Q3 2024 QuantumScape Corp Earnings Call
Yeah.
Slash Henry.
I think its cross sell.
Okay.
Speaker Change: Good day and welcome to quantum escapes third quarter 'twenty 'twenty four earnings conference call.
Speaker Change: John Saker quantum escapes vice president of capital markets and S. P. N. A you may begin your conference.
John Saker: Thank you operator, good afternoon, and thank you to everyone for joining quantum scale third quarter 2024 earnings call.
John Saker: To supplement today's discussion. Please go to our IR website at IR Dot quantum state Dot com to view our shareholder letter.
John Saker: Before we begin I want to call your attention to the safe Harbor provision for forward looking statements that is posted on our website as part of our quarterly update.
John Saker: Forward looking statements generally relate to future events future technology progress or future financial or operating performance.
John Saker: Our expectations and beliefs regarding these matters may not materialize.
John Saker: Actual results in financial periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected.
John Saker: There are risk factors that may cause actual results to differ materially from the content of our forward looking statements for the reasons that we cite in our shareholder letter Form 10-K, and other SEC filings, including uncertainties posed by the difficulty in predicting future outcomes.
Speaker Change: Joining us today will be quantum escape CEO Dr. <unk>.
Speaker Change: And our CFO Kevin Patrik.
Speaker Change: With that I'd like to turn the call over to Scott.
Scott: Thank you John.
Scott: I'd like to begin by discussing the most significant achievement in our company's history.
Scott: We're excited to report that we have begun producing low volumes, all Florida first b sample sales.
Scott: Accomplishing our most important goal for 2024.
Scott: And we have begun shipping these cells, what automotive customer testing.
Scott: These are b samples of Quantum's Gapes first product.
Scott: C five.
Scott: With measured energy density up 844 watt hours per liter.
Scott: Capable of fast charging from 10% to 80% in just over 12 minutes.
Scott: <unk> five represents an important milestone for our company and the battery industry as a whole.
Scott: These cells are to the best of our knowledge the first.
Scott: Free cell.
Scott: I would state lithium metal cell design ever produced but next generation automotive applications.
Scott: This cell is capable of simultaneously delivering exceptional performance with respect to energy density discharge power charging speed low temperature performance and safety.
Scott: This milestone marks a new stage.
Scott: Rigorous development and production efforts.
Scott: Now that the product design and performance profile is set.
Scott: And we have established a baseline process.
Scott: We will continue to ship samples get customer feedback and refine our processes.
Scott: During this be sample pace.
Scott: The issuance of these samples will be subject to extensive product testing, which will take many months to complete.
We have to substantially improve on metrics, such as cell reliability yield and equipment productivity among others.
Scott: Next I'd like to share an update on our progress on separated protection.
Scott: The first implementation of voting disruptive leave fast separate the production process is named Raptor.
Scott: And as of Q3 after it is now our baseline.
Scott: We said this is the key annual goals because of that that is a major improvement from our last generation technology in film quality and performance heat treatment time and energy consumption.
Scott: We expect that the Doctor will continue to support our U S. C five sample output into 2025.
Scott: Beyond enabling be samples.
Doctor serves as a learning platform and transitional step vertical <unk> process, which we continue to see either best phosphate two gigawatt hour scale separated production.
Scott: We are preparing for a cobra production to entered at a baseline in 2025.
Scott: We expect corporate I hate treatment equipment will be in place by the end of 'twenty 'twenty four.
Scott: And with the addition of higher volume downstream automated equipment. This line will enable a significant increase in separate that production.
Scott: Next I'd like to briefly update on our joint work with political the battery manufacturer of the looks wagon room.
Scott: As a reminder, we have signed a landmark agreement with political to bring our USD five technology platform into mass production and the gigawatt hour scale.
Scott: The first phase of this agreement includes intensive collaboration with political contributing skilled personnel.
Scott: The industrialization of the <unk> platform.
Scott: Upon satisfactory technical progress in this space.
Scott: Warner escape will grant powerful a license to mass produce battery cells in exchange for royalty payments, including $130 million prepayment.
Scott: The collaboration fans kicked off in Q3 with joint development activities.
Scott: San Jose facilities.
Scott: During this phase of the project, we combine all of the <unk> platform.
Scott: Deep knowledge of solid state battery technology.
Scott: With powerful his expertise in scaling up a high volume manufacturing processes.
Scott: Powerful is well positioned to contribute an area suggest that play chain production equipment and automation.
Scott: Last.
Speaker Change: I wanted to put this quarter's achievements in context.
Speaker Change: This is a proud moment for the entire to quantum's Cape team.
Speaker Change: We have accomplished our most important goal.
Speaker Change: We have started producing beef samples of USD five product and began shipping them for customer testing.
Speaker Change: We believe these sales represent a new high watermark for the battery industry.
Speaker Change: This is the moment, we've been waiting for the start of the climb towards industrialization.
Speaker Change: The kind of impact on electric transportation. We believe this technology is capable of law.
Speaker Change: We will need enhanced manufacturing processes, which can make millions of cells per year with defective DNA under either off a few cells, but a million or lower.
Speaker Change: It will require a sustained effort in deep collaboration with partners, including the Volkswagen group and political to achieve such a massive scale.
Speaker Change: With those long term goals in mind shareholder should take a balanced view of that achievement, we have announced today.
Speaker Change: It is no more than the first shipment of early low volume <unk> five b samples.
Speaker Change: But at the same time, we believe it is no less than a true world first.
Speaker Change: And annual free solid state lithium metal battery capable of revolutionizing electric vehicle performance.
Speaker Change: Our cell with a potential to offer what drivers are demanding.
Speaker Change: Much longer range faster charging powerful acceleration and better safety all at the same time.
Thank you for your continued support and we look forward to updating you on further progress in the months to come.
With that.
Speaker Change: I'll hand things over to Kevin.
Kevin Patrik: Thank you Steve.
Kevin Patrik: Capital expenditures in the third quarter were $17 9 million in line with expectations Q3, Capex, primarily supported equipment purchases for low volume <unk> five prototype production as well as the Cobra process and other equipment as we prepare for higher volume <unk> five prototype production in 2025.
Kevin Patrik: GAAP operating expenses and GAAP net loss were $132 million and $119 7 million respectively.
Kevin Patrik: Adjusted EBITDA loss was $71 6 million in Q3 and in line with expectations.
Kevin Patrik: We continue to track to full year guidance for adjusted EBITDA loss. This.
Kevin Patrik: This quarter, we tightened our full year guidance for adjusted EBITDA loss to be between $280 million and $300 million within original guidance, but at the higher end of the original range, primarily due to higher legal fees and settlement accruals in 2024 that we do not expect to reoccur in 2025.
Kevin Patrik: We're lowering our guidance for capital expenditures to be between 60 million and $75 million.
Kevin Patrik: This lowered guidance in 'twenty 'twenty four is driven by realized power co deal related efficiencies non deal related savings and a shift in certain payments originally planned for late 2024 into 2025.
Kevin Patrik: We ended Q3 with 841 million in liquidity.
As we've mentioned previously our long term capital requirements are a function of our commercialization pathway.
Kevin Patrik: We believe our deal with VW power co offers a capital efficient path to market and continue to project our cash runway to extend into 2028.
Kevin Patrik: Any additional funds raised including under our ATM prospectus supplement would further extend this cash runway.
Speaker Change: Kevin will begin today's Q&A portion with a few questions. We received from investors or that I believe investors would be interest to them.
Kevin Patrik: So can you elaborate on the significance of quantum escape entering the beast ample phase of the automotive qualification cycle.
Kevin Patrik: Thanks, John.
Kevin Patrik: We hear announcements every day from different battery manufacturers' scouting isolated improvements on our specific performance features.
Kevin Patrik: Today, we.
Speaker Change: We are discussing extensive measurements of our first planned product.
Speaker Change: We have worked so hard to develop.
Speaker Change: We believe that the USD five cell is concurrently.
Speaker Change: But they didn't have major performance specifications at the consumer demand.
Speaker Change: Range.
Speaker Change: Faster charging.
Speaker Change: I believe you to operate at lower temperatures.
Speaker Change: Ability to provide high power and a better safety profile than today's lithium ion cells.
Speaker Change: For the first time, you're seeing a battery that can meet all of the above requirements.
Speaker Change: And we are providing actual measurement data, but all of these features.
Speaker Change: When OEM customers they fly out of batteries into their vehicles at scale. We believe this combination of characteristics will transform the electric vehicles marketplace by offering and no compromise alternate due to internal combustion vehicles.
Speaker Change: So beginning of low volumes USD five prototype production is a major milestone on quantum scapes journey towards industrial relation.
Speaker Change: What key challenges remain ahead.
Speaker Change: John first I'm, just so pleased that we have reached this stage.
We got here through a setup thoughtful deliberate milestones starting with a single layer the visitors in 2020 and progressing towards our first ASR apples in 2022 and six layered alpha two prototypes earlier. This year, we have communicated to you every step of the way.
Speaker Change: Now that we have a design that is frozen and the baseline that funding for our first product.
Speaker Change: This industrialization process follows a well developed playbook that many industries have used before.
Speaker Change: In fact, I'm excited to be in a familiar players that I have been in several times during my career.
Speaker Change: We know what we need to do we need to do systematically methodically interestingly take a product that we have developed at our headquarters in San Jose and bring that into production of millions of cells that are ultimately deployed in vehicles.
Speaker Change: This long term goal.
Speaker Change: It requires constant focus on quality processes customer feedback and very close collaboration with our broader ecosystem to achieve gigawatt hour to scale production.
Speaker Change: Thanks.
Speaker Change: Kevin turning to you what is required to achieve the 2028 runway extension can you elaborate further on the details behind that.
Kevin Patrik: The 2028 runway extension is the equivalent of more than half of our $1 billion of non dilutive improvement to capital availability in our forecast.
Kevin Patrik: There are four primary drivers first under the licensing agreement power co invest capex required for gigawatt hour scale production facilities. The deal replaces our prior JV structure, which frees up $134 million and had previously earmarked for required capital investments.
Kevin Patrik: Second power co will contribute resources and skilled personnel as part of the collaboration which helps reduce cost to industrialize our technology platform.
Third the licensing agreement features an inflow to quantum escape of $130 million royalty prepay contingent upon satisfactory technical progress.
Fourth and separate from the power co deal, we continue to make improvements to the efficiency of our operations, which as mentioned in our shareholder letter we've already begun to realize.
Kevin Patrik: Longer term the shift to a license with BW power co for up to 80 gigawatt hours four times the size of the JV agreement the power Codell replaced.
Kevin Patrik: <unk> forecast capital requirements to quantum scraped by billions of dollars.
Speaker Change: Okay. Thanks, so much we're now ready to begin the <unk> portion of today's call. Operator, Please open up the line for questions.
Speaker Change: At this time in order to ask a question Press Star then the number one on your telephone keypad.
Speaker Change: Our first question comes from the line of Joseph Spak with UBS. Your line is open.
Speaker Change: Hi, This is Gabriel on for Joe Thanks for taking my questions.
Speaker Change: Firstly, congratulations on beginning be sample shipments in fully implementing raptor.
Speaker Change: I know you previously mentioned that you were targeting something like 800 watt hours per liter and that tends to 80 charge time under 15 minutes. So good to see those metrics there.
Speaker Change: Siva we've seen.
Speaker Change: Seen some announcements from some of your competitors intending to launch with their solid state tuck in lower volume fleets around that 26, 2007 timeframe, but we've also heard expectations for.
Speaker Change: Full introduction of solid state is a later decade event.
I know earlier, you spoke about how <unk> stacks up within the competitive landscape, so without setting specific expectations.
Do you see that timeframe as reasonable for the space in general to begin implementing this kind of technology, even if lower volume.
Speaker Change: Yes, thanks for asking the question.
Speaker Change: We I'll talk about our first first.
Speaker Change: As he said that a lot of announcements all the time from everywhere.
Speaker Change: We believe in.
Speaker Change: Systematic methodical.
Speaker Change: Turning to development of our product from amines sample into high volume production.
Speaker Change: This requires that we take no shortcuts.
Speaker Change: We make sure we.
Focus on quality you make.
Speaker Change: Make sure we focus on the supply chain, our ecosystem and do this right and with a partner who knows how to build in volume.
Speaker Change: All of this does require time effort and focus.
Speaker Change: I can only tell you that we are on the fastest path to production as possible our partner and US are both highly motivated to get this at breaking technology into production in the fastest possible manner.
Speaker Change: And that's where we are headed and the first part of getting that started is establishing a baseline that actually delivers all of these which is why we have established today. We have established that concurrently we can give you. The safety. We can give you better than expected energy density very.
Speaker Change: Very good power.
Speaker Change: Very good safety and the ability to operate at very low temperatures for them altogether that even have the baseline and we work methodically and systematically and you'd say to me with that one customer that's about all I can tell you.
Speaker Change: Our customer is working very closely with us on this.
Speaker Change: Great. That's that's good to hear and Kevin you.
Speaker Change: Lowered the Capex guide about $25 million at the midpoint. So the full year guide implies about $16 5 million of Capex in <unk>.
Speaker Change: Is this sort of the quarterly run rate, we should be expecting going forward or are there. Some costs you expect to incur such as Cobra spend that won't repeat going forward.
Speaker Change: I think that's a good that's a great question specifically here are to the question on Capex, we lowered guidance to $60 million to $75 million for three reasons. The first was deal related efficiencies regarding the VW power co deal second was non deal related savings and the third was a shift in.
Speaker Change: Certain payment timing are targeted at the end of 2024 into 2020 five.
Speaker Change: That range of Capex.
Speaker Change: We would expect going forward when you compare 2025 levels to 2024 to be flat to slightly down and actually for the same set of reasons. You should expect the same thing of 2025, opex as well flat to slightly down when compared to 2024 levels.
Speaker Change: Thanks, everyone congrats on the quarter.
Speaker Change: And our next question comes from the line of Jordan Levy with true Securities. Your line is open.
Hi, guys, it's Henry on for Jordan here, Congrats on the B sample milestones just to start with with the assembled now being produced in Raptor continuously running I'm. Just curious are there any key learnings you guys have found somebody continues running can be incorporated into the higher volume line starting next year. Thanks.
And they absolutely are.
Speaker Change: What you're asking is exactly what we are doing.
Speaker Change: Thereafter line.
Speaker Change: Not only produces enough samples to run the baseline, but he is also the platform on which we learn how to.
Speaker Change: Structurally improve and continuously make the cobra that process better.
Speaker Change: Even on the rest of the line is what you would expect that being a stable baseline allows you to systematically improve.
Speaker Change: On the performance and you can see the effect I mean.
Speaker Change: To come and tell you that we can do 844 watt hours per liter three ended in one watt hours per kilogram.
Speaker Change: Well just over 12 minutes of Todd Stein.
Operating up to minus 30 degrees with tenancy capability.
Speaker Change: And with safety that is even at a three and a degree thermal stability that is good.
Speaker Change: This kind of an improvement comes from running a stable baseline.
Yeah.
Thanks for that and then maybe just one quick follow up.
Speaker Change: Kevin do you own the readjusted Capex forecast are you guys able to talk to what kind of drove the shift in certain payments that you mentioned from this year to next what was behind that yeah, just to put a magnitude of that that shift is in the single digit millions it doesn't change any of the publicly.
Speaker Change: Stated kind of milestones for progress and we're very much aligned with our both our prospective launch customer and VW power co on the industrialization and tech transfer work. So I would put it in just the normal course of operations.
Speaker Change: Okay.
Speaker Change: And your next question comes from the line of Winnie Dong with Deutsche Bank. Your line is open.
Speaker Change: Thank you so much and congrats on the quarter and the music starting in December.
Speaker Change: B sample delivery.
Speaker Change: Now, though you had a few months of collaboration with with particle I was wondering if you can talk about maybe some of the specific issues that you know they're solving for them versus what quantum state 90. So let me go internally for it'll be self owned deliveries in testing with customers.
Speaker Change: And then secondly.
Speaker Change: Could you guys maybe share the.
Speaker Change: <unk>.
Speaker Change: Any details around the economics beyond the loyalty payment I understand that there is some sort of shared economics.
Speaker Change: You know beyond the one one dirty prepayment that you guys discussed is any details that you can potentially.
And offer.
Speaker Change: Thank you when you were at and we think the second question first Kevin you want to talk about the economics no I. Unfortunately, not anything beyond the redacted contracts. We put in place as you are correct me noted there is a royalty prepay, which kind of gets unlocked with sufficient technical progress of $130 million in for.
Speaker Change: So to Quantum's, Gabe and then once up and going there are two parts. There's both a royalty rate and then there is a output are there the outperformance share and.
Speaker Change: As is common in the industry those details between.
Speaker Change: Two our two companies arent shared so as not to disadvantage either one and future negotiations.
Speaker Change: So many onto your first question daily on the second question.
Speaker Change: As much as we can disclose we have for many reasons both for confidentiality between the parties and because we want to maintain the ability to negotiate with other customers that means tax. So we don't want to put these numbers out.
Speaker Change: And your first question Hans to walk the volkswagens articles role in the development as well.
Speaker Change: We come in with a very deep knowledge of the solid state battery technology et cetera.
Speaker Change: The electrochemistry is involved the materials involved the processing.
Speaker Change: Sequences.
Speaker Change: But amateurs.
Speaker Change: What's powerful is very very good at is in scaling up in industrialization of the manufacturing capabilities.
Making sure that the ecosystem, the subcutaneous properly negotiated and put in place.
Factory ramp up making sure that the the tools, and then obtains and and and and large scale volume production Cape.
Speaker Change: Capabilities in place those things they are very good at and we are both working together as one team one goal.
Speaker Change: These be samples into.
Speaker Change: <unk> gigawatt scale practices that we both want to get out as soon as possible.
Speaker Change: Yeah.
Speaker Change: And your next question comes from the line of Ben Kalo with Baird. Your line is open.
Speaker Change: Hi, good evening and congrats guys.
Speaker Change: Congrats to you.
Speaker Change: Just could you talk a little bit more about.
Speaker Change: Moving to.
Speaker Change: Cobra or Abbvie Cobra.
Speaker Change: Do you how are you.
Speaker Change: That gets started just pardon me.
Speaker Change: We should expect the ramp up there to meet the more high volume production. Thank you. Thank.
Speaker Change: Thanks Ben.
Speaker Change: As you rightly point out that as a very important step for us to ramp the volume of production from Cobra upfront from Raptor and Tacoma.
Speaker Change: That Cobra equipment. The main pieces of tunes had already started arriving.
By end of this year all the individual pieces that we need just for the core bra process will be in place.
Speaker Change: Early part of next year certain high volume production capable.
Speaker Change: Downstream tools will get added.
Speaker Change: And this will be a continuous process as we are developing and slowly cutting over from that that the cobra.
Speaker Change: That said, we expect will be the main part of the sample production earlier in the year and that's cool, but that comes and it will it will get the Oriental majority into Cobra.
Speaker Change: In 2025.
And then I think you've touched on this a little bit, but just before I ask again, just I know it's early.
Speaker Change: Sample.
Speaker Change: Do samples out.
Any early feedback from customers or potential customers are too early to tell so far.
Hello.
Speaker Change: How you expect.
Speaker Change: <unk> powder to change.
Speaker Change: Receivables.
Speaker Change: Thank you.
Speaker Change: Clearly having samples.
Speaker Change: <unk> is a great thing for all of Us us and our customers.
Speaker Change: And as you would expect the customer data is going to be very proprietary to the customer and they are not going to allow us to share any of that I would say that unless they choose to.
Speaker Change: How about but we do measure the system sales and that's where the data that can be presented today.
Speaker Change: Are all from the Cisco sales and you can see how thoroughly we have characterized it and giving you. The data. So that we are not just showing bits and pieces of data just one that I made at the time, we had actually showing you a comprehensive data exactly how it is measured one of the dimensions on how it will be a major energy.
Speaker Change: Power.
Speaker Change: All of those so this is the reason we're able to share the data and that went to detail.
Customers will of course, we'll measure it their own way with their own specifications and will give us specific feedback that will help us in defining and making the process better.
Speaker Change: Thank you very much.
Speaker Change: Thanks, Matt.
Speaker Change: Again, if you would like to ask a question. Please press star and the number one on your telephone keypad.
Speaker Change: Our next question comes from the line of Jed door Shimer with William Blair. Your line is open.
Speaker Change: Mark shooter on for Chad.
Speaker Change: Echoing everybody else congrats on the debris sample stage gate I think that's the biggest.
Speaker Change: Complishments.
No not to undermine that achievement, but obviously, we're going to look forward a bit.
Speaker Change: You were talking about see samples, that's where the rubber meets the road is a lot of capex.
Speaker Change: We needed to build the new manufacturing equipment for the Copa process.
Speaker Change: Am I thinking about this correctly that the new licensing structure will help create a shared responsibility for developing and also scaling back corporate process and.
Speaker Change: Does this derisk the.
Speaker Change: The type of maybe wait and see type of approach that policy, though it would have taken right.
Speaker Change: Now to add the shared responsibility do you see any advantage.
Speaker Change: Mark This is a very important consideration on why and how we went with this model.
Speaker Change: In the relationship that we have developed with powerful and in the agenda is a capital light model that we're going after.
Speaker Change: Yeah.
Speaker Change: The designation of B sample is actually done by the customer.
Speaker Change: And.
Speaker Change: Whether it is being sample odd when many samples that are fully qualified from them at the same functionality. They will garner the same be example of seed samples depending on where they are in their qualification.
Speaker Change: But the most important thing with respect to your question is this.
Speaker Change: Political Volkswagen commits to spending all the capital to build them and run the factories.
We participate in enabling them to be able to use that equipment very well and produced themselves.
Speaker Change: We make our money when they're in the volumes and we get a royalty.
Speaker Change: Iot prepay when certain progress has been made.
Speaker Change: On a continuing basis will get royalties and an outperformance as we were talking about it earlier.
Speaker Change: We are not committing to spend a lot of capital in building and running factories, that's what our partner would it be doing.
Speaker Change: And so going from B samples to see samples et cetera, there'll be their designation.
Based on their ability to ramp in high volumes.
And if you take a step back from the.
Speaker Change: The shareholder perspective, we're amplifying each partner's core competency.
Speaker Change: For quantum scape is CEVA mentioned that all the knowledge and the chemistry and the process and the cell design and development.
Speaker Change: But from the VW power, Scott, just the expertise and industrialization automation automotive scale.
Speaker Change: We mentioned before over the summer. This is a nonexclusive deal and we think it serves as a template for other.
Speaker Change: For others in the future are the IP is co owned around industrialization for the separator as always owned by Commscope, regardless of who creates it.
Speaker Change: And then as I discussed in the comments in the letter.
Speaker Change: It's a major driver to extend our runway.
Speaker Change: And Mark to your question once you get two Giga scale factory it is tremendous.
The benefits to the Commscope shareholder in terms of the capital to penetrate our technology into the marketplace.
Speaker Change: So we are watching further shareholder returns and this is the optimal model for us to maximize shareholder return.
Speaker Change: That's great. Thank you both for the color just a quick follow up on that.
Speaker Change: Yeah.
Speaker Change: Power toe is responsible for the scale up as you see sample.
Speaker Change: Hey, Mike. Thank you Bob this correctly that even if they create trade secrets of processes around the Cobra process quantum scape is still.
Speaker Change: Monitors to our ship of that and then Kim.
Speaker Change: I know youre working with other major Oems. So can you immediately transfer that.
Speaker Change: That learning to to potential competitors, Chicago, how does that relationship work.
Speaker Change: So on the ownership question is yes, quantum scape retains ownership of the separator technology regardless of.
Speaker Change: Who who creates it in this collaboration phase regarding the exact details of.
Speaker Change: How it works for use with others I don't want to get into the weeds of the contract itself. There are limitations, but we think on balance they are quite favorable to quantum escape.
Speaker Change: And use with other partners.
Speaker Change: Nearly mark our expectation is that we will have multiple customers with whom we will be ramping as rapidly as possible and so the contract. Although certain features for us to be able to do that are clearly.
Speaker Change: Clearly there are even some restrictions, but this is a much faster way to do it.
Speaker Change: Understood. Thank you again.
Speaker Change: And there are no further questions at this time quantum space management, I'll turn the call back over to you.
Speaker Change: Thank you operator.
Speaker Change: As a final note today I would like to acknowledge our co founder and Chairman <unk> Singh, who will be retiring from the board at the end of 'twenty 'twenty four it after almost 15 years of service.
Speaker Change: You gave us the visionary behind the growth of quantum escape, leading up to the critical achievement of shipping samples of our first commercial product.
We are deeply grateful for his inspired guidance and we will continue driving towards the ambitious goals set for the company on.
On a personal level I'd like to express my gratitude for dug deep, but continuing to be a great friend and confidant and what he is invaluable help as they take on the task of leading this extraordinary company into its next stage.
Speaker Change: With that thank you.
Speaker Change: You for listening and we look forward to updating you on further progress in the months to come.
Speaker Change: Okay.
Speaker Change: This concludes today's conference call you may now disconnect.