Digital Ally Inc. Q1 2023 Earnings Call
Sir please hold for the next available operator.
Speaker 1: Please hold for the next available operator.
Speaker 2: Thank you for calling. This is a large conference, third doweling in four.
Speaker 3: They shall be allied.
Speaker 2: Digital ally
Speaker 2: Yes. Thank you, Matt. The spelling of your first and last name, please. Rachel, R-A-C-H-E-L, SNES, S-M-I-T-H.
Speaker 2: Thank you. May I have your company name, please?
Speaker 2: A-Yera, A-I-E-R-A.
The conference is now being recorded good acquisitions, you can see our revenues continue to stay.
Barely high compared to where we were a couple of years ago I know were down.
Relative to Q1 of 'twenty, two but still $7 7 million in total revenue for Q1 2023.
Gross profit.
20% gross profit, which is much better than when we looked at in Q4. So.
Changes, we talked about during our last call and have always had really been effective and we will continue to.
Make sure those are saying in effect and even more so enhancing our gross profit as we move along here throughout 2023.
You can see an operating loss of $6 2 million.
Relative.
I mean, an improvement over 2022, obviously, not where we want to be so we're going to continue to work on that and make changes as fast as we can.
Stock.
Scott <unk> stockholders equity side, we're sitting at $2 7 million shares outstanding we have.
200000 authorized so plenty of room, there and we.
As I mentioned, we did the reverse stock split back on February 6th. So we did 21 split as we talked about at the year end call.
Very few options and warrants are left out there right now and at quarter end, there was only 53000 options outstanding and.
39000 warrants so cleaning all those up and they will run their course here shortly I think theres only they'll all go away at the end of June or July on the warranty side.
We're excited to see our deferred revenue number as we continue to talk about it just continues to grow.
Q1, 2022 that number was sitting at $5 million and now we're looking at $9 million at Q1 2023. So.
Nearly doubled and we're excited to have that number out there.
It raises our floor every quarter for what our sales number will be so it's nice to have that number continue to grow with the subscriptions we've put in place.
And the majority of those are five year subscriptions. So I think our total subscriptions are well above 200000 subscriptions now and thats departments or sorry, 200 subscriptions. So that's probably about $2 50 at this point.
And those are department those arent units.
Those subscriptions can range from 1% to several hundred in car body worn cameras. So.
A lot of deferred revenue sitting out there, which is which is nice.
Seeing that.
On the segment side video solutions did about $1 nine revenue.
Medical billing revenue cycle management did one eight and the entertainment side did four and we're excited to see what happens in Q2 with all of those especially on the entertainment side as Stan mentioned.
Concert concluding this past weekend.
Which was a success I'll, let him go in more detail on that.
Depreciation and amortization for the quarter was.
About 543000 and so.
Those are noncash items that flow through the P&L. So those.
We can calculate EBITDA at another time.
One last comment I have and then I'll turn it back over to Stan I. Just wanted to subsequent event was the convertible note, we issued and filed an 8-K on so.
It was for $3 million of convertible note at $5 $50 of more detail. That's in the 10-Q as well as an 8-K filed at that issuance. So feel free to look into that and just wanted to make you guys. All aware of it as we have already.
I thought that Sam for tobacco.
Thanks, Brody and as I said, the 10-Q's filed and all the details out there.
But I think really what everyone's Mitch.
Curious about and a lot of the emails a lot of the calls I get is sort of the process that we've been going through since we made the announcement that.
That we were looking at spinning off the the entertainment Division and of course, the Entertainment Division will include the ticketing.
Company the production company in the aviation company and so that.
It's still in the process, obviously, we needed to have the year end and quarterly.
Financials done and with that being completed will do a little bit.
Fine tuning in regards to the 2021.
Onto numbers needed for ticket smarter since we acquired it in May.
September of 'twenty, one we need to make sure and just buttoned up the first eight months of 2021, when they were at a point, where we're in a position to go ahead and act upon.
Whatever makes the most sense for us a strategic move whether it would be a spin off or some other avenues that that may present themselves to us so excited to be where we're at now excited to hopefully be in a position.
The coming days.
Define what direction, we are going to go into but even more important.
From that perspective is the launch that customer entertainment has had.
Most recently, we did a concert here in our backyard here in Kansas City, and whether could not have been more of a.
The interest in regards to how this was going to play out because we seem to have.
Continued.
<unk> forecast of rain in the future rain rain, but it's going to rain on are our particular festival day.
As it got closer literally within.
Less than 48 hours it.
It had cleared up in the the you.
The weather forecast was very favorable for this festival matter of fact on the last day, there was almost 500 tickets so well over.
Almost 10% of the.
Those that attended.
<unk> showed up and bought out the door. So we did hit a number of close to 7500 tickets sold which was our think our bogie was somewhere between 6% and 8000. So we're on the high side of that very pleased with that the food and beverage.
As.
We tried to be able to be in a position to control a lot of that.
We believe the numbers are going to come in above what expectations were on that as well. So all in all just a very very successful event you can get on the website. It's country routes best Dot Com and just maybe see a little bit of.
How things.
It did play out whether it be on a on a Facebook or Instagram, just a tremendous amount of people who showed up.
The acts that we had.
From start to finish.
Fantastic a very good atmosphere for us the crowd and we look forward to doing a lot more of these and that's the whole thing I was trying to tell you and explain a little bit about our ticketing platform and the production platform is that we actually can sit there through fire on our own gas on our own fire.
By doing these type of festivals and concerts that helps the ticketing company and obviously with us having the production side of it.
The benefits from that as well so again as we mentioned last year took a smarter did.
$21 million, roughly and if we're sitting there and we're continuing to do.
Let's say half a dozen more concerts this year.
With those kind of revenues will place additional ticketing revenue that it will generate youre going to see.
That particular entity that when I say that meaning customer entertainment go from $21 million to possibly close to $30 million. So by just doing this ourselves so Barry.
We're excited very pleased in.
Impressed with.
And our partners on this deal the sponsors that we had were very recognizable names and we look for forward to being able to announce quite a few up and coming.
And hopefully maybe one of them is in your own backyard and you can actually come out and see it firsthand.
Exciting.
That side of things continue to.
See very very nice.
<unk> in regards to the video solutions Division.
Probably the biggest of all would be on the commercial side of our products.
All of Us know you'll be around over 17 years, we have a very good foothold when it comes to the law enforcement side of things and now we seem to be getting very well established and very well received.
Feedback in regards to the new Evo commercial.
System that we have out there for us in car system and also the uniqueness of being able to use even some of the body cameras in the commercial division as well. So we've got a lot of <unk> out there right now.
We look to.
Hopefully come to fruition fairly soon be able to announce those orders.
They are sizable.
So we'll continue to stay on top of them and obviously when when they come through will be making an announcement of those so let.
Let me go ahead and open up the floor for any questions that there may be out there.
Right.
Let's do Q&A.
Thank you ladies.
Ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press the star followed by one on your Touchtone phone. If you are using a speaker phone. Please lift the handset before pressing.
Sure.
Next question comes from Allen Klee Maxim Group. Please go ahead.
Yes.
On the.
Video solution offerings can you discuss a little how the business breaks out between product sales and recurring and how we could think about the potential growth in recurring revenues.
Yes so.
As far as the products go so most of our sales are now over the past two years I think at this point, maybe even two and after three.
The most.
Most of our products are now sold on a subscription of five years. So there'll be that will include your hardware and your software. So the contract is for both.
As far as collections go usually will frontloaded to get our hardware costs back in line.
At the point of the initial sale, but on the revenue recognition side that'll be tapered off over the five years of the contract evenly just due to Rev. Rec guidelines with the ASC 606 so.
There is.
As far as I guess, the cash influenced a little front heavy but not overly heavy I mean, it's really software over the five years is really what.
What breaks down does that answer your question, yes. This.
This is Sam I'll comment on a little bit to one of the things. The majority I mean, I would say well over maybe even 95% of all the reoccurring revenue is.
On the law enforcement side. So the commercial side is just really starting to be able to get it.
Foot in the door and mainly with the new Evo system.
That we're going to start.
Talent and quite a bit and with that I don't know if you happen balance beyond the call for as the year end, but we recently had a at some data that we received from one of our partners, which is a very large insurance company.
That is looking to assist us in the marketing of our products through all those.
Sure.
And they've seen a reduction and claims that almost paid for their whole all of their devices.
In one year and they still got four more years.
Even though the exact numbers of that what it came in at.
That's going to be very encouraging and then that's something that we'll be looking at doing on a reoccurring revenues with very solid credit worthy.
And users on the commercial side.
That's great. Thank you and then one other question on revenue cycle management.
If I could just understand a little as you integrate acquisitions.
How do you think about the <unk>.
Synergies.
Of owning <unk>.
People.
All of these companies.
In the end markets.
Hum.
Shell to.
Different types of software does that matter or do you try to.
Make it one type or maybe just explain that thank you.
No. The one thing Alan we're pretty blessed that we've got a very very strong engineering team and so when we do look at some of the.
The areas that we can get involved in especially when it comes to the video solutions.
We're very capable to adapt to the environment that that.
Sure.
Meets their needs I mean, if you look at it we're doing everything from law enforcement.
Two stadiums like Metlife Stadium too.
Royal Caribbean cruise lines were doing in taxi cabs ambulances buses.
Buses were doing over the road.
Vehicles. So the videos it truly is a video solutions division anymore to where it's not just so much of.
Our law enforcement or just even call. It in car video because there's so many other applications that we're getting involved in.
And then far as the other.
Avenues that we may look at for us in acquisitions <unk>.
And the companies that we would want to partner up with some of them, we look for where they may have some uniqueness.
In some areas that we may not and we know that may take us a year and a half or two years to get to that area. While we may have uniqueness that they do not and therefore as long as all parties are willing to work with each other things.
Things can happen really quickly and we've got a few of those that came together that we're pretty excited about.
That will continue to enhance the.
The revenue and bottom line for the video solutions side as well.
On the ticketing and production side.
Got it.
We're very very blessed because on the ticketing side, we went from.
A ticketing platform that was pretty much secondary and still does a lot of secondary business, but we now have over 50.
Entities that were the primary mean and it doesn't matter, if it's soccer baseball or a concert.
All of the ticket sales will be gone through ticket smarter.
Which makes it.
Very nice and because of that relationship that we have and with over 200 universities.
We also have a unique opportunities on being able to introduce the production company customer.
Accustomed for 14 much like we just did this weekend and put together events.
One of the things I might clarify on this.
<unk>, our number was 7500.
That may not seem like a big number when you are talking people are used to hearing.
Stuff like Arrowhead Stadium or T mobile arena stuff I get that production that we did was in a minor league ballpark.
Baseball field it actually inside of it.
So we're capable of going to a university a city.
We can do the whole build out and everything.
And because of the relationship that we've had and the credibility we have with our law enforcement background in security background, you have the city fathers and others that are willing to work with us and allow us to bring talent to their city draw business through their cities and so we believe that we'll be able to have numerous opportunities.
In regards to the.
Custom for 40 production side, which also enhances the ticketing side going forward.
I hope that helped a little.
Great. Thank you so much.
Thank you. The next question comes from Newman Lamb, kidney and TG capital. Please go ahead.
Hello, everyone.
To start with I hope I won't be cut from the call I want to express my satisfaction regarding the low and weak performance of the company as investors. We have put so much money to invest in digital ally, but apparently that money is being used for something else and not for the purpose of growing the company.
Overnights for example, we wake up and without any short notice you perform a reverse split.
Secondly, what is our position as investors been victims of this reverse split when it comes to custom entertainment and ticketing. We still haven't received any news about that thirdly, theres a poor communication between the company and investors you never in four months and you think and you never sign contracts you never Grill business.
I ask you. This question last year and the year before year end the conference and you promise that the company will perform better but yeah. We are almost always for tiara as investors and how do you do with spending money on buying a warehouse in.
Alright, Thanks are not even convinced with what you have been saying right now.
You are not selling one of your competitors are growing their business you are behind the desert, nothing but driving the company and investors portfolio down I'm, sorry, sorry, but this is still fishy.
Yes.
We.
I appreciate your comments and we also.
Recognize that.
Maybe youre not picking up on all the deals we just had a call a.
45 days ago, we anytime we have.
News that we do a press release anytime we have a filing this needed we've done our filings and we continue to put together the package that we believe is going to be very successful.
For the shareholders and while.
It's a tough market out there for a lot of companies, we feel like we're still doing the things that can.
Build a successful company and we will build a successful company with the different products that we're bringing it out for us the video solutions and definitely the ability to enhance the.
Ticketing platform with the custom <unk> hundred 40, so thank you for your comments.
Thank you. Your next question comes from Nick Chen John Barta at moments of investment Research. Please go ahead.
Hi, Thank you.
Two part question first of all is that we have almost eliminated the.
Success that you had on the reverse stock split from a stock price standpoint, it continues to deteriorate on a regular basis.
What's what's your next plans if the nasdaq's starts to consider de listing you at that 0.2nd question is.
With the cash burn that we currently see on the balance sheet and with the deferred revenues that you benefited from from the operating standpoint, which will reverse itself in the future basically based on my numbers will create a negative operating cash.
Cash flow margin.
What is the longevity of the company before you run completely out of cash.
Addressing them.
<unk> I mean, we've got a clean bill of health, there and I agree.
That's something we always want to continue.
Continue to have with Nasdaq's, we'll be keep listed and I think one of the things with the.
Ability to sit there and give a little more clarity in regards to some of the assets and the valuations that are there.
He will help enhance our stock price and also the much like I mentioned on earlier the commercial product I think is going to enhance what we're going to see.
In regards to video solutions I know that the.
The stuff we're doing in regards to the custom for 40 and the production side will enhance both the ticketing and the top and bottom line in regards to the custom entertainment. So all of those things that you've stated.
There are things that we've been.
Looking at continuing to address.
We're getting medical billing to the point, where they now are.
Turning to we're starting to reap some of the benefits that we were anticipating and hoping from them Brody can touch on that a little bit more than that that I could but.
All of those things that you are saying are very apparent to us and we're doing our best to address them.
As quick as we can but not being totally disruptive to where we're going to harm ourselves for the bigger picture.
I think.
And I feel very confident when the evaluations of the.
Mainly the three entities that are that are generating a tremendous amount of the revenue is recognized.
In the entertainment company as is.
A standalone entity.
It will greatly enhance.
The visibility of both the video solutions and the <unk>.
Things that they will be doing and have been doing too.
Get back to profitability and eclipse that crossover that youre talking about <unk>.
Deferred revenue and then the entertainment side.
The ticketing platform.
<unk> has been very profitable in the past, while they did try some different very expensive media.
Approaches that didn't quite work out and weather.
Whether or not we got sort of a bag of goods or what happened there we've been getting back to basics.
With that I think we will have.
Good success once we've.
Finally.
Moved on from from those moves that we've made eight let's call it year and a half ago. Those are those are behind us and that will straightened up but a lot of.
Very expensive costs that did not reap any benefits.
Thank you. Your next question comes from Bryan Lubitz at Equitable. Please go ahead.
Good morning, guys.
Good morning, Brian Warner Bra.
Alright. So first question I have for you and I think you had touched on a little bit earlier in regards to getting our financials done for 2021, and obviously in this Q as well do we have any timeline that we can point towards or that we're shooting for in terms of getting the actual split done with spinning off.
Tickets smarter.
So Brian .
The timing of the actual.
Split let's call it.
It is going to be a little bit in the FCC's hands.
We think that we're real close on getting the audits wrapped up so let's say that maybe and in just a couple of weeks. We have the the remainder of 2021 per ticket smarter completed at that point in time.
<unk> provided that we've got a real clear direction on the Avenue that we want to go down with some of the options that have been presented to us.
We will have all the.
Information necessary that the FCC is going to require from us and we can make that filing.
So we're hopeful that.
That is a that's a pivotal point, obviously to get that done and then once we have that all inserted into the proper documents were filed with the SEC. Obviously, they will probably come back with comments now with us being publicly held.
On the <unk>.
The path that we'd go down.
So we looked at.
One time that two and three and we could go ahead and get this.
Wrapped up fairly quickly.
They are.
Okay.
I think they technically have to respond within 30 days of filing so.
Providing they take a look at it and everything looks in order it could happen rather quickly, but I would think that we're going to get at least one round of comments before that allow us to go ahead and.
Exercise a transaction that were that were eventually contemplate.
Okay.
And this one's for you Brody you mentioned earlier when you were going over the numbers that current stockholder equity in the company is roughly $30 million right now.
Can you comment at all to the fact that you guys are sub $10 million in market cap, yet have over $30 million in stockholder equity.
Yes.
I'm just trying to think what's at play there.
Because of this kind of disappointing to us that our market cap is where it is and considering the value. We think we have with really our three core businesses, but.
The business as a whole I mean, our current assets alone are two times our market cap. So.
Our stockholders' equity like you just said is three times our market cap so.
And obviously, it's not a favorable market and we need to.
So some results here soon that can help this our market cap increase as well.
<unk>.
Yes, it's tough to see that with our marketing efforts relative to our assets and stockholders equity as well, Brian that's one of the things that we're trying to do as you know we've attended a couple of conference we are going to be.
Looking at additional conferences to try to get.
You had more exposure out there on the values that that Brody.
For sure and others, obviously believe that that.
That we have.
Because.
You read it right. There. It is stockholders equities is almost three times, what the what our market cap is right now.
Yes. It is.
As already said, a tough market, especially for small caps I'm curious and I know we've had conversations privately.
Being that you guys are.
A third of what your shareholder equity is half of what your current assets are and you have a bunch of mailbox money coming your way.
You would love determined stand have you guys ever considered some of the parts being so much greater than the whole doing a private takeover of the company or selling off parts of the company.
So I think that's sort of you know.
The answer is yes, I mean, we've contemplated a lot a lot of things along those lines.
Thats why we are doing all the things that we're doing right now for us the audits and getting all those in place even.
Going back to full two years on ticket smarter because that opens up our opportunities.
Whether or not you know it.
Strategic to go ahead and spin it out and let it stand on its own as a publicly held company or if the right.
Prices came along.
Take advantage of that as well.
That actually would go with any of the entities that are there.
Obviously, we needed to go ahead, and we do have onto financials on the medical billing side of things clearly on the video solution side. We now will have the ticketing entertainment side completed so it does open up a lot more opportunities to.
To explore not only what you've said, but again staying the course on some of the other things that we've been.
In context with the board is.
It has us looking at.
Okay. Thank you guys.
Thank you Bryan Bryan.
Thank you. Your next question comes from Mike Albeniz at pattern. Please go ahead.
Yeah, Hi, Dan Hi, Brody.
This is Mike with my question just wanted to talk about.
440 quick I guess, congrats on getting your first event, Don and I think you alluded to this but do you have any others planned for the back half of this year.
We do so right now we have obviously a lot of.
Offers out there and what I mean offers not only.
You got to coordinate not only the facility and the availability of the facility, but also the availability of the talent that you want to have come in and so there's quite a few offers that are out there that we're trying to.
Firm up and we will give.
Pretty aggressive here in the coming days.
In regards to go ahead and mill and some of them down.
The things that you do have Mike is that if for some reason a particular artis passes because he just.
There is a conflict or whatever the reason may be.
We are very very well.
Connected and positioned too.
Go ask someone else to step in.
At the same caliber if you want an a list or right off the bat you can go get them I mean, I haven't Chris young and trace Atkins and Gavin Barrett and Jody Massena, we had even.
Some of the history and Lone Star and play Walker There I mean, we had a great lineup out there and everyone's just had an amazing time. So what you do is we really truly are looking for not just a concert to where <unk> got a headliner and one opening act. This is typically these are.
Gates opened at one o'clock in the headline.
Headline or may not go until nine or 10 later that day, so you've got to like six different acts of would be performing maybe more.
So you just got to got to fill them in but we have a tremendous amount of offers out there.
The venues identified and are working with us.
So I think the back side, you'll see a lot of activity on the custom 440 side for sure.
Got it and were you able to leverage your shield line at all I know there is the potential to be able to use that.
These venues.
Yes, I mean, so the intention is to not only use the shield line at these <unk>.
Events, but also to do the best we can to be utilizing.
Video solutions side, as well first our body cameras and even if you have.
Patrol car driving around a little bit make sure that you know.
Those security people that we hire will be utilizing our product as well and also given us with exposure not only to the local.
Departments that will be hired to come in and help monitor things, but definitely our security team will be wearing body cameras and such out there as well.
Was that the case for this past vessel.
We had this past.
First of all they had a situation where that particular company was not allowed to.
They didn't have the proper insurance to go that far and so while this was our first one out of the box, we've got a little more clarity on what to make sure.
The checklist are before we go ahead and sign a contract with them.
Got it okay. Thanks, and then.
In terms of.
Revenue breakout in general between with tough employ 40 between the ticketing segment, we've got kind of all other revenue I mean do you plan on breaking that out I mean, the crux of what I'm getting to is.
I think the expectation of annual live this earlier ticket smarter with profitable has obviously been some headwinds from a revenue and cost standpoint negative gross margins in that business, but.
Back to basics, you can ramp up volume kind of that coincides with the entertainment segment.
Okay.
Do you plan on kind of breaking it out so that we can get a look at what the underlying profitability is up the ticket segment versus al and then I guess, maybe you could provide any insight or color on top of that too.
Yes, I mean applications for cloud.
Profit.
Profitability there.
Sure, Mike I think what Youre asking.
We're definitely going to sit there and identify what the custom entertainment will look like.
I think what Youre asking is can we go a little further than that in and break it out to give us.
At an ideal what.
Customers were 40 versus ticket smarter that platform looks like as well.
That's the case I don't know why.
I mean, we operate them essentially separately, so I don't know why we couldn't.
I'm not I'm not the accounting side of things, so I'll, let <unk> deal with that but I think especially once the separation occurs I think.
Once customer entertainment has their own filings in Hughes in case, the lapsed broken out absolutely between the.
Tickets monitor segment and the custom 440 segment as we currently do it on a consolidated level.
Would probably fall under the entertainment segment, but I think.
Once once the separation is done you'll really see the difference between costs and $4 40 and ticket smarter within their filings, yes, Mike I think.
We're going to want to do that because we actually have been asked by other.
Parties, let's leave it at that.
To step in and put together a.
A.
Whether it be a concert or an event or something along those lines that may be just a corporate event that doesn't have any ticket sales at all.
So it.
It definitely will need to have them separated for sure when we get to that point.
Yeah, Okay, great. Thank you yeah. That's helpful. I, just I think the theory in defense of the investment thesis for that strictly that segment right is that as you build out cost of <unk> 40 in the entertainment segment that will help drive scale and volume per ticket smarter, which in theory should improve its profitability.
Alright, and then you kind of get the extra.
Excellent asset growth or the operating leverage there.
And.
I guess I'm, just I'm, hoping that that becomes apparent as opposed to a situation where ticket tomorrow.
Maybe it doesn't get those benefits and tailwind, but it's kind of masked by a couple of them for coty as a whole.
So I think if you could kind of break that out in your filings.
And so accretive to that.
<unk> theory, so to speak that would be beneficial.
For both analysts and not as an investor as well.
No problem.
Yes.
Take that and definitely we'd like to do that if not we'll try to.
If its an accounting issue we're tried to footnote it to help you out how about that.
Yes that makes sense, okay, and that's that's really it for me. Thanks.
Thanks, Mike.
Thank you. The next question is a follow up from Allen Klee Maxim Group. Please go ahead.
Yes, Hi, your joint venture for medical billing.
This business it seems like it's mostly <unk>.
Bye.
Doctor visits.
Reoccurring and it seems to have attractive margins can you talk about your strategy.
As you are acquiring new companies.
Whats Youre looking for and how the synergies you can get from combining them the type of customers. They have and is there any issues.
Theres different software be juice from the various companies that get acquired thank you so much.
Yeah. Thank you Alan.
So when we're looking at these acquisitions, it's really.
We're looking at ones that have growth potential, but also have positive earnings as they stand now and margins that can be improved as well. So you had mentioned software once we do all these acquisitions we.
Turning them and they all move into our software side and we have our back office, which is really where we can lessen the cost and improve margins as fast as possible by bringing them into our.
Our back office solutions and whatnot so.
We do integrate them all into into our systems and our processes, which is really the strategy. We wanted to have anyway, because thats the way we can.
Grow the profitability of each one of those acquisitions.
So.
That answers your question on if you wanted to I mean, the customers everything obviously.
I think they kind of off mall together anyway, So I don't.
As far as the medical billing side themselves. So a lot of them I think one they've kind of been all over the United States. So I think a couple have been in the same regions, but others have been branch down the Midwest and the northeast.
Northwest and the southwest Alan again, I think the strategy. The long term strategy is to continue the rollout because it's very fragmented, it's very fragmented market and so as we go out there and continue to find that.
<unk>.
Call it the mom and pops or the smaller entities and we can roll them up and then implement.
<unk>.
Our software and efficiencies that will just continue to help it grow and right now I think we're at a run rate somewhere around $8 million a year.
Obviously, we'd like to get it built up into the.
The masses to wear.
It's a very attractive candidate for a possible.
So we're maybe a possible standalone so.
That's sort of the strategy that we've taken but we are not trying to catch any falling knives out there by no means theres plenty of them out there and we don't also one last thing.
I'll wrap this up but.
We also don't have to be just truly what's called medical we also can do dental and some other areas that that we're capable of doing so it's not just.
The minute clinics. So it's also the <unk>.
<unk> offices and stuff like that as well that we're capable of doing.
That's great. Thank you so much.
Thank you and thank you everybody for joining us today, we really appreciate it I.
I know we've got a.
A lot of work ahead of us and we will continue to keep our head down and do what we can to them.
Not only continued to execute on the plan and the strategy that has been announced in regards to.
The separation of the entertainment and the video solutions division or the early or the legacy digital ally.
We will continue to move forward on that and we do believe that will sit there and help bring a lot more clarity as we mentioned you don't have a stockholder equity of $30 million and a market cap of 10 is just.
Somewhat unacceptable and we've got it we've got to get that fixed for our shareholders and we will work hard on doing that so thanks, everybody for joining us we appreciate it.
Ladies and gentlemen, this concludes the conference call for today, we thank you for participating and we ask that you. Please disconnect your lines.