Q1 2021 Neonode Inc Earnings Call
Hello, everyone. Thank you for standing by and welcome to me I know, it's first quarter 2021 earnings conference call. All lines have been placed on mute to prevent any background noise.
After the Speakers' remarks, there will be a question and answer session with the companies covering analysts.
If you'd like to ask a question at that time simply press Star then the number one on your telephone keypad. If you wish to withdraw your question price per pound.
At this time for opening remarks, and introductions I would like to turn the call over to David <unk> head of corporate Investor Relations. David. Please go ahead and start the conference.
Welcome and thank you for joining us on today's call. We will review, our first quarter 2021 financial results and provide a corporate update.
Our update will include details of customer activities technology developments and other items of interest.
On today's call is our CEO Doctor urban forceful.
CFO Maria and also joining us today are our regional sales Vice presidents Anthony in Europe, managing the Americas, Johann Sports Managing Asia Pacific and.
Owners, Werent, managing Europe, Middle East and Africa.
Before turning the call over urban I would like to make the following remarks concerning forward looking statements.
All statements on this conference call other than historical facts are forward looking statements.
These words anticipate believe estimate expect Kim will guidance confidence targets projects and.
Other similar expressions typically are used to identify forward looking statements.
These forward looking statements do not guarantee the future performance that may involve or be subject to the risks uncertainties and other factors that may affect <unk> business financial position and other operating results, which include but are not limited to the risk factors and other qualifications contained in <unk> annual report.
On 10-K quarterly reports on 10-Q, and other reports filed by <unk> with the SEC.
Your attention is directed.
Therefore, actual outcomes and results may differ materially from what is expected or implied by these forward looking statements.
Even though it expressly disclaims any intent or obligations to update these forward looking statements.
At this time it is my pleasure to turn the call over to urban urban. Please go ahead.
Yeah.
Thank you David and welcome everyone.
Yeah.
To begin with.
I'd like to summarize the key messages in our presentation today.
First we continued to execute on their strategies and build our business pipeline.
The demand for contactless tap solutions continues to increase giving us an enormous market opportunity to integrate nanotechnology into new and retrofit that equipment for instance, in elevators and interactive kiosks.
We also see significant interest in our T force in multi sensor technology is from customers in the military and avionics and automotive.
Segments.
To be able to capitalize on more of these opportunities we continue to strengthen our sales marketing engineering teams in Sweden and internationally.
And.
Building on the last point here, let me next.
Introduce our new sales organization.
To increase our customer focus and support further growth we are migrating from our.
Our global business areas structured debt to be introduced last year.
Over to a regional sales organization.
Anthony Uric, who joined the company last month, we lead our sales work in the Americas Jonas Van who previously led the business area Hei's solutions. He will lead our sales work in EMEA and U R spots, who previously led the business area HMA products. He will lead our sales work in APAC.
These three gentlemen will all report directly to me.
So we are then.
Showing here the top level all of our Org chart for the sales work with.
With the three gentlemen, here that you will hear more from later in this call.
It is now.
My pleasure to introduce a full team on today's call. Besides myself and David that you already met we have Maria <unk>, our CFO. She will right. After this take us through the first quarter financials.
After this.
We will hear more from Anthony Uric units van you on Schwab Swart, our VP sales for the different regions.
We include here pictures of everyone on the call.
We will.
Later calls update this and we will also include further information on bio.
Today I will refer you to our website for more information on the bio Florida speakers.
So next we will go to debt.
Financial update I leave the word to Mario <unk>, our CFO. Thank you everybody.
You can find our first quarter earnings release, and 10-Q available for download from the Investor section of our new website.
Columns.
So could you give an update of the quarter.
Total revenues were up by 29%.
Compared to the first quarter previous year, and one $7 million.
Gross margin was down by 14% from previous year's first quarter to 83% and I'll come back to that later.
Yes, we are continuing to invest in sales and.
Marketing and product development.
<unk> expenses for FY 'twenty guidance.
And from the first quarter 2020 can sequence here minions.
Revenues.
Net revenues from our <unk> solutions business area.
One $3 million, which is an increase by 10% compared to the first quarter 2020.
A major part of the revenues from this business area as license revenue from our existing printer and automotive customers.
We believe this business is still rebounding from the pandemic related slowdown in the first half of trying to train a day.
Revenues from operating my photo business area, whereas Europe was $4 million, which is an increase by 200 from 27 per cent compared to the third quarter term strength.
The increase is the result of gum deployments from conferences touch solution.
In Asia, and mostly driven by a partner network.
A major part of the revenue from our HMA put a thesis there yet.
The price in the correct thing.
But we have also had some nonrecurring engineering project and marine projects.
Our total gross margin for the first quarter 2021 was 83% compared to 97% from the same quarter of 2020.
The decrease is related to hybrid I faced with lower margin.
The gross margin furniture mining solutions business area with 100 per cent for the first quarter 'twenty to 'twenty, one as well as 2020.
With little or no <unk> revenues in both from the quarters.
Gross margin for <unk> business area was 24% for the first four months of 'twenty to 'twenty, one compared to 62% for the first quarter. This year.
Some changes China inventories there.
The margin for this quarter it was depressed by low margin antibody assays.
The margin per sensor module sales alone was 27% for the quarter.
Operating expenses for the first quarter 'twenty to 'twenty, one was $3 seven.
Million.
Which is from increased by 29% from the same quarter last year, but a decrease by 9% from the previous quarter.
Operating loss for the first quarter 2021 was $1 6 million.
She has been increased by 6% from the same quarter of 2020, but in line with the previous quarter.
The net loss.
One 6 million or <unk> 14 per share for the first quarter 2021.
<unk> net loss of $1 million net income.
Per share for the same quarter previous year.
Net cash used in operating activities during the first quarter trying to 'twenty, one was $2 <unk> million compared to one consumer in the first quarter in 2020.
The increase from the previous year was primarily the result of the <unk>.
Higher net loss and increased inventory to secure our future deliveries.
On May 10, we filed a shelf registration and entered into $25 million ATM agreement.
This allows us to strengthen our balance sheet at a low cost and with minimum dilution.
And when we find as necessary.
And now I hand, it over to.
Moving.
Thank you Barry.
At this point, we would like to give you an update on our strategy and business.
I'll start with some general remarks before handing over to Anthony join Us in July.
The old.
As a value driven company average.
Seeing we do in every decision we take it's based on our core values one team with purpose customer focus and make tomorrow better.
Full in line with this we have and we are taking measures to streamline and improve on our entire organization on growth focus.
Last year, we established this business area organization with three separate business areas separated by the business model to use.
I E technology licensing for HMA solutions product sales rates my products and software licensing for remote sensing solutions and the markets They address military and avionics industrial elevators interactive kiosks in automotive.
This business area organization gave us a good positive boost last year, but we are not satisfied and think we can improve and do more with the IP know how and resources we have.
Hence.
We are migrating to a different organization, where we have a much clear focus on our core business and on our customers in key market segments that we are addressing.
Especially elevators and interactive kiosks.
As before we are using in building on our existing IP portfolio Knowhow and we are exploring every day, new and better ways to leverage this to bring value to our customers for instance in the form of contactless touch solutions for which our sea force technology and our touch sensor modules are perfect fits.
Going forward, we will maintain our focus on elevators and interactive kiosks, but we are also addressing customers and military and avionics industrial and automotive.
We are rebuilding our business inside out starting with contactless touch solutions for.
Elevators and kiosks and then having further types of applications.
And market segments.
So what I wanted to show with that picture I need to go back excuse me.
Theres a animation here showing the main focus contactless touch elevators and kiosks. This is where we have the clear and dominating focus on the resource spend in the AMOLED since actually since last year, we are making this even more clear now this is not saying that other areas have no focus on <unk>.
Horses, but.
The changes we are making is really to increase the push here with our contactless touch business for elevators and kiosks and in terms of organization. We have already presented our new regional sales organization here shown in the green boxes.
Doing similar adjustments to our income on engineering organization here represented by the Blue boxes, and we are constantly reviewing and updating our mixes and technology partnerships.
For efficiency.
Simply efficacy.
Sumit out.
And this will be my final slide at this point.
We feel that we are on the right track and we have a really positive momentum in a lot of things, we do business development, New product development innovation, and also and <unk> projects and customers the demand for our contract that's touch solutions.
Is increasing and our product sales is ramping up.
This is what we mean by saying we are building our business pipeline. Some of these processes take time, there are certain lead times into sales and then the testing and evaluation basis and in many cases, we are having customers that wanted to do pilot runs and small installations first.
We are all motivated by the success, we are having here and we see that they are really on the right track.
He then long term we are also optimistic about our licensing business and we think that this will be a nice complement to the products business to have.
Further our new licensing customers that gave us recurring revenues.
As the legacy customers that we have in automotive and printers and E. Readers for instance, they continue to bring good revenues really high margin to the company and we have an excellent team.
And we continue to add talent and experience to the team.
And speaking of talent.
It is now my pleasure to introduce and from the Europe.
And have him introduce himself and also our business in the Americas.
Tony Please go ahead.
Thank you Irvin so a little bit about me.
I'm new to the company, but I am not new to the industry. This is a market I'm very familiar with and in fact, they have been in the touch screen industry for over 20 years I've worked from Fortune 100 companies such as three of them touch them industry leaders like playing our and smart technologies.
<unk> also worked for several startups, including the company based in New Zealand called next window, which had a very similar optical touch screen technology. When I started I was responsible for developing business in the Americas later became a global role and we grew sales from just a few million dollars.
To almost a $100 million in six years. The company was later sold to Smart technologies and then they went public.
So, let's just talk about what our strategy is.
Our plan is is to refocus the resources in the Americas and to deploy a more direct sales approach into target vertical markets our target.
What accounts are known and I've worked with many of these companies in the past.
Well, we have that's unique and different is the ability to add in air touch and gesture control to almost any surface. This means that we can offer touch free germfree intuitive.
Alternative to interacting with kiosks elevators and other public surfaces. So if you think about how many chios and elevators that are in the market potential is huge.
So if we look at the market in a different way, we can divide it up into what we call retrofits. These are existing installations or new installs, which would mean, a new project installation or R&D, which is working with a company to provide that.
New product feature.
But if we look at the sales cycle or the time to market retrofits represent a huge market opportunity and the quickest path to increased revenue. Therefore near term our target customer is end users who've already deployed these devices such as hotels and airlines.
Fast food restaurants, retail grocery stores medical offices and the like but in addition to the end users. We also intend to target. The company is responsible for developing the aftermarket solutions are maintaining installing these devices such as solution providers and integrators and value added.
Resellers.
So, let's let's take a look at.
<unk>.
As an example.
So.
Company. They were working with is mad elevated they're based in Canada, They're a global company and they produced fixtures in interiors for the elevator industry.
They've developed a solution they call Phantom, which is designed to convert standard elevator control panels into a touch free interface.
Global sales channel comprised of local and regional installers and this provides us the direct access to these building owners and managers designers and other key decision makers. Our plan is to leverage their industry expertise their product knowledge and most important there.
Contacts to address the early adopters with the low risk market specific solution to prove out the product.
And to confirm the market.
Now, it's going to take a little bit of time to Institute this strategy, but we know the market and.
And we know where we're going.
Back to you Robin.
Thank you Tony.
And I will immediately hand over to Jan <unk>, who will talk about the business in EMEA. Thank you Yvonne.
Let me walk you through the goals I have with the region.
Drive successful business in the whole region, not forgetting middle East and Africa, but make no mistake. The main focus is on the European continent, I feel very comfortable there.
Got it in many different countries there.
I want to align the region with the corporate the overarching near net would makes you envision to be smart to be intuitive and also to work multi modal. This you could see the internal goals as well as external goals.
To review, how we segment our position ourselves and how we go to market and I'll share some of those thoughts here with you.
One of my main concern is how can we make new node easier to buy from quicker to analyze what our existing and good opportunities and leads and what we should hold on to how can we broaden our menu have different types of purchase options etcetera, so really to continuously evaluate and develop our debt.
Ecosystem much like Tony mentioned with the Americas boosted our partners who are currently.
Ecosystem that we're building around us with value added resellers and distributors.
Also remained closely analyzing the military and industrial businesses that worked with before.
Our focus however is going to be on elevators, and interactive kiosks segments and our number one priority.
We'll be now top line growth.
Also development of course more strategic comprehensive now in net execution plans for my region focusing on growth.
Mike.
Silly, but the sale sale and the sale is going to be key.
The people responsible and working in the EMEA region can't wait to get out there once the legislation has been lifted.
So on that note I want to share with you a few cases some of them you mentioned before of partnerships and deep relationships in businesses that we have in the EMEA region.
<unk>, a UK based leading supplier of components to the global elevated market.
We launched a contact less elevated control panel from existing or also new elevator installations.
This solution that we worked with together with them and sold a halo in Europe and was introduced at the beginning of the year.
Another example of a good partner not only as a customer but also introducing us to a great network is Ms unique on a per the CEO of <unk> group.
They're a manufacturer of kiosk solutions and what I like with these that these solutions are out there right now not only selling from being used by customers. In this specific case, if you want to buy a burger King Burger in Paris.
<unk> group's yearend Sir.
They also work with other <unk> and France have piloted contactless self ordering system is a very adaptable solution also ideal which is big for us in retrofitting an existing kiosks, we start to see more and more of our solutions in the field and being used and experienced by the general public.
And hey, what can be more acceptable than ordering new Burger.
This solution is marketed and sold under the name Airclic has also started a few months ago.
They have great contacts and networks in France, but also in North America. So we'll make sure to have a good win win solution with our partner.
So in short for EMEA, we have delivered.
We delivered and will continue to deliver the best technology out there, we're combining direct sales with a selected few partners and making sure we try and maximize the best long term opportunities within the Permian.
Thank you.
Thank you Jonas.
Then immediately it over to you on some months.
The APAC business.
Thank you Bob.
So it's really a nice being able to focus on my so called home coast, The Asia Pacific region again, having beaten in Japan for 15 years and book in or with East and Southeast Asia.
30 years, I'm really thrilled to see this region, leading the migration towards contactless cards.
We have in the past six months fully executed on the strategy that we defined percentage loss for building a solid net book or distribute this and value added resellers system integrators initially targeting.
As Tony mentioned, the retrofit use cases for elevators and interactive kills.
As you may have seen from our recent press releases.
This has resulted in initial deployments of several projects across the region and with public announcement by several high profile end customers.
Meaning that we will hopefully see a substantial contribution to our revenue growth in the second half of 'twenty one.
On the right hand side of this slide you can see some segments per country, where we have particular good traction that is it.
Self service kiosk point of sales terminals in Japan, as well as elevated core operational panels.
In South Korea, China, and Southeast Asia.
So therefore, one of the most important segments for US is self service kiosks at airport retail stores train stations shopping mall sector as I mentioned already at the last earnings call. One of our closest partners is focusing on self service.
Application and SME, gliese, particularly on airports and airlines.
Some time ago, Japan Aerospace secured a strategic business win with a major Asian airline to retrofit existing kiosk contactless Pos technology that will flow for four chicky chicken for self bag until close.
Solution has now been deployed in multiple airports and discuss it's about the widest deployment at additional airports as well as with additional lines absolutely already started.
Having discussions on a weekly basis with Japan aerospace comp for them that they would be able to utilize the good relationship within the aviation industry to further develop and create business in this segment.
However, being part of the Itochu group, one of Japan's largest trading companies and so forth so with short sharp.
Aerospace is also excellent and safe channel into other industries and has engaged with several other customers in the transportation retail and hospitality sectors and were recently together with one of the top three Joseph manufacturers in Japan selected volume made the Japanese retail chain to retrofit.
Based on the change the cash to self checkout kills.
The initial deployment rollout of this solution.
Which by the way is also called <unk>.
To be a popular name.
So in these April in 32 stores throughout Japan continues to be rolled out that additional locations in the second half of 2021.
And that's the case I would like to emphasize is with our partner Fintech in South Korea.
That has developed contactless touch elevated control panels that they have market elevated competencies Korea since middle of last year.
In this case, we have an extremely close cooperation visiting customers to get more or less on a daily basis.
We're at least my local team doses on current that used to the company and then the stockyard Stockholm, having to rely on digital communication.
Recently.
We get a breakthrough with one of the major elevator companies in South Korea selected our solution.
And we are now that is in the U S.
Fine thank per car.
And for wide scale rollout, which we highlighted in the press release, all time ago. So for three pilots have been announced.
The host.
Hospital and office buildings, but more will certainly flow though.
<unk> is also engaged with several other elevate the companies as well as we kill spend it factors in South Korea. So we are optimistic that our business will find stake can grow and will grow significantly and significantly we will see other segments such as retail ordering.
<unk> payment system for quick service restaurants.
Finally, let's have a look at another contact desktops use case also per elevate the control panels for retrofit purpose is solution is mortgages sold and deployed by Hong Kong productivity accounts. So under the name of no touch mainly in Hong Kong.
In mainland China.
However, in Hong Kong productivity 'cause Council has also recently developed.
The business model and have in debt term started to sublicense that solution to other companies such as for example, Jordan Schindler that promote this solution.
With a momentum the wider adoption in overseas markets, particularly in southeast Asia, where.
They have a really really strong presence.
So reported back.
And Tony initiatives has helped all of those close engagements that we have had have helped us tremendously in refining and improving our solution to really make it ideal for competitors tops implementations.
And with that I would like to hand over the word back to Europe.
Thank you.
And we're close to the end of our presentation.
I wanted to.
Summarize the key points regarding our strategy and our business.
Yeah.
The first debt.
Set upfront in the call.
But we feel that we're on the right track could we see a high and increasing demand for our contactless touch.
Solutions on our touch sensor modules.
I E. What we call our products business.
We have a strong belief in this debt.
Help us grow our topline and by this we will also include improve our bottom line.
Our focus continues to be.
Elevators.
An interactive kiosks.
The markets in Asia, Europe, and North America are a little different day look a little different but there are many here common denominators and that both these markets are.
A very large market with huge installed basis of equipment.
And also good healthy growth and in our case, we also see that we have a tremendous opportunity with retrofits.
Debt, we can do.
Rather quickly in existing equipment and we can develop based on the retrofit solutions. We can also then transfer into the new equipment part of the market.
So this is where we see the biggest potential in this year next year and probably the year. After we are very optimistic still and we haven't forgotten about where we come from the last 10 years <unk> has been focusing on technology licensing. We continue to work on this and we continue to try to bring.
Attention to R. R. C force technology that supports touch gesture sensing in the contactless talks applications.
And we are mainly targeting demanding customers in the military and avionics space in the industrial and then by this we mean rugged industrial applications.
In.
Plants and workshops are similar where the harsh environment and the operators and the users typically could have gloves or.
It's a difficult with a traditional touch interface or if they want to do some gesture sensing we can provide product also in automotive.
We have presented before we continue to work on our driver and in cabin monitoring we'd have a very advanced software solution there.
Debt, we have still high hopes for we are engaged to currently with several companies.
And it's interesting to see how this market is developing.
Yeah.
You that have followed <unk> than the previous years, you know that we have worked a lot with touch solutions for ITI systems, we still have new requests.
The solutions, we have in the market with three tier ones. Several Oems, it's very very high performance and well received excellent quality records. So building on that we try to leverage this too.
New programs were.
We can license our technology.
And Furthermore, there is a big interest in gesture sensing.
We have been approached in the last months by several companies asking for proposals regarding gesture sensing both in the cabin of the car and outside.
So automotive remains an important area for us.
And we.
We feel that we are well positioned.
With.
Our owners, our board of directors and our team here in the company.
And so you have heard.
Tony.
You'll note that John talked about we also have an excellent ecosystem of partners. Some of our distributors commence in dedicated is one fulfillment distributors, we are working with.
Several value added resellers, we have the technology partners. Some of them. We have mentioned that they are featured in the presentation today.
But all this together makes us feel that we are well positioned to accelerate growth in the coming months and quarters and also capitalize on the current and future opportunities.
Currently recruiting more engineers for instance.
There will be.
High pressure on engineering team, but we think we can overcome this.
This will be absolutely necessary for us to continue to grow.
But we also have the.
Certain expansion capacity, obviously with our partners and that's another reason why we work with these partners debt some of them to value added resellers and the technology partners. They have engineering resources that could contribute in the projects. We are involved in they are also as you know, helping us market, our solutions and selling them.
So we see multiple use of this ecosystem and that's why we also set up.
Heterogeneous ecosystem with different types of partners and we will continue to work with them in different ways, probably in different markets as well.
But we are all excited and we look forward to the rest of this year.
Into next year, so with that I would like to thank you all for your attention and we can move to Q&A.
Dave.
I'll now open the call for Q&A from our covering analysts.
If you would like to ask a question press star one on your telephone keypad.
Now moving from a line of gossiping Henderson with Redeye.
Yes.
Yes. Thank you very much for taking my question. My first question is to Maria.
Could you explain the shelf registration and the ATM file that Jeb recently, they've made with the SEC.
Yes.
And a shelf registration filed with the SEC and allowance and share with you.
Since then.
Registered securities during a three year period.
You can sell per takedowns.
We still have seven times, such as section one being an at the market offering total ATM.
This is not bringing to the existing <unk> market made at the company's discretion accounts.
Accounts and effectively sell it sounds share.
Good day and into the market.
Yes.
Practicing yourself market today.
And as a flexible way to raise capital without.
Minimal market impact.
<unk> costs and without discounts.
Yes.
Is that okay. Thanks Christian.
Yeah, that's great and so the shelf registration is that 100 million U S dollars and the ATM SaaS $25 million.
How should investors interpret these numbers.
Well none of these numbers target.
Size for future offerings out.
At this time and no decision has been taken to use this option would you have any targets set for the size from share issuance.
And we will use this facility in a careful manner and.
If and when market conditions are favorable.
Good housekeeping on the board to to be able to to be pre <unk>.
Understood.
Ed.
The capital with the pre registered shares in the future.
Okay, Great Amazon. Thank you very much and then also one question for.
Okay.
Are you experiencing any day little both component shortage and if so how how is this affecting your business.
Okay.
We don't we don't see any problems today with components for our products manufacturing.
But we are also.
Feeling that the risk is there so basically we have covered our components needs for this year and into next year, but who knows how long. This concentration will stay so right now we are exploring alternative second and third sources from some of the key components.
To be really prepared if this situation continues or gets worse next year. This year is already covered and we have guaranteed supply of components.
Okay, Great and then one last question about the Fintech elevator partner partnership can you say anything more about like how big is it and how fast can it grow and also how much resources are fine text fitting in.
So so.
I'll hand that question over to Joanna who works directly with Fintech on the more or less daily basis. So maybe you can address debt.
Yes, certainly.
<unk> net.
Let me just say like this so both me and <unk>.
<unk> suite the serious about this and we have both companies have invested considerable time and effort in order to pulse a multiple of that number of grid reliability test and fully quantify these solutions.
Only one.
Elevate the OEM, but with multiple.
Actually the two largest Oems in South Korea. So so we are super committed and.
We both put in their local resources into this.
As I mentioned them.
We have the pilot.
Installations in hosted in the office buildings.
And then being announced by one.
The elevator Oems and although those supply. This reportedly has been received very well by people both the juices and volume volume building openness etcetera, and other <unk> stakeholders, it's kind of it's really difficult to predict as retrofit ratio receivable rollout.
I mean, what we can state is that.
With an installed base of more than 800000 elevators only in South Korea.
By 2020, according to our research reports from studies done even a moderate retrofit basically resolved consistent substantial volumes.
I think that's really what I can say.
Okay, great. Thank you very much.
The next question will come from the line of Christian Schwab with Craig Hallum capital.
Okay.
Hey, Thanks for taking my question.
Every day.
We have 100% sell through of the components that you've secured for next year.
Roughly what would be the company's revenue.
Yes, we are ramping up our production first of all on all of our sales.
So we are targeting to actually.
Growth by multiples and not percentages. So we are targeting very aggressive growth and also continuing in the same fashion in <unk>.
And next year.
I won't give you any guidance to any specific numbers, but I will say that we are growing several hundred percent. This year and also a similar type of numbers next year.
Great and then.
And then give me a kind of a substantial pipeline of opportunities that we kind of highlighted the prepared comments.
No.
How big of a revenue opportunity without necessarily putting a timeframe on it whether it's three years or five years or.
Potentially longer.
How long does it take.
For the elevator interactive kiosk business to become law.
$40 million to $50 million business, if it could become that book.
So we have really high hopes for this but I think we are onto something really good with these two segments elevators and interactive kiosks.
Both have.
I would say huge installed basis, we are close to like 20 million installed elevators in the world and that number is growing by 131 5 million elevators per year.
You'll have a refurbishment rates of the <unk>.
Elevator cars and the general systems like every 10 years or something so there is a significant aftermarket per elevators and what we have done with our own planning is to try to.
Secure a certain market share and grow that market share off of that installed base and with the new equipment. We also have the retrofit play.
Which we can use actually at several time for elevators lifetime.
So in the next 2345 years.
We are really.
We are trying to grow this business as you said up into the several tens of millions of dollars for elevators on the similar numbers for kiosks.
The kiosk market globally, it's much bigger than the elevated market, but on the other hand, it's a little bit more fragmented. So we have every type of kiosk. We have Atms, we have vending machines you have the type of self service kiosks, we saw at airports and it does pass through restaurants.
So for US I think thats realistic total addressable market and kiosks, it's sort of similar in size as elevators.
But combined hay.
We see the huge market opportunity to be want to grow. This we are working to grow this.
Onto the several tens of million U S. In the next three four years.
Yes.
Great and then my last question has to do with the recent.
Patent portfolio protection.
Is there any type of update you can share with us there.
Yep.
It's a great question.
And as you know we have an agreement with a company called equitable technologies LLC.
Our debt agreements with them its publicly filed as an 8-K.
It was done in 2018.
They are trying to monetize.
Those old patents actually two families that we have transfer assigned to them and that they are trying to monetize and of course, if theyre successful the agreement grants us 50% of the net proceeds less expenses.
They are advancing this and.
I would repeat.
<unk>, Inc is not part of any litigation oriented part of these processes.
<unk> technologies LLC is running this independently from us.
They are set up.
Any that they called Neo no smartphone LLC.
100% owned by equity technologies, LLC and has nothing to do with US. This company has for instance sued Apple and Samsung in the Western District, Texas I believe some of the proceedings.
Litigations are available online or at least searchable.
And we follow them as well as you do and you can find it's super interesting to see how this goes.
Potential upside for us at the end of that process, obviously, if they do a settlement or if there is a.
India on the court decides in our favor, which we hope it can.
Big bring some nice dollars into.
Balance sheet as well.
Great no other questions. Thank you.
Thank you.
The next question will come from the line of the West Coast was that at all.
Thank you so much for taking my question I have a question you want to start.
I noticed that the Japanese airlines, they are promoting contactless solution a lot and don't see it so much from other players can you tell me why others have jumped on this bandwagon.
No no about this solutions or have they chosen another pass.
Well I.
I mean.
Talking about globally, obviously, Japan airlines they own.
Lee.
Company focusing on on on air.
Compact cast us checking kills we also have announcements by Changi Airport.
And by Hallmark.
At four P. Qatar. So so there are certainly other players and I think when we talk about self check in kiosks get airports, it's a bit of a complex setup with a combination of sometimes airlines sometimes.
Some times.
Companies like <unk>, Inc, or <unk>.
And sometimes to airports actually owning and controlling the values flavors of of course, so it's a little bit of a complicated setup that for I think it also make things more.
Complicated when when you should progress.
But by them.
I have good hopes that that dose.
The initial announcement and the installations will influence other airports and airlines to actually do this and we have a growth of indications that this will happen.
But it takes a little bit of time.
Hey, good.
Another question about.
In the report you mentioned Youre exploring further partnerships.
Can you tell me.
Are you satisfied with your current partnerships or why are you exploring more partnerships.
Areas, what kind of what kind of partnerships.
So.
Step in and answer this Victor.
<unk> speaking.
So what we refer to as <unk>.
Related to our reorganization into regional sales structure, we have been very successful and found some very nice and active partners that have helped us a lot in Asia.
But yes dimension.
We see that this model is good for neon old in a global scale.
We can talk mainland China, we can talk EMEA and we can talk to Americas.
We are looking into some good the value added resellers on other types of partners in these regions. So this is one thing. We do we also are exploring other types of technology partnerships, where the even competitors that have been approaching us.
During the winter and spring.
Some of these.
Proposals are quite interesting because if he can joined forces with other companies, we can broaden our offering we can.
Also share some of their sales channels and marketing resources.
So actually we are pursuing a lot of these ibs in parallel.
Our new sales organization with Tony on Board in the Jonah is running.
<unk> you want to continue to run APAC.
Gives us then the bandwidth from.
The management team.
To really go after this in a more focused way.
Because we believe in a heterogeneous approach, where we do both direct sales and indirect sales through partners.
Okay got you one last question from me about semi.
<unk> solutions are.
Can you share some.
Other exciting areas in the military market.
Besides touch displays for aircraft from vehicles, what other ideas.
Do you have here.
Well what.
What we have identified so far is that there is a very interesting market for us on our technology.
Aircraft applications, and then I mean, its very classic.
They have different types of displays and several of them or if not all of them will be touch enabled and Arctic technology fits as a glove into that of course, there are other rugged displays Houston by military Army and also naval forces.
And they will be then typically other types of displays are similar types of this place debt that you have in the aircraft.
But.
Zone US informed me of another project that's far more.
Like personal device for our soldiers.
Where.
This company are at an all of the department of Defense wanted to have a touch interface.
Sort of carried by the soldier on is the gear.
And.
This is something that not many other technologies could fall and <unk> with our Sea Force technology is also a good fit there. So we believe that we have a play in the military and avionics market that is not only aircrafts it could be also ground.
Ground vehicles or it could be infantry soldiers and other things.
Yes, great.
My feeling.
So it won't show up on Florida terrifying debt them. Thank you the other people on the call as well.
The next question will come from the line of Phillip Schwartz with <unk> capital.
And yes flow. Thank you for taking my questions.
Yeah.
A question for maybe it's Maria or bandwidth.
He'd like to share with me more information on this shelf registration and also the $25 million.
Sales agreement with B Riley.
Is it.
Should the.
Shareholder understand its Scott.
B Riley now allowed to sell.
25 million worth of stock.
Aftermarket at the in the <unk>.
Markets.
Yes first of all shelf registration is that pre registration of securities.
<unk> shares.
That we can use during three years.
Have the shelf that expired last year during the spring.
Now we are setting up a new one or how to set up a new one.
This allows us to.
The industry period to take down some that have a direct offerings you can do pipe deals or they could do Atms using this shelf.
So that's.
What Maria mentioned the board considers like good housekeeping to set this up.
Have no immediate plans to use the shelf like this or do a direct offering or similar.
But.
Dennis.
Cash flow.
Sure.
What is the purpose for them when they do that is it private placements or is it selling in the market.
The shelf is something the Ono set up.
By our own and we have this now in place and as soon as it's improved we can use it. The second one is an agreement with B Riley.
For an ATM.
We can then at their own discretion decide if we going to sell shares through B Riley's trading desk.
First we've sold at market price.
We will control that sales of shares from the anode.
It's done.
Market price no discounts and also a very low fee. So we think it's very.
Favorable for.
Investors that they have this Maria also explained that also in this case.
The board sorry.
In this session.
Alright, yes, please let me finish so the board Hasnt decided to use.
The total available amount but.
If the shelf from the ATM is approved by the FCC, we have this option.
And that's my Reexplain when market conditions are favorable probably be going to start selling some shares through b Riley and this ATM agreement.
Alright, so they're selling through B Riley's your discretion.
Yes, absolutely yes.
Or if you want to buy shares gave us a call we can give you.
Good price.
Thank you guys perfect. Thanks very much.
With that we are showing no further audio questions at this time.
Do we have any closing remarks.
Yes, let me say a couple of more works.
You have to round off I would like to direct your attention to our new website I introduced it before.
We want to have more traffic to our new nice looking website <unk> dot com, we are continuously adding content and updating so please stay well.
With us through this media and all the other social media like Linkedin and Twitter.
Thank you very much and thank you for joining today's call.
We want to thank you all for joining us for our call have a good day.
Yes.
Okay.
[music].
Okay.
[music].
Total number.
Net.
Yes.
Okay.
[music] average.
Yeah.
Okay.
Okay.
Okay.
Yes.
Okay.
Okay.
Yes.
[music].