ADDvantage Technologies Group, Inc.

Please stand by, we're about to begin. Good day and welcome to the Advantage Technologies Fiscal 2022 First Quarter Financial Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Brett Moss, Hayden IR. Please go ahead.

Thank you, Operator. We are joined today by Joe Hart, President and CEO, as well as Michael Rutledge, the Company's Chief Financial Officer. Before we begin today's call, I'd like to remind you that this conference call may contain forward-looking statements which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among other things, statements regarding future events, such as the ability of Advantage Technologies and its subsidiaries to maintain strategic relationships and agreements with certain original equipment manufacturers and multiple system operators, as well as the future financial performance of Advantage Technologies. These statements involve a number of risks and uncertainties. Participants are cautioned that these forward-looking statements are only predictions and may materially differ from actual future events, or results due to a variety of factors, such as those contained in Advantage Technologies' most recent report on Form 10-K, on file with the Securities and Exchange Commission. Financial information presented on this conference call should be considered in conjunction with the consolidated financial statements and notes included in the company's press release issued earlier today, and included in Advantage Technologies' most recent report on Form 10-K. The guidance regarding anticipated future results on this call is based on limited information currently available on Advantage Technologies, which is subject to change. Although any such guidance and factors influencing it may change, Advantage Technologies will not necessarily update the information as the company will only provide guidance at certain points during the year. Such information speaks only as of the date of this call. During the call, we may also prevent certain non-GAAP financial measures, such as non-GAAP net income and certain ratios that are used with these measures. In our press release and in the financial tables issued earlier today, which are located on our website at advantagetechnologies.com, you'll find a reconciliation of these non-GAAP financial measures with the closest GAAP financials and the discussion about why we believe these non-GAAP financial measures are relevant. These financial measures are included for the benefit of investors and should be considered in addition to and not instead of GAAP measures. I'd like to now turn the call to Joe Hart, President and Chief Executive Officer for Advanced Technology. Joe, please go ahead.

Thank you, Brett, and thank you to everyone joining us on the call today. We continued our strong revenue momentum in the first quarter with significant growth in both our wireless and telco segments. leading to 47% consolidated growth on a year-over-year basis for the quarter. This growth and the accelerating 5G rollout give us significant confidence in continued revenue ramps during the balance of this fiscal year. As we have been saying, the 5G rollout has finally begun in earnest, leading to significant activities from multiple customers in several states, and we expect our wireless revenue to continue to grow from the $7 million range in the second fiscal quarter, with further expansion in the second half of the fiscal year. Our focus now turns to improving our operating efficiency and properly aligning our resources for future demand, enabling us to expand gross and operating margins while we deliver exceptional service to our customers. The rampant resources during the last two quarters and expansion into new markets has adversely affected margins for Q1 and into our Q2 of this fiscal year. Action has been taken to improve margins, and we will be reducing operating and general and administrative expenses to drive margin expansions over the next two quarters. Our entire wireless team is hard at work at managing this rapid acceleration, working closely with our customers to make sure we have crews in place to deliver on work orders as permits are approved. Investors should expect not just revenue growth, but margin expansion as we move through the year, likely peaking in our fourth fiscal quarter. While wireless revenue related to tower work and other aspects of the 5G rollout has already increased by 36% year over year, We expect that it will continue to grow throughout this fiscal year. Our recent growth has been broad-based, involving several carriers, including both long-standing customers and new entrants to the market. The work touches all the regions we service, spread across the center of the United States and touching many large metropolitan markets. Our pipeline of new projects, meaning work we have been awarded, where we are waiting for purchase orders as permitting is completed, gives us significant confidence that the long-awaited 5G surge will continue to accelerate for us in the near term. As I mentioned last quarter, we already have purchase orders in hand for fiscal year 2022 construction that exceed the total value of our fiscal year 2021 total wireless revenues. Over the last few months, we have won site awards to upgrade technology to 5G for over 700 cell sites, and we have increased our staffing to meet this growing demand. In fact, staffing is the most challenging part of this growth in this tight labor market. Currently, we are running at 45 crews and will be ramping up from there in subsequent quarters. The 5G opportunity represents a multi-year secular trend. not just for tower work, but for data centers, technology providers, handset manufacturers, and wireless carriers. Each of the wireless carriers are investing hundreds of millions of dollars in the expansion, and the CapEx plans of the carriers are public information and widely discussed. We are fortunate that as this wireless segment quickly expands, we are simultaneously benefiting from other trends that are driving strong results in our telco segment. The office dynamic has changed and people are working from home, requiring an expansion of the telco infrastructure to facilitate a remote workforce. Simultaneously, the well-documented chip shortage and supply chain issues have elongated the delivery cycle for new telco equipment AND IMPORT PRICE INCREASES HAVE MADE NEW EQUIPMENT MORE EXPENSIVE. ALL OF THESE FACTORS MAKE OUR REFURBISHED EQUIPMENT SOLD BY NAVE AND TRITON A MORE COMPELLING AND VIABLE OPTION. YOU CAN SEE THE RESULT IN THE FINANCIAL PERFORMANCE OF OUR TELCO SEGMENT WHICH FINISHED ITS THIRD CONSECUTIVE QUARTER OVER $11 MILLION IN REVENUE WITH AN INCREASE OF 54% COMPARED TO THE QUARTER OF LAST YEAR. We continue to anticipate a leveling off of demand at some point in future quarters, albeit at a somewhat elevated level relative to the recent past. Overall, we delivered a 45% revenue growth in the quarter. Our margins and overall profitability were impacted by the increased spending to ramp up crews and capabilities as we expanded into new markets in advance of the coming demand. BUT WE BELIEVE THAT MARGINS WILL BEGIN TO IMPROVE LATE IN THE CURRENT QUARTER WITH FURTHER MARGIN EXPANSION AS WE MOVE THROUGH THE YEAR. AND OUR BUSINESS REACHES THE NECESSARY INFLECTION POINTS WHERE VOLUME IS ABLE TO OFFSET FIXED COSTS. WE ALSO BEGIN REDUCING GNA AND OPERATING EXPENSES AS OUR NEW MARKETS MATURE AND WE ENTER THE SECOND HALF OF THE FISCAL YEAR. I'll now turn the call over to Michael Rutledge, our CFO, to provide a more detailed review of our financial results. Michael, please go ahead.

Thank you, Joe. Consolidated sales increased $6 million, or 47%, to $18.7 million for the first quarter from $12.7 million for the three months ended December 31, 2020. The increase in sales was due to increases in wireless sales of $1.9 million and telco sales of $4.1 million. Consolidated gross profit increased $1 million to $4.6 million for the quarter compared to $3.6 million for the same period last year. The increase was due to an increase in the telco segment of $1.1 million offset by a wireless segment decrease of $0.1 million. Operating expenses increased $0.5 million to $2.5 million for the quarter compared to $2.0 million for the same period last year. The increase reflects the company's investment in its regional growth strategy related to expected 5G infrastructure growth. Selling general administrative expenses increased $0.5 million, or 15%, to $3.7 million for the first quarter from $3.2 million for the same period last year. The increase in SG&A relates primarily to increased selling and commissions expenses to support higher revenues. Net loss for the quarter was $2.0 million for the first or a loss of $0.16 per diluted share based on 12.7 million shares compared with a net loss of $2.0 million or a loss of $0.16 per diluted share based on 12.1 million shares for the same quarter last year. Turning to our balance sheet, cash and cash equivalents were $1.8 million at December 31 compared to $2.6 million as of September 30, 2021. Cash was used primarily to fund operations. As of December 31, 2021, the company had net inventories of $5.7 million. We continue to believe we are sufficiently capitalized with appropriate backstops to support near-term business conditions until more normalized business conditions return. This concludes the financial overview segment of our remarks. I will now turn the call over to the operator to facilitate any 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 your mute function is turned off to allow your signal to reach our equipment. Once again, press star 1 to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal. And we'll go first to William Velmer with SA Advisory.

Yeah, hello. Thanks for taking my call. A couple of brief questions. Number one, can you give us a real number, a backlog? Everything seems very mysterious. What's the real backlog here right now? First question.

The backlog for wireless is based on – yeah, this is Joe.

Yeah, thank you.

The backlog for wireless is based on the number of purchase orders in hand or sites assigned where we're waiting for the purchase order to come through. But, I mean, when I said we have 700 sites in backlog, I mean, that's what that refers to, right? Now, have we burnt off some of that backlog? Yes. In the first quarter, you know, we burned off 7 million. The 700 sites that I refer to relate to about 28 million in total backlog. And so we burned about seven of it in the first quarter. And, you know, as we progress through this quarter, next quarter, and so on, you know, we'll continue to get additional sites assigned to us by the carriers. So backlog's a bit of a moving target, but The 700 sites that I referred to is typically, you know, you take an average revenue per site of about $40,000. And, by the way, amongst carriers, that can vary fairly widely, but it's probably not a bad number to use.

What about the rest of the subsidiaries? What's your backlog of the other subsidiaries?

Well, the telco equipment subsidiaries are essentially similar to retail ordering and bid and ask kind of opportunities. So they don't typically have a backlog. They're, you know, on-demand orders that come through Amazon, Shopify, et cetera, in the case of Triton Datacom. So that's a daily, weekly transactional order. kind of business. The NAVE Communications has a little bit more runway of about a week's view of orders that are in process, but they're high transactional businesses, not really subject to backlog, more based on historical run rates.

So we talk about the bottleneck, you know, that's the topic of choice these days. How much of your business is being affected by backlog, bottleneck, can't get the product? And if that's the case, are you raising your prices? I mean, you've had a good quarter, but, you know, you keep promising an EBITDA that's positive and earnings. But here we have another quarter. We lost another couple of million dollars. You can't keep losing money when you explain to us that business is growing rapidly. and you still keep losing money. I mean, this is the third quarter since I've watched you guys, and it just seems to be kicking the can down the road.

Yeah, our telco business is making – I mean, it's making nice margin and making good EBITDA contribution. The issue is on our wireless construction side where – We have deployed to multiple new geographies and new markets and have increased our expenses in order to get deployed to those geographies and have teams in place and logistical support also there in those markets. And that is a ramp that it's one of those you – Experience says you're better off to overwhelm the front end with resources and perform well for your customer right out of the gate, and you ensure a much better future by doing that. Once you're in place and deployed and the market sizing shows itself, then you can trim the resources appropriately, and that's what we intend to do. We intend to reduce our GNA and operating expenses on the wireless side of the business over the next couple quarters to get back to consistent levels of profitability and EBITDA contribution. So I'm with you on that. You're correct.

Yeah. So basically you're getting players, and once you've got the players and they're happy, they're not going anywhere. and this allows you to give you greater flexibility with increasing margins. Would that be a fair assumption?

Well, in the demand in these new markets, you don't get hard promises on a level of demand as you deploy to these new markets, but you have a certain amount of purchase orders, which makes the justification for deployment to that area more but you're uncertain of the demand. As that demand shows itself, you then level the resources and reduce your spend because you're there and you can make good decisions about what the appropriate level of expense to revenue is. And, you know, we're in a total growth mode, right? We're essentially doubling or more the size of the company. and expenses have led the way to fuel these deployments. Now's the time, as we move through the end of this current quarter, now's the time to start recalibrating those expenses and get it back into a profitable situation.

Well, you know that I've listened to you guys before, as I've mentioned, and isn't it time to maybe upgrade that presentation? That's kind of very stale to give us some vision of the company and writing that people can review and maybe do a couple of dog and ponies with some brokerage firms out there to get your name. You know, it's kind of been stale for a while. And since you say you're in a growth mode and ramping up, this would be, excuse me, an ideal time to visit the brokerage community because you, You definitely could use some cash, and I think that that should be something to consider, number one. And number two, a different question is, this second quarter, we're still in kind of the winter environment. Does that seem to affect business ramp-up in the areas that you are – the majority of your work is conducted?

Yes. Kind of a combination of – You know, the latest COVID variant that, you know, hits crews, both our internal crews as well as subcontractor crews, that's a bit unpredictable, as well as any winter storms that pass through. Like in Texas, a week or two ago, you know, we were down for a couple days. So, so far, knock on wood, work continues in the Midwest. But there are days or a few days in a row where, you know, we're shut down for weather. So we tried to build that into our budgets. You know, a lot of us have been doing this for a long time. So you never know when winter will hit, but it's predictable that it will hit in January, February, March in the Midwest.

Correct. And what about the ‑‑ go ahead.

No, that's okay. Sorry for interrupting.

No, I was curious. What about, you know, an upgrade to a presentation and to do some dog and pony shows with some of these brokerage firms out there to get some new eyeballs? Because you do have the tendency, you don't put any press out. You don't really let us really know what's going on except for the filings of Qs and Ks. So maybe that should be, should maybe get a little more aggressive on attracting eyeballs.

Yeah, I think that's a great suggestion, and thank you for that. My preference is when we get to break even and we're about to approach profitability, that's when I'd like to be standing out there in front of investors touting that we have grown the business and we have turned it around and gotten it back to profitability. So that's the game plan, and from a timing perspective – your suggestion is most likely something we would prefer to do starting later next quarter.

We can get the presentation updated. In many cases, there are companies that always are waiting for things to be perfect, and they never are, and waiting for the profitability bell to be rung, maybe you should look at it prior to the bell being rung. You're crowing about your revenue growth, your market size, you know, businesses are expanding. I really think it's time to really, instead of waiting for profitability, start to tell people about it since you've already expanded on the revenue growth, the possibilities, the potential. You're increasing the size of your workforce and your crews. I mean, that sounds pretty positive. We're just missing one ingredient. So, you know, maybe investors should start to be told now while the stock is basically hovering around the dollar, which is really kind of sad. I mean, it's time to get some eyeballs on this thing. Things aren't perfect, but, you know, I think you owe shareholders that root, you know, of presentation and acknowledgement that you're out there, you know, growing. So that's kind of where I'm at.

I think Michael and I are sitting here shaking our heads in agreement with you. Okay. We have our commitment to get moving on that front.

Lastly, maybe occasionally put out some kind of press release and tell us what's going on, I mean, instead of waiting for the quarter to end. I mean, it's three months. We won't be hearing from you most likely for three months. And, you know, you don't want to get lost. There's a lot of competition out there for people to buy stocks in companies, and you get lost. I mean, you're in such an exciting area of communication. I mean, we've been waiting for 5G for years, and it's here. And waiting for profitability I don't think is the answer. I think you need to pound the drum now. So thank you very much for answering my question. Thank you. You're welcome. Thank you.

Welcome next to Caramandus with Carl M. Henning.

Hi, guys. Thanks for taking my call. To try to get a little more color on what you were saying, you probably have mapped out, investors are probably wondering, do you see cash flow break even or cash flow positive by mid-year, it sounds like, based on kind of what you're saying on a monthly basis? Where do you kind of see that turning, April, May, June, something like that?

It's not in the current quarter, but it's, you know, it's, it's, it's, the plan is for it to start turning in that direction hard in the third quarter and be there in fourth quarter. I mean, that's our, that's our current projection.

Okay. Do you, see any insider buying coming, you know, management team at these levels with confidence in the business to go forward and all that kind of thing with, you know, where the stock is at, any idea on border management stepping in to show confidence?

I think it's a great suggestion. We haven't had that discussion amongst ourselves here. in the building with the management team, but certainly with a share price where it is, unfortunately, where it is, it's a great time to consider that. So we'll take your suggestion in hand here and see what we come up with.

Thank you. Appreciate you taking my call.

Welcome.

We'll go next to Edward Culverwell, private investor.

Yes, this is Ed Culverwell. I'd like to get some explanation of the volume. I can't quite understand how you can possibly have almost 13 million shares trade in one day when that's actually – more than their stock outstanding. Could you make a comment on that? There must be some connection to the company people or some of your institutions. I mean, you've got mutual funds, you've got other groups that own this stock, and I can't imagine the whole volume trading in one day.

Yeah, that's... Hi, Ed. This is Joe. It's happened a few times to us over the last two or three years. Now, those big days over the last couple of years have been like a $3 million day or a $4 million day. The recent $13 million day was, I mean, I don't think there's any real explanation for it. Something you start to get some growth and some activity going and you trigger some algorithms in some of the investment houses and trading firms and all hell breaks loose and everybody thinks they know some kind of secret. There was no logical explanation based around the business trends or business news or anything else on our side that triggered that it was strictly, uh, an oddity of the market these days. And, um, you know, there's probably other people on the call that are more, uh, advanced in trying to explain that, but, uh, Well, I'd be interested in hearing that, but yeah, but the, the, uh,

Normally, if you get 12 million shares, you see the price go up. I mean, it would have gone through the roof.

This is Brett. It's the advent of algorithmic trading, right? They're just people flipping shares, computers flipping shares back and forth very rapidly. The same shares just change hands very rapidly. So, unfortunately, that's the world, the trading world that we now live in, right? I mean, there's an audience watching the stock, and, you know, hopefully we keep longer-term shareholders in. within this volume, the longer term shareholders see their liquidity and they start to buy shares and accumulate and it settles down a little bit. But the algorithm of trading is what's doing this. And the results, the positive results of management.

Is there any shelf registrations out there that would be affected by this? I know you're talking about raising money. When someone takes a look at this, it looks as if there have been a raise privately maybe at that particular time reflected in the $12 million.

Yeah, I mean, we still have an active S3 registration that's about two years old now that still has about $9.5 million of capacity left in it. We have not been active in it, and, you know, at current share price, probably won't be active in it for a while, but it's still there. We would like to use it at some point, but that's why our total focus is on improving the performance and profitability of the company, and then we believe the share price will take care of itself from there, along with other good suggestions like update our presentation on the website, issue more press releases, you know, very, very basic marketing.

I certainly second the idea of getting out and telling your story. I mean, it There's so much publicity out there in 5G and such a positive nature, and people aren't even aware of the company. I'm not talking about hustling the stock. I'm just talking about giving people the opportunity to see what the potential is. You don't have to wait until it's profitable. People would like to get it at a lower level. When you are profitable and things have turned, assuming they do, it'll be reflected. Then people will be trying to buy the stock. And as you know, there's really a very small float. And the last time, when they got a short position, they had the shorts, the stock ran to $6. It's... this isn't going to happen. All of a sudden, when you show one quarter profitability, then everybody's going to try to get through the door, hopefully.

Agreed. Agreed. Yeah. Thank you, Ed.

Yeah. We'll go next to George Gasper, private investor.

Yes. Good morning, everyone. Ed, I'd like to dig into this 5G stuff that took place on this issue regarding aircraft problems close to airports on landing. And can you describe what it's been like for your crews? in and around these particular airports nationally or in the areas, obviously, that you're working in. Were you required to get back up on towers to do some work when the airlines were insisting on having the communications temporarily closed off? Or is that... that all be done from the ground level and it doesn't require any of your work. Can you explain that?

I can explain what I know and think is going on, but we have not directly been involved with either installing radios within the glide path to and from any airports, this year. It's specifically in the C-band block of Spectrum that was auctioned off a little more than a year ago by the FCC. It affects the altimeters of some aircraft types, not all. And really it's, as I read, It's a matter of AT&T and Verizon on those towers that they have installed new radios related to the C-band spectrum. They hadn't actually turned any of it on. They were about to. And so they were asked to hold by the FAA. They all agreed. And then since then, they've agreed to either redeploy that spectrum outside the glide paths. I think it's simply a matter of giving the aircraft manufacturing industry a chance to replace and upgrade the technology on the aircraft altimeters. And once they get all that done over the next couple years, it won't be an issue. But for the meantime, it is So it hasn't affected our business whatsoever. And both AT&T and Verizon have the ability to turn those radios on and off in that spectrum or to not actually engage those radios. But, I mean, both companies continue to deploy that new technology all over the U.S., And they're just trying to adjust it in the glide paths. Okay.

All right. Thank you for that question and answer. Okay. The next one is on the crew development. You indicated that you're at the 45 crew level. Now, how do, can you tell us how many are in-house crews and outside, inside crews? of the 45, and can you give us a comparison of how that has developed, let's say, since the close of the last fiscal year with September? And what's your upside target in total crews and in-house crews?

Yeah, I guess I would say I have no real upside target or I'll say maximum threshold, George. If the business continues to double year over year, this year and next year and the year after, then we'll be expanding the crew count accordingly, both geographically as far as following the work with carriers or improving the density within existing geographies. So I don't have any limit in my head or in our budget plans as far as total crew count. We match the crew count to match the backlog, right? And there are weeks where that can go up and down a little bit, where either we hit weather delays or we might hit some permitting delays, you know, and then everything gets completely turned back on in a small geographic area I'm talking about. So, you know, we're at 45. We were probably running in the mid-30s on the last quarterly call. I say probably, but, I mean, I know it because we track it on a daily basis. As far as ratio of internal crews to subcontractor crews, we're probably sitting at the moment at about three to one subcontractor crews to in-house crews. I have for decades believed in the strategy of having a bigger subcontractor base of technicians and crews than your in-house, and that becomes your insurance policy and buffer against the ebbs and flows of the work. So, you know, we're very happy with where we're at. It is a very tight labor market. We're constantly recruiting, and, you know, it's – It's quite the Wild West out there as far as recruiting and retaining, you know, valuable crew resources. So we work that every day, every week. It's a full-time job. So we're kind of happy with where we're at right now with crew count.

Okay, that's interesting. On the actual work that you do daily or weekly or weekly, Can you give us a percentage of how much is on Towers and how much is off away from Towers? Can you, is there any way of giving us some indication of what the revenue stream is versus your total?

Well, I would describe it as it's all on the sell side. So it's within the fence line of an existing cell site. And for example, in the case of the new dish installations, it's about 40% civil work, which is on the ground. So it's trenching for conduit for fiber optic cables and power cables. To bring it over to the radio cabinets, we We have, you know, we build platforms so we can mount their radio cabinets above ground, you know, a couple feet off the ground. And so that civil work is probably about 40% of the scope of work, and the on-tower work is probably 60%. And that can vary from site to site, carrier to carrier.

Okay. And can you describe the outline of your activity in total on a state-by-state basis? Is the Midwest area still from Chicago or Milwaukee on the top to Southern Illinois and Michigan over to Minnesota or Nebraska? Okay. And obviously, Texas, I'm sure, is important. Can you just give us a little color on how you have been and where you're trying to go?

Yeah, it varies from year to year, depending upon the carrier's deployments for the new technologies. and the markets that they built the prior year and are changing the following year. So it migrates. But, you know, this year we're probably back to about 35% Midwest and about 65% Southwest. Okay.

65% Midwest and 35% outside. Is that what you're saying?

No, it's the opposite. It's about 35% Midwest, about 65% Southwest. And we believe that later in the year and next year, that will shift. There are some big plans taking shape for the Great Lakes area, so that will probably shift somewhat.

Okay. All right. Good. And then a question on the increase in shares outstanding in the quarter. I believe it was like 400,000. Am I correct on that?

It was about 600,000. Yeah. 600,000.

Okay. How many of those shares were distributed to employees and and where they had a certain price?

The majority of those shares were actually purchased through the S3 during the quarter, at various points during the quarter.

Yeah, I mean, quite honestly, that day where the volume went off the charts to $13 million, $13 million. we tagged along on the back end of that day and sold some shares, uh, just because of the sheer volume of activity. Um, and you know, our, our employees are basically on a, uh, three years at a time. So they, they get, uh, um, restricted shares of stock, um, based on performance on an annual basis. And, uh, you know, that vests over three years for any particular offering. So it's not a large number of shares in totality, but in any given year, it's probably an extra maybe 100, 150,000 shares, something like that.

I see. I see. Okay. Well, that's encouraging. One question on talking about telco and that whole segment, which has done very well. I mean, you don't hear too many people congratulating you all on the work that went through in building your new equipment warehousing and operation in Florida and outside North Miami and how that's all going. And Of course, as you have indicated today that a lot of this activity that you've experienced in recent few quarters, it relates to people working remotely and the lack of equipment availability. Do you have any thoughts about expanding that operation geographically or in terms of equipment distribution expansion? Any thoughts on this?

It's, I mean, we think about and talk about it all the time. For sure, every quarter. We're reviewing the existing inventories every quarter. It's a bit of a tricky business as far as your inventory that you have on hand is constantly aging. So we're trying to play off selling down existing inventory while we're finding products that we can sell on a flip basis where we don't have to refine the inventory. We buy it, and then we sell it. And comes in the left hand, goes out the right hand kind of thing. I think we believe that we're in a bit of a temporary situation, considering the global chip shortage and the global supply chain logjam. We think that that will... That will eventually right itself. Our team has done just a fabulous job here the last 18 months. And we have seen expanded sales to new clients and new fiber competitive access carriers. So I think it's more about expanding our sales channels, not necessarily the product lines. we want to stick with what we're really good at. And we think that the market situation is a bit tenuous. So we're, I think, a little cautious about investing a lot in new product or new product inventories right at the moment. And frankly, you see, you frankly see our cash situation. So it's not like we've got a stockpile of cash that we can go off and divert into a lot of new inventory.

Okay, and you mentioned cash position. My last question, Eric, could you identify, again, the amount of money that is coming into the company on the basis of the sale of the division to Dave Scheimack that took place, what, a couple years ago? Does that come in quarterly, and how much Does it amount to on an annual basis at this point?

Dave had a five-year note, which was all public information. Dave had a five-year note, and Dave paid that note off in full probably about a year ago or so. So there's no incoming monies from that former sale of Tolson.

So there isn't anything coming in at this point from that sale?

No.

Okay. All right. Okay. Thank you kindly for all your answers. Appreciate it. It could be very interesting over the next three to six months to see this pop. And, you know, based on what we did in the last quarter of 17 mil, range and by four that's 68 million, I would assume that you can drive this up to 85 to 100 million in a year from now.

Any comment on that? Well, certainly manageable growth, you know, growth that, you know, we'll take all the growth we can get. as long as it fits the strategy of the company and is in the geographies we can serve and we can make money, right? Right. Okay.

All right. Best of luck to you going forward here. We're all rooting for a real success.

Take care.

Thank you, George. Thank you.

And as a reminder to ask a question, that is star 1 on your telephone keypad. We'll go next to Anthony Martiz. Private investor.

Hi. Good morning. Your sales for the quarter are greater than your entire market cap at this point. So clearly people are disappointed in what's been going on. You speak very elegantly and glowingly about the future of the company. I'd like to make a suggestion, that is to see some insider buy-ins. We haven't seen anything since, I believe, in 2020 at significantly higher prices by one or two individuals. I see zero insider buying by any of the directors. So on one hand, got a lot of confidence. On the other hand, I think to really show a vote of confidence, it would be nice to be able to see some insider buying. And again, I'm not trying to count people's money, but certainly to see zero insider buying, given all the opportunities, all the success that you forecast, I think that would be the best way to convince people that the turnaround is for real.

Yeah, I think it's a, it's a great suggestion and it's timely as well. Um, I would use a bit of a weak excuse and just say we've had our heads down trying to manage our way through all this growth and turn the company back to profitability. We've kind of lost sight of that, and I appreciate both yourself and the previous investor that asked the same question for reminding us of the signal that it sends to the marketplace. So I appreciate the suggestion.

Yeah, it's going to make it a lot easier for Brett and his team to market the company when you're able to introduce the company as a company that is, A, cheap on an asset basis, sales basis, whatever you want to call it, and at the same time be able to say, hey, not only is it cheap, but insiders are showing their confidence by buying the stock That current level is sort of ironic. The stock's trading at a 52-week low, and yet your sales are just beginning to, what looks like, ramp up significantly. So in any case, it's going to make it a lot easier to market the company as you go forward with insider buying as evidence of confidence of management.

Yep. Yeah. Thank you for the reminder. We appreciate it.

All right.

And at this time, there are no further questions.

All right. Well, thank you, everybody, for joining us on the call today. We appreciate your support. We appreciate your interest. We are clearly focused on returning this company to profitability. We've been deep in the effort of trying to grow the business and both the telco and the wireless side. have shown nice growth two quarters in a row. On the telco side, it's been three quarters in a row. And now is the time to get this company back to a profitable situation. And so that's our mission here over the next two quarters is to get us back in that position in a solid fashion and set the stage for fiscal 2023 already. So thank you again for your time and your interest. Thank you, operator.

Thank you. This does conclude today's conference. We thank you for your participation.