Q4 2023 Ashford Inc Earnings Call

Operator: Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Ashford Inc. fourth quarter 2023 results conference call. Please note, this conference is being recorded. I will now turn the conference over to your host, Jordan Jennings, Director of Investment Relations. Thank you.

Yeah.

Good afternoon, ladies and gentlemen, and thank you for standby and welcome to the Ashford Inc. Fourth quarter 2023 results Conference call. Please note. This conference is being recorded.

Now I'll turn the conference over to your host Jordan Jennings Director of Investor Relations. Thank you you may begin.

Jordan Jennings: Good day and welcome to today's conference call to review results for Ashford for the fourth quarter and full year 2023 and to update you on recent developments. On the call today will be Deric Eubanks, Chief Financial Officer, and Eric Batis, Executive Vice President of Operations. The results as well as notice of accessibility of this conference call on a listen-only basis over the internet were distributed yesterday in the press. At this time, let me remind you that certain statements and assumptions in this conference call contain or are based upon forward-looking information and are being made pursuant to the safe harbor provisions of the Federal Securities Regulations. Such forward-looking statements are subject to numerous assumptions and certainties and known or unknown risks, which could cause actual results to differ materially from those anticipated.

And welcome to today's conference call to review results for Ashford for the fourth quarter and full year 2023 and to update you on recent developments on the call today will be Dr argue banks, Chief Financial Officer, and Eric Peterson Executive Vice President of operations and results as well as notice of the sensibility of this conference call on a listen only basis over the internet.

Were distributed yesterday in a press release.

At this time, let remind you that certain statements and assumptions in this conference call contain or are based upon forward looking information and are being made pursuant to the safe Harbor provision of the federal Securities regulation.

Forward looking statements are subject to numerous assumptions, uncertainties and known or unknown risks, which could cause actual results to differ materially from those anticipated. These factors are more fully discussed in the company's filings with the Securities and Exchange Commission before looking statements included in this conference call are only made as of the date of this call and the company is not obligated to.

Jordan Jennings: These factors are more fully discussed in the company's filings with the Securities and Exchange Commission and Ashford Inc.'s website at www.ashfordinc.com. Each listener is encouraged to review these reconciliations provided in the earnings release together with all other information provided in the webinar. Also, unless otherwise stated, all reported results discussed in this call compare the fourth quarter and year-ended December 31st, 2023 with the fourth quarter and year-ended December 31st, 2022. I will now turn the call over to Deric.

Publicly update or revise them. In addition, certain terms used in this call are non-GAAP financial measures reconciliations of which are provided in the company's earnings release and accompanying tables or schedules, which have been filed on form 8-K with the SEC on February 29, 2024, and May also be accessed through the company's website at www.

Green Dot Ashford, Inc. Dot com.

Each listener is encouraged to review these reconciliations reconciliations provided in the earnings release together with all other information provided in the release.

Also unless otherwise stated all reported results discussed in this call compare the fourth quarter and year ended December 31, 2023, with the fourth quarter and year ended December 31, 2022, I will now turn the call over to Derek.

Deric S. Eubanks: Thanks, Jordan, and welcome everyone to our call to discuss our fourth quarter and full year financial results for 2020. I'll start by giving you an overview of our operations, strategy, and financial results, and then Eric will provide an update on our operating business. After that, we'll open it up for Q&A.

Thanks, Jordan and welcome everyone to our call to discuss our fourth quarter and full year financial results for 2023, I'll start by giving you an overview of our operations strategy and financial results and then Eric will provide an update regarding our operating businesses. After that we'll open it up for Q&A.

Deric S. Eubanks: The key themes we are going to highlight today are, first, the lodging industry has continued to perform well, and for the quarter, we reported solid overall revenue growth over the prior year period. Second, we continue to see an attractive pace of capital raising through Ashford Securities and have raised approximately $580 million of gross capital since its launch in 2021. And third, we're excited to provide an update on our newest advised platforms, the Texas Strategic Growth Fund and Sterling Hotels and Resorts. The Texas Strategic Growth Fund is a private investment vehicle focused on investing in all types of commercial real estate in Texas.

Key things, we're going to highlight today are first the lodging industry has continued to perform well and for the quarter. We reported solid overall revenue growth over the prior year period.

Second we continue to see an attractive pace of capital raising through Ashford securities and have raised approximately $580 million of gross capital since its launch in 2021.

Third we're excited to provide an update on our newest advised platforms, the Texas strategic growth fund and Sterling hotels and resorts.

Texas strategic growth bond is a private investment vehicle focused on investing in all types of commercial real estate in Texas, Sterling hotels and resorts of the newly formed private NAV REIT the plans to invest in a diverse portfolio of hotels and resorts across all chain scales, primarily located in the United States with a focus on both income and growth.

Deric S. Eubanks: Sterling Hotels and Resorts is a newly formed private NAVREIT that plans to invest in a diverse portfolio of hotels and resorts across all chain scales, primarily located in the United States, with a focus on both income and growth. As of December 31, 2023, our three advised REIT platforms, Ashford Trust, Braemar, and Sterling, had ownership interest in 113 hotels with approximately 25,000 rooms and approximately $7.5 billion of gross assets. Braymar's resort portfolio continues to see some stabilization in both demand and pricing as leisure guests now have more options for travel, while its urban hotels continue to recover nicely as both corporate and group demand continues to strengthen. Additionally, as the hotel debt capital markets continue to improve, Braemar recently addressed multiple near-term debt maturities and has refinanced or extended almost all of its 2024 debt maturities.

As of December 31, 2023, or three advised REIT platforms, Ashford Trust and Braemar and Sterling at ownership interest in 113 hotels with approximately 25000 rooms, and approximately $7 $5 billion of gross assets.

<unk> resort portfolio continues to see some stabilization.

Both demand and pricing is leisure guests now have more options for travel while its urban hotels continue to recover nicely at both corporate and group demand continues to strengthen additionally.

Additionally, as the hotel debt capital markets continue to improve our recently addressed multiple near term debt maturities and as refinance or extended almost all of its 2024 debt maturities.

Deric S. Eubanks: Ashford Trust continues to focus on deleveraging its balance sheet and extending its debt maturities and ended the quarter with $209 million of net working capital. To date, Ashford Trust has issued approximately $105 million of its non-traded preferred stock, and we believe this is an attractive source of capital for that platform. Ashford Trust recently announced its plan for paying off its corporate financing during 2024, primarily through select asset sales, refinancing, extending upcoming debt maturities, and raising capital through its non-traded preferred stock offer.

<unk> continued to focus on deleveraging its balance sheet and extending debt maturities and ended the quarter with $209 million of networking capital to date Ashford Trust has issued approximately $105 million of its non traded preferred stock and we believe this is an attractive source of capital for that platform.

Ashford Trust recently announced its plan for paying off its corporate financing during 2024, primarily through select asset sales refinancing extending upcoming debt maturities and raising capital through its non traded preferred stock offering.

Deric S. Eubanks: Our newest advised platform is the Texas Strategic Growth Fund, which we launched in late 2022. Ashford made a $2.5 million investment into this fund, and that capital, along with other capital raised from outside investors, was used to make an equity investment in a multifamily property in San Antonio, Texas. We're also excited about our newest platform, a private NAVRE called Sterling Hotels & Resorts. Sterling will invest in a diversified portfolio of hotels and resorts across all chain scales.

Our newest advisor platform is the Texas strategic growth fund, which we launched in late 2022, Ashford made a $2 $5 million investment into this fund and that capital along with other capital raised from outside investors was used to make an equity investment in a multifamily property in San Antonio Texas.

We're also excited about our newest platform a private NAV recalled Sterling hotels resorts Sterling will invest in a diversified portfolio of hotels and resorts across all chain scales. We plan to raise capital for this platform through Ashford Securities.

Deric S. Eubanks: We plan to raise capital for this platform through Ashford Security. Our strategy and structure are designed for growth. We have a powerful ecosystem of businesses that all benefit as we grow our assets under management. Our size and scale in the lodging industry also bring benefits to third-party owners and other capital providers as we are one of the largest owners and fee payers for the major hotel brands.

Our strategy and structure are designed for growth, we have a powerful ecosystem of businesses that all benefit as we grow our assets under management, our size and scale in the lodging industry also brings benefits of third party owners and other capital providers. As we are one of the largest owners at the payers for the major hotel brands.

Deric S. Eubanks: We believe we have a superior strategy and structure that is unique within the hospitality space, and we are excited about the potential growth of our platform. Over the past few years, we have completed numerous bolt-on acquisitions for our operating businesses, and we continue to look for attractive opportunities to strategically and creatively grow our business. I will now turn to our financial results for the quarter and full year. Net loss attributable to common stockholders for the fourth quarter was $13.6 million, and net loss attributable to common stockholders for the full year was $40.8 million.

We believe we have a superior strategy and structure that is unique within the hospitality space and we are excited about the potential growth of our platform.

Over the past few years, we have completed numerous bolt on acquisitions for our operating businesses and we continue to look for attractive opportunities to strategically and accretively grow our business.

I will now turn to our financial results for the quarter and full year.

Net loss attributable to common stockholders for the fourth quarter was $13 $6 million and net loss attributable to common stockholders for the full year was $48 million adjusted EBITDA was $13 2 million for the fourth quarter and $64 million for the full year.

Deric S. Eubanks: Adjusted EBITDA was $13.2 million for the fourth quarter, and $60.4 million for the full year. Adjusted net income for the fourth quarter was $8.6 million, and adjusted net income per diluted share was $1.26 million. Adjusted net income and adjusted net income per share for the full year 2023 were $42.4 million and $5.20, respectively, reflecting strong growth over the prior year. Our share count currently stands at 8.4 million fully diluted shares outstanding, which is comprised of 3.1 million common shares outstanding, 0.2 million common shares earmarked for issuance under a deferred compensation plan, 4.3 million common shares associated with our Series D convertible preferred stock, and the remaining I'll now turn the call over to Eric to discuss our operating businesses in more detail. Thank you, Derek.

Adjusted net income for the fourth quarter was $8 $6 million and adjusted net income per diluted share was $1 <unk>.

Adjusted net income and adjusted net income per share for the full year, 2023, or $42 4 million and $5 20, respectively, reflecting strong growth over the prior year.

Our share count currently stands at $8 4 million fully diluted shares outstanding which is comprised of $3 1 million common shares outstanding <unk> 2 million common shares earmarked for issuance under our deferred compensation plan $4 3 million common shares associated with our series D convertible preferred stock and the remaining 0.8 million shares of our act.

Physician related shares of restricted stock I'll now turn the call over to Eric to discuss our operating businesses in more detail.

Thank you Derrick we are excited to provide fourth quarter update on our products and services businesses throughout 2023, our businesses successfully gained market share through organic and inorganic initiatives positioning the company well for 2024. This is highlighted by inspires third straight year of more than 20% revenue growth.

Eric Batis: We are excited to provide fourth-quarter updates on our products and services businesses. Throughout 2023, our businesses successfully gained market share through organic and inorganic initiatives, positioning the company well for 2024. This is highlighted by Inspire's third straight year of more than 20% revenue growth, Remington's expansion into the Caribbean and Latin American markets, Red's acquisition of Elite Inui and Maui Dive Shop, and Premier's diversification into new verticals. The first business I'd like to discuss is Inspire. Inspire generated $36.3 million of audiovisual revenue in the fourth quarter and $3.9 million of adjusted EBIT dollars. On the sales front, Inspire executed three new hospitality contracts during the fourth quarter, which are expected to contribute $3.1 million of annual audiovisual revenue. For the full year of 2023, Inspire generated $148.6 million in audiovisual revenue, $39.2 million of which was from international markets, representing a 22.6% and 35.0% increase over the prior year, respectively.

Remington is expansion into the Caribbean and Latin American markets <unk> acquisition of elite annuity in Maui dive shop, and premieres diversification into new verticals.

The first business I'd like to discuss inspire inspire generated $36 $3 million of audio visual revenue in the fourth quarter and $3 9 million of adjusted EBITDA.

On the sales front inspire executed three new hospitality contracts during the fourth quarter, which are expected to contribute $3 1 million of annual audio visual revenue.

For the full year of 2023 inspired generated $148 $6 million of audio visual revenue $39 2 million of which was from international markets, representing a 22, 6% and 35 zero percent increase over the prior year respectively.

Eric Batis: Inspire also executed 11 new hospitality contracts in 2023, which are expected to contribute $10.1 million of annual audiovisual revenue. We are thrilled with Inspire's growth in 2023 and look forward to continuing the momentum throughout 2024. Moving to Remington, in November, the company began managing its first hotel outside of the United States, Crocs Resort and Casino in Costa Rica. Remington also signed on to manage Autograph Starchy in Costa Rica and two resorts in Larimar City, Dominican Republic, the Royal Sinesta Hotel and the James Sinesta Hotel.

Inspire also executed 11, new hospitality contracts in 2023, which are expected to contribute $10 1 million of annual audio visual revenue, we're thrilled with inspires growth in 2023 and look forward to continuing the momentum throughout 2024.

Moving to Remington in November the company began managing its first hotel outside of the United States crops resort and casino in Costa Rica <unk>.

Remington also signed on to manage autograph Saatchi in Costa Rica, and two resorts in Laramore City, Dominican Republic, Royal Sonesta Hotel in the James Sonesta.

Eric Batis: During the fourth quarter, Remington generated hotel management revenue and adjusted EBITDA of $13.1 million and $5.1 million, respectively, representing a 38.5% adjusted EBITDA margin. It also executed nine new third-party hotel management agreements, which are expected to contribute $2.9 million of annual hotel management revenue. At the end of the fourth quarter, it managed 122 properties that were open and operating.

During the fourth quarter Remington generated hotel management revenue and adjusted EBITDA of $13 $1 million and $5 1 million, respectively, representing a 38, 5% adjusted EBITDA margin.

You can also executed nine new third party hotel management agreements, which are expected to contribute $2 9 million of annual hotel management revenue.

At the end of the fourth quarter Remington managed 122 properties that were open and operating.

Eric Batis: Remington managed 68 properties for Ashford's advised REITs, Ashford Hospitality Trust, Braemar Hotels and Resorts, and Sterling Hotels and Resorts. It also managed 54 third-party properties for 31 different ownership groups, 13 of which have hired it to manage two or more of their hotels. These ownership groups include real estate funds, family offices, high net worth individuals, private equity groups, and developers. We're pleased to see that Remington's hotels under management for third party owners now represent approximately 44% of its total hotels under management. Remington's Vantage portfolio operates in 25 states, Washington, D.C., and Costa Rica across 28 brands, including 14 independent and boutique properties.

<unk> managed 68 properties for Ashford advisers, Reits, Ashford hospitality Trust's Braemar hotels, <unk> resorts and Sterling hotels and resorts.

You can also manage 54 third party properties for 31 different ownership groups 13 of which have hired Remington to manage two or more of their hotels. These ownership groups include real estate funds family offices high net worth individuals private equity groups and developers.

We're pleased to see that Remington hotels under management for third party owners now represents approximately 44% of its total hotels under management.

Disadvantaged portfolio operates in 25 States, Washington, D C and Costa Rica across 28 brands, including 14 independent and boutique properties.

Eric Batis: In the fourth quarter, REDD generated $8.3 million of revenue, representing a 38.3% increase over the prior year quarter, and $0.3 million of adjusted EBITDA. 2020 was a transformational year for REDD. The company expanded into new geographies, grew its asset base, and entered new verticals. REDD established a strategic foothold in Hawaii with the acquisition of a Lee Inui and Maui dive shop, which we are pleased to report has recovered to normalized demand levels following the Maui fires in August.

In the fourth quarter Red generated $8 $3 million of revenue, representing a 38, 3% increase over the prior year quarter and zero point $3 million of adjusted EBITDA.

2021 transformational year for Red the company expanded into new geographies grew its asset base and entered new verticals <unk> established a strategic foothold in Hawaii with the acquisition of <unk> and Maui dive shop, which we are pleased to report has recovered to normalized demand levels. Following the valleys fires in August.

Eric Batis: In addition, REDD expanded its services to now include ground transportation services in the U.S. version. Premier generated $5.8 million of design and construction fee revenue in the fourth quarter, culminating in $27.7 million of total design and construction fee revenue for 2023, a 25.1% increase over the prior year. Premier also generated $1.7 million of adjusted EBITDA in the fourth quarter and $9.5 million of adjusted EBITDA in 2023, resulting in adjusted EBITDA margins of 30.2% and 34.4%, respectively. We continue to see strong growth with our third-party business, as revenues surpassed $4 million for the first time in 2023 and grew 32.9% over the prior year. During the quarter, Premier executed seven new third-party contracts representing $0.4 million of expected design and construction revenue.

In addition, <unk> expanded its services to now include ground transportation services in the U S Virgin Islands.

Premier generated $5 $8 million of design and construction fee revenue in the fourth quarter, culminating in $27 $7 million total design and construction fee revenue for 2023 or 25, 1% increase over the prior year.

Premier also generated $1 $7 million of adjusted EBITDA in the fourth quarter and $9 $5 million of adjusted EBITDA in 2023, resulting in adjusted EBITDA margins of 32% and 34, 4% respectively.

We continued to see strong growth with Premier third party business as revenues surpassed $4 million for the first time in 2023 and grew 32, 9% over the prior year.

During the quarter Premier executed seven new third party contracts, representing <unk> $4 million of expected design and construction fee revenue.

Eric Batis: Premier plans to continue to grow its third-party business and build upon its ground-up architecture capabilities in the year ahead. We are very pleased with the ongoing success of Ashford Securities' fundraising efforts. To date, Ashford Securities has raised approximately $580 million in capital.

Some of your plans to continue to grow their third party business and build upon their ground up architecture capabilities in the year ahead.

We are very pleased with the ongoing success of Ashford Securities fundraising efforts to date Ashford Securities has raised approximately $580 million of capital.

Eric Batis: Ashford Securities is currently in the market with a redeemable non-traded preferred stock offering for Ashford Hospitality Trust and has continued to build momentum by growing our institutional broker-dealer and RIA relationship. Since the launch of the Ashford Hospitality Trust Non-Traded Preferred Stock Offering, Ashford Securities has placed approximately $104.7 million of capital from a syndicate of 42 firms. This is an attractive source of capital for Ashford Hospitality Trust to both improve its balance sheet and deploy for growth. Ashford Securities is also raising capital for a growth-oriented investment product focused on commercial real estate in the state of Texas. To date, Ashford Securities has raised $11.5 million of gross capital, which comprises $2.5 million from Ashford Inc. and $9 million from a syndicate of dealers that includes 22 broker dealers.

Ashford Securities is currently in the market with the redeemable non traded preferred stock offering for Ashford Hospitality Trust and has continued to build momentum by growing our institutional broker dealer and <unk> relationships.

The launch of the Ashford Hospitality Trust non traded preferred stock offering Ashford Securities has placed approximately $104 $7 million of capital from a syndicate of 42 firms. This is an attractive source of capital for Ashford Hospitality trust to both improve its balance sheet and deploy for growth.

Ashford Securities is also raising capital for a growth oriented investment product focused on commercial real estate in the state of Texas to date Ashford Securities has raised $11 $5 million of gross capital, which comprises $2 $5 million from Ashford, Inc, and $9 million from a syndicate of dealers that includes 22 broker dealers.

Eric Batis: 2023 was a successful year with our two primary initiatives, third-party sales and strategic acquisitions, and we are excited to continue this momentum into 2024. That concludes our prepared remarks, and we will now open up the call for Q&A. Ladies and gentlemen, if you would like to ask a question, simply press star, then the number one on your telephone keypad. Your first question is from the line of Tyler Vittori with Oppenheimer. Please go ahead. Thank you, and good afternoon. This is Jonathan on for Tyler.

2023 was a successful year with our two primary initiatives third party sales and strategic acquisitions and we are excited to continue this momentum into 2020 for.

That concludes our prepared remarks, and we will now open up the call for Q&A.

Ladies and gentlemen, if you would like to ask a question simply press Star then the number one on your telephone keypad.

Your first question is from the line of Tyler auditory with Oppenheimer. Please go ahead.

Okay.

Thank you and good afternoon. This is Jonathan on for Tyler Thanks for taking our questions.

Deric S. Eubanks: Thanks for taking our questions. First one from me, you know, understanding there's a lot of moving pieces, but given the industry is kind of seeing this normalization of leisure trends and accelerating group demand, any color on kind of how that played out for you guys over the quarter and how you're thinking about the opportunity for that mixed shift going forward? Yeah, sure.

First one from me understanding Theres, a lot of moving pieces, but given the industry has kind of seen this normalization of leisure leisure trends and accelerating group demand any color on kind of how that played out for you guys over the quarter and how you are thinking about the opportunity for that for that mix shift going forward.

Yes sure.

Deric S. Eubanks: In terms of, you know, our portfolio company performance and our hotel performance, we're excited about the trends with the continued growth of leisure and the kind of normalizing of the performance of our urban properties. You can see some of that showing up in our ability to add contracts at Remington. And then across our portfolio companies, you know, Premier is getting some increased third-party business, which is representative of the industry normalizing and coming back to spending normal amounts of CapEx, and leisure remaining strong with Red, for example, in their revenue growth. Also, with Inspire, the, you know, continued stabilization of travel to urban markets and business travel is helping those guys with their continued growth. So by and large, you know, in addition to what we're seeing at our advised hotels, we're seeing the impact of stabilization across our portfolio. Okay, good. And then, can you provide some additional color on the Sterling Hotels and Resorts offering, or maybe how that opportunity came about? How are you thinking about the long-term potential of that offering and the kind of opportunity set for a private NAV REIT that's out there? Yeah, I'm happy to take that one, Jonathan.

In terms of.

Our portfolio company performance and our hotel performance, we're excited about the trends.

The continued growth in leisure in the kind of normalizing.

The performance of our urban properties.

You can see some of that showing up in our ability to add contracts at Remington.

And then across our portfolio of companies premiers getting some increased third party business, which is representative of the industry normalizing and coming back to spending normal amounts of Capex and.

And leisure remaining strong with Red for example.

Their revenue growth also with inspire the continued stabilization of travels or urban markets and business travel has.

Just helping those guys out there continued growth so by and large in addition to what we're seeing in our advisor hotels, we're seeing the impact of the stabilization across our portfolio companies as well.

Okay, Great and then can you provide some additional color on the Sterling hotels and resorts offering maybe how that opportunity came about how you're thinking about the long term potential of that offering and kind of the opportunity set for a private REIT that's out there.

Yes, I'm happy to take that one Jonathan.

Deric S. Eubanks: The, I mean, the genesis of the idea for that platform is that we've obviously operated publicly traded REITs for over 20 years now, and we've just seen the challenge of raising equity capital in the public markets, and publicly traded hotel REITs very rarely trade at NAV or a premium to NAV, and so it's very difficult to raise equity accretively. And so we were intrigued by the NAV REIT concept, where the portfolio is constantly valued at the NAV of the underlying assets. And there's been a lot of capital raised in that space. We now have Ashford Securities; we've raised significant capital through Ashford Securities, that channel has been a very resilient source of capital over multiple cycles, and so we think it's an interesting product.

I mean, the Genesis of the idea for that platform as we've obviously operated publicly traded rates for over 20 years now and.

We've just seen the challenge of raising equity capital in the public markets.

Publicly traded hotel Reits very rarely trade at a premium to NAV. So it's very difficult to raise equity accretively.

And so we were intrigued by the NAV rate concept.

Where the portfolio is constantly valued at the NAV of the underlying assets.

And theres been a lot of capital raised in that space, We now have Ashford securities.

Raise significant capital through Ashford Securities that channel has been a very resilient source of capital over multiple cycles and so we think it's an interesting product were obviously very early days on it. We've just we've just launched it.

Deric S. Eubanks: We're obviously in the very early days on it, we've just launched it, but we think it's interesting because investors can come in and come out at NAV, and so it's hopefully an interesting product for us to be able to grow our asset center management. And so, over time, we're hopeful that we can raise significant capital in that vehicle and grow our portfolio of asset center management, which would ultimately help all of our portfolio companies as well. Okay, excellent. And last one for me, if I could. Any color from the release this morning on the compliance plan with the exchange, kind of what that entails, and kind of what needs to happen to satisfy the exchange requirements? Anything you can add there? Yeah, it really boils down to the value of our public float. And, you know, the challenge we've had: we've got a lot of preferred equity in our capital structure, a very small piece of our companies publicly traded and publicly listed. You know, commercial real estate asset managers, in general, have not fared very well in the public markets lately. I think we got swept up into that, into that somewhat.

But we think it's interesting because investors can come in and come out of it.

And so hopefully.

St product for us be able to grow our assets under management and so over time, we're hopeful that we can raise significant capital.

And that vehicle in.

Grow our portfolio of assets under management, which would ultimately help all of our portfolio companies as well.

Okay excellent and then last one from me if I could.

Any color from the release this morning on the compliance plan with the exchange kind of what that entails and kind of what needs to happen to satisfy the exchange requirements and anything you can add there.

Yes, it really boils down to the value of our public float and.

The challenge we've had we've got a lot of preferred equity in our capital structure, a very small piece of our company is publicly traded publicly listed.

Commercial real estate asset managers in general.

I have not fared very well in the public markets lately I think we got swept up into that.

And of that somewhat and so we're hopeful that.

Deric S. Eubanks: And so we're hopeful that over time, the value will get back to a level that's consistent with the listing standards within YSB America, and YSB America has given us some time to get back in compliance with that criteria. Okay, great. Thank you for all the color. That's all for me. Ladies and gentlemen, we have reached the end of the questions and answer session. Thank you for your participation, and you may disconnect your lines at this time.

Over time the value will.

I will get back to the level thats consistent with the listing standards with NYSE American NYSE Americans given us some time to get back in compliance with that criteria.

Okay, great. Thank you for all the color that's all for me.

Okay.

Ladies and gentlemen, we have reached the end of questions and answer session. Thank.

Thank you for your participation and you may disconnect your lines at this time.

Okay.

Yes.

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