Q1 2025 Heritage Global Inc Earnings Call
Later, you'll have the opportunity to ask questions. During the question and answer session. You may registered to ask a question at any time by pressing the star and one on your telephone keypad.
Please note today's call will be recorded and we will be standing by if you should need any assistance. It is now my pleasure to turn today's conference over to John Nesbit of IMS Investor Relations. Please go ahead. Thank you and good afternoon, everyone. Before we begin I'd like to remind everyone that this conference call contains forward looking statements based on our current.
Patients and projections about future events and are subject to change based on various important factors.
In light of these risks uncertainties and assumptions you should not place undue reliance on these forward looking statements, which speak only as of the date of this call for.
For more details on factors that could affect these expectations. Please see our filings with the Securities and Exchange Commission.
Speaker Change: Now I'd like to turn the call over to Harrods Global's, Chief Executive Officer, Mr. Rostov Ross.
Rostov Ross: Thank you John and welcome all to our first quarter earnings call I am pleased to again report a solid profitable quarter.
Rostov Ross: Once again, executing safe and smart decisions and transactions across all of our revenue streams over $1 5 million in free cash flow affording us the continued currency to fuel growth as we pursue both organic and M&A initiatives aggressively we had a very slow start.
Rostov Ross: To the quarter. It was really a tale of two halves until mid February the markets. We operate in has its similar and continued wait and see sentiment of the second half of last year, but the feeling of a pent up demand continued as seller and then sellers eventually needed to realize.
Rostov Ross: Is that the disposition.
Rostov Ross: Regions they needed to make really took way midway through the quarter and opened up in mid February across the board.
Rostov Ross: We experienced a very strong March with followed with a particularly good April which really bodes well for both revenue generation and the conversion from our pipeline to contracts on multiple larger projects, both fee driven and principal purchases.
Rostov Ross: Our expectations have a very positive sense that this is a trend that will continue throughout the year and well into 2026 asset based lenders with both industrial assets and financial assets want to ensure they have strong cash positions in these uncertain geopolitical.
Rostov Ross: Scapes and there is a greater push to mark to market now more expeditiously, we've experienced both large healthy corporations, focusing a greater emphasis on surplus and the back end of their supply chains.
Rostov Ross: Alongside this is an increase in corporate bankruptcy filings with more chapter 11 filings converted to chapter seven liquidations, requiring auctioneers services like we do.
Speaker Change: Financial asset sellers are moving quicker to recapture values on nonperforming loans at both the banking and fintech sectors as well as with consumer debt remaining still at record levels and Brian will now walk you through in detail. Our Q1, and then I will come back and give you some thought.
Rostov Ross: It's one where we look for our growth going forward, Brian Europe now.
Brian: Thank you Ross and good afternoon, everyone.
Brian: I'll begin by walking through the first quarter financial results with a focus on our key metric operating income and drilling down on segment performance before concluding with the consolidated financials.
Brian: Consolidated operating income was $1 4 million in the first quarter of 2025 compared to $2 6 million in the first quarter of 2024.
Brian: Our industrial assets Division reported operating income of $1 million in the first quarter of 2025% compared to 800000 in the prior year quarter.
Brian: While our financial assets Division reported operating income of $1 7 million in the first quarter of 2025 compared to $2 9 million in the first quarter of 2024.
Operator: All participants are in a listen-only mode. Later, you'll have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing the star and 1 on your telephone.
And one on your telephone keypad.
Please note today's call will be recorded and we will be standing by if you should need any assistance.
Brian: Starting with our industrial asset Division.
John Nesbitt: It is now my pleasure to turn today's conference over to John Nesbitt of IMS Investor Relations. Please go ahead. Thank you and good afternoon, everyone. Before we begin I'd like to remind everyone that this conference call contains forward looking statements based on our current expectations and projections about future events and are subject to change based on various important factors.
Operator: Please note today's call will be recorded and we will be standing by if you should need any assistance.
Brian: Our auction business, specifically had a solid quarter as auction activity began to pick up in the second half.
John Nesbett: It is now my pleasure to turn today's conference over to John Nesbett of IMS Investor Relations. Please go ahead.
Brian: The auction and liquidation segment results aligned with our expectations with one exception.
John Nesbett: Thank you and good afternoon everyone. Before we begin, I'd like to remind everyone that this conference call contains forward-looking statements based on our current expectations and projections about future events and are subject to change based on various important factors. In light of these risks, uncertainties, and assumptions, you should not place undue reliance on these forward-looking statements, which speak only as of the date of this call.
Brian: Our appraisal business had a slow start to the year generating roughly three to 400000 less than anticipated.
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John Nesbitt: In light of these risks uncertainties and assumptions you should not place undue reliance on these forward looking statements, which speak only as of the date of this call for more details on factors that could affect these expectations. Please see our filings with the Securities and Exchange Commission.
Brian: Which contributed to the negative segment comparison to the first quarter of 2024.
Brian: We have since built momentum in this revenue stream and expect a much stronger second quarter in alignment with our prior estimates.
John Nesbitt: Now I'd like to turn the call over to Harrods Global's, Chief Executive Officer, Mr. Rostov Ross.
Brian: Our refurbishment and retail segment has focused on acquiring a broader mix of high demand higher value instruments.
John Nesbett: For more details on factors that could affect these expectations, please see our filings with the Securities and Exchange Commission.
Rostov Ross: Thank you John and welcome all to our first quarter earnings call.
Ross Dove: Now I'd like to turn the call over to Heritage Global's Chief Executive Officer, Mr. Ross Dove. Thank you, John, and welcome all to our first quarter earnings call. I'm pleased to again report a solid profitable quarter. We once again executed safe and smart decisions and transactions. across all of our revenue streams, over 1.5 million in free cash flow, affording us the continued currency to fuel growth as we pursue both organic and M&A initiatives aggressively.
Brian: This enhanced inventory has driven faster sales at stronger price points, resulting in a $300000 increase in segment operating income compared to the same quarter last year.
Rostov Ross: I'm pleased to again report a solid profitable quarter, we once again executed safe and smart decisions and transactions across all of our revenue streams over $1 5 million in free cash flow affording us the continued currency to fuel growth as we pursue both organic and <unk>.
Brian: Consistent with the auction script <unk> seen an increase in auction referral activity, which is expected to positively impact the division's operating income in the second quarter.
Rostov Ross: <unk> initiatives aggressively we had a very slow start to the quarter. It was really a tale of two halves until mid February the markets. We operate in has its similar and continued wait and see sentiment of the second half of last year, but the feeling about pent up demand continued.
Brian: These business development indicators are beginning to validate our outlook on the industrial auction business as the macroeconomic environment continues to drive cost cutting measures layoffs and facility closures and we expect further momentum in our industrial division as we continue to move through 2025.
Ross Dove: We had a very slow start to the quarter. It was really a tale of two halves. Until mid-February, the markets we operate in had the similar and continued wait-and-see sentiment of the second half of last year. But the feeling of a pent-up demand continued, and then sellers eventually needed to realize that the disposition decisions they needed to make really took midway through the quarter and opened up in mid-February across the board. We experienced a very strong March, followed with a particularly good April, which really bodes well for both revenue generation and the conversion from our pipeline to contracts on multiple larger projects, both fee-driven and principal-purchasing.
Rostov Ross: As seller and then sellers eventually needed to realize that the disposition decisions.
Brian: One notable transaction during the quarter in the industrial side.
Rostov Ross: The decisions they needed to make really took way midway through the quarter and opened up in mid February across the board.
Brian: Along with certain partners entered into a purchase agreement for our pharmaceutical plant and its associated equipment assets in Huntsville, Alabama.
Rostov Ross: We experienced a very strong March with followed with a particularly good April which really bodes well for both revenue generation and the conversion from our pipeline to contract on multiple larger projects, both fee driven and principal purchases.
Brian: And executed a lease agreement with the seller for both the plant and equipment assets.
Brian: It's important to note that this transaction is different from certain historical real estate purchases in a sense that the partnership doesn't tend to immediately flip the assets to auction or re sell the building.
But rather collect the lease payments through the first 18 month term ending with a potential execution of the repurchase option by the seller and tenant.
Rostov Ross: Our expectations have a very positive sense.
Rostov Ross: This is a trend that will continue throughout the year and well into 2026 asset based lenders with both industrial assets and financial assets wants to ensure they have strong cash positions in these uncertain geopolitical landscape and there is a greater push to mark to market now more X.
Ross Dove: Our expectations have a very positive sense that this is a trend that will continue throughout the year and well into 2026. Asset-based lenders of both industrial assets and financial assets want to ensure they have strong cash positions in these uncertain geopolitical landscapes. And there is a greater push to mark the market now more expeditiously. We have experienced both large healthy corporations focusing a greater emphasis on surplus and the back end of their supply chain. Alongside this is an increase in corporate bankruptcy filings with more Chapter 11 filings converted to Chapter 7 liquidations, requiring auctioneer services like we do.
Brian: And it's similar in a sense that this transaction is expected to generate strong returns for HCP. Once the assets are ultimately sold.
Brian: Moving to the financial assets Division.
Brian: The brokerage segment got off to a slower start to the year than we anticipated but activity strengthened in the latter portion of the first quarter, reaching $1 6 million in segment operating income.
Rostov Ross: Additionally, we have experienced both large healthy corporations, focusing a greater emphasis on surplus and the back end of their supply chains.
Speaker Change: Alongside this is an increase in corporate bankruptcy filings with more chapter 11 filings converted to chapter seven liquidations, requiring auctioneers services like we do final.
Brian: After experiencing record pandemic related prices for charged off and nonperforming loans through the first quarter of 2024, we began to see movement to a more normalized pricing level over the last year, which is believed to have stabilized at approximately 30% below record highs.
Speaker Change: Financial asset sellers are moving quicker to recapture values on nonperforming loans at both the banking and fintech sectors as well as with consumer debt remaining still at record levels. Brian will now walk you through in detail. Our Q1, and then I will come back and give you some thought.
Brian: However, we continue to see significant volume due to elevated levels of consumer debt and we expect the momentum experienced in the second half of the quarter to continue into the second quarter and beyond.
Ross Dove: Financial asset sellers are moving quicker to recapture values on non-performing loans at both the banking and fintech sectors, as well as with consumer debt remaining still at record level.
Speaker Change: It's one where we look for our growth going forward, Brian Europe now.
Brian Cobb: Brian will now walk you through in detail our Q1, and then I will come back and give you some thoughts on where we look for our growth going forward. Brian, you're up now.
Brian: Our specialty lending segment is the primary driver of decreased operating income in the division as compared to the first quarter 2024.
Brian Europe: Thank you Ross and good afternoon, everyone.
Brian Europe: I'll begin by walking through the first quarter financial results with a focus on our key metric operating income and drilling down on segment performance before concluding with the consolidated financials.
Brian: Which is due to the lack of revenue recognition related to loans placed on non accrual status in the second quarter of 2024.
Brian Cobb: Thank you, Ross, and good afternoon, everyone. I'll begin by walking through the first quarter financial results with a focus on our key metric operating income and drilling down on segment performance before concluding with the consolidated financial Consolidated operating income was $1.4 million in the first quarter of 2025 compared to $2.6 million in the first quarter of 2024. Our Industrial Assets Division reported operating income of $1 million in the first quarter of 2025 compared to $800,000 in the prior year quarter. Well, our financial assets division reported operating income of $1.7 million in the first quarter of 2025, compared to $2.9 million in the first quarter of 2024.
Brian: We've continued to make structural changes in our lending business with the expectation of further improving our collection rates moving forward and improving our long term potential realization for loans currently placed in nonaccrual status.
Brian Europe: Consolidated operating income was $1 4 million in the first quarter of 2025 compared to $2 $6 million in the first quarter of 2024.
Brian Europe: Our industrial assets Division reported operating income of $1 million in the first quarter of 2025% compared to 800000 in the prior year quarter.
Brian: As we have mentioned previously these efforts include accelerating our legal collection methods utilized by our borrowers which may have the most significant impact on the overall collectability of the loans.
Brian Europe: While our financial assets Division reported operating income of $1 7 million in the first quarter of 2025 compared to $2 9 million in the first quarter of 2024.
Brian: Beyond the operating income other consolidated financial results include the following.
Brian Europe: Starting with our industrial asset Division.
Brian: Adjusted EBITDA was $1 8 million compared to $2 9 million in the prior year period.
Brian Europe: Our auction business, specifically had a solid quarter as auction activity began to pick up in the second half.
Brian Cobb: Starting with our Industrial Asset Division. Our auction business specifically had a solid quarter as auction activity began to pick up in the second half. The auction liquidation segment results aligned with our expectations, with one exception. Our appraisal business had a slow start to the year, generating roughly $300,000 to $400,000 less than anticipated, which contributed to the negative segment comparison to the first quarter of 2024. We have since built momentum in this revenue stream and expect a much stronger second quarter in alignment with our prior S&P. Our refurbishment and retail segment has focused on acquiring a broader mix of high demand, higher value instruments.
Brian: Net income was $1 1 million or <unk> <unk> per diluted share compared to net income of $1 8 million or <unk> <unk> per diluted share in the first quarter 2024.
Brian Europe: The auction and liquidation segment results aligned with our expectations with one exception.
Brian Europe: Our appraisal business had a slow start to the year generating roughly three to 400000 less than anticipated.
Brian: Our balance sheet is strong with stockholders equity of $65 4 million as of March 31, 2025% compared to $65 2 million at December 31, 2024, with networking capital of $14 7 million.
Brian Europe: Which contributed to the negative segment comparison to the first quarter of 2024.
Brian Europe: We have since built momentum in this revenue stream and expect a much stronger second quarter in alignment with our prior estimates.
Brian: Our cash balance reflects a total of $18 8 million as of March 31 2025.
Brian Europe: Our refurbishment and retail segment has focused on acquiring a broader mix of high demand higher value instruments.
Brian: And after removing amounts due to our clients or payables to sellers on our balance sheet. Our net available cash balance was $10 2 million.
Brian Europe: This enhanced inventory has driven faster sales at stronger price points, resulting in a $300000 increase in segment operating income compared to the same quarter last year.
Brian: We also repurchased approximately 500000 shares in the open market during the first quarter and as of March 31, 2025. The company had approximately $2 million in remaining aggregate dollar value of shares that may be purchased under the program.
Brian Cobb: This enhanced inventory has driven faster sales at stronger price points, resulting in a $300,000 increase in segment operating income compared to the same quarter last year. Consistent with the auctions group, ALT has seen an increase in auction referral activity, which is expected to positively impact the division's operating income in the second quarter. These business development indicators are beginning to validate our outlook on the industrial auction business. As a macroeconomic environment continues to drive cost cutting measures, layoffs, and facility closures. And we expect further momentum in our industrial division as we continue to move through 2025.
Brian Europe: Consistent with the auction script <unk> seen an increase in auction referral activity, which is expected to positively impact the division's operating income in the second quarter.
Brian: Lastly, as Ross has previously mentioned M&A is an increasingly important component of our growth strategy and we continue to evaluate strategic opportunities.
Brian Europe: These business development indicators are beginning to validate our outlook on the industrial auction business as the macroeconomic environment continues to drive cost cutting measures layoffs and facility closures and we expect further momentum in our industrial division as we continue to move through 2025.
Brian: We are focused on what's next while still managing the underlying core business, which drives our sustained profitability and builds our available cash balance.
Speaker Change: It all ended their back over to you Ross.
Brian Europe: One notable transaction during the quarter in the industrial side.
Ross: Thank you Brian So I'll continue on the whats next so where do we go from here.
Brian Europe: Along with certain partners entered into a purchase agreement for our pharmaceutical plant and its associated equipment assets in Huntsville, Alabama.
Brian Cobb: One notable transaction during the quarter in the industrial side, HCP, along with certain partners, entered into a purchase agreement for a pharmaceutical plant and its associated equipment assets in Huntsville, Alabama. and executed a lease agreement with the seller for both the plant and equipment assets.
Speaker Change: After watching the Kentucky Derby again, it's evidenced the fastest horse out of the gate doesn't beat the horse with momentum that close is strong. We believe we have built heritage to beat the horse with momentum and the skill to navigate the field with a clear view forward in the right path for our run for the Roses.
Brian Europe: And executed a lease agreement with the seller for both the plant and equipment assets.
Brian Europe: It's important to note that this transaction is different from certain historical real estate purchases in the sense that the partnership doesn't intend to immediately flip the assets to auction or re sell the building.
Brian Cobb: It's important to note that this transaction is different from certain historical real estate purchases in the sense that the partnership doesn't intend to immediately flip the assets to auction or resell the building, but rather collect the lease payments through the first 18-month term, ending with a potential execution of the repurchase option by the seller and tenant. And it's similar in a sense that this transaction is expected to generate strong returns for HCP once the assets are ultimately sold.
Speaker Change: Our M&A progress is closing in on exciting targets now and we will be accretive and synergistic as they will both be profitable standalone and escalate, our organic growth and with less liquidity in the market, we believe our momentum and our position with a strong balance sheet.
Brian Europe: But rather collect the lease payments through the first 18 month term ending with a potential execution of the repurchase option by the seller and tenant.
Brian Europe: And it's similar in a sense that this transaction is expected to generate strong returns for HCP. Once the assets are ultimately sold.
Speaker Change: <unk> works in our favor the last 18 months are really the telltale sign for the next 18 months, we see that all signs point to the supply of assets are growing with the demand for quality used and refurbished industrial assets, increasing especially <unk>.
Brian Europe: Moving to the financial assets Division.
Brian Europe: The brokerage segment got off to a slower start to the year than we anticipated but activity strengthened in the latter portion of the first quarter, reaching $1 6 million in segment operating income.
Brian Cobb: Moving to the Financial Assets Division. The brokerage segment got off to a slower start to the year than we anticipated, but activity strengthened in the latter portion of the first quarter, reaching $1.6 million in segment operating income. After experiencing record pandemic related prices for charged off and non-performing loans through the first quarter of 2024, we began to see movement to a more normalized pricing level over the last year, which is believed to have stabilized at approximately 30% below record highs. However, we continue to see significant volume due to elevated levels of consumer debt, and we expect the momentum experienced in the second half of the quarter to continue into the second quarter and beyond.
Brian Europe: After experiencing record pandemic related prices for charged off and nonperforming loans through the first quarter of 2024, we began to see movement to a more normalized pricing level over the last year, which is believed to have stabilized at approximately 30% below record highs.
Speaker Change: <unk> the tariff concerns on the financial front lenders are feeling pressure to ensure getting clean balance sheets, with let's wait and see and moving NPL assets. The market now our team is totally in it to win it and our definition of success is there.
Raised our hurdle bar from steady profits growing profits and we feel confident we can execute on that initiative. Thank you all for listening it's much appreciated.
Brian Europe: However, we continue to see significant volume due to elevated levels of consumer debt and we expect the momentum experienced in the second half of the quarter to continue into the second quarter and beyond.
Speaker Change: At this time, if you'd like to ask a question. Please press the star and one key on your telephone keypad.
Brian Europe: Our specialty lending segment is the primary driver of decreased operating income in the division as compared to the first quarter of 2024.
Speaker Change: Keep in mind, you may remove yourself from the question queue at any time by pressing star in too.
Brian Cobb: Our specialty lending segment is the primary driver of decreased operating income in the division as compared to the first quarter of 2024, which is due to the lack of revenue recognition related to loans placed in non-equal status in the second quarter of 2024. We've continued to make structural changes in our lending business, with the expectation of further improving our collection rates moving forward, and improving our long term potential realization for loans currently placed in non-accrual status. As we've mentioned previously, these efforts include accelerating legal collection methods utilized by our borrowers, which may have the most significant impact on the overall collectibility of the loan.
Brian Europe: Which is due to the lack of revenue recognition related to loans placed on non accrual status in the second quarter of 2024.
Speaker Change: Again, it is star one if you'd like to ask a question today.
Speaker Change: We will take our first question from Mark Argento with Lake Street. Please go ahead. Your line is open.
Brian Europe: We've continued to make structural changes in our lending business with the expectation of further improving our collection rates moving forward and improving our long term potential realization for loans currently placed in nonaccrual status.
Speaker Change: Hi, guys.
Speaker Change: Just a few quick ones.
Speaker Change: So thank you had mentioned a.
Speaker Change: A little slower to start but it looks like things are picking up can you talk a little bit more about the.
Brian Europe: As we have mentioned previously these efforts include accelerating our legal collection methods utilized by our borrowers which may have the most significant impact on the overall collectability of the loans.
Speaker Change: Type of assets Youre seeing in the market.
Speaker Change: Is there any kind of traditional seasonality you are seeing there.
Speaker Change: And do you think can help us get a better get a feel for how that business is trending.
Brian Europe: Beyond the operating income other consolidated financial results include the following.
Speaker Change: No Mark I think that it's really not about fintech versus.
Brian Europe: Adjusted EBITDA was $1 8 million compared to $2 9 million in the prior year period.
Brian Cobb: Beyond operating income, other consolidated financial results include the following adjusted EBITDA was $1.8 million compared to $2.9 million in the prior year period. Net income was $1.1 million or $0.03 per diluted share compared to net income of $1.8 million or $0.05 per diluted share in the first quarter of 2024. Our balance sheet is strong with stockholders' equity of $65.4 million as of March 31, 2025 compared to $65.2 million at December 31, 2024, with net working capital of $14.7 million. Our cash balance reflects a total of $18.8 million as of March 31, 2025. And after removing amounts due to our clients or payables to sellers on our balance sheet, our net available cash balance was $10.2 million.
Speaker Change: Traditional banking I think that it was just the first two weeks of the first three weeks, everyone was kind of wait and see with its massive.
Brian Europe: Net income was $1 1 million or <unk> <unk> per diluted share compared to net income of $1 8 million or <unk> <unk> per diluted share in the first quarter 2024.
Speaker Change: <unk> political question Mark do we sell now do we wait and then at some point kind of flip the switch and about.
Brian Europe: Our balance sheet is strong with stockholders equity of $65 4 million as of March 31, 2025% compared to $65 2 million at December 31, 2024, with networking capital of $14 7 million.
Speaker Change: Midway through February and there was a big push to get stuff done. So we had a really strong.
Brian Europe: Our cash balance reflects a total of $18 8 million as of March 31 2025.
Speaker Change: Half of the quarter and a really good pipeline going into Q2 and everyone. Now I think really kind of moving forward with there is no good wait and see in the market.
Brian Europe: And after removing amounts due to our clients or payables to sellers on our balance sheet. Our net available cash balance was $10 2 million.
It's time to sell.
Brian Europe: We also repurchased approximately 500000 shares in the open market during the first quarter and as of March 31, 2025. The company had approximately $2 million in remaining aggregate dollar value of shares that may be purchased under the program.
Speaker Change: Got it great.
Speaker Change: You anticipate.
Speaker Change: So that business overall.
Brian Cobb: We also repurchased approximately 500,000 shares in the open market during the first quarter. And as of March 31, 2025, the company had approximately $2 million in remaining aggregate dollar value shares that may be purchased under the program.
Speaker Change: Thinking about this kind of macro.
Speaker Change: And.
Speaker Change: As Brian alluded to maybe.
Speaker Change: Can you just stabilize kind of 30% off the highs, but do you anticipate.
Brian Europe: Lastly, as Ross has previously mentioned M&A is an increasingly important component of our growth strategy and we continue to evaluate strategic opportunities.
Speaker Change: There's going to be some growth there or how I guess, how should we model that or think about modeling that business. So that just kind of a slow.
Brian Cobb: Lastly, as Ross has previously mentioned, M&A is an increasingly important component of our growth strategy, and we continue to evaluate strategic opportunities. We are focused on what's next while still managing the underlying core business which drives our sustained profitability and builds our available cash balance.
Brian Europe: We are focused on what's next while still managing the underlying core business, which drives our sustained profitability and builds our available cash balance.
Speaker Change: But consistent quarter in quarter out or anything we did actually see a reacceleration in growth there.
Speaker Change: I think we've really kind of hit the sweet spot and what the asset flow is going to be as far as pricing, but I think we haven't hit the sweet spot in the growth would asset flow is going to need to be the flow through the amount of assets.
Ross: It all ended their back over to you Ross.
Ross: Thank you Brian So I'll continue on the whats next so where do we go from here.
Brian Cobb: And I'll end it there.
Ross Dove: Back over to you, Ross. Thank you, Brian. So I'll continue on the what's next.
Speaker Change: After watching the Kentucky Derby again, it's evident the fastest horse out of the gate doesn't beat the horse with momentum that close is strong. We believe we have built heritage to beat the horse with momentum and the skill to navigate the field with a clear view forward in the right path for our run for the Roses.
Ross Dove: So where do we go from here? After watching the Kentucky Derby again, it's evident the fastest horse out of the gate doesn't beat the horse with momentum that closes strong. We believe we have built Heritage to be the horse with momentum and the skill to navigate the field with a clear view forward and the right path for our run for the road. Our M&A progress is closing in on exciting targets now and we will be creative and synergistic as they will both be profitable standalone and escalate our organic growth and with less liquidity in the market, we believe our momentum and our position with a strong balance sheet really works in our favor.
Speaker Change: They need to get converted.
Speaker Change: Looking at record highs not just in credit card debt, but in.
Speaker Change: In automotive debt.
Speaker Change: So at some point there's.
Speaker Change: Our M&A progress is closing in on exciting targets now and we will be accretive and synergistic as they will both be profitable stand alone.
Speaker Change: Got to be almost mathematically and increase in flow through.
So I think we're in a growth trajectory mark.
Speaker Change: And escalate, our organic growth and with less liquidity in the market, we believe our momentum and our position with a strong balance sheet really works in our favor. The last 18 months are really the telltale sign for the next 18 months, we see that all signs point to.
Speaker Change: Got it.
Brian: Brian just one quick words.
Brian: Where is the loan book cannot stand right now in terms of a balance and have you made any progress in whittling that down since.
Brian: The end of the year.
Brian: Yes, we're at.
Brian: Around $29 million just over $29 million.
Ross Dove: The last 18 months are really the telltale sign for the next 18 months. We see that all sign points to the supply of assets are growing with the demand for quality used and refurbished industrial assets increasing, especially including the tariff concerns. On the financial front, lenders are feeling pressure to ensure getting clean balance sheets with less wait and see and moving NPL assets to market now. Our team is totally in it to win it, and our definition of success is to raise the hurdle bar from steady profits to growing profits, and we feel confident we can execute on that initiative.
Speaker Change: The supply of assets are growing with the demand for quality used and refurbished industrial assets, increasing especially including the tariff concerns on the financial front lenders, who are feeling pressure to ensure getting clean balance sheets, with let's wait and see and moving NPL.
Brian: Our gross loans outstanding.
Brian: That that's a little shy of $10 million on our balance sheet and notes receivable and the remaining piece and equity method investments that we are seeing.
Brian: We're still seeing a higher amount of cash inflows due to the fact that we're not funding or haven't been funding as much each quarter.
Speaker Change: Assets the market now our team is totally in it to win it and our definition of success is there.
Brian: So we're actually seeing a cash inflow from that business right now, but we did.
Speaker Change: Raised our hurdle bar from steady profits growing profits and we feel confident we can execute on that initiative. Thank you all for listening it's much appreciated.
Brian: We did increase the amount of fundings, we did in Q1 versus Q3 and Q4 of last year.
Brian: And then the balance on your non accrual.
Speaker Change: At this time, if you'd like to ask a question. Please press the star and one keys on your telephone keypad keep in mind, you may remove yourself from the question queue at any time by pressing star in too.
Ross Dove: Thank you all for listening. It's much appreciated.
Brian: Lending partner.
Brian: Have you been able to whittle that down at all in the quarter.
Operator: At this time, if you'd like to ask a question, please press the star and one keys on your telephone keypad. Keep in mind, you may remove yourself from the question queue at any time by pressing star and two. Again, it is star and one if you'd like to ask a question today.
Yes, there is.
Brian: A little bit amount.
Brian: Thats kind of staying pretty consistent.
Speaker Change: Again, it is star and one if you'd like to ask a question today.
Brian: The fact that they have lower remittances as we've talked about will operate easily then.
Speaker Change: We'll take our first question from Mark Argento with Lake Street. Please go ahead. Your line is open.
Brian: What are <unk>.
Brian: Contractual minimum payments would be but also the economics in the joint ventures.
Mark Argento: Yeah, Hi, guys, just a few quick ones.
Mark Argento: We'll take our first question from Mark Argento with Lake Street. Please go ahead. Your line is open. Yeah, hi, guys. Just a few quick ones on the financial assets business. I think you've mentioned a little slower to start, but it looks like things are picking up. Can you talk a little bit more about the type of assets you're seeing in the market? You know, is there any kind of traditional seasonality you're seeing there? Anything can help us get a better get a feel for how that business is trending?
Mark Argento: So this business I think you had mentioned.
Brian: <unk>, our cash flows a little bit or our fast recovery amounts due to the fact that.
Mark Argento: Little slower to start but it looks like things are picking up can you talk a little bit more about the.
Brian: That large borrower.
Mark Argento: Type of assets Youre seeing in the market.
Brian: Is still in default.
Mark Argento: Is there any kind of traditional seasonality you are seeing there.
Brian: And the cash flows.
Mark Argento: Anything you can help us get a better feel for how that business is trending.
Brian: Majority of the cash flows will go to the seniors first win requiring a preferred return and we get.
Speaker Change: No Mark I think that it's really not about fintech versus.
Brian: Secondarily, some smaller cash flows that's really a short term situation.
Speaker Change: Traditional banking I think that it was just the first two weeks of the first three weeks, everyone was kind of wait and see with its massive.
Ross Dove: No, Mark, I think that it's really not about fintech versus traditional, you know, banking. I think that it was just the first two weeks or first three weeks. Everyone was kind of wait and see with this massive geopolitical question mark. Do we sell now? Do we wait? And then at some point, kind of, it flipped the switch in about, you know, midway through February. And there was a big push to get stuff done. So we had a really strong second half of the quarter, and a really good pipeline going into Q2. And everyone now, I think really kind of moving forward with, there's no good wait and see in the market.
Brian: Eventually our cash flows increase over time.
Brian: In our seniors or paid down.
Speaker Change: <unk> political question Mark do we sell now do we wait and then at some point kind of flip the switch and about.
Speaker Change: Got it I appreciate it guys I'll hop back in the queue. Thanks.
Brian: Have a good day.
Speaker Change: Midway through February and there was a big push to get stuff done. So we had a really strong.
Speaker Change: And as a reminder, if you'd like to ask a question. Please press the star and <unk> on your telephone keypad.
Operator: We'll take our next question from Dave Marsh with singular research. Please go ahead. Your line is open.
Speaker Change: Half of the quarter and a really good pipeline going into Q2 and everyone. Now I think really kind of moving forward with there is no good wait and see in the market.
Robert: Hello, This is Robert <unk> filling in for <unk>.
Speaker Change: Hello can you hear me.
Operator: Yes.
Speaker Change: Yes, we can hear you. Thanks, it's wrong, we can hear you.
Speaker Change: It's time to sell.
Ross: Hi, Ross.
Speaker Change: Got it great.
Ross: I just wanted to say one thing first four years.
Ross Dove: And it's time to sell.
Speaker Change: You anticipate.
Speaker Change: So that business overall.
Ross: I Love, the Kentucky Derby analogy I had the winter has sovereignty and some R&D was in the 18th position.
Speaker Change: Thinking about this kind of macro.
Mark Argento: got it. And did you anticipate I mean, you know, in terms of that business, overall, you know, we've been talking about this kind of macro. And, you know, it's Brian alluded to maybe Things are stabilized, kind of 30% off the highs. But do you anticipate, you know, there's going to be some growth there? Or how, I guess, how should we kind of model that or think about modeling that business? Is that just kind of a slow, you know, but consistent business quarter in and quarter out? Or do you think we could actually see a reacceleration in growth there?
Speaker Change: <unk>.
Speaker Change: As Brian alluded to maybe.
Speaker Change: Can you just stabilize kind of 30% off the highs, but do you anticipate those going.
Ross: I love that analogy.
Ross: We hope our stock analysis can be as good as our horse racing that analysis. So.
Speaker Change: Some growth there or how I guess, how should we model that out or think about modeling that business. So that just kind of a slow.
Ross: All of that my first question.
Ross: Relates to the prepayment.
Speaker Change: But consistent quarter in quarter out or anything we did actually see a reacceleration in growth there.
Ross: With <unk> three.
Ross: What motivated that.
Speaker Change: I think we really kind of hit the sweet spot and what the asset flow is going to be as far as pricing, but I think we haven't hit the sweet spot and the growth would asset flow is going to need to be the flow through the amount of assets.
Ross: Prepayment and what opportunities do you see deploying that capital near term.
Ross Dove: I think we really kind of hit like the sweet spot in what the asset flow is going to be as far as pricing. But I think we haven't hit the sweet spot in the growth, what asset flow is going to need to be the flow through the amount of assets, they're going to need to get converted. You're looking at, you know, record highs, not just in credit card debt, but in automotive debt and in FinDeck debt. So at some point, there's got to be almost mathematically an increase in flow through. So I think we're in a growth trajectory, Mark.
Brian: So I'll take maybe Brian can answer afterwards.
Brian: We're not looking to pay interest.
Brian: At all on money, we don't need, but it's very important to us to have the available credit.
Speaker Change: It needs to get converted.
Speaker Change: Looking at record highs not just in credit card debt, but in automotive debt.
Brian: We have.
At any given time very episodic transactions, where we could needed so.
Speaker Change: <unk>.
Speaker Change: So at some point there's.
Speaker Change: Got to be almost mathematically and increase in flow through.
Brian: Unlike some companies who wanted to deploy all the capital. We're a company that has a lot of needs of capital in reserve in case, we find the quote unquote next big deal and we have to react fast so paying back in <unk>.
Speaker Change: So I think we're in a growth trajectory mark.
Speaker Change: Got it.
Speaker Change: Brian just one for you quick words.
Speaker Change: Where is the loan book cannot stand right now in terms of our balance and have you made any progress in whittling that down since.
Mark Argento: Got it.
Brian Cobb: And Brian, just one for you quick. Where's the where's the loan book kind of stand right now in terms of the balance? And have you made any progress and whittling that down since the end of the year? Yeah, we're at around 29 million, just over 29 million in gross loans outstanding. That's a little shy of $10 million on our balance sheet and notes receivable and the remaining piece in equity method investments. We are seeing, we're still seeing a higher amount of cash inflows due to the fact that we're not funding or haven't been funding as much each quarter.
Brian: It's zero credit line is a very strong comfort level with us.
Speaker Change: The end of the year.
Speaker Change: Yes, we're at.
Speaker Change: Brian if you want to add to that go ahead.
Speaker Change: Around $29 million just over $29 million.
Brian: I think the freight payment option for the mortgages that we just got into.
Speaker Change: Gross loans outstanding.
Speaker Change: That that's a little shy of $10 million on our balance sheet and notes receivable and the remaining piece in equity method investments that we are seeing.
Speaker Change: Yes.
Speaker Change: A good option for us if we don't have better uses for the capital. So we are very opportunistic as we've seen in the transaction that we just.
Speaker Change: We're still seeing a higher amount of cash inflows due to the fact that we're not funding or haven't been funding as much each quarter.
Speaker Change: Announced.
Speaker Change: The industrial side, so if we need capital weekend.
Speaker Change: Use our available cash or toughened up the credit line, but yes in a couple of years, if we determine that.
Speaker Change: So we're actually seeing a cash inflow from that business right now, but we did.
Speaker Change: We do have sufficient amounts of cash and we can pay off that debt as well, we'll do that.
Speaker Change: We did increase the amount of fundings, we did in Q1 versus Q3 and Q4 of last year.
Brian Cobb: So we're actually seeing a cash inflow from that business right now.
Brian Cobb: And what we did. We did increase the amount of fundings we did in Q1 versus Q3 and Q4 of last year.
Speaker Change: But right now I think.
Speaker Change: And then the balance on your non accrual.
Speaker Change: It's safe to say we have.
Some.
Speaker Change: Strategic initiatives that could require some cash.
Speaker Change: <unk> partner.
Speaker Change: Have you been able to whittle that down at all in the quarter.
Unknown Attendee: And then the balance on your not accrual lending partner, have you been able to whittle that down at all in the quarter? Unknown AttendeeYeah, there's a little bit amount. That's kind of staying pretty consistent. The fact that they have lower remittances, as we've talked about a lot previously, than what our, you know, contractual minimum payments would be. But also the economics in the joint ventures limit our cash flows a or our lost recovery amounts due to the fact that that large borrower is still in default. And the cash flows Majority of the cash flows will go to the seniors first when requiring a preferred return, and we get secondarily some smaller cash flows.
Speaker Change: Great.
Speaker Change: Yes, there is.
Speaker Change: I came a little late on the call you may have answered this.
Speaker Change: A little bit amount.
Speaker Change: Thats kind of staying pretty consistent.
Speaker Change: Wondering about <unk> and <unk>.
Speaker Change: The fact that they have lower remittances as we've talked about will operate easily then.
Speaker Change: <unk>.
Speaker Change: Performance at it.
Speaker Change: It was running at pretty high levels, what what's driving this and how sustainable is this trend.
Speaker Change: What are <unk>.
Speaker Change: Contractual minimum payments would be but also the economics in the joint ventures.
Speaker Change: In the current economy.
Brian: Go ahead, Brian.
Speaker Change: <unk>, our cash flows a little bit or our fast recovery amounts due to the fact that.
Brian: So I believe the question was the performance of analytics and how sustainable that is we've seen.
Speaker Change: That large borrower.
Speaker Change: Is still in default.
Brian: We saw very high.
Speaker Change: And the cash flows.
Brian: Levels of performance and analytics.
Speaker Change: Majority of the cash flows will go to the seniors first win requiring a preferred return and we get.
Brian: When the price both the prices were high during the pandemic as well as.
Volumes were high.
Speaker Change: Secondarily.
Brian: Over the last year was that prices have come down it's more.
Speaker Change: Smaller cash flows that's really a short term situation.
Brian: Normalized level.
Brian: For example, if something is selling at 10 cents on the dollar now during the pandemic now.
Speaker Change: Eventually our cash flows increase over time.
Mark Argento: That's really a short term situation. Eventually our cash flows increase over time. when our seniors are paid. Got it. Appreciate it guys. We'll hop back to the queue. Thanks.
Speaker Change: In our seniors or paid down.
Brian: Selling at around 700 cents on the dollar.
Speaker Change: Got it I appreciate it guys I'll hop back in the queue. Thanks.
Brian: That was prices we believe are stable.
Brian: And going forward I think the key there is there still a lot of volume to get through the brokerage theres still a lot of charge offs that we believe are going to come through.
Speaker Change: All right have a good day.
Speaker Change: And as a reminder, if you'd like to ask a question. Please press the star and <unk> on your telephone keypad, we will take our next question from Dave Marsh with singular research. Please go ahead. Your line is open.
Mark Argento: All right, have a good day.
Operator: And as a reminder, if you'd like to ask a question. Star, and One Keys on your telephone keypad.
Brian: For the next few years and I think that that level is.
Dave Marsh: We'll take our next question from Dave Marsh with Singular Research. Please go ahead, your line is open.
Brian: Is almost all really good benchmark for <unk>.
Speaker Change: Hello, This is Robert <unk> filling in for <unk>.
Brian: And Lex what we did in Q1, and we could see upside due to some spikes in volume or adding clients are increasing the volume.
Speaker Change: Hello can you hear me.
Speaker Change: Uh huh.
Rob: Yes, Hi, Robert we can hear you. Thanks, it's Rob we can hear you.
Robert Maltby: Hello, this is Robert Maltby filling in for Hello Can You Hear Me? Hi, Ross. I just want to say one thing. Firstly, I love the Kentucky Derby analogy. I had the winner. I had sovereignty and sovereignty was in the 18th position. So I love that analogy and we hope our stock analysis can be as good as our horse racing analysis. I love that.
Speaker Change: Hi, Ross.
Speaker Change: I just wanted to say one thing first four years.
Brian: Debt.
Is sold through our existing clients.
Speaker Change: I Love, the Kentucky Derby analogy I had the winter had sovereign D and some R&D was in the 18th position.
Brian: Okay.
Brian: Gotcha.
Brian: Good morning.
Brian: Growth opportunities.
Speaker Change: So I love that analogy.
Speaker Change: Are there specific sectors or asset classes, where you see.
Speaker Change: We hope our stock analysis can be as good as our horse racing that analysis. So.
More significantly.
Speaker Change: Significant growth opportunities and how are you getting.
Speaker Change: My first question.
Speaker Change: It relates to the.
Speaker Change: Positioned to capitalize on that.
Speaker Change: Prepayment.
Speaker Change: C III.
Speaker Change: We're open to looking at opportunities, both organic and M&A to grow both sides of our business to both the financial side.
Ross Dove: My first question relates to the prepayment with C3. What motivated that prepayment? And what opportunities do you see deploying that capital in your So I'll take it.
Speaker Change: What motivated that.
Speaker Change: Prepayment and what opportunities do you see deploying that capital near term.
Speaker Change: On the industrial side. So there is no favoritism either way, we see opportunities to expand on the financial side into <unk>.
Brian Europe: So I'll take maybe Brian can answer afterwards.
Speaker Change: Not looking to pay interest.
Ross Dove: Maybe Brian can answer afterwards. We're not looking to pay interest at all on money we don't need, but it's very important to us to have the available credit because we have, at any given time, very episodic transactions. where we could need it, so. Unlike some companies who want to deploy all their capital, we're a company that has a lot of needs to have capital in reserve in case we find the quote-unquote next big deal and we have to react fast. So paying back and having a zero credit line is a very strong comfort level with us.
Speaker Change: At all on money, we don't need, but it's very important to us to have the available credit because we have at any given time very episodic transactions, where we could needed. So.
Speaker Change: Increasing basically not just our market share, but moving into other kinds of loans performing loans medical loans et cetera.
Speaker Change: <unk> real estate loan so we see the growth there.
Speaker Change: Unlike some companies who wanted to deploy all the capital we're a company that has a lot of needs.
Speaker Change: Industrial side, we see expanding our marketplace into growing our sectors and our international business et cetera. So we're bullish that there is a big open market across all of our business streams to grow we're rapidly looking.
Speaker Change: Capital in reserve in case, we find the quote unquote next big deal and we have to react fast so.
Speaker Change: Paying back and having a zero credit line is a very strong comfort level with us.
Speaker Change: Yeah.
Speaker Change: Figuring out how to expand their whole bio sector.
Brian Europe: Brian if you want to add to that go ahead.
Speaker Change: We see lots of places and no favoritism Robert.
Speaker Change: I think the.
Speaker Change: Frame payment option for the mortgages that we just got into.
Brian Cobb: Brian, if you want to add to that, go ahead. I think that the pre payment option for the mortgage that we just got into is You know, a good option for us if we don't have better uses for the capital. So we are very opportunistic, as we've seen in the transaction that we just announced on the industrial side. So if we need capital, we can use our available cash or tap into the credit line. But if in a couple of years, if we determine that, you know, we do have sufficient amounts of cash and we could pay off that debt as well, we'll do that.
Brian Europe: Yes.
Speaker Change: Yes.
Brian Europe: A good option for us if we don't have better uses for the capital. So we are very opportunistic.
Speaker Change: Fair and balanced love it and finally.
Speaker Change: How does AI, helping or reducing cost.
Brian Europe: <unk> seen in the transaction that we just.
Speaker Change: Leveraging up your activities.
Brian Europe: Announced on the industrial side, so if we need capital weekend.
Speaker Change: Yeah.
Speaker Change: No I was actually an expert in artificial intelligence my whole life.
Brian Europe: We use our available cash or toughened up the credit line, but yes in a couple of years, if we determine that.
Speaker Change: Always thought is smarter than I was so nothing new there but.
Brian Europe: We do have sufficient amounts of cash and we can pay off that debt as well, we'll do that.
Speaker Change: The new generation the people underneath me are actively embracing it and it's actually helping not just on the front end with.
Brian Europe: But right now I think.
Brian Europe: Safe to say we have.
Brian Europe: Some.
Brian Europe: Strategic initiatives that could require some cash.
Brian Cobb: But right now, I think it's safe to say we have of some strategic initiatives that could require some of the gas. Great.
Speaker Change: How to find the clients, but on the Midland.
Brian Europe: Great.
Speaker Change: The clients and on the back end either solve the situations.
Speaker Change: I came a little late on the call you may have answered this.
Brian Europe: Im wondering about <unk> and <unk>.
Speaker Change: So, whereas the aggressive as any other small cap company.
Robert Maltby: I came a little late on the call, you may have answered this. Wondering about NLEX. performance. It's running at pretty high levels.
Brian Europe: <unk>.
Brian Europe: Performance at it.
Speaker Change: And embracing it and a big endorser that we think it's going to move the needle in the right way for us.
Brian Europe: They are pretty high levels, what what's driving this and how sustainable is this trend.
Brian Europe: In the current economy.
Brian Cobb: What's driving this and how sustainable is this trend in the current economy?
Speaker Change: Excellent well I'll go back in the queue. Thank you very much.
Brian Europe: Go ahead, Brian.
Speaker Change: Sure.
Brian Europe: So I believe the question was the performance of analytics and how sustainable that we've seen.
Speaker Change: And there are no further questions on the line at this time I'll turn the program back to your CEO Rostov for any closing remarks.
Brian Cobb: Go ahead, Brian. So I believe the question was the performance of EMLACS and how sustainable that is. We've seen, we saw very high levels of performance at EMLACS when the price, both the prices were high during the pandemic as well as volumes were high. What we saw over the last year was that prices have come down. It's more at a normalized level of, for example, something that's selling at 10 cents on the dollar, you know, now during the pandemic. Now, selling at around seven cents on the dollar. Those prices we believe are stable. And going forward, I think the key there is, there's still a lot of volume to get through the brokerage.
Brian Europe: We saw very high.
Brian Europe: The levels of performance and analytics when the price the prices were high during the pandemic as well as.
Rostov Ross: Well, thank everybody for joining thank everybody for listening. This is like a really good time.
Brian Europe: Volumes were up.
Brian Europe: What we saw over the last year was that prices have come down it's more normalized.
Rostov Ross: For me to close by saying I have a huge amount of positive feeling that it's going to be a good next quarter.
Brian Europe: Normalized level.
Brian Europe: For example of something Thats selling at 10 cents on the dollar now during the pandemic now.
Rostov Ross: And the good year and there's all kinds of factors that are looking in the right way for us So stay tuned hang in there I hope if you haven't joined yet as a holder I hope you will I hope if you are a holder your sticker.
Brian Europe: Selling at around seven.
Brian Europe: On the dollar.
Brian Europe: <unk> prices, we believe are stable.
Brian Europe: And going forward I think the key there is there still a lot of volume to get through the brokerage theres still a lot of charge offs that we believe are going to come through.
Rostov Ross: Stick around because I've got a really good feeling about what the next year will hold.
Brian Europe: For the next few years and I think that that level is.
Robert Maltby: There's still a lot of charges that we believe are going to come through for the next few years. And I think that that level is is almost a really good benchmark for NLEX, what we did in Q1, and we could see upside due to some spikes in volume or adding clients or increasing the volume that is sold through our existing clients. Oh, gotcha.
Rostov Ross: Thank you will graciously for being there.
Brian Europe: Is almost all really good benchmark for <unk>.
Rostov Ross: This does conclude today's program. Thank you for your participation and you may now disconnect.
Brian Europe: And Lex and what we did in Q1, and we could see upside due to some spikes in volume or adding clients are increasing the volume.
Brian Europe: Debt.
Brian Europe: <unk> is sold through our existing clients.
Brian Europe: Okay.
Brian Europe: Gotcha.
Brian Europe: Regarding.
Brian Europe: Growth opportunities.
Brian Europe: Are there specific sectors or asset classes, where you see.
Ross Dove: Regarding, you know, growth opportunities. Are there specific sectors or asset classes where you see more significant growth opportunities and how are you getting positioned to capitalize on that? We're open to looking at opportunities both organic and M&A that grow both sides of our business, both the financial side and the industrial side.
Brian Europe:
Brian Europe: More significant growth opportunities and how are you getting.
Brian Europe: Positioned to.
Brian Europe: Capitalize on that.
Brian Europe: We're open to looking at opportunities, both organic and M&A growth both sides of our business to both the financial side.
Brian Europe: On the industrial side. So there is no favoritism either way, we see opportunities to expand on the financial side into <unk>.
Ross Dove: So there is no favoritism either way. We see opportunities to expand on the financial side into increasing basically not just our market share but moving into other kinds of loans, performing loans, medical loans, et cetera, real estate loans. So we see a growth there. On the industrial side, we see expanding our marketplace into growing our sectors and our international business, et cetera. So we're bullish that there's a big open market across all of our business streams to grow.
Brian Europe: Increasing basically not just our market share, but moving into other kinds of loans performing loans medical loans et cetera.
Brian Europe: <unk> real estate loan so we see the growth there.
Brian Europe: Industrial side, we see expanding our marketplace into growing our sectors and our international business et cetera. So we're bullish that there is a big open market.
Brian Europe: Across all of our business streams to grow we're rapidly looking at.
Brian Europe: Figuring out how to expand their whole bio sector.
Ross Dove: We're rapidly looking at ALT figuring out how to expand their whole biosector. So we see lots of places and no favoritism, Robert.
Brian Europe: We see lots of places and no favoritism Robert.
Brian Europe: Yes.
Speaker Change: Darren ballast and finally.
Speaker Change: How is AI, helping or reducing costs or leveraging up your activities.
Robert Maltby: Fair and balanced. Love it.
Ross Dove: And finally, how is AI helping or reducing costs or leveraging up your activities? So I was actually an expert in artificial intelligence my whole life. I always thought I was smarter than I was. So it's nothing new there. But But the new generation, the people underneath me, are actively embracing it, and it's actually helping, not just on the front end with how to find the clients, but on the middle end, how to help the clients, and on the back end, how to solve the situation. So we're as aggressive as any other small cap company in embracing it and a big endorser that we think it's going to move the needle in the right way for us.
Speaker Change: So I was actually an expert in artificial intelligence my whole life.
Speaker Change: So that is smarter than I was so nothing new there but.
Speaker Change: But the new generation the people underneath me are actively embracing it absolutely helping not just on the front end with.
Speaker Change: How to find the clients, but on the middle and help the clients and on the back end either solve the situations.
Speaker Change: No.
Speaker Change: As aggressive as any other small cap company.
Speaker Change: And embracing it and a big endorser that we think it's going to move the needle in the right way for us.
Speaker Change: Excellent well I'll go back in the queue. Thank you very much.
Robert Maltby: Excellent.
Unknown Attendee: I'll go back in the queue.
Rostov Ross: And there are no further questions on the line at this time I'll turn the program back to your CEO Rostov for any closing remarks.
Unknown Attendee: Thank you very much.
Operator: And there are no further questions on the line at this time.
Ross Dove: I'll turn the program back to your CEO, Ross Dove, for any closing remarks. So thank everybody for joining. Thank everybody for listening.
Rostov Ross: Well, thank everybody for joining thank everybody for listening. This is like a really good time for me to close by saying I have a huge amount of positive feeling that it's going to be a good Nick.
Ross Dove: This is like a really good time for me to close by saying I have a huge amount of positive feeling that it's going to be a good next quarter and a good year and that there's all kinds of factors that are looking in the right way for us. So stay tuned, hang in there. I hope if you haven't joined yet as a holder, I hope you will. I hope if you are a holder, you'll stick around because I've got a really good feeling about what the next year will hold and thank you all graciously for being there.
Rostov Ross: Quarter and a good year and this.
Rostov Ross: All kinds of factors that are looking in the right way for us So stay tuned hang in there I hope if you have enjoying yet as a holder I hope you will I hope if you are a holder.
Rostov Ross: Stick around because I've got a really good feeling about what the next year will hold and thank you all graciously for being there.
Rostov Ross: This does conclude today's program. Thank you for your participation and you may now disconnect.
Operator: This does conclude today's program. Thank you for your participation and you may now disconnect.
Rostov Ross: Yeah.
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