Q2 2023 Rimini Street Inc Earnings Call

Good afternoon, and thank you for standing by welcome to the Romine Street second quarter 20 twenty-three earnings call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question.

Such and you won't need to press star one one when you're <unk> you will hear an automated message advising your hand is raised to withdraw your question. Please press star one one again, please be advised that today's conference is being recorded.

Now like to hand, the conference over to your speaker today painful Vice President of the Investor Relations. Please go ahead.

Thank you operator.

Like to welcome everyone to remind me Street second quarter of 2023 earnings Conference call.

On the call with me today, that's already been our C E O and president and.

Michael <unk>.

They were just need our earliest press release for the second quarter ended June 30th 2023.

A copy of which can be found on our website under investor Relations.

Reconciliation of GAAP denial financial measures has been.

Provided in the table following the financial statements in the press release, an explanation of these measures. Your why do we believe they are meaningful is also included in the press release under the heading.

non-GAAP financial measures and certain key metrics.

As a reminder, today's discussion walk look forward looking statements that reflect our current outlook. These forward looking statements are subject to risks and uncertainties that may cause back. So we're just all zephyr materially from statements made today, we encourage you to review our most recent thyroid including our form 10.

Q filed today for a discussion of the risks that may affect us.

Or stock price now before taking questions will begin with prepared remarks with that I'd like to turn the call over to Sac.

Thank you Dean and thank you everyone for joining us today.

Before we review the quarter results I wanted to remind everyone again that Rimini Street has been growing and evolving from a single service company into a global provider of end to end enterprise software support products and services.

Unlike most service providers you really specialize in software implementation Romine Street. Instead focuses on the very specialized area of I T strategic and operational needs to run.

Manage support.

Tact connect monitor customize configure and optimize mission critical enterprise application database and technology software.

We have global operations with over 1900 employees spread across 21 countries delivering senior engineering support capabilities clients with an average response time with less than two minutes 24 by seven by 365 and earn an average client satisfaction.

Score on our support delivery exceeding 4.9 out of five or five is excellent.

Today, where the leading third party support provider for Oracle and S. A P software and to date have served over 5200 Fortune 500 Fortune Global 100 mid market public sector and other organizations across a broad range of industries.

Well, you're also Salesforce, and AWS partners, and fast and cloud markets respectively.

We enable clients to achieve better business outcomes, such as lower operating costs increased profits increased investment and innovation improved competitive advantage and accelerated growth.

We believe we have delivered over $7 billion of savings and reinvestment opportunity to our clients.

Operating results.

For the second quarter of 2023, we continued focusing on improving sales execution across the expanded portfolio of solutions and being able to deliberate the full portfolio of solutions globally.

As our current and prospective clients learn more about the unique offerings and value of our expanded solution portfolio, they're responding positively and buying across the full portfolio.

Our next generation global revenue strategy program at team are showing good and improving traction that we believe are increasing sales leads opportunities and pipeline and we believe will ultimately drive a higher revenue growth rate had increased profitability.

Operating results included achieving the largest second corner total sales invoicing in North American history, and improving new client invoicing and pipelines sequentially and year over year with continued sales growth across the full product portfolio.

To enhance an accelerated lead opportunity if pipeline development and help close more large strategic transactions are senior executives, including myself continued our extensive in person revealed street clients in prospect meetings and attendants at third party events and executive sales.

Meetings in the United States and globally with hundreds of current and prospective clients.

To deliver are false solutions portfolio globally, we continue to grow our workforce and capabilities backed by innovation and technology that provides additional leverage for increased profitability and growth.

Demand environment and competitive advantage.

We see strong demand for approval reliable partner for mission critical transaction system services that can allow organizations to consolidate their preferred iced tea service providers streamlined vendor management increased aggregated purchasing power and better outcomes.

<unk> today need to figure out how to deliver both revenue growth and increased profitability and now as an end to end provider mission critical IP support products and services Rimini Street has the broader portfolio of solutions needed to be recognized as a key IP service partner.

That could help clients achieve their goals from developing strategy and building roadmaps to plan execution.

We believe that we are well positioned to meet the current and evolving needs of organizations that faced heightened global competition and just about every industry and to help them navigate the complex macroenvironment over the coming years.

Oracle litigation update.

Remaining street in Oracle Bennett litigation for more than 13 years while.

While the U S courts are confirmed long ago. The third party software support is legal we presently have two active proceedings with Oracle the injunction compliance dispute and remaining two proceedings, both of which relate to the manner in which are many street provide support services for certain or <unk>.

Addict lines.

<unk> Street is not prohibited from providing support services for any oracle products.

With respect to the injunction compliance dispute remained.

<unk> Street filed an appeal of 2022 to the ninth circuit of the United States Court of appeals relating to certain rulings of the U S District Court.

Oral arguments on the appeal were held in San Francisco on February 6th 2023, and the matter remains Pattanaik before the court of Appeals. We believe we could have a court ruling on the appeal at any time this year.

With respect to Rimini to the company filed a lawsuit remaining street a versus Oracle International Corp. In October 2014 in U S District Court.

Just days before the trial was set to begin in the remaining two litigation Oracle withdrew all its claims against Germania Street in myself as CEO .

Monetary relief of any kind that there any legal theory in the litigation.

Following trial in late 2022 on July 24th 2023, The District Court issued its finding of fact and conclusions of law and you will be too accompanied by a permanent injunction against the company called the remaining two injunction.

The company prevailed on a number of legal points, including a significant portion of our clothes infringement claims and the U S District Court held that the pertinent software licenses do not prohibit oracles customers from hiring a third party like remains street to perform updates are fixes to the same extent the.

A customer could themselves under the pertinent license.

However, the.

The company respectfully disagrees with several other conclusions findings comments and rulings of the U S District Court in on July 25th 2023, The company filed a notice of appeal of the remaining two findings and conclusions of line and remaining two injunction in on July 28th two.

23 filed an emergency motion to stay in forsman, the remaining two injunction pending results of the appeal.

On July 30th 2023, the district Court issued an order setting an expedited briefing schedule <unk> emergency stay motion with Oracle's response do by August 7th 2023, and the company's reply do by August 11th 2023.

The remaining two injunction is primarily directed at Oracle's people soft software product.

The remaining two injunction currently limits, but does not fully prohibit the support services. The company can provide its clients using or what people soft software product.

The percentage of revenue derived from support services. The company provides solely for Oracle people soft software product was approximately 8% of the company's total revenue during the fiscal second quarter of 2023.

For additional information and disclosures regarding the company's litigation with Oracle. Please see our disclosures in the company's quarterly report on for 10-Q filed on August 2nd 2023, with the U S Securities and Exchange Commission.

Please also note that at this time, we are unable to provide material additional information beyond the disclosures of statements and our press releases SEC filings in court filings, nor are we able to provide additional comments related to the litigation or impacts because we are engaged in current <unk>.

Continued analysis and court briefing in motion activity.

Summary.

We remain confident that we are continuing to take the right actions and making the right investments to reaccelerate grow.

Increased profitability enhanced.

Enhance shareholder value and bring our litigation with Oracle to a successful conclusion as soon as possible.

Now over to you Michael.

Thank you Sir.

And thank you for joining us everyone.

Financial results.

We were pleased with our second quarter performance and revenue gross margin net income adjusted EBITDA and revenue retention rate on subscription revenue. Additionally.

Additionally, we maintain the strong balance sheet with cash and U S government backed securities of $147 million in debt of $76 million, which equates to a neck cash position at quarter end of $64.7 million.

Revenue for the second quarter was a record $106 $4 million a year over year increase of 5.2%.

Ah revenue in the quarter was again negatively impacted by currency movements, having a 0.8% unfavorable impact to revenue growth in the quarter.

On a year to date basis negative currency impacts 1.2%.

Clients within the United States represented 50.7% of total revenue while international clients contributed 49.3% of total revenue.

Annualized recurring revenue was $410.1 million for the second quarter, a year over year increase of 3.4%.

Revenue retention rate for service subscriptions, which makes up $96, 3% of our revenue was 94% for the trailing 12 months with more than 74% of subscription revenue noncancelable for at least 12 months.

Billing for the second quarter, where $104 $4 million compared to $101.6 million for the prior year second quarter, an increase of 2.8%.

Gross margin with 63% of revenue for the second quarter compared to 63.1% for the prior year second quarter.

On a non-GAAP basis, which excludes stock based compensation expense gross margin with 63.5% of revenue for the second quarter compared to 63.7% for the prior year second quarter.

Operating expenses.

While inflationary pressures are still persistent for skilled labor across all theaters. We are very pleased with both our ability to continue to attract and retain key talent. Moreover are strong margin performance underscores the advantage of our global footprint with centers of excellence of geographies, where both the talent.

And value remain extremely attractive.

Sales and marketing expenses as a percentage of revenue.

35% of revenue for the second quarter compared to 35.8% for the prior year second quarter.

On a non-GAAP basis, which excludes stock based compensation expense.

Sales and marketing expenses as a percentage of revenue was 34.3% for the second quarter compared to 34.9% for the prior to your second quarter.

<unk> noted earlier in the call given are improving leading indicators for accelerating sales and pipeline, we remain focused on making the appropriate investments needed to market, our expanded portfolio of solutions and capitalize on these growth opportunities.

General and administrative expenses as a percentage of revenue excluding outside litigation costs.

17.7% of revenue for the second quarter compared to 18.6% of revenue for the prior year second quarter on a non-GAAP basis, which excludes stock based compensation expense G&A was 15.2% of revenue for the second quarter compared to 16.9% for the.

Prior year second quarter.

We are seeing a good year over year improvement and spend due to the previously mentioned restructuring and now that they're required initial investments to develop and launch are expanding portfolio of solutions is largely behind us.

However, G&A expenses as a percentage of revenue continue to be elevated compared to our peers due in large part to the ongoing costs for in house legal and compliance teams and other costs made necessary by your ongoing litigation with Oracle.

Net outside litigation expense was zero point $6 million for the second quarter compared to $3.1 million for the prior year second quarter that.

The reduction in year over year span is due to decreased activity as we await court rulings that discussed earlier.

Or non-GAAP operating margin, which excludes outside litigation spend and stock based compensation improved to 14% of revenue for the second quarter and 11.8% for the prior year second quarter.

For the second quarter net income attributable to shareholders was for $3 million or five cents per diluted share compared to a net income of 110000 or 0.0 cents per diluted share for the prior year second quarter.

On a non-GAAP basis net income for the second quarter with $8.8 million.

Or 10 cents per diluted share compared to a net income of $6.4 million.

Four seven per diluted share for the prior year second quarter.

Adjusted EBITDA was $15.8 million for the second quarter, 414.8% of revenue compared to $11 million or 10.9% of revenue for the prior year second quarter.

Balance sheet.

We ended the second quarter with the cash and equivalents balance of $123.5 million plus short term investments of $17.1 million consisting of short term U S Treasuries and agency securities.

Bringing cash and short term investments to $147 million compared to $162 million at June 30th 2022.

On a cash flow basis second quarter operating cash flow was $13.1 million compared to $14.9 million for the prior year second quarter.

Deferred revenue as of June 30th 2023 was approximately $285 million compared to $300 million from the prior year second quarter backlog, which includes the sum of build deferred revenue and noncancelable future revenue increased to $565 million.

As of June 30th 2023, compared to $551 million for the prior year second quarter.

Capital market activities.

During the second quarter, we repurchased $1 million of our outstanding common shares at an average price of $4.09 per share.

The company is providing third quarter 2023 revenue guidance to be in the range of $105.5 million to $107.5 million and suspending full year 2023 revenue and adjusted EBITDA guidance until there's more clarity around impacts from current litigation activity.

Before the U S federal courts, and the company's litigation with Oracle for additional information and disclosures regarding the company's litigation with Oracle. Please see our disclosures and the company's quarterly report on Form 10-Q filed on August 2nd 2023, with the Securities and Exchange Commission.

<unk>.

This concludes our prepared remarks, operator will now take questions.

As a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one one again, please <unk> compile to Q&A roster.

The first question comes from Brian Canceling with Alliance Global Partners. Your line. This is Ben.

Hi, there this is sherman on her Brian Thanks for taking my questions.

To start have you evaluated the expenses necessary to comply with a more manageable process for people soft if the ruling is upheld and can you share that is so.

Sure a good to good to talk to you.

The answer is we're still compiling the data we have of course been working since the day that we got the court's order and the court's injunction order. We've had teams working on calculating what we have to do the steps that we would have to do that we can do as you've.

Seen we filed an emergency motion to stay the injunction because there are some significant problems with what the court is asking us to do.

And so again at this point in time, we have to get more clarity from the court about what it is that we need to do to comply.

And we'll see what hopefully we'll get some answers from the court hopefully as early as the 12th to 14th some time after we finish our briefing schedule on the 11th so at this point in time, we really can't share any of that data, but I can say is when you go back if you look historically in the records when we dealt with this.

Discussion point back in 2015, and 16 through Rimini, one we used to estimated at that time that we thought that conversion to a manual process would likely cost 1% to 2% of gross margin in that product line.

As you've seen based on our disclosures the product line accounted for roughly 8% of our revenue. So you could do some calculations against dark gross margins and and see that what those numbers might look like.

Great. Thanks, So will the ruling do you think have an impact on your plan an investment strategy, we spend more or less depending the results of the appeal.

Well I think the as you can tell other reason we suspended guidance in the fourth quarter was because we just have too much uncertainty around the court rulings. While we go through this process is you know we're extremely respectful of the process. There's a reason we have federal courts, we have appeals courts, we have the Supreme Court.

Lord So we're going through the process.

Respecting the court's opinions disagreeing with them respectfully now we're in the process through the appeal side of this unfortunately, we wish this would take faster term, but that's just the way the court system works it could be days could be weeks and so we felt against the spending guidance was the right thing because we can't tell whether.

We will have an impact on revenue and impact on sales what the impact might be on course until we get more clarity from the court now we were comfortable giving third quarter guidance, because we're already almost halfway through the quarter and as you know with a radical model on revenue in the way the expense model and the contracts work.

We felt comfortable that we could provide a very reasonable workable range in terms of our numbers, but the fourth quarter was not predictable. So at this point in time I think we just all have to let this process play out over the next couple of weeks now we have of course continued on.

All the operations around the business working of course to comply with the injunction on one hand, but all the other parts of our business that aren't affected by the injunction. We continue to move forward. We continue to close business. We even closed another seven figure deal. This morning, So we're continuing to move the business.

Forward in a methodical way.

In regards to closing new business do you see I know September is a busy quarter for new business or a prospective client is you're talking to asking a lot of questions about the court ruling are you seeing yourself have to explain.

I think we've had a few calls we've had a few inquiries what does this mean does this impact any of my business or the product lines that I'm working with that's natural but it has not been many I would say probably you could count them on one hand today.

Because again a lot of people who are just waiting we've been communicative we put out a press release, we put out the public.

Stay motion. So I think people are being able to follow the basics and they know that we're working this through the courts and I think there's a an amount of patience that we're asking people to take while we work through this process, but I think again the majority of the business outside of where the injunction effects is continue.

Going to move forward normally and in fact, we will be expanding the sales force, we're increasing our hiring based on what we've seen as you know we backed our sales force down a little bit and regrouped over the last couple of quarters in fact down to about 65 wraps.

We feel good now that we find tuned what we wanted to get out of those wraps in terms of the marketing message to sales execution you saw that in North America.

Really with the most significant performance we've seen there in years not just in total, but the cross the spectrum of deal sizes, including doubling the number of seven figure deals compared to a year ago. So a lot of good metrics and so we're comfortable now we're going to move forward and we're looking to expand that sales force potentially up to <unk>.

90 sellers by the end of the year, it's a big lift to get that number sellers hired but that's that's where we are with way we see the business in 24. So yes, we're going to continue to grow the business, we're going to continue to our plans to grow the business and we will deal with the serious court matter along a separate track.

That's great to hear thank you so much I'll have accurate with Ya.

Please stand by for the next question.

Please stand by for the next question.

The next question comes from <unk> with Craig Harlem Capital Group. Your line is open.

Great. Thanks for taking the questions Michael maybe if I could start with you you know you commented on the the pipeline and the leading indicators.

Trending very positively maybe just expand a little bit on that what you are and have been seeing in the pipeline and then one other numbers question on the backlog it looks like it was up roughly 12%.

The duration unless I'm reading it wrong looks like it might have lengthened are you seeing longer term contracts in there.

So Justin Oh actually the backlog question first inherent in that figure in your analysis does suggest.

Longer term contracts had some nice contribution some nice wind in the second quarter and I'd actually like to go over to set by taking can give you a better answer from a pipeline perspective right outside of my remarks.

Sure Yeah, Jeff I think again as I, just said a second ago would Sherman the pipeline interestingly enough in what I really like about what we're seeing is not just growth the numbers of the deals it's the mix of the deals.

Second quarter had probably the healthiest mix of deal sizes.

We have seen in a lot of quarters. It's what we wanted to see a lot of healthy deals and that $200000 to 500000 dollar range, which is really a sweet spot for US you would love to be able to make all your business deal numbers on that two to five and then count your seven figure deals with ice.

<unk> on the cake and I think what we saw in the quarter was really nice to watch the idea that we had a big mix of those mid size deals sweet spot deals. We did big deals up to I think our biggest deal with $7 million in the quarter, which is great on an annual basis again another.

<unk> Big win Mega deal. We also did several deals and the seven figure we doubled the number from from the Q2 of last year and I think the overall range and our a S. P was higher in the quarter. So again, a lot of healthy components and I think we saw that's across North America. We saw this across.

Asia, the big the big problems, we had in the quarter, where performance in a Mia and performance and a M. Z N. ANZ was number one last year, we lost our head of marketing we had to change out the head of sales. So we had some execution issue is not demand issues in both of <unk>, where we just replaced.

The whole marketing Ah leadership, which new one starts in a few days here.

And we add some execution challenges and those were the areas that we're focusing on now now that we've got North America, we think moving in the right direction I don't think North America is going to be a 100% opted to the right will have some rockiness along the way, but generally all the metrics, we're showing up into the right enough. So for us to again move forward with his.

Spanning the sales team.

Yeah, Okay, yeah, great to see so and then one other follow up on the legal side, obviously, the judge threw the book at the people soft processes and tools and came very hard on people soft and as you are commenting you're gonna have to figure out what that means and how to service those customers to be clear did you see anything else in the ruling that suggested.

Meaningful impacts to automation tools I know the tools are primarily for people's off but meaningful process change required to surface any other platforms. That's one and then too.

Threw in some vague comment about Oracle database seems to be related to the migration window, but any more clarity if that comment relates exclusively to the migration window and or it affects any ongoing support going forward.

We will answer to the database question I think as you saw in our filing on the emergency stay.

He noted that from from what we've been able to ascertain in our analysis of the court orders.

She found that the Oracle licenses from years ago, and I think we're talking back to 2016 that there were some on our systems that she didn't believe that we have the right to have them on our systems and we noted in our filing that the license. The all says it's called the <unk>.

A license in service agreement actually.

Actually does not have a physical location limitation on it.

And that was even part of the testimony of Oracle's head of license Alison when he took the standard is depositions as well so from that point of view, we just think that that.

All due respect to the court. It was it seems like it's illegal error, but there was nothing about servicing the Oracle database platform. So that's why there's no injunction components, you mentioned relative to to Oracle database, but we do think that that's just an error on the people saw side as I noted.

Can see in the filings in terms of the disclosures.

Mentioned that we're limited, but but not prohibited from providing support remember when we provide support most of the support is are taking questions, giving verbal responses to issues <unk>.

Some things involved coding.

The general point of what was contained in this no use of automated tools.

Which again, we respectfully very much respectfully disagree with the corn on we that's really around the development of tax legal and regulatory updates for the people soft product and it was a process used only in the people soft products. So from that point of view the rest of the service that we provide.

<unk> the clients the support in general we're still able to provide it's this whole issue over tax legal in rags, there's environment issues file issues and so hopefully we will see clarity from the court as we go through this process in the next two weeks and I think as you've seen for 30.

10 years <unk>.

Litigation has these rhythms.

Findings come out people analyze them appeals are put together there's further communication. There's further clarification, that's the stage, where and now those first couple of weeks. After it after we get them I mean this was a 200 page document.

Digesting all of that trying to understand what the court is saying what does the court telling us we need to do figuring all of that out does take a few days and now we're going to seek additional clarification and we're seeking relief from the court on things that we just don't think are appropriate or even that we think might be illegal.

For us to do so yeah, hopefully work that out soon.

Okay sounds good thank you.

And can you please stand by for our next question.

The next question comes from Derek would lift Keady Cowans. Your line is open.

Oh, great. Thanks, guys and Sandra for Derek These big deals sat there are impressive anything you can say other types of customers verticals G OS, but who you displaced and whether it is expected to close in queue to or where they earlier or later than expected.

Well the good question. They they were actually right on time, we felt they were progressing through the pipeline Ah nicely they moved on target.

Again, we again as I mentioned, we did close even another seven figure. This morning. So we're continuing be closed many deals even since the court ruling so.

So we're continuing to move that business forward globally and I think.

Again, the mix was even global those deals were around the world. So we're seeing good global contribution we're still struggling as I mentioned from Q2 with a Mia and getting ANZ back into a better sales position with the changes were making to sellers sales management Mark.

Getting management, so it's a bit of a reboot for Europe , right now and a bit of a reboot on hand, Z, but but Asia itself was strong and again impressive across all of America is including the South America. So I think.

What's most important is the go to market strategy and we're seeing the sellers really start to be able to talk and walk this bigger portfolio and position it into sales deals and start moving it through the pipe. So I think again, we're maturing quite a bit and that's what's giving us the <unk>.

Confidence that it's time to start Regrowing the sales team began pretty aggressively.

Yeah, that's great.

That sales reps did you did you say 90 by I, Miss which when you expect it to get to 90.

Well I would love to have 90 by the time, we end of the year, but but you know what it's like to higher sales reps and going from 65 to 90 will be.

Honestly, a massive challenge I mean, that's that's a lot of sellers to hire in a period of time, we've never done before and we're putting special programs in place where even changing the nature of who were hiring we have changed from what was traditionally a 20 plus year profile in hiring too.

A 10 year. So we wanted to get people, who were a little more junior in their career that we can shape in the way that we want them to sell.

We think that that's a good move and we know a lot of other tech companies have done similar where they've tried to bring people in a little bit earlier in their career. So that they can help shape and grow them to sell the way that they want them to sell and the other thing. We're doing is we're changing the profile from hiring license reps to hiring service.

Sales reps people who've been out selling services instead of license and specifically Ament services. So we're gonna go to a whole different pool that we've hired in the past because we believe that <unk> is so much more of a complicated sale than even the support that we do what we want.

Do as we wanted to bring in sellers that have a different base. They come in with proven am math skills, and we will train them how to sell support we think it's actually going to be better and easier to train them in the opposite direction, then train people how to sell a mass because of the complexity. So we think the combination of that.

And you add twenty-five that those sellers into the mix of the sales team will greatly bolster our ability to sell our new manage service in our full Rimini, one outsourcing, which we have over 110 customers already on and so we'd see this is a massive increase an opportunity to grow revenue and we.

Think that the changing of the sales force structure.

The the tenure of the people and.

And who were hiring from and their background. We think will have a very positive effect in 2024.

Yeah that makes sense. Thanks.

On the Europe issues that you kind of talked about international had been one of those stronger regions for you I guess the past couple of years. So maybe just expand a little bit more on kind of where you're working through in Europe .

Yeah. It really is it's execution through and through it's it's what I said you always have to separate out do you have a demand problem the products.

Appropriate for the market as the market not appreciate them and the answer is I think the demand is fine the demand and <unk> when both markets I think we had a problem with some of the management, who were not adapting fast enough to being able to sell the full portfolio and from my perspective, we're not aggressive enough in the marketplace.

Place and you know these issues do happen and we do have pockets of success within <unk>. For example, France is very successful we Israel's very successful we've had some good work even building up in other countries in the region, but we didn't do well in the German Dodge region, we're doing it.

Will reboot of the of the selling emotions in that region, we're not doing as well we've done some business in the nordics, but not as well as we'd like and we pretty much don't avoid the southern European we do it opportunistically, but we haven't put people into southern Europe , because we find that the deals tend to be smaller.

The Isps are smaller than the return on that investment just hasn't been as strong. So there is some restructuring going on around both the EMEA structure and of course as we said at AMC. The reboot of the sales leadership, there and making that a much stronger team.

Alright, thanks, guys.

Sir please stand by for the next question.

The next question comes from Brian canceling or with the Alliance Global partners Your line of <unk>.

And just one more quick follow up.

Just wanted some clarity on the appeal is it both the people soft and the press release and marketing statements going forward or is it just related to people soft.

Well first of all let me just clarify cause I know this can get really confusing.

We have filed so far so the court gave US a court order on their findings. The court gave us separately, an injunction telling us what we have to do <unk>.

And what we've done so far as we filed a notice with the court of our intent to file an appeal and that appeal is both of the findings of the court as well as an appeal on the injunction.

So that was number one that we filed but it's only a notice of our intent to appear we haven't actually filed an appeal yet the second thing. We filed was an emergency stay motion on the injunction, which says you need to do X Y and Z and we're responding back saying here's there Sir.

<unk> issues challenges with X y and Z and that's what you saw a pile on the 28th that's with the briefing motions or about because that's the most important thing right. Now is we have to deal with this injunction because the court said, here's what we want you to do and were laying out the challenges in Prague.

<unk> with that and so once we get through the emergency motion to stay and if the court for example, if she doesn't agree and doesn't give us that day. Then the next thing is we go to the ninth circuit. So there is an order to this process and it'll take awhile to get through that and then even.

If we do wind up with the ninth circuit.

Then there's times when there's no timeline for them to respond even on an emergency it could take them weeks. So there is a process and it will take potentially weeks it could even take months. We hope it doesn't because these are really important questions were standing by we'd want to comply with everything the court has asked us to do.

But at the same time, we will file the appeal.

Of the of what we're being asked to do because we may not agree with all of it or any of it.

And we may not agree with any or all of her findings and so that's that's something that we just need to get through and we'll keep everyone apprised of course, you'll see the filings as they go out we will of course keep our customers apprised of where we are with this and any impact, but that's something we've been doing for <unk>.

13 years so.

For us, it's kind of a normal course of business.

While you're waiting ruling on that motion or on those motions.

Will that press release still need to go up on your website.

Well again will will cross these bridges when when they come the accorded asked us to put that up 30 days after issuing the.

The injunction and we'll cross that bridge 30 days hopefully we'll have an answer before then.

The court decides to do but again at this point in time, that's the court's order and we will work with the court to see what we can come up with the between now and then.

Alrighty. Thank you.

Certainly.

I show no further questions at this time.

I would now like to turn the call back over.

To set right and C E O for closing remarks.

Thank you I Wanna, Thank everyone again for joining us for our second quarter twenty-three earnings call.

Thank all of our Ministry colleagues for their efforts in the second quarter and believe me getting the filing done when you have all these subsequent events was not easy. Thank our auditors a K P. M G who worked around the clock to make sure we get all the subsequent events in and we're able to file on schedule and of course as.

We get additional updates and that's where it's appropriate we will update the market relating to litigation matters and lastly of course, we all live in a in a great place. There are a lot of people in harm's way, who have to deal with issues far more drastic life and death and we deal with.

Every day and I always like to take this opportunity to just remind us what goes on in the rest of the world and how Lucky. We are so thank you everybody. Appreciate the time today look forward to follow up calls with folks take care.

This concludes today's conference call. Thank you for participating you may now disconnect.

Mmm.

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Okay.

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Okay.

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