Q3 2022 Sigma Additive Solutions Inc Earnings Call
Good day and welcome to the Sigma Adam solution in the third quarter 'twenty two financial.
Conference call and webcast.
The conference is being recorded at this time I'd like to turn the conference over to Mr. Chris Tyson Executive Vice President of MZ North America. Please go ahead Sir.
Thank you and good morning, I'd like to thank you all for taking time to join US for Sigma additive solutions third quarter 2022 business update and results conference call. Your hosts today are Jacob Bridesburg, Chief Executive Officer, and Frank Orzechowski, The company's Chief Financial Officer.
Press release detailing these results crossed the wires. This morning at eight a M. Eastern today and is available on the company's website Sigma additives Dot com before we begin the formal presentation I'd like to remind everyone that statements made on the call and webcast, including those regarding future financial results and industry prospects are forward looking and maybe subject to a number of risks and uncertain.
That could cause actual results to differ materially from those described in the call. Please refer to the company's SEC filings for a list of associated risks and we would also refer you to the company's website for more supporting industry information at this time I would like to turn the call over to Sigma additives, Chief Executive Officer, Jacob Bridesburg, Jacob the floor is yours.
Thank you Chris.
I'd just like to say, everyone bear with me today I'm getting over a little bit of an illness. The beauty of having a couple of young kids so apologies about the.
The voice here a little bit this morning, but a good morning, and thank you for joining US today Q3, 2022 marks my second full quarter, serving as president and CEO at Sigma and I remain excited to work with this amazing team and to share with you. The progress we have made in transforming the business to a scalable software solution.
And quality standard pretty additive industry.
To help everyone get a clear understanding of the steps that we're taking and the opportunity that we have I will take a bit of alright, well talk a bit about the results and the company's strategic plan.
Frank review the financials, and then finish with the key performance indicators, we use to monitor the execution of our business plan.
On results.
I'm pleased to report that the business continues to move from the sale of a few expensive perpetual license hardware software systems each quarter to building software only solutions that augment and add to our subscription based recurring revenue stream.
There is still work to do to finish out these products over the upcoming quarters, but we believe this is setting the foundation to allow partners and Oems to leverage our background IP with our current and future software solution, putting us in a position to have print right three D installed thousands of production printers.
Some known in third quarter highlights and subsequent events the backlog in subscription revenue tail is continuing to grow which is great to say for two quarters in a row here.
We continue to add additional Oems and software partners with a growing pipeline of OEM software and hardware opportunities going forward.
The sales pipeline remains robust with increased interest in our new products. The deal sales cycle continues to shorten for new opportunities.
Now I'd like to take a second to elaborate on the on our business plan to contextualize progress. Our Kpis. We will review later and that will be reviewed.
And that will center around four core areas of focus for our business.
First product than personnel partnerships and strategic investment and M&A.
Historically segment generated revenue through perpetual and most recently in subscription based licensing of our print right three D technology to customers that seek to improve their manufacturing production processes.
And through ongoing annual software upgrades and maintenance fees. However, 2022 has been a year of significant change for our business from our symbolic name changed to the execution of a new approach to the market.
We have a mission to accelerate the adoption of additive manufacturing by setting the standard for quality and we have charted our path to deliver the first holistic digital quality experience for the additive industry with the following objectives.
Simplify the quality experience from up to 12 disparate software licenses and multiple manual spreadsheet to a single user experience that is holistic and integrated with production workflow.
Film strategic partnerships expand our partner ecosystem and best ensure the success of our existing customers as they move into production.
By offering products that are easy to easier to use and less expensive both for initial purchase and for expansion opportunity remove the need for hundreds of thousands of dollars in software licenses and two years and $2 million to qualify a safety critical component and finally.
Crafting a strategic corporate investment partner with clear product customer and financial synergies.
On our products.
Our holistic digital quality experience connect in process data upstream to the CAD Cam experience through the downstream inspection immaterial data experience.
This digital quality journey begins by creating a new qualification framework for improper stayed up there.
The path to qualified parts and continued production relies on more than just melt pool monitoring and.
And we are addressing that head on to simplify our customers' experience and create a single spot for all of their in process data analytics and reporting.
In the recent months, we have began to launch our new software only suite of solutions. In addition to the just announced beta release of our machine Health module feature process health module together with our melt pool analytics for the part will provide a holistic in process quality base for us to connect the broader digital quality ecosystem.
Our machine health product that was recently launched is based off machine log data files.
Where we convert disparate machine log files and live streaming API data from Oems.
Standards based format for monitoring analytics and reporting function.
Our process health product is for camera based image data beginning with layer wise camera and thermal camera modules for image based defect detection.
We'll offer machine learning data training set that are standards based definition or a defect library, while allowing for the use of third party machine learning and artificial intelligence approaches.
For our part health module. This is built off of our melt pool based part data. This is cigna's proven medical monitoring and analytics applied to any OEM data stigma retrofit or integrated hardware like there are no banter Firefly three D announcement.
A standards based comparison tool across varying sleep monitoring that fits into machine learning and artificial intelligence approaches for defect detection.
All of these solutions are being made as standalone module, but can be connected into a full suite, allowing for correlation of machine data camera data melt pool data or other third party applications to have a home for all things in process. This creates a single user experience to collect analyze and.
CT unprocessed quality agnostic of OEM and made it an open architecture framework for the industry at large.
The consolidation of all in process data into our print 93 D suite provides a connection point for our customers to think to the broader digital quality chain required for qualification and certification of parks.
This Foundation chart the path to begin to simplify the quality user experience from eight to 12 disparate software licenses and several manual spreadsheets to one user and user experience that is integrated into their production workflow.
To provide some context, we began offering our current provide three D integrated hardware and software solutions on a subscription basis in 2022.
Among other things at present, the change reduced the initial upfront costs to a new either from 100 from over $100000 to approximately three to $5000 per month.
The combination of subscription pricing and the new and upcoming software only products that can be embedded in the OEM and software partner offering are intended to make our technology more affordable to acquire easier.
Easier to bundle.
Distribute and support in an effort to become the industry standard.
Okay.
On personnel.
Have reduced overall head count as we align to our business plan. We are currently focused on continued retention of key employees. We have been blessed to have some of the pioneers of the additive quality.
On our team and continue to augment their skill set with strategic additions that align with our digital quality future.
I'd like to highlight a couple of recent strategic hires.
Hurley recently joined US as an application engineer to our customer success team supporting the implementation and scaling at our customer sites. He comes to us with a rich engineering and customer support background from Cyacq E. W. I N D M D.
In addition, we added the foreign curve as our G M of European operations.
One is an additive industry veteran who was the former founder and CEO of three year mine, a digital workflow company and he is here to help accelerate our digital quality assurance future deepening OEM and independent software vendor relationships.
On partnerships.
In order to expand the number of Oems distributing our technology, we launched a three tiered OEM program directed to do three things one for new Oems without their own quality assurance or monitoring solution to established Oems with a quality monitoring offering, but who have customers with multiple printers from multiple.
Oh, Yeah, and want a single third party quality and analytics solution with consistent quality metrics across printers processes materials and three Oems building open application programming interfaces or Apis to integrate components of Sigma proprietary technology with their current offerings.
We are now working with Oems on their next generation printers to offer a software only solution that will utilize the printers computing infrastructure and dramatically reduce the overall cost of this technology.
Enabling the opportunity to move towards a software only embedded solution on every printer sold by partner Oems.
As an example of progress towards what I just discussed I want to highlight our recent announcement on our work with Epsilon solutions.
That's the one that's one of the market share leaders for metal additive and we have collaborated to certify an integrated print right three D with their S y M dot quality API.
This means our products will be able to integrate that.
Any of their installed base with API capability and future sold printers.
All printers have machine sensors and machine logs that are machine health tool can provide value to <unk>.
Most printers Hema layer wise camera installed either at shipments or added in the field, enabling our coming process health module. Additionally, some printers have melt pool installed per month alone that are processed sound South Korea will be able to read and connect to our other modules. This expands our reach capabilities, while enabling S O M customer.
To have a central agnostic home or quality.
This relationship provides positive outcomes for both companies and it's something we plan to emulate throughout the industry.
Taking our OEM relationships up a level into agnostic hardware integration, we recently announced our work with no banter to pioneer the first fully integrated scan head with quality assurance.
Integrating melt pool hardware Intuit scan head means that any OEM that uses the vantiv Firefly scan heads.
Ready to connect with Sigma apart right three D platform. This removes a huge cost barrier for hardware additions and provide the ability to implement monitoring solution across machine sleep without retrofits, the optical chain optical trade.
Yeah.
Lastly, we recently announced our work with didn't write this Sunday.
Okay.
Dendrites additive developer kit users.
Users have a single user experience for Cam material and process development tool path creation, and the resulting in process quality data and analytics. This new solution Mark Sigma connection to further cover the quality value chain in additive manufacturing and simplify our customers' quality user experience.
This is Mary extremely well with our started prior connection.
Simulation.
Look forward to continued progress of this work.
And finally strategic M&A.
As part of our vision to build the future of connected digital quality, we have undertaken an initiative to attract a strategic corporate investment partner with clear product customer and financial synergies to Sigma.
This work is focused on identifying companies that connect to our long term quality vision.
This strategic investment initiatives is focused on synergies and potential product integration to accelerate market visibility and customer adoption.
We believe the industry is evolving application programming interfaces or Apis are opening up.
Some of our relationships with Oems have become public.
There's also a trend towards consolidation in additive manufacturing as companies aligned for profitability.
Sigma made demonstratable progress in 2022 connecting to other products in the a M digital quality stream.
And a connection to a strategic partner paired with near term execution can augment our ability to scale and support the market and create value.
Further alignment with our strategic partner allows for common growth vision and funding of the company to achieve its mission, but also provides an opportunity for other strategic relationships, including potential acquisitions that can further accelerate the execution of our digital quality vision.
Now I will have Frank review of the financials and I will close with details on the key Kpis that makeup our foundation and provide a basis that we will be judging ourselves by to get to our 2025 and beyond goals, they're truly take a seat as the standard for quality and additive manufacturing right.
Thank you Jacob.
Our detailed financial results are contained in our Form 10-Q filed with the FCC. This morning, and the press release, we issued contains key highlights of our financial results. So today I will provide a brief overview of our results for the third quarter of 2022.
As we noted in our last conference call. We are continuing to move away from selling expensive perpetual licenses for three D in which most of the cost comes from physical hardware to setting up for a future software only subscription model with a potential for much higher margins.
As part of the shift in our business, we have realigned our resources in support of this goal and in the third quarter. When you do start head count by a net of five employees.
With a further reduction of two employees in October our October fulltime or a full time head count now stands at 25.
Reduction of 10 employees from our peak of 35 back in April of this year.
Well, we will likely higher one to two more people to fill open positions in the near term, we expect our head count will be relatively stable for the next 12 months yourself.
Revenue for the third quarter of 2022 totaled $188000. This compares to revenues of $700000 for the third quarter of 2021 and as a result of fewer perpetual license sales of our print right three D platform as a result of our shift in business model.
However, our order backlog for the fourth quarter to date defined as firm orders received but not yet shipped totaled 334000 of both perpetual sales and subscription licenses. This represents an increase in our order backlog of 39% from the second quarter of this year.
Our gross profit for the third quarter of 2022 was 109000 or 58% of revenues as compared to 535000 or 76% of revenues for the same period last year.
As we have previously stated we expect continued pressure our margins in the near term. However, I will note that margins have improved from 23% in quarter, one and 18% in quarter two.
In addition, as you may have seen in our September announcement regarding the formalization of our act of dust real Industrial network. This marks a formalization of one of the tracks of our business.
As we are building out our current production scale track, we want to we wanted to increase to create a focused path for work with the R&D community to build the future of additive manufacturing quality.
By creating this network we are formalizing the way we approach the R&D world by granting easy at more inexpensive access to our technology for educational institutions and R&D labs around the world.
We wanted to get industry, leading quality tools in the hands of our next generation production leaders and helped propel advancement in AAM quality tools.
In this regard we are providing member discounts on our technology as well as other early access incentives.
To cultivate a community focused on additive manufacturing for production and instilling confidence in the quality of M printed parts.
The work, we have done to reduce hardware and manufacturing cost has enabled us to launch this program with discounted pricing.
58% margins may not be sustainable until we complete our transition we do expect to see continued improvement in the near term.
Total operating expenses for the third quarter of 2022 with $2 4 million as compared to 3 million for the third quarter of 2021.
This decrease of $634000 were 21% was largely due to option grants awarded to employees in the third quarter of 2021.
A decrease in Investor and public relations and advertising expenses and a decrease in non employees director directors' compensation.
Partially offsetting this reduction was a charge of $130000 taken during the quarter for severance and post employment benefits costs.
For the nine months ended September 30 of 2022, our operating expenses totaled $7 million, which are flat compared to the same period last year.
Given the head count reductions together with other operating expense reductions taken in the third quarter, we expect to realize approximately 10% to 15% in savings from our current expense run rate in the fourth quarter of this year.
Net loss applicable to common stockholders for the third quarter of 2022 was $2 3 million or 22 per share as compared to a net loss of $2 5 million or 24% share.
And the 24 cents per share in the third quarter of 2021.
Cash used in operating activities for the nine months ended September 30 of 2022 totaled $6 4 million compared to $4 8 million in the third quarter of last year.
This increase in cash usage of one 6 million is primarily a result of an increase from our net loss.
However, as a result of our decrease in head count and other operating expenses, we expect our cash usage to also declined by approximately 10% to 15% beginning in 2023.
Cash totaled $4 8 million at September 30th 'twenty, 'twenty, two as compared to $11 4 million at December 31, 2020, one our working capital totaled $5 5 million at September 32022, as compared to $11 7 million at December 31 2021.
At September 32022, we had stockholders equity of $6 8 million as compared to $12 9 million at December 31 2021.
And with that I will now turn the call back over to Jacob.
Thank you Frank.
Noted last quarter, we are tracking the following key performance indicators kpis to monitor the progress and execution on our new business plan.
One revenue two order backlog three pipeline or deal closure time and five partner expansion.
These are the Kpis, we see as critical to achieving our business plan over the next two years to be clear we are focused on moving away from only selling an individual printer solution to supporting the additive industry as a whole at scale.
For the Kpis revenue of 188000 in Q3 tracks with the shift to subscription pricing heading into the launch of our first stop for all new product in Q4 with our others targeted in the first half of 2023.
Our order backlog for the fourth quarter defined as firm orders received but not yet shipped totaled 334000 of both perpetual and subscription sales. This represents an increase in our order backlog of 39% from second quarter and continued progress in adding subscription.
Sales.
Pipeline remains strong with over 250 active qualified leads with aging and stagnant, we'd shown as re emerging with our new path to software only.
<unk> our average deal cycle closure time shows continued reduction at four four months.
And we've had partner additions that increased ahead of plan, bringing the total to six Oems in hardware partners No Vanda additive industries D. M. B, a comedy <unk> and that's why I'm solutions and for ISC software partners materialize Am F. G sentient science and most recently dead right.
We continue to focus on where the market is and where it is going to scale the adjustments to subscription offer options.
More aggressive market positioning and alignment with product Council members is in support of our transition to providing higher margin software only products.
As mentioned in our latest investor presentation.
Approximately 10% coverage of installed printer market in 2025 could yield an estimated $65 million in annual recurring revenue.
Well, even just a 3% coverage of installed market by 2025 could yield a $20 million estimated annual reoccurring revenue.
Open architecture scalable machine process in part health software modules will enable us to set the standard for quality and give us the ability to go after the full additive industry.
To bring back to or start of the call. We have a mission to accelerate the adoption of additive manufacturing by setting the standard for quality and we have charted our path to deliver the first holistic digital quality experience for the additive industry.
With the following objectives.
Five the quality experience from up to 12 disparate software licenses at multiple manual spreadsheet to a single user experience.
Building strategic partnerships, expanding our partner ecosystem and best ensuring the success of our current customers as they move into production.
Offering products that are easier to use less expensive both for initial and expansion opportunities and finally, attracting a strategic corporate investment partner with clear product customer and financial synergies.
We look forward to tracking our progress with you going forward as.
As we live our mission to be the quality standard for additive manufacturing. Thank you for your time today and I will now turn it over to the operator for Q&A.
Thank you well now begin the question and answer session. That's a good question you May Press Star then one of them is a touchtone phone.
Using a speakerphone please pick up your handset before pressing the keys.
Well, it's probably a question. Please press star then two.
This time, we'll pause momentarily to assemble the roster.
First question will be from Scott Buck H C. Wainwright. Please go ahead.
Hi, Good morning, guys. Thank you for taking my question.
The first one on the backlog Jacob how should we think about.
The cadence of the revenue delivery. There you know is that spread evenly over 12 months to over 24 months, what what's kind of the right way to think about that.
Yeah. So typically are our contract structures I'd say that most of the most common one is a three year subscription model that continues to reoccur after that but it's structured that way originally and its a monthly revenue recognition.
For our subscription based products.
Did you see that backlog kind of grow our we see that revenue being recognized more on a monthly type basis.
Scripture side of things.
Okay I understood that.
Helpful.
And then you guys have done a nice job of adding partners them over the last six months or so where is that inflection point, where we start to see that manifest itself in the revenue line.
Yeah, I think you know from a direct partner perspective, we've we've recently added some one of the larger space industry are companies in the recent past some other suppliers to the additive industry, but I think as we start to work directly with our prior customers in.
And current additions you know we will start to scale as we prove out that technology over kind of a 12 month ish period as it scales into their production infrastructure.
I think from an inflection point perspective really some of these are software only solutions that link to large OEM AP is are going to be very strong.
Path to market for us and so our software only product just started being launched are in the prior a month or so here are with our machine health product. You know that's something that can be pretty easily implemented into the install base of the industry as we work to partner with API implementations at Oems. Additionally.
A couple of more products are finalizing and coming to market are through estimated Q1 Q2 next year I think that really is a point, where we become a downloadable solution just from our webpage, which completely changes are our path to market there and it can be a something that drives the inflection point.
There for us and just ease of the sales process and implementation.
Throughout the marketplace.
Super That's really helpful. And then last one for me just curious if you've received any feedback yet on the beta release of the machine health module and maybe what the expected wider launch date for that is.
Yeah. So we actually got to sit down with a number of our customers a couple of weeks ago at the I S. T M. A consortium standards convention.
The reception has been really positive so far.
We're really looking at making this a really good tool for standardizing all the different data logged out there in our user base.
That's really kind of the focus in the next few months here with those those early product counsel beta tester groups is to ensure that they're reporting infrastructure and everything is set up for them to really scale that aggressively.
Software so our target right now is to kind of finish up that work in Q1 and have that really readily available to the market like I said, there's a downloadable solution. The late Q1 early Q2 timeframe.
Alright Super I. Appreciate your time this morning, guys. Thank you.
Thank you Scott appreciate it.
Thank you. Our next question will be from George Wrenching Lake Street Capital. Please go ahead.
Hey, gentlemen, first of all congrats on the Kpis progress.
<unk> maybe for you Jacob.
Well two things I wanted to ask that you know all these partnerships that you're announcing just curious you know are the partners also helping sell the product or is it just you guys, adding value by integrating more with these other applications.
Yeah, it's it's a little bit of both so they go to market is a little dependent on the partner specifically you know if you look at somebody like economy. Our OEM partner, we actually are going to be an option on their website. So as you're buying a machine you can include in our whole suite.
There within in their offerings.
And the API or certified access like our work with us alone.
We certainly will be something that is certified to work directly with their API will probably be the primary path to market them, there, but one that is well integrated and done.
Together with US 11 team. So it's it's a little bit dependent on kind of where that lives. If it lives in an integrated solution with.
Within OEM off of the shipment of their machine or if it's a more established group that has kind of their own offerings on their machine, but we're we're a certified quality tool for them okay.
Understood and then there was a comment and you go to the press release I found interesting you said your average deal cycle closure time that reduced to 4.4 months. It seems like everybody in the additive space is seeing lengthening sales cycles, just given the current environment. So can you just kind of touch on it.
It's just the values getting resonating better with clients or in a way you think youre seeing shorter.
You know deal cycle times versus kind of what the industry has seen right now.
Yeah no. Thank you for that question I think that's something we're very excited about and we were hoping to see as we we kind of launched our upcoming software products here.
Really I think we were on a similar sales cycle for capital equipment before as we were more of the hardware software retrofit world of that 12 to 18 months.
Today, with our software products kind of getting them to market in a more accessible price point as well as just an easier kind of download.
Capability versus a retrofit.
We're able to move a little bit faster than a typical capital sale market. Now so are new opportunities that are coming to light.
Our we're able to react quicker to them you know.
Instead of having a prolonged amount of meetings and budgetary sessions.
We're a little bit more of a subscription software today, a little easier to buy and that is really bringing down our sales cycle, which is something we want to see and we as we release our software only products. It was more just direct downloads them. That's what we're really targeting is getting that from months to weeks. If we can and we're certainly made a ton of progress in the last two quarters go on.
12 months to 18 months down to about $4 four months. So that would also even even a little bit better than I was expecting which is good. So I was happy to see that.
Congrats.
We'd be in Germany. This week Jacob.
And currently taking this call from a hotel room in Frankfurt right now so, yes, Marianne I can imagine that.
Yes, I'm going to go through this year, but a good luck over there.
Thank you very much I appreciate it.
Yeah.
Thank you and again if you have a question. Please press Star then one.
Our next question will be from Scott Bilodeau with Walrus partners. Please go ahead.
Oh, Hi, Jacob.
Congrats on moving things forward.
Couple of quick questions one.
You talk about what the mix right now and is that as we're gonna be a change.
From retrofit to new installs at this point, what would that mix look like and then the second question is you talk about that.
Obviously getting rid of 10 folks.
Over the last 10 months or so can you give a mix of how much of that well.
What's the what are the resources devoted to that to sales and partner support and where.
You know where.
Did you impact those resources during our during that then with the 10 people let go.
Okay, certainly so I'll start with the first question here, which was around the retrofit versus kind of new new installed or integrated installed.
Going forward. This is kind of a three part answer for me here.
Still today a lot of our work is a retrofit in nature as we get to our software solutions being more prolific.
The difference is most of the retrofits were doing today are transitioning to a subscription type model.
And pricing.
So that kind of triggers some different revenue profile here in the short term, but all of that is.
He is really gearing up for us closing out and finishing these software products over the upcoming next two quarters here.
So that we are in a position to.
Scale via more of just a download direct type software.
Versus any kind of retrofitting. The third piece of this is removing the need to retrofit and creating directly integrated solutions with Oems or hardware partner so.
And then no vanda relationship as an example is a really really exciting for us I'm, having a hardware integrated into a scan had me is a complete change for the industry that means zero retrofit to an optical train.
There and that really are it looks to go on kind of the next generation of printers for their Oems that they're working with so that's a similar integration type cycle as we have with our OEM partners that we're working direct with as well to integrate our hardware you know so that won't be immediate but.
That is something that you know, we're really excited about the future for because that you know put puts it as part of every single machine versus.
A custom solution that needs to be purchased or an optional solution that needs to be purchased which is really setting the industry up to get quality in the hands of every user. So that answer your question there and then I'll move on to the second one.
Yeah Yeah.
It helps quite a bit just oh.
Just trying to figure out you know on that from what what's the leg lift.
To get to.
They get it installed and start recognizing revenues. So you know certainly but the goal has been to significantly reduce that in any way possible and I just wanted to understand kind of how that was working.
Yeah. So yeah. We're still we're still you know revenue starts that when we integrate hardware.
Hardware software solution today via subscription, but in the very near future you know early next year.
Changing to a software download, which is a kind of that first inflection point and then the second inflection point is not far after that when we start.
Integration in Novato scan head integration that Nextgen printer lunches and you know.
Those will kind of be the next two major inflection items for us.
Great.
Or for your question on the the head count Hmm, we've been really as I said before blessed with just an incredible team that's been at the forefront of additive quality for 10 plus years here you know starting out of Los Alamos and then adding some really core talent over the past 10 years.
Our retention of those you know critical engineering infrastructures is certainly an important factor for our team and an important factor for us going forward. So the.
The expertise and the hardware of patents that we have as well as the software patents.
Critical core we wanted to keep a with the company that can help us progress our installation or integration.
With Oems and other hardware and software partners.
I think what has changed with the company as a lot of our path to market and how we are working with people.
Specifically kind of transitioning more to a customer support an acceleration. So we established a customer success group, we realize some people into that and have been adding some talent on really focusing on you know taking.
Taking the blue chip customers, we have been working with them towards scalability and implementation, especially as we have a more enterprise type software approach that makes it easier to do that.
So the talent restructuring has been a little bit in that area with.
Some reductions, but increases as well and in specific skill sets there.
Likewise on the commercial front.
I think that infrastructure has changed a little bit Stefan with somebody we brought on really to kind of lead and lead the charge on the OEM and software integration.
Integration front.
Can kind of look at it.
As more of a change in large direct need for sales into a smaller direct need.
First sales more customer support and more focus on OEM and software integration of the path forward. So.
That kind of aligns with our business strategy.
As we move forward here, so I think our we've been lucky to kind of be able to keep some of our core expertise and excited to do that and then add in and really help support them taking their.
Their talents and skills to our digital future here.
Right.
One quick.
One for me and then I'll Oh I'll. Let you go also you talked about you know a courtroom partnership.
Hum.
And talk about you know what what's the tight rope to work too.
Partnering but trying to stay.
You know the third party independent.
Guy who is.
Yeah.
Fighting quality or giving quality results. So you know, what's the tight rope there and has that altered.
Type of partner that you discuss pardon me you know.
Who you partner with.
Yeah. So is that are along the lines of who we integrate and partner with from our OEM and software perspective, more along the strategic investment side.
The question.
I guess more along the strategic investment side, you know because I mean, it's certainly you want to integrate with everyone. If you can put them in a strategic that you want to be careful that you know.
I guess I'm coming more from the strategic investment side.
Sure Okay, perfect Yeah, I think.
You're right on the OEM and software front, we've taken a very agnostic approach to the market. So working with Oem's, who already have monitoring is not a problem for US you know we want to be.
Tool that allows the facility to take any printer and have a.
Very singular same quality experience.
For that and I think that that really aligns well with the API strategy is from a lot of the major Oems.
We can still maintain that agnostic approach and that's well received.
No no vanda echoes that too you know their ignostic oem's do they're trying to provides gamers to the market more broadly that you know it really fits our strategy going well on the strategic investment side of things I.
I Echo exactly what you said right we have an agnostic approach.
The market so.
We really focused on a very discrete list of strategic investors.
Sure.
But you know we believe these strategic investors can help accelerate our business and align with our strategy going forward, while providing some cash for us to get there.
And this is really our preferred outlet to raise capital in the near term while further advancing our business.
And.
We moved forward with that pretty aggressively we've spoken to everybody on our list that kind of aligns with that strategic vision of being a really large agnostic quality player.
The market and we're going to we're going to keep moving that forward as aggressively as we can here in the near term so that we can.
Hopefully accelerate this business here.
And so I think we've been really thoughtful on that list of companies for the exact reasons that you said you know there are a lot of people who are very synergistic with a diagnostic approach versus.
And Oems specific investor and that's really kind of where we focused our time is on the agnostic side of things.
Yeah.
Great. Thanks.
Thank you. This concludes our question and answer session and all the time to call back over to Mr. Jacob Brownsberg for closing remarks. Please go ahead.
Yeah again, just thank you for everybody for joining us today and thank you for the questions and the engagement here at the end.
We remain extremely excited about our progress that we've made in the past two quarters and we'll continue to push to become the quality standard in additive manufacturing. Thanks for the time and have a wonderful day.
Okay.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.