Q3 2021 908 Devices Inc. Earnings Call

Good day and thank you for standing by welcome to the nine O eight devices third quarter of 2021 financial with all its conference call. At this time all participants for innovation on the Mallet. After the speaker's presentation. They will be a question and answer session.

They asked a question during the session you'll need to press one on your telephone if you require any further with assistance. Please specify zero I would now like they had a conference over to your speaker today Kelly Girl Investor Relations. Please go ahead.

Thank you. This morning, Ninoy devices really its financial results for the quarter ended September 30th 2021. If you have not received this news release or if you'd like to be added to the company's distributions. Please send an email.

Q I R at nine O eight devices Dot com.

Joining me today for graduate Kevin Cop, Chief Executive Officer until founder and joke with the Chief Financial Officer.

Before we begin I'd like to remind you that management will make statements. During this call that are forward looking statements within the meaning of federal Securities laws. These statements involved material risks and uncertainties that quick cause actual results whereabouts to materially differ from those anticipated.

Additional information regarding these risks and uncertainties appears in a section entitled forward looking statements in the press release finally issue today.

Or a more complete lifting the exception please be the risk factors section of the company's annual report on Form 10-K for the year ended December 31st 2020, and and it's other filings with the Securities and Exchange Commission.

Exactly as required by law nine O eight disclaims any intention our obligation to update or advise any financial projections are forward looking statements leather because of new information future events or otherwise.

This conference call contains time sensitive information and it's accurate only after the live broadcast November 4th 2021.

That I would like to turn the call over to Kevin.

Thanks, Kelly good morning, and thank you for joining our third quarter of 2021 earnings call.

We are continuing to make excellent progress broadening or global presence strike their relationships and expanding our offering delivered.

More value to our customers we.

We ended the third quarter with 12.5 million in total revenue up 52% from the second quarter of 2021 and up 107% year over year.

I'm pleased with their performance, which was in line with our expectations better revenue would step up in the back half of the year as we continue to ramp or commercial efforts and benefit from seasonal you're and budget cycles.

Replace more than 180 devices during the quarter bring your installed base to over 1700 devices across her three products.

We've made meaningful progress skill your commercial team demonstrating traction within our growing customer base and highlighting the need for a technology within our core forensics research to Biopharma applications as.

As we think about our growth we remain focused on expanding installed base driving utilization and investing in our technology platform.

Starting with our sales channels and commercial organization. We ended the third quarter with 57 employees across sales marketing and product management.

I'm excited by the talent, we continue to bring to the nine O eight team and we are well on our way to reach your goal of 60 commercial employees by the end of Q1 2022.

We are ramping our efforts and engaging existing new and prospective customers on the value of our technologies to that end in September we oser first integrated use your meeting critical mass 2021, which covered the full breadth of a product platforms and their applications. This event brought more than 150 attendees together.

Virtually an in person to hear our customer share their success using a handheld and desktop devices to democratize access to mass spectrometry.

These customers talk spend the breath of our customer base from former Amgen Burke Astrazeneca and Sertorius two top research institutions with Johns Hopkins University, and Dana Farber Cancer Institute, the government agencies with the USTA maiden drug enforcement agency and the Quincy Police Department Tony took the.

Exactly a director of product integrity at Merck with a keynote speaker for the event and discuss the critical role forensic testing place in criminal enforcement against counterfeit drugs.

It was inspiring to hear the impact of technology is having across a range of topics brio process monitoring to identification of counterfeit pharmaceuticals to high throughput drug discovery and perhaps even most importantly, the event give our customers the opportunity to engage in discussions together not only to share their experiences, but also to increase awareness and education.

Hate each other on the value of our technology across used to print applications areas.

As we ramp or commercial efforts, we're seeing growing customer traction across our product portfolio, we focus on leveraging our customer success and testing trial and pilots into enterprise wide standardization for both devices and consumables.

With their hand-held we continue to gain traction with leaving government enterprise accounts for using M. X 90 waste retrace detection identification of narcotics and other chemical hazards. For example, the department of Homeland Security purchased additional Nx 90 wait devices to combat the flow of illicit drugs, including opioids from entering our borders.

The U S drug enforcement administration also as M X 90 wait devices for their clandestine drug lab enforcement teams.

In addition to growing our existing enterprise accounts, we were continuing to build a pipeline of pilot programs that have the potential to involved into valuable enterprise accounts in October, Ohio Attorney General, David Yost announced a pilot program for police departments in three cities, where law enforcement officers will use R. M X nine O eight.

Handheld devices for rapid mobile drug testing in the press conference a G. Yost noted that the M. X 90 weight is literally a crime lab in your hands we.

We currently have over 20 M X nine O eight and use in the state of Ohio, and the Ohio Attorney General has expressed desire for every police department and the state to eventually have an M X nine wait device.

We were proud of the value that M X nine O eight is bringing the law enforcement programs and the communities. They serve and are committed to bringing similar value two additional agencies across the United States.

Unfortunately overdose deaths involving lethal drugs like Sentinel and nothing's gonna be are on the rise at the end of September the drug enforcement administration issued a public safety alert warning Americans of the sharp increase in fake prescription pills containing circle and that's in front of me.

This was the first advisory the D. A has issued in six years.

According to the advisory the number of D. A cease counterfeit pills with Sentinel has jumped staggering amount by nearly 430% since 2019.

Today, two out of every five pills with that little container potential lethal dose.

According to a recent study by the National Institute of drug abuse overdose deaths in the U S involving methamphetamine nearly tripled from 2015 to 2019 among peoples H 18, 64, even a small amount to these drugs can be lethal R. M X underweight handheld device detects trace levels of a full panel of drugs in seconds.

Minimizing exposure for first responders and enabling personnel to immediately act.

Our handheld Sir game changer for the opioid crisis with the ability to detect and identify trace amounts of drugs.

I would like to take a minute to share a few examples of recent customer successes using our handheld devices that underscore the growing need for this technology.

Mexico International Airport Customs personnel recently use the <unk> to the tech pounds of hidden cocaine wrapped in two best enabling officials to immediately sees the drugs lab tests later confirm the accuracy of the M X nine O eight analysis and another instance, three examination of stolen vehicle technicians from the Canadian.

Decontamination solution observed a white powder in the glove compartment box suspecting an airborne hazard the team use the newly released error module for the M X nine wait to confirm the presence of Airborne Festival, which is highly toxic <unk> provided critical information to keep technician safe over the course of the vehicle inspection.

Our handheld devices provide analysis for applications across chemical in narcotics detection, we were demonstrating solid traction with customers rely our technology to combat critical to life problems with easily interpretable actual results in seconds.

Turning now to our desktops today, we were focused on placing our devices with top pharma companies, where there's ample room to increase adoption within a single customer account, we saw strong traction during the quarter with new placement increasing by more than 40 per cent compared to the same period last year.

This growth was primarily driven by traction or a core biopharma segment with new desktop customers, including Gilead Sciences, Boehringer Ingelheim, and Jensen Pharmaceuticals, we.

We have placed devices with 19 of the top 20 pharma companies.

Our rebel product offers critical value to customers, providing process insight a new lens into the bioprocess workflow that allows for realtime process optimization recently at the Bioprocessing summit in Boston and Alexion pharmaceutical scientist presented results were our desktop device was used to mitigate.

<unk> amino acid missing corporation, and optimize feeding strategies for production bioreactor too rapidly achieved the desired critical quality actually it's also known as a C. Q is.

We've previously shared our plan to create a bioanalytics platform that leverages are versatile technologies from biotherapeutic development through production.

The need for such a platform is validated by F. D. As widely publicized quality by design initiative, which stresses the importance of understanding monitoring and controlling a process parameters to ensure finished biopharmaceutical products meet proper C. Q is the pharmaceutical industry also broadly recognize that enhanced process understood.

<unk> and control leads to improved yield and predictability, particularly important with newer therapeutic modalities are devices are directly position to serve these needs.

And finally, moving to innovation related to our products and technology platform, we were working to expand the capabilities of our existing products as well as expand the reach of a technology platform for a handheld we released a software update to our field base of Nx nine Oh wait that's nine new analyte targets for a total of 19, new targets added so far this year.

These new analyzed targets are mainly synthetic drug compounds, such as <unk> and opioids. This built on the already significant capability M X nine O eight inserting the latest technologies in the hands of safety and health responders across the globe for our ZIP Chip recently launched in all your nuclear type analysis kit Oligos.

The state classes therapeutics that include RNA, DNA and their structural analogs and are effective against a wide range of disease conditions traditional work clothes for all ago analysis or lengthy off to required use of extensive liquid chromatograph. Your method development along with harsh I impairing. The agents are zipped chip device coupled with them.

Mass spectrometer provides an easy method for simple and fast analysis of olive goes with minimal sample prep and no need for iron pairing reagents at.

At the American Society for mass spectrometry meeting or a S. M. S. We presented to talk in conjunction with Amgen that demonstrated the use of our ZIP chip kit on proprietary Amgen oligos, resulting in decreased analysis time and sample requirement without the use of I'm paranoid agents.

We were excited to provide our users with a simple rapid and cost effective solution for all ago analysis, enabling them to accelerate their drug development workflow.

We are continuing to unlock our platforms capabilities to increase the areas of used for customers and open up our addressable markets.

For our desktops, we're also continuing our effort to expand downstream into late stage development unfinished product quality domain in may of this year, we announced the joint collaboration with biotech need to develop an extended C. Two a workflow solution for protein characterization. The pairing of biotech B C. I systems ZIP chip allows for.

In depth characterization of biotherapeutic on an intact in your native level with a vastly simplified and time saving workflow as an update in September we presented with bio technique at the cast mass spec conference to demonstrate this workflow solution. This need for rapid high resolution identification and speciation of intact protean forms.

It was also highlighted by boring your ingelheim at the subsequent Cassie Department Conference, where they spoke to the rapid characterization of a bike specific antibody using our ZIP chip device and noted the quality of the separations and ease of setup. We are encouraged by this work in our demonstrations to the community.

While we were largely focused on bioanalytics as the primary application for desktops. There is a breath of opportunity for products and technologies beyond bioanalytics, including proteomics and metabolomics. Just this week at a S. M. S. There were a number of presentations on the application of our products and technologies present.

Patients were from our own scientists as well as researchers from Amgen Lincoln Pharmaceuticals, Dana Farber Cancer Institute three these presentations for in the area. So proteomics <unk>.

First we presented clinical metabolomics studies that compared our ZIP chip hardware and associated 90 wake devices automated the tablet identification algorithms to legacy technology. The ZIP chip approached demonstrated tremendous speed advantages with much higher rate to metabolite ideas and few false stipes.

And as we have shared we're developing new microfluidic chips for a platform for proteomics applications to presentations I'd pay S. M. S highlighted the increase sensitivity and speed of these prototype chips our own scientists presented a poster that demonstrated the greater than 10 fold improvement sensitivity for proteomics applications when integrating solid base.

[noise] extraction or S. P onto the chip integrated S. P E allows us to capture and measure low abundance approaches site.

Scientists at the Dana Farber Cancer Institute evaluated the use of prototype chips reform proteomics analysis on <unk> enzymes compared with traditional chromatography method.

Found significant time savings when using prototype chips 20 minutes versus 90 minutes with traditional chromatography method. This type of time savings can be especially important when working with large sample set.

These presentations highlight the breath of our technology platform and our commitment to increase our platforms capabilities to broaden the areas of use for our customers and continue to open up our addressable markets.

Overall I'm encouraged by her growing pipeline customers and the enthusiasm we're seeing across our end markets for nine O eight technologies with that I will now turn the call over to Joe for more details on our finances.

Thanks, Kevin revenue for the third quarter, 20th 21 was 12.5 million compared to $8.3 million in the second quarter and 6 million in the prior year period.

<unk> and service revenue for the third quarter, 2021 was 12.3 million compared to $5.8 million and the prior year period, representing grace of 111%.

The increase was primarily driven by our handheld devices, including initial shipments to the U S Army under the multi your purchase order.

Desktop revenue from a rebel and zipped your products through 70% in the third quarter of 2021 compared to the prior year period and more than 50% of the device placements or with new customers.

Recurring revenues, consisting of consumables accessories, and surf service revenue grew 134% in the third quarter of 2021 compared to the prior year period.

Service revenue from our extended warranty and service plans from our installed base and increase some consumable revenue related to rebel pits, an initial sales with the arrow module Ah new accessory for a handheld where key growth drivers in the third quarter of 2021.

Licensing contract revenue for the third quarter 2021 was approximately 0.3 million realm.

Relatively flat with the prior year period.

We do not expect licensing contract for them is to be a significant contributor arrived and you want to go forward basis.

Our installed base grew to 1714 units with 184 devices shook during the third quarter we.

We shipped 164 handheld devices and 20th desktop devices within the quarter.

Gross profit was 6.8 million for the third quarter of 2021 compared to 3.8 million for the prior year period <unk>.

The increase gross profit was driven primarily due to the higher M X nine O eight sales volume, which leveraged our fixed costs related to our manufacturing facility and to a lesser extent or desktop devices.

Setting this increase were investments in operation some service personnel.

Gross margin was 54% for the third quarter 2021, I was compared to 63% for the prior year period.

Total operating expenses for the third quarter of 2021 or $12.1 million compared to $5.1 million and the prior year period.

The increase was driven by headcount expansion of crossword business, primarily focused on a commercial organisation, resulting in $4 million of the increase.

The increase was also related to marketing activities and travel with stroke 0.8 million of the increase as well as increased expenses related to operating as a public company.

Net loss for the third quarter of 2021 was 5.2 billion compared to $1.7 million in the prior year period.

We ended the third quarter of 2021 with approximately $139 million in cash and cash equivalents.

In addition, we got 15 million of debt outstanding.

Turning to our outlook for 2021, we expect revenue to be in the range of $41 million to $43 million representing growth of 56% at the midpoint over the prior year period.

This compares to our previous expected revenue range of 42 43 million.

Regarding supply chain market dynamics, we have to take a proactive stance and increased our inventory levels as quoted lead times with grown.

Over the course of the third quarter. This environment has worsened and we continue to stay close to the situation and its potential risks importantly, we design and build our products in house and are able to qualify alternative vendors, providing us a good degree of flexibility and protection.

At this point I would like to turn the call back to Kevin for closing comments.

Thanks, Joe it's been an exciting year for us thus far at 90 wait devices as we continue to expand our installed base deepen our customer relationships and broaden the capabilities of our platform to deliver more value to our customers I'm encouraged by your progress and growing enthusiasm, we're seeing across her and market. We look forward to update you on our progress.

With that we will now open it up for questions.

[noise], ladies and gentlemen at this time, if you would like to ask a question. Please press star one on your telephone keypad. If he would like can we try your question press the pound. He our first question comes from the line of <unk> S V be leary.

Caroline <unk>.

Yeah, Hi, Kevin Uhm, Thanks for answering the question first one it it really good to see the momentum and M X nine O eight but you know trying to understand in terms of you know broaden awareness of the platform. It continues to grow but at what point do you think will get.

A recognition across the board, but most current system security departments and state and agencies ought to purchase and M X nine Wade sort of give us a sense of that sort of inflection point and if you could also clarified the instrumentation rebel verses M. S. Nine O eight.

Placements forces <unk>. Thank you.

Sure, Yeah, Hi, P. Uhm happy to Yeah, I think I think we're we're happy with what we have been cheated new year to date and and it is about getting momentum with those those placements and there was there was an education affect their legs, some of which nine wait can do and as you know we've been doing it now cause our sales and marketing team.

To address Watson, particularly on the on the marketing front.

Really good amplifying our ability to get the message is out there, but but importantly, what we're also seeing more and more customers speaking about the technology and the successes we shared some in the past with the various entities in this call. We sure do Ohio Attorney General talking about our technology and the plethora of.

Talks that we're having across both the correct <unk> of course in the the desktop life Sciences right now so you know it doesn't.

She needs to build and and we were happy with the progress and and it's it's it's a lot of work, but I think we're showing the value that for Britain.

Couldn't even maybe on the on the placement sides here of 184 devices shipped within the quarter breaks down we had 164 M X nine wage and then the 20 desktop that was 13 rebel and seven.

[noise], Okay got it that's super helpful and in terms of you know a commercial priorities, obviously hiring first ramped up you know.

Not an easy environment to you know hire folks right now just if you could provide US you know what you are seeing in terms of early traction. It seems that you know <unk> a rebel just you know coming off of an early you know early.

So I just wanted to get a sense of you know how <unk>.

You know the addition of new sales reps and the commercial team when he could receive more meaningful traction on the rebel side with with the commercial team in place now and as well as expanding.

[noise] <unk> you have invested as you highlighted pretty heavily in the commercial channels no level being a key focus here is expand our our reach with folks who feed on the street.

We have seen attractive grove within our desktops rebel.

Leading the way you know the crew, 76% you know your debate compared to prior year.

Desktop raceman screw greater than 40% you know within the quarter, 60% year to date as we're starting to see some of that traction and we think there's a momentum across our channels, we expect to accelerate placements in queue for the year and farm a cushy in budget cycles.

Pleased with the progress and expect it to continue to pick up based upon customers, both new and existing adopting the technology.

Okay, Great and then the last one if I could squeezing Kevin in terms of.

<unk> could you talk about the use case, a rebel and how rebel is positioning any of the P. D laughs and how would that work flow is in the P. D. Long just trying to understand how this instrument fit than worst as a more comprehensive than you know somewhat closer to a traditional benchtop.

Second the same setting asking does because we recently saw one of your larger pier highlighted partnership to use a much larger L. D. In mass spec in a P. D laughs with the Amber Bioreactors for cross development. So how is that different than what rebel is doing in those but thank you.

Yeah sure absolutely I mean first get any competition in this area, we're talking about something new like this it's it takes a lot of work to educate a a prospective customer on the bed linens and having multiple companies out there doing so good it certainly makes their jobs easier, but put second we're really focused on delivering customers a simple to use desktop device that could you.

Plugged into a standard wall outlet network Jackson, that's it could be on a movable cartoon did this if they like and it really doesn't take special infrastructure requirements. There's no power compressed gas plumbing large bottles of solving waste no, replacing elsie's Collins with a <unk> even require a computer just as a touch screen to operate so rebel.

Built from the ground up to put bioprocess answers in the hands of a file a process development group, but as you know we're using this really differentiated the innovative approach with electronically driven separations with our microplate check and then the Microscale Masback and importantly, adding on the computer algorithms to achieve it. So so we really design.

It to sit next to other routine analyses of new Slobs and that's more like next to the symbol cell vitality or or tighter boxes, which the menu menu and giving P. D lamps and certainly yes, there's been many efforts current in the in the past and <unk>.

Four years, maybe even decades to simplify a traditional calcium that's product offering but they are still largely sitting in core labs and most recent offerings more targeting the late stage development animal the collapse, but those are analytical ads that are still pending by people that are that are trained to cope with that type of instrument the maintenance sample coming up the crap.

And to look at the data right look at those squiggly lines and make interpretations. Another such product was announced this week I'm back in late stage development and I'm sure. They're all great products, but if you really get into the detail is it very very different level of operational complexity that that's part of it. So if you. If you look at our price point to my size, even though.

The difference in the time I need amount of sample that that's required for a rebel and and just the overall into and simplicity me really think it's it's a pretty compelling offering there.

That's great Super helpful. Thank you.

Your next question comes from Max Messy, Kingklip Cohen company Caroline's Okay.

Hi, Thanks for taking my questions.

So the applied to four guide you came in above expectations, great to see can you can you just give us a sense for where the upsides coming from is it the more on the instrument placement side, you know orange it arising consumables utilization and then just uhm would love to know if the applied to four guide.

Has any assumptions or material assumptions related to placements to the army.

[noise] no next.

Two months to go can we maintain arrange our guns illegal some upside beyond the midpoint.

We just know devices or or subtle can recurrent with your and we feel that that revenue growth of 56% of the mid point of our guidance as attractive and requires that were successful related to our initiatives as far as you know COVID-19 and expectations around that you know.

We've been pretty resilient, we've seen we're second order effects uhm, so really focused on delivering on the opportunity and you don't see any specific impacts, but we have maintained 2 million dollar range to accommodate to potentially a piece of that.

Great Great and then your grades to the friend decor at the border and in the comment about serving as a portable crime lab at the state and city level, Yeah, how should we think about the opportunity for forensics related placements and how quickly you know adoption could Ram just given you know the word.

It is mouse in network effect marketing, you're benefiting from an I'm recent updates.

[noise], Yeah, I mean, we.

We are excited about those placements for excited when when customers are making such such comments on and off the publicly that that under their own volition that are just out there.

Talking to the communities around the the benefits provided through.

Through the adoption you're right. It is it is a word of mouth getting momentum. It is still a a cycle that you have to work with customers make sure that their budget. When he was a piece of capital equipment. So very much encouraged by uhm, but it's.

Step by step process.

Add to that vaccine touching on the U S Army, which you were asking about.

Yeah, which competitive dynamics and customer sensitivities, we haven't disclosed exactly how much revenue here in 2021, but we just had our first shipments here in Q3 and anticipate additional product shipments in the fourth quarter.

The U S Army.

At this time, we do expect the majority of the devices to be shipped over the course of 2022 related to that.

Most of your <unk> your purchase.

Great maybe if I could sneak in one more for for Joe <unk>, making some investments in manufacturing and service personnel to position yourself for expanding gross margins imagine some spending uhm to just position yourself to your address any supply chain or manufacturing headwinds that exist in the market.

Just curious you know if if you look at these investments alongside arising consumables, yeah, how does that impact your your outlook in terms of you know when you <unk> jumpstart that next stage of of gross margin expansion.

[noise] no. There are some of those market factors that you're just highlighted and we're proactively investing and service and supply chain challenges, you'll have tempered expectations on gross margins, but we'll look no moving towards price increase to help mitigate as we turned the corner into 2022, but.

We're in the mid fifties from a gross margin today and expect that to kind of be maintained on a go forward basis from year to date <unk>.

Political service, Chris margins for 53% to put you 4% within the quarter. So we are looking to balance make the right investments. So that we can get ahead of any supply chain concern and hopefully mitigate material price increases as we move into the new year.

Great. Thanks for taking the questions and nice update.

That's nice.

And your next question comes from Dan Aragats, with Uhm Stifel airline sofa.

I was wondering guys. Thank you Kevin on the 50 per cent of orders that went to new customers, how does that break down broadly in terms of.

Cell and gene therapy makers versus more traditional mab focused companies and then on that split or you're starting to see a difference in terms of the the revenue generation.

That comes out of those too tight.

Types of projects I noticed thought at one point was it cell and gene workflow complexity can kind of drive a higher level of pull through from that piece I'm. Just curious whether you still feel like that.

<unk> that's in play here.

Yeah. Thanks for 10 that that's a good question, Yeah, I mean with our places over the quota and then a year we have been to of course placements into the cell and gene, but also a lot in the end of the protein therapies space. So yeah. I think we remain excited about both in terms of being able to dissect and which one is is crazy.

<unk> pulled you up this time I think it's really an early evenings situation that we have because we're really working with customers to get into this initial workflows prove out the the value of the technology and the need for frequent measurement of it and we're seeing that that need on on both more standard ma'am therapeutics, but.

Gene therapy area as you know we had some complications can talk to about last quarter uhm can be enough in that area. But then also this <unk> this quarter as soon as you mentioned in the script and it looks like Alexion, let me paint showcasing how they were mitigating me last name Miss incorporation by my more frequent measurements and that.

It was a a traditional map. So we received a value added to both and I need to really needs to tell to confirm which which segment through some segment is driving the highest kitchen.

Yeah, Okay that makes sense.

And then maybe just to your point on the design of the rebel being something that can kind of sit next to the bioreactor on its own when it comes to taking the next step in making this an online inline capable <unk>.

Device in order to push it to G. M P production.

I'm just curious how critical it is to be working with the Bioreactor company ahead of time on direct integration.

I mean does that a process that need some collaborative R&D work along the way or do you think you can sort of do you, saying present, a product and have it be a line that optimize fairly quickly once it's done without the tank maker headache too much input there.

Yeah, Yeah. That's that's a good question I think it is more of the latter certainly we're we're friendly with groups like say, 20th we announced or any software and data integration with them, but in a in a lotta ways. He's a he's a pretty standardized particularly as you think about the single reactors that are are very prevalent across seas across.

It's out in the mountains, where there's a stand alone reactor that's in those rows and rows of <unk> you have a amber's. Another integrated are are important but yeah. I don't think there's too much secret sauce or a requirement to be too tightly connected the uhm, but yeah.

For that one thing I'd also point out that that sometimes gets overlooked with our technology set the customer uses microfluidics compared to traditional L. C. M. S approaches we use a very might need amount of time for you to talk to them about 100 ex left sample, which is important as you think about the future is important that you would think about online and increasing the sampling Creek.

But can you not consuming all the precious sample that's been created.

Okay, sorry, just stick a third in about one last quick one do you think of 2022, we start to see evidence of progressing towards that that next gen device.

We're certainly working on it we're certainly as we said in the past it was probably two or three your <unk> before we have that we are looking to see if there are ways to pull that name or has the interim solutions on it but I think there's a lotta run right with our hotline device, yes. It requires a manual type heading steps.

He placed into a device, but I think there's a lot of runway a opportunity to do that.

Okay I appreciate that thank you <unk>.

Once again, if you would like to ask a question. Please transpire one on your telephone keypad.

Alright at this time there are no further questions <unk> I'll have to call back to Kevin.

Yep. Thank you all thank you all for your time this morning and have a great day.

Hi, Thank you, ladies and gentleman and that concludes today's conference. Thank you all for joining he may now disconnect.

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