Q1 2025 Knightscope Inc Earnings Call
And it will be muted throughout the meeting.
Speaker Change: Have I decided to join us for a little bit today to talk about all things night scope in all things robots.
Speaker Change: So appreciate everyone taking time out of your busy schedules for us.
Speaker Change: As we let people and a few things to cover.
Speaker Change: One.
Speaker Change: If you have a question please use the Q&A.
Speaker Change: Little button at the bottom of the bar of.
Speaker Change: The screen there for you and we will try to answer your questions. If we can't legally answer what you were asking we might reward.
Speaker Change: Your question.
Speaker Change: Another thing to note, we will not be sharing any mmpi or material nonpublic information, we can certainly provide clarifications or stuff that's not material.
But.
Speaker Change: No material items, we want to be in strict compliance with our friends over at the SEC and NASDAQ.
Speaker Change: Still have some people coming in.
Speaker Change: And then again, please make sure to ask your questions.
In the Q&A section at the bottom there.
Speaker Change: And.
Speaker Change: We will spend a few moments first to have a poor.
Speaker Change: Walk you through the results from the first quarter.
Speaker Change: We've had a lot of folks have a little bit of confusion as to when these occur.
Speaker Change: So normally for a 10-Q filing it's six weeks after the quarter has ended.
Speaker Change: I get all types of all sorts of love messages in and tax like Hey, Where's the filing hey, Where's the filing it's the day after the quarter ended its like well kind of lead time to prepare and.
Speaker Change: Get all the.
Speaker Change: Filings pulled together and all the numbers reviewed by the auditors et cetera. So it's six weeks after the quarter has ended.
Speaker Change: And then a little difference for the year and.
Thats usually.
Speaker Change: After the first quarter is actually fully ended.
Speaker Change: And then we do the review thereafter, which we just.
a poor: Did with all of you last month. So now that we are I think we have more than a quorum I'm going to turn it over to a poor who's our CFO who's going to walk you through.
Speaker Change: Pretty exciting first quarter, so you want to add.
Aron: Take it away absolutely. Thanks, Thanks, Bill good afternoon, everyone and thank you for joining us today.
Aron: I'm excited and pleased to walk you through our financial results for the quarter ended March 31.
Aron: 125, and provide some commentary on our on our progress.
Aron: That rating.
Aron: Total revenue for the first quarter was $2 9 million. This is a 29% increase compared to the $2 3 million in the first quarter of 2024.
Aron: Now this is driven by both growth in service revenue and product revenue. Our service revenues grew by grew to about $2 1 million, which is up 25% from $1 7 million prior year, primarily due to the strength in both the ESI subscriptions and the foodservice maintenance agreements.
Aron: On ACD clients.
Aron: On the product side revenues increased by 44% to about 808.
Aron: 809000 actually.
Aron: Compared to the 563000.
Aron: Higher year.
Aron: Primarily because of the some of the distribution partnerships that we've created in the past years, they're starting to take off so this year over year growth reflects.
Expanding deployments across our platform our product lines.
Aron: And client retention as well as expansion into machine as a service model.
Speaker Change: Sorry, maybe you go on the cost structure piece, our gross loss.
Speaker Change: Just kind of walk you guys through there.
Speaker Change: Our gross loss came in approximately $700000, which is a meaningful improvement compared to the loss of $1 $44 million a year ago. Now. This is driven primarily due to some savings in the total cost of revenue our cost of revenue came in slightly higher at a slightly lower at three.
Speaker Change: $6 million.
Speaker Change: This year compared to $2 7 million in Q1.
Speaker Change: Largely flat, but primarily due to the savings from one time scrap fees.
Speaker Change: Last year, if you recall, we were going to changes in our.
Speaker Change: We will in our <unk>.
Speaker Change: Our robots that we were swapping out for the higher version.
Speaker Change: Version Threes versus version five and those.
Scott: One time, Scott fees, with an offset by higher costs and product.
Scott: To support the increase in sales volume this year.
Scott: So importantly, as you can see we are making tangible progress towards achieving the goal of positive gross margins.
Scott: Primarily driven by price optimization better.
Scott: Asset utilization and a disciplined cost control.
Scott: Moving onto our operating expenses.
Scott: <unk> expenses for the quarter came in at $6 2 million as compared to the $6 8 million in 2024. This is about a 9% reduction year over year.
If I break that down you can see the research and development expenses were about $2 1 million, which is about 35% higher than Q1 'twenty 'twenty four.
Scott: This reflects our continued investment in product innovation and features that expansion as you continue to.
Scott: Invest in innovation and drive product growth innovation growth.
On the sales and marketing expense side, we actually came in 15% lower at $1 3 million versus prior year and this is primarily due to the fact that we continue to make strategic changes in our go to market strategy.
Scott: Finally, G&A expenses came in at $2 8 million. This is.
Scott: Almost $800000 lower from prior year's expenses $3 6 million.
Scott: Last year.
Scott: Primarily due to cost discipline and savings in prior year IR spend.
Scott: That we had related to promotion of our public infrastructure bonds in Q1, 2024, if you guys recall.
Scott: And we also had no restructuring charges this quarter compared to about 100000, we had in Q1 'twenty 'twenty four.
Scott: So with that our net operating income or loss actually.
Scott: Loss from operations for the quarter was about $6 8 million. This was about a huge improvement from the $8 3 million in the first quarter of last year.
And Glenn one line further net loss after taking into account other income and expenses came in about 11% lower than prior year's loss of $7 6 million.
Scott: Notably because we did not have to recognize any change in fair value of warrants. So last year. If you recall we had.
Scott: Yes.
Warrant liabilities on our books that were extinguished mid year, but there was a.
Fair value exercise that we have to run when we have these type of warrants and there was a $700000 gain prior year that did not show up this year, but overall, it's a good thing because we don't we no longer have those warrants that arent on our on our balance sheet.
Scott: Other income and expenses came in largely flat.
Scott: Our earnings loss per share improved also to about 1.1 dollars 29 as compared to a loss of almost.
Scott: For <unk> per share last year.
Scott: And I want to highlight also that our cash balance.
Scott: Came in stronger position.
Scott: In this year's Q1 than both Q1 last year and even at the end of 224, where we had about $11 2 million.
Scott: So with that.
Scott: The.
Scott: In summary, Q1 2025 reflects continued revenue growth.
Scott: Narrowing gross loss lower operating expenses and progress on key operational initiatives that the company is focused on this year and.
Scott: And we are focused on basically three main things one is driving towards a positive gross margin.
Scott: Just on scaling our services and product footprint and operating the business with increased efficiency and discipline.
Bill: With that thank you for your support and I'll pass it back to Bill.
Bill: Fourth and that's exciting that you.
Bill: <unk> been with us just a bit over a year and to have a good quarter.
Bill: As you and I have made.
Bill: With the team a massive amount of changes the last 15 months.
Bill: Dozens and dozens and dozens of changes all across the business up and down the income statement.
Bill: All around the balance sheet clean things up and finally.
Bill: It's starting to show up in our numbers and we're hopeful that that trend will continue.
Speaker Change: So folks have questions for a port of ore or myself. Please make sure to put them in the Q&A section at the bottom of your screen.
Speaker Change: But how do you feel overall poor I know, we just went over the numbers, but like how are you feeling about.
Speaker Change: The company and the progress just kind of more subjectively.
Speaker Change: Yes.
Speaker Change: It's an interesting place to be we are.
Speaker Change: A company that is.
Speaker Change: There's a lot of times.
Speaker Change: The performance of the things that we do is largely driven by external events, just as much as driven by internal events and what I am I would say I'm excited about and have a positive outlook on that we've talked about this all of the things that we did last year that we were we thought.
Speaker Change: We're somewhat.
Speaker Change: Risking that center, we didn't know how theyre going to turn out, but we're geared towards driving <unk>.
Speaker Change: Growth driving better margins more efficiency, they are starting to kind of take take hold.
Speaker Change: What this tells me is that we just have to continue to execute and as long as the team is focused on execution.
No.
Speaker Change: A positive and we just got to keep that focus on and continue to make progress towards.
Some of the goals that we laid out in the long term.
Speaker Change: We made some controversial and difficult decisions, but.
Speaker Change: I think we do it all over again and we're heading in the right direction and actually feeling pretty good about stuff. Okay. Now the questions are starting to pile in so that's right. So the goal here is the easy ones I'll do all the hard ones you have to do right.
Scott Buck: Alright, Scott Buck is in the house, let's see Scott can.
Speaker Change: Can you provide a little color on how the current level of macro uncertainty may be impacting the conversations you're having with <unk>.
Owen: Potential customers you want to try that and I can sure Owen sure. So you know.
Owen: On one hand, I think where the uncertainty is having an impact it will have an impact in my mind is really on the financials.
Owen: Primarily if you think about tariffs right. So on one hand, you have political uncertainty.
Owen: It has less.
Owen: Impact on us directly although.
Some of the focus on.
On security on National Safety is actually I would say positive in our favor.
Owen: On the other side you have the financial impact of things like tariffs.
Owen: That is.
Owen: Frankly, it's unknown we.
Owen: We do know that there are some impacts to our suppliers who have to worry about the components. They outsource from from foreign companies Farm base.
Owen: Based companies and those they have to pass on to US. So we have to figure out how to manage that.
Owen: And some of that is still being being determined right things are changing almost on a daily basis. So yet to remain although if if if.
Owen: If tariffs do stay and they stay high we anticipate some impact of that primarily on obviously pricing two component pricing to on really the lead time for some of the items that we need.
Owen: Component lead time.
Owen: Become elongated when everybody wants the same same components and.
Owen: And wants to hold them before.
Owen: Tariffs take effect. So those are two areas, obviously will continue to work through them, but on the other side like I talked about.
Owen: From a safety and security perspective.
Owen: I think we're going to see some some tailwind there bill.
Owen: I think one and the way I view things in chaos is always opportunity.
Owen: So I'm actually kind of bullish about the set of circumstances second.
Owen: Our American made yes, we do have some components and the like.
Owen: That.
Owen: May come with a tariff penalty I think on the subscription side of things it becomes a lot less of a material item because.
Owen: You're if you've got a $1000 widget and now its 1500.
Owen: How many of those widgets does it really apply to and then remember if it's a subscription service you're not paying that tariff. The second third fourth fifth year in the subscription all our operating costs and everything is dollar denominated U S base.
Owen: Then there is certainly the the tailwind on buy American and American jobs, which were right in the thick of things and then not to be funny about it but like chief security officers aren't sitting around going or criminals.
Owen: Hey, what's the tariff amount of this month for this country.
Owen: Or what's on my Bloomberg terminal or what are the markets doing.
Speaker Change: Criminal activity is kind of divorced from that from a very very macro perspective, sure, sometimes and more desperate times things get a little bit worse, but it's kind of on the margins.
Owen: So I think we're just kind of.
Owen: Theres always going to be noise ignore the noise and focus on the signal and kind of move forward. So.
Owen: We're not in the <unk>.
Owen: Market exposure kind of.
Owen: Issue, where.
Everyone's like freeze everything and relied solely on imported items and we've got a like literally a business concern that's not what we're frankly focused on.
Owen: Dave Jones is the per share loss improvement, partially or mostly due to the reverse split I forget the timing of it.
Owen: Before I can answer that one.
Owen: So the reverse stock split took place last year in August September timeframe.
Owen: The board passed it back into August.
Enacted in mid September.
Owen: <unk> per share price is taking into account the reverse stock split so what we do is we essentially take last year's shares outstanding.
Owen: Modify it for the split adjusted for the split and then report out. So this is a one to one comparison.
Speaker Change: Dr. Reddy wants to know when do you report positive EBITDA and when do you report positive earnings.
Owen: Yeah.
Owen: Login process Dr Reddy.
Owen: We are just as excited about reporting positive earnings and EBITDA. As you are if not more so timing is yet to be determined as you continue to drive focus on business growth.
Owen: Give you a slightly different answer it might get me in trouble, but.
Owen: If we wanted to all of a sudden show positive numbers there are certain things that we could do in the company, but then kind of like the.
Owen: Addressable market the size potential of the company the future growth gets very very very limited and so like do you want a immediately profitable company that stay small.
Owen: Or do you look at the competitive environment and the opportunities out there and maybe we should invest in some new technologies.
Owen: And go after a much.
Owen: Larger piece of the pie of a much larger pie.
Owen: So remember we're.
Financially aligned with our shareholders are we worked for you and the objective here is to create long term shareholder value not.
Owen: Quarter by quarter.
Minor improvements in increments, so we will get there.
Owen: But we want to go after the big fish as.
Owen: As opposed to swimming in the in the small pool.
Owen:
Owen: Yes.
Robert: Robert I think it's the same same same question yes.
Speaker Change: Ed Woo is on the call.
Speaker Change: Right those program, having any effect on your focus on federal security customers.
Speaker Change: I think this one's.
Speaker Change: Two ways.
Speaker Change: Look at it on the <unk>.
Speaker Change: Negative side.
Speaker Change: It has made a little bit of headaches for us because people are.
Speaker Change: Long term contacts and relationships and the like are getting dosed or <unk> retiring.
Speaker Change: So that makes doing kind of day to day business really difficult.
What we submitted to the White house at their request was kind of.
Speaker Change: What what is your input what's nights Copeland port for the AI Task force and what could AI and automation bring too.
Speaker Change: Does the entire administration and federal apparatus, and our friends over at the Washington Office racked up the numbers and kind of looked like about $10 billion of opportunity.
Speaker Change: So I think on a more positive standpoint, if you dramatically reduced your.
Speaker Change: Head count.
But you still have kind of the same mission to secure all these facilities, you're looking for much more efficient ways.
Speaker Change: And different ways to accomplish the job so that opens up additional newer.
Speaker Change: Discussions so like everything in life, nothing is kind of black and white got some negative and some positive all.
Speaker Change: On Capitol Hill, all of next week.
Speaker Change: Continuing to foster relationships.
Speaker Change: Throughout the federal sector and.
Speaker Change: There is genuine opportunities for us to help.
Speaker Change: Always remember as I always say the federal government does not move quickly so.
Speaker Change: So we're working on it but there's certainly opportunities out there.
Speaker Change: Yeah.
Anand: Anand asks their investment.
Speaker Change: Returning to the very weak whenever you are going to make profits.
Anand: Again.
Anand: Similar question as the ones before we are on a path our goal is to obviously make profits.
Anand: <unk>.
Anand: We have a path outlined.
Part of that path.
Anand: Okay.
Anand: But a lot of things for you Francis asks what happened to Stacey Stevens.
Anand: So no different than us clearing out the entire board and terminating 40% of the management.
Anand: Order to get a lot more efficient and aligned the board of directors.
Anand: Elected to eliminate the position and Stacy was terminated.
Anand: But we certainly thank him for all the years of effort to get nights.
Anand: Up and going.
But he is no longer with the company.
Anand: Scott asks as revenue scales, how quickly will you need to add additional cost infrastructure to support that growth.
Speaker Change: Again, I want to better understand operating leverage opportunity great question Scott.
Anand: Again, I think I think we have a little bit of.
Anand: Time ready to it's not a linear model is more of a step scale right. So as you think about.
Anand: Where we are today, we are okay. We are adding obviously some cost infrastructure as you recently saw the announcement that the company is moving to a new facility, we will absolutely make some investments in in building.
Anand: Cleaner more efficient production lines, we are already adding additional.
Anand: Additional head count.
As it relates to production shifts and those things and those will happen linearly, but we.
Anand: We are cognizant of that and I think the goal for US is to scale. The revenue first get to the point, where we're kind of bursting at the seams and then add costs and that way we have a better.
Anand: <unk> ability to manage that cost and make sure that the revenue sustainable.
Speaker Change: Introduced do responsibly I think Scott I would add a couple of other items one is.
Anand: Just a simple example.
Anand: We have a staff that runs $24 7 million that monitors the health of the machines all across the country.
Anand: Just because we added 10, 10% more machines, 50% more machines are 100% more machines were not increasing the staff.
Anand: They're so there's like a critical mass needed to operate the company to a critical mass to just be public as a critical math, so I think the numbers.
Anand: Both.
Anand: At the gross margin level and net income level over time basically need scale.
Anand: Need to continue to grow.
Anand: And get our costs down, but there is a factor there. So what we're going to do is try to be very careful of not adding costs and then actually do the opposite.
Anand: So one of our executives along with the entire leadership team is very focused on automation and AI.
Anand: And how that impacts our manufacturing processes, our products or services.
Anand: And having very pointed in conversations as to why does it take so long to do.
Anand: To get from X to y.
Anand: While there is 32 steps in too many meetings.
Anand: Okay, well, how can we automate this part how can we automate this part how can we literally changed the process and delete this part.
Anand: Et cetera, so what we want to do is.
Anand: Continuing to grow the revenue, but not continue to add.
Proportionately additional cost into the into the system.
Anand: Can we finally enjoy those margins. So I think there is significant.
Anand: Average opportunity.
Anand: As we scale up absolutely, especially as you think about focusing on our fixed costs. Our goal is to.
Anand: Keep the fixed costs.
Anand: Part of that Formula right.
Anand: As as steady as possible and continue to obviously.
Anand: Optimize on the variable costs that we do.
Anand: Kurt.
Anand: Correct.
Anand: Gave up yes.
Anand: Joseph John asks.
Anand: Congratulations.
Anand: The new facility be up and running.
Anand: So.
Anand: I wish we can just drag and drop download stuff from the cloud.
Anand: So Fortunately we have an overlap we negotiated a really sweet deal for US we've got free rent baked in we actually have two facilities right now.
Anand: The old facility the lease terminates.
Anand: <unk> timeframe.
Anand:
Anand: So we're in process of adding.
Infrastructure.
Anand: If we get to get furniture, all this other good stuff.
Anand: Get all the branding setup and security profile for the facility. So we started moving things over the case <unk> is the first to go over.
Anand: Awesome to have our first the actual technical and business meeting.
There.
Anand: And the team is excited.
Anand: We're excited.
Anand: It's not just a symbolic.
Anand: Opportunity, but the facility itself is going to facilitate a significant amount of collaboration and efficiency.
Anand: And hopefully once we get all settled in.
Anand: We shall do.
Anand: Open house or shareholder meeting or invite you all for some pizza or barbecue or something we'll figure it out, but we'll do something once we're all settled in but.
Anand: I do want to caution, especially for the analysts that are on the call.
Anand: There is a risk of a bit of disruption during this quarter and next as we move things over we've already.
Anand: Cut down numerous facilities.
Anand: It is a significant amount of.
Anand: Unfortunately.
Anand: Unfortunate workload that needs to get thrown on top.
Anand: Going to minimize the amount of disruption so that we can keep production moving along but there are certain risks.
Anand: But things will look it up it's going to be fun, it's going to be awesome.
Anand: And we're looking forward to hosting you.
Anand: Therefore visit.
Speaker Change: Juergen Brendel asks how does your order book look like any backlogs I can take that bill.
Anand: We do disclose the backlog numbers.
Speaker Change: As of actually early this month, we had.
Speaker Change: Our total backlog of about $2 5 million.
It is comprised of a $1 9 million.
Speaker Change: <unk> no doubt.
Speaker Change: <unk> hundred thousand ASR related orders.
Speaker Change: Ed.
Speaker Change: Just in case, you didn't hear the answer on the question for the tariffs.
Speaker Change: I think there is.
Speaker Change: We can't say zero impact.
Speaker Change: But in my view.
Speaker Change: Not material.
Speaker Change: Uncertainty certainly causes some supply disruptions in terms of timing.
Speaker Change: We're trying to manage that there are few commodities specific ones that.
Speaker Change: May be impacted.
Speaker Change: But.
Speaker Change: I think we've put it in as a risk factor, but unquantifiable and.
Speaker Change: On the positive side.
Speaker Change: U S made.
Speaker Change: And U S operated and with U S customers. So on the flip side of that not.
Speaker Change: Not much to not much to report.
Speaker Change: Okay.
Speaker Change: Greg read asks at IPO I had purchased shares I watch my investment dwindle, what are you doing to get the company back that IPO value.
Speaker Change: First Greg Thank you for the support and the 35000 investors that.
Speaker Change: Back to the effort.
Speaker Change: Second.
Speaker Change: I would encourage you to download the latest updated investor presentation.
At night scope Dot Com Slash America, that's nights go Dot Com Slash in America and that gives you the long list of things.
Speaker Change: Not only that we have done.
Speaker Change: But where we're going.
Speaker Change: The.
Speaker Change: A different way to answer your question is we need to get revenue up.
Speaker Change: Costs down.
Speaker Change: And we need to build new technologies too.
Speaker Change: Wow and sustain long term profitable growth.
Speaker Change: And we've been cleaning house. So there is a if you go out on my Twitter.
Speaker Change: Handle which is W. Santana Lee.
Speaker Change: Under the highlight section I think there is a few posts there like what have you done for me lately and it's a lot.
Speaker Change: If you missed the earlier part of the call.
Speaker Change: No.
Speaker Change: Brought in an all new board of directors brought in a new CFO.
Speaker Change: It took 40% of the management team out took about 30% of the payroll down moving 13 facilities hopefully over the medium term here down to one facility, we added a new department.
Speaker Change: <unk> brought in a new sales team brought in a new accounting team.
Speaker Change: We've changed pretty much everything including the address of the building.
Speaker Change: For the company, probably the only thing that we haven't touched as the logo.
Speaker Change: So the list is very long.
Speaker Change: Why were really excited about.
Speaker Change: Getting to not only the the IPO levels I think those are too low for where we need to go.
Speaker Change: Beyond that is all the changes that we've made over the last 15 months are actually starting to show up in the numbers.
Speaker Change: And as Ive cautioned all these years. This is a long term build this is not a.
Speaker Change: Get rich get rich overnight approach the mission is to secure the country and I think that in the end will be invaluable.
Speaker Change: To not only society, but to our shareholders.
Speaker Change: Yeah.
Speaker Change: Max.
Speaker Change: From.
Speaker Change: He asks have you seen any order delays or cancellations due to macro uncertainty.
Speaker Change: I haven't seen any bill, but I don't know if you recall.
Speaker Change: I've personally been signing contracts.
Speaker Change: As my sales.
Speaker Change: Sales internship.
Speaker Change: And we haven't seen that and again not to be funny about it but.
Speaker Change: Chief Security officers chiefs of police and sheriffs aren't sitting around.
Speaker Change: Counting tariffs.
Speaker Change: Looking at your Bloomberg terminal Theyre focused on day to day realities and that just doesn't hit the pit are part of the economy.
Speaker Change: Marc asks what has been the biggest obstacle in ramping up customer base and becoming a household name.
Speaker Change: Ooh.
Speaker Change: You want me to do that one.
Speaker Change: Sure.
Speaker Change: So mark we just celebrated our <unk> year anniversary last month, and it's been a very very long.
Speaker Change: <unk> difficult road to basically will this company into existence.
Speaker Change: <unk>.
Speaker Change: To make an important footnote three major corporations and three funded startups have tried to do what we do doing all of them have failed gone bankrupt or given up.
Speaker Change: So that speaks to the level of difficulty of executing this.
Speaker Change: This business and in this sector.
Speaker Change: I think if I were to.
Look back at the 12 years like what went wrong or what could've made things go faster.
Speaker Change: Sadly, it's cash cash and cash meaning funding.
Speaker Change: Prior to put it in context, if you were a newer investor before we went public.
Speaker Change: So the first nine years, we've probably raised around $120 million sounds like a lot of money, but $120 million over nine years is not a lot of money.
Speaker Change: We probably should have tried to I don't know, how we would have done it but we probably should've tried to raise a quarter billion dollars to get things going and then another quarter billion to grow. So every issue that we have on the team and the growth is literally funding related.
Speaker Change: We know how to get from <unk>.
Speaker Change: And it's.
Speaker Change: As I, often say people cash in time, there is no like now there isn't there was before now there isn't like I don't know how to do that or I don't know how to we know exactly what to do and that's why all of these changes over the last 15 months have been effective is we have a very keen grasp on the business and kind of where all the dead bodies are and all.
Speaker Change: The bad stuff and all the technical debt and process that but if you don't have enough salespeople.
Speaker Change: If you don't have enough production people and if you can have enough capital to build enough finished goods inventory. So that you can sell faster. If you don't have enough of a marketing budget. The list goes on and on and on you can expect some big hockey stick.
Speaker Change: Growth.
Speaker Change: So that's the unfortunate.
Speaker Change: Ruth Lake what would I wanted to do differently I don't know how it would have done it but that's to me the.
Speaker Change: Sure.
Speaker Change: The root cause of the issues.
Speaker Change: Yes.
Speaker Change: I will also say that one we are a <unk> business, we're not in a BDC business. So it's.
Speaker Change: Our customers are other businesses that like our products and want to utilize them to make their property and their perimeter safe.
Speaker Change: I am actually to be honest surprise some times when.
Speaker Change: I talk to.
Speaker Change: Random person or a stranger and senior robots or I saw you too yeah.
Speaker Change: So I.
Speaker Change: I'd love it to be a household name I think we will.
Speaker Change: That happened organically as we continue to deploy more and more robots and more of a technology not just robots into the field it'll happen and if you want to help.
Speaker Change: If a hospital administrator in your neighborhood.
Speaker Change: Mayor City Council member.
Speaker Change: Chief the Sheriff.
Speaker Change: The Chief Security officer at the local casino or commercial real estate or whatever.
Speaker Change: Send them over to nightclubs dot com and we will take good care of them and see if we can be helpful. But.
Speaker Change: This can't be we can't achieve the mission.
Speaker Change: Grow the company literally by ourselves like one that would be naive to be arrogant.
Speaker Change: We genuinely need your help and support and I am grateful and appreciative that 100 people would.
Speaker Change: Time on out of their Wednesday to sit here and listen.
Speaker Change: About how to really make a difference in the country and it can't just be us and it just can't be technology by itself.
Speaker Change: Scott and Ed are asking us to give them more information on the new headquarters.
Speaker Change: The plans for when we will move and potential disruptions and lower cost.
Speaker Change: From from well the first thing we're going to do is upload scotton ads profile picks into our system and we're going to be on the lookout for these two guys. They show up at our headquarters.
Speaker Change: Just kidding.
Speaker Change:
Speaker Change: No.
Speaker Change: To give a little context.
Speaker Change: We've been operating out of originally about 13000 square feet of class B warehouse space in Mountain view, California.
Speaker Change: Through the acquisition of case, we inherited another dozen facilities all across the country.
Speaker Change: We started to consolidate.
Speaker Change: All production facilities and some of the warehousing in.
Speaker Change: In mountain view and literally ran out of space.
Speaker Change: So it's been a.
Speaker Change: A bit brutal.
Speaker Change: So we landed.
Speaker Change: There are.
Speaker Change: Quote I think the Silicon Valley business Journal, but.
Speaker Change: Theres, probably well over $1 billion of <unk>.
Speaker Change: Commercial real estate kind of just sitting around.
Speaker Change: Silicon Valley.
Speaker Change: So we were basically able to get a facility Thats 33000, plus square feet, so more than double where we have class.
Speaker Change: Class a.
Speaker Change: Office space.
Speaker Change: Siemens had.
Speaker Change: <unk> taken over a couple years ago had dumped $11 million into it.
Speaker Change: Basically a brand new effective.
Speaker Change: Brand new building.
Speaker Change: Never moved in.
Speaker Change: So we were able to land.
Speaker Change: Land.
Speaker Change: And secure that facility for on a square foot basis, probably half of what we're paying for double the amount of space.
Speaker Change: So.
Speaker Change: That will help us consolidate the team.
Speaker Change: All the production.
Speaker Change: Give us some extra room to do testing.
Speaker Change: We're going to turn the facility into.
Speaker Change: A test environment for.
Speaker Change: Future technologies.
Speaker Change: As well as be able to set it up to greet government officials prospective clients.
Speaker Change: Hopefully our investors in one two or three equity research analysts.
Speaker Change: To come and visit and get some robot cell fees and touch and feel and see.
Speaker Change: Robots in action.
Speaker Change: This is going to take some time.
Speaker Change: There is as I mentioned earlier, a little bit of disruption risk.
Speaker Change: To do this move before the August timeframe.
Speaker Change: But things are underway and.
Speaker Change: Genuinely excited for the team they've all worked really hard.
Speaker Change: We only knew what it would take to do what we're doing.
Speaker Change: I wanted to.
Speaker Change: My way of rewarding them is.
Speaker Change: One of the ways is to give them a much more positive inspiring and exciting environment.
Speaker Change: To have them do their life's best work.
Speaker Change: And service of our country.
Speaker Change: And I can I can offer some insights onto the cost and disruptions really what.
Speaker Change: The costs are going to be around moving facilities, some moving costs furnishing costs right setting up the facility for our operations.
Speaker Change: So those are some anticipated cost.
Speaker Change: I think any of them to be.
Speaker Change: Anything beyond what you would normally expect from like this.
Speaker Change: On the other hand, the disruption piece is something we'll continue to keep an eye on and worked through.
Speaker Change: Scott and Ed really comes down to when we <unk>.
Speaker Change: <unk> performed a move we have to obviously stopped production that production on the ASR start production on the on the ACD take.
Speaker Change: Take all the production lines out and re establish them in the new facility. The facility is not that far but there is a disruption associated with that now what we are doing is we.
Speaker Change: We're evaluating both internally using third party consultants to help us figure out how do we do that will minimize disruption and simultaneously use the opportunity to optimize the new production lines. So.
Speaker Change: Most likely one of the things we're going to do is we're going to accelerate production and then have inventory on hand.
Speaker Change: And then pause production.
Speaker Change: Or either the <unk> or the ASR, depending on which one we picked to go first and then establish it get that up and running and then do the same thing a repeat the process for the next line so odd.
Speaker Change: Obviously, there will be something there that we're concerned about both bill and I talked about this earlier.
Speaker Change: Hoping to and we are actively evaluating ways to communicate that we shut down two facilities last year and we try not to make the same mistake twice.
Speaker Change: So we're going to be super careful here to try to make it as smooth as possible, but it's a significant amount of workload that's right.
Speaker Change: If you've ever moved your own home, you'll realize like Wow I have a lot more stuff than I actually realized and why the boxes keep coming.
Speaker Change: Supply that times 100 right.
Speaker Change: Alright, let's keep going.
Speaker Change: Francis Hamit asks two things he says one I'm impressed by a new marketing who is doing that and secondly, he wants to know what our <unk>.
Speaker Change: Sales processes now.
Speaker Change: I'll send you the payment for that question later Francis.
Speaker Change: <unk>.
Speaker Change: So one of the fortunate or unfortunate things had been doing the last 15 months to make all these changes and turn things around is basically for me to physically do the work myself.
Speaker Change: So theres a running joke.
Speaker Change: Internally that I have numerous internships.
Speaker Change: And one of my internships has been marketing in turn.
Speaker Change: And basically going into that area seeing what tools, we're using what messaging we are using.
Speaker Change: How the process is working or not working and then a lot of cases, ripping everything out and starting over.
Speaker Change: So that's me plus.
Speaker Change: Some outside.
Speaker Change: Help that that are brought in to do some of the blocking and tackling to implement what I've, what I'm asking to get done.
Speaker Change: Our sales process today, I guess, we have.
Speaker Change: I'd say two different sales processes.
Speaker Change: On the emergency communication devices is very different it's more transactional.
Speaker Change: A lot of inbounds.
Speaker Change: And we have numerous resellers because.
Speaker Change: Because it's more of a commodity.
Speaker Change: Let's say the general contractor already had spect us in and just needs that they.
Speaker Change: They don't need a demo they don't need to be talked into it like it is already.
Speaker Change: Done.
Speaker Change: So thats a completely different process than hey, we're going to put up for.
Speaker Change: 400 pound robot that's autonomous on your.
Speaker Change: Campus and.
Speaker Change: They probably need a demo need an explanation. So you typically what those happen.
Speaker Change: How those happen is to have.
Speaker Change: First.
Speaker Change: But like.
Speaker Change: Discovery calls like do you actually have a problem that we can help with.
Speaker Change: The worst client that we could have as the.
Speaker Change: Sorry, if there's anyone that's chief innovation officer on the call but.
Speaker Change: One of the worst client so we could have as the CIO that has budget and once the shiny object, but doesn't have any actually any problems.
Speaker Change: That's kind of a waste of time for us the client that has.
Budget problem or crime problem or both.
Speaker Change: Where we can be super helpful. That's why we're going to go spend time, so we want to make sure that.
Speaker Change: Who are we talking to do you actually have authority do you have a budget kind of do you actually have a need.
Speaker Change: Whats this year next year next quarter Tomorrow.
Speaker Change: Kind of do that first and then second duo.
Speaker Change: Kind of webinar type of demo.
Speaker Change: Then we will go deploy.
Speaker Change: And online and in person.
Speaker Change: Technical review for lack of a better way of saying it.
Speaker Change: Complicated site survey of understanding their needs, but also.
Speaker Change: Whereas the outlet to plug in the documentation.
Speaker Change: Or what's the connectivity.
Speaker Change: And then we'll come back to them what the proposal.
Speaker Change: And off we go.
Speaker Change: But.
Speaker Change: Very different processes.
Speaker Change: Two questions related to government. One is please discuss the fed ramp authorization how long it lasts and then are we looking for additional government contracts.
Speaker Change: Fed ramp.
Speaker Change: You have to.
Speaker Change: Got it and then you have to maintain it.
Speaker Change: So you need to.
Speaker Change: Have a ongoing contracts, but you need to support it so think of it.
Speaker Change: <unk> said this publicly we spent.
Speaker Change: Four and a half years and two $5 million to to get through the nightmare fed ramp process.
Speaker Change: Probably.
Speaker Change: Plus or minus is probably going to cost us a half a mill.
Speaker Change: Year to keep it.
So you need to have a staff you need to do all the processes that you outlined do you need to do the con man or continuous monitoring of stuff. So it's.
Speaker Change: Not an insignificant it's not just the piece of it is not a business license that you just put on the on the wall and forget about.
Speaker Change: Yes, we're actively going after additional government contracts.
Speaker Change: Multiple agencies in multiple departments.
Wherever there might be a need.
Speaker Change: We are going.
Speaker Change: Certainly going after that we did win.
Speaker Change: Phase one contract with the Air Force.
Speaker Change: We deployed initially with the department of Veterans Affairs, and we're in active discussions with numerous other opportunities I think the opportunities are very large.
Speaker Change: But theyre not going to be quick. So this is going to take some time as ive cautioned throughout but.
Speaker Change: It's one of our colleagues who worked on fed ramp for.
It was a nightmare years.
Speaker Change: I told him like Hey, we got our foot in the door like.
Speaker Change: We can get our foot in the door, we had a whole body in the door like.
Speaker Change: And now with our team at Washington Office that we've set up in D. C I'll be there.
Speaker Change: All of them next week actually speaking to folks on Capitol Hill.
Speaker Change: Prospective end users.
Policymakers think tanks et cetera.
Speaker Change: And we recently announced that we joined <unk> Si.
Speaker Change: This is the association of unmanned.
Speaker Change: Our vehicles.
Speaker Change: And there is a strong push.
Speaker Change: To have the administration and the legislature start thinking about how we.
Speaker Change: Actually put forth a national robotic strategy.
Speaker Change: You don't want.
Kind of what happened in other sectors of the technology economy to happen to the robotics industry.
Speaker Change: So we're working on strategies to.
Speaker Change: See how we can take a more.
Speaker Change: Aggressive and proactive approach to growth.
Speaker Change: Our next question from Dino. He asks please help us understand how our machines such as Optimist I think that's the Tesla machine robot with millions of dollars behind its development might or might not leapfrog Knight scope machining capabilities.
Speaker Change: The applicable to safety and security.
Speaker Change: Dana I think I'm Super excited for Optimus and figure and everyone work working on humanoids.
Speaker Change: They likely will start indoors Mohan nearly 100% of our business is outdoors.
Speaker Change: The technologies.
Speaker Change: Extremely difficult but.
Speaker Change: I don't know what the time bound as if the next two years or is it the next five or seven.
Speaker Change: Going to happen Theres enough capital and intellectual capital and financial capital behind it to get it to work and the the really thoughtful approach of not trying to take parts from the industry and try to make something.
Speaker Change: They are very much focused on the actual mechanics in fluid mechanics and.
Speaker Change: Power budgets et cetera needed to a tailored solution I think it's actually going to be really exciting I think you were kind of pre supposing that we may not partner with one of those providers once it's viable.
Speaker Change: Something that we will be working on but probably the easier way to answer your question like I don't think.
Speaker Change: That youre going to find a.
Speaker Change: Bipedal humanoid doing 10 to 25 miles an hour.
Speaker Change: To patrol something outside like I don't think that's likely to happen.
Speaker Change: And more likely that we would add a humanoid two are <unk>.
Speaker Change: Portfolio as I, often said and I said, a little bit earlier, we'd be highly naive and arrogant to think that we're going to make the U S. The safest country in the world all by ourselves.
Speaker Change: So I think we're going to build a bunch of technology that is proprietary and magical.
Speaker Change: I think we're going to acquire more and more companies over time, and we're going to add.
Speaker Change: Partnerships. The idea here is not like how do we make the best robot I think that's not the mission, we're not a robotics company.
Speaker Change: Public safety innovator the mission is to make the U S. The safest country in the World. If he told me that we can do that with rubber bands and paper clips guess, what tomorrow, we're going to open up massive rubber band and paper clip company like.
Speaker Change: We need to focus on the mission not on necessarily the technology.
Speaker Change: And there's a time and place criminals and terrorists can be anywhere youre going to need a massive port.
Speaker Change: Portfolio.
To actually have nights cope everywhere and become a household name that was mentioned earlier.
Speaker Change: Next question is.
Speaker Change: I was wondering if manufacturing speed and capabilities have improved.
Our sales looking for the K five.
Speaker Change: Compared to the emergency phone devices any color.
Speaker Change: Uh huh.
Speaker Change: So manufacturing speed capabilities have improved I think probably.
Speaker Change: A lot more yet still to be done.
Speaker Change: For those of you joining us kind of newer investors, we used to build one.
One technician build one robot and took forever.
Speaker Change: And now we've gone down from like 120 hours to build a machine to less than 60, and if we get really slick about things, we can hopefully get down to 20 hours.
Speaker Change: So that's moving along nicely.
Speaker Change: So much so that we're adding are actually recruiting for a second manufacturing shift.
Speaker Change: So someone that.
Speaker Change: It's highly skilled we'd like to go help build some robots here in Silicon Valley haven't got a nightclub dot com slash careers and please apply.
Speaker Change:
And I think moving to the new facility is going to also provide some process opportunities that we just physically couldnt do it in the smaller facility.
Speaker Change: And then looking at some of your newer technologies to kind of speed things up.
Speaker Change: On the K five.
Speaker Change: Remember that we spent last year building new machines to replace the old machines, and we took a hit on purpose to get the entire K five version three fleet out of the field as I had demanded prior and wasn't completed.
Speaker Change: And then we finally got that done and so we haven't been spending time generating new revenue.
Speaker Change: For the ASR is in a material manner up until now that we've got that accomplished and now we can go focus on.
On growing that ASR business now that we have things significantly improved in terms of.
Speaker Change: Quality and service calls and maintenance issues.
Speaker Change: Two questions I'm going to combine them one is the relationship with DP are continuing.
Speaker Change: Any drawn integration with the case seven and then how far away is the case seven from being able to operate in real time.
Speaker Change: The dragonfly team.
Speaker Change: The letter of intent, we signed had the onus is on them to propose.
Speaker Change: To.
Right there.
Speaker Change: Our technology we.
Speaker Change: We do have one pending client that we've been working on.
Speaker Change: In terms of case have been in drone integration I think now having spent enough time.
Speaker Change: Waltzing around the federal sector.
Speaker Change: It's probably the opposite what Youre thinking.
Speaker Change: The need is actually the anti drone.
Speaker Change: Or counter UAS work that's.
Speaker Change: Probably going to be more of our focus as opposed to adding a drone.
Speaker Change: Although that still could be on our on our roadmap in terms of the case seven make.
Speaker Change: Making lots of progress Super excited crossing fingers that before the year is out we will have a visually representative running prototype.
Speaker Change: And then start production next year.
Speaker Change: Bryan asked can you provide more detail on types of partners in sales that are helping growth at night school.
Speaker Change: Most of the ASR businesses, a direct sale, having this is already really complicated technology complicated sales process.
Speaker Change: You don't want an intermediary in the middle of that to really watch it.
Speaker Change: On the ICD side, we do have multiple resellers, where thats been a more streamlined sale.
Speaker Change: Yeah and then.
Speaker Change: A question came in I'm happy to see cash on hand, you mentioned cash raised in the quarter was that just more ATM or dilution decreasing.
Speaker Change: Yes, I think maybe the answer to all those questions is yes, although.
Yeah.
Speaker Change: Dilution.
Speaker Change: Im assuming you mean by dilution Mark that is the share price is going to be impacted.
Speaker Change: Really one share price isn't necessarily determined by one thing right as macro events, they're micro events. There is company specific events that drive some of that.
Speaker Change: We did raise some money through the ATM as well as the.
Speaker Change: The level two disc proximately 2 million relates to a specific customer but at the end of March so.
If you think about vascular Doc customer sorry, yes, investor and we also have a right we sell products. So it's the increasing velocity on collecting on accounts receivable continuing to strategically leverage our ATM and working with investors when we can to raise cash needed to run the company.
Speaker Change: Is all of the different ways you look for the.
Speaker Change: The cash rate.
Speaker Change: And I think it's gone a lot easier now that we have a very clean.
Speaker Change: Cap table, we don't have a lot of <unk>.
Speaker Change: <unk> going on.
Speaker Change: And people are seeing that we're making good progress so.
Speaker Change: I think things are looking up.
Speaker Change: How do you compare your with your peer companies as far as side.
Speaker Change: I'm not sure what you mean by Pierre I think Thats one of the issues. The analysts have because it's like where do you put nights scope is it a public safety company no. It's a technology company no actually it's in a robotics company well, it's kind of a weird odd drone, let's put it in the drone sector or no it's actually law.
Speaker Change: <unk> technology, no, let's put it in defense and aerospace and having there isn't a publicly traded.
Speaker Change: Peer that is scaled autonomous technology across the country.
Speaker Change: As I mentioned earlier in the call is three major corporations and three startups have tried to do this they've all are all kind of failed.
Speaker Change: <unk>.
Speaker Change: I think if you wanted to change the word peer to something broader.
You could do that I mean, theres a lot of people doing a lot of great work at the team at <unk> technologies privately held.
Speaker Change: Flock safety privately held.
Speaker Change: Obviously, the team at axon and motor Motorola solutions.
Speaker Change: Our multibillion dollar companies that continue to grow and serve our country.
Speaker Change: So I think the problem towards peer.
Speaker Change: I'm not sure how to answer that.
Speaker Change: Are there any new partnership opportunities with the U S fed on defense border.
Speaker Change: Border protection et cetera.
Speaker Change: Hi.
Speaker Change: Tons of opportunities it could be border protection.
Speaker Change: It could be securing of critical infrastructure.
Speaker Change: Some of it is just it might sound boring, but like.
Speaker Change: There are.
Speaker Change: Where do you store the armaments.
Speaker Change: Well in acres and acres and acres of land, where we're kind of middle of nowhere.
Speaker Change: Those acres and acres and acres and acres and acres of land secured.
Speaker Change: Well, we can barely afford like five guards to try to do this 24, seven but kind of not working well, maybe we should have a conversation.
Speaker Change: How many guards or had the FEMA warehouse staring at the supplies.
Speaker Change: Supply is really moving do you really need.
Speaker Change: Our.
Speaker Change: As I, often say the GSA manages.
Speaker Change: Nearly 10000 federal buildings.
Speaker Change: Lot of them vacant.
Speaker Change: With the federal protective services 13000 officers and guards.
Speaker Change: A lot of that being cut down now.
Speaker Change: How do you secure national lab.
Speaker Change: What security do you use at NASA.
Speaker Change: What's the next generation of technologies, the FBI wants to see.
Speaker Change: Thanks, Doug.
Speaker Change: Now hopefully start understanding why we spent so much time and so much money. There's so many opportunities to be helpful. And if you got your foot in the door I won't name, which <unk>.
Speaker Change: Three letter agency, but.
Speaker Change: Multiple calls and alike.
No.
Speaker Change: We wouldn't be talking to you. If you didn't have your Ato like this conversation would be over.
Speaker Change: So.
Speaker Change: Lots of lots of opportunities lots of lots of lots of effort.
Max: Max asks.
Max: When do we think when we think about the sales force.
Max: Where are we at for Rep head count and where do you expect to be at the end of the year.
Max: Ooh.
Speaker Change: We typically don't give out kind of head count by Department.
Speaker Change: I think we have way too small of a team right now and it would be really smart for us to double or triple.
Speaker Change: Before the year's out is probably the cleanest way to answer that.
Greg Read: Greg ask I saw the road show and Asbury loved it.
Speaker Change: He's a seed investor thank.
Greg Read: Thank you Greg.
Greg Read: And then.
Greg Read: Mark.
Greg Read: Says continued toward the page County Sheriff happy to make a connection I'd love that Mark.
Speaker Change: Okay. Then we have Paul who asks how many robots are with client base what is the growth rate in the near term.
So.
Speaker Change: Our financials oddly are.
Speaker Change: A couple of comments and then I'll turn it to a port.
Speaker Change: Our financials are set up on product and service and this gets a little.
Speaker Change: Confusing, but on the product side the emergency communication devices are sold.
Speaker Change: Outright.
Speaker Change: And then there may be a service component of software and maintenance that goes with it but it's a much smaller portion than the product sale itself.
Speaker Change: Services is all the autonomous security robots.
Speaker Change: And that includes the hemisphere as the tower the K three of the K five.
Speaker Change: And those are obviously on.
Speaker Change: Recurring.
Revenue basis.
Speaker Change: I think if we have not been separating.
Speaker Change: Separating out the autonomous security robots and reporting on them.
Speaker Change: In total the machines and network is nearly 10000, if you combine all the <unk>.
Speaker Change: <unk> and wanted to caution.
Speaker Change: Because I've been asked this question multiple times.
Speaker Change: We need to be very careful with the numbers because.
Speaker Change: Okay.
Speaker Change: A one time sale of a I don't know.
Speaker Change: Blue light tower for.
Speaker Change: 13, or $15000 is very different than a hemisphere.
Speaker Change: It gets sold for 7500 box or 11, 11000, Bucks a year or somewhere in there.
Speaker Change:
Speaker Change: Versus a $70000 robot. So you can kind of just use each number and kind of all add up <unk> seen people do this and that's why I'm trying to caution you not to do is and go let me just add all these up.
Speaker Change: Assuming the same average revenue and you can't do that because the revenue is as low as four.
Speaker Change: Maybe ill.
Speaker Change: Coal boxes, I don't know 5000 $7000 to as high as some clients 90 or $100000 range. So that's why we kind of don't break it out that.
Speaker Change: That way because folks end up making a.
Speaker Change: Really bad assumptions.
Speaker Change: I don't know did you want to add anything to that no I think.
Speaker Change: But it really the way, we think about our growth.
Speaker Change: As machines in network.
Speaker Change: The <unk> side.
Speaker Change: There's two aspects to this one on the ASR sides and subscription model.
Speaker Change: The growth is really dependent on our ability to continue to increase that installed base the more of that.
Speaker Change: And Thats, a cumulative process right as slow slow.
Speaker Change: Slower in terms of speed, but as you get more and more customers on our machines and network.
Speaker Change: That has kind of this awesome.
Speaker Change: Cumulative impact the ECT side is more today to transactional sale. However, we are continuing to think about ways to add more and more subscription based services to those.
Speaker Change: Communication devices, and I think right now it's a 60 40.
Speaker Change: The split between the two but as that changes are either shifts we expect to get more robots out there and continue to get more more Cds out there and again as you mentioned earlier bill the price points are especially that really a customer may go for the ECT first or different types of customers and we continue to.
Speaker Change: Find the right.
Speaker Change: Optimize path.
Speaker Change: And going to market.
Speaker Change: Our checking the time, let's do the Fedex version to try to get the rest of these because they think we're past the top of the hour here absolutely.
Speaker Change: Any big name clients Fortune 500, and the pipeline to proved credibility and stock value.
Speaker Change: Cannot comment on that.
Speaker Change: Yeah.
Speaker Change: Yes, we have to get their permission.
Speaker Change: How do the Knights scope K, five robust optimized water security and surveillance compare and market fit and scalability too optimistic I think we already kind of answered this question.
Speaker Change: We definitely are open to a partnership and more humanoids or any type of robotics out there actually helps us because it makes the mass market.
Speaker Change: More.
Speaker Change: Have a hypersensitive to adopt robotics. So it's all it's all at a tailwind for us.
Speaker Change: The next question is how is how is it going with the Philly and New York City.
Speaker Change: Yeah, not not not so well.
Speaker Change: I feel.
Speaker Change: I'm sympathetic to leaders of major organizations that demand to get X thing done and then the organization.
Speaker Change: Is unable to or unwilling to follow through.
Speaker Change: We're here for the NYPD and NYSE whenever they're ready.
Speaker Change: With the appropriate budgets and authorities.
Speaker Change: But it has not gone.
Speaker Change: Well to be Frank.
Speaker Change: Has the time between first contact of a potential client signing a contract been consistent increasing or decreasing compared to last year.
Speaker Change: So I sold.
Speaker Change: The last four asr's.
Speaker Change: I might've broke some process rules, along the way, but we were minus four days on delivery to order.
Speaker Change: So yes.
Speaker Change: Yes, we have been improved things significantly one enablers, we don't have.
Speaker Change: Humongous backlog remember.
Speaker Change: Some time ago, we were nearly $6 million worth of backlog now we're down to around 225 million Bucks.
Speaker Change: Second the production processes have improved.
Speaker Change: Third we tried to get the client experienced team involved with the sales team much earlier in the process so that the downstream activities.
Speaker Change: Go quicker, but I think the way to fix this and what I was mentioning earlier in our port mentioned touched on as well is to fix this is to get to have enough financial resource to have enough finished goods inventory so that we have.
Speaker Change: Amongst two or three months of inventory on hand so.
Speaker Change: My team hates me for saying this but we sign up sign on Friday, we should ship. The following Friday like why are we sitting around waiting.
Speaker Change: Weeks and months on end, but.
Speaker Change: Has significantly improved.
Speaker Change: Still more to be done.
Speaker Change: Yeah.
One fences.
Speaker Change: Bought more shares this morning, Thank you Pat.
Speaker Change: And he is looking he wants to know if we're looking at new verticals.
Speaker Change: New verticals.
Speaker Change: Going to say no.
Speaker Change: We're pretty much the verticals that are on our website or the ones that we're focused on we got plenty to do.
Speaker Change: Don.
Speaker Change: Adding more.
Speaker Change: Robert wants to know when you remove older equipment at your clients and provide them with new upgraded equipment.
Anthony nightclubs expense or does it client contribute towards the updated cost.
Speaker Change: So this is a luxury for our clients that have stuck with us for all these years Euro nights go client you get unlimited software upgrades firmware upgrades and at times hardware upgrades all on our nickel.
Speaker Change: So they're not having to come out of pocket.
Speaker Change: To get the latest most advanced technologies that they want at their fingertips and Thats part of providing great service.
Speaker Change: Service and part of the subscription and to clarify that's primarily on the ASR side.
Speaker Change: Clients sign up for the subscription so the expectation is that they continue to receive the best of hardware and software at.
At no extra charge to correct correct.
Speaker Change: Next question is.
Speaker Change: Sorry.
Speaker Change: Sure.
Speaker Change: Regarding PR why don't we see reports news articles of successes.
Speaker Change: Arrest reduction in thefts.
Speaker Change: Relating to a night scope machines are in use.
So if you go to <unk> Dot Com Slash crime, you can see what we've legally been allowed to say this.
Speaker Change: This is a massive frustration for the media and four.
Speaker Change: Investors.
Speaker Change: And it comes down to this most chief security officers.
Speaker Change: Don't want you, knowing what they're doing or what they are utilizing for the obvious security reasons.
Speaker Change: And.
Speaker Change: If it's a retail establishment as an example.
No one wants to go on camera and say, yes. So there is a couple of murders here and then that's it stop happening like that doesn't help business right.
Speaker Change: So.
Speaker Change: We're trying to think about clever ways to.
Speaker Change: Get around that one.
Speaker Change: One we started writing.
Speaker Change: Some short stories.
If you go to a nightclub dot com Slash chronicles these.
Speaker Change: These are stories based on what's happened in the real world.
Speaker Change: But generalized enough. So we don't get in trouble with our.
Clients.
Speaker Change: But I think these will happen over time, but that's the root causes of why they are not happening as quickly as you probably might want.
Speaker Change: As the autonomous robots rely on efficient batteries, how is nights scope optimizing power systems with a K five indicates seven.
Speaker Change: One is do a thorough analysis on power budgets, so one of the big.
Speaker Change: Fights here is you want a lot of compute at the edge do you want to be able to do things faster and not be going up into the cloud, but that amount of compute eats a lot of juice kind of kind of gets hungry.
Speaker Change: You don't want to do all the stuff in the cloud when it costs a lot of money to there's a lot of latency going up and down and then oh by the way going up and down cost a lot of money.
Speaker Change: So we're expecting the rate.
Speaker Change: Chipset is X.
Extremely important and trying to figure out what.
Speaker Change: You run on that chip is also important and how efficient and maybe you can parse it.
Speaker Change: Some of the work gets done at the edge some of it that's less time sensitive as gets done in the cloud.
Speaker Change: And then you've got to think about the battery technology itself and the patrol schedule.
Speaker Change: So maybe a.
Speaker Change: A little technical.
Speaker Change: Not all batteries.
Speaker Change: Charge and discharge in the same kind of it's not a linear curve. It doesn't just go this way. So you want to find that part of that curve. That's the least damaging to the battery to charge and recharge and the fastest part and then you oscillate from that.
Speaker Change: Let's go oscillate from 65% to 85%, 65% to 85% gets you the most efficient way for us to operate 24, seven because no one wants a robot sitting.
Speaker Change: Charging for eight hours. So we will try to charge for 30 minutes and then gold patrol for a couple of hours and then come back.
Speaker Change: Kind of topping off the tank. So that's kind of a different way to do the power management, but the root cause of it is you've got to be very careful.
Speaker Change: A lot of stuff can eat a lot of.
Speaker Change: A lot of energy lights Motors.
Speaker Change: Compute cameras thermal cameras et.
Speaker Change: Et cetera, all eat a lot so we've got to be very efficient.
I think we were at the end.
Speaker Change: <unk>.
Speaker Change: Those.
Speaker Change: Mark has a suggestion on.
Speaker Change: Putting essentially facts and circumstances to be sure on the website along with the value prop.
Speaker Change: Thank you Mark will review that suggestion and obviously try to continue to provide.
Speaker Change: Ways to how we add value to our clients.
Speaker Change: Both internally and externally.
Speaker Change: So I want to thank a poor and the entire <unk> team for.
All the.
Speaker Change: Supporting all the Crazy changes we've made over the last 15 months.
Speaker Change: But now we're in a much much better.
Speaker Change: Spot I think.
Speaker Change: Physically emotionally psychologically financially strategically kind of every which way you want to look at it things are looking up and we're also grateful for our.
Speaker Change: But thousands of investors that continue to support and back to the company.
Speaker Change: And hopefully we can have you all out sometime later this year.
Speaker Change: Take some robots healthier and grab a bite and.
Speaker Change:
Speaker Change: Have some discussions on the on the future of public safety and.
Speaker Change: Discussing the fact that robots will be everywhere alright.
Speaker Change: Alright.
Speaker Change: Way over time, thanks, everyone appreciate it.
Speaker Change: All the kind of support.
Speaker Change: And we're working literally seven days a week 24, 7% for you.
Speaker Change: And for the country and generally appreciate the support.
Thanks, everyone.
Speaker Change: Okay. Good.
Goodbye.