Q3 2020 Digital Ally Inc Earnings Call
Ladies and gentlemen, this is the operator todays conference is scheduled to begin momentarily.
And at that time, the Orleans will again be placed on music hold thank you for your patience.
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Ladies and gentlemen, thank you for standing by and welcome to the 2023rd quarter operating results Conference call. At this time, all participants are in listen only mode.
After the speaker's presentation, there will be a question and answers that question to ask a question. During the session you will need to press star one on your telephone. Please be advised that todays conference is being recorded if you require any further assistance. Please press star Zero. This conference call May include forward looking statements.
Within the meaning of section 27, a the Securities Act of 933 and section 21 E and the Securities Exchange Act of 1934. The words believe expect anticipate intend estimate may should could well plan future continue and other expressions that or predict.
Mentions us or indicate future events and trends and that do not relate to historical matters identify forward looking statements. These forward looking statements are based largely on our expectations or forecast of future events can be affected by inaccurate assumptions and are subject to various business risk and known and unknown certainty.
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A number of which are beyond our control. Therefore actual results could differ materially from the forward looking statements made during this conference call and call participants are cautioned not to place undue reliance on such forward looking statements digital ally incorporated will undertake no obligation to publicly update or revise.
Any forward looking statements, whether as a result of new information future events or otherwise a wide variety of factors could cause or contribute to such differences and could adversely impact revenues profitability cash flows and capital needs. There can be no assurance that the forward looking statements made during this conference call well.
Well in fact transpire or prove to be accurate.
I would now like to hand, the call over to Mr. Stan Ross. Thank you. Please go ahead Sir.
Thank you thanks, everybody for joining us today for our third quarter call.
Well as I say is what a difference a quarter makes I know that the.
Second quarter was a little worse all obviously.
With the country being shut down as much as it was.
And.
Things have dramatically changed and I think that.
First of all I want to just kill all all of the deal.
There's a good gelato proud I am of them for staying focused through the last few months.
Once in being able to achieve the quarter that we just Uh huh.
As to for you all.
Today with me is Tom Heckman, the Companys CFO and I'd like Tom to go over the numbers and then I will go over a little bit of insight what we're still seeing for the remainder of this year and what our expectations are a little bit for us.
2021, Tom.
Thank you Stan and welcome to everyone I appreciate to joint.
Joining us today.
We just filed our form 10-Q earlier today and I would suggest everyone to go look at the 10-Q for a more complete review of what happened during the quarter.
And it is available now on Edgar filing so anyway from a highlight.
Pinpoint.
Anyway, you look at it the third quarter is a very good quarter for us I view, it as a as a turnaround quarter.
Yeah, we had revenues up 23% year over year and more importantly, I think we had 3.6 million in revenue for the quarter total revenues and that was our best showing.
Since the first quarter 2017 on the total revenue lines. So that tells me that we're turning it around.
Also and probably even more importantly, we had our best earnings and earnings per share.
Reported since the first quarter 2013, so given the impact of the Cove It panned Dan.
Dan Macon, and its effects on our law enforcement commercial customers.
Reporting those kind of numbers is impressive are and we're pretty proud of those.
Just to kind of go over a little bit about the effects on our main law law enforcement customers commercial customers from a law enforcement standpoint.
When you when you are trying to convert.
A new customer or upgrade an existing customer generally they like to have demos and.
Installed and where they could use of them and have time to evaluate and yet those sort of things and obviously with the restrictions on.
On travel and thus the distance social distancing, that's that's been preached out there we have been virtually unable to do.
Onsite demos and install of upgrades and so on and so forth. So obviously the law enforcement revenues were constrained during the quarter, but in order to.
To abate that we introduced a new monthly subscription plan.
For our in car video systems and earlier this year, we did that for body cameras and quite frankly, they have been accepted very well, we've we've gotten a number of subscriptions and we have been informed of a major.
Subscription to expect during the rest of 2020.
That would involve.
A full scale implementation. So the monthly subscription model has helped abate some of the effects on our law enforcement customers, but again with a with a monthly subscription model you don't get the.
So the high hardware sale upfront revenues reported from that rather you turn it into a monthly subscription.
Impact the mailbox money is what I call. It. So we get we get a check every month and we get to recognize this pretty much the same revenues and maybe even a little more over an extended period of time so.
We look forward to good impacts from that down the road from a commercial customer standpoint, you know what I'm talking about our major commercial customers like the cruise lines Royal Caribbean cruise lines, you'll on its obviously impact the krona viruses had on on a cruise lines and they pretty much docked.
Older vessels, but.
But I will report that we've been in discussions with with Royal Caribbean and we expect that.
Are they expect they expect to be able to start.
Releasing vessels for.
Cruises early next year, which is a good good sign for us since there on one of those monthly subs.
Audits and models and as soon as they start sailing vessels will be able to recognize that revenue and receive that income so thats. Good news.
Other commercial customers taxicab businesses, obviously been effected in general, but I think we had a nice.
Implementation by one of our largest.
Taxicab Z. trip earlier this year so.
They seem to be turning around a little bit hard hit though is our that business and the event business is surrounded by the the sport venues sporting events.
Like football Chiefs, and Giants and jets in that.
They've been.
Just say constrained in the number of fans that they could even allow in the venue. So our revenues from those sort of events have has been very subdued we're hoping that that gets.
Improve once the vaccine is out and things get more back to normal I don't think.
Very good back totally than normal, but I think I think were looking up in 2021 for that business. So given the headwinds we had in our law enforcement commercial lines.
That makes the reporting that we did have revenues and in earnings for the quarter that much more impressive from our standpoint.
One of the big drivers for the quarter.
From the revenue line and the bottom line impact.
Courses are the acceptance of our new shield and thermal view product lines.
They combined contributed about 1.1 million of revenue in Q3.
In it we started virtually from zero, we just picked up those lines in late second quarter early third quarter, So thats rather impressive for.
For how new that product line is and we do expect a continuation of the revenue generation from those new product lines.
Once once the vaccine is out there it will be somewhat subdued, but I think from on an ongoing basis. This.
This sort of product lines are going to be essential to open up the country and maintain.
Public health the way they want it to.
Also contributing to our bottom line.
He is a decrease of 400000 year over year.
Yes, DNA expense, that's a 12% improvement and obviously you know the the restrictions on travel and that had a good impact, but I will tell you that the insurance impact.
To us has been tremendous.
Yeah, we've been able to absorb the increase in the insurance rates and still show a 12% improvement year over year and SDMA expense also reported during the quarter was a 2.3 million dollar gain from the extinguishment of the pie a the proceeds investment agreement and just just.
Just to remind you that his approach and litigation financing mechanism that we entered into two years ago, two or three years ago.
With a provider.
That basically fund.
Funded our litigation against both axon and Watchguard dirt.
During the period.
And you'll read about it in our 10-Q.
We failed to.
Gain any kind of approval of our appeals and have pretty much a band in our pursuit of axon.
In in the courts unfortunate event, but the.
The good side of that is that we were able to negotiate and extinguishment of the pie a liability.
And I'll remind you that we.
Received a total of $10 million in funding and all total we had to pay another 1.25 million during the quarter to extinguish that liability, but in total we only.
We paid 7.25 million. So were we received about almost $3 million more in funding that we than we were required to pay back to extinguish that liability. So that liability has gone from here forward.
Other items that I'll point, you to is on the balance sheet, we have eight and this.
As at the end of the third quarter, we have $8 million in cash and cash equivalents, we have 14, and a half million of working capital and a like amount of net equity as well so very very strong balance sheet. The only debt we have the only interest bearing debt that we have it as at the end of.
The third quarter is a $1.4 billion PPP loan that we we received we are in process of applying for forgiveness of that debt and we believe it will be 100% forgiven based on.
The numbers and the documents so we pulled together for the forgiveness applications. So we think that will be gone.
Hopefully by the end of this quarter the December quarter, but if not certainly by the end of the first quarter 2021.
The only remaining interest bearing debt that will have after that we did get a $150000 eat alone which is also part of the the cures act or the the.
The COVID-19 rescue model.
Thats, a $150000 alone at a 3.75% interest rate amortized over 30 years I think the the monthly payments like 700 Bucks a little over $700 for 30 years. So it's it's very manageable debt that we have on the books and and based on.
Our liquidity we may in fact, we had pay that off but we haven't made that decision yet. So again, our balance sheet is very very strong and it sets us up well for the remainder of 2000 22021 I will also remind you that in July of 2020.
We filed.
A shelf registration statement.
For 100, and up to a $125 million, which the FCC declared effective so we have that shelf statement out there if we would would ever need liquidity for either our business operations or potentially acquisitions or product line improvements so that gives.
Gives us a lot of liquidity should we decide to use it.
Obviously 2020 is ramping up very nicely after.
After having been hit with the cold weather effects in the first half of 2020 and.
And I think standard probably talk more about it but we're excited looking at the.
In the fourth quarter 2020 and on into 2021.
And the reasons. We're so excited is the new shields thermal view products are generating meaningful revenues already and we see that continuing and hopefully improving in the upcoming quarters. So we believe that thats going.
Going to become a very good.
Product line for us and generate some some good revenues with good.
Gross margins.
The cobot effects on law in commercial customers should decrease and allow for at least normal revenue streams to return from those those customer channels.
Especially if this.
So called vaccine works and is generally and widely available as they see it might be.
You look at our balance sheet is now an asset for us in the past, it's sometimes it's been a bit a detriment to us.
Given the strong liquidity position in the working capital we.
We have.
Steve and I and the board are all looking at new products to offer upgrades or additions to existing product lines and even the acquisitions and I would say that.
The the good part of the Cobot process has been that Theres. Some good companies with good product lines.
Fallen on hard times during the cobot and may be available to attractive prices. So we're open to all that and I think stand may even addressed that a little further. So overall guys are people I think at really thank you for your patience in the past quarters and we believe the third quarter results are just.
That is gaining a better quarter quarters to follow so with that I will turn it back to Stan yes. Thanks, a lot Tom and again I'd just sort of on a.
Reiterate what Tom was talking about I mean, there were still quite a bit a headwind in what we've seen in the third quarter, but the shield product and product lines and thermal view really contributed in just.
Repeatable ideal on why we're still so excited about that particular product line and opportunities. There is that we did if I'm not mistaken roughly $6000 as all in the second quarter. Because we just really just got the product completed and was able to get out there.
And even in the third quarter I know that the 1.1 million.
It's a good number and contributed quite a bit but you got to realize we're really only in a little over 90 days into.
This new product line and even there you still are extinguishing yourselves you are making.
Yeah, creating new customers and proven your product is worthy of being in their companies and their store.
As in the unity being utilized as a cleaning product. So you know it.
It just keeps growing on it on a on a daily basis that we get to continue to put our product in front of different entities and very large entities are starting to.
Take us seriously because of the relationships.
Sure the doors that we have through utilization, let's say whether it be.
Mask, our or the NFL or.
Our Ll race team you know, we really of getting some great great massive exposure to some some very big big opportunity. So again, you got to realize that.
Boy This the shield product line and thermal do is an absolute new new new product in our product line and we look for that to continue to be able to contribute and grow.
And these days coming along.
I will also tell you that we look to because of the success of those.
Products expanding that line and very soon you'll hear us talking about additional products that that are coming in there such as electrostatic sprayers, which are in great demand and we'll be in great demand for many years to come as it's probably one of the most effective way to.
In addition factor or clean room.
Those can keep.
You know kids save sterilize buses police cars ambulances whatever it may be so we're thrilled about some products that we have designed along those lines patents, we filed along those lines.
Of the innovations and will continue to expand on that and again as Tom said, we have been.
And put into a nice position with our balance sheet to where some of our competitors have fallen on some tough times, it's not that they don't have.
Good product lines or may have real good.
What I want to say extensions of our existing product lines. So in other words, we don't compete head to head, but they are somewhat the same sector.
Yeah.
We will have talks with them and keep looking at so.
Again like Tom said, we're very thankful that you guys stuck with us and and that we're here and we do have this opportunity.
Going forward to continue to try to.
Prove.
Where they go.
Going through the tough times.
Yeah, but this and good afternoon, and really get the stock to appreciate in value and do the right things to build a very successful company. So that being said we will go ahead and open up.
The lines for Q and a.
As a reminder to ask a question.
Yeah.
Hello.
So let's try your question press the pound key.
Please standby will be good day roster.
Your first question is from Bryan Lubitz with Agnes.
Yes.
Good morning, guys quantify.
Morning, Brian.
Congrats on the quarter.
Hopefully any one of many more to come.
Can you guys can we get any clarity on your you mentioned that earlier, Tom it as far as the Metlife and the Ken.
Kansas City partnerships as well as the potential for your new product lines to shield products as well as.
The thermal views to be implemented there at any low stadiums.
Well, yes, the chiefs are actually allow and a small amount of fans in the stadium for games. This.
Here and we have had a very minor number of units out there. So we are generating a little bit of revenue from.
From the cheese as far as I know that the Metlife Stadium is has not or has not been using the the security cameras that we anticipated.
Yeah.
We put this unit in a couple of other venues, including soccer stadiums and that being the thermal view and and that would be good to great success. So I think obviously.
Obviously, when when fans come back in droves in are loud into events like football games and Soc.
Soccer games, and basketball games, and so on and so forth that this thermal view product will be front and center and be be.
Be a key component of being able to do that if.
And that's what it's made for really I mean, it's made for high speed large crowds coming through.
Can can read.
Currently temperatures is as they walk through the turnstiles. So yeah, I really believe that once the the event stadiums are opened up for full scale customers and fans that that will also lead to to growth in the thermal view sales. Brian. This is Stan I want to.
Elaborate little bit on that obviously, the Metlife and those guys are still utilizing.
When they do have an event I'm not sure what their status is the body cameras, but the thermal units I want to really touch on this a little bit I mean, we have everything from very large stadiums that.
That are utilizing it to hair salons I mean.
It is so wide spread and.
Been received.
Restaurants, and venues and police stations in I mean, we got we have cities buying it for all their city buildings in any access to recombinant going it within the city buildings, we have them at the fire stations I mean.
I don't.
No there is not our sweet spot other than any place where there is going to be some type of gathering I mean.
Businesses.
Our buying them just for the safety of their employees so that thermal unit is.
Continuing to get a lot of traction and people are understanding it and more importantly, I can tell you this and and.
You may be familiar but we have one of our employees here who.
Sunwin business College campus and of course, they wanted to take his temperature well they took in enhance some.
Hi, reading so they went got another.
One of those handheld gods and reading was totally different Nick finally went through three different.
Bring guns before they said well this one looks acceptable enough. Let's go ahead and run with this and have them come on in I mean, thats. The inaccuracy of some of the cheaper products and people are seeing that and so they're going ahead and going with the higher quality thermal units. So both do we see that the thermal device continuing to grow and get into the bigger venues, but also.
Also we will start seeing.
Much more of the situational security with the body cameras coming into play and that maybe is a scenario twod where were not only are we outfitting.
People with body cameras, but were there at the gates with our thermal units as well for a particular event, whether it be a football concert or what.
That sounds excellent. It sounds like you guys are real excited about the product now Tom did you say you guys already have a couple of units at the Kansas City Stadium, and moving forward or would you guys looking to leverage those relationships with Kansas City in New York to other cities for the NFL et cetera.
Well, yes, let me clarify we have body cameras on on security.
Assets out at.
Stadium. So we we don't at this time have thermal views, although we've shown it to them and I think.
Obviously, the NFL is a prize customer of ours and.
We'd like to push it throughout the league, but right now they are dealing with some pretty pretty large issues and they.
They are not ready to commit to that full scale and throughout the league because obviously some somebody as statins aren't even allowing fans in so theres no need for thermal view for not having havent fans in the stadium so.
It's kind of a hit and Miss right now with NFL, but I think when things kind of come down that obviously, they would be a very very rich target for us to go after for the thermal views as well as a shield disinfectant as well.
Now moving on you guys recently announced that you.
Shipped the first shipment out to the military.
And I'm, assuming it's regarding the military contract you guys were awarded earlier. This year can you guys talk about the potential of that contract and where you see that going as well.
Yes, I mean, all all as we know and the most they are telling us Brian is that.
You know they.
They were ready to go ahead and received the first batch of body cameras and there may have been some if I'm not mistaken evo are evil HD involved in that as well and that.
Hello.
While this is a full blown they've acquired the product I think they are watching to see how well it's received.
And how well it works and then they can go ahead to some of the other branches or divisions in and get an expanded that's about all they are telling us they are being pretty tight lipped, yes.
Yes, Brian I understand we're on the GE say contract, we have a GSM contract and so all of the.
Deal.
The department of defense, whatever the federal government can't buy through that contract now, we're still pushing to get thermo view on it as well as shield and I think once were successful getting that on our schedule on our contract then that will open up a whole new host of potential customers.
As for that those products.
Awesome.
Last one from me guys.
Recently I saw.
Through some research you guys had acquired or leasing a warehouse here in New York I know that your products are very well received on there as you guys have said schools hospitals sporting events et cetera.
Is that warehouse that you guys are or leasing out here is that for.
The two new product line and obviously when I see out here I mean, I'm talking about New York do you guys looking to expand obviously you know.
Ocean to Ocean, if you will.
Yeah, what we're definitely looking going you know ocean Ocean.
In the in the <unk>, what you're seeing out there maybe in one of our distributors Brian.
But right now we're looking at you know far as getting the car as much coverage as we can as quickly as we can we do have enough margin in the products you know with the new product lines ULE products and thermal that we have been entertaining distributors.
Been coming in and some of them been coming in and sizeable truck.
Trusting products here in in Kansas has done a phenomenal job of getting involved in a phenomenal job of selling to Trump.
Tremendous amount of schools and even have been entertaining some large state contracts and so they will actually.
Really inventory of the product and service the product.
You know so that we can get a lot quicker and faster broader.
What it was like coverage.
Very soon again like I said, we really only have those product little over 90 days. The third quarter is really the only quarter that it's been able to show how.
How will it can contribute.
Small again guys congrats on the quarter, we're looking for many more to come.
Thanks, Brian.
Your next question is from.
[music].
Right.
Yes, Thanks for taking my question guys and first of all congratulations.
You know, it's funny a lot of companies they should a lot of press releases after covert hit with new products and I can't think of a single one that other companies reporting third quarter earnings that had the kind of impact that you guys did I mean, there's nearly a third of sales from these new products. So that's a real Testament to you guys and new product development and ability to to really react quickly. So couple of questions on these new products.
First of all it's impossible to break down the the.
She'll versus thermal view of the 1.1 million.
Yeah actually the thermal views the lion's share of that it's probably around a $900000 range from 200000 from shield.
But you know shield is a.
Not a onetime bias, it's a recurring buys generally and so whatever sales we have we expect that to recur month in month out.
Yeah, and I imagine you'll gain customers for that business as well.
On the.
Just a thermal view.
Has an optional facial recognition feature as well and obviously to improve facility secure that's pretty intriguing to combine that with the temperature.
Hey can you discuss how thats the units use.
Got notice for from Kansas, and Lynn County, some of those you're talking to.
Just I was just curious how many of their sort of percentage of them are really sort of strongly considering or if it's taken on the facial recognition optional feature in addition to the temperature yeah, absolutely. So so basically real quickly there's three different models and all these models have different capabilities in regards to triggers.
That trigger meaning.
Can you open up a gate can you open up the door can you you know can.
Can you.
Clock somebody in to keep keep score you know who's coming in.
It has a lot of capabilities just manual type of stuff that you would do with the card, but then they want a little higher.
And that's our base.
Since exist and let's call that the 500, the thermal 500, the thermal view 600 is where the facial recognition comes into and that is being utilized than they used to like it. This morning, Casey to where they want to not so much to worry about who's going in what areas in other words worried about a who's going back and engineering or.
Base.
Hospital room or somewhere like that they wanted to just make sure not only are we check in your temperature, but do you have a mask on because you have to have a mass on to have your temperature rent. So that and then if you had all the above you have your mask on your temperatures. Mike then you could proceed and going through the ticketing side of things so the facial recognition really.
She comes into play on the thermal view 600 and.
And again there is a lot of features therefore as unlocking doors, telling you to go to the nurses office doing what you need to parts of school.
And then are the top of the line. Our third review 700 is actually unit, that's permanently installed and installed and most.
Our time at a hallway or maybe rather populated entry.
Entrance, where people are coming and going and it will constantly scan those people that are coming and going and now you can go as far as trying to get the facial recognition and capturing people come and go on but I think they've been most women utilizing that to make sure.
Let's say at a school that all of a sudden it's midday in kids during the cafeteria, and they pick up little Johnny's got running looks appears to be running a fever misco pull him out of class and get him in the Nurse's office, who is not exposed to a lot of people. So theres three different models. The the thermal units the 500.
That obviously because of the.
The sophistication of it meaning that the real need and that is like at a restaurant or.
As I mentioned, the hair salon or some of the basic businesses, it's the hottest selling item.
By far right now the 600 is right behind it.
Because you are having much higher.
When you say security area.
Areas coming into whether it be a city building a police station or whatever they want to make sure that the individuals that are coming in they are not only are not running a fever and possibly contagious, but also it's the right person getting access to certain areas. So thats.
That's where the 600 and then obviously that the.
The 700 being the most expensive it's taken a little more time, but I'm seeing a lot more of schools and hospitals intrigued by it and then the other two.
Okay, and maybe just one last one for me.
I definitely see your comments in the in the press release.
On.
The significant foreign contract for the 5000 body cams.
Just wanted to just just maybe delve into that a little more is this.
Theres some countries that are trying to adapt to this second wave type of things were getting into the winter in the northern hemisphere anyway.
Is this something it's a colder weather country, it's a country that.
Yes.
Probably could be.
Delay things for at least the next several months.
How should we sort of think about tying out this I.
I think there is still I think theres still some.
Fear of what's going on and so.
While I hope things you know appear to be getting a lot better I mean I.
I don't know about you talked about I think it's going to be something in regards to going into next year for sure and depending on the vaccine and travel restrictions and everything getting lifted.
No I don't I don't see it in the fourth quarter for this this is a location or a country that that is going through initial implementation.
And with that.
We've got to fly people down there to do the infrastructure install and all the training of of their people and.
They have to commit to the training and so on and so forth. So there is a lot of things working against US right now, but eventually when when.
And if this this vaccine comes out and is generally available and widely distributed.
That.
That.
Those impediments should should fall to the wayside, especially you know if once we can travel people down there to install and train their people that I'm very hopeful that that.
It gets back on track quickly.
But I can't say, it's this quarter next quarter or a year from now, but I am very hopeful that it does happen sooner than later.
Okay fair enough congrats again on the quarter guys. Thank you.
Q.
Your next question is from Devin Conrad.
Edible in question.
Hi, Good morning, guys. Congrats on your team from getting a solid positive EPS since 2013, I was waiting for you guys to drop that.
I just wanted to ask quickly about the 125 million shelf offering I know you had mentioned something earlier this year that you weren't going to be proceeding with that in for.
Further how comfortable do you guys feel going into the rest of the fall and into the new year that.
You won't have to exercise that or you will end up exercising some of that shelf offering.
You know right now as Tom said in regards to our balance sheet. It is extremely strong.
You know so far as you know operation side of things and with but.
Leave is has been a sort of a turning point within the company.
We wouldn't anticipate needing to do anything.
Concerning the the shell.
We'll keep the open that if for some reason the acquisitions and new product development. Some things that were were looking that do come into play.
You know, we're glad it's there and again and provide you know the price is right everything makes makes sense, but in short.
It's there I want to call it the safety net it's there as a tool.
There is a tool that assist us in.
Identifying opportunities and if needed help us.
To go out and tackling but right now operations as you can see seem to be going the right direction.
Yeah, I would say that shelf offering is just that it gives us instant access should the market dictate it's time to do it or we have needs for.
And quite frankly from a from an operating standpoint, we've got plenty of cash and plenty of of working capital. So if if there were to be an attractive acquisition or new product line that we feel would be.
Advantageous to two to jump on then that gets.
Is that the flexibility to do so so it's really there as a backstop for operations, but we don't see that need any.
Any time soon and then it's really more for not being able to pounce on an opportunity when it when it presents itself.
Absolutely taking a look at the share price.
Some insider trading you guys have been able to really kind of get back to your employees and you guys are committed to the on your end as well. It seems like you are pretty confident the other thing I wanted to ask was probably the research costs that you guys had kind of developed obviously your new product line can you explain how kind of fluctuated with now increasing sales teams or how you proceed.
Yes, how you envision that going forward, obviously with new products coming out are you laying back on research and so your sales team increase so how are you proceeding with that and then the amount of police departments that are on the subscription platform I guess as my second question to that.
So I'll. This is Stan you in regards to the sales side of things.
I'm actively looking to continue to bring on individuals to assist US you know probably more on the shield products and the thermal view side than law, we've got a great reputation in low. They know we are we've got to do everything we can to continue just to be in front of them showing them, our new products and making sure that they are aware.
Robert and remember you know a lot of times when when they department by something they bought it on some type of warranty program were subscription so they're pretty can tip for years at a time you know before they come back to you.
So, but we are actively looking you know on the sales side of things.
In regards to the.
The commercial the and clearly the shield products and thermal be within Tom I'll, Let you address yeah.
I would tell you on a research and development side. If you look at the projects we've taken on and would have come out even though was was brought out last.
And here, it's our in car platform or the the amount of R&D that we spend on that now it's really just be a new feature development and and Backfilling. Some of the features that weren't completely built out so that's pretty well done.
The commercial he though are the commercial.
So.
Product that is really in a box rather than in a mere is.
It's almost done and should be available here in the fourth quarter or if not the first quarter, so that that projects nearly done so.
Stan mentioned the electrostatic sprayer, it's done we're in.
Beta test right.
Right now and that looks very good.
And you're talking about timing my gosh, you know with all the the cobot stuff and this is really an outstanding addition to our our shield and thermal view line. It goes hand in hand, especially with the shield disinfectant.
And that should be out here in the fourth quarter and widely available in the first quarter. So you know we're on a downhill slide of a lot of our major.
Product development cycles, but that doesn't mean that we're not going to continue to do that and we've got a we've got a good core group of engineers.
We supplement them on an as.
Basis with the outside.
Engineering shop, So we're getting we're getting our bang for Buck.
On the research and development site in terms of subscription.
Acceptance I will tell you, we've probably got 25 to 40.
Subscriptions out there.
Where that just came on with with the the.
Introduction of the body cameras subscription program as well as the the in car video program and again I think I mentioned his or her but I'll reiterate when we go to that subscription model, we don't get the big revenue bump up front from a hardware sale.
Rather we get a monthly check if you will mailbox money as we go through it so you're not going to see a huge spike in revenues.
When when those things are signed but you'll see a nice rollout of revenue through the the the lifecycle of the contract and generally we're looking anywhere from three to five year contracts for that.
Okay guys I appreciate your time I thought you go through the summer now Q3 would be a turning point. So it's good to hear and good day. Thank you. Thank you.
Your next question is from non <unk>.
We've been chocolate.
Hello, guys.
Yes.
Hello, Oh, Hi, So first of all I would like to congratulate you for latest results great. On my question is when are we expecting to see contracts with the government and what shall we expect an exactly as investors from the shares so it's probably going to go.
Go higher or what's going to happen next thank you and good luck.
And that you are yeah.
You know we continue to get a inquiries we continue to fill out.
Bid request, we and we continue to call on new opportunities with.
All the government agencies that are out there in <unk> and and you know what we try to do is make sure that if there is anything real material that were out there you know doing a press release and trying to show the significance of it.
And so hopefully you know.
We will be putting ourselves in a position that and what we're trying to do every.
Today is to show appreciation in the stock price for our shareholders and we will continue to keep our head down and and do that for you on yeah.
We can't predict stock prices honestly and all we all we can do is try and put results up on the boards and again this third quarter was a nice turnaround quarter for us but that.
I think Stan and I, both realized I understand that that's just the beginning we got to do this quarter after quarter and improve those results quarter after quarter and were ready to do that based on the product line that we have.
And where do you see the company by the end of 2021.
All the benefits and everything going on.
Yeah. That's that's a great question you know you know.
Opinion on what transpires in regards to how quickly that the country can get back to some normalcy.
We feel very very confident that we put the product lines.
We have the product lines in place to benefit from.
What I want to say you know the law enforcement side of things from an EBITDA is an amazing amazing product or the button. We will have the next generation body cameras first quarter hits coming around the corner. So I mean, Fars law enforcement I feel very confident we just this.
The you know our software out there that now allows if they would sort of like prosecutors and others to have access much easier you know to a video that they would need to serve for prosecuting and Vince type of things to.
Saved in my money with in regards the time and then the.
The shield products, you know I do not see this country wants to do a step backwards and not.
Continuing to take a better effort of disinfecting, then cleansing sanitizing and so those efforts I I see you know for years to come so.
That's a great question, if I really had.
And.
I feel for you know how this pandemic was going to start to wind down.
I think I could give you a little clear insight, but I'd say, it's still revolves around that and and the functionality of our of our country and other countries you know getting back to some normalcy.
Yeah.
Okay. Good. Thank you so much and good luck. Thank you.
Well there are no further questions at this time I'll turn the call back over to management for closing remarks.
Listen thanks, everybody for calling in and I were picking up quite a bit of your time today.
We had a very good turnout on this call I know the call will also be.
You know up on our website and will have access to the the replay. So if you do have some questions that were out there and we weren't able to answer them.
Feel free to give us a call we'll do our best to answer it if were so permitted.
And again, thank you for your one of them. So you can hanging with us and we look forward to continuing to be very aggressive and tried to.
Expand on what Weve already created from this quarter on so thank you all very much be safe.
Ladies and gentlemen, this concludes today's conference call.
Thank you for participating you may now disconnect.
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