Earnings Transcript for HCANF - Q1 Fiscal Year 2022

Operator: Ladies and gentlemen, thank you for standing by and welcome to the Halo Collective First Quarter 2022 Earnings Call. All participants have been placed on mute to prevent any background noise. [Operator Instructions] Thank you. Katie Field, President of Halo. You may begin your conference.

Katie Field: Thank you. Good afternoon, my name is Katie Field, and I'm the President of Halo Collective and I will be your conference moderator. At this time, I would like to officially welcome everyone to the Halo Collective Q1 2022 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session based on question called by our communication team. In addition to myself your speakers on today's call will be Kiran Sidhu, Co-Founder, Director and CEO of Halo Collective and Marshall Minor, Interim Chief Financial Officer of Halo Collective. Before we begin, I would like to remind listeners that certain statements made during this conference call presentation may constitute forward-looking information and forward-looking statements within the meaning of applicable securities laws. These statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of Halo Collective and its subsidiary entities or the industry in which it operates to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this conference call presentation such statements use words such as may, will, expect, believe, plan and other similar terminology and include among others, statements regarding expected operating results, future growth anticipated capital expenditures, corporate strategy and proposed acquisition. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date hereof. Important factors that could cause Halo's actual results and financial condition to differ materially from those indicated in the forward-looking statements, include among others, changes in the consumer market for cannabis products, changes and expected outcomes of the proposed changes, Halo's operations, delays in obtaining required licenses are approvals necessary for the build out of Oregon operations. The proposed spin out with Halo Tek delays are unforeseen costs incurred in connection with construction. The ability of competitors to scale operations in Northern California, delays are unforeseen difficulties in connection with the cultivation and harvest, Halo’s raw material, changes in general, economic, business and critical conditions, including changes in the financial markets. These risk factors are discussed in detail under the heading Risk Factors in Halo’s Annual Information form dated March 31st 2022 and Halo’s additional disclosure documents filed on SEDAR. New risk factors may arise from time-to-time and it is not possible for management to predict all of those risk factors were the extent to which any factor or combination of factors may cause actual results, performance or achievements to be materially different from those contained in forward-looking statements. Given these risks and uncertainties investors should not place undue reliance on forward-looking statements as a prediction of actual results. Although the forward-looking statements contained in this presentation are based upon what management believes to be reasonable assumptions Halo cannot assure investors that actual results will be consistent with these forward-looking statements. The company undertakes no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise other than as required under securities legislation. In addition, throughout today's discussion Halo will refer to non-IFRS measures that do not have any standardized meaning prescribed by IFRS such as EBITDA and adjusted EBITDA. Management believes non-IFRS results are useful to enhance the understanding of company -- of the Company's ongoing performance, but are not supplemental to and should not be considered in isolation from or as a substitute for IFRS financial measures. These IFRS measures are defined in our MD&A filed on SEDAR, which also includes the reconciliation of these measures to the most comparable IFRS financial measures. I will now turn the call over to Marshall Minor, Interim Chief Financial Officer.

Marshall Minor: Thank you, Kate. I would like to start discussing the overall operating performance for the -- operating and financial performance for the company for the first quarter, the three months ended March 31st 2022. Total revenues were approximately $7.6 million with a gross margin of 18.7% which means revenues were down 24%, compared to the previous quarter of 2021. Collectively, the company sold 4.4 million total grams in Q1 of 2022 versus 5.7 million grams the comparable quarter in 2021, representing a 17.2% decrease. We sold 929,000 grams of flower for Q1 a 21% decrease, compared to the same quarter of last year. Pre-rolls, we actually sold 647,000 grams pre-rolls, a 20.1% increase. There were no trim or fresh frozen sales for the quarter. Oils and extracts we sold 1.206 grams for the quarter, a 51% decrease, compared to Q1 of last year. Edibles we sold 128,000 grams of edibles, an 18% decrease. Overall Oregon revenue of $4.9 million was achieved with a gross margin of 13.8% and an adjusted EBITDA loss of $1.2 million versus $7.8 million of revenue achieved in Q1 2021 with a margin of 18% and adjusted EBITDA, adjusted EBITDA loss 405,000. For California revenue was $2 million versus gross margin of 20%, adjusted EBITDA -- positive EBITDA of 103,000 versus $2.1 million of revenue in Q1 of 2021, let's say 25% margin and adjusted EBITDA loss of 248,000. Kushbar create contributed positive to the quarter, our January revenue of 637.5,000 revenue with a gross profit of 205k with a 32.2 gross margin. For operating expenses company had overhead of $10.6 million for Q1, which is actually a 3% decrease compared to Q4 2021. We will continue to reduce operating and corporate overhead, which will address later in the call. For EBITDA, EBITDA that we experienced EBITDA loss of $9.4 million adjusted EBITDA loss of $3.9 million, which is adjusted for the fair market value of inventory and COGS, non-cash items related to payments to staff and services and biological assets. For cash flow, the company experienced a net cash flow loss of approximately $13.8 million. We had an increase in working capital of $4.9 million and adjusted non-cash items for north of $9.1 million. For the quarter, the company raised approximately $10.4 million in financing. For our balance sheet and liquidity items as of March 31 2022, the company had roughly $1.9 million of cash on hand on its balance sheet. Total assets were roughly $118 million versus $105 million at year-end of 2021. Total liabilities came in around $37 million for the quarter. FERC as of March 31, 2022. For the quarter ended March 31, 2022, the company issued collectively for the quarter 43.5 million shares. Currently, the company has 49 million shares currently outstanding. The current book value of the company is $80.7 million or $1.65 per share. That concludes the financial overview for the first quarter of 2022. And I'll turn it back over to Kate.

A - Katie Field: Great, thank you, Marshall. All right, now we will proceed with the question-and-answer portion of the presentation, and I will be allocating the questions to each of the participants on this call, including Kiran Sidhu, our CEO. So Kiran the first question is for you and it's regarding the share price of a condo and essentially what has happened recently and how we're monitoring it?

Kiran Sidhu: So the -- as we are a significant shareholder of condo we have post questions to them. And really a lot of this should be directed directly to them with fill up moving, planning to move on to Halo Tek and resigning from our Board. Currently, we don't have board representation at condo. And as I said, it would be more appropriate for condo to answer those questions and Halo at this time.

Katie Field: Great. Okay, I guess before we get into other specific areas of the company Marshall, we can talk a little bit more about some of the financial results. One question here is about the legal fees incurred in the recent quarter. Wondering we've talked about in an area of potential reduction, but specifically what was -- we will see related to this quarter? And it is something that do we think could be over time?

Marshall Minor: Sure for legal fees for specifically for Q1 2022 majority of the legal fees are related to the Halo Tek spin-off some M&A activity. So going forward we shouldn't -- should not see a legal fees at these levels.

Katie Field: And Previously, your predecessor Philip van den Berg talked about the plan to reduce the company's overheads, that's something we talked about on our last earnings call. How do we plan on carrying this forward? And what are some other opportunity areas?

Marshall Minor: Sure. The company is in the process of identifying and reducing both operating and overhead costs. California wholesale business achieved positive EBITDA this quarter and we expect to see an increase in Q2. Oregon wholesale business is undergoing restructuring and we should see positive EBITDA achieved in the second half of this year.

Katie Field: Okay, great and then one other question was regarding interest expenses and essentially, whether the fact it was greater than the company in gross profit it's just going to continue. What is our plan in terms of interest and financing and our ability to meet those obligations?

Marshall Minor: The company has focused solely on revenue growth and cost reduction for the back half of this year and going forward. With the revenue growth and cost reduction the access to non-cash interest financing, this will help the Company thrive and survive going forward.

Katie Field: Great. Okay, so Kiran going back to some of these specific topics investors were asking about they are wanting to know more about Halo Tek and concrete realistic time horizon for the spin-off. Can you give us an update on the status of the Halo Tek spin-off?

Kiran Sidhu: Well I believe the long-form prospectus has been filed with the OSC, we should be getting comments back probably within the next four weeks, depending on how much to and fro, there is with that. It could take as long as six months and as short as three months, right? But again, it's with the regulators, so you really don't know, those are forward-looking statements. Obviously, we're going to try to expedite it as we said, Philip is going to be running it right now, he has financial commitments. And I think another question came up, where do we intend to list it, it will be listed on the CSC. And we are splitting it out by way of a shareholder dividend.

Katie Field: Okay, great. Thank you. One question submitted was about the SAFE Act and whether it's going to help us potentially reduce security problems for retail, for example. And in general is it's going to help the company. So I think Marshall and I can probably both speak to this a little bit. The first thing I would say is just to specify Safe Banking doesn't directly involve security per se, it more has to do with a Safe Harbor to giving federal depository institutions and credit unions from federal prosecution and thereby increasing their likelihood and the types of services they are able to offer to marijuana and marijuana-related businesses. So just essentially even though we have access now to some of these services for essentially credit unions mainly other limited access with banks, the SAFE Act will make that more broadly available and not just for Halo, but for any cannabis company reduce our dependence on cash-based transactions and deposits and that sort of thing. So in a peripheral sense, the sensory not just Halo’s but any dispensary will be less of a target in a sense they won't have as much cash on site in theory, but we already have some access to that, so we are -- at lease me and then I'd like Marshall to comment on this as well. Bright Seed is having more of an effect for us is the fact that access to capital is going to be broader potentially at lower interest rates and working capital and that's something that companies across not just Halo, but any company we have not had such access. And so to me the SAFE Banking Act is very valuable for that reason. And overall, the cost of compliance and maintaining accounts should go down as the SAFE Act provides a Safe Harbor and Banks get more comfortable essentially less means some of the compliance, lessening the costs that the marijuana businesses have to bear at the present time. So look, we all agree this is going to be a great thing, but in terms of retail security we don't really -- it's not for that purpose and I wanted to clarify that. So, Marshall, do you want to comment on the SAFE Act and whether this is the positive or negative what we see is valuable for us.

Marshall Minor: Yes, from just adding Katie’s point this is all the positive for the company and the industry. One is we have access to just traditional banking services, which will lend us to have more access to different forms of financing, traditional forms of financing versus some of the expensive forms of financing at the cannabis industry is subject to, as well as reducing cash exposure at the company helps with -- compliance helps with our financial reporting and our auditing as well.

Katie Field: Exactly. Okay. So Kiran, we are going to shift back to you for a second, this question is on Phytocann -- and why that we announced recently I think investors are wanting to know a bit more about the Phytocann deal, how it can benefit the shareholders, benefits the company rather benefit the company? And how we proposed to go about executing it with the upfront payment EUR12 million. I think everyone needs to understand the structure better.

Kiran Sidhu: Okay, but fair enough. So first of all, Phytocann is a profitable business based on unaudited preliminary 2022 numbers and based on Swiss statutory GAAP audits in 2021, it does approximately -- it will do approximately just roughly speaking, EUR6 million of revenue last year and EBITDA of around EUR2 million revenues, but it's profitable, all the way down the line to profit after tax. Okay, and that's an important fact and how we're doing this deal. So with EUR12 million realistically today just assume conservatively our market cap is $10 million ironically one-10th of our IFRS book value after impairments. So just looking at that, the most stock that we would ever be able to providing that transaction would be less than CAD2.5 million or roughly EUR2 million unless we go to a shareholder vote. The -- so the remaining let's say EUR10 million is being done in a traditional leverage buyout format where we will issue a note to Phytocann’s shareholders secured by the assets of Phytocann itself. As well as the -- as well as 90% of the shares we will own in Phytocann through a potentially through an intermediate holding company. So therefore it would be out of $12 million, roughly $2 million would be an equity and $10 million would be in debt, so it's highly levered. Now that debt has absolutely at this point contemplated no recourse to us at Halo, similar to the UVI mortgage similar to other deals we've done. It does it really -- it really if something happened with Phytocann and the debt was being -- was unable to be repaid, it would not have recourse to Halo collective legally. Then the note will be serviced itself by free cash flow from Phytocann, if Phytocann does not have sufficient free cash to service the debt, then that will be deferred, that is what we're contemplating. When Phytocann is combined with us, which we're targeting sometime over the summer, subject to regulatory approvals. It is going to have significant impact to our revenues provided that they continue to grow at Phytocann, and it will have significant impact to our EBITDA it will be operating, it will be profitable. And then it's a really good acquisition we've done some, I would say hands on due diligence on it. And you know it's the business at this point appears to be 100% legal and the two larger markets they serve which is Switzerland and France. And it's a good point.

Katie Field: Right, because we're going to be able to consolidate the company's financials.

Kiran Sidhu: Of course, because we're going to own 100% of it. Despite it being highly levered, correct.

Katie Field: Okay, great. I think that's going to be helpful clarification based on the questions that we were hearing about on our Investor Relations channels.

Kiran Sidhu: Yes, obviously we want to avoid using equity. Yes, in any future acquisitions given the fact that we're trading at a 90% discount to book value, and that's not book value with anything mark to market, that's actual cost with auditor impairment.

Katie Field: Right.

Kiran Sidhu: The other thing people have to realize is even though it's not a statutory requirement everyone of our quarters is reviewed by our auditors Davidson and Company, right.

Katie Field: Right.

Kiran Sidhu: So these are numbers that we are preparing in some, sort of, vacuum.

Katie Field: Right. Yes, all of our quarters they have reviewed.

Kiran Sidhu: Right at this point, correct.

Katie Field: Okay. No, I think that's helpful and I think there was actually another question that we had received, which is about should we do acquisitions in the future? How are we going to pay for them since many of them that we've done in the past have been very stock based? And you mentioned that, look, we don't have to just pay in stock as with the market cap being what it is, we can use cash to some extent, we can use seller carry financing and our different types debt. And so those are the structures that we're contemplating.

Kiran Sidhu: Correct.

Katie Field: As evidenced by Phytocann and do you have anything else to add to that?

Kiran Sidhu: Yes, but I mean we're really focused on deals like Phytocann and we're evaluating others and we want those deals to have the potential of being able to be spun out on senior exchanges and the other area that we are looking at or emphasizing now and it's the only other area we're really emphasizing now is dispensaries in California. It seems that out of all the segments as we know the markets have significantly downturn in California in particular, but dispensaries have seemed to weather the storm better.

Katie Field: All right, they are well saturated there.

Kiran Sidhu: Right, and a lot of the companies our size have gone out of business. Definitely in California, which gives us a real sweet spot, whereas there are lot of larger MSOs, many of which are reversed to California. But they're not a lot companies our size out there bidding on profitable or near profitable dispensaries, you know, one-off or two-off, which is again our sweet spot. And so if we can do it with the combination of cash instead of carry with negligible or no equity, it could be very accretive to all shareholders. But there's no assurance any of those could be at this point can be completed.

Katie Field: Right. So getting back to this whole discrepancy between market cap and book value how -- what is our sort of official position as management that can explain that? I mean, obviously there are general market conditions, the war, COVID, potential recession, federal legality of cannabis, those factors that affect all companies. But you know for both Kiran and Marshall, do we have any other theories on those? Why the book value and market cap have diverged?

Kiran Sidhu: I’m 57-years old and I've been in investment banking, since the age of 20, when I graduated from Wharton. I have never seen such a large divergence in my career. I actually went through a similar sort of situation, it's just more analogous, when group of us three friends formed a company that we floated on the LSE Aim at the turn of the century called Nano Universe and our net asset value publicly traded fell 20% below our cash and at that point we immediately were subject to an untendered bid and inevitably capitulated to it. But I've never seen anything like this. And it's a staggering divergence we haven't looked at liquidation value, anyone on this call can do a tangible net book value, but you're looking right now, when I look at the numbers today at 90% discount, which is absolutely staggering and theoretically by the book there has to be a convergence and if you look at our numbers Q4 over Q1, sequentially they're much improved, and we hope that Q2 will also be much improved. And so that would actually have a positive effect on book value. So I don't see book value going down in the short to mid-term just based on my observations. Marshall, you have anything to add?

Marshall Minor: No, I mean, I totally agree, that's the difference is not, let's say easily explainable or logically explainable, I'm kind of dumped out as well, but I agree with Kiran like, you know, our book value of assets is roughly over $80 million, and we have significant value within this company. So going forward, I do believe that we’ll go forward and kind of achieve our strategy and our targets essentially help create value.

Kiran Sidhu: Yes, the other thing is our book value in a Akanda, is below a Akanda’s current closing price of $1.6 just to give you some perspective, so that $80 million figure really is not inflated by any sort of Akanda value.

Katie Field: Yes.

Kiran Sidhu: Yes.

Katie Field: Okay, great. Let's see if we have another question here about shrinking company overheads, I think Marshall commented on it earlier. We do think there will be some modest reductions that can be made in some staff at all levels in the company, but really the largest opportunity areas, were in legal, class, professional and travel. So we're going to continue to look at that and implemented. Another question let’s see was asking more about Philip’s transition and Kiran you and Philip have worked together for a while.

Kiran Sidhu: Yes.

Katie Field: So can you talk a little bit more about his departure and exactly what he's doing now in terms of Halo related businesses and how we are going to continue to work with them going forward?

Kiran Sidhu: So, yes, I've known Philip for quite a long time, it goes all the way back to Gibraltar and the days of party gaming, where Philip actual managed substantial amounts of money for us. And then, Philip and I came across the U.S., I invested and Philip became the CFO of one of the first, if not the first U.S. company ever to go public in Canada, which is now called Chalice Farm's, then Philip and I worked on a company called Everyone Does It, which we vended into the must day when that stock was $0.20 and then we founded Halo, and Andreas is chicken coop, and I think 2016. Philip really wanted to go off and work on Halo Tek, he sees a lot of opportunity there. He is evaluating his own targets and defining his own path, we speak I would say once or twice a week and he's very optimistic about that business, and he's been very, very I think so Marshall can speak very helpful in transitioning helping with Marshall with the trends, with his transition, so yes, you know, everything there is extremely amicable and obviously as shareholders of Halo for myself, I hope Halo Tek does well and I hope Philip does so well with it, even though we can assure anything would happen. But I hope that you will do well with it.

Katie Field: Yes, no, I think that something to just keep in mind is that Philip is kind of always been involved with the Halo Tek related assets and from the time that we acquired them, so for me, it’s almost a natural transition and he is a -- not just financial leader, but he is a leader, he’s an Executive and leader, if not just for Halo, but it could be for any company. So for me, this is a boom talking about tax that he will be fundamentally involved in at the helm of that company, it’s great. And lucky to have him, so they will be lucky to have him as we proceed through this, so let's see here. We're kind of nearing the end of the questions that were submitted, questions were submitted regarding triangle and again the intention is to grow at market condition. And an overall update on local permitting. So essentially we've already -- we don't have any updates on what we've already released, other than not really an update, but recapping again what we've already believed, we intend to grow its local permitting i.e., a local major use permit is obtained and we're still waiting on that we don't really have an update and we will provide it when it's available. Again, we have the provisional state licensing, but for us to be fully operational, we do need that major use from it. There is also a question regarding, whether there is restructuring with management and our partners and their involvement? And honestly we don't know where this question is coming from, our partners are still very much involved and they are on board, so the delay has nothing to do with anything than what's already been disclosed, which is local permitting. So all we can really do is hope to the past and provide everyone updates as we have done.

Kiran Sidhu: Yes, but looking at this retrospectively, and I would say it's more luck than fortitude, can -- I mean, Cannabis prices have collapsed in California and if we actually were able to execute on Bar X, it could have literally been again, speaking in attitudes the depth of us, and we've heard estimates that California has overcapacity of 15 times, in terms of cannabis, so that's something to tread very carefully on and we always have that asset value of the land in and of itself and so in many ways in retrospect it wasn't really a negative that was not executed.

Katie Field: I definitely agree with you Philip here, for sure. That was not -- with its previously year’s harvest, but and look at it will take some time for the market to rebound and potentially not even fully rebound, until there is more -- there's interstate commerce, which who knows when that will be possibly.

Kiran Sidhu: That’s true.

Katie Field: So the point is, though that, I think we all should local permitting be achieved, we would evaluate how much of a growth to do, and we can probably do something, but we would necessarily rush into it to do the whole thing. It would really need to evaluate capacity in the market decline, wholesale prices and good news is that there, we have our finger on the pulse of that, which really do, I mean there are data available to us and ground in the market and we know that the prices are, so we can make an intelligent decision should that time come to pass. But unfortunately, we're still waiting for the approval. So that is the best update that we have on that front. Next question, and then I think we basically answered, what was submitted, we're getting into the top of the hour here. Question about Winberry and the Winberry business segment, dropping 82% year-over-year. So this question, I think Marshall, you're familiar with the way all of that work in subsidiaries, function and relationship to each other in intercompany. So I'll let you take this one.

Marshall Minor: Sure. This is a high level there wasn't a precipitous drop in Winberry specifically, there are some intercompany transactions we are restructured or have restructured, where we're doing accounting in the Oregon markets and you'll see as in this MD&A and financials going forward, we're going to do regional reporting. So for the Winberry’s numbers are combined with another entity -- internally called Halo PDX or Halo Distribution. So it's not a -- included that there was some day 82% drop in revenue in Winberry.

Katie Field: Right, so I think that's important for everyone to understand. To me it's more intuitive to look at the subsidiaries at the market and how they all consolidate to Oregon for example, or to California in theory. To me it's more intuitive to look at it that way. So Kiran did you want to chime in on any of that?

Kiran Sidhu: No, I mean, you know, Oregon, is and always has been a tough market and you know it's going to require some serious more restructuring in order to drive it to positive to neutral EBITDA by Q3. I have full confidence in Josh and Dustin and what their action plans are to achieve that. The one bright spot is the sheer number of competitors in or again have dissipated and -- but I don't see us really investing monies in Oregon, it’s rather managing the assets we have prudently and reducing costs efficiently and building on the brands we have. I don't see us deploying much capital in Oregon. One sort of shiny spot there is Governor Kate Brown signed into law basically stopping any issuances of new licenses, which will help substantially and which should help substantially, I should say, but that is going to take time, I don't see it happening in this season maybe towards the middle of next year. So we have to basically manage our way out of loss into profitability and we have to do it within the next six months.

Katie Field: Yes, agreed. I think one sort of I guess the way I think about it going forward is remaining nimble and where we can opportunistically allow ourselves to operate, but potentially for example shifting from -- for doing production in California, for example, we're doing white label shifting from in terms of some of those customers to getting paid right away.

Kiran Sidhu: Right

Katie Field: And that sort of thinking and where we can opportunistically do that to allow ourselves, the ability to continue doing what we do by just giving our self the maximum flexibility to adjust over time. And what California has really done, this is -- it has been going well for us and retail contributed to that. And in Oregon, we just -- we need to figure it out and that's something that we're committing to do work -- that's something that we're committed to doing and we'll keep everyone updated on our plans.

Kiran Sidhu: Yes. And if we follow the trend lines of California, we would not be doing well, but California we are doing well. And part of this really just my personal opinion is last man standing and in California, where we are almost at capacity and we're being inundated with all sorts of different opportunities to white label as the largest player in the market, the parent company, CSU, shut their doors. But I think our focus really is on building out our own, sort of, seed to sell network and retail and maybe we'll pick up one or two private label clients, but the whole concept is to do everything in a working capital neutral basis, that adds marginal profitability, if it's possible to do, right?

Katie Field: Exactly. No, that's right. So one, I guess final question, which we've started to talk a little bit about in our press release is certainly with this with Phytocann and just in general theme has been this idea of Halo as a holding company. And I think one question investors asked herein is, so is the idea to be a holding company, is it to be operational, if so in which jurisdictions? And I think that just clarification on our sort of overall strategic positioning and plan for the next year, clarification of that I think investors would appreciate.

Kiran Sidhu: Yes, as I said, even at the current valuation of Akanda, it's been a successful venture to us, based on our historical current cost basis. I think the way we sort of view the world is California is a business and it's a business that is profitable and it's a business that's growing and if there is an opportunity to realize shareholder value from that we're going to find a way to do it or again we're a large player, you know, with Nactar and ourselves. And a few others we're one of the larger players definitely top five and inevitably there's a way to get that back profitable and realized value, so another place will realize value. There's nothing sacred that we own, and what we're noticing is where the real sort of where the -- one shining light in cannabis is definitely international markets European facing. And hence why we looked at Phytocann, but if we see opportunities and we can use leverage in a traditional, sort of, private equity, public equity funds. And we can use very little equity with very little -- with little or minimal risk to the parent in and of itself, we're going to take those opportunities. And those could be the most accretive opportunities and it seems that given our backgrounds and our pedigrees, I mean, a lot of us have done a lot of that in the past and given the state of markets today, there seems to be a lot of opportunities there. And I don't think a lot of public companies are looking at it that way. And it's something that we're looking at. And you know it's something that we're -- as we've said in our press releases, we're looking to do more off.

Katie Field: Great. Well, I think that covers all the questions that were submitted covers our presentation. So unless Marshall or Kiran, you have anything else to say, I think we can pass this back over to me call operator and call today.

Marshall Minor: Yes, I mean what I have to say is if we look at our balance sheet sequentially, you do basic, you know, quick ratios, you do a current ratio, you do tangible book value, you do all the analytics that are statistical non-IFRS measures, you'll see that we are getting stronger and stronger and as far as operationally and as a company, I feel fairly confident it's not highly confident. And what we're doing and where we're headed. There are lot of headwinds, both on a macro basis and on a micro-basis, but I feel that we're tackling well into those headwinds. And, you know, my concerns are less than they were in Q4, and hopefully in Q -- hopefully by June there'll be less and less and we'll continue to be less than less. But I'm positive about the future of the company and where we're headed.

Katie Field: Great. Thank you. All right, so operator, if you want to wrap this up?

Operator: Certainly. This does conclude today's conference call. Thank you very much for joining. You may now disconnect.