Q4 2020 Ault Global Holdings Inc Earnings Call
The improvement and working capital and so we have seen growth and revenue largely driven.
On the Gresham worldwide defense business.
So one of the things I want to comment about the gross profit as you see a dramatic improvement in gross profit of 374% improvement gross profit of $1 9 million well I thought maybe you could comment on what I know that there was some discontinued operations and will are Ken one of you could take a comment on balance.
The gross profit for the fourth quarter.
Yes of course the cell.
If you look at it.
What happened at the end of 2019 or and even throughout 2019, there was really two negative and the fact.
Factors that really hurt our gross margins of one of course was.
Digital firms, which was our legacy entity day, we'd establish Q.
Mine crypto currencies for our own accounts.
We have some more expensive.
Data centers, where our miners were stored and it just it made it incredibly difficult to have any type of margins.
One because of the cost of the energy that we're paying and which is as much more expensive and true because of the price of bitcoin at the time, so that really hurt our margins and then we also have some credit losses. Some provisions that we took.
Unrelated to the digital farms, but to deep day lending and at the end of 2019 so the.
A combination of not having to deal with either one of those negative impacts really increased.
Gross margins this year on a comparative basis.
Although I would expect to see gross margins go up from what I've seen.
During the first quarter so far.
Yes, I want I want to say that one of the things. We're focusing on now is we're not sacrificing everything for lack of profitability. We are trying to make sure that the the other three remains subsidiaries they were generating gross margin and we're doing it efficiently. We're seeing a lot of improvement here and very pleased with the.
And what's happening and defense.
We funded them as Ken alluded to Ken when we go to the next slide the loss from operations I want to highlight we lost 719000 from operations I know there was some accounting charges in there, but this is on a GAAP basis can I thought maybe you could cover I want to go back to a few years ago, we can always hope pre COVID-19 the fab.
Forward that we would be profitable by the end of the year, we did not achieve that because of various reasons lots of reasons, including financing and other problems, we had but we havent, we havent dramatic improvement and continued operational improvement I know that and the first quarter. We're seeing a lot of improvement there too and can you talk about the loss from operations of what.
And what we're seeing that's happening there.
Yes.
And in the fourth quarter on a GAAP basis, we have $709000 loss for continuing ops.
Considering our history of that.
Actually fairly close to a breakeven run rate on the on.
On the GAAP basis exiting 2020.
And with the.
And the working capital improvements came late in the year and a little bit too late for us.
And to hit our goal of becoming.
Profitable on the operating basis by the end of the year, but we're close and when you look at the compared to last year Q4 kind of almost $9 million loss. So it's it's greatly improved.
And it's headed and the right direction, so with the fully loaded with the working capital we need going into 2020 of the bodes well for us to flip that into the black.
Yeah, I would say and I don't if you want to comment, but the continual operations. While you can never predict the future of yet were not there in terms of being profitable long enough, we see a dramatic improvement and profitability do you want to couch that in terms of what youre feeling like with our continued operations and what we're seeing across the coolest. This.
<unk> and Ultra Alliance I'm really happy with this number I know the support in terms of our burn rate and that there is a very dramatic improvement from $8 $9 million of the boxes to only 700 and effectively of couple of tweaks here and with working capital what are your thoughts.
And really a couple of things, we talk about overall profitability and loss from operations and were gains from operations.
Pending upon.
What periods and we're looking at but the reality is we've been able to inject capital into all of our subsidiaries and we saw the micro face when we go back and look at 2000.
Compared to 2020, once we were able to get adequate funds funding and the subsidiaries like micro phase.
Net current with the vendors and our suppliers it really allowed us to be a lot more efficient on the manufacturing side and and produce at levels that was more in line with what our backlog was.
So we're experiencing that not just.
And micro face, but also and and our tech.
And those are.
Those are two key drivers of our revenues, but of course, if you are looking at profitability and overall profitability, which really entered this company historically has been the need to go to.
Third of the markets for debt financings and we.
We've really taken the bulk of our charges and the bulk of our losses and the result of.
Historical debt levels.
<unk>.
At the end of 2020 exited almost every and every one of the.
Onerous.
Debt arrangements and you can see that by looking at our balance sheet.
If you compare on a balance sheet.
At the end of 2022, even even the balance sheet and September 30th and our current liabilities.
We're almost $34 million.
At September 30, and we reduced those down to just under $22 million.
At year end.
It's a sizable decrease and it really reflects the ability to get out of existing debt agreements and.
And by paying them off of or issuing securities, which we did.
During 2020 and that was a big part of our loss.
Going forward, because they are not leveraged and because we're not on an admission where we have to take.
And since draconian terms.
Anybody on the on lending.
And I expect a huge.
Markedly improves.
Operating income.
The process or results of operations and 2021.
Is it kind of stay willing and with the the fact that we have so much cash on our balance sheet everyone knows the subsequent events. We raised 165 million in total in the fourth quarter and the first quarter with that 100 plus million dollars of catalysts way more than that on the balance sheet. We just don't really have any net debt net of cash and really.
Don't need to deal with than the any kind of lenders that were draconian and the passenger will effectively for the most part we just do not need capital correct.
Yeah.
Yes.
And it all depends on how we operate the business and obviously.
We could get by without bringing on any additional capital, but as we start to look at to look at some of the subsidiaries.
Or some of these investments that we have that are not of direct subsidiaries, especially the avalanche, we may and determined that it is and our best interest to <unk>.
And best more heavily than we would otherwise.
And of course, there is a couple of of those right you've got the EV business, which we're pursuing.
Which is the.
There's been a lot of progress made on the last six months and we've got we've got avalanche, which both of those kind of require a significant amount of capital now.
And now again, we're in a fantastic position because we can determine how that capital is deployed and the timing of it.
Right. So obviously is true we had a net loss of 10 4 million for the quarter, including the <unk>.
Non cash charges of 11 $2 million. So obviously will any comment on the noncash charges that are kind of obvious right. They were non cash they were finance and debt extinguishment related yes, so realistically it boils down to the debt agreements that we had entered into it and it's because when we entered into the debt agreements we had.
Contractual obligations to issue securities based upon when approximated I'll say the market price of our stock when we entered into these agreements.
By the time, we actually issued the security and snow.
Six months later seven months later or whatever.
The value of our securities and increased significantly so when you had to compare the amount of debt that was being retired with deep value of the securities. We ended up with the massive massive loss on extinguishment.
Net loss was $18 million of which.
Big portion of it was recognized in the fourth quarter.
And that covers the fourth quarter.
Think of that for the year as we move on to the year end.
The $23 9 million of revenue and increase of six 7% I think was the miracle.
Okay, and I don't know how you feel I see this as a miracle.
We started off the first quarter being told to shut down and.
And England, and Italy, where we manufacture the.
MTI International and gets limited Avalanche slash products for MTI is limited.
And we start off of that Youre of shutting down everywhere.
Covid ravaged us I would say pretty hard.
Because in every jurisdiction, where we manufactured we were ordered to shut down we were lucky to be a single source of the wire for a very critical and important jet for the.
The military and therefore, we were ordered to reopen and Connecticut and that probably had a dramatic influence on helping us a six 9% increase year over year I cannot tell you how disappointing the number is $22 9 million and how wonderful. The number is because I would have never expected us to.
Of the recovery did gross profits of $7 5 million of dramatic increase on gross profitability of 145% total loss of operations for the full year, including Covid of $6 million down from $24 7 million a day.
Dramatic improvement.
Ken any comments on any of these numbers anything you'd like to say and before you make a comment I want to be clear to everybody on the call. The auditor has removed our going concern qualification will and can can can you comment on the numbers of and then will can you kind of couple of on the.
<unk> and concern removal and what a big deal that is for us.
We have some recurring themes of what we talked about on fourth quarter results here, where the defense business grew.
Big uptick in margin from.
Higher higher revenue plus.
Margins were burdened by.
The crypto currency mining operations, which 2019 as will mentioned.
How does the negative impact on margins, but we ended the year.
Much better working capital situation, we had $12 $5 million of positive working capital where.
Where we ended last year to guard last year, meaning 2019, we had of working capital deficit of $19 million. So it was as you mentioned and thought it was tough coming into 2020, the negative working capital of $19 million coming into the year strained vendor relationships.
And of hampered and executing on the backlog.
But the.
Exit of the year with a positive working capital of $12 5 million.
Big.
The big change and the cap structure and the.
And our subsequent to year and we're checking on another $125 million.
Yes.
Equity race.
Besides sort of dramatic change from having a negative working capital of 19 million to of positive working capital of $12 million huge change and the operational structure of the company what about the.
The only concern I know this was important to you of.
What are your thoughts here.
Well.
Look the reality is is whenever you evaluate the company from a volume on a going concern basis, you'd look to see if they have enough capital to get through the the next year.
And when you filed obviously with raising $125 million.
In the fourth or and the first quarter.
And now.
And kind of alleviate and many of those concerns even when you guys go.
And look at what we could invest and on our existing businesses.
And it would still not be enough to use the entire $125 million and of course, if you look at our operating losses and our uses of cash historically, they've been unless they have been around the $10 million to $12 million range per year in years, where we were and are not and the loss position. So.
I think this is a very very easy judgment call for both management and our auditors.
And now and commenting on the fourth what's going forward I will clarify the side no. We are worried about these words were using but obviously youre going to see a very big improvement dramatic improvement in revenue and.
And the first quarter quarter over quarter from the fourth quarter to the first quarter. Obviously, we already ended it we're working on the numbers, but we expect the dramatic increase and the revenue I Wonder will do you want to comment on what Youre thinking about the.
And the revenue total revenue per 2021, and I know, we're not giving guidance, but what about any thoughts on just the wording you would stay about revenue of improvement given the fact that we are able now to execute on our backlog what do you think.
Of course, we somewhat guarded.
Thank you can look at our historical results, we were under $24 million and total revenue for 2002 thousand and we know that we recognized about $7 2 million.
And the fourth quarter, which that's above the average of just under 6 million of quarter. So we're seeing a positive trend.
Of that trend to continue and and of course because of the infusion of capital of $125 million as well as of the capital that was received.
And 2020, we're now able to.
Actually we put a significant amount of investment into.
Alt Alliance and of course, DCP lending, which is our California lender as well as.
And on the platform that we use the entity that we use to do investing activities.
And you've seen and our subsequent events footnote as well as our 13D filings we've been quite active in the.
And the public markets to so those are going to drive significant revenue and they have and Q1.
The extent I don't want to go on to that yet, but there has been some 8-K as filed on the assemblies.
Yes, there has been some press releases too, we obviously see the lending platform and the operations they're improving.
There's obviously a difference and funding capabilities here.
One thing for.
The audience of investors to keep in mind is.
We acquired <unk>.
<unk> and.
And as of November so Gresham out of a new subsidiary electronics, and the U K and it.
<unk> contributed over 600 thousands of revenue in the month of December and so we will have.
And the contributions of that new subsidiary for fully weighted for 2020 that bumps up the run rate as well so just keep that in mind.
With the <unk> acquisition and the funding of the subsidiaries and working backlog and the funding of the lender, obviously crypto mining turned on in March.
And youre going to see a what we expect to be a fairly dramatic increase and.
And revenue and we'll stay tuned for the fed I think we have to report within about 30 days or so.
I'm going to kind of skip over this next second you can see the slide it kind of speaks for itself. It's backward looking we covered a lot of this already.
Obviously aggression worldwide is improving because of funded of course is coolest has shifted its focus from just power electronics to working on the EP products and it has.
Here's the thing about EV that I'll comment on about electric vehicles.
It's just second bitcoin mining cost. This is the power electronics business that makes power supplies that are of power supplies and EV units and it was a logical step for us.
Almost kind of and leaseback company to move it into EV had been working on a per a few years and there is a big tailwind for infrastructure. The electrification of the businesses. We expect costs just to change dramatically over time because of its EBITDA exposure and we have been investing and that business.
Well I don't know if you want to comment on <unk>, We did hire a chief technology officer Douglas against the join US and welcome to Douglas and Joe Crypto, Joe moved over to the CIO role of Chief Information Officer and so.
Do you want to comment on the hire of Douglas against and what we're doing and EV. There I know that you are very involved and overseeing some of what's happening there.
Sure so.
I think on this has been with us for about two months now and.
The primary reason that we brought on him on the on the timing of when we brought him on was because as we start expanding the offerings on the EV side, specifically the commercial side of the business.
The network infrastructure and the mobile apps.
All of that needs to be integrated and it was the perfect time to bring somebody that Scott.
I would say nearly 30 years of experience joining the sorts of things. So that was a huge success that we were able to convince segment's income.
And on board and.
And devoted time to this as far as the EV business goes.
<unk>.
That's the business, that's going to require a significant amount of capital.
But it's where society is going so.
I think the long term prospects.
Our great there.
Right, Yes, I am excited about the new products. They have obviously I net the distributor of our home EV charger.
A very large order I think it was and the magnitude of around over $10 million on my right about that well do you remember the size of that net order.
Yes sort of an aggregate of 35000 units.
And those are at.
Okay.
And <unk>.
And with accessories, I think it could approach.
Between 12 and $15 million.
And so when you look at when you look at it.
And you look at Gresham, we had talked about in the past at both of those subsidiaries are kind of being groomed to ultimately be hopefully of public offering of something we reserve all of the rights of what we're looking at doing there we talked about this and various disclosures, but those two subsidiaries are being funded and a way or trying to make them autonomous.
The you reported the Wil.
As the CEO of the parent company, but will of setting them up and properly and setting them up so that they can be.
Incubated and built up to be their own standalone companies I think.
And that's moving and the right direction.
And again, Todd if you look at the <unk> business and the capital needs that they're going to go on to this long term.
And you are talking commercial installations, and Youre talking expenses.
The commercial charging units.
And this is something that really does need to be of Standalone company long term because.
You could be talking about infrastructure cost of hundreds of millions of dollars over the over the next several years.
I mean, obviously, we do not and intend to fund that from the parent company. So it would be logical one can conclude that as the EV space growth that will be something we'd want to view the benefit of shareholders and as I'm channeling, our general counsel who is not.
Obviously, you're on mute he would say to me all rights reserved of what we're going to do there we have told the public debt.
Ultimately, we expect these things to be Standalone entities, we don't know the timing yet, but we are working on both of them and getting funded and obviously the logical conclusion as demand for EV picks up dramatically around the globe and the U S and with buying the infrastructure builds we think pending the tailwind there.
It would be natural for cool assist to ultimately be and independent Standalone company and as one of the largest shareholders of our global will make sure that we do everything we can to make sure the shareholders Thats. The plan the same with <unk> and worldwide as we talk about.
Ken Ken any more comments from either you or will on gresh of worldwide or cooler assist on.
What we're doing there before we move on the <unk> Alliance.
I think we've covered we have some I think the with some of our most.
The most exciting prospects kind of of ethanol and alliance with <unk>.
Data center and lending and investing activities. So I think it's a good time of transition right. So as I move to open lines of business run by Darren Mango and I'm.
And the chairman of that business, which is a wholly on subsidiary.
Of our global.
We have resilient crypto mining.
We got.
And I don't know what the better the best word to pick we got our heads cut off the first family of Crypto mind.
We decided to do it a lot differently this year and buying of datacenter.
And I noticed that riot bought at the datacenter that has is capable of 300 megawatts. We have of data center thats capable of that obviously.
We're very excited about the purchase price we paid for that.
Will was really intimately involved and the details so I'm going to ask will the comment on the data center and what that means we put out forecast long term of what we think could happen. There. This is a mega facility $34 five acres.
And with very with much improved energy cost for us a big footprint directly connected to nuclear power plant.
The 14 acres under roof on.
Already cash flow positive.
I think firstly, it's one of the best acquisitions, we've ever made I don't know I can't speak for you, but maybe you could talk us through the data center and your thoughts on what is all of the alliance.
The services all of life's cloud services, and what we're doing and the data center space. This is really exciting for me as you get the comment.
About the long term viability of free cash flow from this project and the ability for us to cash flow and pay the bills of the parent company and making sure that we're cash flow positive as the business well.
We're both excited about this maybe you could comment.
No Youre absolutely correct. We are both excited and just thinking about.
And the data center is the.
This eliminates the problem that we had when we first moved into.
The mining crypto.
Several years ago, and that was the ability to control our costs and to control, how we were going to mine.
This to me this gives us the tools so that we can mine and if it's profitable, which right now with bitcoin and 63000 or whatever it is.
And the cost of power and that we have here, it's clearly profitable, but also it gives us the ability to.
On leverage that data center for other customers, so that we're not entirely dependent on.
On just mining.
So this is the best of both worlds, we get a facility at 617000 square feet and because it's on 34 and a half acres, we could expand that we guide the facility that we can put up to 300 megawatts of relatively low cost power.
Yes.
And it speaks volumes to what we can put them through.
And 300 megawatts is an enormous amount of power I don't think we can use it and the entire 617000 square foot the facility.
And then of course, just kind of take us time to build that out our initial build out as the only.
On a 5% of that facility space 30000 square feet.
And then what's going on.
Yes.
It's confusing for people to see that we ceased crypto mining operations last year and March we turned back on Indiana, Indiana, which does our old facility is burning off bitcoin to pay down builds for the Indiana facility, but the Michigan facility that is mining bitcoin right now where we're retaining all of the bitcoin we're not sell.
And any of the Michigan Bitcoin, we're keeping that bitcoin, obviously smaller amounts as we just get started but we're excited we're very careful how we are doing this I know we're trying not to have history repeat itself. So we may be a little slower than everybody else, but we're being methodical by buying and your own facility and controlling our on power and making sure the.
And we're careful of what we're paying for miners.
And I am pretty thrilled about this I'm excited to see bitcoin on our balance sheet, a small amount of obviously I know, we'll get to clarify the small but that we're retaining it I don't know of crypto Joe.
And the second quarter, we will be talking about as the mining operations, though about what we're doing there.
Nearly all of the alliance Theres other things in there like the investments we have a fintech lenders of digital power lending that will be going through a name change later this month for the next month.
That lender is building a platform to deploy capital to public capital the public companies and also has an activist Atlanta as many of you know I've been in the business for 32 years on an activist investor and we've created a holding company very similar to we hope like Carl Icahn Enterprises, where we do have actavis the investments there and we.
We think that will contribute.
The dramatically to what we do in terms of capital markets and how we improve our free cash flow for the business and do you want to make any comments about all of the lines. I know you are integrally involved and seeing what's happening there I wonder if you have any comments.
But we do feel.
Fortunately to have the license lender, California, the license finance lender and.
And now we have the opportunity to fund that and build up our loan portfolio.
We saw decreased revenue from 2019% of 2020, but.
On the first quarter of 2021, we've seen.
Excellent returns on the capital we've deployed at GP lending and so it bodes well for us.
The two.
To improve our overall corporate profitability and.
And 2021.
This next the next slide talks about debt extinguishment will kind of covered that obviously, it's pretty clear here. It breaks it down and what happened in terms of total debt extinguishment and I don't think we'll do you need to comment on this next slide or can we move on.
No. It just and it just goes to show the significance that these I would say hi Lee.
The expense of debt instruments, how badly the impacted our operating results when you look at it year over the year.
And you take out the debt expense and we pulled that all of these noncash charges and it's a much much different picture.
For the next leg.
I appreciate that will obviously I have of quoted here, we talked about $165 million, we of the simply the strongest cash position of the strongest balance sheet I believe and the 52 year history of the company.
We literally.
We literally are funded for years to come, especially with our plans. Obviously, we'll is talking about with cool assist and the EDI business, we'd be counting on long term.
Hopefully, making the out of public company.
Our standalone business, but.
But we are in excellent position right now with the cash we have and of course the operations because we have been and investing in things like Gretchen for many years I mean, we started with.
And with the micro pace of acquisition.
And J R and the team there Tim long.
The <unk> the CEO of aggression on worldwide and Tim long the <unk>.
Chief operating officer, obviously of improve the operations of microphone <unk>.
Intertek is doing a great job they are improving dramatically as they have cap of deploy and work on their backlog and I know that garage.
Ltd, and in England is working on restoring some of their backlog.
The two women that run that company over there of working very hard and then of course.
Welcoming relax towards the organization and that is a long standing business that we are proud to be able to acquire we're really building out the defense business I Wonder if you could talk about what we've done on the defense business at all in terms of building it out that acquisition what are your thoughts are going forward.
Yes.
To me the defense businesses and difficult one to discuss in some respects.
And the proper scale is a great business.
Relatively predictable.
On the ranked R&D.
And with the refinancing of R&D, you can see consistent growth and those businesses.
The question is how it fits and our overall portfolio of long term and that's a difficult one because we are looking at.
Really transitioning to.
The technology play if you start looking at the textile.
Machines with Avalanche, if you start looking at the data center. If you start looking at the EV component net of coolest. This.
Yeah.
Whereas the defense business is much more of a manufacturing business.
So long term.
I don't know if that was still up on the air and we've had discussions about that Todd and.
Internally significant one.
All of the public ultimately as debt.
This improves we would be looking at bringing it public we've made this clear.
That's the same with the EV I think with EV I think we want us to see a little more traction of few more orders.
And then.
And that's kind of a different conversation, but when you look at the overall scale of the business. When you look at the MTX machines, and we took in that 50 million or purchase sort of many years ago.
We had some trouble financing theres no question I'm not going to get into the details there.
But we're still very optimistic about the future of the MTX.
Machines, and what Theyre doing and textile it's really disruptive technology of amazing disruptive technology will all be careful because I know you analyze this one of your comment a little bit on how thats going with customers.
To the extent.
Comment I would I mean, I know, we want to keep is limited, but I guess, what I don't want to say about that discretion worldwide, where true holding company and.
And from time to time as we evolve.
And we want to reward shareholders. We noticed obviously the the price of the stock is down to below $3.
We might even be gearing and cash levels I know, we're below book value.
So it's important for us too.
Look at our plans and say how do we unlock the value for shareholders with the with the IPO of progression, where some sort of transaction progression with the potential transaction for EV everything's on the table. We're looking at all avenues to make sure. We could share holders will is that a fair statement is that what you're referring to and in terms of how hard.
Just talk about that right now and.
And it is and obviously I think there's a lot of positives that are going.
And the way.
Progressing that business forward with MTI and Avalanche.
And the customer relationships are.
Good we were in advanced discussions with several customers right now.
The contract discussions and then we've had really really good relationship with all of the key vendors and that was the that was the biggest well.
One of the two biggest issues and the experienced in 2019 and 2020, certainly Q2 and 2020 the second.
Obstacle that we experienced towards of course, COVID-19 and the restrictions that are placed on trying to do any significant business, especially when youre talking about travel restrictions the O&M from here to the UK or to Italy.
It really made it difficult because youre talking about <unk>.
Significant components with long lead times, and then of course getting those all in one location for assembly and.
And it's.
And it's difficult enough of it you have the capital of the Israel and the travel restrictions and it's.
It's virtually the standstill.
Right. If you look at you look at it.
The prospects for the future with with EV and the defense business I think Jr. Argue he really much wants to acquire businesses isn't that defense space and I think he would be he has been brought on to help prepare the company for something like that we ultimately think the defense business could roll up of lot of other.
The smaller defense businesses and as part of our mission is to fund these companies and eventually help them with potential acquisitions and increase shareholder value. So it would make sense and it's logical sense for us regression and caused us to two.
To eventually have an opportunity to be on the road I know on the EV space a lot of the companies have great valuations and of course, our valuation for our company is nearly of cash.
Somewhere close to it so clearly the market isn't value of aggression or the cause of this business yet and if you look at the data center business. There is tremendous potential for cash flow from the data center and that real estate play and it would make a lot of sense for us.
To deploy capital into the data centers. So we have an opportunity with those two two.
And move the amount of cannot do you of any comments on the Gresham or call. It sits at all in terms of future transactions.
Yes, I can.
The question.
About the quarter the driver and the growth of the business they've been driving a lot of the true margin of bottom line.
And if you look at <unk> and we've shown that we can identify.
The accretive transactions, even though the relatively small transaction that the model of something that we can replicate there are.
The defense businesses out there.
The thing too.
Took the emergent to scale or maybe there is older owners that are looking to exit and so it's jarrod has identified a lot of the interesting opportunities there and.
And so I think thats.
That's definitely a positive it's helping our overall trends and I think the.
The.
The the huge growth trends.
We see massive opportunities and the end of the areas we've discussed.
Electric vehicle Chargers data center.
The investing.
Lending so I.
I think we have of chests are firing on all cylinders, but.
But we definitely support J of our support EV business.
And the controlling their own destinies field, the rigors of real capital and execute on those plans.
And I think one of the things, we havent talked about.
Bringing and Douglas gains is that was that technology, specifically, helping and EV. We are building on the team there to help almost grow that <unk> business. They have a lot of opportunities and forecast with the fast food program with what's happening with the Tim Hortons.
The franchises.
Franchisee and Canada, there is a lot on their plate there that they have to deal with.
Let's go to the next slide.
Okay.
And there's a little bit of backwards, but when we look at the addressable market for Fintech. It's about 130 billion. When we look at the FX is about 930 billion addressable market. We believe were in and power supplies and about 25 billion of our business truly doesn't overlap for EV. That's a really really include the EV space and the.
And the addressable market is clearly more of holding company you can see on the chart Douglas Kansas. The added this as the people that are at the parent company and we put it up on Org chart here for you see courses digital power, which is of 50 <unk>. The original lifting of the company before it became a global question and on all of its subsidiaries of <unk> micro.
<unk>.
And our tech and Russian power and England Ultra line of digital power lending of.
The lifestyle services I'm going to talk about the social side of it we listed the subsidiary, but effectively very small I think the subsidiaries under the millions of year.
And you guys want to comment on the chartered all of anything here or do you think is important for us to talk about well before we wind it down.
No I think I think the org charts fairly self explanatory the owner.
Thing that really is not on here and greatly so at this point because it just didn't quite meet that standard is of course, the and significant investment we have and.
Avalanche and by default avalanches of wholly owned subsidiary of MTI, It's limited.
I look at this.
This.
I think this technology is disruptive I think it could change the entire structure of this company.
Over the next several years as we continue to look to either invest invest and it directly or to potentially partner with other entities.
And we start proving out the model.
So and we thank you we're going to answer some questions real quickly.
And we have several questions I will I will.
Read them and and then I will comment and ask we will intend to comment if they'd like to.
Can I get an update on the tin importance EV program.
You are exploring no you cannot get an update.
And we'll update that at the end of the first quarter call. We expect to report the first quarter and the next 30 days and I want the team at caused this to be able to update you directly we will be inviting them on the call to talk about EV and the exciting programs they have and in the next quarter.
What was the purpose of taking and investment mistaken.
And of KD.
What are your plans on holding and you're holding onto it no I have no comment on navy because as the strategic position.
And we are of passive investors there I have no comment.
And noticing uncomfortable pattern of what I consider to be expected of penny stocks.
This is a very risky and I want to have of savings money on and they need the upcoming downturn.
And.
I think there is a comment about the ATM, we of a $75 million ATM that we are not used will be want to comment on that at all we have not used that ATM. We have not drawn anything down on that $75 million do you have anything to add there well.
No I think thats clear and our <unk>.
And Kate and we filed today we have.
Range.
<unk> hundred $25 million, just under $125 million of the 200 million and it's available so.
And that's speaks for itself.
Well just maybe a question for you what part of of course is play if all is in the president of infrastructure plans for 500000 chart.
<unk> installed you of any comment on the presidential infrastructure plan and how does that affect you think long term the <unk>.
Business of course, this with their <unk> project.
Well I think as you pointed out there's a lot of tailwind on the EP business right now.
And.
Relatively new to the game and yielded almost has been working on creating the Chargers for the last couple of years with this manufacturing partners, but.
It's the ETE play on the EDI Division is so much more than just the Chargers.
And it's going to take us a little bit of time to make sure that we've.
Chosen on the right partners and built out our network.
Well, that's how many of <unk> charges do you expect to sell of the next quarters.
Comment and say.
That we did receive an order, but we're not giving guidance on the total EV Chargers sales yet.
We will be of any comments on that or do you concur with what I said, no I concur and we wouldn't comment on how many units we're going to sell.
Can you provide and update on annual deliveries of of course as textile treatment systems and utilizing the of Mtx's proprietary multiplex laser surface enhance the Wow systems, one of the growth that whole thing out.
And my comment is is that.
We feel stronger than ever that the technology is incredibly disruptive I would say that.
It was a lot more difficult.
And to understand the customer lead time, and what it was going to take well I don't know if you have and any comments about and you kind of did make some comments and the cost. So far do you of any comments on that question look we've taken a long look at the forecast of five year forecast and.
Obviously, I'm not going to disclose that.
But I will say is we have.
We've made significant payments to our third party vendors debt.
All of global Holdings is obligated to pay for in order to complete the manufacturing of the first.
A couple of three machines, because we are working on three different machines right. Now. So there was a lot of prepayments and.
And before the vendors would really start doing any significant amount of work.
Wanted to get current and they wanted to make sure. They had a down payment. So we work through that we're working through.
Scheduling and them and.
And we're going to finish the first two machines and and we're working on the third machine.
And when we have agreements we will announce them.
And.
Well, thank you for that.
Ken.
Ask you about the comment of the ultimate Neuro IPO, obviously reported that we were going to invest up to $10 million of that IPO.
I would simply say is clear as day to everybody the ultimate narrow I am the chairman of the company.
The ultimate and neuro did file.
File confidentially, we put that out and the press release can be of any comments on I know this is the quiet period. So we got to be careful what we say about the ico loans and the narrow.
Yes, I would just refer people to the press releases, we issued discussing the confidential filing of the registration statement, we really can't comment beyond that right now.
Are you planning on expanding your bitcoin mining capabilities, if yes. Some of the miners you plan on the buying and win.
I will refer back to my comments earlier, we are mining and now we're not giving guidance on minors.
We did say we plan on putting in a 1000.
The new ones.
I would say to you what we are is the.
The company is in a position to generate cash now with the money. We have we want to generate cash I see questions about the stock buyback obviously it would make sense. If we didn't think we could generate a lot of free cash to use cash to buy something that is at depressed levels and.
Well I know the year very good at describing the so why don't you comment on of potential buyback I know that.
We've been talking about it I know, there's a lot of questions on it what are your thoughts on whether we would ever consider it or not.
I think theres a couple of factors when you start looking at a stock buyback one of course is our immediate needs and when.
And we filed the shelf for $200 million.
The most recent shelf that we filed I think it went effective at the beginning of January if I recall.
And we were really looking at all of our prospects and and again you have to keep in mind that this isn't just our existing legacy businesses like the defense business, but also the new business.
We're expanding into you've got a data center, that's 617000 square feet, that's going to require significant upgrades.
Over the next three or four years.
Obviously, and we plan on doing those upgrades.
At a rate where we can lease it out so that we don't get ahead of ourselves.
It doesn't make sense to have and asset just sit there being not being used effectively we've got significant costs that we could invest.
To support the MTI X MFS of Ela machines, and then of course, we've got a significant amount of cost for the easy business. So it's difficult to advocate to do a stock buyback right now.
Although I do believe the stock is low.
When.
It's uncertain what the total capital investment is going to be for these various initiatives now obviously.
If we were part of if we had operating income and we were.
Both GAAP and on a cash basis profitable I think it would be of different discussion and.
That's something that we'll look at later this year and we will evaluate it.
Yes, I would comment debt as we announced the first quarter coming up and we assess our cash needs will be important the company is and are positioned to grow and grow cash flow and.
No.
And I'm more concerned about the cash flow side of it and not and.
Burning of minimal amount of cash as I am whether were GAAP profitable because obviously some of these opportunities to bring EV public or do a deal and the EBITDA and grow EV will bring a lot of value.
We think there is a lot of prospects for us to add this is a global build out of the electrification is not going away. We think we got a great asset and it just needs a lot of work.
And we think the market's under clearly I believe the the market's undervaluing, where the company is and I think over time as the people see the first quarter. They start to see what we're doing they see progress with Ncix limited they see progress with Gresham and they start to see us generating cash and opportunity per sales that the market.
It will reward us with the higher stock price.
Obviously.
We're in a lot of different position than we were before with the cash we have and the bank we have years of of capital.
The only need to go to the market, if we wanted to and to expand our our lending and investment operations or if we wanted to speed up some of the machine delivery.
Really and a different position.
And that we've ever been and the.
And I reiterate.
I think the company and what was it a fair assessment and to say I know you always want to limit. The these comments is that a fair assessment and say, we are and the best position we've ever been in in the company's history.
And with what we have we're really in a position to sort of maximize what we're doing and I don't know that it could be any better and my opinion and other than <unk>.
If we had delivered.
The 101 hundreds of machines out of kind of what else can be better for us what's your thoughts.
So yeah, I would agree with that statement and I believe and actually add to it. It's not just the fact that we have a strong balance sheet now and it's the fact that we have eliminated debt and our operating results are improving and our financial results service on.
Obviously, improving as a result of all of those reasons.
The fact that we've been able to start on expanding our management team and that was something that was very very thin.
Several years really going back to the 2016.
And as we start as do we share.
Bringing on more talented PD, one distributing the workload.
Yes.
Yeah, our prospects of 10 times better because we can look at opportunities and we're not rush to make decisions in the past I think if he ever and look at.
The <unk> businesses fail, sometimes it's because they react too quickly and they don't properly evaluate.
And what their business prospects and.
And we certainly fall into that trap before.
And I think I think that over the next 30 days or so as we start to report the first quarter, we look at our cash flow and obviously, we'll assess.
Question about buybacks are pretty it's pretty prevalent question will the SaaS, what we can do there I suspect.
We're not going to be very happy with the price being down here, but you can affect that hopefully the market will see.
See what we think what we think is value I mean keep in mind at this point, we have a subsidiary cash and worldwide. We are of subsidiary, which is the courses and EV power electronics. We are of a data center and Fintech subsidiary with all of the Alliance and then we have.
A large ownership and MTI ex international Avalanche and the growth of those machines that we still believe in and.
We're fully funded at this point, we have the capability of growing the business and so I'm pretty excited and we appreciate everyone's questions Ken.
Do you have any comments on our way out here.
And I would just agree with your position.
And about our positioning and I think.
And there is no friction right right, we can do it.
And just on the execution and so that of that I think puts us and the best wish we had been and right. So obviously.
And the largest shareholder throughout the company.
You can see that we're filing of lot of 13 DS we're actively pursuing and activist strategy, we hope that as accretive to the company.
And obviously those people who've known me for 32 years I have had some success and activism.
Hopefully that contributes to the Fintech side of our business. We are a true holding company you've got a lot of assets and we're going to work on growing them will appreciate you being on the call Ken Thanks to all of the shareholders. A special thanks to a lot of people that stood by us during very difficult times. It is a much different company. Thanks to Henry necessarily the price of the company for sticking by Us.
And a special thanks to.
One of our lenders last year Zeus that helped us through some difficult times, it's a different world for US now and I want to point out of couple of other things before we hang up on that as we ended with 49 million and of equity, which is about eight times the required equity.
At the end of the year for the New York Stock Exchange, we had we raised on an additional $125 million. So if you do just do the math and put that onto the assets we have.
And that could take it to substantially big numbers. If you just add the $77 million of assets and the $125 million of cash that we raised and the second quarter. It's wonderful I expect us to be and hope to be and compliance and hopefully.
We are definitely above the equity standards, we're in good shape, and we think and.
Well look we'll look to talk to you again right. After we report the first quarter, which should be coming up and about less than 30 days or so the unusual when a company. The small as ours reports this late because youre already past the first quarter, we really can't comment about it but we thank everybody for being on the call a special thanks to the team Jr.
And.
And Israel the team and welcome to the people at relic, what's going on with Gresham UK, almost and the team Jody <unk>, who is working on and EV everybody.
Welcome to the scans for joining us the board everyone.
The exciting time for us.
The most excited I have to be here will obviously became the CEO and the first quarter I've been working very closely with well for many years I think we will and I are good team. We've put together a good team. We are of Great Executive Committee now and we will see you and report the next quarter take care everybody.
Okay.