Kubient, Inc.

Good afternoon and welcome to Kubian's fourth quarter and full year 2021 earnings conference call. Joining us for today's call are Kubian's founder, chairman, chief executive officer, chief strategy officer, and president Paul Roberts, chief financial officer Josh Weiss, and president of agency and brand partnerships Michael Kalman. Following their remarks, we will open the call for your questions. Before we get started, I need to alert you to our safe harbor statements under the Securities Litigation Reform Act of 1995. During this call, we will be making forward-looking statements, including statements related to future events or to our future financial performance, and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. Listeners should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties, and other factors which are, in some cases, beyond our control and which could and likely will materially affect actual results, levels of activity, performance, or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties, and assumptions relating to our operations, results of operations, growth strategy, and liquidity. These statements are subject to known and unknown risks, uncertainties, and assumptions that could cause actual results to differ materially from those projected or implied during the call. Furthermore, listeners are referred to the documents filed by Kubian Inc. with the SEC, including our annual report on Form 10-K, filed with the SEC on March 30, 2021, our quarterly report on Form 10-Q for the first quarter of 2021, filed with the SEC on May 14, 2021. Our quarterly report on Form 10-Q for the second quarter of 2021 filed with the SEC on August 16th, 2021. And our quarterly report on Form 10-Q for the third quarter of 2021 filed with the SEC on November 12th of 2021, with the understanding that our actual future results may be materially different from what we expect, which include these and certain other important risk factors. We qualify all of our forward-looking statements by these cautionary statements. Also note that the forward-looking statements on this call are based on information available to us as of today's date. Except as required by law, we assume no obligation to publicly update or revise these forward-looking statements for any reason or to update the reasons. Actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. Please refer to Kubian's SEC filing, specifically its registration statement on Form S-1, initially filed on December 12, 2020. for a more detailed description of risk factors that may affect the company's results. During the call today, management will discuss adjusted EBITDA, a non-GAAP financial measure, and the company's press release and filings with the SEC, both of which are posted on the company's website. You will find additional disclosures regarding this non-GAAP measure, including a reconciliation of this measure with its comparable GAAP measure. Non-GAAP financial measures are not intended to be considered in isolation form in isolation from a substitute for or superior to gap results. The company encourages you to consider all measures when analyzing its performance. Now, I would like to turn the call over to Paul Roberts. Thank you, sir. Please proceed.

Thanks, operator, and thanks to everyone who has joined us today.

The fourth quarter marked the end of a transformative year for Kubian as we continued to make progress in positioning ourselves for success amid the changing demographics in the modern advertising industry. Though there have been some macroeconomic and geopolitical issues that affected the world economy during 2021, we were able to garner many encouraging wins and have set ourselves up for an even more exciting 2022. A key highlight to mention is that we beat our revenue target for the fourth quarter and full year by achieving approximately $850,000 and $2.7 million, respectively. This is the result of our continued execution across a multitude of fronts within our business, and we are just getting started. Further propelling our growth trajectory was the acqui-hire of Media Crossing, which we'll discuss in further detail later on in this call. Additionally, if not for the disclosed legal settlement and associated legal fees incurred towards the tail end of Q4, we believe that we would have also hit our overall cost and EPS target. I'll pause there and refrain from further commenting on the financials, as our CFO, Josh Weiss, will cover that topic in more detail. But overall, I believe that our organization is moving full steam ahead, both from an operations and financial standpoint. Despite the numerous external circumstances outside of our control, there are tailwinds that illustrate the growth of the digital advertising industry, which is a big encouragement. In particular, a recent study published by Salesforce estimated that 60% of customer interactions will take place online in the next five years of commerce, a rapid acceleration from the reported 49% in 2019. We believe that the increasing need for effective advertising spend has never had such a bright and growing spotlight. further illuminating the need to cut fraudulent and inefficient advertising engagement. With the total addressable market rapidly growing, we intend to ramp up operations to expand our footprint and capture as much market share as possible. In order to execute this goal, we've had to and will continue to bolster our roster of talented employees. For example, we hired Mitch Berg as our new Chief Technology Officer in late November 2021. Mitch brings more than two decades of technology, engineering, and executive management tenure to the Kubian team. His tremendous industry knowledge and experience in scaling advertising technology businesses made him the ideal candidate as we look to enhance the capabilities of our solutions and ultimately ramp up commercialization efforts. Mitch has already put into place industry-leading practices for our development strategy, and the announcement of his joining Kubian has already attracted some incredible talent interested in working with him to accelerate the next generation of online digital advertising. As I've mentioned in the past few earnings calls, supply continues to outweigh demand in the job market. Nevertheless, our human resources team has meticulously handpicked and will continue to do so individuals that are not only great on paper, but are a great match to the culture of what our organization is looking to be. That said, I'm pleased to share that we now have a total of 38 valued employees and we're growing each month. However, as was iterated in the past, we have had contractors based in Russia. Due to the current international environment, we have decided to no longer work with any contractors based within Russia and have canceled all contracts with such Russian contractors that remain in the country. Given the circumstances, we recognize that we must be a fluid and nimble organization and focus on controlling the controllable. With that said, Mitch has been able to replace those contractors with additional resources here in the United States without experiencing any drop in development progress or platform performance. In addition to organically hiring, we have been very successful growing our team by way of M&A. making the quality of employees of an acquisition target a key criteria in our ongoing search. M&A has borne great fruit for our personnel expansion and comes in handy during these times where competition for skilled labor has never been stiffer. This inorganic growth strategy is and will continue to be a key pillar of our go-forward strategy, bolstering our vertical and horizontal growth in the advertising ecosystem. A shining example of our efforts on the M&A front has been the acquihire of Media Crossing, a company that was previously engaged in the business of providing digital media services to agencies and brand advertisers. Michael Kalman, the former CEO and co-founder of Media Crossing, will soon take the baton from me to speak further to the role he's playing in expanding Qubient's Managed Services division. Later, I'll go into greater detail on our operational updates leading into the new fiscal year and discuss our valued and evolving partnerships. But for now, I'll let Michael take the floor. Michael?

Thanks, Paul. I definitely appreciate the warm introduction. I could not be any more excited to be part of this wonderful QBN team. In less than 45 days, QBN successfully integrated Media Crossings personnel, clients, Vendors and Expertise in the QBN's Managed Services Division, or KMS for short. I'm grateful to everyone that helped us manage through the transition and thrilled that our team was welcomed with open arms into the QBN community and culture. As we've already found ourselves seamlessly woven into the company, employee morale is extremely high and we could not be more excited for the extensive capabilities under our belts within the KMS division. From the onset, we wanted to utilize Cubion's technology to help our clients drive notable outcomes, with the underlying themes being innovation and solid client service. To enhance our advertisers' success, we believe the proprietary technology of Cubion's CHI, acting as an omnipresent fraud tool, coupled with Cubion's audience marketplace platform, offers the prime ecosystem to deliver incredible quality results. With that in mind, we didn't miss a beat servicing our clients. going to market, and explaining what our new partnership with our new ownership team would provide from a value proposition standpoint. Qubient Managed Services has been developing strategies and plans for advertisers to help them win market share, increase their share of voice, and ultimately gain the client conversation. Our team truly believes that the future of a successful digital advertising strategy depends on a brand's ability to work directly and transparently with quality supply sources and other key technology partners. By integrating our roster of incredible advertisers into the audience marketplace, we believe that we are setting them up for continued success. Looking ahead, as it relates to further inorganic growth opportunities, we are specifically searching for companies that will grow our existing ecosystem of services by adding additional direct publishers, direct advertising partnerships, as well as ones that provide additional technology, operational expertise, business development, and human capital resources. Furthermore, we are confident that our installed base of advertisers will greatly benefit from the types of M&A transactions Paul and our leadership team are vetting. I cannot emphasize enough how ecstatic our team is to operate as part of CUNY Advantage Services, and we look forward to updating you on all of our progress going forward. With that said, I would like to hand the mic over to Josh to go through our financials. Josh?

Thanks Michael and good afternoon everyone. Thanks for joining our call. Now to our financial results for the full year ended December 31, 2021. Net revenues for the full year of 2021 were approximately 2.7 million compared to approximately 2.9 million in 2020. Turning to our expenses, technology expenses increased to approximately 3.1 billion from approximately 2.1 million in 2020. The year-over-year increase was primarily due to increases in salary expense of additional technology personnel headcount, stock-based compensation, consulting expenses, amortization of software, and cloud hosting costs. General and administrative expenses increased to approximately $6.1 million compared to approximately $4.2 million in the full year 2020. The year-over-year increase was primarily due to a one-off legal settlement and related legal fees incurred in Q4 2020. in addition to increases in salary expense primarily arising from an increase in recruiting fees, as well as increased insurance expense, professional fees, and taxes. GAAP net loss attributable to common shareholders was approximately 10.3 million, or 75 cent loss per share, and decreased compared to approximately 9.6 million, or $1.85 loss per share in 2020. The year-over-year increase in net loss was due to increases in expenses described above, as well as the one-time legal settlement and related legal fees. Adjusted EBITDA, a non-GAAP measure, increased to approximately 9.2 million EBITDA loss compared to an adjusted EBITDA loss of approximately 3.6 million in 2020. As of December 31, 2021, the company had a cash balance of 24.9 million. This concludes my financial summary. For a more detailed analysis, please reference our Form 10-K, which we plan to file this week. I will now turn the call back over to Paul, who will discuss some of our major operational updates and provide a general outlook of our business. Paul?

Thanks, Josh. As evidenced by the larger companies we work with, we have discovered that both advertisers and publishers increasingly want one point of entry into the Kubian ecosystem. A singular, full closed-loop solution under the umbrella of Kubian, rather than a fragmented approach wherein customers utilize CHI and other offerings a la carte. In response, Kubian is now focusing on transitioning existing and future proposals into a unified contract approach wherein clients receive access and service from all of Kubian's technology and offerings, including CHI, all through the marketplace. This decision was made based on direct input we received from several of our key partners providing feedback on their future roadmap. As a result, CHI will no longer be offered as a standalone product and will instead be offered in the bundled audience marketplace offering. Thus, the tracking of individual CHI audits will no longer be utilized as a key KPI going forward. Clients will now benefit from the full package suite Qubient has to offer, where they will save time and money and enhance their overall operational efficiency in the digital advertising campaign. In the past year, The Audience Marketplace platform has seen a substantial net increase in the number of new publishers plugged in. Ty has been a key for us in evaluating existing direct publisher partnerships, and this has led us to removing some partners due to the spikes in fraudulent traffic. In aggregate, we maintain a relationship with roughly 14,417 publisher partners in the Qubit Marketplace, with 9,932 of those being direct relationships. A point I'd like to once more tout is that we provide one of the safest and most transparent advertising ecosystems on the market. Thanks to the capabilities of CHI directly plugged into the audience marketplace, we are able to avoid the vast majority of fraudulent activity and provide our customers and partners a pristine marketplace to transact. That said, we're still witnessing a greater concentration on the publisher side than we do on the direct advertiser or buy side within the chicken and egg scenario we've previously alluded to. Our team is hard at work in bringing this situation to an equilibrium, but for now, in parallel with our team's efforts to find new demand side partners, they've also been tasked with further establishing the relationship with our existing base of partners to ensure they are fully capitalizing on all advertising opportunities. One large win we had recently is a direct partnership with MediaMath. MediaMath is one of the largest independent DSPs in the world. This new partnership provides access to some of the largest global brands in their digital advertising budgets. The work now begins for our team to connect with those brands and explain how impactful CHI and the Qubits audience marketplace will be for their advertising campaign. Additionally, Another operational highlight I'm pleased to share is that we have extended our contract with Yahoo to also connect Kubient as a supply-side partner, or SSP, opening up Kubient's pipeline to every global brand that uses Yahoo to buy media. While these partnerships represent some of the largest players in the digital advertising world, recognizing Kubient as a true differentiator, there is additional work to be done before we see the fruits of our labor. Our team has a full list of all the brands and clients using these DSPs, and now we're busy setting up meetings to discuss pointing the media dollars into the Kubient marketplace. We're very excited to see our go-to-market strategy slowly coming to fruition, and we look forward to providing you updates. In the dynamic market of digital advertising, Kubient is focused on expanding its breadth of channels across the board. One area in particular we continue to see a strong demand from is with connected TV, or CTV, from both the buy and the sell side. According to eMarketer, CTV spend will top $19 billion in 2022, representing a 32.3% increase from 2021, and that number is projected to soar past $30 billion in annual spend by 2025. While this new channel for digital dollars is growing year over year, we are optimistic our fraud prevention technology will be a critical piece in helping advertisers prevent wasting a large portion of their media budgets on non-human and fraudulent traffic. Next, a macro shift within our industry that has effectively provided an opportunity for us is with respect to audience identity. As a result of the shift instituted by Apple and Google with their privacy policies and audience identity via cookies respectively, there has been an increase in the value of the verified audience data we have built within CAAT. There are direct brands and agencies who have connected with us asking how the audience data we have aggregated via our SSP can be used to help them continue identifying their ideal audience without the use of cookies in the future. We always believe there would be a large value in our first-party data, and our team is discussing how to productize this offering. I'd like to now touch on our go-to-market strategy. We're very excited that the world is beginning to open up again as some of the restrictions have been lifted from COVID-19. Thus, we are planning to have a presence at a few of the leading industry events, including Advertising Week here in New York City, along with numerous Digiday events throughout the year. These in-person events are an incredible opportunity to meet with industry leaders on both the brand, advertiser, and publisher sides of the world and gives us a platform to further evangelize Kubin's capabilities. We have already attended a few industry conferences in the past couple of months and remain very optimistic and encouraged from the feedback we've received regarding our solutions. The digital advertising industry is constantly evolving. creating significant opportunities for accelerated growth from companies that are truly making a difference. While we have been very vocal publicly talking about the need for an efficient and fraud-free audience marketplace, it has been very encouraging to begin to see large global brands like Target, Instacart, and even Walmart, via their Walmart Labs, begin to build technology to directly address the inefficiencies they find in the programmatic advertising landscape. With an increasing number of companies putting more and more mindshare into their programmatic advertising strategies and campaigns, it serves as a grown tailwind for us, and we intend to capitalize as much market share as possible. To conclude, though we are proud of our accomplishments thus far, we are realistic and understand how much more work has to be done to fully capitalize on the potential of our companies. We are here to play a critical role as our customers, along with every brand in the world, accelerates their utilization of a fully integrated advertising technology to better obtain full visibility across their campaigns in a more effective and efficient manner. In our broader growth effort, we'll look to continue to leverage our technical capabilities and IP, our strong reputation in the industry, a loyal customer base, and a talented energetic team that fuels our operations. Longer term, I'm confident that the successful execution of our M&A and organic growth strategy will translate to solid expansion underpinned by a highly scalable global organization.

Now, we'll turn it over to the operator for Q&A.

Operator? Thank you. At this time, we'll be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tool will indicate that your line is in the queue. You may press star 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing any star keys. One moment, please, while we poll for questions. Our first question comes from the line of Jack Vanderard with Maxim Group. You may proceed with your question.

Great. Thanks, guys. I appreciate the quarterly update. Thanks for taking my questions. I'll start with a question for Paul on headcount plans and the hiring environment that you touched upon in your prepared remarks. I think you said you have 38 total employees, but also you had contractors in Russia that you have since let go. Just for clarity, is that 38 headcount a current headcount that excludes those contractors in Russia, or is that prior to that?

That's 38 full-time employees currently. So we had more than that, and obviously due to the world events that are happening, and, you know, at times we have to make hard decisions, so we decided to part ways with those contractors. But as I mentioned, Jack, in the prepared remarks, you know, Mitch – has been very successful at attracting some new engineering talent here in the States. And we've also brought on a full-time dedicated technical recruiter to help us in this market attract some talent.

Got it. And actually, that's a nice segue.

I was going to follow up with just commenting on that. With Mitch coming on board as CTO, it sounds like you are definitely gaining some increased demand from talent. Can you maybe just talk a little bit further about your specific hiring near-term plans and needs? Maybe what areas you're currently relatively strong in and what areas you're looking to strengthen in the near term?

Yeah, I think, you know, obviously we're always focused on getting more demand-side partners and direct advertisers. And, you know, with the last two years, COVID has presented a very interesting marketplace for talent where a lot of people weren't very open to making moves. As we're starting to see New York City and other major metro areas within the US opening up, I think that's going to change. So our focus is really around those demand side salespeople, people who have direct brand relationships. They're already at other ad tech companies selling directly to brands and agencies. And that's really going to help strengthen the other side of our market that we talk about. It's a lot easier to go out and sign up a new publisher and offer them more revenue. It's easier to give people money than to ask people for money. So that skill set is somewhat unique. We're also very in tune to the fact that we have multiple M&A discussions going on where we don't want to necessarily hire somebody on Monday, and if we potentially acquire a business or a team, we have an overlap in the role. So we're trying to be very careful planning out the strategy for this year, And, you know, again, the key goal is to strengthen the marketplace through those organic hires and some potential acquisitions.

Guys, that's helpful color. And maybe just to follow up on the DSP partnerships that you've mentioned in your press release and prepared remarks, good to hear about the Yahoo contract extension and the direct partnership with MediaMath. Can you maybe just provide more color on, you know, I know it's a chicken or the egg scenario here, but Just more color on the overall status of where you're at with your demand partners, strategic outlook, I suppose, and then kind of what you realistically expect for that directionally, how you expect that to ramp up going forward.

So the first key is really to sell the platforms themselves, the DSPs, on the need for Kubient in the market, which is challenging because at times they view us as a competitor. So we have to really show them the technology, CHI, all the differentiators that we're out there telling the brands about. Once we actually get the sign off of a media map, which, you know, as we mentioned is, you know, one of the largest independent DSPs in the world and a company like Yahoo to agree to plug in their DSP. We then, you know, request the list of all the brands, agencies, media teams that are using those platforms to execute media. And that's basically our go-to, you know, our list of go-to people to call, reach out to. We know exactly which media buyer at Kraft is using this DSP, what campaigns they're fighting. And we have the opportunity then to connect and say, here's why, you know, we integrated into these DSPs. Here's the value add. You now have a very clear path to buy media on Kubian's marketplace. So it's, It's a lot of, you know, starts and stops and starts and stops, but I think we're making tremendous headway getting these types of DSPs, number one, to pay attention to the problems, and number two, to realize that we have a solution that once they integrate, their brand partners can benefit from.

Yeah, that makes sense.

And then, you know, I think another piece of new information this quarter is the announcement with Kai. which is going to be, I guess, exclusively now bundled into the audience cloud and no longer offered as a standalone product, right? So can you maybe just expand a bit more on the strategy and thought process behind that? I feel like you probably spent a lot of time thinking about why that would be the best approach here. I think it's competitive differentiation and gets, you know, really focused on your core audience cloud, but I'll let you take that. Yes.

So, you know, Kaya is at, at its core is the ability to remove fraudulent traffic. The brands are really the people who care the most about this type of solution. So our, our path so far has been, okay, we're going to do an audit. We're going to basically show a platform, show a brand, how much fraud there is in their current, you know, their current technical setup. And then we're going to integrate with wherever that brand is buying media, whether that be another SSP, another DSP, et cetera. what we've been hearing from the brands themselves is we don't want to really have to wait or we don't have to, you know, bring you along to our current technical partners to integrate. Can we just buy the media through your audience marketplace? So it's the perfect time for this type of feedback with the addition of the media crossing team, because they are purpose built to service those direct brand advertisers. So initially we didn't have the resources in house if, A brand said, we want to buy directly through, use CHI, you know, here we go, here's our budget. But if you look at the background and experience of the Media Crossing team, that's really their bread and butter, working directly with media buyers at large, you know, global companies to say, here's my campaign KPI, here's the budget I want to spend, here's the audience I want to reach. So now it benefits Kubient because we're basically taking all of that budget directly through our pipes, whether they plug in through a DSP, through their trading platform, et cetera. But it's really based upon the feedback we've gotten from the market where people don't want to use CHI in somebody else's platform. They want to use it natively in Qubient's marketplace. And, you know, based upon that, we, as a team, said with the amount of resources we have, let's focus on what's going to generate the most revenue as quickly as possible.

Gotcha. No, that makes, that makes a ton of sense.

Um, and then, so I guess that would, I would imagine that when you are looking at your revenue growth going forward now, it is going to be predominantly or almost entirely through the audience cloud. Um, unless you start launching some, I know you have some other revenue streams or product kind of solution offerings, uh, maybe longer term. Um, is that a fair assumption?

It is. I think it's really going to be more about the media dollars that are coming through our pipes and being able to demonstrate how impactful CHI is over time. And that's going to be the tool that we go out into market and say, if this is working for this brand, you're in a very similar position.

It'll work for you and your media strategy as well. Got it. And then just one last question.

You mentioned Connected TV as a a secular growth market essentially that's really taken off here. I'm tracking to be $30 billion or so according to eMarketer in 2025. Is this a new channel for you that you're focused on now or is this something that you were already targeting? If you could just help me understand that dynamic and where that came into play.

The connected TV market, the numbers speak for themselves. What you're seeing is a lot of brands move money from you know, traditional television into this new medium. So for us, we have to kind of follow where the brand dollars are going. So we've basically, you know, had a hard conversation internally about we need certain integrations for this to work. We need connections into Roku, into Hulu, et cetera, so that our audience marketplace can deliver the audience that these brands are asking us for. The good part about CTV is that the CPMs or cost per melee, the pricing of these and units are very at a much higher premium than traditional desktop or mobile type traffic. So we think it's the right place for us to be because there's also a huge issue with digital fraud within CTV. The criminals Jack, they'll typically follow where the dollars are being spent so that their efforts, you know, they could steal the most money possible. So I think it's very good for us that brands are moving into this newer area of the market. we can use CHI, we can connect directly in, and again, delivering that promise of the efficiency and the fraud prevention for our partners.

Awesome. Well, great to hear the update. I appreciate the time.

I'll hop back in the queue. Thanks, Paul.

Thank you, sir.

Our next question comes from the line of Ben Jen with 1435 Capital. You may proceed with your question.

Hi, Paul. Thanks for the updates from their earnings call. It's great to see that you guys have made significant progress in the past year. I'm just curious from an M&A perspective, you know, what, I guess, what do you guys have in the pipeline and, you know, in terms of potential acquisitions coming up or anything?

Sure. So, obviously, there's certain information I can share and, you know, thanks for the question, Ben. The reality is that the market, the public market and the private market for capital has changed significantly in the last few months, even more so now with the world events that are happening. So being a publicly traded company with proprietary technology, such as TIE, such as our marketplace, it's really opened up the door to some very, very unique conversations recently of much larger companies that were potentially exploring the public markets this year or potentially exploring funding and those, those opportunities might've closed for them. So we have been, you know, very, very diligently looking at what is going to deliver the most value for our shareholders. And I think, you know, the opportunities out there that are presenting themselves are exciting on numerous fronts. One, it's from a partnership headcount, you know, revenue, But the size of the opportunities have somewhat changed, in my opinion, in the recent development. So having the public vehicle, having this technology, you know, we're a well-known entity within the programmatic space. So there are a lot of companies that have reached out to us to really partner and see what more strategic can be done. So hopefully that answered your question without, you know, setting over any lines there.

Yep, it was extremely helpful.

Thanks, Paul. I'll go back into the queue.

As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue, and you may press star 2 if you would like to remove your question from the queue. One moment, please, while we pull for additional questions. Our next question comes from the line of Jack Vanderaard with Maxim Group. You may proceed with your question.

Great, thanks. Hey, Paul, just one follow-up for you on the headcount and expansion plans. So around 38 total full-time employees, I think last quarter, maybe two quarters ago, you had some, I think, like an informal target of hitting around 50 employees. total employees or so, is there an update to that target? And correct me if I'm wrong if that wasn't the target, but is there a sense of where you're trying to move for like a magic number here for total headcount just so I can have an idea of how OpEx will also track with that?

Sure. So the 50 number obviously included some of the ICs that we had, Jack, you know, including along with the FTEs. So the independent contractors and FTAs we felt would add up to about 50. You know, again, the biggest challenge for us as we weigh some of these potential M&A activities and the resources they bring versus what we're out there in market looking for, you know, we've had a lot of conversations with our board and our comp committee around, you know, do we put the job rec out there and potentially hire the person? And then, you know, we have duplicative roles within the organization. So we're trying to be very thoughtful of the OPEX. But I think, you know, realistically, we're probably going to be close to that 50-50 number probably by the beginning of Q4 of this year, and that will be primarily driven by FTEs here in the U.S.

Okay, great. That's helpful. Thanks, Paul. That's it for me. Great.

At this time, this concludes the company's question and answer session. If your question was not taken, you may contact Kubian's investor relations team at kubian at gatewayir.com. I'd now like to turn the call back over to Mr. Roberts for his closing remarks.

Thanks, Operator. Obviously, thank you, everyone, for joining us today on our Q4 and full year 2021 earnings call. I especially want to take a moment and thank our employees, our partners, our investors, and customers for their support. We appreciate your continued interest in Cuvient and look forward to updating you on our next call.

Operator?

Thank you for joining us today for Kubian's fourth quarter and full year 2021 earnings conference call. You may now disconnect your lines. Have a great rest of the day.