Good afternoon everyone. Welcome to Inseego Corp's Third Quarter 2024 Financial Results Conference Call. Please note that today's event is being recorded. All participants today will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity for Q&A.

[Operator Instructions] On the call today are Phil Brace, Executive Chairman of Inseego's Board of Directors; and Steven Gatoff, the Company's Chief Financial Officer. During this call, certain non-GAAP financial measures will be discussed.

A reconciliation to the most directly comparable GAAP financial measures is included in the earnings release, which is available on the Investor’s section of the company's website. An audio replay of this call will also be archived there. Please also be advised that today's discussion will contain forward-looking statements.

These forward-looking statements are not historical facts, but rather are based on the company's current expectations and beliefs.

For a discussion on factors that could cause actual results to differ materially from the expectations, please refer to the risk factors described in the company's Form 10-K, 10-Q and other SEC filings, which are available on the company's website.

Please also refer to the cautionary note regarding Forward-Looking Statements section contained in today’s press release. With that, I'd like to turn the floor over to Phil Brace, Executive Chairman of Inseego. Please go ahead..

Thank you operator. Good afternoon everyone. It's a pleasure to be with you today. I'll be making some opening remarks, and then I'll be passing it over to Steven who will provide much of the detail. Q3, 2024 was a significant quarter for Inseego. We had a number of major events that when combined set the company on a positive trajectory for the future.

In particular, the company delivered strong financial results. We completed the restructuring of our debt and right-sized our capital structure. We divested a non-core international telematics asset for $52 million, and we continue to invest in our people, the product roadmap and channel expansion, to drive opportunities in the future.

Let me provide some color. First and importantly, our financial results for the quarter were ahead of our expectations. Total company revenue came in at $61.9 million, 27% growth versus the same quarter last year, and above our guidance.

The outperformance was driven by strong carrier promotions for our mobile products, and good execution by our sales and operations team, to capitalize on the increase in demand and delivering the product. Our subscribe SaaS management platform also contributed meaningfully with good year-over-year growth in revenue and profit.

Adjusted EBITDA was also significantly ahead of expectations at $9.3 million for the total company. Based on good cost control and strong revenue results. This delivered the highest adjusted EBITDA margin in years. Second, we substantially reduced our debt, and announced the closing of that transaction today.

In addition to the convert restructuring, based on the strong financial performance throughout the quarter, the company has been paying down the $20 million short-term loan, and now has only a $6 million remaining balance.

Once the $15 million stub of the convertibles, and the $6 million short-term loan are repaid, the company will have a manageable $41 million of long-term senior debt outstanding, down from over $160 million a year ago. This represents a dramatic improvement in the company's capital structure and positions Inseego well, looking ahead to the future.

Third, we signed an agreement to divest our non-core international telematics business for $52 million in cash, which we expect to close this quarter. This transaction provides increased liquidity for the company, and enables us to focus on the U.S. 5G wireless connectivity business.

You will see that the financial results for this business are now required, to be reported as discontinued operations in our financial statements. And fourth, Inseego continues to invest in a strong product roadmap.

There are a number of new and exciting growth opportunities in front of us, and we continue to focus on diversifying our revenue base, with multi carrier products for the broader channel ecosystem, in addition to expanding our business with the major U.S. carriers.

This diversification of our revenue base is important, to help us weather the potential volatility that comes from us, being tied to major carrier promotional activity. It's also an important incremental driver of our long-term growth.

Finally, as we look ahead in the current quarter, we see continued year-over-year growth in revenue and adjusted EBITDA, for our continuing operations. Before I hand the call over to Steven, I'd like to update you on our CEO search, and what I see ahead for Inseego.

The Board, along with the leading executive search firm have been actively engaged with a number of strong candidates, and we are encouraged with where things stand. While you can never predict exactly when this will get closed, our current expectation, is we'll have someone in place by the end of Q1, 2025.

Inseego now has a solid capital structure, a new management team is growing, is profitable, is generating free cash flow, and has a strong product roadmap, a dramatically different position than at the beginning of the year.

With that, I would like to thank our stakeholders, who worked collaboratively to enable the restructuring, and the Inseego employees who have been working hard to grow the business, and deliver the financial results I share with you today. I'm glad to take any questions in a few minutes. Right now, I'd like to pass the call over to Steven..

Thanks Phil. Hi everyone, I'd like to cover four topics with you today. First, I'll take you through the details of our Q3, 2024 financial results. Second, I'd like to update you on the completion of our capital structure overhaul, and debt reduction that just closed. Third, I'll provide an overview of the sale of our telematics business.

And fourth, I'll share some color on what we're seeing in the core business, and provide guidance for Q4 as we finish out the year. As Phil said, as we always do, we'll of course wrap up by opening the call to your questions. With that, let's start with our Q3, 2024 results.

First off, please note that given the signed agreement to sell the telematics business, U.S. GAAP dictates that those operations be reported as held-for-sale on the balance sheet, and in one net line item as discontinued operations in the P&L. As such the Q3, 2024, results present the company's revenue and expenses, on a continuing operations basis.

And importantly, we've laid out the apples-to-apples pro forma historical financial information for continuing operations, for the prior six quarters in the earnings press release, and in a new earnings deck that's on our Investor Relations website.

This data will give you the consistent quarterly info and visibility, for all of 2023 and 2024, to see the trends and relevant performance in our go forward core business. With that, let's get into the numbers. As Phil said, Q3 was a very strong quarter.

Total revenue for the company, which will include for this review, to include both continued and discontinued operations, came in at $61.9 million, an increase of more than 27% year-over-year versus Q3, 2023, and for the second consecutive quarter delivered total revenue growth for the first time in years.

The two primary growth drivers were one, strong continued performance in the carrier mobile hotspot products, from the large carrier partner MiFi promotion that we've talked about for the past few quarters, and that drove Q3, 2024, mobile solutions revenue growth of more than 43% year-over-year.

And two, growth in our Inseego subscribed SaaS offering on a contract renewal that we also mentioned on the last call that drove services, and other revenue growth of 33% year-over-year.

Rounding out product revenue, fixed wireless access or FWA revenue came in lower in Q3, on lower consumer based purchases by one of our carrier customers that is being acquired, by another carrier customer and subsequently reduced its purchases. And on some slower purchasing, from a carrier who is managing their inventory heading into year-end.

Finishing up with our telematics offerings, which as I said a moment ago, we've entered into a contract to sell, and is therefore reported as one net line item in discontinued operations in the P&L, the business came in at a consistent solid growth on good continued demand and execution.

Moving on to gross margin Q3, 2024, gross margin percentage for total company that combines, continued plus discontinued ops came in at approximately 38%, compared to 33% on a non-GAAP basis in the same quarter in 2023.

As we previewed on the last call, the 100 basis point lower sequential gross margin in Q3, 2024, was driven in large part by the over-performance of the mobile hotspot business that had a record quarter, but contributed at a lower gross margin level.

Looking next at non-GAAP operating expenses, we've continued our focus on operational excellence, and have successfully managed the business to both lower sequential dollar spend versus Q2, 2024, and to a meaningful improvement in efficiency as a lower percentage of revenue.

Sound headcount and expense management and operating efficiency efforts, delivered total Q3, non-GAAP OpEx that was a favorable 3% lower sequentially over Q2, and came in at 28% of revenue on a continuing operations basis, improved from 30% in the prior quarter, and meaningfully improved from 34% in Q3 of 2023, and that is including a fully funded bonus this year.

We realized OpEx efficiencies on a percentage of revenue basis in Q3, in both sales and marketing efficiencies, and R&D improvements.

Pulling this altogether, the very strong Q3 revenue performance and focused expense management drove record Q3, 2024, adjusted EBITDA dollars that came in, at more than double the prior year quarter at $9.3 million, on a combined continuing plus discontinued operations basis.

This also enabled us to deliver a record high adjusted EBITDA margin of 15% for the quarter. Wrapping up our Q3 results with a September balance sheet. As you know, we largely completed right-sizing our capital structure, materially reducing our debt and improving the company's outlook going forward.

At the very beginning of the quarter on July 1, in fact, we repurchased a large $45 million position in our convertible bonds, at a discount of 30%. I'll talk about this more in a moment as a material improvement, to our capital structure as a subsequent event to the quarter.

But we ended the September quarter with $107 million in convertible debt outstanding, and a small stub of $6 million out of the original $19.5 million short-term loan that we had utilized to take advantage, of the opportunity to buy in the large convertible position.

Overall working capital continues to be well managed these past several quarters, and we continue on a trajectory of generating cash flow.

The final point to make on the balance sheet is that with the capital structure improvements, and convertible restructuring that's further bolstered by ongoing cash generation, we no longer have the going concern risk that became part of the company's disclosure earlier this year.

With that, let's move to the second topic and look at the debt restructuring, and the overall capital structure improvements that, we've accomplished in the past several months.

As you heard us say, since we arrived at Inseego, we've been methodical about driving a thoughtful and optimized outcome, for our stockholders and restructuring the convertible notes, and reducing overall debt levels. This has been a complicated multi-step process, with many considerations, constituents and moving pieces.

As you saw, we closed the restructuring of the convertible notes this past week. In total, we repurchased, or converted to long-term debt and equity $147 million, or more than 91% of the outstanding notes. The total overall consideration in the exchange consisted of four elements.

One, $34 million in cash, two, $41 million in new senior secured notes due in 2029, three, the issuance of 2.9 million shares of common stock, and four, the issuance of 2.5 million warrants to purchase common stock at a premium, to when the agreements were signed.

Pro forma for these transactions, total debt has been reduced to $62 million and is heading lower. It consists of the $41 million in long-term senior notes, a small remaining stub of $15 million on the convert, and the remaining $6 million of the short-term loan that you heard me mention, a few minutes ago.

Further to this point, and as I'll talk more about in a moment, we anticipate the $6 million short-term loan and the $15 million convert stub, to be fully repaid from a combination of balance sheet cash, free cash flow generation and a portion of the proceeds, from the telematics sale.

Going forward pro forma for the planned additional paydown, of the small remaining debt balances that I just described, and for our anticipated excess cash on the balance sheet post-closing of the telematics sale.

The company's net debt, is expected to be approximately $25 million, with an ongoing annual interest expense of approximately $3.7 million. Our pro forma capital structure provides the company, with significant flexibility as we allocate capital, and our free cash flow to driving growth.

As a final note on the capital structure improvement, we wanted to also call out a meaningful positive for the company. We were successful in structuring the warrants that were issued in the exchanges to be cash pay.

As such, upon their exercise, the company expects to receive approximately $38 million in cash, a further enhancement to our liquidity and financial flexibility. We're pleased to have executed these transactions, and accomplished a meaningful reduction of debt and right sizing of our capital structure.

Adding that strong dynamic to our profitable operations, free cash flow generation and continuing growth, we see the company as now well positioned, and financially strong to support driving further stockholder value through growth in our new product portfolio. With that, let me share some info on the telematics sale.

Our decision to divest that business, was based on a combination of factors including the strategic fit within our North American centric 5G wireless solutions business, our desire to deleverage our capital structure, and our intended streamlining of our focus and resource allocation, on the strongest growth opportunities in our core product roadmap.

We ran a solid process. It's a strong business and it attracted interest from multiple buyers, and we're pleased with the sale price at roughly two times revenue, essentially twice the multiple that the company received for the sale of the legacy South Africa telematics business then Inseego sold back in 2021.

We expect the transaction to close this quarter, and as I mentioned a few moments ago, we provided pro forma historical financial info, for the core continuing operations going back six quarters to Q1, 2023, so you have the full period of comparable quarterly history.

With that, let's turn to the fourth discussion topic today, on what we're seeing in the business in the current quarter, and provide our guidance for Q4, which we want to reiterate with the telematics sale is for continuing operations only. Q4, 2024, faces a tough sequential comp for two reasons.

First, delivering on the heels of a record revenue and adjusted EBITDA quarter in Q3, 2024. And second, the impact of the recurring annual seasonality of a lower sequential Q4, on carrier purchasing trends in the second half of December.

Nonetheless, we are bullish on delivering both meaningful revenue growth, and material improvements in adjusted EBITDA year-over-year.

In product revenue, while we have reasonably good visibility on mobile broadband, and a continued promotion at our largest carrier customer, an offsetting end of a promotion at a North American carrier customer and some inventory management focus in another carrier customer, temper our expectations to produce another breakout quarter in mobile in Q4, like we did in Q3.

On FWA, while our new channel specific products won't hit the market until late in the first half of 2025, our investments in building pipeline overall channel program, are getting some traction and we expect to be able to offset the typical seasonal decline, and deliver fairly consistent FWA sequential revenue in Q4.

On services and other revenue, we expect to have another solid quarter in Q4 that comes in at levels consistent with Q3, 2024, on a dollar basis and meaningfully higher, than the prior year in Q4, 2023 thanks to the good work we've done on the Inseego subscribe platform.

And so far as gross margin and again on an apples-to-apples continuing operations basis, we expect Q4, 2024, gross margin percentage to increase over Q3, 2024, on a greater proportion of FWA and services revenue.

Like our last call, we would again note that the final revenue mix between mobile broadband, FWA and services and other will be the ultimate determinant. Q4 non-GAAP operating expense from continuing operations, is expected to be relatively flat over Q3, 2024.

And so, pulling this altogether, we're providing Q4, 2024 guidance for continuing operations that is the core ongoing business, does not include the telematics operations as follows.

Total revenue from continuing operations in a range of $43 million to $47 million, a growth rate of 25% year-over-year at the midpoint, and adjusted EBITDA from continuing operations in a range of $3 million to $4 million, a more than 50% growth year-over-year at the midpoint.

In closing, we're happy and not surprised to see the strong growth and profitability delivered in Q3, and we're encouraged by the positive dynamics in the business that, are driving continued traction as we close out 2024, and invest in new products to drive revenue growth in 2025.

With that, we appreciate your time and support, and we're glad to open the call for questions.

Operator?.

[Operator Instructions] Our first question today comes from Scott Searle from ROTH Capital. Please go ahead with your question..

Hi, good afternoon. Thanks for taking the questions. Nice to see all the efforts on the restructuring come into fruition here, guys.

Maybe just to quickly follow-up, I just want to clarify, in the net debt commentary, at the current time, the $52 million from the telematics sale is not being reflected in terms, of how you're addressing the balance sheet.

Is that correct, or are you assuming some of that in the paydown of the $15 million stub and the $6 million term loan?.

Yes, Scott, the net debt numbers on a go forward basis, we would include paying down the $15 million stub. But as of the balance sheet date and as of the numbers today, the debt amounts that you see on the presentations, and press release do not include application of the cash from the telematics sale..

Got you. Okay. Helpful. And look, you've given a lot of sequential guidance in terms of the different business segments. I'm wondering if you could look a little bit further out in terms of seasonality into the March quarter, what your early thoughts are on that front.

And then if we look at the different business segments of mobile hotspot, fixed wireless access, and then Inseego subscribe, what are the growth rates that you are thinking about at the current time in 2025?.

Yes, Scott, it's Phil. Look, I think it's a little bit early for us to comment on what's happening in 2025. I mean based on what we see now, if you kind of look at it, I think the Q1 tends to be a little bit seasonally down from the Q4 timeframe. I'm not seeing anything that would suggest abnormal seasonal patterns.

And for us, we commented that for example from FWA. That growth in FWA is really going to come from new products we got coming kind of in the mid part of next year, and also kind of coming off some lows where we've got some customers that are got some acquisitions of their own that, they're kind of working through.

So we're kind of expecting that to grow from there. So I'd suggest that our FWA growth is - maybe not. We've got some puts and takes that are different than what we might see in the market just based on what's happening to our customer base. And then mobile, mobile growth really depends on promotions and what's happened there, and seasonality there.

So it's a little bit early to tell. But kind of how I think about 2025 is, look at where we're kind of coming in 2024, and kind of progress what I would say normal seasonal patterns, from what we've seen in the last couple of years. So that's kind of what we're - looking at..

Okay. Fair enough. And Phil, maybe on the hotspot front, just to think a little bit out further, and I guess strategically how you're thinking about the business, are there different go-to-market strategies, and ways that you're thinking about enhancing the gross margin, and differentiation of the product portfolio.

And then, last one just to throw in and I'll get back in the queue. You're in a position that the company hasn't been in a long time, with a very healthy balance sheet. Do you start to think about some inorganic opportunities going forward? Thanks..

Yes, good question. Look, on the gross margin side, I mean, we're never satisfied with where they are.

I think I've been clear about the fact that, I think the company's got a long way that we can go, not only in the cost structure of our products, but frankly, doing things like monetizing our software and doing a much better job of valuing, and getting value for our software products there.

So frankly, that's an area, where I'm not happy where we are yet as a company. And it's an area that we're going to continue to focus on building going forward. I'm kind of pushing on that front, so I would not expect us to be done there.

And I think, when we look at the hot - I mean, one of the areas we're looking at is diversifying our revenue base, right. Making sure that we've got products that can support multiple carriers, maybe different use cases, go out to the channel environments, different approaches there to help diversify our revenue base, improve our gross margin.

So I think, we have a number of levers to pull, and the company is kind of focused on building those areas going forward. And then I think your second question.

What was your second question?.

Just thoughts on the inorganic front, Phil, you know, given where you guys are in terms of business. Yes.

How do you think of that?.

It's wonderful to be in that position right now, I mean from where we were three quarters ago. I think that right now we're going to have a disciplined approach to capital. We're going to be careful. I think we still got some new, a couple of more things we just need to take care of including paying down the stub, and the remaining loan.

But look, we're going to take a disciplined view for that. If there are things that are creative and that will be right in our wheelhouse, then we'll certainly look at that. But, nothing imminent..

Great. Thank you..

Our next question comes from Lance Vitanza from TD Cowen. Please go ahead with your question..

Thanks. Thanks guys. Nice job on the quarter. A couple questions on the fixed wireless side. You mentioned that there was some M&A. I think you said that a couple of your customers emerged and that was putting some pressure on sales in the quarter.

Could you elaborate on that a little bit in terms of magnitude and timeframe? Like do you expect that that's going to revert to the mean at any point, or is this just sort of like a step function lower? And then also I think you called out that you had another customer, and I may be getting this wrong, I apologize, but that was choosing that chose to reduce inventory levels into year-end, and I'm wondering if you could provide any additional color on that.

And is that sort of again like a permanent destocking, or is that something that we think comes back in either the fourth quarter, or early in the first quarter perhaps. And then I have a follow-up about the asset sales? Thanks..

Yes, this is Phil, look, I think the one, I mean it's probably pretty public. There's a large U.S. carrier that's being acquired by another large U.S. carrier.

The one that is being acquired was one of our customers and so you might expect, they are taking a very conservative posture with respect to what they're purchasing, and all that other kind of stuff. So I don't necessarily.

We're not planning on that to somehow magically get back better, and we'll see what happens when, if and when the companies combine and do all that stuff. I just, I don't know much more. I can comment on that publicly. And the other one you commented about was just managing inventory. Look, my guess is that's going to come back.

I mean it's hard for us to tell right now, and that's just kind of what we're seeing. I think that one customer in particular, is just at the end of the quarter and trying to be a little bit more conservative with how they position that. So it's not something that is raising alarm bells in my brain yet. And it's something we're just.

We're kind of watching. And I think that, that's something we're just. We'll see how that plays out..

And I think last quarter you'd mentioned, a newly implemented channel program that was beginning to ramp, and that there was some question as to how successful and/or how quickly that ramp would play out.

Any update there? Are you pleased with the results there? Is that sort of, going on alongside the sort of the noise from what we just discussed, or is that also, helping or hurting the results?.

Oh look, I think we're making gradual incremental progress on that. I'm never satisfied with where that is. So no, I'm not satisfied with that. It's the similar question that, I guess Scott asked on the software gross margin side. No. Are we making progress? Yes. Is an area that's strategically important for us to continue to do? Yes.

And you'll see us like, as an example, some of the things we're trying to do, is put more products out there that are certified across multiple channels. Because if there are multiple carriers, because if you're a channel partner, you have to be able to offer multiple different options for them depending on the particular use case.

So some of those product announcements that, we're just starting now right, are just kind of getting out there. So I would say that we are seeing green shoots. I think that it's positive. I think it continues to be an investment area for us.

And I'm not satisfied where we are, and I don't expect to be satisfied for where we are for quite some time, just because I want to keep us growing in this space..

Thanks. And just the last one from me on the telematics sale, it looks like that business, the residual, the services business that you have left, subscribe rather, that's running at about 85% gross margin. It looks like the business that you are selling is less than 60% gross margin.

Could you explain why the remaining business is so much more profitable, and was this a factor in the decision to divest? Thanks..

Sure. We'll tag team on it, Lance. So the residual business do that. First to your question is the Inseego subscribe business. That is a very complementary SaaS offering that we provide to a large carrier customer that enables 5G, and wireless subscriber management. So it's a nice kind of complimentary offering that we have. And it's a SaaS platform.

So it has very high margins and that's what that business has been operating at. We've been improving it lately. We've kind of been running the business a little bit differently, and it's been working out quite well. That has not a lot to do with the telematics disposition though. They're really run separately from an operation standpoint.

And as we mentioned on the call, the telematics business is a nice business. It's just something and so far as our strategic focus. If we like other companies have limited capital that we want to put to work and deploy, we're going to put it in our core sweet spot of our product portfolio, and our growth area and our 5G network services in the U.S.

And for now that's where we chose to focus, and it was an attractive asset and so far as generating capital to address capital structure, and the other needs in the business..

Great. Thank you..

Yes, sure. Good question. Thanks..

Our next question comes from Tore Svanberg from Stifel Nicolaus. Please go ahead with your question..

Yes, good afternoon, this is Jeremy calling for Tore. Congratulations on the nice restructuring and the solid cash flows. I guess maybe my first question for the mobile solutions business. It sounds like there were, it was aided by some nice promotions in the quarter. At the same time there's some last time buys, I think.

Can you just give us a sense of what the steady state for this business is, and maybe a little bit more insight into how much 4G is left here, and just kind of the makeup of this business, please?.

Well, this is Phil. I'll try my best to answer that. I mean, I don't think there wasn't any material last time buys in there. So I don't think any of that was a big play. I mean the promotional activity, it's one of those things where generally speaking we always have some sort of promotional activity going on. That's the nature of this business.

In the carrier space. This particular one is going really, really well, and we did a great job responding to it and our customer is happy with it. And they seem to be extending it into the public sector markets, and we seem to be going pretty well.

So I mean you can just look at our historic performance over the last three quarters in that space, and you can kind of see that we've got a pretty good run on that. I don't think we put a number on what that is, but it's a material part of the business.

But I think we're looking to try and figure out how to extend it, how to diversify our revenue base, and how to grow our business and taking advantage of frankly making hay when the sun shines. The customer has strong demand and we execute cleanly. And we got it.

And our guidance going forward, is reflective of a certain level of promotional activity going forward as well, so..

Got it. Thank you. That's very helpful. Maybe if we can, I guess shift gears a little bit to the fixed wireless business. Can you? And I guess, this might be help. Is this one of the businesses that will be helped by the channel strategy going forward? And maybe a question on that.

Do you expect any OpEx changes over the coming year, just to support that new initiative? Also is there going to be a need to maybe stock the channel, or how do you expect to manage the inventory of the products that, are aimed specifically at the channel? Thank you..

Yes look, I do think, I think our channel presence certainly, probably disproportionately benefits FWA space, but I think the mobile space may also be helped by this as well. I mean, and I think from an investor perspective, or excuse me, an investment perspective in OpEx, we've already kind of reallocated some of our investments along.

And if you look at some of the, some of the comments that Steven made. We've actually improved our total spending. We've certainly improved all the metrics of the spending and we expect to maintain a pretty disciplined focus on that going forward. I'm not expecting any step function change in operating expense going into 2025.

I think we have, you may see some things around the margins here or there, but we have what we have, and we're going to allocate the capital accordingly..

Great. And maybe just housekeeping item on the modeling side, is the interest expense. I think it was $3.7 million.

Is that what we should be modeling for the other income line, or are there other meaningful puts and takes there that we should be aware of?.

Yes, we think generally speaking interest expense should start to wind its way down, Jeremy, after we get through the retirement or the paydown of the convert stub, and the senior loan. So we talked about a kind of a steady state, if you will, of $3.5 million, $3.7 million, compared to kind of $5 million annual run rate now.

So we see an improvement in interest expense, from the new cap structure..

Great.

And one more, if I could squeeze it in, with all the restructuring that you've done, the increase in shares and the warrants, can you give us, where you expect pro forma share count to end up both on a fully diluted, and a basic share count basis, please?.

Yes, sure.

The good news for the timing of all of these transactions, so we closed everything last week, which we're thrilled about for many, many reasons, not the least of which is that the answer to your question is on the cover of the 10-Q that's getting filed tonight, because it will have the current total share count outstanding and that number to preview it, will be approximately 15, one five million shares, which is up marginally from 12.5 million shares on the last quarter 10-Q, and that includes the shares that were issued, et cetera..

Got it. Great. Thank you very much and congrats on the strong execution..

Right on. Thanks, Jeremy..

Thank you..

And ladies and gentlemen, with that, we will be concluding today's question-and-answer session and conference call. We thank you for attending today's presentation. You may now disconnect your lines..