Q3 2023 Intrusion Inc Earnings Call

Speaker 1: Welcome to Intrusion, Inc., third quarter 2023 earnings conference call and webcast. At this time, all participant lines are in a listen-only mode. For those of you participating in the conference call, there will be an opportunity for your questions at the end of today's prepared comments. Please note this conference call is being recorded. An audio replay of the conference call will be available on the company's website within a few hours after this call. I would now like to turn the call over to Josh Carroll with Investor Relations.

Welcome to intrusion, Inc. Third quarter 2023 earnings conference call and webcast at this time all participant lines are in a listen only mode for those of you participating in the conference call there will be an opportunity for your questions at the end of today's prepared comments. Please note this conference.

Call is being recorded and audio replay of the conference call will be available on the company's website within a few hours. After this call.

I would now like to turn the call over to Josh Carroll with Investor Relations.

Thank you and welcome joining me today are Tony Scott, Chief Executive Officer, Kimberly Payne Chief Financial Officer.

Speaker 2: Thank you and welcome. Joining me today are Tony Scott, Chief Executive Officer, and Kimberly Pinson, Chief Financial Officer.

Speaker 2: This call is being webcast and will be archived on the investor relations section of our website.

Call is being webcast and will be archived on the Investor Relations section of our website.

Speaker 2: Before I turn the call over to Tony, I'd like to remind everyone that the statements made during this conference call relating to the company's expected future performance, future business prospects, future events, or plans may include forward-looking statements as defined under the Private Securities Litigation Reform Act of 1994.

Before I turn the call over to Tony I'd like to remind everyone that statements made during this conference call relating to the company's expected future performance.

Is your business prospects future events or plans may include forward looking statements as defined by the private Securities Litigation Reform Act of 1995.

Please refer to our SEC filings for more information.

Factors that could cause our actual results to differ materially from the projections described in todays conference call.

Speaker 2: Any forward looking statements that we make on this call are based upon the information that we believe as of today, we undertake no obligation to update these statements as a result of new information future.

Any forward looking statements that we make on this call are based upon the information that we believe as of today and we undertake no obligation to update these statements as a result of new information future events.

In addition to U S. GAAP reporting we report certain financial measures that do not conform to generally accepted accounting principles.

Speaker 2: In addition to U.S. GAAP reporting, we report certain financial measures that do not conform to generally accepted accounting principles.

Speaker 2: During this call, we may use non-GAAP measures if we believe it is useful to investors or if we believe it will help investors better understand our performance or business.

During this call we may use non-GAAP measures that we believe it is useful to investors or if we believe it will help investors better understand our performance or business trends.

Speaker 3: With that, let me now turn the call over to Tony for a few opening remarks. Thank you, Josh, and good afternoon, and thank you all for joining us today.

With that let me now turn the call over to Tony for a few opening remarks. Thank you Josh and good afternoon, and thank you all for joining us today.

In today's call I'll cover our high level third quarter financial results and provide an update on our product offerings and traction in the marketplace. Our pipeline, our recently announced securities purchase agreement through a private offering.

Speaker 3: In today's call, I'll cover our high-level third quarter financial results and provide an update on our product offerings, traction in the marketplace, our pipeline, our recently announced securities purchase agreement through a private offering, and other highlights from the third quarter, as well as some visibility into the fourth quarter and beyond.

Other highlights from the third quarter as well as some visibility into the fourth quarter and beyond.

Yeah.

Overall Q3 was one of the busiest.

Speaker 3: Overall, Q3 was one of the busiest and challenging quarters in the company's history with increased bookings including the finalizing of the major $5 million award as we previously announced.

Challenging quarters in the company's history.

<unk> bookings, including finalizing of the major $5 million award as we previously announced.

Speaker 3: and an increasing number of new customer PFCs in our pipeline and our product development teams delivering exciting new capabilities and all of that with the painful backdrop trying to raise capital in one of the most challenging capital market environments in memory. Let me start with booking

Increasing number of new customer POC and our pipeline.

And our product development teams delivering exciting new capabilities and all of that with the painful backdrop, turning to raise capital and one of the most challenging capital market environments in memory.

Let me start with bookings and a view of our pipeline.

Speaker 3: In early October , we announced that we've been awarded a $5 million deal with a large telecommunications provider to provide intrusion shield support for its data centers.

In early October we announced that we've been awarded a $5 million deal with a large telecommunications provider to provide.

Support for its data centers.

Speaker 3: The implementation plan includes a phased production rollout, beginning now in the fourth quarter of 2023, that builds upon a successful pilot that actually started in the first quarter of 2023.

The implementation plan includes a phase production rollout beginning now in the fourth quarter of 2023. This builds upon our successful pilot.

We started in the first quarter of 2023.

Speaker 3: The terms of the award allow for further expansion of the use of S.H.I.E.L.D. with the possibility of generating additional revenue after the completion of the initial setup project.

The terms of the award, allowing for further expansion of the use of <unk> with the possibility of generating additional revenue.

After the completion of the initial set of projects.

Speaker 3: The customer has already requested an accelerated rollout, which will result in earlier revenue recognition than originally got in place.

The customer has already requested an accelerated rollout, which will result in earlier revenue recognition than originally contemplated.

Speaker 3: We expect to make a public joint announcement on the scope and nature of the agreement with this customer in Q4 or early 2024.

We expect to make a public join announcements on the scope and nature of the agreement with this customer in Q4 or early 2024.

Speaker 3: During the quarter, Intrusion also booked four other new SHIELD contacts.

During the quarter intrusion also booked for other new <unk> contracts in aggregate. These are relatively small initially in terms of IRR. However, two of these new customers have the potential for additional revenue growth during 2024.

Speaker 3: In aggregate, these are relatively small initially in terms of ARR. However, two of these new customers have the potential for additional revenue growth during 2024.

Speaker 3: We signed two new reseller agreements in Q3 and our previously announced partnerships with SEIC, MedGate, First Advisory Health Services, and others remain strong and are leading to new opportunities to showcase our technology and generate new business.

We signed two new reseller agreements in Q3.

Previously announced partnerships with FDIC net gate first advisory health services, and others remained strong and are leading to new opportunities to showcase our technology and generate new business.

Speaker 3: Our pipeline is robust, and we are focused on converting existing POVs and POCs to revenue-generating customers. A bit more on that.

Our pipeline is robust and we are focused on converting existing povs POC to revenue generating customers a.

A bit more on that topic in a few minutes.

Speaker 3: Finally, with growing evidence of traction in the marketplace for intrusion shield technology, we'll once again explore more strategic technology partner relationships.

Finally, with growing evidence of traction in the marketplace for intrusion shield technology will once again explore more strategic technology partner relationships.

Speaker 3: We've heard over and over again that intrusion technology is unique, but the big technology players have routinely looked for evidence of customer adoption.

We've heard over and over again that <unk> technology is unique but the.

Big technology players have routinely look for evidence of customer adoption we.

Speaker 3: We believe that in the next two quarters, we can begin to show those proof points and revenue that the larger technology players have been seeking.

We believe that in the next two quarters, we can begin to show those proof points and revenue with the larger technology players have been seeking.

Turning to our product development efforts I am pleased to report that our product development teams have continued to deliver exciting new capabilities.

Speaker 3: Turning to our product development efforts, I'm pleased to report that our product development teams have continued to deliver exciting new capabilities.

Speaker 3: We have released, for general availability, version 19.2 of our SHIELD software, which has many improvements over prior versions.

Have released for general availability version 19 Dot two of our field software, which has many improvements over prior versions.

Speaker 3: including enhancements to reporting, additional threat monitoring capabilities, improvements to our renderer software, and significant changes to Shield's management interface.

<unk> enhancements to our reporting additional threat monitoring capabilities improvements to our renderer software and significant changes to shield management interface.

Speaker 3: We've also completed our integration of SHIELD technology to the PFSense firewall and are beginning to introduce that to customers.

We've also completed our integration of <unk> technology that the PSS firewall and are beginning to introduce that to customers and we've introduced a cloud dashboard, which will allow customers to consolidate reporting across multiple instances of our shield technology.

Speaker 3: And we've introduced a cloud dashboard which will allow customers to consolidate reporting across multiple instances of our shield technology.

Speaker 3: And one of the most exciting developments from a product perspective is our beta release of SHIELD on a small form factor hardware device, which we are testing in a POC with a large Starlink customer.

One of the most exciting developments from a product perspective is there a beta release of shield on a small form factor a hardware device.

We are testing in a POC with a large sterling customer.

Speaker 3: If successful, this could pave the way for a new market opportunity for Shield with this and other Starlink customers.

If successful this could pave the way for a new market opportunity for shield with this and other starlink customers.

It is a fast growing service and it serves customers in previously hard to reach an underserved locations around the world.

This small form factor device can also be relevant in many other applications beyond steroids.

Now onto our financials as you will hear from him later in more detail total revenue for the third quarter was $1 $5 million, which was relatively flat on a sequential basis.

Total revenues for the third quarter were <unk> 4 million in line with the previous quarter as we did not recognize any revenue in the quarter from new bookings.

Going forward, we expect some lumpiness in revenue due to the timing of deployment activation of our technology and when we can recognize revenue.

Year to date Shield is represented 27% of revenue for the year and we will continue to be a bigger percentage of overall revenue over time.

Turning now to our consulting business, our third quarter consulting revenues were flat sequentially with the absence of an approved federal budget and the conditions that surround the current continuing resolution many do spend decisions have been delayed.

Potential government shutdown could further impact our ability to get timely renewals of some long standing contracts.

The uncertainty of when a federal budget will get approved I remain optimistic about the demand for our products and services and expect growth in the future from our government customers.

Apart from our government customers, we do believe that we will see some positive future growth in our consulting business as well, which is evidenced by the addition of a well known customer in the travel and leisure industry that we signed in the second quarter.

Finally, as we renew many of these consulting contracts in 2024, we do see opportunities for rate increases and other revenue generating enhancements to existing contracts.

As I previously indicated in various Q&A sessions I informed we stay in touch with many former colleagues and notable CIO C sows across a wide spectrum of industries.

Among other things. These conversations helped me understand the general sentiment in the consensus opinion.

These important individuals' as it relates to trends spending.

<unk> related to cyber security.

During the last quarter I heard that as a result of the current economic environment that we are in a large majority of the companies have been going through some form of flattening or reductions in growth when it comes to their cyber security teams and their budgets.

Meanwhile, the bad guys continue to proliferate and launch all kinds of new and lethal attacks. This has put a significant amount of pressure.

<unk> T cells to keep up with both.

Technology and staffing needs with more limited.

<unk> ability of new resources.

We believe that this provides intrusion with a significant opportunity to step in.

Fill the gaps. These companies currently have in their technology stack and then their cyber security teams and we can help provide them with the needed capability to identify select.

And eliminate any cyber threats that they may encounter.

Okay.

When I joined intrusion in late 2021, we were faced with the daunting array of legal issues from we've provided regular updates on our progress in terms of resolving these issues.

Im pleased to announce that during the third quarter, we were able to successfully conclude the last of these and with the FCC investigation now behind US. This resolves all of the outstanding legal issues that we've been dealing with for the past two years and our team can now fully focus on growing our.

Business.

Finally, let me spend a few minutes on our fundraising efforts as you may have seen in our filings after careful consideration, we decided to pull our S. One registration with the SEC.

Well up to $8 5 million in stock and warrants and a public offering.

It became evident that market conditions were very unfriendly and we were being severely negatively impacted by short sellers among other factors.

However in place of the S. One registration and offering we announced on November eight 2023 that we entered into a securities purchase agreement in which we sold to purchasers and a private offering and the aggregate of $4 4 million shares of our common stock each of which is <unk>.

Coupled with a warrant to purchase two shares of common stock at an aggregate offering price of <unk> 60 per share below the market price at the time.

The offering resulted in net proceeds to intrusion of approximately $2 4 million.

The company intends to use the net proceeds from the offering for working capital general corporate purposes, and the potential partial repayment of outstanding indebtedness discrete or growth capital LLC.

Private offering was participated in by myself members of our executive team board of directors and existing shareholders, which we believe demonstrates the confidence that both our organization and our loyal shareholders.

And our unique technology.

The offering also marks an important step for intrusion as we continue to focus on ensuring we have the funds we need to propel our growth focus on satisfying our customers' needs cost effective cyber security solutions for their enterprise.

Now I'd like to turn the call over to Kim for a more detailed review of our third quarter financials Jim.

Thanks, Tony.

Revenues for the third quarter of 2023 or $1 $5 million with both shell and consulting revenue was flat compared to the previous quarter.

Third quarter sales revenue totaled $400000.

We do expect to see revenue begin to ramp with some of the recent wins that have been announced.

And much of our pipeline consists predominantly of shale appliance product sales.

Revenue recognition is dependent on an implementation and customer acceptance timeline.

Staffing revenue in the third quarter totaled $1 million.

As Tony mentioned earlier, the current continuing resolution and threat of a government shutdown has tendered the timing of new contract awards.

We have a relatively strong consulting pipeline at once about the budget uncertainty is resolved.

Okay.

Revenues for the nine months ended September 32023 totaled $4 2 million a decline of one 8 million or 30%.

The same in 2022 period.

The decline is a result of decreased consulting revenue was up $2 1 million related primarily to the loss of a contract in the fourth quarter of 2022 and merchants agents.

<unk> chose not to renew the final option year of the contract.

This loss was partially offset by increased revenue at <unk> 3 million.

As disclosed in prior quarters flat loss of this one consulting contract significantly impacted intelligence topline revenue.

Lastly, on this contract with 14% and Panama.

<unk> had a marginal impact on profitability.

<unk> profit margin was 78% for the third quarter of 2023 compared to 54% in the third quarter of 2022.

Increase in gross profit margin in the current quarter, Eric talk about product mix with share revenues, representing a higher percentage of revenue.

And the last is a landmark in consulting contract as previously mentioned.

Sales revenues currently represents 29% of our revenues.

As you May recall from our first quarter earnings call in late March of this year, we implemented cost reduction measures. We estimated quickly thoughtful cash savings of approximately $1 $5 million.

Per quarter on a go forward basis.

As a reminder, these measures included the voluntary reduction of salaries of certain of our executive officers for a six month period, the reduction of some full time position and a reduction of the subcontractors.

Many of the reductions were in research and development, which impacted the number and frequency of product releases.

I am pleased to report that combined cost reduction savings for Q2, and Q3 totaled $3 1 million operating expenses in the third quarter of 2023 totaled $3 $8 million a decrease at <unk>.

Sequentially from the second quarter of 2023.

As a reminder, as we grow our customer base and increase revenues, we may choose to accelerate our product development and future periods, which will take our increased spending we will and are continuing to evaluate each spending decision, while also making prudent investments in our long term profitable growth.

The net loss for the third quarter of 2023 was $3 $2 million or <unk> 14 per share.

In line with our loss of $3 1 million or <unk> 15 per share for the second quarter of 2023.

When compared to the same periods in 2022 earnings per share showed marginal increase in our <unk> per share from a loss of <unk> 15 per share for the 2022 quarter.

Q3, 2022 with benefited by the recording of the employee retention tax credit refund of $2 million, which reduced the net loss per share by <unk> 10.

Each of the three annualized periods.

And net loss per share for the nine months period of 2023 with 51.

Per share compared to <unk> 57 per share for the same period in the prior year.

Turning to the balance sheet on September 30, we had cash and cash equivalents.

0.2 million down from 2009 at year end we've.

We've taken steps to improve our liquidity and strengthen our cash position.

In August we filed an S. One registration statement, which was subsequently amended to raise up to $8 5 million.

As Tony mentioned earlier with Jbs, one on October 2nd.

It really due to the two alternatives not being advantageous to the company.

Alternatively, we completed a private offering on November eight that resulted in net proceeds of approximately $2 4 million.

Also in October we entered into two separate exchange agreements with state of the capital our debt lender, where we agreed to exchange an aggregate $350000 of principal for approximately 1 million shares of our common stock.

The number of shares and exchange with determining.

At market pricing.

While this exchange did not result in bringing in additional capital.

A positive step forward and deleveraging the company.

We believe that these combined efforts will provide us with the liquidity needed for operations as we execute our plan to grow the business.

Before I conclude I'd like to address our NASDAQ listing compliance.

In April we received a letter from NASDAQ, indicating that we have failed to meet nasdaq's market value of listed securities are ldls standard at $35 million minimum required for continued listing on the NASDAQ capital market.

We will provide an initial period of 180 calendar days to regain compliance on.

On October 26, we received a letter from NASDAQ informing us that our shares have failed to comply with the <unk>.

As for continued listing on the NASDAQ capital market.

As a result, our shares are subject to divesting.

We have filed an appeal with NASDAQ, which has stayed the de listing of our common stock on the NASDAQ capital market pending a NASDAQ listing qualification peering panels decision.

There can be no assurance that the panel will grant our request for continued listing however, we intend to present a plan to regain compliance to the panel that includes a discussion of the events that we believe will enable us to regain compliance.

Panel hearing is scheduled for February 1st until that Gary and Patricia stock will remain listed on NASDAQ.

I'd like to now turn the call back over to Tony for a few closing comments Tony.

Thanks Kim.

To conclude I think we are continuing to see encouraging signs of growing interest in our <unk> family of products.

That gives us confidence that we're heading in the right direction as we continue to focus on satisfying our customers' needs with cost effective cyber security solutions for their enterprise.

I look forward to sharing the next steps in our journey with all of you I want to personally thank our investors and financial partners for their continued patience and support as we execute our strategy.

This concludes our prepared remarks, and I'll now turn the call over to the operator for Q&A.

Thank you we will now begin the Q&A session. If you would like to ask a question. Please press star followed by one on your telephone keypad.

If for any reason you'd like to remove that question. Please press star followed by <unk>.

Again to ask a question. Please press star one we will pause here briefly as questions are registered.

Our first question is from Scott Buck with H C. Wainwright. Your line is now open.

Yeah.

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

Tony I'm curious on the $5 million Shield agreement with a large telecommunications company can you give us a little more color around that contract and what.

What is the duration and really what is that the cadence and how that should ramp over time.

Yeah, Great question so.

The.

The award contemplate say.

Full rollout in three years.

But the revenue will come over a period of five years. So what youll see is over the next ensuing quarters.

As we deploy.

Into their data centers.

Revenue that we recognize as we fully ramp up to the.

So the full order.

And then as I indicated they've already indicated to us two things that they.

Wanted to accelerate the rollout, which we're in the process of working out with them, which will result in.

Revenue recognition sooner than.

Then our original contemplated plan.

Then there is also an opportunity for expanded use of shield.

In <unk> and beyond.

Initial data centers. So we think it's a very positive development.

As I said on the call we expect to have.

More public visibility of this.

More than likely.

Right after the first of the year.

A more sort of public announcements on.

Okay. That's helpful and would that public announcement provide the actual customer name.

Yes, essentially.

Yes, yes, okay Super.

That's great that's great and then I would ask you about.

Two $5 million or so that you guys just raised.

Is that fair.

Clearly too.

Keith.

The lifestyle and right now or is there actually some some.

Projects that you can put that capital towards that.

Potentially accelerate our shield sales.

Special marketing programs et cetera that youre looking at.

Yes, we will spend that money for general corporate purposes, as we've said.

That will include marketing and.

Continued engineering development.

As I think I've mentioned on prior calls we've got it.

At least a three year roadmap of things that we.

We want to do with the shield family.

Our products and so we'll continue on that roadmap as well, but Kim and I are both focused on not letting our spend and get ahead of our revenue. So.

As we.

As we get revenue in from some of these.

Deals will make the best decisions, we can in terms of.

How that money could could best be used.

Great. That's helpful. And then just the last question from me quickly could you just give us a little more color on the macro environment, and whether or not and we were talking about government side, but.

On the commercial side, whether or not.

The level of economic uncertainty is causing.

Hesitation in people to pull the trigger on really any of the software.

Yes, the sentiment I'm getting from my colleagues and friends in the industry is.

Enjoyed many years in a row of increased budgets and increased staffing and so on.

And well there you are getting some.

Increases.

Two things are happening.

The rate of those increases has leveled off sharply.

And then just the availability of people has meant that they're not able to staff to the level that they had hoped or even planned in many cases.

So that.

Those two factors mean that.

<unk> got to be more efficient with the resources that you have the dollars in the people and generally that means more automation more.

Leverage of technology in some cases it also means a focus on.

Reducing the number of <unk>.

Different solutions that you have in favor of.

Solutions that are highly effective.

And I think it's a truism in the industry that.

There are some solutions that.

People think are valuable, but it's hard to prove and in the case of intrusion technology. We can we can show proof every single day of the <unk>.

Things that.

We're blocking or alerting CSO staffs do so.

I think that's a high value proposition.

For our success.

Great I appreciate the time guys. Thank you very much.

Thanks Scott.

Yes.

Okay.

There are no additional questions waiting at this time.

As a final reminder to queue for question is star one on your telephone keypad.

Our next.

Question is from Michael Reuben felt with mid Atlantic Builders. Your line is now open.

Either Tony and how their teams.

I wanted to say a couple of quick things congratulations on your cost controls are certainly admirable.

Obviously excited about.

Some of the Great news on the shield technology.

Tony you just made a comment about being able to show the value of the product every single day can you talk a little bit about sort of the adoption rates. Once you get to showcase the product what percentage of those people who are trying it are adopting it I guess that's question number one and question number two is sort of.

As we look at these cost reductions and obviously, the higher margin shield product, becoming a bigger and bigger piece of the sort of the revenue mix can you speak a little bit about.

What point do you think maybe you look at the future and you start to look at when Youre going to be cash flow positive is there any sense of what that looks like and feels like.

Yes, let me talk about.

Our process to adoption so typically.

The challenge that we've had is getting our foot in the door to try to get somebody to.

Try our product, it's often confused with other firewall technology and so on so.

Historically, we've had to spend a fair amount of time.

<unk>.

Our technology is different from.

Traditional firewalls, and how we actually work really really well with.

Whatever firewall technology is out there.

And once we get past that and can get to a proof of concept or proof of value.

Situation, where the customer can actually.

See in real life.

What our product does.

It usually goes really well from there.

In a typical pov or POC, we split our product run for a week or sometimes 10 days and we show the customer all of the things that shiel either blocked in the case of.

It being active or if it's in passive or observe mode. What we would have blocked.

Had we been enforced mode.

And.

As our CTO likes to say when.

<unk> shown that data as a typical customer.

Their muscles tighten up and they get.

Their eyes wide open and they're shocked by the things that are either leaking in through the firewall or in many cases call homes that are taking place from infected devices or infected technology inside their firewall that are calling out to command and control server.

Somewhere on the Internet.

And once we show that data.

Then it's just a conversation about.

Generally speaking.

How many of these do I need and where do I place them in my network and so on so we have a pretty high.

Conversion rate once we get to that point.

So im not worried at all about that aspect I'm just at this point, we've got to make more noise in the marketplace, we got to get more at bats.

We need to have.

As greater awareness of what our capability is.

And that's I think going to be our challenge.

As you probably know cyber security technology companies spend billions and billions of dollars a year in advertising and Billboards in trade shows and all the rest of it and and making a dent in that is a little bit of hard.

For a little company like intrusion at this point so our strategy is to use partners use the channel.

Use.

Managed service providers and others, who.

Can immediately see the value and act as force multipliers for us in the in the marketplace.

In terms of cash.

Cash flow positive I don't want to make any predictions at this particular point I think it's all <unk>.

Pending.

How quickly we can ramp revenue.

I think you may have seen in the market.

There is some pretty big companies their cyber security companies that even it.

Real high valuations.

Our cash flow positive yet.

While I would love to join them.

In the in the high revenue space.

I think it's all.

Speculative at this point in terms of.

When when and how we might get to that particular point, so I don't want to make any predictions.

We'll get there as quickly as we can.

All I can tell you at this point so.

Thank you very much.

Our next question is from Ed Woo with <unk> capital. Your line is now open.

Yes. Thank you for taking my question I was saying the best advertising you could get massive data breach are massive.

Hacking going on there was a couple of big high profile ones out in the West coast.

Some of these big Las Vegas casinos.

Rumors that they actually paid us money.

Have you seen a noticeable reaction high profile hacking type event, and how does that impact your business win.

Companies are getting these high profile hacks counter effect in a very public.

Yes, I think it's I think it's a case Ed.

Whenever there's a big fire people start to pay a lot more attention to whether they're smoke alarm is working.

Effectively or not and.

So we certainly get a lot more calls.

When there is publicity around a big event.

And.

I can speak from experience and all of the businesses I've been in.

One of your competitors This act.

The first thing that your own board asks US Hey, how are we different than those guys in are we better protected.

Everybody want some reassurance that.

They're not going to be the next victim.

The reality today is that.

The bad guys are inventing and reinventing.

Their technology, all the time and they're very nimble and they are very quick and so I can't foresee the day when there won't be.

<unk> in the future.

Our mission is to stay as best we can one step ahead and.

And protect as best we can but.

Youre going to continue to see these.

For the foreseeable future at least.

I think that.

Bodes well for intrusion, because some of our work with our government customers lets us see the most advanced threats and the newest things that are.

Being tried by the bad guys and then we can build that.

Indoor commercial product in the shield and protect against those.

Very quickly so.

I think it all bodes well for us for.

For the future.

Great well, thanks for answering my questions and I wish you guys. Good luck. Thank you.

Thank you.

Thank you Ed. Our next question is from James Green. Your line is now open.

Hi, Tony I had a question about the mobile app in its development and when we will see at least data.

So right now we have.

Windows and Android in development, the Android and Windows are feature complete.

And we're demoing with customers, we will be doing constant upgrades to those.

Products over time so.

We will.

We'll have to see how that goes with.

With customers, but it's part of our broader vision for.

No.

For.

A much broader set of coverage in terms of.

Covering all of the places that matter, whether it's in the data center, whether it's in the cloud or whether it's in the endpoint.

And so.

I think I think youll see.

Further developments.

From us in all of those spaces over the next several engineering cycles.

Will the shield family of products eventually be rolling out where ordinary consumers will have access to it I believe previously you had mentioned that you were focused on commercial interests and I was wondering if the technology will reach.

Regular consumer base essentially.

Well right now the Android is available for consumers, but it's not the full featured product that we.

Sure.

Have in her.

Well, we have available today, it's not what's available in the in the Android store is not.

The same product.

But I think our target market is still enterprise.

Small medium business even.

It's probably not the consumer market.

At the end of the day.

That's just a different.

Demand, it's a different selling model.

Different cost model it.

And really aimed at different needs at the end of the day so.

Currently don't see us getting into that space.

At the moment.

Okay and previously you had been talking about a plug in for integration with <unk> in that case and I was wondering.

You guys said with that plug in development.

Bug and work is done.

And we're piloting with customers right now.

Alright. Thank you so much for your time.

There are no further questions at this time, so I'll pass the conference back to management team for any closing remarks.

Alright, well thank you everyone.

I just wanted to say, especially thank you to our <unk>.

Investors, who participated with us.

On the management team and our board and investing in this latest round as I mentioned, it's a.

Not a very pretty.

Environment out there.

And so I really appreciate everyone's stepping up and helping to get us the runway we need to.

Deliver in this exciting.

Set of products that we've been developing and.

I look forward to our next call with all of you appreciate the support and the time.

And if we don't talk.

Happy holiday season, and we'll see you in the new year.

That concludes today's conference call. Thank you for your participation you may now disconnect your lines.