Q3 2020 HC2 Holdings Inc Earnings Call
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Greetings and welcome to the E C. Two holdings incorporated third quarter 2020 earnings call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star one on your telephone Keypad Other reminder, thisconference.
Being recorded it is now my pleasure to introduce your host Garrett Edson. Thank you Gary you may begin.
Thank you and good afternoon, we'd like to thank you for joining us to review <unk> third quarter 2020 earnings results with me today are Wayne bar interim CEO of HC two Unlike center H.C. to his chief Financial Officer. This afternoons call is being webcast in our website H.C. two dot com in the Investor Relations section. We also invite you to follow along with our webcast presentation.
Can be accessed on H.C. twos website again in the IR section before.
Before I turn the call over to wait I like to remind everyone that certain statements and assumptions in this earnings call, which are not historical facts will be forward looking and are being made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act 90, 95, including among others statements relate to the expected or potential impact of the novel Corona virus 19, pandemic and the related responses to the government agency.
Warner business financial condition results of operations in any such forward looking statements whether concerning the cobi 19 pandemic or otherwise involve risks on sumption and uncertainties. These.
Looking statements subject to certain assumptions and risk factors that could cause HC. Two is actual results to differ materially from these forward looking statements risk factors that could cause. These differences are more fully discussed in our filings with the FCC.
The forward looking statements included in this conference call are only made as of the date of this call and as stated our SBC reports H.C. two disclaims any intent or obligation to update or revise these forward looking statements, except as expressly required by law.
During the call management will provide certain information that will constitute non-GAAP financial measures under the FCC rules, such as but not limited to adjusted EBITDA insurance adjusted operating income insurance pre tax adjusted operating income.
Certain information required to be disclosed about these non-GAAP measures, including reconciliations with the most comparable GAAP measures is available in the most recent earnings press release, which is also available on our website and finally as a reminder, this call cannot be taped or otherwise duplicated without the companys. Prior consent now I'd like to turn the call over to 80 twos interim CEO Wayne Bar Wayne.
Thanks Garrett good afternoon, everyone. Thank you for joining us I hope you and your families are all doing well.
On today's call I'll walk through some third quarter highlights and discuss our recent progress toward launching in completing a successful refinancing which will strengthen our balance sheet and position us for long term success.
Our CFO, Mike Senno will then provide more details on our third quarter performance and then we'll and by taking some questions well.
While we continue to see some impact from the pandemic.
Third quarter also shows the resiliency of our businesses and their ability to generate solid results as the economy gradually rebounds.
We also renamed some of our segments to better reflect their businesses and where we believe they have potential future opportunities.
Additionally, the board has made significant progress in assessing each of our businesses and it's close to solidifying the platform.
Our focus has been threefold simplifying the overall portfolio.
Determining which businesses are poised to take advantage of market trends in the medium to long term.
And identifying which businesses are best situated to contribute to our shorter term efforts to refinance our senior secured notes.
Overall, we were pleased with our operational performance, which is further evidence of the strength of the platform.
And the value we believe is inherent at our various segments, which I will now review.
First our infrastructure segment, formerly known as construction.
[noise] generated adjusted EBITDA in the quarter of nearly $18 million a solid performance in further proof that dbms ability to withstand the challenging economic environment.
It also continues to win New awards thing its backlog improved by $26 million in the quarter to 436 million.
And also maintains a substantial adjusted backlog of $640 million, which positions us well to further rebound and capitalize on potential trends in the market as the economy continues to improve.
Meanwhile, in our life Sciences segment, Mark to commence the pre launch of its glacial Rx skin lightening embracing system and is expecting a formal launch in Q1 2021.
Initial preorders for the products, which include the FDA approved device in consumables are strong.
Look forward to the full commercial launch early next year.
Additionally, we were pleased to see that Medibeacon received an additional commitment of watt dong for $20 million and non dilutive funding over the next two years to pursue class one status in China, which will allow the device to immediately after the Chinese hospital system.
The payment will be treated as an advance of royalties for anticipated sales in China.
Medibeacon is on track to begin its pivotal study in the third quarter 2021.
Oh far too and Medibeacon are clear indicators that the value inherent that our life Sciences segment, and we are excited to see the continued progress toward commercialization and FDIC approval respectively.
As a reminder, <unk> art, you and Medibeacon are fully funded for ongoing activities and as a result, we currently do not anticipate the need for further capital investment from H C.
We noted on our last call that we were in the final stages of extending the debt maturity at the H.C. to broadcasting Holdco.
And at the end of August we successfully completed a one year extension on that debt.
Since that time and as agreed upon with our lenders as part of extending the debt.
We've started selling noncore assets to begin reducing debt burden at broadcasting we.
We believe de levering this platform will better position us to maximize the value of our network of nearly 230 stations in 97 de amaze.
We remain well positioned to take advantage of opportunities in the market as cord cutting further accelerates as.
As you May know our spectrum segment controls the most operating broadcast spectrum in the U.S. with more than 2.3 billion megahertz Pops of new HF and VHF spectrum.
We are pleased with the path and gradual progress towards reducing debt and the continued strong relationship we have with our lenders.
At our clean energy segment beyond six continues to perform very well during the pandemic growing its adjusted EBITDA, approximately 61% compared to the prior year period.
Aided by the alternative fuel tax credit as well as increased demand for fuel.
In addition, beyond six recently entered into an exclusive partnership with piling on a maker of the electronic drivetrain class eight trucks that use an onboard CNG generator.
As an alternative fuel solution platform beyond six has become a leader in CNG and Orange is feeling.
George and his team have continued to do a tremendous job taking advantage of the positive trends in the evening and renewable energy industries.
There is a vast amount of interest in investment being made in these and related sectors as the world works toward reducing carbon emissions.
Beyond six is very well positioned to grow long term, while making a real difference in improving our environment.
Meanwhile, Continental insurance ended the quarter with strong total adjusted capital of $374 million and we are still actively exploring strategic alternatives for the benefit of all of our stakeholders.
Last month, we announced the sale of P.G.I. carrier services, our telecom subsidiary and after receiving FCC approval closed on the transaction this past week.
We appreciate the efforts of Craig and his team there the past six years and wish to purchase their success with BTG.
The divestiture was a step towards simplifying our overall business in advance of a refinancing.
We expect to utilize net proceeds for working capital purposes.
As we've noted repeatedly our top near term priorities at the holding company are improving our capital structure and reducing overhead.
While we continue to take steps to reduce corporate overhead executing in the near term on our first major goal of refinancing, our 11.5% notes and reducing our debt service.
Position us well for long term success and generating value for our stockholders.
We've spoken frequently about the fact that the refinancing will involve multiple steps one of which we took this past quarter with the launch of the $65 million rights offering which is partially back stopped by lesser capital, which is headed by our chairman I'd be glazer.
We acknowledge and welcome the continued support of Bobby and other of our major stockholders and look forward to a successful conclusion of the rights offering later this month.
After a comprehensive review led by our board we determine that.
Several means available to us to address our capital needs. The rights offering was the most prudent way to raise capital in order to strengthen our balance sheet and best position the company in advance of the refinancing as well as provide current stockholders with the opportunity to maintain the percentage of ownership we.
We believe the partial backstop from our chairman will help ensure the success of the rights offering and displaces firm belief and H.C. two in full alignment with all of our stockholders.
The rights offering is slated to expire on November 20, and subject to stockholder approval of an increase in the number of authorized shares of our common stock.
Net proceeds from the rights offering will be available for general corporate purposes, including debt service and working capital.
Our current efforts have been and are focused on the refinancing there are various pieces to a successful outcome here and we believe the rights offering is a key piece.
We are hard at work on the other pieces and we'll provide more detail on them in due course.
As we think about the longer term strategy for H C. We believe in general we have a great set of assets. Some of them, we believe our position to be able to extract value almost immediately and others have more short to medium term potential once.
Once we have fixed our capital structure with the various steps in place and to come our focus will be on building value over the medium and long term with our remaining assets.
To sum up I want to thank all of our employees the H.C. too and our subsidiaries for their hard work and dedication in helping us make steady progress over the past few months, we were all firmly aligned and pulling in the same direction with respect to what we need to achieved in the near term and beyond.
By executing on our near term goal of generating a successful outcome. The refinancing will be best positioned for the long term to strengthen our balance sheet and maximize the full potential and value of our businesses in order to create long term stockholder value.
With that I'll now turn the call over to our CFO, Mike Sena, who will discuss some of our financial highlights.
Thank you Wayne, Let's review, our third quarter performance consolidated total net revenue for the third quarter 2020 was 393.3 million compared to 427.5 million in the prior year period.
As lower revenues are generated from the telecommunications infrastructure and spectrum segments as well as the insurance segment net of eliminations.
Which were partially offset by an increase in revenue from the clean energy segment.
Net loss attributable to common and participating preferred stockholders for the third quarter of 2020 was 17.7 million or 38 cents per share compared to a net loss of 7.5 million or 16 cents per share in the prior year period.
Total adjusted EBITDA, which excludes our insurance segment was 11.9 million in the third quarter of 2020 comparable with the prior year period.
We saw improvements are clean energy reduced losses that spectrum.
And lower non operating corporate expenses, those were offset by reduced contributions from infrastructure and telecom.
And an increase in losses from life Sciences, due primarily the Archer, which increased spending from the comparable period to commence the preorder processed foods glacial Rx system.
And continued development of its product platform utilizing proprietary technology.
Let's just take a couple of minutes to go into a bit more detail in a few of our seconds.
It infrastructure, we recorded adjusted EBITDA for the third quarter of 2020 of 70.7 million compared to 19.4 million in the prior year period.
As in the prior quarter third quarter 2020 results were impacted by the timing of commercial project work on their execution.
At lower contribution from industrial maintenance and repair project work, primarily due to covance.
The segment continued to experience additional costs of 6.4 million during the quarter related to certain measures to comply with covance protocols and consistent with prior periods. We.
We have excluded these costs from our adjusted EBITDA.
As of September 30, 2020 reported backlog was 436 million up from 410 million at the end of the second quarter adjust.
Adjusted backlog, which takes into consideration awarded but not yet signed contracts was 649, mainly.
Mainly consisting of smaller to medium sized projects, which provides infrastructure that significant visibility.
Well just the backlog would based on a quarterly basis, we have a healthy number of proposals outstanding and continue to see more opportunities entering the market.
While our backlog and the market opportunities of late have been small to medium size and nature. We are beginning to see larger projects entering the market.
We do expect the pandemic to continue to have an impact on the timing of projects for the foreseeable future.
At clean energy, we recorded adjusted EBITDA in the third quarter of 3.7 million compared to adjusted EBITDA of 2.3 million in the prior year period.
Segment continued to benefit from the renewal of the alternative fuels tax credit or a hefty C, which has not yet been approved in the third quarter of 2019.
As an additional reminder, we expect clean energy revenue and adjusted EBITDA for the fourth quarter of 2020 will be well below the fourth quarter 2019 totals as the FTC renewal in the fourth quarter of 2019 was retroactive to the beginning of 2018, we recognized two full years of credits.
In the fourth quarter of 2019.
This led to a one time outsized revenue and adjusted EBITDA in the fourth quarter of 2019.
We believe a renewal of the tax credit will provide further tailwinds the continued growth in our clean energy sector.
Meanwhile, at insurance, we generated pre tax adjusted operating income for the third quarter, a 14.3 million compared to 13.5 million in the prior year period.
The increase was primarily driven by favorable claims activity and reserve developments in the current year part.
Partially offset by a decline in net investment income due to lower yield on investment assets as a result of lower interest rates and the timing of portfolio reinvestment.
As of September Thirtyth, 2020 insurance had cash and invested assets 4.7 billion.
Total GAAP assets of 5.8 billion and an estimated 374 million of total adjusted capital.
At the end of the third quarter. It seemed to have consolidated cash cash equivalents and investments of 4.7 billion.
Which includes cash and investments associated with H series insurance segment.
Well the insurance consolidated cash was 49 million.
Recurring corporate expenses for the third quarter of 2020 were 3.7 million a 1 million.
Decreased from the prior year period, as we continue to make strides and reducing our overall overhead including the consolidation of our headquarters from two boys on to one for significantly reducing our lease expense moving forward.
We continue to focus on significantly and responsibly, reducing overhead at the holdco level, particularly in the face of the pandemic.
As of September 30, there remains 342 million of the outstanding principal on our 11.5% notes, a 27% reduction from where it stood at that they're gonna have 2020.
A decrease in aggregate principal outstanding provides us with annualized interest savings of 15 million.
Our primary focus in the immediate term is our liquidity in refinancing besides the rights offering which we hope to successfully complete later this month, we have various internal matters if needed to provide corporate level liquidity from our subsidiaries in the near term in excess of 25 night.
Based on these factors and our plans, we feel comfortable in our ability to meet liquidity needs over the next 12 months.
Remained keenly focused on our overall liquidity position further expense reductions and pursuing our strategic initiatives to reduce holding company debt and unlock value within the HC two portfolio.
I'd now like to open the call up for questions operator.
Thank you we will now be conducting a question and answer session.
If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the question queue.
The conference you May press Star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the sarkies one moment, please while people while we poll for questions.
Thank you. Our first question comes from Sarkis Sherbetchyan from B. Riley financial. Please proceed with your question.
Hey, good afternoon, and thanks for taking my question here.
Hey, Steve how are you thinking away so when the statement evaluating refinancing scenarios and portfolio monetization to reduce that leaves plenty of room for the imagination right. So like what are the likely pathways of the board and management are considering you know we know the rights offering is one one.
Lever here and you know this is a 340 million dollar question right.
It is indeed, and then you know it's a top of mind for US. It is the number one priority is both Mike and I have stated you know weve taken approximately 27% of those notes out this year through the various asset sales, but that definitely appreciate the.
Or the amount of money that we have becoming current on December one Oh, we're focused on more and more of an overall improvement to the capital structure, rather than just a refinancing of a easy living in a half percent bonds. As you noted a the rights offering is an extremely important step I think strength.
Our balance sheet I think it demonstrates on behalf of RV Glazer as well as other major stockholders their belief in the equity in the company and we're continuing to take a look at a variety of different ways to achieve this refinancing we haven't made any.
Any definitive decisions with respect to it yet sarkies, but we are they are well down the path and as soon as that becomes a consensus as a board will be in front of you all and letting you know how we're going to move forward with the refinancing.
Mhm and and you know what are the explicit holding company level cash requirements for the balance of the year. If you can help us with that one.
Yeah. So Keith this is Mike of course, we have a the interest payments on the debt the convert the revolver and.
And ER and the preferred stock and then our normal corporate overheads.
Care to put a total dollar value to that Mike.
Yeah sure you know, we're looking at about 22 million and interest costs and then you know our AR. We have about two months left of the quarter and you know we've been running at three and a half to 4 million a quarter for Ah for corporate SG nine.
Okay. Thanks for that and that run rate you just mentioned through enough million to 4 million a quarter on corporate expenses that after the headquarter consolidation you just described or should we expect a little bit of improvement.
On that number.
You know we're continually trying to push that down we did you know of course moved from consolidate the space in.
The middle of the middle of the quarter I'm. So there wouldn't be there could be some additional savings, but we're working on of course try to continue to push that down.
Gotcha and now the you know segments are relabeled here. So construction is infrastructure broadcasting spectrum and energy as I believe clean energy more recently, so I guess, what's your messaging to investors with this move should we expect a further.
Further investments in some of these relabeled areas or are we just kind of moving away from describing asset that's core versus non core.
Yeah, I I think said the re labeling really is in a indication of just kind of the excitement and the opportunities that we think are lie in front of us.
We have some really good assets here across all five of the operating segments and I think the re labeling is a a little broader than the prior segment names that we used before and I think that it reflects the broader expansive opportunities I think that we could take advantage of in each of those.
The segments.
Got it one more for me and I'll hop back in the queue <unk> talked about the about backlog at what is now infrastructure.
$436 million I think the number was so.
You know maybe if you can talk to the composition of the backlog you know, maybe if there's concentration of customers or geography or types of project. Just you know in relation to the current environment.
Yeah, I I think that's a good question because the nature of the backlog I think has changed a little bit I think it's kind of a testament to rest and then the team that they feel very confident that even though some of the the characteristics of these types of projects are changing a little bit.
They're they're gonna more than up to the task to meet that.
Mike did you have any.
It's on that as well yeah. I mean, you know obviously, we have continued to see positive trend moving from ER into reported backlog. It's up 25 million went from 410 last quarter to 436. This quarter that means you know of course revenue was 160 million means they sold everything they burn.
Out of backlog plus some this quarter. So that's positive I think and talk into the D.B.M. team.
They still see a lot of.
So it is in the market and have a lot of our piece out there. They are starting to see so we've talked about backlog over the past few.
A few quarters, where does move in just sort of small to medium sized jobs.
They are starting to see some larger jobs in the market that are or larger opportunities come into the market. So so I think that's a positive sign too.
Okay, and just to be clear no.
No real levels of concentration in either customer or types of projects you've undertaken in this backlog.
Its pretty its pretty spread out I can tell you that.
There has been you know a good portion of what they signed in commercial space, but you know, it's really I wouldn't say, there's any concentrations in it.
Lot of them again, we've been talking about the $10 million to $50 million range of projects for a while and that's kind of you know still what the composition looks like in.
In a in backlog today, although again, they're starting to see some larger opportunities pop into the market.
Thanks, I'm going out hop back into queue.
Great. Thanks to our case thank you.
Thank you. Our next question comes from Derek winger with Concise capital. Please proceed with your question.
I've heard snippets of what maybe could be construed as guidance, but just snippets like in the clean energys, you're expecting fourth quarter will be well below fourth quarter last year and infrastructure you gave the backlog, but can you be more specific in terms of outlook for fourth quarter and in county here 21 in terms of.
Do you think you're comfortable with giving in terms of revenues EBITDA traditional measures.
Don't have to do it for the five segments, but.
The overall.
Sure I mean, we don't we don't give guidance, we try and give you. Some view on what we think so we've talked about D.B.M. for instance, being we expect it to be lower than last year for for 2020.
And you can see that in results through September you know that it is or lower than <unk> than it was last year and we expect you know for the full year that to be the case you know we do still see healthy backlog. We have said that some of the things that weve that were seeing in.
In our backlog and reduction is around delayed maintenance capex projects and the industry.
Industry, what we call the industrials business, which is primarily the grey Wolf business, we acquired and we do expect some of that come back in 2021.
Well, how long does it take you to.
Burn off the backlog at the infrastructure Division.
They.
The smaller smaller projects the projects can run anywhere from you know a few months to 18 months. We've we've had a lot more smaller to medium sized projects in our backlog. So I think you know when you look at those those projects there probably.
Within 12 months of what we have in backlog some some of the maintenance contracts related to the industrial business carry on longer than that but your your fabrication and erection business or kind of.
Six you know a couple of months to few months to 18 months.
We do disclose in our in our Q and K sort of the run off of the backlog in the first and the second footnote.
Okay.
[noise] it at least gives you a sense of what we're going to burn in the next 12 months and whats beyond that.
All righty and can you.
You really kind of avoided it can you give any.
Color on how the status of the rights offering is going and at what level is the stock price for this.
<unk>.
So we we commenced the rights offering at market, which was 227 at the time.
The rights offering did not come out at any type of discount to market. So on the day that it was approved and launched the stock was it to 27.
You know, we will the a rights offering.
His extent is open until November twentyth.
And you know we'll have a an announcement when we consummated at that point, but were hopeful that everybody will take advantage of what we believe is the most democratic way of putting some cash on the balance sheet here all of our stockholders have an opportunity.
To participate and we're very hopeful that they will take that opportunity and.
And help us achieve this a very important step towards the refinancing.
I'll also just add that it is partially backstopped up to $35 million and that.
Two of our large shareholders have also indicated that they are going to participate at their applicable share which is roughly 13% of of additional addition, additional amounts of the rights offering.
So that the price up to 27% stone that that's what the prices.
Yes.
What happens if the stock falls below that by November Twentyth.
I would assume less people would be inclined to I subscribed for for the rights in that instance.
Yeah I just wanted I just wondered if you had a plan b if that were to happen not that it will.
It's still backstop for $35 million regardless.
Okay, well, thank you very much.
Thank you.
Thank you. Our next question comes from Brian Charles with RW Pressprich. Please proceed with your question.
Hi, good afternoon. Thanks for taking my questions I got a couple of quick ones first you did give some guidance about maybe harvest thinking about 25 million or more.
Cash from your subsidiaries to the holding company.
I want to make sure I understand that is that its cash. It's currently at the subsidiary level or is that maybe unlocking value at the subsidiary level may be true see I live broadcasting stations or or or such.
[laughter].
No no that would be ability, we have to pull cash from our subsidiaries that they have.
Okay. So the 40 million I think that's at the subsidiary level right. Now you have a you estimate you have access to about 25 million or more or less 25 plus okay.
Okay.
On the on that note of the broadcasting station sales do you have any guidance or any kind of color there as to what stations you might be targeting for sale and what kind of value you might be able to realize.
I'm not too.
Yes. So a you know a decision was made to to sell some noncore assets. We have we have a pretty exhaustive list of a variety of stations everything from full power to class eight to L.P. TV stations. These he emphasis really is on.
I'm rounding out the L.P.T.V. and class a network that we have across the country and so.
If you were to just look at kind of the noncore assets from that the where they're interested in selling full power stage certain of the full power stations. You know the idea here is to de leverage broadcasting and to put that are particular operating segment in a stronger position as we move forward and continue to.
Build out the network.
Okay, but you don't have a ballpark dollar figure on these things you're targeting I could go get worked out and try to pull that apart.
Yeah. We we are we're looking at these on a case by case basis, obviously evaluating a variety of offers that we are receiving and we'll make decisions a little when we see one that we think makes sense.
Okay, great. Thanks, and finally, the last question you mentioned a couple of large shareholders had signed up for these probably the rights offering that would represent an additional 13% over the rights offering am I understanding that correctly is that 13% 65, no land so it might be another seven and $8 million.
Committed to the rights offering on top of the 35 from my answer exactly yes, okay.
That's perfect. That's all I've got thank you gentlemen.
Thanks Brent.
Thank you. Our next question comes from Sarkis Sherbetchyan with B. Riley financial. Please proceed with your question.
Hey, Thanks for taking the follow up here I just wanted to circle back to to the insurance segment. I know you know, it's still under strategic alternatives, but just wondering where any dividends taken up or management fees from insurance to the whole holding company this quarter.
What are the expectations for doing that going forward.
Yeah, I mean were pulled in like a million to a million and a half a quarter of management fees. So that's that that's consistent with what our expectation is right now.
Okay. Thanks for that and just want to now go to life Sciences Real quick you know mentioned the initial preorders are strong for the hard to device. I guess, you know can you help us understand what the opportunity is or you know if you can frame it maybe quantitatively what preop.
After strong means.
[noise] quantitatively I think gets it gets a little little into guidance, which were reluctant to.
To give here.
I think the best take away from all of this is that are you.
Our two really demonstrates what Penn send as well it took this technology. It added regulatorily approved through the FDA process. It's now with the commercialization stage, which is which is new to us a EPS.
And then you remember star Keys that are you know, we we transacted and a beer before there was any commercialization of it our two is a bit of a different flavor with respect to the skill set here and I I think based on kind of their early projections as to.
What they thought the device would be doing it's it's ahead of schedule even in just the soft launch period. So I think they're continuing to refine the marketing in the launch process for that for the full blown launch and you know I think that.
Everybody is very pleased with the results so far without kind of answering your question as to a quantitative a number as to what you know what we'd expect here I'm curiously, apparently dermatology and dermatological products are doing very well despite the pandemic.
You know I think folks kind of attributed do not liking what they see and Jim calls et cetera. So they are heading heading to the dermatologist and hopefully.
Hopefully you know we can we can continue to take advantage of that kind of uptick in activity. Its a great technology. The team behind it is a is a proven team I'm, having brought that sculpting zeltiq to the market before this and when when paired up with David and shrinking over at Penn sales.
I think it just really demonstrates that some of the value a that the pens and contributes to the overall portfolio.
Got it at least I tried right and speaking of our good friend Benazir I'm.
Just want to kind of.
Pick your brain that to see if there are any developments from the.
The acquirers Jensen regarding if they're using it or or if there's any updates on on the potential you know payments to HC two from from the milestones outlined during the sale at the time.
Yeah, we they continue to develop it every well the indications we get from our internal updates from them are positive you know I think when we get closer we'll start to see F.D.A. applications to be submitted for the product we havent.
Not yet and so you know we don't have much of a status update other than that they are.
Continuing to develop the product in line with their expectations.
Got it thanks, that's all from me.
Okay psyches. Thank you.
Thank you there are no further questions at this time I would like to turn the floor back over to Wayne bar for closing comments.
Thank you.
So I'd like to thank everybody for participating this afternoon I certainly appreciate all the continued support that many of you are showing for us as we as we continued to make changes here at H.C. to it said in a really exciting time over the course of the last six months and everybody is working.
And together very well to do.
<unk> to achieve a the variety of goals that we've set for ourselves said not the least of which is to refinance the debt and continue to drive stockholder value here we.
We look forward to a successful conclusion to the rights offering and Ah, we definitely will be back to you as soon as we have finalized and executed on our plan to refinance the debt. Thank you.
This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation and have a great.
[noise].