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Q3 2008 · Earnings Call Transcript

Nov 10, 2008

Executives

Leona Hobbs - Director of Communications Elliot Noss - President and CEO Michael Cooperman - CFO

Analysts

Thanos Moschopoulos - BMO Capital Markets Alex Grassino - Laurentian Bank Securities David Shore - Research Capital Aram Fuchs - Fertilemind Capital

Operator

Welcome to Tucows Inc. third quarter 2008 conference call.

I would like to advise everyone that this conference call is being recorded. I will now turn the call over to Leona Hobbs.

Please go ahead, Leona.

Leona Hobbs

Thank you, operator. Good afternoon and thank you for joining us today.

With me is Elliot Noss, our President and Chief Executive Officer and Michael Cooperman, our Chief Financial Officer. Earlier this afternoon, Tucows issued a news release reporting our result for the third quarter of fiscal 2008.

The news release and financial statements are available on our website. Please visit tucowsinc.com and click on Investors.

Before we begin today, I would like to point out that the matters we will be discussing include forward-looking statements, and as such, are subject to risks and uncertainties that could cause actual results to differ materially. These risk factors are described in detail in our documents filed with the SEC, specifically the most recent reports on Form 10-K and 10-Q.

We urge you to read our securities filings for a full description of the risk factors applicable to our business. I would now like to turn the call over to Elliot.

Elliot Noss

Thank you, Leona. Good afternoon and thanks for joining us today.

On today's call, I'll provide an overview of our business during our third quarter ended September 30, 2008 and the outlook going forward. Mike will then review the financial results, before returning the call to me for final comments.

There were number of highlights during the third quarter. First, I am pleased to report that we grew revenue 13% over the same quarter of last year.

This growth was driven primarily by higher revenue from core domain name registration and a strong performance by our domain portfolio services, now known as Yummy Names, as well as growth in retail services. Second, we divested the remainder of our non-core hosting assets, which generated just under a $1 million in cash.

Third, we signed our first significant personal names deal with web.com, through which web.com will offer the OpenSRS personal name service through its extensive network of customers, more on this in a few moments. There is an event that occurred subsequent to the end of the quarter that I would like to discuss as well.

Last week, we sold our stake in Affiliates, the global registry services business in which we were founding shareholders in 2000. We sold it back to the company for $7.4 million in an all cash transaction.

We received $3.2 million on November 7th and are conditionally scheduled to receive the remaining $4.2 million in two equal payments in June and December of 2009. Those last two payments are conditional upon Affiliates having sufficient distributable reserves as that concept is defined in Irish law.

As a result of the proceeds generated by this transaction, we've significantly strengthened both the balance sheet and our ability to execute on the share buyback program. Before going any further, I want to take a minute to address our performance for the year-to-date and our expectations for the year as a whole.

We've spent much of 2008 focused on strengthening key aspects of our business, which we are confident will contribute to long-term growth. While we're benefiting from these initiatives, a number of unanticipated factors during the year have impacted our financial performance.

As I will discuss in a moment, email revenue was weaker than expected, decline in gross margin from domain registration was greater than expected and advertising revenues have been dampened by the weakness in the economy which has put some downward pressure on domain portfolio advertising revenues but especially on bulk domain portfolio sales. While we expect to achieve our guidance of growth in revenue and profitability compared to last year, we no longer expect to achieve the year-over-year growth in cash flow.

Further, over the coming quarters, we expect to lose our three largest email customers. Two are customers acquired through the Critical Path transaction in 2006.

One of the customers will migrate by the end of the year and we anticipate that the other two will migrate by the end of the first quarter of 2009. Each case, the decision to leave was a strategic decision that was part of a larger relationship, two with Google and one with Microsoft.

In each case, email was a small part of a much larger strategic relationship for our customer. In no case was the decision made at an operating level where our customer relationships were.

We have no other customers with similar corporate structure where this type of risk exists. This has some impact on 2008, the greater affect will be felt in 2009.

We expect email revenue in 2009 to be approximately $4 million, down significantly from both this year and last year. While we are now experiencing the cost savings related to our new platform and have been successful in securing new customers, overall this is a disappointment.

To be clear, we remain committed to this line of business and still believe it to be strategic and to hold the opportunity for significant long-term growth. A positive piece of news in our email business is that we signed a key email and personal names with the web.com.

As you know, we have a portfolio of over 39,000 surnames and we believe this will be one of the stickiest Internet services available, especially the growth and what I would call the personal internet continues. We believe personal names will help drive renewal rates and growth amongst our reseller channel as well as our retail offering.

This deal underscores the value that personal names can bring to our customers. I will now review in more detail the performance of our other three lines of business.

First, domain registration: There were a number of encouraging signs during the third quarter. We saw continued growth in domain registration transaction volumes.

In fact, volumes through out the year have been higher than expected. In the third quarter, new transactions were up 13% year-over-year, renewal transactions were up 16% year-over-year and we continue to achieve customer wins and see a significantly higher level of interest from potential customers.

Increases across all of the volume metrics we track are obviously positive signs in our core business. While gross margin continue to decline, it is now clear that this is the result of sales mix much more than pricing pressure.

This is important as it holds the seeds of opportunity for 2009. Domain portfolio line of business grew 135% on a year-over-year basis, with no large portfolio sale in either of these quarters.

While we are generally pleased with growth, revenue generated by our direct navigation names continues to be impacted by the industry-wide downward pressure on advertising payouts from syndication partner such as Google and Yahoo! We expect to continue to experience pressure on yields.

We've seen and will continue to see a material impact of large portfolio sales, and accordingly, we are taking a much more conservative approach and lowering our internal expectations for this business. Positive here is the demand for good, brandable and generic domain names is relatively unaffected and we expect it will continue to grow as more mainstream marketers come into the market.

This is the segment we are focused on. Central to that strategy is the recently launched Yummy Names, which allows direct access to the tens of thousands of high quality names in our portfolio.

Site is particularly oriented towards marketers. Internet presence has evolved to the point where today one of the most important elements of any marketing campaign is a quality domain name.

Yummy Names is really the first with this focus on marketers and will help us realize the value in our portfolio. In the retail business, we saw continued growth year-on-year.

Fourth quarter, we expect to commence the migration of our old retail brands, Domain Direct, NetIdentity and IYD Retail onto our new Hover brand and think this sets us up nicely for 2009. As previously noted in the third quarter, we sold the last of our retail web-hosting customers.

In 2009, we are very focused on providing domain registration and email through Hover in a way that takes the personal internet to a whole new level. I am also pleased to note, just last Thursday we launched the beta of a new website butterscotch.com.

Butterscotch is a technology website for non-geeks. It is using video-over-the-internet to help people get more out of technology in general and the Internet in particular.

Think Home & Garden TV or the food network for technology. It is being led by Andy Walker and Amber MacArthur, two long time veterans of technology media and the tucows.com team.

It will be very tightly linked with the existing tucows.com software libraries and over time will become the brand that predominates for us in content. At the end of this transition, Tucows will simply be the name of the company.

I would also note in looking at the disposition of non-strategic assets, we certainly look at the software libraries. However, the opportunities were not sufficient.

In parallel, I have been searching for new leadership and a new direction for what is in our view a valuable property with a loyal audience and a great niche. We were lucky enough to convince Andy and Amber to join us.

The additional investment is minimal and the incremental opportunity is exciting. The approach we are taking with Butterscotch is very consistent with our internal mission to make the Internet easier and more effective.

The launch has been well received and we're very pleased with the early results. Team has done a great job.

There is a soft beta with the full launch early in the New Year. And I'd encourage all of you to go take a look at it butterscotch.com.

I will now turn the call over to Mike for a detailed review of our financial results.

Mike Cooperman

Thanks, Elliot. Net revenue for the third quarter of fiscal 2008 grew by just over 13% to $20.1 million, from $17.8 million for the third quarter of last year.

Increase was primarily due to the result of higher revenues from our traditional domain registration, domain portfolio and retail services categories, which were offset by lower revenues from our email and content services. Cost of revenues, before network costs, for the third quarter increased by 19%, $4.3 million from $10.3 million, primarily as a result of higher domain registration volume and a higher registration fees we are paying the registries as a result of the price increases they implemented in October last year.

These increases were partially offset by a decrease in network costs of $540,000, primarily the result of the lowest support contract in people costs we achieved with the closure and relocation certain of our co-location facilities following the completion of the email migration as well as the lower depreciation we incurred now that certain of our older computer hardware has been fully depreciated. Gross margin for the third quarter was 27% compared to 25% for the same quarter last year.

The increase is primarily attributable to the reduction in network cost of roughly $500,000 I mentioned earlier and a shift in the percentage contribution to gross margin we experienced on our service categories as our sales mix changes. Looking at the gross margin contribution by service category, gross margin from domain name registration services for the third quarter decreased to $2.7 million from $3.2 million for the same quarter last year.

While domain transaction volumes for the quarter were up on a year-over-year basis as a result of the price reduction we announced when we change to cost plus model in August of last year, our gross margin percentage for the quarter decreased to 20% from 26% for the third quarter of last year. As expected, the adoption of the new pricing structure has had a dampening effect on gross margins and profitability in the short-term.

We believe, however, that the new pricing structure has strengthen our competitive position as evidenced by the favorable trends in both new and renewal transactions as Elliot described earlier. Gross margin from domain portfolio services increased to $1.1 million from $380,000 for the same quarter of 2007.

While we are pleased with this growth, we believe that the contributions of both portfolio sales and Parked Pages Programs were impacted by the effect of the slowdown in the economy has had on advertising spending and that they will continue to be impacted for the foreseeable future. Gross margin for email services decreased $1.4 million from $1.6 million for the corresponding quarter of last year.

As we discussed on previous conference calls, the decrease resulted primarily from our losing enterprise customers that we acquired as part of the Critical Path asset acquisition that since moved on to suppliers that are probably more appropriate for their needs. Gross margin from retail services increased to $1.5 million from $1 million to the same quarter of last year.

The increase is primarily attributable to the recognition of $384,000 of deferred revenue as a result of the sale of our remaining hosting customers in September of 2008, and to a lesser extent, on the changing sales mix as a result of our having exited the retail shared hosting services market. Gross margin from other services decreased marginally to $1.2 million from $1.3 million for the third quarter of last year.

This decrease primarily reflects the slower advertising through our website and the reduction we have been seeing in the yield from our syndicated Google fees. Total operating expenses for the third quarter increased by 26% to $6.4 million, or 32% of net revenue from $5.1 million or 29% of net revenue for the same quarter of last year.

Operating expenses, which I will remind you, are those we define as cost relating to ongoing sales, marketing, development and administrative costs were relatively unchanged on a dollar basis compared to the same quarter of last year, $4.7 million and decreased as a percentage of revenue, 23% of revenue compared with 27% same quarter last year. Other operating expenses for the third quarter were $1.7 million or 8% of net revenue, compared to $340,000 or 2% of net revenue for the third quarter of last year.

The increase is primarily the result of the following three factors. First is the impact of foreign exchange.

As we've discussed on previous calls, a large portion of our costs are in Canadian dollars. During the third quarter, we recognized the loss on foreign exchange transactions of $683,000, which include a loss on the change in the fair of forward-exchange contracts that were still outstanding at the end of the quarter of $526,000.

This compares to the recognition of a gain on foreign exchange transactions of $370,000 includes gain on the change in the fair value of forward-exchange contracts of $62,000 in the third quarter of last year. Second, as part of the completion of our migration to our new email platform, we disposed off some of our older computer hardware at co-location facilities that we no longer intend to deploy and incur a net loss on disposition of $500,000.

Third, in the third quarter of last year, we incurred transitional cost $244,000 related to the IYD acquisition. Adjusted net loss for the third quarter of fiscal 2008 was $93,000, compared to adjusted net income of $1.1 million for the third quarter of fiscal 2007.

Net loss for the quarter was 71,000 or less than $0.01 per share compared with a net loss of $311,000 or less than $0.01 per share to the corresponding quarter last year. Turning to the balance sheet, cash and restricted cash at the end of the third quarter was $2.7 million, decrease of $3.5 million from $6.2 million at the end of the third quarter of last year, and a decrease of $200,000, from $2.9 million at the end of the second quarter of this year.

The decrease compared to the second quarter of this year is the result of several factors, including cash used in operations of $107,000, additions to property and plant and equipment primarily related to our hosted email environment of $627,000 and the repayment of $479, 000 of our bank loan. These uses of cash were partially offset by the #921,000 generated by the sale of our remaining detail shared hosting accounts during the quarter.

As Elliot mentioned in his opening remarks subsequent to the quarter end, we sold our ownership position in Affiliates for $7.4 million which immediately generated $3.2 million in cash. The remaining $4.2 million is payable in two equal installments in June and December next year and are conditional on Affiliates having sufficient distributable reserves at that time.

Deferred revenue at the end of the third quarter was $54.4 million, up 9% from $49.8 million at the end of the third quarter of last year and unchanged from $54.4 million at the end of the second quarter of this year. Lack of growth compared to the second quarter of this year was impacted by the reversal of the $384,000 of deferred revenue generated by our Retail Shared Hosting Assets following their sale during the quarter.

Over the last year, we've implemented a number of initiatives designed to capitalized on the opportunities inherent in all components of our business, including the change in pricing structure on domain registrations, launch of the Yummy Names, migration of our email customers to a new platform and the consolidation in re-branding of our retail business to name a few. We are beginning to see the financial benefits of some of these changes to our business and expect this to continue in 2009.

While we continue to expect 2008 revenue and profitability to increase compared to last year, we will fall short of our objective to grow cash flow operations, the reasons that Elliot discussed. Fundamentally, however, the ability of our business to generate cash from operations remains strong.

Our cash position has been significantly stringent as a result of the sale of our stake in Affiliates, and sale of our Shared Retail Hosting Assets which has put us on a firm financial ground during a challenging economic environment. I would now like to turn the call back to Elliot.

Elliot Noss

Thanks, Mike. We all know the difficulties in the macro environment right now.

Over the lower-term, we believe that our priority should be on generating cash and over time on returning capital to shareholders through share buybacks or through dividends. In the short-term, the economic environment puts a significant premium on cash tempering the above point to some extent.

As stated earlier, that our three largest email customers will be leaving over the next couple of quarters. I also stated that we'd generate less cash than we did last year.

Obviously, neither of these are good news. Anyone listening to conference calls over the last few weeks knows there are many negative announcements in the broader business environment that makes this no less difficult.

On the other hand, there are many positives from this year product launches of Butterscotch, Hover and Storefront. The brand launches of OpenSRS and Yummy Names, smooth email migration and the cost savings that generates for 2009.

On top of that there are three things I wish to talk about specifically for 2009. First the OpenSRS domain registration business, we have seen solid and accelerating gains in volumes in this quarter.

We have a full pipeline and are seeing continued momentum with customers. We think the data demonstrate that we have strengthened our competitive position.

The only cloud there is, is the gross margin decline was greater than we have anticipated. It's now clear to us this is the result of continuing changes in our sales mix rather than increasing pricing pressure.

This sets us up in 2009 to focus on additional market segments. You will see some of that with the Storefront launch later this month.

You will see a number of additional elements added in 2009 that will drive additional volume. We will take this business to a new level.

The second thing is continued cash generation, and extremely large portion of our revenue comes from low priced subscription services. The domain has been renewed three years in a row, chances are very high that it will renew again.

Renewals make up the vast majority of our domain name transactions. In addition, Tucows has a demonstrated history of cost control and execution.

We have managed through a number of cycles, we know how to put our heads down and grind. We will continue to generate solid cash from this business.

Lastly, the Affiliates transaction and others will allow us to buy back our own stock. Times like this the safest thing to do is to bet on what you know and we know the value on our own company and our own people.

This will allow us to generate a solid return for share holders, which is what they deserve. These will be tough economic times, but we consider ourselves fortunate to have the business, the business model and the people that we do.

And so we have always had a conservative inclination which makes adjusting to turbulence much easier. We expect 2009 to be a good year for Tucows.

With that, I’d like to open the call for questions. Operator?

Operator

(Operator Instructions) Your first question comes from Thanos Moschopoulos from BMO Capital Markets. Please go ahead.

Thanos Moschopoulos

Hi. Good afternoon.

BMO Capital Markets

Hi. Good afternoon.

Elliot Noss

Hi, Thanos.

Thanos Moschopoulos

Hi, Elliot. To begin with, on your comments regarding the margin in the domain registration business: I am not quiet sure that I understand what you mean by mix.

Could you just try more color on that?

BMO Capital Markets

Hi, Elliot. To begin with, on your comments regarding the margin in the domain registration business: I am not quiet sure that I understand what you mean by mix.

Could you just try more color on that?

Elliot Noss

Sure. The additional volumes that we're seeing are being driven by a greater contribution from our larger customers.

Customers that are at lower prices.

Thanos Moschopoulos

Okay.

BMO Capital Markets

Okay.

Elliot Noss

And so that's just having the effect of driving down the blended number.

Thanos Moschopoulos

Okay.

BMO Capital Markets

Okay.

Elliot Noss

We think that fact provides some openings going forward.

Thanos Moschopoulos

Okay. As far as the ongoing pricing pressure in that market, has it been accelerating in recent weeks given the downturn and perhaps more overall pressure on people to be more aggressive?

Or has it been in line with the ongoing decline you've seen over a prolonged period?

BMO Capital Markets

Okay. As far as the ongoing pricing pressure in that market, has it been accelerating in recent weeks given the downturn and perhaps more overall pressure on people to be more aggressive?

Or has it been in line with the ongoing decline you've seen over a prolonged period?

Elliot Noss

I think that certainly the fact that vast majority of our customers, like us sell bread and milk, not cars and refrigerators. And so I think that those are things that are a little bit less impacted.

There is no question that there is an impact, there is an impact everywhere. I think it's also the case that where we are dealing with services that are relatively quite low margin right now.

So we will be surprised if we see a little more pressure; we're not quite seeing that yet.

Thanos Moschopoulos

On the email front, you mentioned how your expectation now is for, I believe it was $4 million in revenue for 2009, is that correct?

BMO Capital Markets

On the email front, you mentioned how your expectation now is for, I believe it was $4 million in revenue for 2009, is that correct?

Elliot Noss

That's right.

Thanos Moschopoulos

Let us say that you develop $6 million run rate currently. Does that mean that we're going to have more of a drop off in the near-term?

I know you’re anticipating growth I guess for the $4 million for '09, is that correct?

BMO Capital Markets

Let us say that you develop $6 million run rate currently. Does that mean that we're going to have more of a drop off in the near-term?

I know you’re anticipating growth I guess for the $4 million for '09, is that correct?

Elliot Noss

No, you'll see a trend down all through. It really depends on the specific migration plans of the customers, something that is so tough to predict.

I said on the call, we expect by the end of Q1 all three companies will be gone. We could stretch it to Q2 as well.

You're talking about very big companies, and as you can imagine, everybody's plans are in flux. We have to wait and see what their specific plans are.

But you'll see the best way to think about this, is it will drift down through the middle of next year and then start to pick up from there.

Thanos Moschopoulos

I guess another way to rephrase the question is this: the three customers together were they about $2 million run rate or were they more than that? And then just looking at absolute residual revenue as we did the migration over the year and that's how we get to the number for next year.

BMO Capital Markets

I guess another way to rephrase the question is this: the three customers together were they about $2 million run rate or were they more than that? And then just looking at absolute residual revenue as we did the migration over the year and that's how we get to the number for next year.

Elliot Noss

Right. At there peak those three customers were more than a 2 million run rate, closer to three; one of them has been drifting down and we've been backfilling.

And the other two we're still seeing full revenue from, so that will be the drop off kind of appear to the trough.

Thanos Moschopoulos

Okay. You mentioned your confidence says these issues are unlike could recover with rest of your basis that just because of the customer type?

BMO Capital Markets

Okay. You mentioned your confidence says these issues are unlike could recover with rest of your basis that just because of the customer type?

Elliot Noss

Yes. It's very much a function of customer type pay, much larger companies and email was a small part of a large strategic relationship for all three.

Thanos Moschopoulos

Can you comment on how the sales cycle is progressing as far as trying to close new business for the email side now that migration is complete?

BMO Capital Markets

Can you comment on how the sales cycle is progressing as far as trying to close new business for the email side now that migration is complete?

Elliot Noss

Yes. So I think that the challenge there is that we compete.

First of all, I would say okay or fine, we've got a reasonable pipeline. We've got things that are coming out to the other ends of the pipeline.

The challenge there is that we compete with the non-consumption. And as the economy gets worse often for us when you're competing with doing yourselves, it feels to the customer like it will cost them a lit bit more money going forward.

So that's certainly a bit of a drag.

Thanos Moschopoulos

Okay. And then on the Butterscotch side, you said no significant startup cost associated with that?

BMO Capital Markets

Okay. And then on the Butterscotch side, you said no significant startup cost associated with that?

Elliot Noss

There is a few extra people.

Thanos Moschopoulos

Right.

BMO Capital Markets

Right.

Elliot Noss

But not much beyond that. And I'd love you kind of dig in and give your feedback.

Thanos Moschopoulos

Okay. Elliot, that's fine for now.

Thanks.

BMO Capital Markets

Okay. Elliot, that's fine for now.

Thanks.

Elliot Noss

Thanks.

Operator

Your next question comes from Alex Grassino from Laurentian Bank Securities. Please go ahead.

Alex Grassino - Laurentian Bank Securities

Hi, gentlemen. Could you give me a little bit more color on where you see CapEx going forward, is it jumped up to 600,000 this quarter, do you expect that to revert back down?

Elliot Noss

Yes. CapEx, next year will be more in the $1.5 million to $2 million range.

Alex Grassino - Laurentian Bank Securities

Chances are about. Yes, so okay.

And a general idea where do you see gross margin as a whole going in 2009?

Elliot Noss

That's a tough one to answer because it's going to be very much determined by the mix and I don't think that I or Mike has really drilled down on that. It could be, for instance, a positive.

If blended gross margin is going down, if the reason that is going down is because we are having a significant growth in domain name transaction business.

Alex Grassino - Laurentian Bank Securities

Okay. Perfect.

In terms of exploring divestiture of non-core assets, are you more or less finished now? Or are you still sort of looking at refining, what do you have at this point?

Elliot Noss

Yes, I think the big stuff has pretty much occurred. If we were speaking six months ago or 12 months ago, I might have talked about more potential for a large domain name portfolio sale, for instance.

Alex Grassino - Laurentian Bank Securities

Okay.

Elliot Noss

That market has really been negatively impacted.

Alex Grassino - Laurentian Bank Securities

Okay. Perfect.

That's all I have for now. Thanks.

Elliot Noss

Thanks.

Operator

Your next question comes from David Shore from Research Capital. Please go ahead.

David Shore - Research Capital

Thanks. Could you talk more about the other premium domain market and what you are seeing there and what you think that business will look like over the next year or so?

Elliot Noss

Sure. We are definitely seeing softness in those long-tail direct navigation portfolio type names.

We are not really seeing the same kind of softness around the brandable items; those are obviously much smaller number of transactions and they are much bigger price tags. You look out in the market what I'd call the wholesale market there, those are professionals who are trading with each other.

There might be a bit of softness because for those professionals their purses get filled with a lot of that parking revenue, the direct name revenue that what we see from marketers, for instance the Yummy Names launch and some of the follow-on discussions, there is value and for them they are looking at the value of a generic or semi-generic; a brandable name relative to what search traffic costs or relative to very, very large advertising budgets. So we don't think that through '09 we'll see a negative impact around valuations, in those categories.

In fact, we think it's such an early stage in that market that if we do a good job of reaching market, as in bringing the midst to the market, we think we can see continued growth there nicely.

David Shore

Okay. Thanks.

That's it for me.

Research Capital

Okay. Thanks.

That's it for me.

Elliot Noss

Thanks.

Operator

(Operator Instructions) Your next question comes from Aram Fuchs from Fertilemind. Please go ahead.

Aram Fuchs

Hi, this is Aram Fuchs, Fertilemind Capital. You've been at the premium domain business for a while.

I was wondering if you can talk about which channels are working well to attract the end user, the marketers you talk about. Are they the auctions or some relationship with agencies?

If you can give us that landscape that would be great.

Fertilemind Capital

Hi, this is Aram Fuchs, Fertilemind Capital. You've been at the premium domain business for a while.

I was wondering if you can talk about which channels are working well to attract the end user, the marketers you talk about. Are they the auctions or some relationship with agencies?

If you can give us that landscape that would be great.

Elliot Noss

Sure. Right now, the auctions are not great.

They were probably better 12, 18, 24 months ago. And I am sure as things come back a bit, they may get a little bit more useful.

The thing that yields the most in terms of direct leads or sales right now is actually the network of brokers that are out there to maintain contacts sort of broadly across the industry. Those are the relationships which probably will contribute the most this quarter.

When it comes to the agencies, that's really just hard work at this point. So that's the sweet man who runs that group; people you met just going and giving seminars and talks appear in conference speaking and doing sessions for people.

And so that's really just bringing in buyers in ones and twos.

Aram Fuchs

Great. Thanks for your time.

Fertilemind Capital

Great. Thanks for your time.

Elliot Noss

Thanks.

Operator

There are no further questions at this time. Please continue.

Elliot Noss

Thank you, operator. We look forward to speaking to all again next quarter.

Operator

Ladies and gentlemen, this concludes the conference call for today. Thank you for participating.

Please disconnect your lines.

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