CynergisTek, Inc.

21 First Quarter Earnings Conference Call. Today's conference is being recorded. Joining us today from the company are Mr. Caleb Barlow, President and Chief Executive Officer, and Mr. Paul Anthony, Chief Financial Officer. Before we begin the formal presentation, I'd like to remind everyone that some statements made on the call and webcast, including those regarding future financial results and industry prospects, among others, are forward-looking. These forward-looking statements can be identified by the use of forward-looking terminology such as believes, expects, anticipates, would, could, intends, may, will, or similar expressions, and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the conference call. Certain of these risks and uncertainties are or will be described in greater detail in the company's SEC filings. Given the risks and uncertainties, listeners should not place undue reliance on any forward-looking statement and should recognize that the statements are predictions of future results which may not occur as anticipated. Synergistic is under no obligation and expressly disclaims any such obligation to update or alter its forward-looking statements, whether as a result of new information or future events or otherwise. And now at this time, I'd like to turn the call over to Mr. Caleb Barlow. Please go ahead, sir.

Thank you, operator. As a reminder, it was a little over a month ago that we provided an update as part of our year-end call. So today's discussion will really be a continuation of that dialogue. We're continuing to see positive signs of a return to normal in our clients. Budgets are returning, pandemic-related downward pressures on pricing are easing, and pre-sold revenue continues to grow coming out of the momentum that we started in Q4. And it's been great to see clients face-to-face again as many of our staff are now fully vaccinated and we've safely opened up travel. As anticipated, We're also seeing increased consolidation in healthcare providers and an improving awareness of security vulnerabilities across the industries in which we operate, all of which creates new opportunities for growth in existing clients. Now, this was highlighted with our recent announcement of a $1.4 million renewal and expansion, the renewal of which was closed in Q1 and an expansion to additional affiliate locations that closed in Q2. Look, I think consolidation amongst healthcare providers ultimately is a good thing for us. And this is a great example of the add-on business opportunity when our healthcare customers acquire or affiliate with other organizations and leverage our services to raise the maturity of their entire system. As guided in Q4, the first half of this year is expected to be our trough from a revenue perspective. And early signs in Q2 indicate that we're returning to growth for the second half of the year. We're also starting to see synergy between our healthcare business and the work we've been doing to prepare for offering services under the Department of Defense's Cybersecurity Maturity Model Certification, or CMMC, program. You see, several of our existing healthcare clients are recognizing that due to the work they do in support of our active military, reservists, veterans, and dependents, they too will need to be compliant with CMMC. This was noted in our recent announcement concerning Pacific Medical Centers, a primary and integrated multi-specialty healthcare network who chose our Redspin business unit to conduct a CMMC readiness assessment as they prepare for eventual certification. Simply put, our strategy to grow in the government sector is also improving our hand in the healthcare sector while leveraging our existing resources. Now, in related developments, yesterday's announcement that the Biden administration has issued an executive order aimed at helping the U.S. defend itself against sophisticated supply chain attacks, like the recent ones at SolarWinds, the shutdown of the Colonial Pipeline, and the incident with Microsoft Exchange, are all starting to reinforce the federal government's commitment to tighten its security posture while using the federal contracting process to force changes that will likely trickle down to much of the private sector. Now, I also want to mention that earlier this year, we started increasing our investment in marketing by first establishing a VP of marketing role to drive our strategy to position the company for expansion into adjacent verticals and larger enterprise health systems. This is important as we needed to shift our messaging to support the more advanced services we developed over the past year. I'm excited to say that by the end of Q3, the first phase of our marketing strategy will be complete, which includes new brand positioning and websites with an elevated look and better user experience for both the Synergistic and Redspin brands. Initial testing of our messaging is resonating very well with our clients, and more importantly, is leading to pipeline growth of our managed services including our advanced and validation services. Better marketing also opens the door to services being considered in adjacent markets. Our outlook has given us the confidence to expand our efforts with the addition of multiple new sellers who have experience in adjacent markets, bringing our total to nine direct sellers. Bottom line, we used the pandemic to completely retool the company, and that transformation is largely complete. We feel good about where we're headed and the initiative which we have pursued, to be more relevant in a changing healthcare cyber market, expected to grow 16% per annum over the next five years, and to be one of the first companies to capitalize on the emerging multi-billion dollar business opportunity, securing the defense industrial base. All of this is expected to translate into a more profitable business that grows at a double-digit CAGR over the next five years. With that, let me turn it over to Paul.

Thanks, Caleb. The key metric, Caprice, Revenue continues to grow following on the strong Q4, increasing by an additional $200,000 to $17.4 million due to greater demand from our healthcare providers coming out of the pandemic. Additionally, we saw our cost reduction efforts improve earnings year over year by almost $1 million. Our balance sheet ended the quarter with $4.4 million in cash. Q1 traditionally has a higher cash burn due to annual software subscriptions and other beginning-of-the-year cash outlays. but this was offset by the benefits from the employee retention credit provided under the CARES Act that we qualified for for Q1 and expect to have in Q2. Since the end of last year, we have not taken any additional stock issuances under the $5 million ATM under our shelf registration. We still have the $2.8 million in debt that we received under the Paycheck Protection Program and still expect the majority of the loan will be forgiven but are pending word back from the SBA. We are also expecting the tax refund from the carrybacks of available losses from 2020 to the extent possible, which at this point still exceeds over a million. Addressing the Q1 standard financial disclosures, revenue decreased 0.9 million to 4.2 million compared to Q1 2020. The decrease from prior year was due to lower revenue from managed services, which reduced by 0.6 million to 2.4 million compared due to the impact of some customers canceling or delaying renewals and the reduction in net new customers due to the pandemic. Consulting and professional services revenue decreased $0.3 million to $1.7 million due to lower revenue from two customers who completed contract work in the first half of 2020 and less business as a result of the pandemic as our customers had continued to minimize spend with third-party contractors. Gross margin was 50% for Q1 2021 or an adjusted 39% when excluding the benefit from the employee retention credits. This is an improvement when compared to 33% in Q1 2020 and 37% in Q4. The increase in gross margins is due to the staff and expense reductions, the reduced travel, and the delivery efficiencies that we've been talking about on the last couple calls. Sales and marketing expenses decreased to $1.2 million for Q1 2021, compared to $1.5 million for the same period in 2020. This decrease was due to lower marketing and sales support payroll costs from the headcount reductions, less travel costs, as well as the benefit from the employee retention credits. These were partially offset by higher recruiting costs. We do expect sales and marketing to recover to levels similar to 2019, as we increase investment in marketing to support our expanded go-to-market activities. Our G&A expense decreased by $0.4 million to $1.7 million for Q1 2021. This decrease is due to the expense reduction efforts taken last year, lower professional fees due to 2020 being higher from strategic advisory and recruiting costs, and the benefit from the employee retention credits provided under the CARES Act. We do expect G&A expense to increase in the second half of the year as we start to reinstate some employee benefits that were suspended in 2020. We start to travel again, as well as the employee retention credit going away. Non-GAAP adjusted EBITDA loss was $0.6 million for Q1 2021 compared to $1.4 million last year. The full-year financials and reconciliation of GAAP to non-GAAP information can be found in the earnings release that came out today. In summary, taking into consideration the drop in revenue, the aggressive steps we took to respond to the pandemic shows in this quarter's results when compared to last year. With continued improvement in gross margins, a reduction in our net loss, a reduction in our adjusted EBITDA loss, and continued reduction in our cash flow use from operations. All this positions us well going into the rest of 2021 where we are seeing things improving throughout the rest of the year. This concludes the financials and the prepared remarks for Q1. Operator, please open the floor for questions.

Thank you. If you'd like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speakerphone, please make sure that your mute function is turned off to allow your signal to reach our equipment. Once again, that is star 1 if you'd like to ask a question. We'll take our first question from Matt Hewitt from Craig Hallam Capital. Please go ahead.

Thanks for taking the questions and the update. Maybe first off, regarding the recent attacks, and you mentioned those in the press release and your prepared remarks, but I'm curious if you're sensing a change from customers and potential customers following these recent attacks when in the past it's created maybe a flurry of activity and then things kind of seem to die off. But these seem to be a little bit more critical in nature. And are you seeing that have an impact? in your discussions, and quite frankly, in the pipeline?

Yeah, great question, Matt. So the short answer to your question is yes. I mean, look, I don't ever want to tie any level of success to what bad guys do, but I do think the awareness here is definitely driving changes. I mean, we're sitting here right now with two major portions of U.S. infrastructure impacted this week, right? We have an entire hospital system down with Scripps Health out on the West Coast due to ransomware. At the same time, we have a U.S. pipeline down due to a ransomware incident. And, you know, not only is this creating additional awareness because I think every organization is realizing that proper preparation is going to be a whole lot less expensive than the cure. But at the same time, I think at the government level, we're also starting to realize that we're going to have to come up with a different way to deal with these adversaries. This is not normal criminal behavior. This is having a massive impact on the U.S. economy. There are And the thing is, they're outside the reach of traditional law enforcement, right? So, you know, I don't know what to call these people. They're not traditional criminals. They're not necessarily terrorists either. There's something in between. But I think what you're starting to see the U.S. government ramp up to is it's time to have a more proportional response to this. The first step of which, though, is getting our defenses in order. And I think a lot of what you saw in that executive order is the desire to use the U.S. federal procurement process to ultimately drive changes that we see in the public sector. I mean, excuse me, in the private sector. And that's probably a smart way to do it. But just to put this in context, right, when we look at the 500 plus ransomware incidents that occurred last year, you know, these are starting to have real numbers associated with them. You know, when the University of Vermont health system went down, they'd call in the National Guard. It ended up costing them over $60 million, and that was one of several of these. So, you know, you quickly realize with those kinds of losses, you know, an ounce of prevention is going to cost you a whole lot less.

Absolutely. You know, so you've got that in the headlines, and obviously it appears that the situation is improving from a COVID perspective, and I'm curious if that's driving some renewed interest conversations with some of the customers that had maybe delayed some of the renewals last year? I know that you were able to sign the one contract in Q1, but are you seeing a similar impact with some of the other customers?

It is. It's creating a – there's a couple of things we've seen happening at macro level. So, first of all, you know, at the top line, things are definitely improving, right? We're seeing far less pricing pressure. In fact, you know, if anything, we're able to lean in on pricing more. You know, we are starting to see people have more control over their budgets and starting to recognize that they need to invest in security. And in many cases, they've got a technical debt that built up over the course of the pandemic that they now need to catch up on. One of the other trends that we're seeing, that we're following very closely, is there's also an emergence of kind of the haves and the have-nots, particularly in our healthcare providers, where The larger systems, those that are well-funded, are doing quite well and are starting to lean in very heavily on security. They're starting to consolidate. The example we gave earlier on the call is a great example where they're now looking out to their affiliates and the rest of the network saying, hey, we need to see the same security posture that we have here back at the home office. We're also seeing the emergence of the have-nots, right, where there are some providers that were beat up very heavily in during the crisis. We're continuing to work with them. That's where they've got a little more pressure. And frankly, in a lot of cases, that's where we're going to see consolidation. But the strategy we put in place about a year ago, and we talked about it on these calls, to start becoming much more relevant to the larger practices is working out well. So in a lot of ways, we saw this shift at the start of the pandemic. we shifted to make sure our services were relevant and so far that's paying off.

That's great. And then maybe shifting gears a little bit, the gross margin benefit in the quarter, I understand some of it was tax benefit related, but 39% gross margin was a nice improvement year over year and sequentially. I'm curious if that is sustainable. Do we grow from here? How should we be thinking about that base gross margin number?

Paul, I don't want to cover that one.

Yeah, no problem. We do think it's sustainable at these revenue levels, but then we obviously would expect it to improve as revenue grows.

Excellent. Okay. Yeah, that's it for me. Thank you very much. Thanks a lot, Matt.

Thank you. Once again, that's Dara Wong. If you'd like to ask a question, take our next question from Jerry Welley from Welley Fund.

Yeah, good afternoon, guys. Say, just if you could give me, and I know it's a moving target, quarter to quarter, but actually adding some of the marketing expenses with growth opportunities, but trying to get a sense on kind of a break-even revenue, cash flow neutral. What revenue number do you need to get cash flow neutral on EBITDA basis adjusted?

Yeah, we still target around that 5.5 to 6 range is our target.

Okay, for the break even. Yeah, that's right. Okay. Thank you much. All I have.

Thank you. We'll hear next from Abby Fisher from Longcast Advisors.

Hi. Do you guys know of any restrictions that prevents our board members from buying shares? Because I observe a lack of shareholder buying from our current board members. The strategy that they're implementing, one would assume, would help lead to growth in the future. And as a shareholder, it dismays me that they're not investing in it. So I wondered if there's any restrictions on that that you could talk about.

Now, we have been in a closed window, Avi, for at least at this point in excess of six months. We've been in a closed trading window. So, yes, there has been some limitations on the board and their ability to trade it.

Does that open at any time soon so we can possibly see some insider buying?

That is the expectation. As you know, we didn't file our proxy. We're still finalizing board agenda items. Those finalization of board agenda items will limit our ability to open up that closing trading window. But we do anticipate getting that done in the next few weeks. Okay.

And then... Caleb talks about, and obviously a lot of people are aware of, an environment that seems profoundly good for a company that provides cybersecurity services. But you're, you know, pre-sold is roughly flat sequentially. Your deferred revenue is down 40%. I'm trying to get a sense of kind of what are we missing here? What is it going to take for us to sort of benefit from the overall environment?

I think the biggest thing, Avi, which we talked about last February, March, we entered the pandemic, we purposely pulled back significantly from a marketing perspective. That was a roughly discretionary cost that gave us the ability to throttle back significantly. And not only was that about saving money at the time, but Also, it was nearly impossible to get a message out, both with, you know, news cycles and being shut down with both COVID as well as all the election crazy and the Capitol riots. You know, now we're starting to lean back in on that, both from an investment perspective as well as there's an open window. I mean, we've had three broadcast news segments in the last week, including, you know, NBC Nightly earlier this week You couldn't have done that three or four months ago. So, you know, we've still got work to do, but at the end of the day, the barrier there for us is brand awareness and, you know, getting that top of the funnel built. So that's where you're going to see us start to lean in heavily, Avi. You know, the other thing here, too, I mean, look, if you take a look at our website, our website looks like it was built in 1995, right? We've got to get that retooled, and that's the other side of this that we're working on. I mean, that sounds minor, but it actually makes a really significant difference.

So I just want to dig into this a little bit, Caleb, because you talk about brand awareness, but we constantly come up on top within the healthcare industry of having a great brand. So I'm trying to understand. I mean, I'm trying to understand your goals. Are we pursuing big elephant contracts or smaller contracts? How are we allocating that? And one other question is when I talk to competitors, Many of them saw the same things you saw during the COVID, early COVID period, which was a huge retrenchment. But many of them I talked to are like, it's all rebounded and we're forecasting double digit growth this year. Yet we are not seeing the same thing. And I'm just trying to understand why. I mean, I guess you said we've delayed your spending, but the whole industry should help lift us up too.

The industry will certainly help. Investment in this area will help. And we're starting to create slowly the free cash flow to be able to invest further in that. You know, in addition to that, Avi, I think the, you know, just like healthcare was the first to enter the pandemic, you know, they'll be one of the last to clear out. Now, you know, granted, I think they've started to accelerate their cybersecurity investments. But, you know, although restaurants are back open in most places, most emergency rooms still have COVID patients. So, We've got a little bit of a delay there, but like I said in the earlier comments, we're very optimistic on where this is headed. But also the difference here is we're not dependent on one market like we were before. We've used this time to retool to make sure that we're relevant in adjacencies, and we've started to see some nice progress there as well.

And finally, would you disclose what pre-sold is as of today or at least how it compares to how it was at quarter end?

Yeah. We can't do that right now. We don't traditionally give guidance. I can tell you that we were, as Caleb mentioned in his comments, we had a nice close that occurred going into Q2. So we're happy with the way Q2 has started. And so, you know, that's a positive sign. All right. Thank you.

Thank you. We'll hear next from Michael Potter from Monarch Capital Group.

Hey, guys. Good tone to the call. And certainly, as you laid out, Caleb, the backdrop in the industry seems to be very positive for the growth of this company for this year. Just a quick question. The bookings for the quarter, can you give us what the bookings number was for Q1?

Yeah, we don't traditionally provide the bookings number. You can back into a rough estimate of that number just by looking at the movement in pre-sold and revenue, but we don't provide that number.

Can you start? I mean, it would be very helpful to us if we understood the KPIs that both you and the board are using to measure the progress of this company. And certainly for me, bookings would be a big contributor to that.

understand how this company is moving forward or what or what is giving you the confidence that this company is moving forward yeah i understand and and again we'll we'll take that into consideration and see if we can't try to provide some update at least at this point pre-sold is kind of where we're we're focused on as it relates to information that that's out there to give you the best indication right but we have to back into that i mean that you the prior the prior

Caller just kind of asked that question, and we couldn't get an answer. But bookings would be helpful. Again, your competitors give out that business. It would be very helpful for us to understand, and we're going to see the bookings number increase, certainly, as we should, prior to seeing a turnaround in the top line.

I understand. Like I said, we'll take that into consideration for the next call.

Okay. Caleb, you mentioned that we now have nine direct resellers. Is that correct?

No, not resellers, direct sellers.

Direct sellers. Okay, sorry. Direct sellers. And how does that compare to where we were a year ago?

I don't remember off the top of my head exactly where we were a year ago. We had had a significant departure. I mean... When I started back in August of 2019, we didn't have a head of sales, and we were at four or five sellers, several of which have since left. We had to completely retool the sales team. To be completely transparent there, too, we had some turnover in sales during the pandemic as well. This has been a... Nothing I'm proud of, but we'll be very transparent there. We've had some work to do there, and I feel like we're getting ahead of that.

Okay. Yeah, I know that's been a big issue that unfortunately was out of your control, but you've rebuilt the sales team over the past year and a half.

So we have nine direct... We've rebuilt it, and we've also tried to really bring in... Well, and this is true across all positions. Our head of HR is very good at this. Every time we have a departure, we really sit back as an executive team and say, okay, what's the profile we need to take next to really try to upskill and uplevel? And what I'm really also very pleased with is all of our sellers today have a very robust cybersecurity background. So they can talk the talk and walk the walk.

Okay. Got it.

Okay. Maybe we can talk a little bit, you know, I don't want to belabor the point, and you've already kind of laid the groundwork between SolarWinds, the Colonial Pipeline, Scripps, which is our new University of Vermont. There's enough anecdotal evidence out there at this point of some big headlines, you know, in the private sector that I would think that this has moved up the priority list for spend for 2021 with a lot of companies in the healthcare system and the industry. So what more is it going to take before we start seeing more contract announcements and, again, our bookings really start to increase?

Well, I mean, obviously that's what we're focused on every day, right? And, you know, anytime we get something meaningful that we can talk about. A lot of times we have clients that won't allow us to talk about their deals even if blinded, you know, just because they're security related. But we work hard to give you as much guidance as we can on that. As we said earlier, I've got a high degree of confidence of where we're headed next. in terms of that rebound. And, you know, here's the thing, you know, you asked kind of about the mindset. You have to remember, particularly in healthcare, the biggest issues historically were data loss. And the way you dealt with that risk was to buy cyber insurance, right? You know, if you lost data, it was a bad day. You had to pay fines. It probably came with a reputation loss, but you could defer that risk to cyber insurance. The reality now that I think every board is realizing is you can't defer the risk of a shutdown to cyber insurance. First of all, the insurance carriers have gotten very smart. They're starting to require specific features and functions to be in place if you're even going to be insured. But also now you've got the cost of downtime if you're locked up. Now, you know, I think everybody on the phone here will understand it takes some time for that to work through boards to realize I've got to move money to invest in this. And we're really seeing that movement and that dialogue. And one of the ways I see that early sign, too, is we're getting called into more and more board meetings where I'm presenting to boards, helping them understand their strategy and where they need to go. So it's going to take a little bit of time. Some of this is we're digging out of a hole. But at the same time, I'm very optimistic on where we're starting to see this go.

Okay. And... let's touch on CMMC a little bit. You've had some wins, which has been terrific. Can you kind of walk us through the process of where we are in regards to approvals with the government? And I guess, when is this going to start to be implemented? Or when is the government going to start, DOD going to start mandating that this is implemented?

Well, you know, so like all government projects, you know, there have been various starts, stops, and iterations on this. As the government stands up the nonprofit that will be managing this called the CMMCAB, they seem to be coming together and coalescing. They've just anointed their first CEO, you know, so they're kind of moving from volunteers to, you know, being a real entity. What we have to do, and we're in the same boat as a few others, we're one of the first in queue, and what we have to do, because there's nobody to assess the initial assessors, we have to go through an assessment that's being run by the DBCAC, or the Department of Defense. That assessment is underway literally this week. We've, pretty much the entire executive team has been on calls all week going through that audit. What I will tell you is that we're learning a lot about this program through being one of the first to go through it. It is far more in-depth and far more comprehensive than I think anybody understands. I mean, just to give you a simple metric, we're a, what, 106, 107-person company. When I print out our security policies and practices, just the bare minimum, it is three and a half inches thick. Every single word in there matters. Every single reference has to be proven, and we have to have evidence to back it all up. That's what we're going through now. Now, we have to pass that assessment, and then where we go from there is then we and the initial kind of cadre of assessors get approved to actually get started with this work. It appears like the DOD is very anxious to get this work going, and they just need now to get the first few companies through this assessment process. And like I said, we're right now one of the first in queue. We've got to pass it. So far, so good. And we'll obviously let the street know when we get that official nod.

Okay. Thanks. Thank you. We'll take our next question from Timothy Ventures with Retail Investor.

Hi. Thanks. I appreciate that. Hi, Caleb. I just wanted to piggyback on some of the questions that some others have basically called out here, and it's in regards to revenue being generated in your sales force. And so I had a couple of questions along those lines. The first question is, does the company have any type of – strategic relationships with other companies that may help to, for lack of a better term, shoehorn business into you from a cybersecurity perspective?

We have multiple relationships with technology vendors that provide technology that we use in our services. So, for example, our patient privacy monitoring, compromise assessments, incident response, as examples, right? The company historically has been a bit shy of kind of traditional partnership relationships where we're either getting a cut of that business and or where we might be getting a referral credit. And that is because we really wanted to maintain a level of being agnostic. I think what we've learned in both Ben Dankers, who really runs our operations and delivery, as well as myself, have had a lot of experience doing this in prior companies. And we believe that there is a way to thread that needle, right? Where you can be agnostic, but you still might have a preferred vendor. And in a lot of ways, that can be beneficial to our clients as well. because oftentimes it allows them to put an entire solution on one piece of paper, one contract. So we started some early experiments there, and I think that is an area where we want to lean in more. Certainly not to the extent of being viewed as a reseller, if you will, but I do think there's an opportunity there. You also have to recognize we sit on a data set that – basically articulates everything everybody needs, right? I mean, in every client we go into that we do an assessment, we know all the security solutions they have in place. We know what they don't have in place. We know what their budgets look like. We know what their skills look like. So we do sit in an interesting position where we can not only advise, but we can do some matchmaking. And that's an area where Ben and I want to lean in a bit more in the future.

Okay. that's helpful. And so, uh, you know, with that being said, like I said, my questions are more so still around sales and generating the sales because it seems like you've had a lot of really, you know, great opportunities over the last year in terms of cost cutting measures. But, you know, as, as some other investors have mentioned that the revenue doesn't seem to be really spiking given the times and given the situation, um, that some of your competitors may have. And so I'm just wanting to kind of hammer a little bit more at that to kind of understand what the difference is. In terms of, for example, this most recent situation, are you, and if so, how are you planning on incorporating this into kind of your sales process to try and generate business?

Well, Timothy, you know, the first thing to recognize, especially in the midst of a crisis like a pandemic where our clients were in some cases going bankrupt or closing down because they needed to only take in COVID patients, you've got to survive in order to grow, right? So we quickly switched into survival mode. The important thing there is we made it out the other side, and now we've got to flip into the growth mode, right? Now, if you look at the recent situation, the best way for us to capitalize on that is to really flip into the educational mode. We're out there on everything from social media and webcasts talking about it, but we're also advising our clients privately. I mean, one of the things that our investor community doesn't see is that in all of our managed services, we give our clients the opportunity to open a ticket with us and ask us a question at any time and get one of our experts on the phone. And anytime something like this happens, our tickets will shoot to the roof as clients want to understand, hey, what do I need to do to protect myself against this? You know, what do I need to know about this that may not be in the public realm? And how does this change my strategy? So you can imagine we've been having a lot of those conversations. And What ultimately comes out of that is helping clients lay out their budgets to deal with this. And as anyone that's worked in any bureaucratic organization like a hospital understands, you help them to lay out their budgets today, you're going to see the return from that three to six months later when they can actually get that budget approved.

Okay, so with that being the case, I know you've talked about not being able to provide numbers, but no. in general, uh, are you guys seeing a pretty big uptick, uh, in terms of business being generated now that we are kind of on the backend of, of, um, of the pandemic? Well, hopefully. And then, and then finally, this will be my last question on top of the one I just asked, but I'm curious as to what the, your Salesforce is saying the main challenges are, uh, in terms of getting business and securing contracts. Is it, um, you know, securing those initial meetings to be able to kind of give the pitch due to, you know, the website potentially discouraging some clients from moving forward with doing business with you or brand recognition, as you mentioned? Or is it a matter of them getting the business and not being able to necessarily close the sales? What are you hearing from your sales force in terms of that?

Top line marketing and lead generation. That's, you know, the... If you think about also the way in which all of us buy products today, and this isn't going to be a surprise to anybody, but we were predominantly face-to-face. Our marketing traditionally would bring people together face-to-face at events. Well, not only are these things gone, but they're never coming back in the same way. So having that digital onboarding, that digital presence, that top-of-the-line marketing funnel is important. more critical today than it ever was. And, you know, we've been busy over the last couple of months building the back end for that. And now what we need to do is turn on the front end experience. And our sellers have been very involved in that. They're very excited about where we're headed, but that's exactly what they need.

Okay.

Thank you.

Thank you. And that does conclude today's question and answer session. I will now I hand it back over to Mr. Barlow for any closing remarks.

Caleb, please go ahead.

Well, look, in closing, it's been great to see our employees getting shots in their arms. We're starting to travel again. Our customers are beginning to open up, and they're even being willing to have face-to-face conversations for the first time in a year. I anticipate that our sales team is going to be back on the road, if you will, regularly as we move into Q3. That said, we do plan to capitalize on certain efficiencies that we've learned throughout the pandemic, including largely remote delivery of our services. And I just want to take a minute here to say thank you to our customers, our employees, and our investors for their support throughout this pandemic as we got through it. And I think in the end, we've all learned a new way to work. With that, thank you.