Q3 2024 MIND Technology, Inc Earnings Call
Greetings and welcome to the Mind Technology 3rd quarter of fiscal 2024 conference call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone who requires operator assistance during the conference please press star zero on your telephone keypad. As your mind are at this conference it's being recorded. Now turn the call over to your host, Ken Denark. Please go ahead, sir.
Greetings and welcome to the main technology third quarter fiscal 2024 conference call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded and now I'll turn the call over to your host 10 Dennard. Please go ahead Sir.
Thank you operator, good morning everyone, and welcome to the Mind Technology Fiscal 2024 third quarter earnings conference call. We appreciate all of you joining us today with me are Rob Caps, President and Chief Executive Officer and Mark Cox, Vice President and Chief Financial Officer.
10 Dennard: Thank you operator, and good morning, everyone and welcome to the main technology fiscal 2024 third quarter earnings Conference call.
10 Dennard: We appreciate all of you joining us today with me are Rob Capps, President and Chief Executive Officer, and Mark Cox, Vice President and Chief Financial Officer.
Before I turn the call over to Rob, I have a few housekeeping items to run through. If you'd like to listen to a replay of today's call, it'll be available via webcast by going to the Investor Relations section of the company's website at mine-technology.com or you can listen to a recorded instant replay until December 21st. Information on how to access these replay features was provided in yesterday's earning drill.
10 Dennard: Before I turn the call over to Rob I have a few housekeeping items to run through if you'd like to listen to a replay of today's call it'll be available via webcast by going to the Investor Relations section of the company's website at mine Dash technology Dot com or.
10 Dennard: Or you can listen to a recorded instant replay until December 21st information on how to access. These replay features was provided in yesterday's earnings release.
Information reported on this call speaks only as of today Thursday, December 14th, 2023, and therefore you are advised that time-sensitive information may no longer be accurate as of the time of any replay listening or transcript reading.
10 Dennard: Information reported on this call speaks only as of today Thursday December 14th 2023, and therefore, you are advised that time sensitive information may no longer be accurate as of the time of any replay listening or transcript reading.
Before we begin, let me remind you that certain statements made by management during this call may constitute forward-looking statements within the meaning of the Private Security's litigation reform act of 1995.
10 Dennard: Before we begin let me remind you that certain statements made by management. During this call may constitute forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
These forward-looking statements are based on management's current expectations and include known and unknown risks, uncertainties, and other factors, many of which the company is unable to predict or control, that may cause the company's actual future results or performance to materially differ from any future results or performance expressed or implied by those statements.
10 Dennard: These forward looking statements are based on management's current expectations and include known and unknown risks uncertainties and other factors many of which the company is unable to predict or control that may cause the company's actual future results or performance to materially differ from any future results or performance expressed or implied by those statements.
These risks and uncertainties include the risk factors disclosed by the company from Tom to Tom and its filing with the SEC, including in its annual report on form 10K for the year-end of January 31st, 2023. Furthermore, as we start this call, please also refer to the statement regarding forward-looking statements incorporated in our press release issued yesterday.
10 Dennard: These risks and uncertainties include the risk factors disclosed by the company from time to time in its filings with the SEC, including in its annual report on Form 10-K for the year ended January 31, 2023. Furthermore, as we start this call. Please also refer to the statement regarding forward looking.
Speaker Change: That's incorporated in our press release issued yesterday and please note that the contents of our conference call. This morning are covered by these statements with that now behind me I'd like to turn the call over to Rob Capps, Rob Hey.
And please note that the contents of our conference call this morning are covered by these statements. With that out behind me, I'd like to turn the call over to Rob Caps. Rob. Hey, thanks, Ken. And thank you all for joining us today.
Rob Capps: Hey, Thanks, Ken and thank you all for joining us today.
Rob Capps: I'll start by addressing some key achievements during the quarter and highlights of our results.
Rob Capps: Mark will then provide a more detailed update on our financials and I'll return to wrap things up with some remarks about our outlook.
Rob Capps: First I want to address two very significant achievements for mind.
Rob Capps: During the quarter, we took a meaningful step towards streamlining and focusing our operations with the previously announced sale of client general oceans for cash consideration of $11 $5 million.
Rob Capps: We utilized a portion of those proceeds to repay our term loan eliminate our outstanding debt.
This transaction, which resulted in an answer gain of almost $2.4 million.
Rob Capps: This transaction, which resulted in a financial gain of almost $2 $4 million.
Rob Capps: Has provided us with important liquidity and financial stability with which to exploit the remarkable growth we're seeing within our cement business.
Rob Capps: Now this brings me to our second achievement.
We ended the third quarter with a record backlog of $37 $4 million over double where it was just three months ago.
I'll touch on this in greater detail shortly.
Rob Capps: I believe this unprecedented backlog is indicative of our specialized capabilities and product lines.
Rob Capps: Additionally, subsequent to the end of the quarter, we entered into a supply agreement with a major international seismic contractor.
Rob Capps: Vic to receive initial orders under this agreement shortly.
Rob Capps: This means that we start the fourth quarter of this fiscal year.
Rob Capps: Moving to next fiscal year with a record backlog and confidence in our continued order flow.
Rob Capps: Our marine technology products revenue during the third quarter was approximately $5 million and this was significantly lower than what we had anticipated.
Rob Capps: Experienced delays in the delivery of certain components, which prevented us from getting these orders completed at the door and recognized as revenue for quarter end.
Rob Capps: These orders, which total from $5 million to $6 million are expected to be delivered in our fiscal fourth quarter.
Rob Capps: This situation clearly demonstrates that supply chain issues, while much improved from a couple of years ago are still with us it can impact results or particular periods.
Rob Capps: The good news here is that the orders are not lost merely delayed.
Rob Capps: The magnitude of our backlog does give us better visibility and therefore better ability to manage our procurement process. However.
Rob Capps: The increased level of activity also means increased cafe requirements.
Rob Capps: Based on the orders so we were delayed and the schedule of other orders our backlog, we expect a significant increase in revenues in our fourth quarter.
Rob Capps: We continue to believe that mind is exceptionally well positioned to capitalize on favorable market dynamics to achieve sustainable topline improvement.
Rob Capps: We think our record backlog is indicative of the growing demand for our differentiated CNET product lines, such as scaling source controllers buoy linked positioning systems and ceiling streamer systems.
Rob Capps: We believe this continued policy the backlog trend and the early benefits of our framework agreement reflect the strength in the underlying market demonstrate that we are the partner of choice for companies looking to acquire high quality and versatile of marine technology products.
Rob Capps: We continue to believe that the current market environment is advantageous for mind.
Rob Capps: Each of our three key markets exploration defense and survey remained loaded with opportunity.
Rob Capps: I think related to the sales decline in August we now operate a more streamlined and focused switch products and we are better positioned than ever to deploy our product lines into a variety of end markets. Additionally.
Additionally, our team continues to develop new and innovative ways to adapt implement our technologies to meet the evolving needs of our customers.
Rob Capps: In addition to traditional energy related opportunities.
Rob Capps: We're seeing new applications for our <unk> technologies as an example, our.
Rob Capps: Backlog includes over $5 million related to one of our C link Ultra high resolution <unk> seismic streamer systems <unk>.
This system is intended for use in surveys required for offshore wind farms and other green energy projects.
Rob Capps: There's also a growing opportunity for mind to provide seismic streamer repair services not only for sealing streamers, but also for products manufactured by others.
Rob Capps: And then the maritime defense and security market. We continue to believe that our C circuit passive array system, which is derived from the commercially developed ceiling system.
Rob Capps: As a significant and economical solution for various demanding applications within this space.
Rob Capps: We are also optimistic that through our collaboration agreement with general Oceans, we will see increasing interest in our spectral AI software suite and find further applications for this technology.
Now with that let me, let Mark walk you through our third quarter financial results in a bit more detail.
Mark Cox: Thanks, Rob and good morning, everyone.
At the outset, I would like to point out that with the sale of Klein.
Those operations have been treated as discontinued operations and prior period results have been restated to reflect that.
Accordingly, the results from continuing operations that we reported yesterday and are discussing here today <unk>.
Mark Cox: Including prior period comparative data do not include amounts related decline.
Mark Cox: They include only our ongoing business.
Speaker Change: As Rob mentioned earlier.
Speaker Change: Revenues from continuing marine technology product sales totaled approximately $5 million in the quarter.
Speaker Change: Which was up about 64% from approximately 3 million in the same period a year ago.
Speaker Change: While we experienced several delays during the third quarter that resulted in some revenue getting pushed into the fourth quarter.
Speaker Change: We believe the strength, we're seeing in all our key markets and the growth in our backlog of orders positions us well for sustained higher level revenue in the coming quarters.
Speaker Change: Gross profit during the third quarter was approximately $2 3 million, which was up meaningfully when compared to gross profit of approximately 862000 in the prior year period.
Speaker Change: This represents a gross profit margin of 45% for the quarter.
Speaker Change: We're pleased that we were able to deliver some higher margin orders during the quarter. Despite the overall lower sequential revenue levels.
Speaker Change: Revenue revenue in the quarter was largely driven by sales of spare parts.
Speaker Change: The sales of full systems.
Speaker Change: These transactions, while smaller in size tend to generate higher gross margins.
Speaker Change: Our general and administrative expenses were approximately $2 9 million for the third quarter, which was down slightly when compared to approximately $3 5 million from the second quarter and.
Speaker Change: And $3 million for the same period a year ago.
Speaker Change: The sale of Klein is allowing us to streamline our operations and thereby reduce some cost.
Speaker Change: We've recently taken some actions in this regard.
Speaker Change: Including selected head count reductions.
Speaker Change: <unk> the size of our board of directors and.
Speaker Change: And reducing the compensation for the remaining members of the board.
We also believe that the more streamlined operations will result in lower professional fees and travel costs.
Speaker Change: We will begin to see the impact of these changes in the fourth quarter of this year, but will not recognize the full benefit until next fiscal year.
In the third quarter the impact of cost reduction measures taken earlier. This year was partially offset by severance costs and higher professional fees.
Speaker Change: Our research and development expense for the third quarter, which relates only to our continuing operations was approximately 508000 up.
Speaker Change: Up slightly from the comparable period a year ago.
Speaker Change: These costs are largely directed toward the development of our next generation Streamer system and continued development of our spectral AI software suite.
Speaker Change: Operating loss for the third quarter was approximately $1 5 million, which was nearly a 50% improvement from a loss of $2 9 million in the third quarter of fiscal 2023.
Speaker Change: Yeah.
Speaker Change: Our third quarter adjusted EBIT dollars from continuing operations was a loss of $1 1 million compared to a loss of $2 4 million in the third quarter last year.
Speaker Change: Overall, we reported net income of approximately 568000 for the third quarter of this year driven by a gain of approximately $2 4 million on the sale of Klein.
Speaker Change: As of October 31, 2023.
Speaker Change: We had working capital of approximately $16 5 million and approximately $5 6 million of cash on hand.
Speaker Change: After factoring in net proceeds from the client sale completed in August.
Speaker Change: Our liquidity position has significantly improved.
Speaker Change: Additionally, as a reminder, upon the closing of the sale of Klein, we repaid and eliminated our high cost debt, leaving.
Speaker Change: Leaving mind debt free today.
Rob Capps: I'll now pass it back over to Rob for some concluding comments.
Rob Capps: Okay. Thanks Mark.
Our conviction about the future of mine technology has only been strengthened by our recent achievements.
We've taken the necessary steps to streamline our operations and focus on profitability.
Rob Capps: We believe that this company is better positioned now than ever.
Rob Capps: Our marine technology products continue to penetrate a variety of industries and markets, which I believe is a direct correlation to the work that our team has done to develop and continually adapt our technology to meet the evolving needs of our customers.
Rob Capps: We believe that the record backlog that we have achieved is just the beginning as there are still significant opportunities foreseen at per unit and our other initiatives.
Rob Capps: Market conditions remain favorable and we generally feel that the robust customer interest and engagement that we've seen to date signifies that the market adoption of our product lines is gaining traction.
Rob Capps: Our confidence in our mind is headed in the right direction and we look forward to building on the strong foundation that we constructed.
Rob Capps: As I mentioned earlier the increase in business comes at a price that being the capital needed to execute the growing business.
Rob Capps: As you probably know we did declare and pay a dividend on <unk> stock for the quarter ended October 31 2023.
Rob Capps: However, it remains about $4 $7 million as accumulated dividends from prior periods and the ongoing dividends accrue at a rate of about $3 8 million per year.
Rob Capps: While our liquidity and financial position are much improved.
Rob Capps: We do not believe that our current operations can generate the capital needed to exploit and grow our business and at the same time, a ongoing or cumulative dividends on the preferred stock.
Rob Capps: Before while no decisions have been made.
Rob Capps: And circumstances can change we currently believe it unlikely that we will declare further dividends on our preferred stock for the foreseeable future.
Rob Capps: As we experienced this quarter and if traditionally seen.
Rob Capps: It will likely be revenue variation between quarters due to a variety of challenges and unforeseen circumstances as well as simple customer delivery requirements.
Rob Capps: But that said, we do believe the general trends, we wanted to increase revenue.
Rob Capps: The favorable market trends robust customer interest and substantial growth of our backlog continues to give us confidence that sustainable higher level revenue is achievable.
Rob Capps: Looking forward.
Rob Capps: We anticipate meaningful financial improvements in the fourth quarter and in fiscal 2025, as we convert our record backlog to revenue.
Rob Capps: We're encouraged by that.
Rob Capps: Current macro environment and believe that our streamlined differentiated market, leading suite of maritime technology products is uniquely positioned to capitalize on favorable customer demand.
Rob Capps: We expect to continue adding new orders in the coming months and intend to utilize this momentum to drive meaningful shareholder value.
Rob Capps: And with that operator, we can now open the call up for some questions.
Speaker Change: Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.
Speaker Change: Formation tone will indicate your line is in the question can you.
Speaker Change: You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.
Speaker Change: Our first question comes from the line of Tyson Bauer with KC capital. Please proceed with your question Hey, good morning.
Speaker Change: Gentlemen.
Speaker Change: Gotcha.
Speaker Change: Trying to get a where we are today kind of look at the company and all of this is going to lead up to either of the eventual question of where we needed to get to but.
Speaker Change: You ended the quarter at $37 4 million of backlog $5 $6 million of that is because we had deferred revenue that will fall into this quarter.
Speaker Change: So you have approximately $32 million back.
Speaker Change: Backlogs that.
Speaker Change: It is a significant increase from the $17 million at the end of July where you're kind of today and where your backlog stands relative to also you recognize revenue in the quarter has that five to 6 million has been realized.
Already along with your other expected revenue you thought youre going to have or is this a situation where the components delay.
He has pushed everything to the right.
Speaker Change: Calendar. So we don't necessarily have that catch up where all of a sudden we have a $12 million to $15 million quarter.
Speaker Change: Yes, so tyson.
Speaker Change: Those delayed orders have partially been <expletive>, they're not all completed partially done.
We do expect them all done by the end of the quarter.
Speaker Change: Much by the end of the calendar year.
Speaker Change: I think we will see a bit of a catch up to use your term.
Speaker Change: In this quarter.
Speaker Change: So it's not it's not a bad way, that's getting pushed out all the way.
Speaker Change: Certain components that was two months late coming to us from a supplier.
Speaker Change: So just didn't give us enough time to get everything built it out the door when we originally scheduled to.
Speaker Change: And are these components that are just drop in for like we see.
Speaker Change: See what the automakers they need a chip they build a vehicle and then they can put the chip in and then ship. It is that the situation here, where it's a drop in component that you can make the.
Speaker Change: Product and you're just waiting on that last component to complete it or is this something we at the beginning of the process that just kind of helps the whole.
Speaker Change: As Kevin Phil.
Speaker Change: So it's kind of halfway in between that's why I would describe it it's certainly as it is a drop in and we can complete a much of the system.
Speaker Change: But we have to drop in this component.
Speaker Change: We can then complete everything else. So it's a little bit of both so we certainly have been able to continue with production or have things ready.
Components sitting on the bench right now that were.
Speaker Change: Again dropping in to use your term to finish this in the horse and theirs.
Software to be Burndy and things of that nature part of the process that has to happen at the end so.
Speaker Change: So we have been able to continue with the process tanked the fundamentals of your question Okay.
Speaker Change: Okay, and just for the sake of clarity because I think you mentioned this on the last call. If the expectation you did $5 million you thought you had 5% to six that was deferred that implies that you thought you were going to be able to do tend to $11 million in the quarter.
Speaker Change: In the last call you thought that the quarters would be somewhat similar obviously, depending on some timing issues.
Does that mean, you're walking into this quarter with the expectation that you thought you were going to do say roughly $10 million and the five to six as an add on or.
Speaker Change: Give us a little bit better clarity.
Speaker Change: No I understand what you're really going in and the answer is yes, although I understand just the caveat things can happen and we can have something drop in unexpected we do better.
Speaker Change: <unk> pushed to the last for the REIT, rather for whatever reasons, but fundamentally where your analysis is correct. Okay.
Speaker Change: Okay.
Speaker Change: <unk>.
When we look at where your accounts receivable, where it was at the end of July compared to where it was obviously you had the benefit client drops out of that obviously also you didn't have the sales that were realized in the quarter.
Speaker Change: Does that anticipate if we go back to that July level and that level of business that youre expecting to do since we haven't made all the deliveries as of yet a 3 million dollar working capital requirement.
Speaker Change: Just on that alone not looking at additional inventories and that which would leave you at the end of the.
Speaker Change: Fiscal year, roughly $2 5 million of cash left.
Speaker Change: There's a lot of calculus that goes into that ties them. So I'm not sure I would draw that exact conclusion certainly.
Speaker Change: The late shipments being delayed cash flow coming in.
Speaker Change: There'll be some catch up there as well.
Speaker Change: We have had to use working capital to buy components.
Speaker Change: So there is some benefit there there are some contracts that we have advanced payments on prepayments from customers. So there is lots of things that go into that calculus.
Speaker Change: But I think that the messages.
Speaker Change: With increasing business that means there is an increase in working capital requirement the receivables and inventory.
Speaker Change: And so that's the reason we're trying to take the position we are.
Okay.
Speaker Change: Well, that's what we're ultimately all of these questions are going to come down to what operational level do you need do you think or believe we need to be at to Reinitiate that dividend also meet your working capital needs given the growth outlook.
Speaker Change: And we've already seen say on your wherever or inventory and a 2 million dollar increase that was offset by the reduction in accounts receivable. So at $5 5 million, where you ended the quarter are you anticipating being able to maintain that level.
Speaker Change: Or is that level going to be further stressed at the end of the year and what level is comfortable for you to reexamine.
Speaker Change: Whether you have the operational results to Reinitiate the dividend.
Speaker Change: And meet your requirements growth.
Speaker Change: So the answer there is we don't know for sure because we need to understand how the business is it went to.
Speaker Change: How the cash flow and how the working capital requirements are going to flow as this business flows through the through the production cycle. So that's the reason we want to be conservative here and keep our powder dry if you will so that's the whole reason or if this is a huge backlog improvement.
Speaker Change: This is.
Speaker Change: Unbelievably larger than anything we've seen in the past. So we think it's only prudent to make sure that we first serve the business and can execute on the business before we make any decisions on the preferred stock. So we just havent decided yet.
And for the foreseeable future.
Speaker Change: If we get three and we play a little catch up as you just mentioned and we start kind of getting into a more stabilized flow as long as the component supply is there.
Speaker Change: Does that imply by the end of Q1 of the next fiscal year, you should be in a more comfortable position on where you're at to make that decision I mean, this foreseeable future.
Speaker Change: Two quarters or is it don't expect anything for the next fiscal year.
I said I don't know at this point, that's what we're trying to understand.
Speaker Change: Can't give any more guidance than we have here.
Speaker Change: Okay.
Pending contract structure, obviously, youre not going to name who it probably doesn't make that big of a difference are those more for components whole systems that you are going to be supplying which obviously is going to be far more lumpy is that imply that they're operating as kind of a middle man as opposed to the end user which is typically your customer.
They refer full systems. They are the end user.
And there is a production schedule that we're working out with them over the next <unk>.
Speaker Change: Several quarters.
Speaker Change: Okay. So when we see orders from that and these are going to be for a whole system. So we're looking at.
Speaker Change: Yes, one five all the way up to 4 million type systems that they would be purchasing at a time.
Speaker Change: Correct.
Maybe even some smaller systems as well, but yes. The answer is yes, okay and is this a multi year agreement.
Speaker Change: It is.
Is there an accordion feature to this where you've set the price and that's just a function of that price will be good for what they need going forward.
Speaker Change: No no.
Speaker Change: No, but I won't don't want to get into specifics for competitive reasons as you might imagine.
Okay.
Speaker Change: But we should see before the end of the year, some more details and color coming from this contract that will make it clear and obvious to the rest of us the scope of it.
Speaker Change: Well I think very confident about them.
Speaker Change: Okay.
Speaker Change: Alright, I mean for right now I'm sure processing Q, we'll let him takeover, but [laughter].
Looks like at least operationally.
Speaker Change: You're where you want to be is this what are we going to do on a decision on that accumulated deficit on the preferred.
Speaker Change: And it wasn't going to take to actually catch up.
Business wise to basically crave that residual value for the common once we satisfy the preferred side so hopefully.
Speaker Change: Hopefully, we will know that in a quarter or two.
Speaker Change: Okay.
Speaker Change: Thank you. Our next question comes from the line of Ross Taylor with Arris investment partners. Please proceed with your question.
Speaker Change: Well Tyson was right.
Speaker Change: [laughter].
I will tell him that.
Speaker Change: Well he knows it now.
You and I have had a number of conversations about the imperative nature of paying this dividend because there is no way you can I mean, the equity is a residual here and for those of us who own equity.
Speaker Change: We want and need you to get yes.
Speaker Change: Preferred out of the way so we can start to accumulate the value.
Speaker Change: It's going to grow in this company and it strikes me as a couple of questions first what was the.
Speaker Change: Inventory working.
Speaker Change: Working capital impact from drag last quarter from the deferred sales obviously were building stuff you had costs that you incurred that didn't go out the door sales to generate revenues, so what kind of impact was that.
Speaker Change: Our inventories to a nice over the last six months are up about $3 million roughly.
Speaker Change: Okay.
Speaker Change: So as you sell that out we should start to see that cash flow should come in.
Speaker Change: Yes, but understand we're going to continue to build.
Yes, I understand.
Speaker Change: Yes, and as you build as you build backlogs and accounts receive you and I talked about the fact that.
Speaker Change: You can actually do other steps factor.
Accounts receivable things of that nature that the cheapest that youre really going to get.
Speaker Change: Is the preferred and it also absorbs right now that preferred probably has about $46 million worth of value. Your equity has about $8 million worth of value.
Speaker Change: It strikes me as I said before that if I want my equity to grow you got to solve the problem with the preferred and it's going to be imperative and one of the things that you guys. Do is you keep promising it's going to work as a company and then just when you get back on the road I think if you didn't think you could say the fourth quarter dividend why would you pay the third save.
The money and paid in the fourth so you can start a string of winning and starting to think you guys are managed by the same people manage the Seattle Mariners.
Okay.
Speaker Change: But just being from Seattle not complement.
Speaker Change: But I think that I mean, im wrestling with what Youre thinking is because I'm hearing you say, we worry about this but in fact, you have a lot of other alternatives to finance.
Speaker Change: Quite honestly, if I were sitting on your board I would say if I vote against the dividend. The only other question is.
Speaker Change: I hire a banker for a.
Speaker Change: Yes.
Speaker Change: Shop, the company ill give it to Tyson to do an ATM and raise $5 million because by my calculations for if you could buyback.
Speaker Change: Five.
Speaker Change: Yes, it's a 500000 shares for $5 million, you actually create $3.33 a share an extra value for the common stock.
Speaker Change: Stock, which as you know.
Speaker Change: Basically a better than 50% increase helpful.
Speaker Change: I know that.
Speaker Change: It strikes me as we really need to get focused on being a public company and developing.
The confidence in the street.
Speaker Change: Every time it seems like you are about to turn that corner view go into another dark place.
How do we how do we keep from being Darrin entering Tyson's question of you don't know I understand you don't know, but you got to have a plan and that plan has got to be.
Speaker Change: Using that you and I talked about other ways of raising capital using these other ways because I think that you want to actually be able to eventually use that preferred dividend preferred as a way to raise capital to better way than going into the general financing market I would think.
Speaker Change: Yes, I am I wrong, Ross I understand all your comments, leaving.
Speaker Change: So there's nothing as news to me on this I understand completely.
Speaker Change: It's not news, but I mean to be honest in the idea that you dropped the comment you haven't made a decision and you drop it with two weeks left in the year is just wrong.
Speaker Change: We've talked and I've known you for a long time and I've been.
Speaker Change: Real loyal shareholder.
Speaker Change: But you know how frustrating it is to watch you basically come in and do something like this with two weeks left in the year.
Speaker Change: Because it just it sets you back so much more than potential loss of one quarter's dividend set you back to where you are the streak that you're building is going to have to be start.
Speaker Change: And I think keyboard needs exactly.
Speaker Change: You've got cash and you've got stuff coming on and your credibility as a public company and then just one thing if you're a private but you've topic. So you have a duty to shareholders.
Speaker Change: And I think that duty I'd, rather see you issue equity dilute me a little bit on.
Speaker Change: On equity even heavily because getting rid of that preferred, particularly if you can get rid of it at 10 or $12 a share if you can buy back.
Speaker Change: That's a huge win for our shareholders.
Speaker Change: Got to be thinking about the game plan, Okay. I know Thats I know this isn't the happy conversation.
Speaker Change: I'm not happy with the way this is something together.
Speaker Change: Feel like we're right back where we were a year or two ago, except for we thought we were so much better.
Speaker Change: Okay. Thank you alright, I appreciate the comments Ross.
Speaker Change: And again Thats in the call about the ATM. If you if you don't pay the dividend and I think he left the business.
Speaker Change: Thank you, ladies and gentlemen that concludes our question and answer session I'll turn the floor back to management for any final comments.
Speaker Change: Alright, thanks, everyone for joining us today, and I look forward to talking to using of our fourth quarter. Thanks very much.
Thank you. This concludes today's conference call you may disconnect. Your lines at this time. Thank you for your participation.