Q2 2024 Knightscope Inc Earnings Call

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Speaker Change: Welcome and thank you everyone for attending the night scope town Hall as well as a 2024 annual stockholder meeting, we're grateful to each and every one of our investors and genuinely appreciate you taking time to tune in today.

Speaker Change: We get straight to the point almost every company goes through difficult times in the last couple of years have been quite challenging for nights ago as a public company.

Speaker Change: I can tell you, it's an odd situation because internally, we believe we're doing profoundly better than when we were private.

Speaker Change: But as I, often say I believe wall Street can be.

Speaker Change: Wrong in the short term and typically quote right in the long term.

Speaker Change: Meantime, we will continue to relentlessly work the issues and I am confident.

Speaker Change: Ali confident we'll have a very very bright future this too shall pass.

We're making solid progress on our all of our internal goals.

Speaker Change: Key ingredients to reach profitability and I'm excited about the future of made scope and driving long term stockholder value.

Speaker Change: A good amount of that has to do with the sweeping changes, we're making to the business.

Speaker Change: I for some days it feels like we're changing everything except the color of the logo.

Speaker Change: Our aim is to leave no stone unturned.

Speaker Change: And we're focusing on various opportunities to improve the company and its financial position.

Speaker Change: We still have a lot of work ahead for us and we believe that we just need to focus on execution.

Speaker Change: Knights scopes from largest stockholder I have an unwavering belief in and support for the <unk> team.

Speaker Change: Our team shows up every day, no matter, how hard or how complex the challenges that we face maybe and just keep pushing forward our progress towards a brighter future.

Speaker Change: That relentless nature is what helped actually helped get nights go off the ground 11 years ago.

Speaker Change: Led to us being one of the 5% of startups that succeed in getting off the ground and staying off the ground.

Listen the Sky is Blue Tomorrow is just another sunset away, we just need to work the solutions, including instilling investor confidence and executing airplanes. We have a plan we have the right team working the plan and are making progress every single day.

Speaker Change: I believe the future is extremely bright for nights ago, and I Love Our company our team and our investors I don't want to be working on anything else and it's my honor and privilege to be fighting for nights scope in our country every single day.

Speaker Change: Today I'll focus on <unk> for personal reasons why on long on nights scope and absolutely in certainly short on the criminals.

Speaker Change: Market technology operations and people, so let's get into that now.

Speaker Change: Market.

Speaker Change: Investors Love to here love to hear that there is a large market right for disruption, especially if there is a unique technology in our business model to go with it.

Speaker Change: In our case, we believe we are not just targeting a very large market, but one that has a recurring need.

Speaker Change: Public safety law enforcement executing markets are not only right for disruption, but we believe they're right for disruption utilizing robotics AI and automation.

Speaker Change: So let's work through maybe three different angles on sizing what we believe can be a multibillion dollar opportunity.

Speaker Change: First.

Speaker Change: We often say I, often say robots will be everywhere.

Speaker Change: We believe the market potential is very large in our case, we think it's a market that will not only will not collapse as crime is an ongoing recurring problem. Unlike markets that can disappear think about typewriters pagers fax machines, but phones in station wagons.

Speaker Change: Remember our property crime occurs every four seconds and our country and a violent crime every 26 seconds.

Speaker Change: We do not have to live this way I believe every American has a basic and fundamental right to live in a safe community and a safe country.

Speaker Change: Second.

Speaker Change: Another angle would be some sort of unique triangulation or taking a few different data points to help draw conclusion. So let me give you. Some numbers there are approximately 1 million law enforcement professionals.

Speaker Change: <unk> 1 million in SaaS security Guards.

Speaker Change: Approximately 300000 law enforcement vehicles, and about 80 million security cameras and operation in the U S.

Speaker Change: The answer in my eyes is certainly not small.

Speaker Change: But requires a large technology portfolio that we're just getting started building.

Speaker Change: So I don't believe it's tens or hundreds or thousands of robots millions is where we're focused in the long term.

Speaker Change: Third you can take 8% augmentation approaches some of the numbers above and long term in our eyes is a potential for a $40 billion recurring revenue opportunity once everything is in place.

Speaker Change: And you can download the deck at nightclubs dot com Slash rise do you want to take a closer look, but here's a screenshot of the relevant slide for you.

Speaker Change: Now that you understand this is a huge opportunity how do we tackle it and what progress have we made.

Speaker Change: Here's some things for you to think about.

Potential for recurring revenue well with our machine as a service subscriptions, we're demonstrating that a recurring revenue business model for our recurring societal problem can work and has already generated millions and millions of dollars of revenue.

Speaker Change: High margins, we've demonstrated greater than 60% margins over five year period by analyzing data from numerous numerous over our longest serving clients for our autonomous security robot, which is a major major milestone confirming our projections with real world results.

Speaker Change: Now, we just need to scale things up.

Speaker Change: Renewals.

Speaker Change: Clients have renewed our subscription services, including for 234567, even eight years eight consecutive years.

Speaker Change: Science don't stick around that long without us providing real value for them.

Speaker Change: Dwindling competition we.

Speaker Change: We believe every major effort by a competitor either a major corporation or a startup.

Speaker Change: Has effectively failed thus far granting nights scope a genuine first mover advantage.

Speaker Change: Fed ramp we believe we are currently the only autonomous security provider authorized to do business with the U S Federal government.

Speaker Change: And we have successfully deployed our first K five Gulf machine at a U S Department of Veterans Affairs Hospital in Texas Super excited about that.

Moat, we have begun to build a strong moat with a combination of approximately 3 million hours of operating in the field.

Speaker Change: The fed ramp authorization I, just mentioned from the U S Federal government.

Speaker Change: And growing technology, and advanced technology portfolio and more than a decade of real world experience.

Speaker Change: Crime fighting wins, our machines have done a lot of good for society already and we're just getting started.

Speaker Change: Help apprehended armed gunmen helped with domestic abuse case, aided a victim of kidnapping health issue an arrest warrant for a sexual predator stopped numerous cards.

Speaker Change: And list goes on and on and on and check it out at nightclubs Dot com slash crime.

Speaker Change: We envision that in the future will be required to have autonomous security no different than having a I don't know a smoke alarm or fire detector and that will be the tipping point or robots to be everywhere.

Speaker Change: RPX, our newly established risk and threat exposure Department.

Speaker Change: It's proven to be a road sounding success with.

Speaker Change: For and keeping your loved ones safe.

Speaker Change: And the number of robot southeast continues to grow.

Speaker Change: So to sum it up what's not to love <unk>.

Speaker Change: Our massive market with a real problem.

Speaker Change: Re American can relate to.

Speaker Change: A potential path to recurring revenue with potential for a high margins at scale.

Speaker Change: Proven technology, and a competitive landscape, where none of our competitors.

Speaker Change: Not yet succeeded.

Speaker Change: Interesting times.

Speaker Change: Let's move on to technology.

Speaker Change: Nightclubs, a technology company focused on public safety building, new tools to fight against those that seek to cause harm to everyday Americans.

Speaker Change: What we have achieved is not only technologically extremely difficult to build but even more challenging to operate 20, $473 65 across an entire nation.

Speaker Change: To emphasize this fact literally three major corporations and just as many funded startups have failed given up or gone bankrupt.

Speaker Change: We now have a real advantage, we believe we got it working now just need to optimize.

Speaker Change: Now it is time to scale things up with a focus on driving growth cost reductions efficiencies process improvements et cetera.

Speaker Change: Kind of maybe the less glamorous stuff, but extremely important and we'll continue to build our moat as we develop our portfolio of software hardware and unique services that combined together will uniquely position us as leaders of public safety technology.

Speaker Change: We believe that in order to address the nation's public safety problem, we need to put at least 1 million machines and network that can see feel hear smell speak and autonomous we cooperate.

Speaker Change: They need to work 24, $703 65, and give the $2 5 million officers and guards real tools for them to be able to do their jobs effectively and keep you and your loved ones safe.

Speaker Change: I'll say it again.

Speaker Change: That robots will be everywhere and anyone who thinks that that is not the case is in Florida, very very rude autonomous awakening.

To give you a flavor of the future that we're planning for nights scope I thought it'd be helpful to highlight our current portfolio of technologies and equally as important.

Speaker Change: As a technology company share what the future might hold for Knight scope.

Speaker Change: We currently have eight different machines and devices in the field as well as two software platforms.

Speaker Change: Hey, one hemisphere.

Speaker Change: On size and price matter. The K, one hemisphere can be had for as low as 75 cents per hour, including being monitored remotely by our RPX team K.

Speaker Change: <unk> tower has been popular at ingress and egress points, where there's a good amount of human or vehicle traffic.

Speaker Change: K three indoor has been proudly patrolling indoors at a large hospital in Houston for many many years.

Speaker Change: K five outdoor our most popular ASR and now on our fifth generation of the technology, providing both the physical deterrent to negative behavior, but also given an officers and guards eyes ears and voice on the ground in multiple locations at the same time.

Hey, Juan Boule tower.

Speaker Change: Beacon of public safety across our school and corporate campuses.

Speaker Change: Q1, Blue light emergency phone.

Speaker Change: Compact emergency calling solution very popular in parking structures.

Speaker Change: The K one call box.

Speaker Change: And thousands of these deployed for emergency roadside assistance and remote locations, Hey, listen no seller no problem, that's our thing with our K one call boxes.

Speaker Change: Hey, Juan retrofit kit, it's an opportunity to upgrade solar power wireless connectivity with self monitoring software and support.

Speaker Change: And on the software side of things, we've got the Knights Global Security Operation Center. This is our browser based user interface that provides a unique format for humans to interact with our autonomous security robots and the over 90 terabytes of data they generate annually.

Knight scope emergency management systems, our camera once a year ago that health monitor nearly 10000 fleet.

Speaker Change: Our <unk> devices in the field operating 24 seven.

Speaker Change: Additionally, and through strategic partnerships we've added.

Automated gunshot detection.

Speaker Change: 100% automated for indoor outdoor usage reporting a gunshot within two seconds.

Speaker Change: Riding the three D shooter location accuracy within two meters.

Speaker Change: Economists drones in partnership with our friends at dragonfly, forming a unified offering both in the air and on the ground.

Speaker Change: And the recently announced K, one laser using lasers to fight against criminals, especially for perimeter security the <unk> lasers operate under adverse weather conditions and low or no late.

Reliably delivering advanced detailed at the $80 million plus security cameras in the U S cannot.

Speaker Change: All of these actions enhance our offerings for our clients on our mission to better securing our country.

Speaker Change: This is just the start of.

Speaker Change: But what we anticipate will be a wide a very wide portfolio of technologies to better protect the places people live work study and visit.

We plan to do that by building new technologies organically.

Speaker Change: Through partnerships and through acquisitions.

Speaker Change: In the near future, we're focused on two key strategic initiatives.

Speaker Change: First one being platform commonality to.

Speaker Change: To drive engineering efficiencies improve quality speed up manufacturing throughput increased economies of scale and drive innovation, we must we must consolidate our wide ranging of technical architectures hardware software firm, where telecom and electrical systems into <unk>.

Speaker Change: A single common companywide platform.

To that end, we've kicked off a very ambitious project called ICM or intelligence control module that we intend to eventually become the backbone of the entire lineup handling all things AI all things video audio lighting control and telecommunications we believe this.

Software firmware hardware platform designed to provide a seamlessly unified customer and operating experience across all our products will not only drive significant significant cost reductions, but numerous benefits in manufacturing quality and operations at scale.

Speaker Change: We're targeting the ICM to go into production during 2025.

Portfolio expansion in.

Speaker Change: In the medium term, we intend for the aforementioned ICM module to go into the future <unk> Super Tower.

Speaker Change: And the all new and Super exciting K seven ASR that we highlighted during our <unk>.

Speaker Change: Innovation.

Speaker Change: Concurrently, we intend to tackle additional growth opportunities through a methodical approach long term in some cases organically and as I mentioned in other cases through partnerships and acquisitions.

Speaker Change: We are certainly have our sights set on the K 10 patrol.

And future K 15 tactical vehicles.

Speaker Change: Although the industry is not yet ready for this level of technology.

Speaker Change: <unk> seeks to become that trusted adviser that trusted technology advisor over time for our clients to help bridge the gap between those on the front lines and cutting edge new technologies.

Speaker Change: We need to work in the future to deliver the future.

Speaker Change: This is an exciting time, where we think technology can genuinely and positively help society help our communities and help your community and your loved ones.

Speaker Change: And we believe all of that we envision is technically possible.

Speaker Change: The right people cash in time to execute.

Speaker Change: So you may be asking what about artificial intelligence, how does AI play a role in <unk> future.

Well first some of the basics involved in AI already have been implemented at night scope and working in the field.

Speaker Change: Kid around her teeth folks like do you think there's like a little guy inside our robots in pedaling away like crazy to get the machine to move around by itself. That's all AI.

Speaker Change: That is real world practical implementation of AI, and so is autonomous recharging facial recognition license plate detection people detection object tracking all of that is AI we.

We intend to integrate AI and everything we do as we have already and it is part of our core.

Speaker Change: The exciting part in my mind is the latest breakthroughs in AI are only going to accelerate our efforts at night scope.

Speaker Change: When we say, we need 1 million machines and network and they need to see feel hear smell speak and autonomously cooperate we believe that will all <unk>.

Speaker Change: All of it will be accelerated dramatically by AI.

So let's go through them what.

Speaker Change: What do we mean by C well process vast amounts of video data for object and seen classification detect humans vehicles animals bicycles behaviors and threats.

Speaker Change: <unk>.

Speaker Change: One machine learning models on live streaming thermal data or analyze the motions in a crowd of people or the type of fire.

Speaker Change: Here.

Speaker Change: <unk> conduct sound classification and localization for acoustic event detection, which could include gunshots cars, starting glass breaking a yale for help or an accident.

Speaker Change: Smell.

Speaker Change: Tivoli place a dog's nose on a chip to detect pathogens or chemical biological radiation or other similar risks.

Speaker Change: Speak Utah.

Speaker Change: Utilized generative AI to allow the public to conduct a value added conversation with the robots, which could be used for basic information directions call for help or details on a point of interest.

Speaker Change: And what do we mean by autonomous we cooperate well utilized AI to enable autonomous cooperation swarming data transfer and data sharing foreseen or incident analysis planning and investigation amongst all the machines.

Speaker Change: For example, imagine the FBI, putting up the most wanted list in the machine being able to attract that suspect down anywhere in the country within minutes.

Speaker Change: Here's another example, we need to build a state of the state of the art AI driven mission control software platform to be able to fulfill it state cooperation between all of these machines.

Speaker Change: There is a standalone user interface for each of the autonomous security robots, our <unk> portfolio of the drones automated gunshot detection and the recently announced K one laser.

Speaker Change: For our clients and our team to get the most out of all of these systems, we need them to be able to effectively communicate share data planned missions conduct the investigation and autonomously cooperate with each other.

Speaker Change: It's going to be a hell of a software Marvel to build we think the opportunities where they are AI are endless and the possibility to build game changing technology for the benefit of our communities and our country is invigorating and what gets US up every morning here in Silicon Valley.

Speaker Change: Operations the team spent years and years getting all this stuff to work and we were not necessarily focus on optimizing for material costs labor efficiencies processes et cetera.

Honestly the priority was just to get all this stuff to work improved the decline will pay for it.

Now having done that we can now focus on refining.

Speaker Change: The work to optimize things is not glamorous as I mentioned, but it is a known quantity we know what to do and are doing it now we simply need to increase revenue reduce costs and scale up.

Speaker Change: After which we believe the profits will come.

Speaker Change: Providing some specifics so you'll get a better understanding of flavor of where we're focused and the progress we're making.

Speaker Change: Reduction in machine downtime across the fleet through design changes material changes improved quality assurance burn in testing and software and firmware improvements reduction in service calls through more carefully managing the service process documentation and escalation procedures.

Speaker Change: Reduction in service costs through outsourcing technician work and eliminating our fleet of trucks.

The reduction in false positives through improvements in machine learning and algorithms as we as well as diagnostics.

Speaker Change: <unk> and the bill of materials through changing suppliers changing materials, eliminating parts and significant design changes.

Speaker Change: Reduction in labor hours through improved processes documentation and use a contract manufacturing for select sub assemblies.

Speaker Change: A reduction in number of facilities through ongoing consolidation.

Speaker Change: A reduction in salary costs through contract negotiations and technical changes as well as an increased usage of private LTE.

Speaker Change: Reduction in operating expenses through numerous optimization techniques elimination of processes and head count optimization.

Speaker Change: At the same time as we're making all of those reductions. We've also made the following improvements.

Speaker Change: Improvement in purchasing controls and improvements in production planning and sign off authorities improvements in production throughput where for example, we used to ship maybe one K five perhaps every week or two and now consistently shipping about three a week.

Speaker Change: Improvements in QA processes throughout the production process and the line test documentation again, and again again strict controls on authority to ship.

Speaker Change: Improvement in decision, making by eliminating a significant portion of the management team.

Speaker Change: Improvement in root cause analysis by driving decisions based on improved collection of data from the field and not just going to fix the problem and not analyzing it improvement in client retention through both upgrades to the fifth generation K five but also implementation of the aforementioned RPX team or the risks and <unk>.

Speaker Change: Threat exposure team.

Speaker Change: Improvement in team alignment, which is really important where we now have a solid cadence of engineering and production changes underway.

Speaker Change: Wanted to work to squeeze out as many efficiencies as possible cleaning house, improving business and technical processes, while focusing on the bottom line. As a result, we think that these improvements will begin to show up in the financials in the coming months quarters and years setting ourselves for what we believe will be.

Speaker Change: Hospitable growth and in a very exciting future.

Speaker Change: People.

Speaker Change: One of the keys to.

Speaker Change: Success here is the absolute relentless nature of the nights go team.

We've made a lot of changes, but not limited to cutting a third of the management team to streamline decision making.

Speaker Change: Recruited an all new board of directors on track to cut up to 30% of the payroll expense and we're focused on building a very cohesive teams one team one fight.

Speaker Change: And did you know that a third of nights Goldman employees have been with the company between three and 11 years.

Speaker Change: Frankly that is a bit of a miracle here in Silicon Valley, where typically folks last maybe a year or two max at an employer.

Speaker Change: These are smart driven people that could work anywhere.

But theyre, giving that they're all against all odds to make nightclub successful and achieve our mission.

Speaker Change: My bet is and will always be on the <unk> team.

Speaker Change: I also consider our thousands of retail investors part of our team without your steadfast support we wouldn't have been had the fuel to build the company and get this far in the first place.

Speaker Change: Heartfelt. Thank you to you all.

Speaker Change: My motto has been life is short do what you're allowed to make a big impact and.

Speaker Change: And what I Love is working on our honorable mission here at Knight scope that everyone says is impossible.

Speaker Change: That fuels, a deep fire within me and the entire team this.

Speaker Change: This country gave my parents a chance for a better life coming from South America and Asia. My Mom was from Bogota, Colombia, My dad was from outside of Shanghai, China and they met in the melting part of New York City, where I was born.

Speaker Change: And here in America, they were able to build a positive life together and provide me a chance to grow learn and succeed.

I feel a deep need to repay that debt to our country.

I believe in America, and I believe we can make it the safest in the world.

Speaker Change: Look for that to potentially happen I need you to continue to believe in ninth scope and the Mexico team together, we can do this well.

Speaker Change: While many investors don't understand is that after 911 I committed to dedicate the rest of my life to better secure the U S and so the drive here is deeply personal with me.

Speaker Change: We're not going away.

Speaker Change: No matter how hard so many tried to trip us up.

Speaker Change: I'm willing to do whatever it takes so long as its legal ethical and moral to force a win for our country and for our stockholders.

Speaker Change: If we can't run we will work if we can't walk we will crawl, but nothing is going to stop us from moving forward and I mean nothing has.

Speaker Change: Having put in over a decade working the same problem over and over and over again gets us several steps closer to a victory.

Speaker Change: What is crazy.

Speaker Change: Indeed possible to achieve the mission as crazy as that might sound and making the U S. The safest country of world sounds outrageous.

Speaker Change: But.

Speaker Change: That deep change in public safety requires investment and building of new technologies, not just going to download this solution off the cloud and the federal state and local government are not going to fix this problem. It requires real work by serious people backed by serious investors and I know, we can do it together.

Speaker Change: Listen Americans Love I'll comeback story, and I hope youll be a meaningful part of it to join us and be a force for good.

Speaker Change: Onward.

Speaker Change: [noise].

Bill: Thanks Bill.

Bill: Know that this journey is challenging but nice scope is well positioned for long term success.

Speaker Change: With that let's jump into our second quarter financial performance results.

Goldman: I'm a floor of DVD EVP and CFO at nights Goldman.

Speaker Change: The second quarter of 2024, we reported total net revenues of $3 2 million.

Speaker Change: This represents a decrease of <unk> 4 million or a 10% decline compared to the same period prior year.

Speaker Change: Primarily because the gain in our services business was offset by lower year over year product revenue.

Speaker Change: <unk> revenue increased by 1 million to reach approximately $2 million for the quarter, primarily due to the ASR subscriptions and as more clients in.

And the <unk> product line signed up for recurring maintenance.

However.

Speaker Change: Total product revenue, which currently consist mainly of the <unk> products declined by <unk> 5 million coming in at approximately $1 3 million because a large one time sale in the prior year did not repeat.

Speaker Change: Moving onto costs.

Speaker Change: If you recall the company made a few strategic changes in the first quarter aimed at fitting our path to profitability. Many of these will directly aimed at reducing our cost of goods cost of services. We also acknowledged that these initiatives would initially result in higher short term costs and that we also expect.

The disruptions in the impacted activity that the business to directly affect our P&L throughout the year as a result, we fully expect to 'twenty 'twenty four to continue to be a transition year.

Speaker Change: Our cost of revenues came in at $3 8 million, which is an increase of approximately 200000 from the prior.

Speaker Change: Prior year.

Speaker Change: This was driven primarily by cost savings that include <unk> 5 million in lower cost of materials and $25 million 4 million in head count savings that were offset by $1 6 million and higher third party costs $3 million in scrap fees and $2 million in other <unk>.

Speaker Change: Costs associated with the transition.

Speaker Change: Onto gross profit this quarter, we recorded a gross loss of <unk> 6 million a significant change from the gross profit of 9000 reported in the prior year second quarter.

Speaker Change: The decrease in gross margin was driven by $4 million and lower year over year revenues and $2 million and higher cost of revenues. It is important to note that our gross loss would have been between $1 million and $3 million. If we exclude the one time scrap fees of <unk> 3 million and the one time.

Transition costs of two.

$2 million.

Speaker Change: Moving onto Opex total operational expenses came in at $6 2 million for the quarter ended June 30th.

Excluding the <unk> 3 million of restructuring charges that we took our opex was flat to prior year as it came in at $5 9 million for this quarter.

Speaker Change: Overall, we saw head count savings of <unk> 6 million offset by <unk> 4 million and higher third party expenses, primarily legal and financial support costs and <unk> two.

Speaker Change: 2 million and higher R&D costs.

Speaker Change: Related to product development as the firm explores the new generation of product design.

Speaker Change: Restructuring.

Speaker Change: <unk> charges of <unk> 3 million are primarily related to severance costs and moving fees as we closed down the Irvine, California facility to move our production to mountain view, California.

Speaker Change: Loss from operations of $6 8 million was approximately <unk> 9 million higher than prior year because of the drivers discussed earlier.

Speaker Change: It's important to note that excluding the onetime restructuring costs of <unk> 3 million and the scrap fees of <unk> $3 million and investment in new product development of <unk> 2 million, our opex, our operating loss would be flat to prior year on $4 million and lower revenues, indicating that the company is working hard.

Speaker Change: To deliver on its operational efficiencies.

Speaker Change: Net loss of $6 3 million for the quarter came in approximately $1 $5 million higher than prior year Pri.

Speaker Change: Primarily due to the $7 million increase in other expenses, coupled with the point $8 million higher opex versus prior year.

Speaker Change: The increase in other expenses includes $5 million and higher non cash warrant valuation losses, and <unk> 2 million in interest on the bonds that we closed in the first quarter.

Speaker Change: Finally, Knight scopes of basic and diluted net loss per common share was <unk> as compared.

Speaker Change: <unk> to a loss per share of <unk> <unk>.

Speaker Change: Prior year.

Speaker Change: With that I'll pass it back to Bill.

Speaker Change: Good afternoon, everybody. Thank you so much for joining the <unk> Q2.

Speaker Change: Town Hall.

Speaker Change: Stacey Stevens Executive Vice President and Chief client Officer here at night scope I want to thank bill and a poor if theyre going to be joining us live momentarily I wanted to go through some quick housekeeping measures.

Speaker Change: First and foremost all of your questions. Please put them into the chat window. So that we can address them.

Speaker Change: If it's stuff, that's just comments and things like that I'm. Just if you see your comments disappeared with only because one of the leading until I can keep track of the question and then I will tee those up for Bill and a poor. So you guys can ask them the live questions.

Speaker Change: So let's go ahead and get started.

Speaker Change: Bill I wanted to talk about.

Speaker Change: Some of the highlights and accomplishments for the for the quarter that we're talking about right now just so people kind of know some of the positive stuff. Obviously, we got to go through all the financials and everything else but.

Speaker Change: It's not all Doom and gloom, so let's talk about some of the positive changes that have been made bill hey, good to see as this poor.

Speaker Change: Everybody only a few hundred people online with only a few hundred questions. So we're going to be here a little bit we'll.

Speaker Change: We will try to answer as many as possible.

Speaker Change: As we mentioned where this year is a kind of a clean house turnaround a year to make a lot of fundamental changes.

Speaker Change: We expect that those numbers will be choppy, it's not going to be a linear kind of progression as we make substantial changes throughout the entire organization and as I mentioned in the video.

Speaker Change: Honestly it feels like we're changing everything except the color of the logo.

Speaker Change: But I think our pork and I and the team are pretty excited despite.

Speaker Change: All the red stuff that you see.

Speaker Change: On the share price side of things.

Speaker Change: I think the future is looking pretty good and we're excited to move things forward. There are things that are less obvious that don't show up in regulatory filings, obviously, we're not going to share any material nonpublic information here, but we may highlight a few things.

Speaker Change: Sometimes and all the regulatory filings things get lost or frankly, a little too complicated.

Speaker Change: But I'll turn it over to Paul if you want to kick off some.

Paul: Things that will help answer a ton of questions that are flying in here.

Speaker Change: And things that we have changed that may not be so obvious for folks.

Absolutely absolutely.

Speaker Change: We started off this quarter by focusing on cleaning up our cap table, primarily when we looked at our balance sheet and look at prior years. You saw that there was this on a shareholders' equity section there was its about 34 million in preferred shares.

Speaker Change: That kind of sat there and what that did is that normally not common when you are a public company most preferred shares convert automatically into common upon an IPR liquidation event in our case, because we did a direct lifting.

Speaker Change: That did not occur so that kind of made us a little bit of a anomaly and of being a public company. So the first thing we did.

In second quarter was convinced are that although a majority of the preferred shareholders to vote to convert by doing so a couple of things happened one we got we aligned ourselves more with the with.

Speaker Change: With public company structure secondly.

Speaker Change: We also were allowed to or able to put that $34 million into step us stockholders'.

Speaker Change: Equity number so that wasn't before that wasn't being calculated. So we had this negative stockholders' equity or stockholders' deficit on our balance sheet, but making that change and cleaning that up we were able to now show as you guys can see on our <unk>.

Speaker Change: Recent filings, we had $11.2 million of shareholders equity now what's good about that is that one.

Speaker Change: And cleaned up our balance sheet too on a NASDAQ perspective, it allows us to show.

Speaker Change: Qualify for or continue lifting under their stockholders' equity requirement NASDAQ has three requirements.

Speaker Change: Revenue requirement sorry.

Speaker Change: Market cap requirement and equity requirement and a net income requirement.

Speaker Change: Previously only able to qualify under the market cap requirement now we have this equity requirement, which is great for us on top of that we.

Speaker Change: Also non.

Speaker Change: On NASDAQ move to capital markets tier, which better aligns us for our company.

Speaker Change: We raised over $5 billion in funding we continue to do so many questions on how do you continue to.

Speaker Change: <unk> funded.

Speaker Change: Haven't activate T. M program that we use whenever we can and we continue to find that could be useful as the cheapest form of capital you can get without going into some of the more exotic types of funding that available sometimes.

Speaker Change: We have.

Speaker Change: Some of the best quarter this quarter actually in terms of revenue was the best quarter in the last few quarters, 40% growth versus prior quarter again this is <unk>.

Speaker Change: This is choppiness that we're seeing timing, but we think we're taking the right steps to get there.

Speaker Change: And then some of the things Bill maybe you want to talk about our partnerships and product developments in some of the things we're doing on the <unk>.

Speaker Change: On the experience side.

Speaker Change: Alright.

Speaker Change: We need to obviously get the revenues up in the cost down and you can't just.

Speaker Change #100: Put band AIDS on some other stuff some of this through acquisition or through our own organic technology development, We're a technology company.

Speaker Change #101: And there are significant opportunities as we scale up where perhaps we were three D printing stuff before now we should.

Speaker Change #101: Do something a little bit more.

Speaker Change #102: Efficient and low cost and better for higher volumes and get some consistency one of the thing have super excited about is the intelligence control module.

Speaker Change #103: Because if you look at the all the products that we have better behind me here, we have different architectures different software different firmware and everything else and that requires a lot of staff and a lot of engineering maintenance service support production QA and it's a huge drag on throughput.

Speaker Change #103: An.

Speaker Change #103: Addressing our service issues service costs et cetera, and so with one fell swoop, we're looking to communize that across the entire platform. So we can build faster we can QA faster, we can ship faster we service a lot less and then that starts and has with the K five.

Speaker Change #103: Five.

Speaker Change #103: Replacing the <unk> three.

Speaker Change #104: So a question on here or how are you going to do all this with <unk>.

No massive incremental resources well, if we can be a lot more efficient with what we're doing here and not have people working on older technology that needs a lot of babysitting and we can permanently fix that stuff that alleviates and relieves the team to go work on actual new product development.

Speaker Change #104: And I think that's going to be.

Speaker Change #105: Certainly one of the most exciting things for me I used to be an engineer and former life.

Speaker Change #106: That's my kind of excited but it's going to have a dramatic effect I think on overall quality throughput and our financial performance.

So, whereas as we keep saying this is going to be a little choppy because you can make a change like that but it doesn't necessarily time with when we're going to shut down certain facility and then when that leases are versus when you terminated that person and so it's going to be a little messy, but overall I think we're trending in the.

Speaker Change #107: Right direction, and we're going to take some lumps along the way, but we need to set this up for for long term success and I think we've got the right strategy with the with the right team now its just time to to execute.

Speaker Change #107: Alright.

Speaker Change #107: Let's get into some of the questions then yes, because there is a lot of questions and thanks, everybody for tuning in and.

Speaker Change #107: All of your pretty busy in a pretty busy lives. So.

Speaker Change #107: We oh.

Speaker Change #108: Grateful for that the two videos that we just played will show up on on Youtube here in a couple of hours or so on our Youtube channel and we'll close them on social media. So in case, you missed something or you wanted to go back or like what are the per se.

Speaker Change #109: Mind, you will be able to do that here shortly but let's get to the questions. You got here alright. So just everybody knows I'm not going to be coming back on video just simply because I'm navigating multiple screens here and I don't want to be a distraction.

Speaker Change #109: Starting at the top what were the orders for.

Speaker Change #110: I do.

Speaker Change #111: And assuming this means hemisphere H, one K, one hemisphere versus a year ago.

Speaker Change #111: A year ago, we didn't have it in production.

Speaker Change #111: So it's been and initial growth driver I think we're also learning where the best applications might be.

Speaker Change #111: We've had apartment complexes warehouses.

Speaker Change #112: Monitoring mailboxes for for HOA is and Theres more coming.

Speaker Change #112: So we've delivered more than a bunch and theres a bunch more to two or to go out and we want to make improvements to that but I think there is a genuine market are there for the hemisphere.

Took a little longer than we wanted to get out the door, but I.

Speaker Change #112: I guess versus yet last year last year was there.

Speaker Change #113: For those of you raising your hand, ladies just put your question into the chat window, we do not have the video enabled us.

Speaker Change #112: Like we have in times past.

Speaker Change #114: So raising your hand, Unfortunately, we will not get us to be able to interact with you directly.

Speaker Change #114: What percentage of sales, our <unk> versus the Blue light products.

So obviously, what we would.

Speaker Change #115: I refer you to for the specific numbers through our regulatory filings, but and this varies every quarter, but plus or minus just to give you a flavor about and of course going to correct me here in a minute about two thirds of the business is <unk> related and about a third of it is ASR related.

Speaker Change #115: It will be fascinating what that looks like three or five years from now depending on how things are mature.

Speaker Change #116: But two thirds versus one third.

Speaker Change #117: I get that right, yes, you did it's about 68% for this quarter and.

Speaker Change #117: And the reality is our Q1 base of customers is much higher so.

Speaker Change #118: The sales team does a really great job of going out and selling to existing clients thing more services.

And continue to expand on that just because of the branding.

The ASR side.

Speaker Change #118: Is still new.

New technology, and we continue to sell those as well, but from a revenue perspective, the check sizes, sometimes tend to be bigger on the <unk>.

Speaker Change #118: How much cash on hand on the balance sheet at the end of Q2.

Speaker Change #119: Again, when we refer you to the regulatory filings for the exact number but I think the cash on hand over the last 18 months or every filing that we've had as.

As oscillated somewhere between two plus million dollars to maybe $5 million and kinda oscillates along the way.

Speaker Change #120: And everyone keeps like all of you know you guys don't have enough cash don't have enough, yes, we need more funding, but you know I've heard this.

Speaker Change #121: Line of attack of Youre going to run out of money Youre an hour, we're not running out of money.

Speaker Change #120: Everyone needs to just calm down.

Speaker Change #120: And we have been public for two and a half years haven't run out of money, where private for nine years and run out of money.

Speaker Change #122: We continue to try to raise capital as efficiently as possible.

Speaker Change #122: And tried to reduce our <unk>.

Speaker Change #123: Burn and I would remind folks that you know three major corporations and three funded large startups has failed at this and so there is a level of technical difficulty to get all this stuff to work and commercialized.

Speaker Change #123: We're at the bleeding edge of technology, and everyone expecting some sort of overnight change.

Speaker Change #124: Very quickly done in 30 days and everything is going to be fine.

Speaker Change #123: Is kidding themselves.

Speaker Change #123: This is going to take some time, but.

Speaker Change #123: I think the fundamental thesis of what we're trying to do.

Speaker Change #123: And where we're going to go and now really focused on.

Profitable growth is really important and I said in the video just restate it for the for the group here.

The first 10 plus years, we're focused on just getting the technology to work remember what I, just said half a dozen companies failed at this and including three major corporations.

Speaker Change #123: And probably I'm going to guess quarter billing to half a billion burned and nothing to show for it.

Speaker Change #125: That speaks a little bit to the level of difficulty here now that we've got it working now it's time to do the blocking and tackling like okay can we optimize what material we use for that part did we pick the right architecture, maybe we should change how we build these machines.

Speaker Change #126: So now we're in the optimization mode now that we've proven that there is a market there.

Speaker Change #127: Now, we just need to do it more efficiently and this is going to sound a little odd that's actually the easier part right, where there's not a I don't know how to get from <unk> I don't know how to cost reduce that part that's not the case, so let's just work that needs to get done and.

Speaker Change #126: Folks.

Speaker Change #126: Ask you to continue to be supportive and be patient we are working very hard.

Speaker Change #126: To turn this into a big success.

Speaker Change #126: And like I, often say wall Street's typically in my opinion wrong in the short term.

Speaker Change #126: And right in the long term and our goal here is to make.

Speaker Change #128: Make for a lucrative business, but also make a big impact on the country.

Speaker Change #129: And I'll just follow up Bill it was $2 $6 million of cash at the end of the quarter again as you mentioned, that's kind of where we hovered just drove between the.

Speaker Change #128: Five and two.

Speaker Change #129: Every quarter.

Speaker Change #130: I think maybe now would be a good time to talk about cleaning up some of the balance sheet and.

Some toxic financing that were put in place.

Speaker Change #130: Without getting too much into the weeds here we had.

Speaker Change #130: A convertible debt offering.

Speaker Change #130: Our financing that was done a few years back and had a lot of tox.

Speaker Change #130: Toxicity.

Speaker Change #131: That was not helpful. Overall, and then there are some blockers in those agreements that precluded us from.

Speaker Change #131: Doing normal financings or raising capital that like any other company would be able to do.

Speaker Change #132: You can refer to the 8-K that we filed maybe a few weeks back.

Speaker Change #133: We have now kind of cleared that up and now we have.

Speaker Change #132: Freedom.

Speaker Change #134: To raise capital in any form that we deem favorable for our shareholders and not pigeonholed only to be able to rely on one or two forms of capital I don't know if you want to add anything else to that.

Speaker Change #135: Yes, absolutely I think I saw a question came up earlier about this it's very important to kind of talk through this so what we did is we.

Speaker Change #135: We had this.

Speaker Change #136: Fund that.

Speaker Change #137: We had given warrants out too as part of their convertible notes it was $1 3 million warrants struck.

Speaker Change #136: <unk> 2025.

Speaker Change #136: What we've found is that as we look through the details.

Speaker Change #136: Of this transaction was that the warrant themselves, we're actually extremely toxic for the company toxic how in that they have these clauses.

Speaker Change #136: Theres, a one clause called the reset costs that basically if we do financing.

Speaker Change #138: Their warrant strike price comes down to whatever refinance at the second part of that what that that.

Speaker Change #138: Warrant language was that as if we do a financing event and then the price of the stock.

Speaker Change #138: Strike price drops.

Speaker Change #139: We have to keep the value of that debt arrangement. The same. So if you think about 2020 by a sense, one 3 million shares for warrants equal $3 7 million.

Speaker Change #139: Dollars of value right, we would have had essentially award them.

Speaker Change #139: $3 $7 million worth of warrants divided by whatever the strike the new strike fighter is.

Speaker Change #139: And as we looked at that we thought that in terms of dilution.

It's a highly dilutive instrument and we had to get rid of that not only for ourselves, but also for our shareholders.

Speaker Change #140: We were concerned about this dilution. So yes, we the 8-K states that we were able to basically convinced and getting agreement with the fund to extinguish the warrants. They also had things like participation right. So if we do different funding during the future it could step in and participate which we didn't think it was.

Speaker Change #139: Good idea for us.

Speaker Change #139: And as a result of that we were able to convince them to take about $3 million of.

Speaker Change #139: This debt that we have on our books, but get rid of those warrants and we.

Speaker Change #139: We think it's the best view that the company could come up with and do.

Speaker Change #141: And now feed us to go out and have the freedom to do as Bill said earlier to go out and other types of funding to be able to attract other investors to work with partners in our bankers to capitalize the company in a way that's potentially less dilutive than what that arrangement was contemplated.

Speaker Change #139: <unk>.

Speaker Change #142: Alright, Stacy what you got next to it.

Speaker Change #142: Keep fighting in Sydney.

Speaker Change #143: Can you give me a status or give us a sense sorry of the investigations into the possible legal actions of the short seller.

Speaker Change #143: This is regarding the capybara.

Speaker Change #144: Suit, we it's an ongoing investigation and an ongoing lawsuit there is no update to provide other than than that.

When and if something does.

Speaker Change #145: Change, we will certainly let you know, but nothing new to report.

Speaker Change #145: Most of the night press releases mentioned, new contracts or new sales, but it gives <unk> indication of impact on profit loss.

Speaker Change #145: Okay. So.

Speaker Change #146: But the and announcements as a fun internal discussion because we have a lot of investors, which is awesome, but we also get a lot of inputs and opinions and in some cases folks who like I don't want hear anything until like its actually deployed and money is coming in the door, okay, well, that's the financial statements.

Speaker Change #147: Well I Wanna noteworthy to deploy okay, well, that's a different thing well I want to know when a contract is signed and so we've played around with different when and how we do this but.

Speaker Change #146: What we kind of.

Speaker Change #148: The best thing was for us to announce when we have a new contract and that in a lot of cases is not for the Investor Relations perspective is actually to help the sales team.

Speaker Change #148: So that if you know.

Speaker Change #148: The contract happened in North Carolina.

That might help.

Speaker Change #148: To help the client development team that might be talking to another.

Speaker Change #148: Prospective clients in that area. So we typically do the announcements of of that then there is this whole long process, though.

Speaker Change #148: Getting the site ready or doing site surveys or what have you building all the the machine or devices and then deploying it. So there is a.

Speaker Change #148: The time difference between when it shows up in our financials and when we announce.

Speaker Change #148: What we're hoping to do as we increase production.

Speaker Change #148: <unk>.

Speaker Change #148: I just wanted to get rid of finish retiring.

Speaker Change #148: Hearing all the <unk> fives.

Speaker Change #148: I've been a financial drain and operational drain on us.

Speaker Change #149: Second clear out as much as the backlog as we can and we've made a good amount of progress on that and the third is to actually build some finished goods inventory. So one of the ways to improve the financial performance of the company is thinking through the order to cash when you get an order and when do you deliver.

Speaker Change #149: You don't want this to be a very long period. So if we had some finished goods inventory or sub assemblies completed.

Speaker Change #149: You know the dream here is to get a contract on Friday and ship the next Friday right.

Speaker Change #149: So we're working our way towards that and that's one of the other reasons why we're focused on throughput and cycle times and efficiencies and in some cases, having to redo the technology. So we can actually.

Speaker Change #149: See that but all of those contracts that we sign.

Speaker Change #149: Especially since a poor began on onboard here, we're very much focused on making sure it's lucrative for the company.

Speaker Change #149: Makes sense for us to do and frankly in a lot of cases going back to some existing clients, where we have some very.

Speaker Change #149: Ancient old contracts that need to get redone.

Speaker Change #149: So we're going through that process as well.

Speaker Change #150: Okay. So we're getting a lot of questions about specific numbers, how many robots, how many <unk>, how many blue light how many whereas the profit, whereas this where the where is that on the numbers side.

Speaker Change #151: As Bill said earlier and also echoed.

Speaker Change #152: If you are looking for those specific numbers be sure to go to the nightclub Investor Relations site and look at the SEC filings 10-Q was filed yesterday. So we've got to make sure that you are pulling that information directly from the legally available.

Speaker Change #153: IR Dot night scope dot com IR dot Nightscape dot com.

Speaker Change #153: And then you can just click there and all the regulatory filings are there all the specifics are there to a nauseating level of.

Speaker Change #154: Of detail.

Speaker Change #155: With 32000 and footnotes to go along with them, it's arduous process.

Speaker Change #156: Process to do all this stuff. So if you have that level of interest you know kindly ask you to go. Please look at the numbers directly yes, just didn't want anybody to think that that was when they see their question disappeared Thats. The reason because you can find that without taking this time.

Next question is given that Youll, probably do a reverse stock split okay. That's an assumption sorry, but that's not a definite yes.

Speaker Change #157: What actions will not take to prevent the stock from being driven back down to a penny stock by sellers and or short sellers after the split.

Speaker Change #158: Okay. So Portland I will do this one together and I know, it's a top of mind for everyone.

Speaker Change #157: And so.

Speaker Change #157: We have until October 4th.

Speaker Change #157: Alright.

Speaker Change #157: Bill.

Speaker Change #159: Just reading the next question and it dovetails into this also explain what the vote was because I think theyre still misconception as to default being for the split versus.

Speaker Change #160: So a few bullet points on this and we're going to take a little extra time, because there's a flood of questions on this.

Speaker Change #159: One.

Speaker Change #161: We have a deficiency notice with NASDAQ are they're basically in order to cure, we need the stock price to be over $1 for a minimum 10 trading days in a row.

Speaker Change #161: In order to cure that we have until October 4th as negotiated with NASDAQ.

Speaker Change #162: To do that and you got to kind of back up from that time and theres some processes and the like to.

Speaker Change #162: Enacted if we decided to go forward.

Speaker Change #162: Bullet 0.1.

Speaker Change #162: Bullet 0.2 is.

Speaker Change #162: The annual shareholder meeting the formal.

Speaker Change #162: Part is actually tomorrow at one o'clock Pacific and that's kind of the.

Speaker Change #163: The formal forum, where we count all the votes for all the resolutions are in the proxy statement with respect to the reverse stock split itself.

Speaker Change #164: What NASDAQ requested and we agreed to in the board agreed to is we are requesting the shareholders to approve and delegate the authority to do a reverse stock split to the board. It is not to enact the reverse stock split.

Speaker Change #164: So this is basically the shareholder saying okay.

Speaker Change #165: It looks like we may have to do this.

Speaker Change #166: We support management and the board hears the authority to go do this only if you have to do it and you have no other choice.

Speaker Change #167: And we still obviously have some time.

Speaker Change #168: Before that I had the personal side as the largest shareholder I am the.

Speaker Change #168: Significantly not interested in doing a reverse stock split unless we absolutely have to and the primary reason is a majority of the time and you can we can argue is that how often.

Speaker Change #168: So a minority of the time it goes fine.

Speaker Change #168: And the stock May trade up.

Speaker Change #169: After a reverse stock split you can look at the numbers I don't know 10 20, 30% of the time, let's just say.

Speaker Change #168: A big round numbers.

Speaker Change #170: It works out fine and actually in favor of the shareholders.

Speaker Change #171: But there is that 50 60, 70% of the time like it doesn't work well and in some cases the companies did it themselves like they did a financing right on top of a reverse stock split or put out a bunch of bad news or whatever it is kind of shot themselves.

Speaker Change #171: And the foot and then every company is different right. There's all kinds of circumstances. So we're trying to avoid this I if we can.

Speaker Change #171: So the vote tomorrow is to.

Speaker Change #172: I gave the authority to the board and delegate if we need it.

And then there's a ratio as to what that number should be is it a.

Speaker Change #173: Five to one or 50 to one and that's another thing that the board will need to decide based on market conditions and the like I'll pause. The airport. If you wanted to kind of add anything else to that.

Speaker Change #174: Yes, I think.

Speaker Change #174: The goal here is not to rush into a reverse stock split right.

Speaker Change #174: I don't know if someone just asked how can how can investors.

Speaker Change #174: Help prevent this really it's about three things right one buy more shares to hold those shares three.

Speaker Change #175: Direct your brokers.

Speaker Change #174: Brokers.

Speaker Change #176: Two to basically that they should be prevented or stop them from borrowing your shares to short sellers.

Speaker Change #176: One of the things we did.

Speaker Change #176: This this deal.

Speaker Change #177: Deal that we put together with the the fund to the promissory note fund actually wood will help us in the long term against for the dilution of the share price.

Speaker Change #177: One of the things that would kept happening is because they were all because they had this this exploding warrant.

Speaker Change #178: Feature you could always have continued to short felt because they knew that they would get their shares back from us.

Speaker Change #179: Whenever there was a financing event now effectively by by doing this deal we've been able to.

Speaker Change #179: Effectively stop them from from actively short selling our shares so those type of things.

Speaker Change #179: Or are things, we're hoping to continue to keep doing they take time. Unfortunately.

Speaker Change #179: But but we.

Speaker Change #180: We have until October Ford actually we probably have about will say until mid September to get the share price above $1 organically. After that we will have to make some tough decisions.

Speaker Change #181: But again our goal is not to go down that path. Our goal is to continue to be successful organically and there are several questions related to well what are you guys doing about it there is effectively only three things that we can do again, we don't directly control the share price you know not to be funny about it but.

Speaker Change #182: You all do is supply and demand if a bunch of people buy more shares and very few are selling than likelihood the price goes up and the opposite is likely true the three things that we can do.

Speaker Change #181: We are doing.

Speaker Change #181: Improving the financial performance of the company.

Speaker Change #183: Setting ourselves up for a successful long term growth and then lastly, just communicate communicate communicate the more we inform you the more we answer your questions. The more we spend time like this.

Speaker Change #184: The better you are informed and then you can decide if you believe in the management team do you believe in the market and do you believe in the technology and either decide to hold your shares.

Speaker Change #184: Buy more shares or decide you know.

Speaker Change #186: You'd rather sell them and that will have a direct impact on the price. So this is not a.

Speaker Change #186: Just the nightclub team on their own is going to turn this around.

Speaker Change #187: We're going to need the active support of our investors and supporters and fans and the like to make this a success, but again. This is a kind of a two way street and it's not a it's not just us and we are working very hard to do our part.

Speaker Change #187: Alright next up.

Speaker Change #187: Can you describe the background of your sales force.

Speaker Change #187: So our head of sales, Jason Gonzales has been with US now six years, he's ex Honeywell He's led the C O or garden company.

Speaker Change #188: We've got folks that has spent almost the entire career selling a K one kind of blue light tower stuff.

Speaker Change #189: Most of the folks on the team in some form or fashion have a law enforcement security.

Speaker Change #190: Or you know military veteran background.

Speaker Change #189:

Speaker Change #189: Think on the <unk> side.

Speaker Change #189: As well as technology.

Speaker Change #189: Yeah, and obviously and as well as technology.

Speaker Change #189: I think on the K one beside the sales process is a lot more straightforward and.

Speaker Change #189: I don't want say commodity like but.

The transactions easier the implementation, sometimes a little bit of a project.

Speaker Change #189: The ASR side of things does require a very.

Speaker Change #191: Technologically astute salesperson that also understands public safety law enforcement and security the complexities of the technology and the questions you get from clients and where it's applicable in our lives.

Speaker Change #189: Is a is a somewhat.

Speaker Change #189: Somewhat intense process and having personally sold a few of these it's a it can be a bit challenging.

Speaker Change #192: How does <unk> plan to help mitigate the risk of school shootings love that one.

Speaker Change #189: Uh huh.

Speaker Change #189: So I think theres two answers one more.

Speaker Change #189: More technically focused and then the other ones cash.

Speaker Change #189: Our budgets.

Speaker Change #193: So the technology side of things I think.

We need to provide more of a deterrence, putting up a camera somewhere above your head is not going to deter or anybody from doing anything. So that's why the robots can be very important.

Speaker Change #193: Doing a automated gunshot detection.

Speaker Change #193: Adding visible weapon detection and in the future.

Speaker Change #193: And treating that school I like to think like that.

Macoma like a data center.

In my view.

Only the people authorized should be there, meaning the parents the faculty and the students anyone else should be flagged.

Speaker Change #193: And there is technologies to be able to do that both outdoors and indoors I think my bigger concern, especially K through 12 put the university decide is the budgets I mean to be Frank we as a country don't pay our school our teachers anywhere near what they're actually contributing to society.

Speaker Change #194: Alrighty and in lot of cases, the teachers themselves are covering for school supplies and all kinds of.

Speaker Change #195: Needs that the students have and where exactly is that school is supposed to come up with a six figure or seven figure budget to now properly harden and secure the facility.

Speaker Change #195: So I think there's a fundamental budget problem.

Speaker Change #195: And in both our budget problem and a technical solution.

Speaker Change #196: <unk> solution and I think as <unk> grows you know at some point in time not now we're.

Speaker Change #196: We're going to need to spend some.

Speaker Change #197: Time in Washington, D C and speaking to Congress and there is no way the I forgot how many of those 22000 schools are going to fend for themselves and figure this out by themselves.

Speaker Change #198: The private schools might be a little bit different but it budgets a huge huge problem.

Speaker Change #199: How is the fact that many cities are not enforcing in prosecuting criminal activities Ie shoplifting et cetera impacting the sale of the robots. So I'll speak from a law enforcement stand I think you need to answer this one because I'm going to lose my temper.

Speaker Change #200: I'll speak from law enforcement standpoint for a moment on that first and foremost the number of cities that are doing that are very very very small in the grand scheme of things.

Speaker Change #200: Secondly, we have not seen an impact primarily because our.

Speaker Change #201: Our focus on end users. The primary is not law enforcement they are secondary tertiary.

Speaker Change #202: As far as the targets are concerned for many of the same reasons as the schools that Bill just mentioned a moment ago. So we're not seeing a lot of that but what we are seeing are private companies, taking the security more seriously now and being more proactive about how they are able to collect information and deliver that information to law enforcement.

Speaker Change #203: Professionals. So that we have we law enforcement have better tools to investigate those crimes and prosecute them when able to do so so we've not seen that impact and I haven't.

Speaker Change #204: I'm still obviously very close to the sales process and everything that's going on there, but I have not seen anybody saying well. This is not important it's quite the opposite.

Speaker Change #204: Anything to add bill.

Speaker Change #204: Hum.

Speaker Change #204: Yeah.

Speaker Change #204: Okay.

Speaker Change #204: You get a T shirt that you were very into video.

Speaker Change #205: Oh that.

Speaker Change #206: That one I made personally for our our internal for our employees so that one's not.

Speaker Change #206: In the store, but if.

Speaker Change #207: You're interested in getting some swag go to nightclubs dot com and just hit the swag button, there's a bunch of stuff there and.

Speaker Change #208: At some point in time, we will put up some new stuff as well and think about maybe seeing if we can add that one stacy.

Speaker Change #208: What efficiencies are being implemented in Q3 to reduce costs and improve earnings per share.

Speaker Change #209: Executing all the stuff that was in the video.

Speaker Change #209: We want to keep hammering the same thing over and over again, but.

Speaker Change #209: We are massive.

Speaker Change #209: Keynes in telecommunications.

Speaker Change #209: And what does that mean, okay, well imagine Ah you had for cell phones.

Speaker Change #209: And you wanted to livestream high definition video of Youtube.

Speaker Change #209: Kind of 24 seven.

Speaker Change #209: Your.

The bill Youre going to get from a Verizon or T mobile or sprint or whoever is going to be rather large at the end of the month.

Speaker Change #209: So we go through terabytes of data.

Speaker Change #209: A year and a month actually and we.

Speaker Change #210: We made a ton of significant technical changes in contractual changes that are going to go literally straight to the bottom line.

Speaker Change #210: There's.

Speaker Change #210: Some head count.

Speaker Change #210: Impacts that will start hitting.

Speaker Change #211: There are some throughput QA type of things in Ghana reduction in cost and a lot of cases, it's not always the bill of material that is.

Speaker Change #212: It is important like how much does it cost to build a machine or the labor hours, but remember these things are running 24 seven.

Speaker Change #211: And the <unk>.

Speaker Change #213: <unk> service work, the maintenance and service the parts that shipping parts, if stuffs breaking like it costs a lot of money and it was a huge driver for why we wanted to retire the K five three some time ago.

Speaker Change #214: Because it was causing a lot of money to build taking too long to build and oh by the way when it is out in the field kind of eating up a lot of the team's time back to someone's question on how the heck are you going to go work on new stuff.

Speaker Change #214: And and eating a lot of monies.

Speaker Change #215: So were still in transition right we've retired.

Speaker Change #216: Well over 50% of the V threes Theres still more to go.

Speaker Change #216: So I think that will also go end up going to a to the bottom line.

Speaker Change #216: Anything else you want to add yes, I mean, I think obviously somebody mentioned this right.

Speaker Change #216: We were.

Speaker Change #216: Taking a multi pronged approach and.

Speaker Change #217: I think bill had put together a 2024 path to profitability, which I think would be a great framework for you guys to look at on what we're trying to do.

Speaker Change #217: If you think about it we need topline growth that's going to continue to happen as we invest in sales and invest in our products and invest in our.

Speaker Change #217: The suite of.

Speaker Change #218: Product design and product development that we're working and simultaneously we have to cut costs. It still cost us quite a bit to build these things because we're doing it by hand, because we're doing it at low scale, so changing that out and as we continue to start investing in that scale will it will start to increase our margins and those margin.

Speaker Change #218: To help drive some of that path to profitability.

Speaker Change #218: Finally, becoming more efficient.

Speaker Change #218: And the Opex side right I think we did a really good job bill of cutting our our our our head count and our.

Speaker Change #219: Expenses down if you look at just the second quarter I think we saved over it I think half a million dollars in gist.

Speaker Change #219: Hum.

Speaker Change #219: Our cost where we thought it was a good idea to do.

Speaker Change #219: So.

Speaker Change #220: We will continue to evaluate those so again, it's both it's got it got it you've got to grow the top line and you've got a decrease your costs and you guys got to run lean and we will continue.

Speaker Change #220: On those fronts, while introducing products that we think are going to be successful in this industry.

Speaker Change #220: Yes, and I was just glancing on one of the questions earlier was some folks are worried that we might have terminated folks that were.

Speaker Change #221: I spent a lot of time with us during innovation week I think from memory I don't think anyone that was on camera.

Speaker Change #221: Plus the team.

Speaker Change #221: So everyone's kind of waking up every morning.

Speaker Change #221: Putting their heart and soul into the company and taking all the inbound beatings that we get I don't think it will probably want to see my inbox.

Speaker Change #222: I can take the criticism and all that don't appreciate the death threats. They can pass on those but we are working genuinely very hard.

Speaker Change #222: This is a big success. It will take some time, we do have a path we are not going to run out of money and we're doing an honorable thing for the country.

And this will work out it's just going to take a little bit of time.

Speaker Change #222: To get a very difficult set of technologies to work at scale now that we've got them working in low volume.

Speaker Change #222: What do you, what's your IP or patents deck.

Speaker Change #222: We've got maybe a dozen patents.

Speaker Change #222: Not a huge fan.

Speaker Change #223: Uh huh.

Speaker Change #224: Patents. This is not the pharmaceutical industry, where your recipe is like the most important thing and youre going to protective for 17 years like it.

Speaker Change #224: The technology changes so fast.

Speaker Change #225: You know when we first started I often say we had one Intel <unk>.

Speaker Change #226: Seven or eight in CPU in the machine or like how the heck, we're going to use all this stuff and now we don't have enough compute and we've got like two Nvidia Gpus and CPU and were wanting to add more capability.

Speaker Change #226: And you know a lot of cases, the technology changes so fast it does not really worth.

Speaker Change #226: Spending staff time legal time to go get a large portfolio of IP.

Speaker Change #226: Our patents rather.

Speaker Change #227: Could we have patented probably 100 items sure.

Speaker Change #227: Good use of shareholder money.

Speaker Change #227: I'm surprised we still get this question how do you plan to incorporate AI.

And to your business.

Speaker Change #227: [laughter].

Speaker Change #227: Alright.

Speaker Change #229: Not folk and followed the question. It's a legitimate question, but I don't I, just don't think people realize how much is already there. Yes. There is I think maybe there's a different way to answer the question. So.

Speaker Change #230: There is a ton of AI just to get the machines to do what they do today alright, they move on their own they're replanting re mapping.

Speaker Change #231: They autonomously recharge on their own there is no one sitting around remote controlling them.

Speaker Change #232: So this is the automotive equivalent of level five completely hands off.

Speaker Change #233: So there's a ton of AI to be able to do that it requires AI and machine learning to detect a license plate and then read the license plate. It takes AI to detect a person it takes AI to do facial recognition for example.

Speaker Change #233: If youre speaking of generative AI.

Speaker Change #233: I think now that I.

Speaker Change #233: I think theres still need some work on telecom speeds and the speeds of the <unk> bye.

Speaker Change #233: I think enabling the machines to be able to have a thoughtful.

Speaker Change #233: Irrelevance conversation with someone.

Speaker Change #233: Would be something that's certainly on our on our roadmap.

Speaker Change #233: We're.

Speaker Change #233: Instead of just pushing a button.

Speaker Change #233: Or just you know.

Speaker Change #234: Looking for an alert or something you can actually have a a conversation with the machine and that could be.

Speaker Change #234: A.

Speaker Change #234: Citizens out in the wild out in public somewhere or could be internally for us.

Speaker Change #234: For our own risk and threat exposure people to have a dialogue with.

Speaker Change #234: The next future version of our of our user interface.

Speaker Change #234: Where instead of typing away.

Speaker Change #234: What we're looking for and for an investigation as to be able to do a real time via speech.

Speaker Change #234: So there's a ton of opportunities but yeah.

Speaker Change #234: Yeah, I think for a technology company, that's in Silicon Valley that.

Speaker Change #235: Got AI working before it was a huge big thing it is a little awkward to get still that question, but we will continue to answer and to continue to communicate.

Speaker Change #235: Is so just a quick time check we have 35 minutes left in the scheduled time Bill I know you typically say hey, we'll stay till we get all the questions answered.

Speaker Change #236: If I had a guy I I will stay.

Speaker Change #237: Let me look at my calendar I will stay.

Speaker Change #238: If we have to punt the next meeting or if you need to go.

Speaker Change #238: I think sometimes are a little busy.

Speaker Change #240: No I can I can stay for the next half an hour, but after that.

Speaker Change #240: I think there's so many questions that you know we're happy to to stay on and if folks are.

Speaker Change #240: We're happy to invest the time, but we may need to do some speed round the tight answers then.

Speaker Change #241: Fedex, let's go.

Speaker Change #242: Privacy, a big market adoption concern if so how are you addressing them what are other adoption headwinds.

Speaker Change #242: Not really a we're typically operating and public and.

Speaker Change #243: Privacy typically is more of a question that we get from the media than we get from from clients and then remember contractually the client owns the security related data all the machine data is owned by us.

Speaker Change #244: Other headwinds I think to be fair you know one of the reasons, we have the robot roadshow going across the country. We've done now Stacy helped me here more than a 120 stumps over 120 525 stops is that education curve is getting people comfortable.

Speaker Change #245: They can watch a video they can get on a zoom powerpoint people adapt but they still want to see the robots in action.

And that mobile trade show.

It can be really helpful on the marketing and sales process. So I think there is still that comfort level.

Speaker Change #245: Needed.

Speaker Change #245: For for some for some folks I would think that would be a little bit of a headwind.

Speaker Change #245: Alright.

Speaker Change #245: It's happening with the dragonfly partnership.

Speaker Change #245: So dragonfly owes us a.

Speaker Change #245: Prototype of what they think could work.

Speaker Change #246: For us the <unk>.

Speaker Change #246: <unk> had a filmed something that I think we've put on our social media that they are working on it so.

Speaker Change #246: Once they are ready to go then.

Speaker Change #246: Then we'll be ready to go.

Speaker Change #246: Is Mexico considered going into the residential market.

Now we're already in the residential market and a lot of cases, if you mean, an HOA or an apartment complex. If you meant like literally consumer residential someone's a specific home other than a large <unk>.

Speaker Change #246: The state for a multi millionaire and billionaire.

Speaker Change #247: Haven't really spend too much time, there we do need to be careful here, we intentionally did a big focus on business. The business now, we're adding business to government.

Business to consumer is a very very very different business.

Speaker Change #248: Maybe requiring different technology, and certainly different sales marketing and distribution techniques.

Speaker Change #248: So that likely is on our roadmap, but likely last.

Speaker Change #248: What do you consider to be the biggest obstacle.

Speaker Change #249: Preventing the stock price from going over $1 a share.

Speaker Change #248:

Speaker Change #250: People buying shares I mean, I can't isn't.

Speaker Change #251: Again legally tell people to go buy shares but to answer your question why why would share price in general go up is because a bunch of people all bought shares roughly in the same timeframe.

And very few people sold shares for any company not just night scope the share price will likely go up.

Speaker Change #252: And we don't control that we don't control behavior of everyone on this call or other investors that we have but you know I think we have.

Speaker Change #252: And I guess 15000, investors or 20000 or something like that.

Speaker Change #252: If everybody went in and bought or sold would have a material impact on the on the share price.

Speaker Change #252: Or.

Speaker Change #253: Getting new investors I think one thing that we at nights coke need to improve as we make more progress and and our financial performance is attracting larger institutional investors and this is a big challenge for any company less than a 500 or $1 billion market cap.

Speaker Change #254: Is getting large institutions to participate I think we're 90 90, 95% retail last time I checked I.

I think as we grow.

Speaker Change #255: And improve our financial performance. We're obviously, we'll be spending a lot more time on attracting some larger institutional investors I think that's something we certainly want to do.

Speaker Change #255: The company has any company of process for potential acquisition and or significant investment.

Speaker Change #256: I don't think I legally can't answer that I answer that but I don't think I can answer that yes I would.

Speaker Change #255: [laughter].

Speaker Change #257: Well, it's a different way to answer is the company is not for sale, but I am an officer of the company and I have worked for you. The shareholders. So I have to look at every single offer every single opportunity to maximize.

Speaker Change #258: Shareholder value so legally have to look at everything, but I don't think legally I can comment one way or the other please don't infer something from me not answering is just we.

Speaker Change #258: We need to be careful how we answer questions.

Speaker Change #259: I think bill you know.

Speaker Change #260: The company is.

Speaker Change #262: We are a business right. So I think as a business.

Sure.

Speaker Change #262: We have to be open to anything and everything right.

Speaker Change #262: And we are but whether anything.

Speaker Change #263: Anything materially is happening or not its something youre absolutely right. When the time is right and if there is something to be announced we will do so on the flipside. We have stated since we went public that we are always actively looking at acquisitions.

Speaker Change #263: And.

Speaker Change #263: Obviously, preferably accretive that can help on the top line revenue side on technology et.

Speaker Change #263: Et cetera, and so we continue to to have those ongoing discussions, which we had previously disclosed.

Speaker Change #263: Our accounts receivable has gone up significantly what is the strategy to collect on a R.

Speaker Change #264: Would there be a better source for cash other than using the ATM.

Speaker Change #264: I can answer that question, yes, we have so.

Speaker Change #264: So basically.

Speaker Change #264: A R increase.

Speaker Change #264: Reflection of kind of some of the things that were happening when the finance team was getting reorganized.

Had a transition that occurred in the first quarter, when I joined and as part of that.

Speaker Change #265: We were slow to jump into the HR side. Since then we have a team in place that's focused primarily on a are they work closely with the sales team. They work closely with our CX team to reach out to clients to work with clients to get var down one of the other things to think about is you know.

Speaker Change #265: On the or is a portion of that AI that actually is related to our case.

Speaker Change #265: What we call the municipal clients that we are working through to actually.

Speaker Change #265: I would call the rightsize the.

Speaker Change #266: Relationships or at least the the the business aspects as Bill mentioned, a while ago. Some of these contracts are 10, 15 years old and some of their tons, including payment terms are or designed in such a way that although they might've been profitable to the company 10 years ago. They are no longer.

Speaker Change #265: <unk> are sustainable.

Speaker Change #267: So we are working closely and partnering with our clients on the municipal side too to rightsize some of those contracts and thats, taking a little bit of time as well because again you guys might know working with government is not as easy or quick as resolving things on the commercial side, but.

We hope to get those resolved.

Speaker Change #267: And by doing so not only will we obviously shrink or a are down but also set up the business such that those contracts to become profitable and long run.

Speaker Change #268: Alright lets too I think we're doing both of us pick up the pace on the length of the answers and the western ever going to get through all of these and we really wanted to answer whats the status of the New York City robot installation.

Speaker Change #269: As disclosed by the New York Times. The city is looking at redeploying it at a different location, which has its own complications because it's the first location took.

Speaker Change #269: I dunno.

Speaker Change #269: A long time, and dozens and dozens and dozens of people.

Speaker Change #270: So we're kind of going through that process again.

Speaker Change #270: Oh yeah.

Speaker Change #271: Well, we got to do short come on that.

Speaker Change #271: He was confused by the short answer.

IMA Scouter Daryl. Thank you. So much wondering if you will get into alarm systems short answer no.

Speaker Change #271: Sorry.

Speaker Change #272: Be blunt about it but no that's not our bailiwick.

Speaker Change #273: Please explain the discussion surrounding future stock split we already did that one.

Speaker Change #274: During our previous town Hall of as mentioned manufacturing was being consolidated in the mountain view and the goal was to ramp up production.

Speaker Change #275: So the consolidation and ramping up.

Speaker Change #276: We disclosed in our 10-Q, we have.

Speaker Change #277: <unk> not only started the process, but pretty much finished up shutting down the Irvine, California facility consolidating everything into.

Speaker Change #278: Cage cure nightclub headquarters in mountain view and that process is underway.

Speaker Change #277: To.

Speaker Change #277: Improved labor flexibility, so <unk> and <unk> can be built depending on you know.

Speaker Change #279: What orders are coming in or what the priorities might be there is a significant changes required in and quality control.

Speaker Change #279: There are some engineering stuff that needs to get done but that.

Speaker Change #279: That for huge step has already been taken.

Speaker Change #279: The balance of the facilities are.

Speaker Change #279: Warehousing type of things are smaller offices.

Speaker Change #279: In a couple of instances or more there's really annoying language contractual.

Speaker Change #279: From some government stuff that may require.

Speaker Change #279: Some stuff to stay open but.

Speaker Change #280: We've been working through the process. So the big the big one kind of got done already.

Speaker Change #280: What is the company doing to increase institutional awareness.

Speaker Change #280: So that the <unk>.

Speaker Change #280: To avoid the stock continue to struggle so the institutions begin investing.

Speaker Change #281: We need to improve the financial performance of the company.

Speaker Change #281: Institutions typically want to see a five dollar above stock price. So we've got some work to do.

Speaker Change #282: And then keeping them almost half a dozen analysts up to speed.

Speaker Change #283: And hopefully we get an additional equity analysts to cover the stock and then after we get through this cleaning house period.

Speaker Change #283: Appointment I will be spending some time with you know the typical conferences.

Speaker Change #283: Conferences and the like to improve the awareness.

Speaker Change #283: How can the portfolio be expanded when there are no human or financial resources to undertake this.

Speaker Change #284: Through partnerships.

Speaker Change #284: Through acquisition through the.

Speaker Change #284: Deletion of dumb processes, and so that people can actually be working on stuff, that's productive and improvements through quality.

Speaker Change #284: If the team is not having to babysit and.

Speaker Change #284: Maintain and service and support stuff they can be working on on new things.

Speaker Change #284: And then being very careful what we.

Speaker Change #284: What battles, we pick and what we want to work on.

Speaker Change #284: So being kind of very surgical.

I'm not going to Kid you that it is tight.

Speaker Change #284: We don't have as much resources as we wanted to.

Speaker Change #284: <unk> worked through this and the aforementioned toxic financing was huge blocker for us for a very long time to.

Speaker Change #284: To be able to get the additional resources, but.

Speaker Change #284: The work is being done.

Speaker Change #284: So, we'll we're scrappy entrepreneurs, who are kind of figure it out.

Speaker Change #284: What is being done to take key products international.

Speaker Change #285: Nothing absolutely not I worked on as I, Boston mentioned I've worked on four continents, I kind of know exactly what needs to get done that.

Speaker Change #285: That is not the additional operational financial.

Speaker Change #286: Legal insurance and liability risk, we want to be doing right now.

Can you offer any update on the bond offering.

Speaker Change #287: The bond was a closed during the first quarter.

Speaker Change #287: And.

Speaker Change #288: <unk> disclosed in the prior 10-Q.

Speaker Change #289: That that got completed I think we raised $4 2 million or so.

Speaker Change #289: What are you doing to sell more of your tech and services out in the marketplace.

Speaker Change #290: We need to overhaul the marketing and sales process I mean, no different than what we were just talking about how do we more efficient on the manufacturing side of things or how we.

Speaker Change #290: Making the product better or whatever we're looking and turning everything.

Speaker Change #291: Looking under every rock and actually Stacy is working on improving the upfront process on lead generation.

Speaker Change #291: You know how the website flows or doesn't flow.

Speaker Change #293: When does the client experience analyst get involved and part of the sales process so that.

The sales team can be spending more time doing sales and not operational.

Sometimes back office or project managing work.

Speaker Change #293: A bunch of stuff to accelerate and then.

Speaker Change #294: We need to recruit recruit recruit so if there is anyone on the call here that has some awesome sales candidates. Please send them to <unk> dot com slash careers, because we are recruiting.

Speaker Change #294: What is being done to mitigate cyber attacks.

Speaker Change #295: Having spent three years going through the as I, often say nightmare cyber security process with the U S. Federal government I put a lot of conditions on us.

Speaker Change #295: And we need to work to comply.

Speaker Change #295: Comply with us and they're exorbitant.

Speaker Change #295: Second we are ramping up our cyber team.

Speaker Change #295: That Mercedes stories are leading.

Speaker Change #295: Third one of the other reasons to redo the entire technology stack.

Speaker Change #295: Is in order for it.

Instead of just having one product that is suitable for federal use.

Speaker Change #295: Is to have the entire portfolio be compliant so theres a lot of strategic reasons as to as to how we approach that.

Speaker Change #295: The ATM is still active how many shares are selling weekly how many shares outstanding now.

Speaker Change #296: We refer you to the 10-Q or 10-K, we don't do a play by play on that and I would not be appropriate.

Speaker Change #297: The ATM is available to us, but I'll turn it over to a port.

Yeah again, it's difficult to give you a week by week, just because that's not how we how the ATM is intended to be used we used it when when we know.

Speaker Change #298: Our bankers.

Speaker Change #299: Advise us and they use the ATM when they think the time is right when the stock is doing certain things.

Speaker Change #299: So we don't generally.

Speaker Change #300: Closed week by week information, but you can you can definitely I think in our disclosures, we disclose how much we raise in any given quarter.

Speaker Change #300: If any large orders came in for a government agency do you have confidence in fulfilling them in a reasonable amount of time.

Yes.

Speaker Change #300: Short answer is it requires people and some real estate, but other than that.

Speaker Change #301: Be happy to have that problem and we're actually working on that but yes.

Speaker Change #301: Also most of the federal contracts like that we'll also phase it out there will be a delivery schedule and things like that that kind of come into play as well.

Speaker Change #301:

Speaker Change #301: Yeah.

Speaker Change #301: I just would appreciate some elaboration on changes in the board strengths weaknesses, what has been gained or lost.

Speaker Change #301: I think as a poorer eloquently put it.

There's a time and place for certain skills.

Speaker Change #302: <unk> for the original board that helped us get through.

Speaker Change #302: Public listing in the first couple of years.

Speaker Change #302: We're onto a new phase.

Speaker Change #303: We've got a well billings who's.

Very extremely strong financial acumen.

Speaker Change #304: If you want to see it read their buyers. Please go to the nightclub dotcom splashboard.

There are very few people in the world that have scaled up.

Speaker Change #304: Economists.

Speaker Change #305: Robotic technology and mill, a Tory leads an entire organization that's been doing that for quite some time. So we've got the technical background and then and then Bob marketing is a former senior.

Speaker Change #306: Federal government official a focus on the department of Homeland Security and as we continue to work on growing in the federal space is super important.

Speaker Change #305: So we're.

Speaker Change #305: Part of the turnaround.

Speaker Change #305: And and work that we're doing is in.

Speaker Change #305: Better aligning the governance structure.

Speaker Change #305: And if it helps like I've worked with Bob.

Speaker Change #307: Some time ago, so is stacey.

Speaker Change #308: A poor if has worked with will both our ex GE finance people so strong.

Speaker Change #309: Strong caliber folks and we expect a real financial results by making strategic decisions in improving our operations.

Speaker Change #310: All right other than the current legal process, taking place is there a strategy to eliminate the shorts.

Speaker Change #310: Improve the financial performance of the company and try to instill confidence from our existing and investors and get new investors I mean, there's.

Speaker Change #311: The shorting product I mean, one of the reasons the South Koreans made short any legal is.

Speaker Change #312: Right I'm not going to get into that.

Speaker Change #312: There is.

Speaker Change #313: Only certain things that we can do it as a very opaque process. One thing that we can't provide financial advice, but as a port mentioned earlier on the call. If you don't want your shares being used to short.

Speaker Change #314: You can literally call your broker up and tell them like call up Charles Schwab or robinhood or a trader wherever you use and tell them that you would not like your shares to be lent out for shorting and that also can.

Speaker Change #315: Can be helpful. But again, we can't provide financial advice, we're just providing a fact there for you.

Speaker Change #315: Can you provide some color on the future outlook for government and military contracts.

Speaker Change #315: Huge opportunity when I take a very very long time.

Speaker Change #316: But I think the positive thing since we're in this for the long haul.

Speaker Change #316: Is once you're in it's kind of hard to.

Speaker Change #316:

Speaker Change #317: Got kicked out.

Speaker Change #317: I think b, having spent a good amount of time looking at not on stuff on the battlefields, but military.

Border patrol Nash.

Speaker Change #317: NASA.

Speaker Change #317: <unk>.

Speaker Change #318: GSA F. P. I mean, the list is very very long and a humongous amount of opportunities for us, but it is a very hard and I think the opportunities there it's going to take some time, but we got our foot in the door or is one of our directors.

Speaker Change #319: On the on the team said, we didnt get our foot in the door, we got a whole body in the door.

Speaker Change #318: So we're working on it.

Speaker Change #318: Can you talk about some of the companies competitive companies.

Speaker Change #318: Large and small that have failed on this the robot side.

Speaker Change #320: Short sharp failed switch failed and Amazon failed.

Speaker Change #321: I believe cobalt robotics, obviously has disclosed that they are no longer doing robots.

Speaker Change #320:

Gamma too and I'm, losing track of of the rest.

Speaker Change #320: But.

Speaker Change #320: I think it speaks.

Speaker Change #320: You have a half a dozen teams.

Speaker Change #322: With hundreds of people and hundreds of millions of dollar spent and they couldnt get it to work I just ask you all for a little bit of Grace.

Speaker Change #323: And got us a little bit of slack not a lot just a little bit to understand that the technology is extremely difficult to build.

Speaker Change #322: And to operate in.

Speaker Change #322: And we're now last.

Last team standing and we intend to make it to the finish line, but we do need your support to be able to do that.

Speaker Change #322: If blue lights account for 68% of the sales what is the profit breakdown. If robots are a drain is it time to shift focus to the blue lines.

Speaker Change #322: Ooh that's a.

Speaker Change #322: Not a short answer, but I'll try really fast.

Speaker Change #324: So selling the <unk> stuff outright as a product has a positive gross margin.

Speaker Change #325: Servicing the K, one blue light stuff needs a massive amount of work and that's part of the cleaning house part that we've been working on.

Speaker Change #325: So we're working to get that to profitability the ASR side of things.

Speaker Change #325: <unk>.

Can be profitable, but you need a certain critical mass for it to operate and so what I mean by that is for example, we have a full time 24 seven staff to monitor the machines. So if we double triple the number of machines do we need to double or triple that team now.

Speaker Change #325: So because it's a kind of a subscription basis.

Speaker Change #325: The economics look a little or sorry, the accounting looks a little.

Speaker Change #325: Odd but.

Speaker Change #325: There is not.

Speaker Change #325: I think a need to do that especially since.

Speaker Change #325: Looking at our clients that have been around for half a decade, plus if you actually look at those margins, which we have there are 60% plus.

Speaker Change #325: So it takes time and it need scale and no different than frankly, a SaaS company.

Speaker Change #325: I don't know if the CEO and CFO buy some shares purchase of shares by insiders with good confidence for the investors to buy more shares.

Speaker Change #325: So I.

Speaker Change #326: Had 7 million shares I didn't sell a single share in the public listing havent sold any shares since then and you can check out the regulatory filings I did buy more shares recently for my personal account to me this share share prices absolutely ridiculous, Mike you're I don't know one fifth one.

Speaker Change #327: The invested capital you're at a price that's below the series a preferred if I'm not mistaken 10 years ago.

Speaker Change #327: If I didn't have my entire network then this would I buy more shore and already have done that so hopefully.

Speaker Change #328: Folks will take that as a positive indication.

Speaker Change #329: And and my confidence in the team and the business going forward.

Speaker Change #330: Is there a gunshot detection currently available yes anybody interested please go to <unk> dot coms less discover fill out the form and we will demo it.

Speaker Change #329: Sorta.

Speaker Change #329: [laughter] careful with that one.

Speaker Change #329: Sure.

Speaker Change #329: Could you incorporate three D printing at a lower cost and massively produce more machines.

Speaker Change #331: No because three D printing, we already use.

Speaker Change #332: It actually costs more and actually take some more time.

Speaker Change #332: It's very helpful for prototyping.

Speaker Change #332: But in terms of throughput and cycle time.

Speaker Change #332: Not in a lot of cases, a lot of our parts are very big causes another problem.

Speaker Change #332: So we're actually actively as part of the bill of material cost reduction exercise.

Speaker Change #333: How do we do read a bunch of these three D printed parts because they cost a lot of money.

Speaker Change #334: Also I think of my understanding the three D printed part, especially at the size that we're trying to build a mat tend to there's some structural issues, sometimes that arise when basically you kind of gluing and layering each part.

Speaker Change #335: Each layer of that part and I think you're printing is good to your point for prototyping, but not necessarily for what we're trying to do but that technology is also evolving. So obviously you know.

Speaker Change #336: People Trust me I'm, a fan and Ikea on AG you got him expand the team spent four months looking at even buying our own setting up our own three D printing in house.

Speaker Change #336: And just the math doesn't work.

Speaker Change #338: But let's move on because they know there's more questions.

Speaker Change #339: It's difficult to get cities with major serious crime order robots to help their police force, yes, absolutely.

Speaker Change #338: Yeah.

Speaker Change #338: I mean, that's another huge challenges just getting.

Speaker Change #338: Not intended to be a negative comment bureaucrats in the local state and federal government to rethink how they do public safety and <unk>.

Speaker Change #338: That I think someone asked about a headwind is youre trying to change an entire country's way of doing things.

Speaker Change #338: And yet because what we're doing right now is not working you don't have to believe me you know a violent crime occurs every 20 <unk>.

Speaker Change #338: Six seconds and a property crime every four seconds and that's normal sorry, that's not okay.

Speaker Change #338: Can you discuss how you plan to reach net positive EBIT.

Speaker Change #338: And profitability within the previous timeline mentioned are we still on track.

Speaker Change #340: I think we have some difficulties there because of the aforementioned financing problems with that blocker on in terms of the toxic financing now that we got it resolved we're trying everything to.

Speaker Change #338: Make up for the lost time.

Speaker Change #341: I think someone you know some people have mentioned here.

Speaker Change #341: And the chat.

Speaker Change #341: <unk>.

Speaker Change #341: You need resources to do this stuff right.

Speaker Change #341: And so.

Speaker Change #341: I think one of the things that we really wanted to focus on is.

Speaker Change #341: Showing a steady improvement.

Speaker Change #341: And we'll see how things turn out but I don't know if you wanted to add anything.

Speaker Change #341: We're often careful to not be providing forward looking.

Speaker Change #341: Statements or guidance, but.

Speaker Change #341: Yes.

Sorry can you repeat your question Bill I was trying to answer.

Speaker Change #341: Timing of profitability.

Yes, I mean look I think we.

Speaker Change #342: Are on the path to get there right. It would be I think for now premature for us to give an exact timeline as we're cleaning up many of the aspects of the business both on the operational front as well as on the capital front as well as on the.

Speaker Change #342: The balance sheet to fund I think.

Speaker Change #343: What we're asking for as you mentioned earlier is no continue.

Speaker Change #343: Continued to support us to be patient and we're going to continue to execute.

Speaker Change #344: At this point, we don't give out that level of guidance.

Speaker Change #343: So but.

Speaker Change #343: But we are working towards that and our goal is aligned with our investors is to get to profitability.

Speaker Change #343: As soon as we can.

Speaker Change #343: Yeah, So I think.

Speaker Change #343: There's three things we can do is grow the top line lower the variable cost and lower the fixed cost.

Speaker Change #343: I think we're at a point, where there's some more fixed costs that we can reduce but theres a certain amount of money to be able to be public.

Speaker Change #343: To run the company to do everything else and you can't just kind of cut your way to profitability is just not going to work.

Speaker Change #343: So then you need to work on variable costs and.

Speaker Change #343: Operating expenses in the like associated with the machines, which we're actively working on we need the top line to grow.

Speaker Change #343: There's a lot of people asking well you know at.

Speaker Change #343: These are you know kind of percent of revenue.

Speaker Change #343: Losses, how do you fix this remember you need a critical mass to run the company, but after that.

Speaker Change #345: Adding up very nicely, it's not like we triple the size of the company and we have to triple the cyber team right.

Speaker Change #345: So as the topline grows this will start.

Speaker Change #345: Looking more and more attractive.

Speaker Change #346: Who is your IC compute platform platform AWS azure or other.

Speaker Change #346: We're on it.

Speaker Change #346: Ws for 11 years.

Speaker Change #348: Uh huh.

Speaker Change #349: And thank thank you to the Amazon AWS team, they've been really supportive and helpful.

Speaker Change #349: So here's a very very sticky one, but I'm going to ask because we answer all the questions that come in how about replacing the CEO.

How about it.

Speaker Change #349: Feel free to give it a shot.

Speaker Change #349: Find someone that wants a word you know 60 8100 to 120 hours a week.

Speaker Change #350: To do the irrational illogical things to force a win to happen well sit here for hours on end and take whatever questions are a hand make himself or herself available.

Speaker Change #350: He is fluent in law enforcement.

Speaker Change #350: And security and automotive knows the entire technology stack understands the investor relation side of things actually sold stuff.

Speaker Change #350: And can run a very complicated organization and even when turnaround experts have come in have been unable to resolve the matter.

Speaker Change #350: And 11 years later when everyone said the company would never make it would never be able to build these products would never have the any of the autonomy working would never be able to scale up to any regard nobu.

Speaker Change #351: Nobody else has been able to do that including those six major companies that and startups that have failed. So I think if you wanted to do that youre going to have an impossible.

Speaker Change #351: Accruing problem.

Speaker Change #352: It's going to be very difficult to find somebody to do the job with the passion that I and the team have and it's not just me.

Speaker Change #353: We've got a relentless group of people have been added for a very long time.

Speaker Change #354: And if you wanted to try and give it a shot by the way of tenants voting shares so that'll be another discussion to have.

I'm happy to take.

Accountability for all the mistakes that have been made.

Speaker Change #354: I'm also happy to get criticized I'm happy to be responsive and be respectful in civil.

Speaker Change #354: With folks.

Speaker Change #354: I will I try very hard to answer the thousands and thousands of questions and messages I get I can't always answer all of them.

Speaker Change #354: But I hope the spirit is there and you need to decide what you want to do do you want to bet on this management team who has forced us.

Speaker Change #354: To build the team and we'll get into existence and now no then.

Speaker Change #354: We have forgotten and most people know how to do this.

Speaker Change #354: Or do.

Do you think the market opportunity there and do you believe in the technology. If you don't sell your shares.

Speaker Change #354: And.

Speaker Change #354: If you think that.

Speaker Change #354: This team has gone through the most difficult times no matter what it took when everyone said it would fail and somehow they kept pushing forward right.

Speaker Change #355: I appreciate you're placing a bet on the team just like I have my entire not worth it in this I'm not going anywhere.

Speaker Change #355: So I will fight to the very end to make sure that we get done what is supposed to get done.

Speaker Change #356: Thanks Bill.

Speaker Change #356: I feel that running with such a lot of such.

Speaker Change #357: Such line of products, they may be running themselves too thin what is the main focus public safety. That's the main focus using technology.

Speaker Change #356: Short answer.

Speaker Change #356:

Speaker Change #356: What I would modulate theyre a little bit.

Speaker Change #356:

Speaker Change #358: There are a lot of Skus and so we've had some investors go away you're building too many things in your spread too thin.

Speaker Change #358: And so one of the reasons when I mentioned in the video platform commonality is kind of really important so that you can.

Speaker Change #358: Fixed the spread too thin, but at the same time have a wide breadth youre not going to fix and deliver the mission with one single product and you're going to keep going to that.

Speaker Change #359: Chief Security officer, or Chief of police with your one little solution and that's going to fix the problem.

Speaker Change #359: In a word criminals and terrorists can be anywhere.

Speaker Change #359: So we have to be everywhere, but the key here and a little.

Speaker Change #360: Jedi mind trick is how can you be everywhere and do it efficiently and that's what this whole ICM platform commonality.

Speaker Change #360: Is it really kind of important.

Speaker Change #360: The next is actually a comment but I think it begs a oh.

Speaker Change #360: Our rebuttal to an extent at.

Speaker Change #360: At the end of the day. This vision is great. However, without a solid partnership with with another company or VC group.

Speaker Change #361: And an infusion of cash the stock will continue to go down.

Speaker Change #361: I think there is some misunderstanding in that question.

One vcs typically don't participate in public companies to their typically wrong nine times out of 10, although they walk around like they have an attitude that theyre right nine times out of 10 I live here in Silicon Valley and I can say that VC is not going to fix this neither is a private equity shop or a hedge fund.

Speaker Change #361: Our strategic partner.

Speaker Change #361: Possibly.

<unk>.

Speaker Change #361: Don't have had.

Speaker Change #362: Three two or three that have invested in the company prior or still investors actually I think all three of them are still investors.

Speaker Change #362: In some cases it can be super helpful.

Speaker Change #362: To a point in a certain area.

Speaker Change #363: Konica Minolta, well also and we had 2000 service technicians accessible to us when we were still in California and didn't know how to operate across the country. So that that can be helpful.

Speaker Change #363: But there are very few that are focused on the problem that we're working on you know.

And autonomy is not something that's been solved.

So that's likely not a place the law enforcement security sector is very very fragmented.

Speaker Change #363: We have partnered with some of the large garden companies that you.

Speaker Change #363: Usually there's an actual conflict of interest there.

So we're continuing with you know without saying anything out of turn.

Speaker Change #364: Always looking for additional partnerships like we've announced.

Speaker Change #364: This last few months between automated gunshot detection a.

Speaker Change #364: The K, one laser and and dragonfly.

Speaker Change #364: And there's always an opportunity we havent found a solid one yet.

Speaker Change #365: And then I had actually had this discussion with the board last night.

Speaker Change #366: To me I think the more exciting one is going down there in the acquisition route to be able to bring in additional resources.

Speaker Change #366: Fixed some gaps.

Speaker Change #366: The catch up on some technologies that we're super interested in.

Speaker Change #366: And live here in Silicon Valley 22000 startups.

Speaker Change #366: Literally 95% of them fail.

Speaker Change #367: So theres always interesting things to to look at but I, maybe said a different way now and I'll shut up is trying to just grow this organically by itself without some inorganic growth is likely not going to work for where we want to go.

How does that change how will these changes allow you to become unprofitable. If you continue the current business model of leasing expensive equipment at a loss.

Speaker Change #368: We don't lease expensive equipment.

It's a full subscription so lease implies that someone who has a financial interest in a particular asset.

And as I mentioned.

Speaker Change #369: The it requires scale and as we scale up the financials will follow.

Speaker Change #369: I want to know about where the data is delivered after being collected and what's the response time that beats robot to human response.

Speaker Change #369: The data is problematic so theres all kinds of data.

Speaker Change #369: Some of it stays on the robot some of it goes up in the cloud someone who gets the lead it off the robot.

Speaker Change #369: So.

Speaker Change #369: Crudely speaking as I mentioned earlier the private.

Speaker Change #369: Like security related data is owned by the client.

Speaker Change #369: And then the machine related data is owned by us.

Speaker Change #369: Response times the machines do things in milliseconds are.

We now stood up and our TX team the risk and threat exposure Department.

Speaker Change #370: That is helping our clients be able to utilize the technology. So that things are much quicker.

Speaker Change #370: And that has helped not just our clients who are inundated with alerts. If you imagine you know trying to manage a large enterprise with all kinds of alarms and gates going often and what have you.

Speaker Change #370: They're short staffed so adding that extra layer helps and it also helps us operationally as well.

Speaker Change #370: In the recently filed 8-K kind of explain the reason for the non disparagement clause and confirmed at actual or that money actually flow to night scope or is not simply adding $3 million of debt.

Speaker Change #370: Two its balance sheet.

Speaker Change #370: Of course, if you want to I cannot I can answer that.

Speaker Change #371: The non disparagement class and that kind of little edited earlier is really it's a typical clause that most when you when you negotiate with.

Speaker Change #372: Parties. They neither party wants to either party to say anything negative about them publicly and I think thats the key.

Speaker Change #373: Cause it's normally there in this case investor was extremely interested in making sure that they had their clause and we don't have a problem, giving them that in terms of the $3 million. Yes, we do have the debt in place we did not receive cash for it but what we got and you turned was extinguishment of the.

Speaker Change #372: The.

The warrants the extinguishment.

Speaker Change #374: The extinguishing of their participation rights and some of the many other obligations that the company had previously signed up for as a result of that agreement. We believe that it's a really good agreement for us It opens up not only does it open up.

Speaker Change #374: US open us up for getting better funding, but also opens us up to work with better types of investors as we go out and partnering with them to grow the business.

Okay.

Speaker Change #374: Has there been any attempt to integrate threat information from social media platforms, particularly for K through 12 schools.

Speaker Change #375: We actually looked at that a long time ago, and then the social media platforms as I recall this correctly.

Speaker Change #376: Stopped them, providing as much information as one would need to do that right and we haven't looked at that for a very very long time.

Speaker Change #376: Probably at some point in time, we should go back to that but we haven't looked at product for Gs.

Speaker Change #376: Seven years.

Speaker Change #376: Any plan to be a platform as a service versus software as a service fleet managers a miscommunication there.

Speaker Change #376: We're already more of a platform as a service so.

Speaker Change #377: We call it machine as a service so you get the machines the software the maintenance the decals of training the user interface. The RPX team Everything's included in that in that subscription.

Speaker Change #377: How many shares needed to be bought and held to get the stock price to one dollar I E with many people on the call and I don't know.

Speaker Change #377: I don't know if that's the question we can answer.

Speaker Change #378: I can answer that.

Speaker Change #378: So that would be super intense.

Speaker Change #378: Yeah.

Speaker Change #378: Can you repurpose and licensed their technology to other companies for additional revenue.

No.

Speaker Change #379: Uh huh.

And we write it in Williams Santana literature precedent in the general election in November of course, rather than anybody.

Speaker Change #379: Thank you.

Speaker Change #379: It's been a it's been a long few months I appreciate that the chase are phenomenal.

Speaker Change #380: The chaser fidelity lend out of shares to be sold or sorted.

Speaker Change #379: Yeah.

Speaker Change #379: We don't know how each broker does things.

Speaker Change #381: But almost every broker has that ability. So if you don't want them doing that you need to call. Your broker directly yes. It's a question nishu definitely ask their broker directly and sometimes it's just a setting in your dashboard the log in.

But we wouldn't have a way to answer that question.

Speaker Change #381: You can easily ask new broker.

Speaker Change #381: How long does a robot needs to be in service to pay for the production costs.

Speaker Change #381: Or.

A year plus or minus depending on the robot and we're trying to improve that so one way to think about it as I often say is we try <unk>.

Speaker Change #382: Hard to get the first year's revenue to pay for the machine and then the second third fourth fifth year, you're generating margin and that's why the operating costs are really important so the telecommunications cost every year the cloud cost the maintenance cost of service cost of service parts.

Speaker Change #381: All that is.

Most in some cases is more important than the cost of the machine.

If you want the details of that you can go to a nightclub dot com slash rise and download the latest investor deck.

One of the slides actually gives you. The an example, so you can see that and Ah graph form.

Speaker Change #381: Whats the head count of the R&D team.

Speaker Change #383: You would think I would have this memory. So that the team we went down from maybe a 114 heads at the peak to now 70 plus.

Speaker Change #383: And now we're kind of our recruiting.

Speaker Change #384: It's a little weird to answer your question only because the R&D team does a lot of operations work. So that we don't have folks only exclusively working on research only or development only they're helping our.

Speaker Change #385: Lyons, improving tools fixing issues and the like so I don't know.

Speaker Change #384: A couple of dozen.

Speaker Change #384: I will add bill that engineering is one of our largest department. So we do focus on R&D technology Mueller technologies firm.

Speaker Change #384: So again.

Speaker Change #386: Your question I don't know if we have specifically that many people that are dedicated directly just to R&D I think about where we look at in our engineers.

Speaker Change #386: I'm looking right now we have what is it close to.

Speaker Change #386:

Speaker Change #387: Almost half of our or more than half of our our head counted engineering across they cannot team across the deployment team across the.

Speaker Change #386: The manufacturing team.

Speaker Change #386: It's a.

Speaker Change #386: Engineering is a big part of our culture.

How many.

Speaker Change #388: I guess talk about the backlog actually I have two questions about that so we had previously had talked about there being a backlog and where are we on that.

Speaker Change #389: But just to just under $3 million of backlog and its split probably half and half between the two we do disclose in our 10-Q. If you just go open it up and down in backlog.

Speaker Change #390: Black Lager historically, we were in the $5 million to $6 million range. So we've cut it by more than half.

Speaker Change #390: <unk> still got some work to do but the team's cranking away.

Speaker Change #390: What's the main reason for the termination of some of the contracts using the technology.

Speaker Change #390:

Speaker Change #390: Off the top of my head.

Company went out of business.

Speaker Change #390: The company closed the facility.

Speaker Change #390: They opted to go back to a human guards.

Speaker Change #390: I think.

Speaker Change #391: A lot less now than before we probably we or a third party sold it to someone that we shouldnt have sold it too so the not funny, but funny example for me is you know the worst client, we could possibly have as like the chief Innovation Officer.

Speaker Change #392: That's a major corporation, who has budget and need something shiny and then come time for renewals like well you didn't solve any of our problem a problem well you didn't have a problem in the first place you just wanted a whole pot.

Speaker Change #392: I think that we've fixed now with a very.

Speaker Change #392: Poignant sales.

Speaker Change #392: Sales process of our long list of you know.

Speaker Change #393: Deployment checklist site surveys technical reviews like why do you need this robot do you have a budget.

Speaker Change #393: So that's another process improvement that the team has made.

Speaker Change #394: Ah stay motivated bill if <unk>, however, forced into a reverse split.

Speaker Change #394: How severe of a split are you thinking it would be.

I don't think I can legally answer that one too.

Speaker Change #395: In the proxy statement, there's a five to one up to 50 to one that's up to the board to decide and then to be fair to the board. It's kind of when you make the decision because the stock price, obviously fluctuate and that can have an impact.

And there are other market market or business conditions that one would need to think about so again, we're trying very hard to avoid.

Speaker Change #395: That altogether, but it's obviously very challenging.

Speaker Change #395: With other with the other companies failing so I think this goes back to the competition.

Speaker Change #395: Surprised that wall Street doesn't recognize a reward that you comment.

Speaker Change #395: There is going to be a collective how many folks there's a couple of hundred folks on here.

Roll roll of the eyes with the first the first answer.

Speaker Change #395: As much as.

Speaker Change #395: Certainly our world revolves around nights cope you would be shocked.

Speaker Change #396: People that don't know who the Hell night scope is.

Speaker Change #397: And what do we do and you know a nice prototype when are you launching kind of thing for the amount of advertising robot Roadshows Webinars and everything we do I don't know, how many investors and how many funds and how many frankly people.

Speaker Change #398: People in law enforcement and security have never heard of US I know that sounds ridiculous to everyone on this call.

Speaker Change #399: I've been an investor for five years like how can they possibly not know about in hyattsville and that's one of the reasons. We ask you to please.

Speaker Change #400: We send out a newsletter forward it onto someone when we put something on social media. Please share it invite people to webinars and send them to the website to help us get the word out because as silly as it might sound. There's a lot of people that don't see that I think.

Speaker Change #401: The share price doesn't help again large investors typically looking at stuff that's.

Speaker Change #402: You know, maybe 501 billion billion and a half market cap, they're typically not looking at companies you know less than I don't know.

Speaker Change #403: Arbitrarily 20 $25 million of revenue so it will get there.

Speaker Change #404: But it's been a bit of a challenge I think at the end of the day is going to be very hard in the future for wall Street to just ignore growing company in the middle of autonomy robotics and AI.

Speaker Change #404: And working on the nation's most difficult problem just ignore it.

Speaker Change #404: And so I think in the future that's going to change dramatically.

And for those that have supported and stuck with us hopefully that that'll be a good tailwind.

Speaker Change #405: What happens if the company gets delisted.

Speaker Change #405: Oh.

Speaker Change #406: Don't have we don't really spend too much time on that because.

The.

Speaker Change #407: NASDAQ has told us exactly what we need to do to <unk>.

Speaker Change #407: Nokia delisted.

Speaker Change #409: Unfortunately, if we have to enact distance the reverse stock split so we're not spending any time on the company not getting nuts.

Speaker Change #409: I'm not saying on Nasdaq.

Speaker Change #411: What are your thought I think I would say you know we have a lifting was not and not even on the horizon, we worked closely with NASDAQ.

Speaker Change #411: We have a path, we don't expect that to be anything anytime in the near future.

Speaker Change #411: Ever really.

Speaker Change #411: Okay.

Speaker Change #411: Sure.

Speaker Change #412: Stacy I'm gonna cancel the next meeting and there's like a 160 people still on here and Theres still questions coming in so I'm going to cancel the next meeting so you can keep going.

Got it.

What are the top products and what are the top markets for the products what will it take to successfully penetrate the markets.

Speaker Change #413: I think we've had a lot of success.

Speaker Change #414: If you go to a nightclub dot com you can see the verticals, but the ones I would highlight.

Speaker Change #414: Would be certainly a lot of hospitals a lot of casinos.

Speaker Change #415: Corporate campuses commercial real estate.

Speaker Change #415: Hum.

Speaker Change #416: I think those would probably be the the first thing that come to mind and for those of you that had been with us for a long time, you've heard me say this before it's really hard to get the first casino, it's really hard to get the second casino getting the third fourth fifth six casino gets a lot easier.

Speaker Change #417: And that's why we just keep kind of pounding away and I think one of the reasons I get really excited and get maybe a little quickly when books are Mike I don't think youre going to make it it's not going to work like.

Speaker Change #416: Yeah, but.

Speaker Change #418: We have clients that are renewed for the service on the ASR side for 2345678 consecutive years.

Speaker Change #419: If you think some major hospital, our major corporations, just going to pay us for half a decade, plus and we're not providing them value and we know that there is margin there like there is a business there.

Crimes not going away, we got the technology, working we just need to improve and scale things up.

Speaker Change #419: And now that we've got some of these headwinds, which someone is asking about headwinds that toxic financing that we spoke of earlier was a massive headwind for us.

Speaker Change #420: And now that that's out of the way it I think where we're going to be in good shape in the coming years.

Speaker Change #420: As robots being damaged in issue.

Speaker Change #420: Okay.

Speaker Change #420: I'll be honest with you I thought it was going to be a lot worse, a lot lot worse than what we've experienced.

Speaker Change #420: There has been.

Speaker Change #420: A handful of locations that are highly highly problematic.

Speaker Change #421: And honestly it wouldn't matter if it's a robot your car a human a gate or a camera, it's gonna get destroyed Mike.

Speaker Change #422: I don't want to say it looks like a war zone, but kind.

Speaker Change #423: It looks like a war zone, so its not really the robot in in essence, I thought it would be a lot worse.

Mike: It does happen and it's a cost of doing business like you know theres a cop cardiac repeat it sure does the gate get broken shore I think it's kind of just part of it and we kind of need to deal with it but also be careful where we put these.

Okay.

If we were to get lifted we hold the same number of shares until we are re listed.

We saw.

Speaker Change #425: So we already just cover that we're not getting these listed and we have a path forward. We have a very good relationship with NASDAQ that dates back to 2017, they've been profoundly supportive of us and very helpful.

Speaker Change #426: We're not getting delisted we have a path.

Speaker Change #427: But hypothetically or just for your awareness I think one thing people freak out is delisting. It doesn't mean your shares are taking away from you.

Speaker Change #428: <unk> and the NYSE and the OTC, it's just the place where people trade stuff.

Speaker Change #429: It could be Facebook like you could be trading you know different kinds of furniture. It's just the a forum to trade stuff. So if we move to a different exchange.

Speaker Change #430: You still own the shares that you own it.

Speaker Change #430: It just would be trading somewhere else.

Speaker Change #430: So no one's going to take anything away from you and we're not getting deals.

Speaker Change #430: How many people are in sales now how many more are you firing.

Speaker Change #431: We've got roughly about a half a dozen in marketing and sales, we probably need to have poor was going to knock me over how we probably need to double or triple that Budd.

Speaker Change #430: We're working on it.

Speaker Change #430: So we're actively recruiting.

Speaker Change #432: Both more senior kind of director level positions and more junior kind of inside sales and lead generation and marketing folks.

Speaker Change #432: Wouldn't long term growth be better if the company replace the CTO since there continues to be issues with the tech and it would and it would save the company money.

Speaker Change #433: Well first of all we don't have a CTO position.

Speaker Change #433: Second.

Speaker Change #433: As part of this.

Speaker Change #434: Cleaning house and re org and all this other stuff that we've done all the engineers report to me directly and I know a poorer than a few folks are not happy with this but I've got I've lost track, maybe 15 direct reports so the person that's making the changes and improving things as me personally.

And so it has the management attention.

Speaker Change #434: Part of the problem is some of these.

Speaker Change #434: Technologies are extremely difficult and require someone.

Speaker Change #434: Someone that's actually gone through numerous product new product development cycles.

Speaker Change #434:

Speaker Change #434: And.

Speaker Change #434: Replacing one particular person is not going to fix the technology you got mechanical.

Speaker Change #434: Somewhere software.

Speaker Change #434: Process.

Speaker Change #434: Operating system cyber all kinds of issues.

Speaker Change #434: And there is not one reason we don't have the CTO is go good luck trying to recruit that person that person doesn't exist.

Speaker Change #435: You also need to be fluent in all the <unk> all the telecom stuff and we've got two software product forms chems and the kaesong it's.

Speaker Change #435: It's unmanageable to have one person manage all of that so I have.

Speaker Change #436: <unk> solid engineers and senior engineers that I work with directly so that we can better manage this and improve things.

Speaker Change #436: And and the team's delivering them, so and I've got direct insight to that.

Speaker Change #436: This is <unk>.

Speaker Change #437: Long, one, but I'm going to try to get it all out okay. There are a lot of manufacturers engineers and resources that have time available or machine three state side that are willing to set a lower rate or help intellectually or point to top tier suppliers or coders, because we all have mistaken seeing a positive outcome is there someone or a <unk>.

Speaker Change #438: Resource, we can go to them to help align our talents to see a positive result.

Speaker Change #438: I appreciate the gesture.

Speaker Change #438:

Speaker Change #438: One thing that we have been doing because some other stuff gets really gnarly.

Speaker Change #438: On the technology side, we have been kind of laser.

Speaker Change #438:

Speaker Change #438: Hiring.

Speaker Change #438: Individual contributors consultants on specific subject.

Speaker Change #438: But.

Speaker Change #438: I don't have a good I don't have a quick answer for that I'm, just thinking how you implement that and it's kind of hard because the technologies extremely difficult flip the question a different way what can and our investors due to.

Speaker Change #438: Kind of help.

Speaker Change #438: The best thing you can do to help us is get the word out.

Speaker Change #438: Get people to go to.

Speaker Change #439: Learn about the technology have them go to nightclubs dot com slash discover and fill out the form and do a deep dive and see if we can actually be helpful for them to kind of anything on the revenue side of things, which would be super helpful to.

Speaker Change #439: To the team I think the second thing you can do is on the recruiting side.

Speaker Change #439: We time is money and recruiting can be.

Speaker Change #440: Tedious and more volume of possible candidates that we can get a would be super helpful, especially if they're qualified so please send them to a nightclub dot com slash careers.

Speaker Change #440: And then again I can't tell people it'll go buy the shares but I can tell you to communicate with folks and if they want to learn more about the company.

Speaker Change #441: Just have them download the investor presentation, and you can download that that at a nightclub dot com slash rise and those are the kind of the big three things you can do.

Speaker Change #441: The rest of this stuff is highly specific and sometimes with the best intentions and cause more difficulties in not okay.

Now I'll pause here, but I appreciate the gracious thought.

Speaker Change #442: If you get a senator to see the common sense of supporting your technology, that's been appropriations Bill of law to support the industry.

Speaker Change #443: Agree or disagree.

Speaker Change #443: Having worked in Washington D C.

Speaker Change #443: Up and down.

Speaker Change #444: Both the Senate the house and the White house in a past life.

Speaker Change #444: If the question was a senator.

Speaker Change #446: No that won't work you would have to have a coalition of folks and are in the house and the Senate and the white house and the appropriate agencies.

Speaker Change #446: And that is on our to do list. Once we have scaled up large enough and the private sector to go do what you're suggesting but that is a very expensive.

Speaker Change #446: Time consuming.

Speaker Change #447: And laborious process and Stacy you know you've had similar experience as as I have with us.

Speaker Change #448: And that's a 357 year commitment.

Speaker Change #449: And I think the best thing, we can do with scale up the company.

Speaker Change #450: And then go have that conversation doing that now.

Speaker Change #451: Not be time, well spent and we put it that way.

Speaker Change #452: Regarding sales, what about Amazon, Walmart et cetera distribution centers.

Speaker Change #452: I can't speak to specific clients for August.

Our reasons.

Speaker Change #452: Distribution centers, there's certainly an opportunity.

Speaker Change #452: Some very large companies are.

Speaker Change #452: Can be extremely difficult to deal with and sometimes it's frankly not worth the effort not speaking to any particular company.

Speaker Change #452: But distribution centers is certainly an opportunity.

Speaker Change #452: For us.

Speaker Change #452: How does the nightclub team feel about the recent crowd strike outage and what impact if any does it have on short or long term strategy.

Speaker Change #453: Fortunately no affect on us and were a lot of our technologies on a boon to an older crowd strike stuff is on <unk>.

Speaker Change #454: Primarily around windows related stuff, which we don't use.

Speaker Change #455: Are there any lease expenses still from the closed locations.

Speaker Change #456: Ah, yes, so we're still working through those.

Speaker Change #457: And not an insignificant amount of workload to shut down a location.

Speaker Change #457: So we're working on it we've got a few down we've got a lot more to go.

Speaker Change #457: But in a lot of cases, we need to prioritize production versus having people go out and doing inventory counts and the like.

Speaker Change #457: It'll get done.

Speaker Change #457: It's going to take some time and as we warned you that it's not going to it's not a cliff you don't just you know.

Speaker Change #457: Sure.

Speaker Change #457: Whole different landlords and just say hey, we're going to be out of here tomorrow.

Speaker Change #457: So it is being worked on.

Speaker Change #458: Have you asked the Carnegie Tech team to evaluate the aspect of your business the team knows them, but are you using them.

Speaker Change #459: Soma Carnegie alarm.

I spoke at one of their car.

Speaker Change #459: Conferences.

Speaker Change #460: We've met with folks and you know one of the professors there has been sending over recruits for for many years now.

Speaker Change #460: Nothing in particular to <unk>.

Speaker Change #461: Do there there's been some spinouts that are interesting, but remember there.

Speaker Change #462: Universities, mostly R&D focused on the word our research like more pie in the Sky scientific basic stuff.

Speaker Change #463: And we're doing very little research and a lot of development like if we can't ship. It in the next 369 12 15 months, we're probably not working on it.

Right.

Speaker Change #464: Please discuss executive compensation as well as incentives bonuses for profitable earnings per share as well as claw back reduction for nonprofit book quarter Al and his executive team financially held accountable.

Speaker Change #464: So there is an independent board of directors.

Speaker Change #464: They make.

Speaker Change #465: Makeup the compensation committee.

Speaker Change #466: They look at other.

Speaker Change #467: Comparable for other firms the size of us and with the risk of loss and also retaining our talent.

Speaker Change #468: We've got recruiters climbing all over this place trying to steal our talent. So as much as people are like Oh, you should just pay everybody a dollars like okay.

Speaker Change #469: Good luck retaining the talent to be able to do that.

The new board is very much focus on equity incentives and long term decision.

Speaker Change #469: Decision, making and all.

All of that comp is spelled out in our regulatory filings and.

Speaker Change #470: Management can provide input, but the decision is done independently and those directors are.

Speaker Change #470: Literally and legally represent the shareholders. So they need to do what's in the best interest of the shareholders.

Speaker Change #471: Is there a public relations planning to include your local congressional delegation and an update on how the company is making communities safe.

Speaker Change #471: There is not because the because of the aforementioned.

Speaker Change #472: Work required at the federal lobbying level is an abyss of workload and money and having had some experience do it doing that is not going to get you. The bang for the Buck that you are looking for.

Speaker Change #473: In the short term I'm, not saying, we won't do it.

Speaker Change #474: We've had obviously some conversations with folks, but there's a time and place and now is not the time or place.

Speaker Change #475: Are there still issues with the supply chain as <unk> been able to acquire all of the materials needed a manufacturer of the units.

Speaker Change #476: Fortunately all the Covid related nightmare on supply chain issues that has significantly subsided. So we didn't I don't think we even flagged that as a risk factor anymore in our filings.

Speaker Change #477: Are you utilizing Adam beam in your storage and transmission function.

Speaker Change #477: No.

Speaker Change #477: Any pending government contracts in the works.

Speaker Change #478: We're always working on.

Speaker Change #479: Contracts government private or the like and we wouldn't be able to disclose anything in advance.

Speaker Change #480: Can you do a robot roadshow in the Denver, Colorado area, Yes, we have and we will come back again should we have a.

Speaker Change #481: Most willing to bring us in so if you go to Nitro Dot com Slash roadshow.

Speaker Change #482: First off there is the calendar of all the upcoming events and secondly, if you have a host locations, where we can bring in.

Speaker Change #483: The roadshow pod, which takes up approximately six parking spaces.

Speaker Change #483: And you will allow us to be there for a day then we will use your location for a stop anywhere in the Continental U S.

Speaker Change #483: It can be a host you could be the cool person that brought the robots into town.

Speaker Change #484: And Stacy manage that directly so he's always.

Speaker Change #485: Hopeful to have a a host and some support so that's another way you can actually help.

Speaker Change #485: Tom is promoting the fact that he would like us to come to Australia and he is he is ready to help unfortunately.

Speaker Change #486: We're just not there very much appreciate the support and enthusiasm though.

Speaker Change #485: Okay.

Speaker Change #485: Okay.

Speaker Change #485: Alright.

Speaker Change #487: You caught up with me so I'm trying to find another question it has not yet been answered.

Speaker Change #488: I'm still in shock.

Speaker Change #488: We've been on here for like how long and there is still a 100 plus people on here.

Speaker Change #488: Hey, guys are you guys and gals are awesome like seriously the spend this amount of time with us.

Speaker Change #488: And to ask all these probing and thoughtful questions.

Speaker Change #488: We don't take your time lately so.

Speaker Change #488: Thank you.

Speaker Change #489: So Charles asked a question I actually love this question because it's Oh.

Speaker Change #490: Tenet assumption of 120 Roadshow stopped that's expensive and not working Stacey.

Speaker Change #489: Yeah.

Speaker Change #491: Let me, let me shed some light on the difference a typical trade show will cost me well in excess of $150000.

Speaker Change #492: Each one of our Roadshows class a minuscule fraction of that.

Speaker Change #493: And the majority of our sales can be attributed directly to roadshow stopped so sorry.

Is that an incorrect assumption. It is the absolute best thing that we have as a marketing tool we get rave reviews everywhere. We go so Oh and then just to be helpful. With our first phases benefit I think theres a lot of investors that have a different perception of what the road show.

Speaker Change #494: Could be that they are thinking they're going to show up to a location and it's like a huge party or a rave and like there's all kinds of.

Speaker Change #494: Retail media and politicians, there and it's like a huge monster event in some cases that has occurred.

Speaker Change #494: <unk> already of the cases is we're trying to close a prospective client that has an actual need and we just need to make sure that their top decision makers are there and it's not intended to be you know some party or festival and it's more for specific people and if theres an opportunity.

Speaker Change #495: <unk> to meet with the media or a local official or whatever I'm sure, but that's not the primary reason this mobile tradeshow keeps going around the country.

Speaker Change #496: Is <unk> considering collaboration with tests lessons Tesla mentioned that they are planning to create products that seem to be similar two nights ago products or if not considering any collaboration how do you plan to keep your market advantage.

Speaker Change #497: We can't comment on particular names like.

Speaker Change #498: That you know I personally am a huge fan of the Tesla team.

Speaker Change #499: I have a tesla.

Speaker Change #500: I'm, an ex car guy.

Speaker Change #500: Good luck to the legacy automakers like it's going to be really hard.

Speaker Change #500: Decade, or two coming up for you.

Speaker Change #500:

Speaker Change #500: Yeah.

Or how do we.

Speaker Change #500: From a competitive standpoint.

Speaker Change #501: I think we've talked about a few times. The last couple of hours is we've been at this for a very long time, we've learned a lot. There is that 3 million hours of field experience.

Speaker Change #501: We can look at a new design and go yeah, that's not going to work or some new competitor.

Speaker Change #501: Might show up yeah, that's not going to work because X y and Z and I think we just need to kind of focus on our clients and not so much the.

Speaker Change #501: Potential competitive noise.

Speaker Change #501: Second I think that.

Speaker Change #502: We would be profoundly arrogant.

Speaker Change #502: And naive and genuinely stupid.

Speaker Change #502: Think we're going to secure the U S by ourselves.

Speaker Change #502: So in a weird way would welcome.

Speaker Change #502: Other players who are working on public safety and law enforcement.

Speaker Change #502: Because the country really needs it.

Speaker Change #503: And there is more than enough problems to go around.

Speaker Change #504: How is the fed ramp approval process going are you able to accept other government contracts outside of the VA.

Speaker Change #505: So long as the other agency is willing to accept what the VA has done then yes.

Speaker Change #505: We're having ongoing discussions there's a ton of opportunities I don't think we would have spent this amount of money and time and frankly headache.

Speaker Change #505: To work on all this stuff if there wasn't a genuine opportunity.

Speaker Change #505: But working with the Feds is very very difficult and.

Speaker Change #505: Frankly, some of the very large law enforcement agencies and large corporations can be just as difficult to kind of a joke, sometimes with the upward who unfortunately had to go.

Speaker Change #505: Kind of tied up with.

Speaker Change #505: Some other things that he needs to do but.

Speaker Change #505: Maybe we should just you know just sell to EZ clients and not have to go through all of that but some of those volumes are a little bit lower but.

Speaker Change #505: Stuff.

Speaker Change #505: Stuff that we worry about.

Speaker Change #505: Oh right.

Speaker Change #506: And you have acquisitions has the case business gone up or down since acquisition.

Speaker Change #506: Now let me do the math in my head real quick.

I think the answer in any form would be up.

Speaker Change #507: For the marketing aspect why haven't you offered the presidential candidates some of your tech robot for the rally and convinced us to keep candidates safe and better recognize potential threats I think if you had a robots at the conventions of rallies would cause millions of photos and videos.

Speaker Change #508: The technologies are.

Speaker Change #508: More appropriately used before.

Speaker Change #509: Monotonous 24, seven do the same thing over and over and over again.

Speaker Change #510: It is not.

Speaker Change #510: Necessarily great for one time events.

Speaker Change #510: <unk> rallies sporting events and the like.

Speaker Change #510: This is intended to be used in a play.

Speaker Change #510: Places, where you're just gonna rinse and repeat and do their thing over and over and over again.

Speaker Change #510: So in the same vein.

Speaker Change #511: How could nightclub security solutions have helped prevent or mitigate incidents like the assassination assassination attempt.

Speaker Change #512: Same same answer is in small short event at this stage of the game it could.

Speaker Change #512: And appropriate technology for deployment there.

Speaker Change #512: Questions keep coming in I'm amazed.

Speaker Change #513: Thanks folks, let's keep going.

Speaker Change #513: Usually going to that are you going to pass out I mean, Stacey no I'm good usually I think.

Speaker Change #514: Lake after they are profitable do you regret going public early asking after looking at the challenge to attract more investors.

Speaker Change #514: My wife asked me this question a lot.

Speaker Change #514:

Speaker Change #514: Do I regret.

Speaker Change #514: There's a few mistakes that we made that.

Speaker Change #514: In hindsight would have not done.

Speaker Change #514: Second and I've said this publicly before so I guess I can repeat it.

Speaker Change #514: I think at the time.

Speaker Change #514: We could have continued to raise more capital.

Speaker Change #514: While we were private in a manner that we were raising the capital.

Speaker Change #514: And despite the chaos in the market you know one of the nice things about being public and this is not 100% truthful, but in theory.

Speaker Change #514: One should never run out of capital, it's the cost of capital when you were private it can be a binary.

Speaker Change #514: Situation, where you know you've got a company that found themselves in a very set it very difficult set of circumstances and there is only one or two routes for them to raise capital in that they both say no.

Speaker Change #514: Game over.

Speaker Change #514: Like I mentioned 22000, and startups in Silicon Valley, 95% fail and part of it is they can't get any more funding.

One of the nice things about being public there's all kinds of permutations of all kinds of.

Speaker Change #514: Very clean same capital very complicated capital, but there's all kinds of capital it is a commodity.

Speaker Change #514: And can be helpful for some companies that's not 100% true you know their situations where.

The company may not be able to raise more.

Speaker Change #514: More capital to keep investing and growing the company, but I think the one regret Uh huh.

Speaker Change #514: Never asked the question the one thing that absolutely drives me crazy.

Is I can't have a sane normal conversation with friends family investors clients the media.

Speaker Change #515: Who asked me.

Speaker Change #515: Seemingly benign normal everyday questions.

Speaker Change #515: And it's really frustrating because I can't have a normal conversation with anyone.

Speaker Change #515: So I think that's one of the reason that I'm sitting here because I can try to be careful here and not get in trouble with the authorities.

Speaker Change #515: But yeah, that's probably the one massive regret.

Speaker Change #516: All right you're going to love this one why not.

Speaker Change #517: To put K five kids on take Todd.

Speaker Change #517: Kids play with NBA protected humorously could be a cheap way to get better known Keith on early television got their parents buy things I'm thinking something like an SNL type episode et.

Stacy: Et cetera, et cetera, as Stacy won't download take talk to postpone.

Speaker Change #519: We will not.

Speaker Change #519:

Speaker Change #520: Having that could be that there's a lot of fun things here to be done, but remember the audience of who we're trying to sell to in some cases have a great sense of humor and some cases not so much.

Speaker Change #520: So we Stacy is working on with the team on improved messaging to focus on the end user decision maker.

Speaker Change #520: Hum.

Speaker Change #520: Yeah.

Speaker Change #521: Likely is not necessarily on tick tock and would enjoy that that kind of video.

Speaker Change #521: You never know.

Speaker Change #522: Regarding distribution centers have you looked into the defense logistics agency. They have 17 distribution centers across the U S, including Barstow in San Joaquin.

Speaker Change #522: On the very long list have not spoken to them directly.

Speaker Change #522: How many VA medical facilities as night scope deployed at are you aware of any new hospital sized clinic under.

Speaker Change #523: I'm sorry are you aware of the new hospitals, our clinic under construction at the Fredericksburg, Virginia.

Speaker Change #522: Area.

Speaker Change #524: So no we.

Speaker Change #525: We've been the plan was and I think.

Speaker Change #524: Yes.

Speaker Change #526: They have some clarification here I think people were expecting that we would get the authority to operate and then there's be a massive flood of contracts.

Speaker Change #526: We successfully deployed the.

Speaker Change #526: The first machine the K five Gulf machine on the outside it looks exactly the same as the other the five machines, but.

Inside its completely different it's kind of at the federal.

Speaker Change #526: Requirement level, so the software hardware everything insides significantly.

Speaker Change #526: Significantly different.

Speaker Change #526: And there are some operational things that we need to kind of manage for that so that one has been successfully deployed in Texas and now were them with ongoing discussions on the <unk>.

Speaker Change #526: Help me out here 140, 347, other VA hospitals.

Speaker Change #526: To see if there might be some opportunities there and then as well as bringing all kind of obviously other federal agencies, but we needed to get the first one working which was a massive undertaking despite its looking like every other robot out there.

Speaker Change #526: And that we have.

Speaker Change #526: Yeah.

Speaker Change #527: Is your team.

Speaker Change #528: Has your team looked at the power devices with hydrogen in particular that drove part of the business.

Speaker Change #527: No.

Speaker Change #527: What products of that scope could be could not be deployed to be used in security of the border.

Speaker Change #527: But not one.

Speaker Change #527: Maybe we should just ask what could be used and that's pretty easy K filing in the hemisphere and the.

Speaker Change #529: The emergency phones gunshot detection the laser so yeah pretty much everything.

Speaker Change #529: Yeah, maybe a few other things we might have a personally.

Speaker Change #530: Ever think about a package deal with the government, meaning we sell a case seven with a blue light we could identify the situation and then provide us a.

Speaker Change #530: Provides that situation away to get help if they need it.

Speaker Change #530: One thing I am in the search for that I think it's okay to say it.

Speaker Change #531: As a single.

Speaker Change #531: Military base.

Speaker Change #531: In the Continental U S.

Speaker Change #531: That would want.

Speaker Change #531: That has a decision maker that would want to re imagine our military base.

Speaker Change #531: Physical security profile.

Speaker Change #531: And take a look at what technologies and learnings that we have from the private sector that can be put into the public.

Speaker Change #531: Our sector and then what gaps might be missing that we could develop something new for them. So we're on that search for that one leader.

Speaker Change #531: That could.

Speaker Change #531: It could be the the.

Speaker Change #531: Laboratory for lack of a better way of saying it.

Speaker Change #532: We saw your product and most significant chunk for many years ago and gave it a hub of the world. We saw you too.

Speaker Change #533: Robots ever get vandalized.

Speaker Change #533: As I mentioned before is that.

Speaker Change #534: A lot less than I expected, but it does happen.

Speaker Change #534: It is the case even deployed yet.

Speaker Change #535: No the case ovens at Alpha prototype stage, we've got it running.

Speaker Change #535: Cross fingers, if everything goes well, we're running a little bit behind and we're hopeful that next year, we can start taking preorders for it but.

Speaker Change #535: It's a it's a complicated product and a well.

Speaker Change #535: Personally and professionally Super excited about it.

Speaker Change #535: Well.

Speaker Change #535: Yes.

Speaker Change #536: Sorry, it's still standing for questions in between the comments.

Speaker Change #536: If the company had de listed from the NYSE.

Speaker Change #536: NASDAQ will say.

Speaker Change #536: Are there clear guidelines on how to get lifted again.

Speaker Change #537: We have its almost zero risk of us getting de listed on NASDAQ not the NYSE and you're still on your shares if that were to ever happen, but we have an agreement and plan with NASDAQ as to how to stay listed.

Speaker Change #538: So that's not really a anytime we're not spending any time on that because that's not a thing.

Speaker Change #538:

Yeah.

Speaker Change #539: I'm not sure if this must be a sideways comment theres. Another one says who do you consider your competitors with the others that have exited.

Speaker Change #540: Sorry, all the competitors have gone under what's the question.

Speaker Change #541: Oh, they're asking if there are any other competitors who've been somebody else at RPX with like a word.

Speaker Change #542: Yeah I would.

Speaker Change #542: I think on the.

Speaker Change #542: If we were talking about autonomy I think.

Speaker Change #542: It would be an interesting discussion.

Speaker Change #542: Same thing with Boston dynamics, and then Singapore based cabanas seems to be doing well.

Speaker Change #542: Just other comments coming in on the same subject.

Speaker Change #542: Okay.

Speaker Change #542: And actually I can tell you Boston dynamics is not focused on security they're focused on.

Speaker Change #543: Or or autonomy.

Speaker Change #543: Yeah. They are focused on.

Speaker Change #544: Business checks or specific checks systems checks inspections.

Speaker Change #544: Uh huh.

Speaker Change #545: Some of these I'm, sorry, I don't understand that they're there must have been diagnosed have been commenting or asking a question about something that was being said so I'm not sure what they're asking.

Speaker Change #545:

Speaker Change #546: How can you expect them to buy more shares if we can't get into fall about how many K fabs are operating and how many you need operating to achieve profitability. There is very little clarity on the operations of the business.

Speaker Change #547: I think we would take.

Speaker Change #548: Issue with that we do massive regulatory filings every 90 days, they're all readily available for you at IR Dot nights Coke Dot com.

Speaker Change #549: Second you with two thirds of the business being K won't be one third being a S. Sars.

Speaker Change #550: Your question Presupposes that.

Speaker Change #550: Youre going to get the math it doesn't work you're trying to take one product to see if we can get the entire company to be profitable and you want me to give you a fictional number on the number of K fives needed. When we have I don't know eight different products. So.

Speaker Change #550: Like I Dunno back and Ford Motor Company like <unk>.

Speaker Change #550: How many Lincoln Navigators do you need to sell to make the whole company profitable and exclude the millions of other vehicles like the question doesn't make a lot of sense.

Speaker Change #551: We do break down the <unk> b sales in the product sales and everything is in there I think the other notional problem with the question.

Is well how many E S ours versus K won't be well look at the price point of a K one hemisphere versus the price point of an ASR and you're going to combine those and co mingle those into the amount of units needed like.

Speaker Change #551: It's not it doesn't make sense the question doesn't make any sense.

Speaker Change #552: Probably the better way.

Speaker Change #552: To think about it would be.

Speaker Change #553: What is that you know and we're working on this what is the topline revenue needed to get to profitability.

Speaker Change #554: And the big inherent problem with that is product mix.

Speaker Change #554: There's at least you know I don't know 17 different.

Speaker Change #554: Ways you can cut it. So then to give forward guidance with one exact particular number when there are 17 different ways to get there is also problematic.

Speaker Change #554: So that's one of the reasons we don't.

Speaker Change #555: We're not hiding.

Obviously, hopefully having spent a few hours here with you we're not hiding away from any questions, but and sometimes the questions that are asked don't make logical sense and we're not looking to hide anything we're publicly traded we have to disclose everything and again everything is readily available for you at <unk> that night.

Speaker Change #555: Dot com.

Have you considered implementing crypto solutions like a security Diego to tap into the social and financial capital of the large and impactful crypto community.

Speaker Change #556: I'm going to get in trouble with this answer, but maybe I'm a little old school.

Speaker Change #557: If the sec's investigating.

Speaker Change #557: We're not involved.

Speaker Change #559: So we I think on existing Crimson and overall our cryptography.

Speaker Change #560: Could be helpful for us in the future as a chain of custody on evidence and would be super interesting use case, but that's not you know.

Speaker Change #560: Kind of critical on the immediate road map.

Speaker Change #560:

And we really introduced another referral sales program of some kind or can you speak to the one that exists if act applicable I know you have resellers that maybe we should make everyone a potential seller.

Speaker Change #561: Do you want to answer that one.

Speaker Change #562: Sure Scott program is still in place. The Scout program is a referral program that's intended to be not a sales position. It is you know somebody in your rolodex on your holistic context that you.

Speaker Change #563: No has influenced over the purchase of security related technologies, and you can over dinner or a beer Goldman tell them Hey, you should look at night scope and then you get paid for that.

Speaker Change #563: Resellers are completely different these are industry experts, whether they are security companies.

Speaker Change #563: Integrators or other technology providers that already have an existing us client base or customer base in their case.

Speaker Change #563: And they can implement the technology as well in into the current offering of technologies that they have.

Speaker Change #563: I would love to have more but as bill led to earlier when we were talking about the sales side of things.

Speaker Change #564: These are incredibly.

Complicated complex.

Sales to go through when talking about specifically the.

Bill: Security robots.

Speaker Change #565: On the Blue light towers, we have a bunch of resellers and they are phenomenal. They do an outstanding job and we are still very proud of those relationships. So are.

Bill: All of it.

Bill: Stacey you got a you got to stop saying rolodex, because I know, there's I know, there's a 20 something in that crowd in here and there on Google going what is the rolodex [laughter].

Bill: But yeah, it's both programs are already in place.

Scott what room is there the reseller program is there it just depends on who you are and what you have access to but referrals are always always always appreciate it.

Bill: Okay.

Please explain the rationale for the huge stock option award. The CEO was granted in June 24, given the massive dilution experienced by our long term shareholders. This is absolutely inconsistent with the oft repeated claim that the C.

Speaker Change #566: <unk> in the same boat as investors investors did not get the delusion mitigation benefit of a massive new option grant.

Speaker Change #567: That is the decision of the compensation committee to incentivize management to turn this around and.

Speaker Change #567: Keep growing the company.

Speaker Change #567: And that goes for the other stock option grants as well.

Speaker Change #567: Some of these folks have been around for a very long time and don't.

Speaker Change #567: Have either all fully vested war have and know.

Speaker Change #567:

Speaker Change #568: Upside in its decision on the comp committee not my decision.

Speaker Change #569: Q2 gross loss is 558000 or 117% of revenue. Please explain how this is sustainable.

Speaker Change #570: I already answered that question earlier it requires some additional scale in order to cover of the critical mass required to run the company.

Speaker Change #571: Regarding the toxic financing deal who put the deal in place you keep referring to approved it.

Speaker Change #570: Yes.

Speaker Change #570:

Speaker Change #572: I relied on.

Prior management prior outside legal counsel and prior board, but I was involved as well.

Speaker Change #572: And.

Speaker Change #572: That was one thing.

Speaker Change #572: I wish we had not done in order to finance the acquisition.

Much discussion has been hand over the closing of the <unk>.

Speaker Change #572: Multiple different locations are your threat.

Speaker Change #572: It's actually still in California.

Speaker Change #573: Have you considered leaving California to get away from a non from a business friendly state.

Speaker Change #574: Two answers to that.

Speaker Change #575: I have lived in a lot of places in my life. The one thing I learned, especially what startups like if you want to be an actor being Hollywood do you want to be a politician B and D. C. You want to build cars be in Detroit.

Speaker Change #575: You wanted to work on Wall Street in New York, you want trade commodities being in Chicago.

Mike: Mike If you want to build cutting edge brand new technology, you need to be in the heart of Silicon Valley like is it like the equivalent of being in the Renaissance in Italy at that time and decided to go somewhere else.

Speaker Change #576: And so we're in the right location I think the other thing to think about is.

Speaker Change #576: If we were building.

Speaker Change #576: $10 million.

Speaker Change #577: <unk> machines a year.

And we're kind of rinse and repeat.

Speaker Change #577: On moral commodity.

Speaker Change #577: Product sure maybe theres multiple facilities across the U S at that point, but we're not at that stage right now is.

Speaker Change #577: Is it fair I didn't come across over the last couple of hours. This technology is extremely difficult you just don't stick a plant somewhere and have them continue to rinse and repeat.

Speaker Change #577: Well Bill Regrettably I do have a.

Bill: Commitment that I cannot get out of right now.

Speaker Change #578: You're going to a bell.

Speaker Change #579: It was like 107 people on here I'm aware.

Speaker Change #580: So alright, so let's do this for the if I didn't answer your question.

Speaker Change #581: Please go to a nightclub that slash rise the little button at the bottom is the instant messaging thing.

Speaker Change #581: If you leave your email and they're all I'll be sure to reply, if it's a really long question you.

Speaker Change #581: You can send it to me directly at invest at night sculptor Com that only comes to me nobody else is going to see that and I tried.

Speaker Change #581: Do you know to answer as best I can I do get thousands of messages, so just be a little bit patient.

Speaker Change #581: If my answer is a little shorter than you might like or take a little longer than you might like but I appreciate everyone. Taking so much time out of your day.

Speaker Change #581: I really hope to you now.

Speaker Change #581: Continue to have your trust and support and continue to build the company, we will get through this and it's a difficult time, but we've been through much much much much worse, and we always make it through and the future's bright as a lot of fun good stuff, that's going to happen and we just need to keep at it.

Speaker Change #581: And I appreciate everyone tuning in.

Speaker Change #581: The videos and everything else will be on the if not already on the Youtube channel, if you need them and thanks everybody.

Speaker Change #581: Goodbye.