Q3 2021 Akerna Corp Earnings Call

[music].

Good morning, and welcome to our current its third quarter 2021 earnings conference call.

Today's call is being recorded.

At this time I would like to turn the conference over to ever Companion Investor Relations for Carnegie. Please proceed. Thank you and welcome to today's third quarter ended September 32021 conference call on the call today are Jessica Billingsley, CEO and chairman of the Corona and John Fowle CFO.

Uh huh.

Before management begins with formal remarks, I'd like to remind everyone that during this conference call certain statements will be made that are forward looking statements within the meaning of the safe Harbor provisions of the United States Private Securities Litigation Reform Act of 1995.

Words, such as estimates projected expect anticipate forecast plan intend believes seeks may will should future propose and variations of these words or similar expert expressions or versions of such words or expressions.

<unk> are intended to identify forward looking statements.

These statements include but are not limited to statements regarding the future growth and prospects for Corona and statements regarding expected future revenue recognition.

These forward looking statements are not guarantees of future performance conditions or results and involve several known and unknown risks uncertainties assumptions and other important factors, which could cause actual results or outcomes to differ materially from those discussed including risks related to changes in the cannabis market.

Risks related to the impact of COVID-19 pandemic.

These risk factors are more fully described in our current filings with the Securities and Exchange Commission.

We're looking statements speak only as of the date they are made.

Our Corona undertakes no obligation to update or revise any forward looking statements, whether as a result of new information future events or otherwise except as required by law.

Now I would like to turn the call over to a corner CEO Jessica Billingsley.

Yeah.

Good morning, everyone. Thank you for joining us today.

Our third quarter results continued their momentum for 2020 one.

Software revenue growth of 37% year over year, our business as a whole grew 38% year over year, and 5% sequentially with a mix of both organic and inorganic software revenue.

Our total SaaS air or is currently $16 5 million a 25% increase over the same period last year.

In addition to top line growth our focus on cost containment and accretive acquisitions continues to deliver results with adjusted EBITDA, improving 49% year over year and 6% sequentially.

Looking ahead to the growth drivers of our business. There are a series of opportunities ahead for our current and new markets and product line expansion to new regulations, and ultimately to legalization at the federal level.

On today's call and in light of the strategic acquisitions. We have made this year I'd like to spend some time discussing our business strategy and the product portfolio and ecosystem, we are creating.

At the heart of our strategy is our ecosystem, which incorporates both our compliance engine as well as our open API infrastructure.

Which enables the seamless exchange of information between application.

And our view, having a robust compliance engine with the greatest breadth and depth of capabilities is crucial to being an enterprise software provider in the cannabis industry as regulatory requirements are a foundational part of virtually every operational process.

Of course, having a leading compliance engine is only one piece and the overall solution as both user interface applications like point of sale cultivation and manufacturing with reporting applications like S. E T. Microsoft 365, and net suite, which need to integrate directly across the software stack.

To pass information back and forth.

This is where the importance of our ecosystem and our over 80 integrations comes into play.

Through our Standalone gateway with which both our applications and those of our ecosystem partners integrate we have significantly reduced the complexity of maintaining compliance within the fragmented ever changing market framework.

Given this architectural approach and our longstanding presence in the market. The net result is the ability for us to build a robust software portfolio with the most comprehensive compliance and regulatory capabilities in the industry.

Able to serve both the business and compliance requirements.

The entire candidates supply chain and more medical and recreational markets in North America and beyond than anyone else.

To help illustrate how the platform works together.

Let's take an example of a vertically integrated and myself, who owns cultivation manufacturing and retail locations at.

At each facility, which is a distinct step in their supply chain process.

There are separate workflows and associated software applications with which employs regularly interact.

This is often where challenges are introduced namely how to capture the data from those separate processes and leverage it across the organization for compliance financial and data driven analytic purposes.

Msos often have three choices to solve this problem.

First they can develop their own applications and workflows, which often leads to manual intensive processes like the use of spreadsheets lacks sophistication and features and introduces significant liability risk by taking on the responsibility for compliance changes and updates.

It is in this group, where the majority of the industry sits today essentially creating good enough solution to keep the organization running while management attention is focused on building and growing the business footprint.

The second solution is to use a competing product, which generally comes with prebuilt applications for generic workflows and limited integration with applications and data beyond the core environment.

Well, sometimes easier to implement the developing from scratch. These products often use a one size fits all approach there are limited and the ability to upgrade with new features and do not integrate with resource planning applications like S E T and Microsoft 365.

In addition, as episodes grow and look to penetrate new states. If those products do not yet serve the compliance requirements. If those regions. Msos are then required to deploy separate systems, thereby increasing the complexity of the overall environment.

The third option is a corner, which offers episodes a broad ecosystem of integrations to leverage the best in class applications of their choosing for each of their facilities.

While at the same time offering the ability to integrate data captured across the organization and leverage decades of best practices and supply chain and manufacturing through industry leading applications.

In addition by tightly integrating our retail point of sale in e-commerce applications like MJ retail and our newly introduced to kind of connect we are able to provide episodes with both the necessary consumer data to make effective business decisions.

And the ability to seamlessly interact with consumers.

With the potential to quickly enable payments when legislation is passed.

This is why we believe the infrastructure improvements we've made and the acquisitions. We've closed in the last two years positioned to Kona for success delivering compliant access to the necessary comprehensive set of capabilities has been a focus of ours as we strengthen our channel connections with existing enterprise financial and tax planning.

Providers and firmly solidify our strategic moat as the only true enterprise software solution and scaled technology ecosystem for the cannabis industry.

This started with our own integration with S E T Netsuite and Sage and continued with our acquisition of Viridian earlier. This year as we took the strategic steps to broaden the scope of our offering to cater to the growing needs of our clients with the recent addition of 365 candidates. We further extended these.

Capabilities to the Microsoft product suite.

From our perspective this was of particular importance to the cannabis industry as the Microsoft dynamics 365, offering has been gaining wide acceptance with small to mid sized organizations, which is well suited for the scale of many of the msos in existence today.

As these companies look to take the next step in their I T evolution and move beyond spreadsheets and the office 365 product suite, including word and excel to more robust enterprise software solutions, Microsoft becomes a natural choice.

With our integrations now covering access to a majority of the mainstream Midmarket financial and tax planning market. We believe this is a crucial competitive advantage rigor.

Regardless of the cannabis business is preference for a particular accounting and tax suite or other traditional ERP add ons, such as HR and payroll we have the widest variety of solutions to meet their needs.

As we discussed on prior calls over the past few years, there has been a substantial positive change in the political and social climate surrounding the cannabis industry.

Which has seen continued growth in revenue new markets and consumers.

As new markets are added and the possibility of U S. Federal reform advances cannabis operators are looking to expand their operations, both vertically and horizontally like opening locations in new states.

As these businesses grow and the complexity of their operations expands the increasingly require comprehensive enterprise software systems that can scale with them from start up to enterprise, while always meet heating multi state compliance.

As our clients continue to scale their operations and the industry makes a natural progression to maturity.

We believe the leadership position, we've created will allow us to capitalize on the multitude of growth vectors ahead.

To illustrate this point well over 40% of public cannabis companies. Our current our current our clients. The vast majority are still in the early stages of rolling out our ecosystem to.

To help demonstrate the opportunity this represents I'd like to take a moment to highlight a few examples of how our client operations are growing ever more complex through consolidation.

In the first example.

Stalwart in the U S cannabis industry recently acquired a smaller operator in the second and third largest markets in the U S cream.

Creating an organization with a combined 60, dispensaries and 11 cultivation and production facilities across eight states and the operational platform for further expansion into new states.

And a second example, two regional operators recently combined with an existing portfolio of 27 retail locations with an additional eight T plus in the pipeline over the next 18 months.

A third example, a recent consolidation within the Canadian market.

Loud one of our clients to double their footprint to 16 retail locations with an additional two in the pipeline before the end of the year.

And these particular examples the companies being acquired or not existing or current clients. Some of these acquired locations are now in our implementation pipeline and the rest become captive opportunities to increase our revenue as our clients work to roll out comprehensive software systems.

While far from a complete list. These examples are reflective of both the continuing growth and.

Consolidation activities of our clients and the opportunities they represent for our content.

With our focus on large multi state operators, who are naturally becoming the consolidators in the industry.

We believe we are well aligned with the highest growth segment of the market. In addition, how does the complexity of these organizations grows and the value of sophisticated data driven analytics continues to increase.

We believe there will be additional opportunity beyond the current level of software spend in the industry.

In closing we are very excited about the many value creation opportunities ahead, and the business, we have built to leverage the upcoming waves of growth.

With the leadership position, we have in our core business and capabilities we have integrated.

Advantage of new opportunities such as new state initiatives with both leaf data systems for governments and our enterprise software platform. We strongly believe we are quickly approaching an inflection point in growth.

Both in the cannabis industry and the current his role within it.

All our hard work and achievements to date have positioned us very well for this moment and we look forward to driving long term shareholder value as the path unfolds in front of us now.

Now I'll hand, the call over to John who will take us through the details of our financial results. John Please take it from here.

Thanks, Jessica this morning, I'll provide an overview of our financial results and key business metrics for the third quarter ended September 32021.

As a reminder, these results are discussed in further detail in our Form 10-Q, which will be filed shortly with the SEC financial.

<unk> reported today are preliminary and final financial results and other disclosures will be reported in our quarterly report on Form 10-Q and may differ materially from the results and disclosures today due to among other things. The completion of final review procedures. The occurrence of subsequent events or the discovery of additional informed.

Asian, we encourage you to review the filing in detail.

Q3 was another solid quarter for our current total revenue was $5 1 million a record for our Corona up 38% year over year growth in the quarter was a result of increased demand from new and existing clients combined with accelerating revenue growth and new product lines, such as data and partnerships.

Additionally, Q3 included 900000 of revenue from the acquisition of Iridium Sciences completed in April of this year.

Viridian Sciences, along with 365 candidates, which we completed October 1st were primarily acquired to accelerate our extension into the enterprise market a rapidly growing segment within the cannabis industry as Jessica highlighted earlier.

This past quarter, we continued to deliver on our core objectives of investing in innovation and revenue growth opportunities, including key investments in our compliance engine, which Jessica mentioned is at the heart of our platform.

New development on our new retail Pos solution and exciting development initiatives in our consumer facing technologies, including our current connect these development initiatives are critical as they align a current or closer to the volume growth in the industry.

We continue to experience improvements in customer retention and growing volume through our platform.

<unk> has improved 33% compared to prior year, while consolidation continues with many of our larger clients significantly increasing their footprints are average <unk> deal size has also increased by 7% year over year BTB transactions tracked in our system increased by 29% year over year.

Transaction volume was up 28% year over year retail orders were up 28% year over year and retail order spend was up 26% against the same period last year total platform users were up 22% year over year.

Now I'll review the financial results for the quarter as a reminder, unless otherwise noted all metrics are non-GAAP a reconciliation of GAAP to non-GAAP financials is included in our earnings release and posted on our Investor Relations website. We encourage you to review the reconciliations there as well as review our financial statements for the quarter ended.

September 30th 2021 contained in our Form 10-Q to be filed with the SEC shortly.

Total revenue grew 38% year over year, and 5% sequentially to $5 1 million through expanding software revenue and growth in our consulting business software revenue was up 37% year over year, and 2% sequentially to $4 6 million with a mix of both organic and inorganic software revenue including access.

<unk> revenue growth in data and partnership product lines.

Government revenue was flat year over year as these contracts are in run and maintain mode. We currently have approximately 900000 of our our backlog pending go lives.

Consulting revenue increased 66% year over year, and 34% sequentially to approximately 550000 important to note. The third quarter of 2020 was an unusually soft quarter for consulting a result of the global pandemic as such year over year comparisons may be skewed.

Progress on new state initiatives continues to be mixed some states have deferred the licensing process, while others have transitioned from application style to a lottery system of license awards.

We are the clear leader in this space and are positioned well to capitalize our states issue their licenses and there's some emerging states returned to more aggressive licensing programs.

Gross profit was up 61% year over year, and 6% sequentially to $3 2 million. This represented a gross profit margin of 62% compared to 54% in the prior year the improvement in both gross profit and gross profit margin was a result of expanding high margin software revenue, both organic and inorganic.

Our return of consulting revenue and improved efficiencies in our operating infrastructure, including improving network cost and labor efficiencies. We continue to focus on increasing our subscription gross margin over time through ongoing investments in automation.

Moving to operating expenses total operating expenses decreased 5% year over year, but increased 2% sequentially to $4 7 million.

The decrease year over year as a result of efficiencies realized from integrating acquired businesses demonstrating our ability to continue to drive leverage through our income statement. The net effect of increased revenue, while leveraging cost with an improvement in our adjusted EBITDA margin of 49 percentage points year over year and six percentage points sequentially.

These are sustainable changes that will drive our operating margins higher over time as high margin revenue continues to build.

Development expense decreased 10% year over year, but increased 4% sequentially to $1 4 million the decrease year over year as a result of integrating product and engineering teams from acquired assets centralizing development efforts simplifying the product roadmap and realizing cost synergies from third party providers such as hosting.

<unk> development expenses increased 4% sequentially as we continue to invest in our global cloud platform, including new products content and features to drive long term sales growth and cost efficiency.

Sales and marketing expense decreased 3% year over year, but increased 10% sequentially to $1 9 million the decrease year over year as a result of integrating sales and marketing functions from acquired businesses, our sales and marketing expense as a percentage of revenue improved 30% year over year, we continue to be pleased with our sales.

<unk> marketing efficiency as we continue to deliver new business growth with improving client acquisition costs.

The increase of 10% sequentially was consistent with our expectations and as announced on our prior earnings call. We increased our marketing spend this quarter to enhance our marketing messaging.

Brand alignment across our software portfolio and capitalize on our key development initiatives.

General and administrative expenses decreased 2% year over year, and 10% sequentially to $1 $5 million, mainly a result of timing and professional services such as legal and tax we expect G&A expenses to remain flat as we believe we have the right operating infrastructure to deliver scalable growth.

Adjusted EBITDA improved 49% year over year, and 6% sequentially to negative $1 5 million, we believe adjusted EBITDA when considered with the financial statements determined in accordance with GAAP is helpful to investors in understanding and comparing our performance.

Turning to our balance sheet and cash flow statement, our cash and cash equivalents were $9 6 million as of September 30th a decrease of $2 2 million from the prior quarter. This includes approximately $1 2 million in debt repayments and $1 8 million in proceeds from our ATM program sub.

Subsequent to the quarter end on October 5th we announced we entered into a securities purchase agreement for a $20 million convertible debt financing with existing investors, who held the company's then outstanding convertible notes net proceeds from that offering were approximately $14 6 million, which includes deductions for the original issue discount the payment of approximately.

$3 3 million of outstanding amounts on the prior notes and payment of expenses.

Our pro forma cash balance as of October 5th following the issuance of the notes and including the $4 5 million payment related to the closing of the Companys acquisition of 365 cannabis is approximately $20 million.

For the nine months ended September 30, 21, operating cash flow was negative $5 2 million, a 66% improvement year over year from negative $15 4 million for the same period prior year.

We continue to be prudent with our spending levels and we've maintained a healthy cash position to manage the business. We believe cash on hand, and access to the capital markets positions us well to execute on our strategy, which is a significant advantage over many of our competitors.

In closing, we have an exciting opportunity to continue building a high growth company. We are the leader in a large market that is still early to adopt compliance automation technology, we're seeing a demand transformation as individual businesses become vertically integrated vertically integrated businesses become multistate operators and multistate.

<unk> expand into new states.

These changes coupled with an ever changing regulatory environment make it even more difficult to maintain compliance that we believe requires automation.

At the same time, we're evolving as a company delivering an increased supply of products and capabilities such as our compliance engine or enterprise software offerings and the current of connect all created to increase the value. We are able to deliver to customers. We also continue to invest in initiatives that will allow us to win across all <unk>.

Segments of the market, including key investments that drive significant value under federal legalization. This positions us well to drive long term revenue growth.

Although we have been out this for over 10 years. It often feels like we're just getting started.

This concludes our prepared remarks, we are happy to take any questions. You may have please keep in mind that the forward looking statement disclaimer discussed at the beginning of this call applies equally to the Q&A session now lets turn the call over to the operator for questions operator.

Thank you at this time, we will conduct a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.

A confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the stock east once again Thats star one at this time, one moment, while we poll for our first question.

Our first question comes from Brian Pitz Linger with Alliance Global Partners. Please proceed.

Hi, Good morning, guys. Thanks for taking my questions.

Can you talk about the land and learning and can you talk about the landscape for consulting what utilization is of that group and how much if any it's weighing on the bottom line I guess, you mentioned lotteries of new states and delays in licensing so what does that mean for the consulting group.

Good morning, Brian Good question. So I think what's interesting about the consulting business is at historic Lumpiness and.

We've historically had million dollar quarters, and even more rarely millions dollar months it has.

And we expect that you know its been historically, we expect it to continue to be lumpy.

This shift in the award the awarding of licensing which is new this year.

Does limit our opportunity to consult with clients in advance of license Award.

No. It certainly does not impact our post license award consulting opportunity or of course, our software opportunity in those states.

We're the clear leader in this space and we're well positioned to capitalize this issue their licenses and there's some emerging states returned to more aggressive licensing programs, which we are seeing indications.

John do you want to comment on the on our gross profit as it relates to consulting.

Yeah, I mean interesting good morning, Brian or our gross profit margin on consulting is actually still quite very strong. It's it's much higher than I would say traditional.

Professional services and other business models, so consulting for us, although we talk about sort of the shift in.

Maybe [noise] excuse me the application style versus lottery system, it's still for US continues to be a very strong margin profile and I think we've maintained the REIT structure in the organization to capitalize on on movements within the states when they occur.

Great and then.

In the last three quarters bookings have declined sequentially, just just to pay a small amount.

But still nevertheless, and declining is that based on what you're talking about a lot of reason to delays.

Is the win rate change at all in any meaningful way just maybe talk about what else you might think that might reaccelerate given the landscape.

Overall, our software business remains healthy with two main growth drivers first from new states prospects, which contribute new greenfield opportunities for software revenue and secondly, as we mentioned are to some extent in our prepare.

Remarks from our existing clients, who as we articulate it continue to grow their respective footprints are in addition to signing on for multiple year contracts, there premium tools like MJ analytics.

So I think where we have overall been really steady and that bookings and of course, where we're looking to do what we can to increase that over a period of time acknowledging that some of that does depend on greenfield as well as expansion.

Okay, Great last question I have.

You guys have communicated in that 365 cannabis generates about $8 2 million of revenue trailing.

Trailing two trailing 12 months about 5.2 of that is recurring SaaS, how do we think about how much of that nonrecurring revenue.

<unk> continues online over the next 12 months I guess I'm trying to understand the contribution to your business post acquisition, which I assume is somewhere between five to $8 $2 million.

Can you help us.

Think about the contribution.

John you want to take that one.

I will take that one yeah, Brian so as we think the the software subscription and the professional services not just $3 65, but also our viridian business are very closely aligned.

As we get now and move more into enterprise software the implementation periods. The support needed to bring these new products life is much more significant and then certainly the support that.

That we provide once installed in after go live is pretty significant so you tend to see a fairly high correlation between the two it's it's often we just think about them separately because of the nature and timing of our operational deliverables, there, but I think it's fair to think that.

The two will sort of.

Mirror each other is as we grow that software business and we're very excited about some of those growth opportunities. We should see that professional services sort of align and not nature. You know obviously some will some will some will start to slow down, but as new customers come on it should it should replace that so I think sort of that call.

Contribution distribution should remain sort of similar.

Great. Thanks, so much guys.

Thank you our next.

Our next question comes from Max Michaels with Lake Street Capital markets. Please proceed.

Hey, guys. Good morning. My first question is about 365 candidates and I'm, just kind of want to jump back into like the contribution of it into.

Into Q4, so what do we expect that to have an impact on revenue as well as gross margin and opex.

Yeah.

So we we reported when we acquired a 365 you could think of it is about an $8 million of your business. So just do the math quick $2 million a quarter again as we've touched on a second ago, that's a function of both.

Of both.

Subscription and professional services you know their margin profile I think it's similar to ours, if not just a slight uptick in improvement we're going to continue to.

Watch that very closely as we move to integrate these two businesses and so we'll be mindful of sort of that margin profile.

I think the first year you know these are.

365 is a pretty sizable acquisition for us and.

There's a lot of infrastructure will be integrating so in the next year will be a really critical time for us to focus on driving some of those operating synergies through the P&L. So we can really realize the value of the acquisition really over the next nine to 12 months.

Alright. Thank you and then I know last quarter you guys had mentioned that you guys expected gross margin to be around the mid sixties range coming in at around 62%. This quarter should we expect this this kind of stabilization around the 61, 62% going forward into Q4 and in fiscal year 2022.

You know I I I I think last quarter, when we talked about what we expected in terms of a margin profile it was still.

It was still sort of under that assumption that consulting would be a little more robust than it's turned out to be you know like like we talked.

Before the shifts sort of in the consulting business.

It has been a small drag just just not having that top line revenue or our overall expense profile and sort of that infrastructure. We have in place to support the business is very well solidified so for US all of our new revenue is very high marginal profit you know in the 90% range. So focused on driving that top line revenue and we.

We could get back to the mid to upper 60 is certainly by middle of next year.

Alright. Thank you and then just my last one was just a clarification. So you guys said that your pro forma cash was $20 million at the end of the quarter is there do you guys have a pro forma debt number that I might have missed.

Yeah.

Oh, Yeah. That's a good question I guess I guess you could.

On a pro forma basis, probably think of it as 20 million I suppose.

Probably just $20 million I guess on the balance sheet.

Okay. Thank you I'll jump back in queue nice quarter guys.

Thanks, so much thank you.

Our next question comes from Scott Buck with H C. Wainwright. Please proceed.

Hi, good morning, guys.

I was wondering what made me a little bit of morning, a little bit of color on kind of where you stand on the integration of 365 cannabis and you know as you've started to go through that process anything that surprised you to the positive or the negative.

Sure thing, we're really happy with the integration progress with canvas $3 65.

What kind of candidate as well, while we're still early in the integration and it's only been a little over a month since he closed and the results. Thus far are aligned with our initial expectations, including a feedback that we gather via internal surveys and it did show that we're trending very positively.

Okay. Thank you Jessica that's helpful and then.

How should I think about the M&A pipeline going forward.

Having just completed that deal are you guys taking a.

A breather from M&A or are you continuing to remain active in the market.

Yeah.

We continue to have a strong pipeline of potential technology and in each of our three target categories, namely Tam expanding technology, a product tuck in and market share.

As a result, we can afford to be very opportunistic with anything we pursue and focus on opportunities where there is positive cashless synergy and that said you can you can expect to see us focus.

On a shifted our focus just a bit in the types of deals.

We really saw 365 candidates as the final piece of the puzzle in the financial and tax planning strategy, we were pursuing with our ecosystem and being able to offer more than and now to our clients I there pick up all of the mainstream tax and financial solutions, coupled with our.

Structure.

Okay, Great I appreciate the time.

Sure thing thank you.

We have a follow up question from Brian <unk> with Alliance Global Please proceed.

Yeah, Hi, great. Thanks.

Clearly lots of companies in consulting as well as software integration you talked about the challenges of labor right now so while you're being very careful about adding expenses is the labor shortage in any way create any challenges for a corner at this.

Time.

And that's it that's a great question and you know certainly I can share that we we certainly did experience.

Some some labor challenge, we experienced I would say very very early in the face of what is now being called the great resignation, so really very early.

And this year and mostly among some of our.

The layer of individual contributors I that I think maybe by virtue just of our our profile and the interest in the cannabis industry and some of the exciting new initiatives on which we've been working I think we were we were really on the early side of that so we've we've we're largely on the other side of it today as.

We've got a few open positions, but but managed to actually really really competitive and I think desirable as an employer due to the opportunity and growth across our prospects that exist at both in Canada, but also in some of the really interesting tack. We're pursuing that is that's appealing and.

And so I would see today.

Still today, our largest challenge remains on the regulatory front.

But we are certainly seeing a increasing political tailwind and.

We remain as excited as ever about the potential for federal action and then I guess it would add secondarily and somewhat related is the overall maturity of the industry as we previously articulated in our prepared remarks consolidation in the industry is it's creating an inflection point for the adoption of our platform.

Great. Thanks, so much.

Thank you.

Ladies and gentlemen, we have reached the end of the question answer session I would like to turn the call back to Jessica Billingsley for closing remarks.

Thank you operator.

We are the technology ecosystem for cannabis serving operators governments and brands our ecosystem strategy and strategic investments are focused on locking up the tech spend of the enterprise cannabis businesses.

And solving with technology, the growing demand for increased supply chain transparency, among both consumers and governments we.

Thank you for your interest in a corner and we look forward to sharing our progress with you as we move forward.

Thank you. This concludes today's teleconference. You may disconnect. Your lines at this time and thank you for your participation and have a great day.