Good morning, ladies and gentlemen, and welcome to the 22nd Century Group Second Quarter 2023 Results Conference Call. [Operator Instructions] I would now like to turn the conference over to Mr. Matt Kreps. Please go ahead, sir. .

Thanks, Lara. Good morning, and welcome to 22nd Century's Second Quarter Results Conference Call. Joining me today are John Miller, Interim CEO; and Hugh Kinsman, CFO. .

Earlier today, we issued a press release announcing our results for the second quarter 2023. The release, presentation and 10-Q are available in the Investors section of our website at xxiicentury.com. We'll start today's call with prepared remarks from John and Hugh before moving into Q&A.

The Q&A will be a session with our analysts and today's call will focus on key updates to the commercial activity in our VLN tobacco and GVB hemp/cannabis business units. We will not be able to cover every aspect of the business in the time allotted for this call.

If you have questions about our business not addressed in this call, you are welcome to e-mail Investor Relations using the contact information provided in today's press release. .

On Slide 2, a few reminders for today's call. Some of the statements made today are forward-looking. Forward-looking statements are subject to risks, uncertainties and other factors that may cause actual results to differ materially from those contemplated by these statements.

Additional information regarding these factors can be found in our annual, quarterly and other reports filed with the SEC. .

During today's call, we may also discuss non-GAAP financial measures, including adjusted EBITDA, which we define as earnings before interest, taxes, depreciation and amortization as adjusted for certain noncash and non-operating expenses. For more details on these measures, please refer to our press release issued earlier today. .

And with that, I'll turn it over to [indiscernible] beginning from Slide 3. .

Thank you, Matt, and good morning, everyone. It is my pleasure to update you on the meaningful progress we made this past quarter and our company's path forward. .

I was appointed interim CEO of 22nd Century in late July, and I am grateful for this opportunity at such an important time in our history. I believe 22nd Century possesses unique assets in both the tobacco and hemp/cannabis business to create meaningful value for the company.

This is what originally attracted me to 22nd Century last year, and my enthusiasm about the future has not changed. .

As interim CEO, my #1 goal is to grow the value of our assets while being fiscally disciplined. I am very pleased to report in our hemp/cannabis business, we had another record volume quarter as we continue to assert our industry leadership. .

In the first 6 months of 2023, kilogram shipments have already exceeded shipments for all of 2022, and we expect improved operating results in the second half of this year as we bring our internal production back online and move ahead with our Cookies and Old Pal license agreements. .

We have also made solid progress on the tobacco side of the business. We had some delays in our commercial plans earlier in the year, but we have quickly expanded both our state and store counts for VLN over the past couple of months. This includes our recent launch in California, Texas and Florida with the #1 U.S.

c-store chain and other retailers in those states. These retail placements are all supported by national and new regional distribution programs we executed earlier this year. Additional retail chains continue to schedule launches, including our first drugstore chain that will push us to over 4,000 stores in 16 states in September. .

In addition to making strides building our brand, we are also revising our go-to-market strategy to better maximize the potential of our product portfolio by prudently deploying our capital. Another important element I will share with you today is the way in which we have previously supported VLN is changing.

With our 16 to 18 state footprint, we are pivoting our VLN strategy to streamline operating costs, focus on demonstrating the new -- the unique brand attributes of VLN and drive performance to create value from this incredible product. .

Having considerable experience in this product development, I know it takes time and money to build a brand. Even after our brand is established in the marketplace, there are considerable resources required to keep the brand relevant.

The path to creating value with VLN is within reach with our new footprint and it requires a more targeted and efficient approach, showcasing how VLN as a brand of choice for adult smokers, who want to smoke less.

These changes in our strategy are part of how we are able to target over $15 million in annualized cost savings from our business, as noted in our July press release. .

Starting from Slide 4, let me dig into the tobacco business and our continued evolution of the commercial plan. Slide 5 gives key updates in our VLN rollout so far this year. During the second and third quarter, we have expanded our state and store presence, which now stands at almost 3,000 stores across 14 states.

We expect to surpass 4,000 stores in 16 states by early September with a drugstore chain launch in 5 states and the continued development of the diverse funnel of regional and national chain's interest in VLN. .

We are pleased with the progress we are making, bringing VLN into new states, yet we recognize the launch has not been without its delays. We experienced longer-than-expected lead times bringing on new C-stores as we don't often control the retail distribution timelines. Delays are typical for any product launch. Our launch is no exception.

But one thing is clear, retail chains recognized that adult smokers are interested in this product. Our expanded retail footprint now gives us the base and scale on which to prove out VLN as a brand, which is the full focus of our new marketing and social channel activity in the second half of the year. .

This campaign emphasizes positive motivation and empowerment as opposed to the typical negative messaging associated with anti-smoking campaigns. I'm pleased to report early returns on engagement and driving adult smokers to stores that sell our product are solid. .

We are also eagerly awaiting the FDA updates on its highly anticipated menthol policy, which is scheduled to be issued this month. Menthol is known to increase the addictiveness of tobacco products and menthol products have for years targeted higher risk and minority communities.

Banning menthol could be a transformative public health policy, but research and experience tells us that a menthol ban, absent an off-ramp product is not effective at reducing smoking and instead tends to drive menthol smokers to other traditional cigarette brands.

We believe a clinically and scientifically informed policy providing for nonaddictive off-ramp products such as VLN menthol can help these smokers truly cut back and they grow in progress. Millions of dollars have been spent on studies illustrating this fact, many of them used for our MRTP authorization and funded by federal health agencies.

This makes our product an ideal candidate from exemption. .

Turning to Slide 6. We began commercial efforts on VLN at the start of this year and made progress versus what is normal in industry even for established brands. Perhaps most important, you'll see a larger number of dark green states, where we have initiated VLN sales activity, including the 3 largest markets of California, Texas and Florida.

We now have line of sight to 16 states with our upcoming drugstore rollout, which will increase store counts to more than 4,000 locations. .

Much of this has been accomplished due to the national and regional distribution resources put in place early this year. It was an investment of time and money and added key chains quicker than we could have otherwise. This includes the 3 state corporate launch with the #1 C-store and upcoming 5-state drug store rollout.

Proving out the brand with these chains will be a major part of our second half efforts, where we are increasing our focus on maximizing market acceptance within our footprint as we continue to refine and update our strategy. .

Doing so will be the key to opening up new partnerships, licenses and other opportunities for VLN and other reduced nicotine products our technology can support. .

On Slide 7, the updates to our strategy are closely tied to what we have identified as key success drivers for VLN including awareness, education, trial, repeat purchase and advocacy as smokers see positive outcomes of VLN.

Early consumer data from our new marketing campaign continues to affirm strong product acceptance at more than 70% and a similar metric for VLN replacing their usual brand. An amazing 98% of the smokers are willing to talk about VLN with other smokers. .

Getting the word out is important, and our new campaign deploys an extensive tool set, including marketing communications, in-store activations, digital and social outreach, our brand website, consumer engagement, peer-to-peer marketing and PR efforts.

We are augmenting our brand activities with regulatory efforts to drive a more favorable environment for harm reduction products. We are pursuing commercial development towards partnerships and licensing opportunities that could further the reach of reduced nicotine products. .

Governmental outreach has been initiated to educate and inform on the need for policy driven by science that build on good clinical research to reduce the harms of smoking. And marketing campaigns have launched to create a more favorable environment for adult smokers to choose a lower nicotine future. .

Slide 8 illustrates some of the new marketing campaign elements to reach adult smokers. Much of this is driven by targeted social and digital marketing, especially in channels where we can identify a likely smoker or person interested in reduced smoking, including influences with smokers, such as family members. .

As you know, VLN is a very different product from traditional FDA-approved smoking cessation products. It recognizes that smokers are not just addicted to nicotine, but also the act of smoking itself.

We want adult smokers to learn that VLN offers a new, positive and optimistic approach to reducing smoking that gives them flexibility to keep moving forward with their health goals even if they have a setback. .

We empower smokers to confidently and capably take control of their habit, break the nicotine addiction and then move away from the behavior. This education process takes time, and it's definitely a different mindset from traditional cessation tools, but a welcome new idea to many adult smokers who want to smoke less.

Early data in key markets show that our campaigns are driving VLN messaging to interested adult smokers. .

We're seeing high impression and content viewership rates and strong click-through rates as well as data demonstrating that the campaign interactions are creating store visits from potential VLN consumers. This and other data allows us to build efficient campaigns in the specific markets. .

Moving on to Slide 9, we'll discuss Pinnacle, a private label conventional product that we contract manufacture for a top 5 C-store chain. Pinnacle is positioned as a well-crafted traditional cigarette attractively priced versus other well-known brands.

For those not yet ready to cut back or quit, Pinnacle offers a high-quality reduced cost option and is now available across more than 20 states in 1,200 locations. Early sales are good, and we look forward to the retailers' efforts to increase share and drive additional volume.

Pinnacle can also help pave the way to other private label brands and placing VLN products in these partner stores. That wraps up my overview on our tobacco progress and the revised strategy. .

Starting from Slide 10, I want to spend a few minutes on our successful and growing hemp/cannabis business, where we are now in position to further improve operating results with the turn of our in-house -- with the return of our in-house manufacturing capabilities. .

On Slide 11, GVB continues to assert its market-leading position for the supply of hemp-derived active ingredients and finished consumer packaged goods. We've built a solid global footprint, providing opportunities for further market growth as this industry becomes more mainstream in multiple markets.

Sales have ramped strongly and we believe will continue to do so, proving an important opportunity as we resume in-house production at our new facilities. .

In addition to record volume and the return of vertical manufacturing, we now have multiple additional growth and improvement vectors.

These include our new license and distribution agreements with major brands such as Cookies and Old Pal, the launch of our own hemp extraction capability rather than purchasing extract from third parties, and our first direct biomass contract growing program. This will help to reduce cost and transfer more margin to 22nd Century.

Putting all these pieces together, we believe our hemp/cannabis business is now firmly on a strong trajectory in an exciting new global growth market. .

Slide 12 details our record-setting ingredient volumes. I'm pleased to report that this quarter, we delivered more than 76,000 kilograms of ingredients. That's 3x what GVB delivered in the same quarter last year. Additionally, for the first half of 2023, kilogram sales have already exceeded 2022 deliveries. .

As you can probably surmise, this has put us in a strong position in the North American hemp/cannabis extraction business. Our decision to ensure we maintained all customers' deliveries during the rebuild is paying off, even though we incurred a margin cost that has directly impacted our cash flow models and cash position. .

As noted in today's press release and 10-Q, we believe our business interruption insurance will cover a portion of these losses, which were estimated at $2.4 million in the most recent quarter alone, and we have initiated litigation to protect our interest in this matter. .

As our capacity comes back online, we expect our margins will return to positive territory and even increase through internal optimization efforts already in motion. This is an important point to reiterate as it provides true gross profit dollars to offset operating costs, where we have not been able to do so for the past 9 months. .

On Slide 13, we're also moving into the implementation phase of our license and distribution agreements with Cookies and Old Pal. These exclusive agreements cover branded, hemp-derived cannabinoid consumer products and accessories, uniquely in the industry.

22nd Century can provide a single source of integrated supply, production, sales and distribution, leveraging our industry-leading formulation, ingredient and manufacturing infrastructure plus a comprehensive sales and distribution platform. .

With 22nd Century providing these functions, the brand can fully focus their resources on product and market development, help them to grow a new market characterized by high-margin, high-velocity products that fit perfectly into the existing C-store and specialty channels that already serve the targeted consumer. .

To summarize, our GVB business remains strong. We are now well positioned to drive improved operating performance to generate cash flows to better offset our operating costs and improve total corporate performance for our stockholders. .

Now I'll turn the call over to Hugh for a detailed review of our financial results on Slide 14. .

Thanks, John. Starting on Slide 15 with the second quarter financial results. Net sales increased by 61.8% year-over-year to $23.4 million, reflecting the addition of GVB revenue and increased unit sales of our hemp/cannabis bulk ingredients.

This was partially offset by lower tobacco revenue as a reallocated production resources away from lower margin filtered cigars and towards higher-margin VLN and conventional cigarette products. .

It should be noted we had approximately $600,000 of shipments intended to be recognized in the second quarter that will instead be recognized in the third quarter due to shipment timing around the 4th of July holiday.

And as John referenced, we had updated our full year revenue outlook to a range of $80 million to $90 million to address changes in our VLN launch timing and retail rollout strategy. .

Gross profit decreased to a loss of $2.3 million, reflecting lower filtered cigar revenue as we shift production mix at our NASCO facility, along with the impact of reselling bulk ingredients for hemp/cannabis products until production facilities are fully restored.

Gross profit is expected to improve going forward with higher margin product mix for tobacco and completion of hemp/cannabis extraction and distillation facilities in Q3 2023. .

Moving to Slide 16. Tobacco revenue for the second quarter decreased to $8.1 million from $10 million as we shifted production mix away from low-margin filtered cigars and towards higher-margin CMO store brand and VLN products. Gross profit margin on tobacco sales decreased reflecting this transition, which we expect to improve going forward. .

Moving to Slide 17. Hemp/cannabis unit sales for the second quarter grew almost 3x year-over-year to $15.4 million in revenue, reflecting continued strong customer demand for the company's bulk ingredient products. Gross margin was impacted by recent activity required under our new facilities until our [ newer ] facilities are restored.

Both extraction and distillation capabilities are now both online, which will enhance gross margin in the second half of 2023 and we are also contracting biomass cultivation to further increase margins later in the year. .

And on Slide 18, you'll see a few key highlights from our balance sheet. Quarter-end cash balance is approximately $12 million, which does not reflect the benefit of almost $15 million in gross proceeds from our July 2023 equity raises as well as cash we expect to be recouped through our business interruption claim.

And it should be noted, we still have not received business interruption proceeds due from our insurance provider. 22nd Century's cash requirements are anticipated to decrease, reflecting improved gross margin profile as well as our cost reduction initiatives. .

And with that, I will turn it back to John for closing comments and Q&A. .

Thanks Hugh. On Slide 19, as you've heard today, we continued advancing on our goal to increase the value of our brands. Despite the timing issues on the VLN rollout, we have doubled its availability in just the last few months. We believe we will be able to demonstrate that the VLN brand will play an important role with consumers who smoke. .

By demonstrating that value, we will be able to better capitalize on the potential of VLN. Furthermore, we are delighted to be back online with GVB manufacturing, which brings us significantly higher production capacity and improved economics. Our GVB business may be underappreciated by some of the investment community, but not by us.

The growth is dynamic and the market opportunity is large. That, combined with demonstrating the potential of VLN and our focus on cost reductions enables us to continue endeavor to build the value of our proprietary technologies in the near term. .

Last, I'd like to thank all those at the company for their contributions and continued dedication this quarter. With that, I'd like to ask the operator to open the call for Q&A from our institutional research analysts. .

Thank you, sir. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Your first question comes from the line of Vivien Azer from TD Cowen. .

I'm just going to start with the tobacco business, please.

As we think about your revised outlook from a revenue perspective, can you help dimensionalize what you think the mix is going to be between VLN, Pinnacle and the deprioritized filter cigar business?.

Yes, sure. Absolutely. Thank you for the question. We're not providing detailed guidance right now according to product line within the tobacco revenue, we typically haven't done in the past.

So right now, we're just not in a position as we're rolling out -- continue to keep rolling out and getting more density in the markets to provide that level of granular detail. .

Okay. That's fine, but maybe I'll try it a different way because if our math is right, we're showing that your tobacco cartons sold declined 46% year-over-year. Your price per carton was up 49% year-over-year.

So I'm just wondering whether we're just seeing that you guys have taken pricing because competition has taken pricing? Has there been underlying mix shift that has driven that price per carton growth? Can you offer any incremental detail on that?.

Sure. Yes, definitely. There -- we're -- it's not so much a price of market share issue, as it is just an overall decline in demand across the board industry-wide for the filtered cigar business. So it's something that we began to see in Q1. It's been sustained throughout the year. .

Typically, what's happened in the past is in the first half of the year, filtered cigar unit volume demand is sluggish, reflecting probably accelerated purchasing in the fourth quarter. And then what you'll normally see is starting in late Q2 going into Q3, a significant pickup in orders. .

But we haven't seen that so far. So we're being pretty conservative about the forecast going forward in terms of guidance just because -- until we start to see that type of unit demand pick up again, we want to be relatively conservative going forward. .

Okay. I appreciate your comment on conservative and I'll just squeeze one last one in before I turn it back over because it does seem like that was the real deficiency, right, in establishing guidance and now the full revision.

While I appreciate the timing of retail rollout certainly can kind of move from quarter-to-quarter based on something like 4th of July, which you called out. .

But it seems to me that perhaps there was an excessive amount of optimism around the rollout of VLN. It's -- if you're a larger company and you're launching a new beer brand, say, you can get 95% ACV in 6 weeks.

So is this just a function of you guys overestimating the negotiating leverage that you guys have with retailers given your relative size and the newness of the product? Or was there something else?.

Yes. Hugh, I'll take that. Vivien, to your point, if you're a large beer company or Altria, there's -- there you can absolutely get distribution quicker. I will tell you that we've really started moving into the 3-tier system at the beginning of the year. And to be able to achieve distribution in Core-Mark, [ McLean ], E.B.

Brown, which are 3 of the 4 biggest distributors, certainly expand through Circle K getting into the #1 C-store chain in the United States, the #1 drugstore chain. .

I know that seems like it was kind of slow to ramp. But quite honestly, the progress we've made, I think, has been actually pretty good. It just does take time. I mean, when you're a brand-new company going into a category, there are just things that you have to overcome. .

Now those -- once you're past those hurdles, especially on the distribution side, and with the major accounts, you don't have to go through those hurdles again. Those -- and those hurdles aren't consumer acceptance. Those could be insurance claims. Those could be some other logistical issue that the chain has. So we're past that. .

It did take a little bit longer. There's no doubt, not necessarily on our side. But those are things that I've talked about in my opening comments about they're not our controllables. And quite honestly, when you talk to the retailers, they're pretty impressed with what we've been able to do in a relatively short amount of time. .

Yes. But if it's outside of your control, then it's incumbent upon you guys to handicap what you're securing from the retailers.

So how have you guys adjusted your approach to handicapping what you're hearing versus what you think actually might materialize?.

No, we -- yes, totally understand that. I mean -- and we understand the different hurdles we have to go through. We know we can only do what is promised to us by the chains. And again, there's hurdles there you overcome. There's things that happen internally in some of these organizations that you have mergers, acquisitions.

You have multiple variables that impact distribution. .

And again, I will say that to get into -- we're going to be in 16 states by the end of September, over 4,000 stores and growing with a clear definition and path forward, we feel it's pretty solid, and we're getting there, and we continue to have more and more [ interest ]. .

[Operator Instructions] Your next question comes from the line of Jim McIlree from Dawson James. .

If I can just follow-up a little bit on Vivien's line of questioning. She was -- you answered her question by saying that you faced distribution issues and your past those now.

And my question is, are you past those issues for the current retailers at the current locations, but you will continue to face those issues or similar issues for new retailers or existing retailers at new locations?.

Again, as we continue down this path, Jim, of distribution and talking to these key retailers and understanding their goals for the category, understanding what's happening within their framework of their stores, we continue to keep learning. .

Our success continues to be based on being persistent moving forward with these accounts. We feel very comfortable in where we are and how we're getting there. So it's a challenging environment, and everyone knows that. We just continue to keep getting our story at about VLN, about what makes it unique, the attributes of the product.

People are very interested in these marketing programs we're doing. They're very interested in how we're targeting the consumer. .

So all of those things are driving the interest, and we're going to continue to keep building distribution. I don't know if that answered your question, Jim, but it's very fluid and we keep going. .

All right.

And is it fair to say that the change in the revenue expectation is mostly attributable to VLN?.

Yes, Jim, that is a yes. That's correct. It's mostly attributable to the delay of the ramp in VLN, as John described. .

Okay.

And can you talk a little bit about the cost-cutting program, when you think we'll be able to see the effects of that? Is that something we're going to see a little bit of in Q3 and the full effect in Q4? Or is it more extended or shorter than that?.

No, it's going to be shorter than that. You'll see a meaningful impact in Q3, you'll see the full effect of it in Q4. We initiated all those cuts basically 1.5 weeks, 2 weeks ago. So that's my start of the cuts. So starting in the beginning of August is when you'll start to see the impact of it.

So you'll see a fairly meaningful impact in Q3, and you'll have the full effect in Q4 going forward. .

Okay. And then just back on VLN for a little bit. I'm trying to understand a little bit of the relative impact of what you're talking about in terms of the rollout that is coming from, I guess, John, what you've been described -- you've described as a challenging environment versus the cost-cutting program.

If you can just try to help me understand which has the bigger impact on the change in the revenue outlook?.

Well, I think, Jim, what we're talking about -- do you want to start it? No, go ahead. .

No go ahead, John. I'm fine. .

Okay. I was going to say in the opening comments, Jim. We talked about the footprint we've been able to establish, those 16 to 18 states. We know what the path is to the consumer with awareness, education, trial, repeat purchase and advocacy.

Once we've had -- been able to establish the product now in these markets, especially the key markets like Florida, Texas and California, right? Those 3 states are significant. They're the top 3 state in the country for cigarette volume. .

So as we continue to establish our footprint there, moving out to the other states, proving our brand.

And what we've learned over the last 9 months of commercialization, all of this is playing into our discussions and pivots on what we need to do, understanding the consumers' behavior, understanding if you see -- if you saw in our marketing campaign about the optimism and how it's so much different than the other anti-smoking campaigns, all of that is now playing and being laid into our marketing plans.

.

We also know that we can do this in an efficient manner, that some of the things we initially thought we might have to spend on, we don't have to spend on. And there's continual learning around these that allow us to drive efficiencies and get the message out in a much more effective way. Go ahead if you have any follow-ups. .

No, I'd just reiterate that as well. I think it's just they're making a more target -- concerted targeted effort. And I think it's just the natural sort of delay in the -- when you're trying to get penetration with some of the retail clients. .

Your next question comes from the line of Aaron Grey from Alliance Global Partners. .

This is [indiscernible] on for Aaron Grey. My first question is for the gross margins. So they've continued to worsen. And while we understand there is some one-offs from the flyer and gross margins would have been roughly breakeven ex to that $2.4 million impact, we're now seeing negative gross margins in the tobacco business.

So I know in opening remarks, you made out some initiatives to help improve gross margins.

Would you provide some specifics on where -- has you expect gross margins to trend in the next few quarters? And which of the initiatives will be the primary drivers of that gross margin expansion?.

Thank you for the question. Really, the main issue with tobacco is the lower volume and the filtered cigar revenue.

Basically, there's fixed overhead and need throughput in order to cover expenses and as volume decreases, there's just been embedded expense that's incurred and that's why we're shipping our product next to where we're going to have more throughput and better margins and increase the overall margin profile of the business going forward.

That will be a big driver in improving margin enhancement for that business unit. .

And then again, for the hemp/cannabis business units really just restoration as each sequential production capabilities. So we have extraction fully online right now. We have distillates fully online right now and then we expect our isolate capabilities to be fully online in Q1 2024 basically taking to meet that timeline.

And that's a really big driver. .

The cumulative effect of that is not to mention our biomass cultivation effort is significant.

So we're not providing detailed guidance going forward, but there's gross margin enhancement of, at least, call it, going from breakeven for hemp/cannabis with the adjustment, you should be at the, call it the high-single digits, low-teens towards the end of the year and then moving -- doubling that going through 2024 as you restore your isolation. .

Tobacco is more of a moving target just we're going to continue to change the product mix and reallocated resources to higher-margin products, but we expect that margin to improve going forward as well. .

Great. And then my second question in regards to sell-through for VLN. Could you provide any additional color on any retention rates or market share in some of your legacy markets? I know you previously spoke to kind of the 1% share in some of your original markets.

So any commentary on those trends in existing states would be appreciated?.

Yes. We're still tracking those things. And those are the metrics now that we're really starting to look at in terms of as we initiate these marketing campaigns. .

If you look at the process of getting into a store, you have to get your distribution set up then you get your introductions. Once we've gotten store density, which we do have now in specific markets, then you can start launching the bigger marketing campaign. .

We knew one of our biggest issues to pull through and volume was awareness and education, truly educating consumers about what this product is. Some of the better data I have is on what's happening in the digital marketing side with click-through rates, impressions, connecting with consumers. .

Our volume has remained obviously stable. Consider the -- all of our initial retailers continue to carry the product. But now we're starting to see this as marketing ramping is where we're going to have the biggest impact. So that's where we are. I don't have really any more information to share on that.

These programs are now starting, and we're starting to see the pull-through more and more. .

[Operator Instructions] There seems to be no further questions at this time. I'd now like to turn the call back over to Mr. John Miller for any closing remarks. .

Well, thank you, everyone, for joining us today for the call. We appreciate the continued support, and please continue to look for more updates as we continue to move both of these businesses forward. Thank you, and have a good day. .

Thank you, sir. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day..