Q2 2020 180 Degree Capital Corp Earnings Call
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Losses sports advertising potbelly struggles as a business like most restaurant companies came under the rest.
Finally, as we discussed a few weeks ago, we were the anchor investor in the recapitalization of some technologies at 75 cents per share.
On the private side, we generated 30% return led by the take over our private holding Petra form too.
We also want to mandate this quarter demand, it's $25 million from a portion of a publicly traded companies pension you account, we've already put some of that money to work. We've achieved achieved a nice return so far for the play.
While we're happy with our absolute return for the public holdings, although on a relative basis. The returns were mixed there has been a significant dichotomy between those of value stocks versus those of growth stocks in the past quarter as investors have been flocking to the scarcity names of those companies that are actually showing growth you're dependent upon.
Turning to slide highlighting the have have not market you're currently living room.
Finally, we're off to an incredible start on the public portfolio. This quarter as we were up 11.7% through July and literally 25% through August seven or I'm, sorry, Q last night.
Slide please.
Slide four shows are any of the history.
We had a significant snap back to the two dollar and 70 cents per share from its two dollar in 12 sent book value from the March quarter.
If he kept our private portfolio flat this quarter Q3, which is just an assumption as of last night, our book value is materially higher as of the flows given our.
Public portfolio stocks for the first 40 days of this quarter.
On slide five this chart shows the stock price discount to our and Avi. Despite the fact that we have fixed our balance sheet generating more cash and liquid securities. The any point last three and a half years and despite the fact that we have shown three monetization events of our private portfolio that were done at levels greater than the Navy those positions had been.
For the monetization sticks place, we still traded only 65% of our book value.
Next slide I.
I think most of you know by now that we spend the majority of our time focused on microanalysis for the company's were either owned or are looking at.
That said, we think about macro each and everyday wanted to points with slide that accurately picks the markets that we're living through.
We climate, Tom My Soapbox for half a second.
While we aired achieved at 24% gross total return that was mix relative to the Russell Microcap index. Its 30, and the Russell Microcap value index of just 23% this quarter I've never seen greater bifurcation their performance for the U.S. stock market. For example, as at the end of July the Invesco trip.
For Q index, which tracks. The NASDAQ 100 is up 26% year to date, while the Russell 2000, which tracks mid and small cap stocks is actually down 10.6%.
The Russell 1000 growth index was up 18.3%, while the Russell 1000 value index is down 13%.
We have seen the same discrepancy against the two indices, we used to benchmark our own performance.
At the end of July 20, the Russell Microcap growth index is up 5.7%, while the micro cap value index was down 21.7%.
The deferring returns are staggering I mentioned this to service factual information for you because as you know we play in the value sandbox of the market.
While it is completely understandable that investors have gravitated towards those companies least impacted by cobot 19, essentially the large growth companies devaluation discrepancy has never been so extreme as shown in the below chart.
As value investors painfully live really all or nothing tech bubble back in 2000, I've never thought I'd see a market like that again as a matter of relative performance. The current period of draconian outperformance by the Triple Q Index has led to an even greater disparity of performance between growth and value than the tech.
And that's by a factor of three.
As I said I understand how we've gotten here given the melt down at the time during periods like this investors gravitate towards those companies showing growth, but I've also seen how it ends when investors for money into only a select few companies if and when this economy moves down the path of sustained recovery there will be a huge catch up trade for the type of company.
As we invest them.
Next slide please.
Our normal source of change in net assets for the quarter on slide seven we start with the two dollar and 12 cents. A navy we had 27 cents from our public holdings 34 cents from our private holdings at three cents of normal operating expenses, and we end up where the two dollar and 70 cents Nate.
On slide eight it's the same chart for for the calendar year 2020 through June Thirtyth, a 24 cents hit from the public Holdings 810 hit from the product portfolio and four cents of expenses led to a 11.75% decline the brand Avi through the first six months of the year.
On slide nine lastly, this is the same chart only highlighting the performance when 80 was born.
In January 2017, an impressive 94 cents of gains from our public holdings offset by 14 cents of losses in from our private holdings and 38 cents of losses from expenses to run the business.
Slide 10 at the specific breakdown and performance of our holdings led by good performances from also franchise group inland strong it's offset by performances as we highlighted earlier from the Maven and potbelly, let's dig into the specific names on slide 11.
On Slide 11, you see the names that help franchise group health or any by 13 cents timing, 160% this quarter.
The company provided a business update in may as halted investor fears that the company was either insolvent and or at risk of bankruptcy.
They provide a better than expected guidance on revenues EBITDA, a non-GAAP earnings and continued its quarterly dividend of 25 cents per share.
We sold 121537 shares during the quarter in average price $25.
And 80 cents in the stock was up 12% through July 30, Onest 2020.
Also helped by a seven cents on an 82% move this quarter also provided investors with the useful framework to understand the operating leverage in the company's business in the face of Covance 19 related impacts while business was impacted by state homeowners. The lifting of those orders in the second quarter led to a quick recovery.
Certain markets, specifically to Florida, construction related business and slower but meaningful recovery for the rest of its businesses. It's warehouse businesses in Illinois was less impacted.
Also also announcing close to acquisitions in the quarter logistics consulting company in New York City based focus dealership business.
On the net slides you will see lantronix, which helped or any view by seven cents. The company reported revenues for fiscal year Q3.
2020, despite supply chain in business disruptions due to the cobot, Nike pandemic and they reported record revenues for that quarter.
Showed increasingly increasing strength in the company's remote connectivity solutions business and they continue to add to the senior management team by hiring for Microsemi employees that work with the CEO Paul Pickle when he was at Microsemi.
Quantum rose, 31% in the quarter, which turns out to be a much more muted recovery than the other names beyond.
The company renegotiated, it's covenants on outstanding debt that provided is increasing increased operating flexibility and reduced investors' concern over default risk hyperscaler customers returned to purchasing albeit not at the same rate is prior to December 19 cause positives during the quarter would temper.
For by lower than expected guidance for calendar year quarter to due primarily to delays in purchasing by the media and entertainment customers.
On slide 13, we see maven our value is based on our Btwoc of at least 1% of the outstanding shares traded and net of additional accrued partial liquidating the liquidated damages of 276000 or due to us.
The cold pandemic shutdown sports reduced advertising spending continues to materially impact maybe business. We currently believe the advertising spend hit a bottom mid quarter to and is slowly recovery of significant no. We join the Mavens board as an observer during the quarter and we can spending a ton of time on this.
One as we believe while like most advertising companies. It carries greater short term risks and other companies independently. We also think maven provides the most upside of anything we own.
Potbelly cost us four cents this quarter.
In Q1, the company is in an earnings call on gave the impression to investors that the company was hedging for bank saves the disorganized massive the conference call.
We then had to go back and attempt to clarify operating position in subsequent in the subsequent release and presentation.
We purchased additional share for 180 and for our pension account and became the largest reporting shareholder of the company had a combined ownership or 8.6%.
We filed a 13 de on June 29, noting our ownership and the poor performance of the company under its CEO, while commending the actions of the boards to bring in restaurant experience onto the management team and the board.
A couple weeks later Potbellys board hired a new CEO with deep restaurant experience Robert right, who is the former COO Wendy's this coupled with Steve's rule US who was hired from Panera leads us to conclude that the business is now being run by a fine executive management team, we think our third.
In the filing health.
On Slide 14, we show our performance on a year to date basis for each and every public company we have.
Franchise group Mersana and Adesto lead the way on the upside Potbelly Alta and Synacor lead the way on the downside.
On slide 15, this shows our soccer team over the entirety of our history, clearly more winners and losers and our significant significant wins like Adesto The street and quantum followed very large significant starting positions on a percentage of assets.
On the next slide I said this before you don't get everything right and as I said in the past a successful investor will be right to at three times, just make sure the onetime you're wrong doesn't outweigh the two times, you're right Fortunately for us weve limit our losses and we maximize the gains as you can see on this chart.
On slide 17, all in all the proceedings livelihood of Islam, our performance as I said, our public holdings performance was mixed this quarter and we underperformed the Russell Microcap, while outperforming Russell Microcap value index, we have a similar similar story year to date through June, beating one index and underperforming the other.
Our one three inception numbers date are also been fully and then we're very proud of what we've done on that front significant outperformance.
On Slide 18, we show this same slight each and every quarter and we're making progress towards our eventual goal having all of our assets in cash and liquid securities. We have more than doubled our way of cash and liquid securities from 27%. When we first started to over half of our balance sheet today.
On slide 19, we've highlighted this in my previous comments, but we're off to a roaring start this quarter and here are some detail on that front, our public portfolio is up 25%.
From the ended the quarter through last night. The Russell is up 10, and the Russell Microcap value Index is up nine year to date, we are now nearly 7%, which is almost unfathomable, given where we were at the end of the March but were happy and we'll take the largest increases in value of occur from potbelly.
Quantum saw them and Tronics and franchise group Daniel.
Thank you Kevin.
Please turn to slide 20 and 21.
As Kevin mentioned during the quarter, we established a new core position in signing technologies Inc. ticker symbol as Oh and.
Finally, as a communications company that provides rugged cellular phones and accessories, specifically designed for workers for engagement physically.
Very good physically engaged in her environments and often in mission critical roles.
These workers are typically an industrial public sector enterprises operating across the construction energy utility hospitality logistics manufacturing public safety and transportation sectors.
We have known saw them for a long time, having been introduced the company when it was project considering a public listing we pass on investing in a company multiple times, including in its IPO, primarily due to valuation concerns. We are trying to our belief that the price we pay relative to the business. We buy is the most important driver.
An investment returns.
Between May and September 2019, Sonum experience tactical in software issues with its devices experienced significant carrier agreement delays in gross we mismanaged sounds Liberty time.
This resulted in significantly reduced revenue guidance.
As both the top and bottom lines and caused the decline you saw the stock price to $3 from a peak around 18 per share in June.
Adam began restructuring efforts in September 2019, following the appointment of a new CEO, Tom Wilkinson and CFO Bob turbine.
Forward looking guidance, we suspended a restructuring efforts began the stock trended below a dollar per share.
Prior to joining Wanni, Kevin ran a funny on RG J capital, where it was a significant shareholder any company called explore technologies, which was led by Tom Wilkinson, the new CEO Saddam.
Tom's leadership Xplore export business was dramatically improved and accompanied with ultimately acquired.
What do you have confidence in times abilities as an executive to engineer similar turnaround. It's on one of the sounds first priorities was to clean up its balance sheet.
Outstanding loans created substantial uncertainty as to the viability of the current business and prevent the company from investing in next generation mobile devices and connectivity platforms. We believe that the removal of instead overhang coupled with the cash infusion to fund development of future product lines can unlock value in the near term.
Our management to focus on long term value creation.
This past quarter, when 80, I heard a public offering of 36.8 million common shares 75 cents per share that raised gross proceeds of 27.6 million. In Additionally point 3 million shares were issued in exchange for conversion of 60% of the outstanding debt to 4 million was repaid in cash some now has a clean balance sheet.
With no debt and substantial capital resources to fund development on its next generation devices.
Well, ladies investment at 75 cents per share.
Weighted to an enterprise value to trailing revenues less the 0.2 times.
Explore a good pretty terrible publicly traded company was acquired approximately one times enterprise value to trailing revenues.
First responder positivity has become increasingly according to covert 19 pandemic as well as other domestic and global investments place additional importance on type activity in all environments. The secular trend you could provide provide meaningful growth opportunities for sonum just to know yesterday on closed the dollar nine chair.
45 cents increase from our cost basis.
Please turn to slide 22.
This slide lifts, our 10 largest legacy privately held holdings by value as would be ended the quarter for the quarter, our private portfolio increased in value by approximately 10.6 million or 34 cents chair.
The increase in value was led by Petrobras with additional contributions from Echopixel in Oregon.
These increases the value were offset impart by decreasing loader Therapeutics Corporation.
Last quarter, a number of our private portfolio companies were adversely impacted by the covert 19 in pandemic. While many of these companies have recovered in part or in full from such impacts it remains uncertain its negative impacts to value will return in future quarters.
We also noted that certain of our privately held companies are well positioned to provide valuable diagnostic in monitoring capabilities. They could we it's material growth for those companies. For example in April 2020 origin received an emergency use authorization from the food and drug administration for its novel covert 19 test.
Origins high throughput automated test capabilities the generated meaningful growth in the company has it addresses this ever increasing market need.
And last quarter shareholder letter, we stated that while we desire that we desire to shepherd, our existing private portfolio to access or explore opportunities to sell our positions in those companies, we have a luxury of not being able to sell our private holdings. When we believe it makes sense for shareholders rather than being forced to do you started survives.
The remaking of our business and a significant cash and securities apart a publicly traded.
Portfolio companies that we hope that we have grown men, we do not have to sell anything this stability allowed us to benefit from the acquisition of Petro by an undisclosed party Q2, 2020, we possibly other liquidity events with future.
As a refresher on the patch for acquisition the acquiring company in the terms. The deal are confidential. So we can only speak to what we've already received from the transaction. We received approximately 4.4 million in cash equipment.
In addition, we received another three or 305000 cash from one of these ownership and then the affiliated with Patrick called Accelerator for New York.
Also approximately 350000 will be held in escrow for one year food Dana closing when he is also about eligible through its ownership.
On the acquired company and the utility and the podium entity accelerator to receive up to approximately $86.9 million and potential future payments upon the achievement of undisclosed undisclosed development and commercial milestones.
180, currently estimates that the first milestone payment.
Recurring approximately two to three years subsequent milestone payments could occur at various points in time over the subsequent 10 20 years, the timing and likelihood of the acquired achieving these milestones is highly uncertain and if these milestones are achieved the timing may be materially different than the current estimates.
These factors were used to develop a fair market value based on a probability net present value analysis of the future potential future milestone payments of approximately 6.4 million.
We note that successful completion of the first milestone alone would result be payment of approximately $6.8 million 20.
Lastly, simultaneously simultaneous with the closing the transaction Petra spun out certain assets into new company.
We own shares with this new company Revana Pharmaceuticals Inc.
Overall, we are more confident in the potential for our current privately held portfolio in aggregate to generate future returns that.
Than we were when we started three and a half years ago and even at the beginning of 2020.
Why is that you might ask.
When we started 180, our private portfolio is comprised of 31 positions a greater than zero.
Today, we had 18 position side greater than zero, most of which remain in the portfolio because they have demonstrated staying power and the ability to secure capital from other investors.
At the end of 2016, our top 10 investments accounted for 42.79 or 79% of the total value the private portfolio with three positions valued at more than 6.5 million. We sold one of these positions Hcl for seven we ended 2018.
Ryan has increased in value to 13.2 million.
The way it has not performed its value is dropped materially in Q1 2020 to 1.2 million from almost 10 million at the end of 2016.
Today, our top 10 invest since my value accounted for 36.89 or 91% or the total value of our private portfolio aside from the fair value of potential future milestone payments of the sales pressure of approximately 6 million.
We only have one credit portfolio company valued at more than 3.1 million an attack by.
The write downs of many of our private portfolio holdings in Q1 2020.
Coupled with the attrition of other companies in the portfolio other private companies in the portfolio either through sale IPO or liquidation.
Materially reduced overall risk in the private portfolio.
That's not to say that there will not be future write downs syndrome write off some of the our current positions in the future.
We expect that there will be but the impact of these negative events. If they occur wood on balance impact any of the to a lesser extent then they would have in the past.
Flip side, we believe there could be the opting for materially positive impacts Navy for success like sets like Petroquest should they occur.
As mentioned previously we now have a balance sheet and allows us to see our private portfolio three to its natural and rather than being forced to sell position as the survives we're not making any promises with regard to the private portfolio. We're just stating our belief that it has been materially de risk as compared with prior periods. The particular.
When we started 180 as Kevin mentioned earlier, we believe our current stock price does not actually would track the status of our private portfolio, particularly when taking into account this information.
Please turn to slide 23.
As we've noted in previous letters, we have dramatically reduced our cost structure under new strategy in 2016 before funds change in investment focus the management team operating expenses, excluding stock based compensation and interest on outstanding that averaged approximately 1.3 million a quarter.
For Q2, 220, 20 operating expenses equal approximately 193000, the 17% increase from year ago material portion of this increase was directly related to the legal expenses incurred with registering.
As a registered investment adviser and other startup costs associated with our separate account for a portion of a publicly traded companies pension fund.
I remind shareholders that our Q1 2020 expenses included a reversal of the deferred portion of the 2019 bonus of approximately 317000.
Deferred portion of the 2019 bonus was not reinstituted as at the end of Q2, but we note that this deferred Dennis could be reinstituted in future quarters at the discretion the compensation many of our board of directors.
Please turn to slide 24 inch screen size.
We continue to anticipate the reductions in our operating expenses as a percentage and then assets we based on growth in our net assets rather than further reductions in our expenses.
Positive into Q3 2020 discussed previously if they hold throughout the quarter in year will help reduce Steve expense ratios as of the next quarter and as at the end of year.
We remain committed to treat every dollar shareholder money with the utmost Karen consideration.
As we've stated often is much easier for us to grow any the winter expense hurdle rate than where it is today I'll now turn the call back over to Kevin.
Thanks, Daniel its been a greater year.
I'm happy were appeal year to date, although I fully recognize this will ensure notably based on a number of factors.
Pandemic being the greatest concern.
Now moving to the forefront view us election, and we expect extreme volatility around out of that.
Smooth sailing doesn't seem to be in the forecast, we will just focused on finding value doing the work in individual names.
The timing the value there just like they were with saw them this quarter will make concentrated investment decisions.
And then when we open up for today.
Okay.
Daniel.
Oh, sorry, my apologies if you have a question. Please type star six on your phone or click the ask a question icon. If you are participating by your computer.
Two Brandon. Please go ahead.
Hi, great quarter.
Looking at D wave I haven't looked at the private portfolio while.
With that Mark down I saw it was the under 2 million and.
At one point recently on the last year the year before substantially higher what wasn't materially events that caused that big markdowns D wave.
It was marked down last quarter, Daniel if you want to get into the specifics.
Sure, So hi, Brian and so.
It was last quarter that the mark on occurred and it was directly related to a financing events is that.
Repriced the company as well as and you may have noticed the if you look no financial statements as well.
As part of that restructuring if somebody did restructure the security if I were outstanding claps everything into one.
One preferred share class and changed its name from our holding company perspective to DW ISI holdings, but it's still does business on a D wave systems, but it was all related to financing about.
Okay. So worried recently last quarter that I just add notice for.
That's correct.
Thank you.
No problem.
Thanks, Brian.
Okay.
Yeah, Hi, good morning ahead.
The 25 million, you're managing has that.
Didnt put to work and so has it been input to some of the similar situations are involved in and.
How large do you expect to raise that 25 million too.
Faster here for me, Sam Hope you're staying healthy.
Yes, we received the money, yes, we put.
About 40% of the assets to work.
We've actually generated a.
Approximately 15% return since we started in the middle of June.
So we're quite pleased with ER.
How discipline, we've we've been about investing the assets and obviously the returns that we've gotten from those assets and it's an important note in terms of how we think about managing money.
We don't want to get the money and put the money to work day one.
This is a concentrated.
Portfolio process.
And if we don't have a good idea, we're not going to force the money to the market just because we have it.
And that will be the saving for the new funds that will be managing in that it will be almost to call our cost of capital model where.
Let's say, we raised 100 million Sam.
Yes uh-huh million at work.
Only going to put the money to work when we have an idea.
That's how I wanted to rate come as money ever since I Love Blackrock.
Don't want.
Through to just force the money into the market I think thats how.
Investor as goal, arriving that they do really really well the money comes in usually at the peak it put it into the marketplace and then the returns get unit, we're only going to grow that are coming to work with a good idea.
And how much do we expect to raise on top of that I don't know I mean, I would like to think that we have the capacity to raise 100 200 million on top of the.
The balance sheet that we have plus the 25 million. We just got started on that process.
I guess, where even though I've been around 30 years, I guess, we're kind of new to the rest of the world.
Some folks are going out to get comfortable with how we think about investing and they're going to low follow us and watched our performance and you know the way that all works.
So we're hopeful we're optimistic but we think we've done a good job for people and we think that will take care of People's assets, if and when they show us the confidence to let us make some money. So we're optimistic about being able to raise more money on top of the 25.
And at this point of view.
Have you invested in a similar idea is are the same stocks.
For the 25 million as you've done for Andres 80 degree.
Yes, if we so for us on them.
For example, it was a side by side investment a portion of that commodity.
Of our investment came from one of these balance sheet.
And then next to that was a significant investment for the pension fund.
There are times, where 180 doesn't have as much cash, let's say as when you get new money and so there's a couple of new ideas that have gone into the pension fund that haven't gone into 180, but that's only because we're fully invested or had been fully invested on 180, but if the key.
Cash is there for both funds you should think that we'll have the same exact weight.
Have a certain position for each of the funds.
So there might be some from some deferring names here in there, but all in all the performance should look fairly similar as you go through time.
Well it sounds good and keep up doing what you're doing and and then the 25 million will grow.
Good luck.
Okay. Thanks, Thanks, a lot.
Hi, John Sorry go ahead.
Daniel and good morning, Thanks again for the update you guys continue to.
Deliver on your approach and you've been consistent and I appreciate.
The following through and doing what you're doing.
So congratulations on that.
A follow up to the Patrick sale.
How much.
As separate pennies on the navy or whatever measurement you might.
And our the milestone payments.
Are there any part of your current to sandy any be that Youve put out and is the milestone payments from after sale.
So yeah, I think what we've.
No. Please go ahead.
I was going to take so Todd so yes.
It is so we do have to fair value those potential milestone payments.
As I mentioned, there's the potential for about $686.9 million and future payments over admittedly a long period of time. The first one potentially could occur we estimate currently in about two to three years the on could be slower care can be faster could be shorter barcoding longer, but that's our proxy.
At the moment, we currently fair value.
All of those milestone payments that you need that the stream of 86.4 of 80 86.99 at approximately 6.4 million currently.
So Tom what I'd say on that is.
You got a haircut your views on the likelihood of those milestone payments.
Taken place, although I will say to following.
He said it earlier the market is basically paying us form if you give us full credit for our cash and liquid securities literally $1.80 per share last night.
The market was paying us $4 million for $40 million assets.
Theres one milestone payment.
The first one it's a significant one.
And it's.
It's barely based on.
It the likelihood of that wasn't happening is greater than 50% I.
I think we probably have it at 75% in reality, it's probably 99% I don't know why.
The acquiring drug company.
Would have bought this business if they didn't intend.
On bringing the drug.
To trial.
And that's kind of what the first one is based on a generic terms so and that alone is greater than the what the market is paying us for the entire portfolio. The whole thing is absurd I understand it I get it but I'd like to think that over the course of the last three and a half years, we've shown that from time to time men.
Any of our holdings, not only get monetize a bigger monetized at a greater than the NPV, we had them on our balance sheet or so.
We'll see where that goes there is also another there's a world out there are folks that likes to buy royalty streams or milestones. So maybe we may look to market that.
I think we will look to market that and like everything else someone's willing to pay us a fair price.
It's not who we are what we want to be anymore.
Obviously ours are our goal is to be it where we're investing public companies. That's that's when 80 is with a with a private portfolio history.
So if someone wants pass fair price will sell if somebody wants to come in and offer us a stupid price what's on the go take a walk and that's the beauty of what we've done over the last three and half years has been only sell anything.
And when I first guy here four years ago, we had almost seller anything that we could to to get more cash in our balance sheet.
Overcome the high operating expenses, we have so we feel good about that royalty payment.
Stream, we think it's worth more than what the market things for the entire portfolio triggers as I said absurd to begin with but we'll see how it plays out you know, it's just a world extremely you have to hit certain milestones get paid on it.
Mhm.
So soon is that 6.4 million in the 40 million dollar portion the private portfolio value at the end of June yes. It is.
So is it about 21 cents on anything.
Correct 31 kind of 1 million shares outstanding.
Okay, just double check all right well great. Thank you guys alright.
Thanks, Tom.
Hi, often please go ahead.
Yeah, I had a question on.
Three Pratt three the private car part you may not be able to answer any questions on them, but do you have any information kovack of some sort of on.
Manifests D wave I know you talked about just a minute ago are there Rick formation or something but I've got their operations and what's going on narrow and the biggest holding of those AG Vietnam at all.
So is there anywhere so provide some color on those holdings as best again.
Absolutely. So Austin. Thanks, My question, So and I think first is it to your point I mean, we are governor confidentiality provisions and and so there's we're limited and exit then the detail that we can go into but in terms of publicly available information, which can be I'll start with AG by yeah.
Agbiome launched one of their first products this year called howler. Its a it is available on a variety of but just from what I've sites.
And it's a unique biologics for pest control that is it applicable in both turns turf in order to mental spaces, So long lawn maintenance golf courses.
But also in not in.
D.A. I farming and the other general opportunities, where you where there's a certain past and it goes after that's pretty tough to management. This product actually does an extremely good job I. So great first product on the market great. He came to came to market I got EPA approvals for.
Oscar than I think any other product that we've launched.
Testament to the tech not to their approach and what they're bringing to market. They have a variety of other brands the down.
That are both their chemicals that are on the market as well, but that was there first biologic and then they combine those chemicals that biologics to produce an even better product and extend patent license.
And a variety of interesting growth opportunities. The company. They did also sign a deal with Gen. Active that was law that was announced at the end of last year. They signed a couple of other deals as well. So the company is doing well I think.
You're entering into that commercial phase of development, which is exciting as well as you know work and securing additional opportunities and partnerships with large companies.
Yes, Nanosys hi, so interestingly trend does that I think is.
Out there it's out there publicly and you can you can see it is that the l. or the OLED TV I said that deal like the Q led their call until quantum dot LCD televisions are selling really well and in fact during the pandemic now that you have a lot of people.
Well, obviously at home.
Television sales, especially high end television sales have increased year over year.
Verses decreased and a lot of that is due to just everybody's home and now they can think about a year and they use their television swine. So they can think about that they want to upgrade so it's actually counter intuitive and so the company is actually doing fairly well the actually just also announced a partnership with a low.
Large chemical company in Japan, which will help distribution of their products within the television manufacturing market. So generally bullish on the trends that you're I'll caveat that with the company has been around since 2001.
It is almost yeah on age allowed to drink it's allowed to vote.
Thats why do you have seen already moving assets.
And so it's you know when it hits that growth.
Steep philosophy of revenue growth I don't know.
But it's been able to sustain itself and the question now is.
You can they transitioned from a stable business to a growth business and that's what we're waiting to see and hopefully it sooner rather than later given how long this company has been around.
And lastly, with D wave I think you should you can see the announcements that have come out publicly earlier this year Allen Bradley took over as CEO. He is a very successful.
Hi person within the.
Software and computing industry really impressive guy so very bullish on hence the opportunity in the skill set that he brings to the company to lead to the next level, but it's been tough.
Fundraising has been very difficult sales have been difficult they transition to a cloud computing model, which I think is the model going forward that they're going to need to use to grow but it has not been an easy transition and obviously has resulted in a material decrease in value.
Partially due to covert impacts there were some other impacts geopolitical impacts that caused me to fund raising more difficult as well, but at the end in day, they weren't able to raise capital at a may and maintain or increase their valuation and unfortunately, it's come down now it's been de risks.
From a value perspective perspective on our balance sheet, which I think we feel very club or more comfortable with but it's unfortunate obviously given the revaluate the prior valuation in prior Rob around financing and prices rose and wish that has occurred.
Thank you.
That one that from may be.
So the security.
At some or I think that company has started and I commend you know there wasn't right you are correct that's very good point.
So we'll see you never know when we get paid just like we never though we were going to we obviously had no quota petros going to get taken out and it comes when it comes so as Daniel said, we think we like to think that would be if you just the portfolio to a point where many of these companies have sustain themselves for a reason is because there was.
Actually business there the people still want to investing.
Well, we'll have the opportunities.
To monetize more of our names we've got some names in there that.
No our are certainly doing well because of Cowen and diagnostic testing.
And we'll see where that goes and then maybe maybe you can have a monetization event around that from some of our holding so we'll see we feel.
I feel better about portfolio today than what expert Scott here in the middle to succeed.
Thanks Austin.
Hi branding go ahead.
Hey.
Just confirming what I saw on that yet.
Slides.
Your current any the as of yesterday, good looks like Youre damn slide as of August 10th.
Rio flag to 70, plus it looks like 35 in the public portfolio appreciation.
From June 30 is that a true statement real five and may be right now.
So those two assumptions in there.
One we give people that information so that they have access.
Just to try to do the math like you just the two assumptions are one our private portfolio is flat.
And you know we don't know that today will we always look better in the quarter.
So make the assumption the private portfolios flat you got to take out a couple sense of the operating expenses.
Maybe another penny for reversal of an accrual, we'll see but your math is.
That is that.
Okay, So you're with about where we're heading be wise jeez. These 31st.
Roots is there you said I'm sorry, I was talking over your will respect.
So I think your any be on these 31.
19 ones are three on sex.
Correct.
All right pretty so you're right, we're close to being right as of last night. We're an open end mutual fund we view I run my number.
With again and justify the portfolio slightly I got some expenses.
Alright.
Thank you.
Yeah, I still see a $1 stock price so.
I guess, when the analytical and we'll be back out of it.
Yep.
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Well, thanks, everyone I spent a little while you're and ER and unsettling times and certainly volatile we appreciate your.
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