it's a it's a great. Each other it's frankly, it's a cheap way to generate leads.
Making press releases cost money and we all know that so were still until we start getting profitable or certainly not in a position to be a you know just a study I mean, there we don't house it.
Okay and I'm sure care worked up there can you give us enough where they stand from a either or a S. One registration or are you being able to monetize your position and what's your offerings they've done what percentage of shirk or would you I'm now.
I think what percentage would be releasing the 10-K tomorrow.
But oh in terms of you know any type of their own S. One plans and all that that that is something that is a will be that information 70 by bedbugs no. It's in Wendell everybody. So that's something that no. Obviously, we are upheld by her years with share care. So.
Can't comment on that but what I can comment on that digital health space is very strong a nice to see lowball goal and Teladoc has performed a amazing over the last few months and there's a big with selection of their this will help industry certainly as Ah yes.
So a share care is very much in that industry and I think it bodes well for us.
Okay. That's all I had thank you.
Thank you that you see.
Thank you we'll take our next question from guarantee after high with Roth partners.
Well I think that's interesting the caution she maybe if you could start its good to see you pay the debt all on what's your current state of cash as it stands today and what's kind of the current share count.
Oh share count will be released tomorrow and the 10-K.
Okay, I can say auto or a the cash that we have right now well what is it more than sufficient.
To handle our working capital needs and to be able to fill the waters.
But almost on a thermal side.
You mentioned some.
Some wins and obviously the piece things together you can get to figure out maybe you can see those business more partners or some questions on that maybe can you give us a sense for.
I think you kind of one of the why you win but in terms of how you're selling its like what's the cost or maybe a sense for so many.
Cameras are kits are installed in each venue and then as you think about your let's call. It 2020 pipeline, how many a sort of opportunities you currently have right now and maybe how many installations have you put into place already.
Okay, Walt the stops specifically as it relates to know the the when you mentioned before we would obviously can't talk about because I mean, I think the easiest way, it's come to Vegas and Super itself, but we certainly kind of dropped 710 says that our technique.
Now she was featured a you know into welcome back video and I think actually I seem to be load up the Wynn Las Vegas, Lepage, well, you'll see no you'll see our technology. There no. They then you know I would say in general ourselves lead either come from my relationships.
Or referrals I'm, you know that has allowed us to get to this point with the best of acting as the fed and it's a different industries I'm you know I know a lot to see a lot of different industries and as soon as they heard what we were doing it clearly we're interested and then the next step was too.
Being able to showcase it Ah you know as I mentioned Las Vegas Ah that's for police or they were early adopter of our technology, which gave a lot of these different groups. The confidence that you know that all technology works.
So how we're finding it really is that we go out and sell our thermal kids, a and b cell that at the 25000 dollar pricing.
And we're selling a lot of them and we expect to sell more but as the different venues begin to open up more because right now they are not allowed to open up there probably isn't prudent for them to open up their entire facility count you know because there's just nothing but bad there, but then we would also.
Ah fix for pad as a way of doing secondary screening, whereas another way to do employee back of house communion, because not only does attract.
Mentioned the temperature, but we can tied into the different employed management systems to be it so that it can handle multi function.
Well the other it's got nothing goes like two other through other questions I got on the back of that.
Yeah, I was just kind of curious.
It maybe two or on the topic. So one what is can you quantify what the number of installation you've actually dawn and then what the pipeline, perhaps looks like edge given three cents for what the opportunity looks like for say in 2020.
Oh I can comment was that we are in over 20 different installation flights.
But I can't comment on how many were doing for each.
And then in terms of your backlog how does that that's 20 installation compared or kind of you know are there any sense that kinda courthouse ultimately twice in London.
Yeah, I mean, we probably good I would say.
Serious inquiries a week I'm, sorry, 10 series Syn 10 series increase the day, our backlog I would say would be closer to 70 to 90 different groups, but we need to one or you know how often the business negotiation part of the number to be able to fulfillment. So we don't.
As one except the contract until we're sure that we couldn't fulfill it because there are issues with the whole world. You know walk sees a formal scans to be able to reopen though so, especially with trying to coming back online.
You know where now having to compete against like the schools as I mentioned in the different business over there that I spoke about.
Got it and conducive to.
Perhaps there is a top three or four industries.
You're seeing kind of the greatest demand from it and not just the demand, but but in terms of the sense of scope movie you know say a sports stadium would have probably more points at present.
Yeah, something from a smaller as I'm just trying to kill.
I understand that yeah, so I would say the irrs would be like hospitality.
Yeah, I would say certainly the sports or sports slice medium sites. So that includes kind of the concert venue symbolize actually stopped a number three would be the amusement parks.
Which are a big and then and then the fourth poverty government Oxy government agencies, no and say for example, let's say government agencies I would say include that with other law enforcement agencies or hospitals.
And got all him out just.
The fact that we you know had been doing this.
With that metric police and the U.M.C. you know your covering both law enforcement club medical side, and ER and Ah I can because a lot of confidence to the different private enterprises that I know that we're able to check the box on both sides.
Got it and just last one from me.
Let us on your thermal AI sites, there's a there's a tab for becoming a distributor what is kind of your strategic focus in terms of getting resellers and distributors <unk>.
Given kind of your limited scope in terms of manpower capital right now.
Yeah, Yeah, so where where that's a great point I mean, where no. We went into 2020, we cut a lot of the costs in our business and certainly when does this obviously that was it caught everyone by surprise them.
Frankly get Didnt have the we don't have enough people to service. The demand. So we are certainly working with the Big gets me fellows in different parts about Europe, the U.S., but in the Middle East Europe, and North is in Southeast Asia.
Picking our technology to those kinds of you know you can't cover the world obviously.
But we've had a very strong interest.
Not just interest, but you know groups already that we apart pardon me up in terms of the reseller.
Got it thank you.
Sure.
Yeah.
Thank you.
Thank you well now take.
Warners.
Well there.
Ben.
Hello.
Thank you and we loved brands.
Yes, yes area.
Well good shouldn't question I got on the call lead I don't know there was some problems why couldn't you know I'm not sure. If you obviously mentioned it but the twins foods in your press release, you said 12.7 million, that's full payment against the losing their careers.
That was made today.
Yes.
Okay. He told me <unk>.
You didn't put it in leasable weird that 12.7 billion come from.
Well the 12.7 million came from a different partners have provided the financing for us to be able to take care bye bye.
So you issued equity please hold the debt is that what do you want to doing.
Yes.
Okay. Okay, so that'll be in the perks Weve tomorrow personal.
Dowdy reflected in the K tomorrow.
Okay. Okay, that's what I want I didn't see it put anywhere today says I want to question. Another thing is I'm curious to know how do you generate most of your sales leads that you get what do they come from really.
So ah yes, so so wrong, we get ourselves really through my personal relationships, but I think even more more importantly, the our customers are that's sales lead generators right.
I mentioned in my.
<unk> marks or are there are customers or.
The generators there you know after we show them that it works after they become a customer they refer us to each one of the first just to I'd say between 10 to 15 other customers. So Ah you know so we're pretty excited about that because you know it's the they create the demand for help.
Help create demand flow.
Mhm.
So.
Cost of the network that you have.
It appears that a lot of these contracts are being rolled up from one person to another person once they get to meet too is that more or less what happens from UBS. So your products and so could basin children, yes.
Right.
Mhm goes through or well get more information tomorrow, but thank you very much appreciated.
Thank you Ron.
Thank you and I think our final question from doing Hazlett with Roth capital partners.
Hey, Thanks for taking my question wanted to follow up on the landscape in China sort of how things trended in terms of the people scale and some of these rollouts across the various partners in schools and construction CP group I'm sort of sales.
The Chinese economy has opened up a little bit more here sort of the last two months or so.
That's all I mean, I Miss you in the middle that I just heard about due at the China economy opening, but that's how is that.
Well I just see other parts, you can kind of coming in and out.
Okay, I'm, just wondering how the pace of.
Good.
Smart terminal girls lots have been sold.
The Chinese economies start into the open.
It's a sort of the teacher at exiting sort of December.
Yes. So you know we we are in 2000 stores already we you know certainly be closed that you know shut everything down in the world as we all know.
But now I think China is maybe 30% there in terms of getting back on to speak off. So we still think that we will be in the watch the 5000 stores by the end of 20 told me that is a goal that is set by China mobile.
What I'd, probably say 2021 is to get to seems to be over 10000 offset that.
Got it and then yes, I, Tom coming back, but it still coming back slowly.
Okay.
And then have you gotten any of sort of the early 2019 deferred revenue recognized at all yet.
No we haven't.
Yeah, I have any visibility to hit for it for one that could possibly come through.
Oh, we do have a good visibility and no part of that is you know as the calmly opening up you know we need to you need to balance how we.
Typically when you're dealing with somebody that with like China mobile is that they.
The deferred until you're talking about.
Yes.
Well, which which part.
I'm not sure I phone so.
Oh, well just can you just nicole offline and we can that we can go through that detail.
I mean, there's approximately a four to 18.
I think the last time was talking about there's about $5 million deferred revenue that you get to collect.
Yes, sure I'm wondering where that balance stands.
Right. So so <unk> something somewhat some some we will be okay. So that that's I think that they will be recognized him. Soon some of it will be written off but most of that you'll be able to recognize it. It is a there will be greater detail that indicate tomorrow.
Okay. Thank you last one for me could you talk a little bit about sort of quarterly cash opex rate in sort of way that's trending so far here in a sort of <unk>.
Okay I.
I guess maybe to Q.
I I would say, it's it's hard to do any kind of forecast trending that.
Things are changing so much week to week.
He knows that we have.
Coming into Tony Tony we cut our cost down dramatically.
And now we just have to sit there out or how to scale up again because of all this increased demand.
So that's something that we're working on right now, but it's it's too hard for us to sarcastic, but the big part I think which hampered us in the past that we've acquired in the past to put that 100% you know deposits when we're working with our performance.
Different partners and now we're able to handle that using the working capital from our customers because they have to put down 60% to 80% of the deposits in order to get anything started.
Got it Vicki next today my questions.
You're welcome thank you.
Banking that does conclude today's question answer session.
The conference back over to Mr., probably for any additional or closing remarks.
Thank you everyone for participating in remark holdings fiscal 2000, their Nike financial results Conference call. It replay will be available in approximately four hours read the same link issued in our May 13th press release. Thank you have a good afternoon.
Thank you and that does conclude today's conference. Thank you all for your participation you may now disconnect.
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