Ondas Holdings Inc.

Good day, and welcome to the ONDIS Holdings, Inc. Third Quarter 2021 Earnings Conference Call. Today, all participants will be in a listen-only mode. Should you need assistance during today's call, please signal for a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touch-tone telephone keypad. To withdraw your question, you may press star then 2. Before we begin, the company would like to remind you that this call may contain forward-looking statements. While these forward-looking statements reflect ONDIS's best current judgment, they are subject to risks and uncertainties that could cause actual results to differ materially from those implied by these forward-looking statements. These risk factors are discussed in ONDIS's periodic SEC filings and in the earnings press release issued today, which are both available on the company's website. ONDIS undertakes no obligation to revise or update any forward-looking statements to reflect future events or circumstances except as required by law. Please note that today's event is being recorded. At this time, I would like to turn the conference over to Eric Brock, Chairman and CEO. Please begin, sir.

Well, thank you, Operator. Good morning and welcome to our third quarter investor call. I'm joined today by Stuart Cantor, our President and CFO, and Reece Moser, the CEO of our wholly owned subsidiary, American Robotics. I'd like to set the stage for today's call by providing an overview of Ondas Holdings now that we've closed the American Robotics acquisition effective August 5th. Andas Holdings is now formally comprised of two wholly-owned subsidiaries, Andas Networks and American Robotics. Both companies, Networks and AR, provide platform technologies as full end-to-end integrated mission-critical IoT data solutions. Networks provides mission-critical private wireless networks, offering unmatched data capacity and operating flexibility for industrial and government markets. American Robotics offers the Scout system, the first and only fully autonomous drone platform approved by the FAA to fly beyond visual line of sight without on-site human operation in industrial, agriculture, and government settings. Both companies have attractive, high-margin, capital light, and high return on investment business models. Networks offers a large platform sale, whereby our Fullmax wireless technology is able to generate significant revenue at network deployment, And, of course, those networks then grow. The network platform sale is complemented by recurring software and systems maintenance providing SaaS-like revenue and profit streams. Similarly, Merica Robotics deploys a Scout system in a turnkey robot-as-a-service, also known as data-as-a-service, business model. The Scout drone system is owned and operated by AR, while the customer pays an annual subscription to receive the data analytics required for each of their use cases. Together, you will see tremendous synergy between the two companies as we scale. We have the opportunity to bring the Fulmax wireless platform to the Scout system and extend the reach of the Scout system more deeply across field-era operations for our customers. Similarly, we see customer interest in the Scout system as driving new MCIoT wireless network opportunities for OnDOS networks. We see significant customer marketing and field services synergy across the common customer and market both companies target. In short, Andas Holdings has a full suite of technology positioned to attack large end markets with significant growth potential, and we do this with businesses operating under attractive financial models. With that overview, let's shift towards outlining the agenda for today's call. First, I will highlight the progress we are making on the key business priorities of Andas Networks and American Robotics. Then I will ask Stuart to share our Q3 financial results. Next, Stuart and I will provide detailed updates on activity with the rails, Siemens, and Aura networks. Reese will then provide a similar update for American Robotics as we execute the go-to-market strategy with the Scout system. Then I will summarize the call and then open the floor to questions and answers. So let me start by highlighting that we've made significant progress over the second half of 2021 in executing on all our key priorities for both OnDesk Networks and American Robotics. Importantly, at OnDesk Networks, we are now marking this upcoming period as a transition. We are transitioning from investment mode to FOMACS platform delivery in adoption mode. I want to emphasize this. Commercial adoption of our FOMACS technology platform has begun in and we are transitioning towards platform delivery. Today, we are excited to announce that OnDots has received the first commercial purchase order for systems connected to that all important Greenfield 900 megahertz network. This order has come from Siemens on behalf of a major class one rail. In addition, Siemens and OnDots are in conversations with other class one rails about additional 900 megahertz orders. This moment has been eagerly awaited for by our investors. and we continue to be thankful for your support. Again, we have now transitioned ONDOS networks towards platform delivery. This is a huge accomplishment, and I want to take a moment to acknowledge the team at ONDOS and all the hard work and talent that has gotten us to this point. It's really exceptional, and I'm very proud of our team and grateful for their efforts. In addition to the initial order for 900 megahertz, our partnership with Siemens continues to broaden. On the call, we will share details on the outlook for additional jointly developed products whereby Siemens continues plans to integrate our FOMAX wireless technology in the critical train systems that Siemens markets to rail customers worldwide. The Siemens partnership is also expanding on the marketing side. We see identified customer network opportunities in international markets and have also begun exploring near-term opportunities in transit markets, as we expand beyond our initial focus on North American Class I rails, and as interest in IEEE 83.16s and .16t builds throughout the global rail sector. So the SEMA's relationship continues to grow across products and end markets, signaling the value which our full max connectivity platform provides as we build our ecosystem. We've also now completed the phase one effort with Aura Network Systems. We will provide more insight on the technical development there and the value created for Aura Networks. Let's turn to American Robotics. We are now in execution mode as AR focuses on scaling their business. We laid out the American Robotics business expansion plan in great detail in our business update investor call at the end of September. That plan has been launched, and as you know, it's very ambitious. Key hires are being onboarded, and we're adding significant talent to help build our business. We have ramped production capability of the Scout system, and deliveries have begun. We believe field installations are poised to accelerate. Customer activity is expanding, and the ecosystem around Scout is also growing, as evidenced by the recently announced partnership with Dynam AI. Dynam is a supplier of artificial intelligence technology with physics-based foundations. REES is going to provide important highlights of all this activity as American Robotics scales its Scout delivery platform. Stuart, I will now hand the call over to you to provide more details regarding the third quarter.

Great. Thank you, Eric. As I share our financial results today for the third quarter and first nine months of 2021, please note that we've included our financial statements in this morning's press release and that we'll be filing our 10Q by the end of the day. The numbers we are reporting do include financials for American Robotics beginning August 6th. Now, moving to our third quarter results. Revenues decreased by 54% to approximately 0.3 million for the three months ended September 30th, 2021, as compared to approximately 0.6 million for the three months ended September 30th, 2020. The decrease in revenue was primarily a result of lower product sales and development revenue in the three months ended September 30th, 2021, as compared to the three months ended September 30th, 2020. Gross profit decreased by 95% to approximately 14,000 for the three months ended September 30th, 2021, as compared to 248,000 for the three months ended September 30th, 2020, as a result of lower revenue and higher cost of goods sold related to development agreements. Gross profit on a percentage basis was approximately 5% for the three months ended September 30, 2021, compared to 40% for the three months ended September 30, 2020. The lower gross profit percentage was driven by lower amounts of product revenue with higher gross margin and higher cost of goods in development revenue. Operating expenses increased by $1.9 million for the three months ended September 30, 2021, as compared to three months as compared to the three months ended September 30, 2020. The increase in operating expenses was primarily due to an increase of approximately $664,000 in professional fees related to the American Robotics acquisition, an increase of approximately $629,000 in depreciation and amortization expense due to amortization of American Robotics intangible assets and an increase of approximately 463,000 in R&D development expenses for the three months ended September 30th, 2021. The company realized an operating loss of approximately 4.9 million for the three months ended September 30th, 2021, as compared to 2.7 million for the three months ended September 30th, 2020. Operating loss increased primarily as a result of an increase in operating expenses of approximately 1.9 million, primarily associated with the American robotics acquisition, and a decrease in gross profit of approximately 235,000 for the three months ended September 30th, 2021. Net loss was approximately 4.9 million for the three months ended September 30th, 2021, as compared to a net loss of 3.3 million for the three months ended September 30th, 2020. I'll now transition to our first nine months financial results. Revenues increased by 19% to approximately $2.3 million for the nine months ended September 30, 2021, compared to approximately $2 million for the nine months ended September 30, 2020. The increase in revenue was primarily due to larger amounts of development revenue from Siemens and Aura Networks during the first nine months of 2021, offset by lower amounts of product revenue. Gross profit increased by 5% to $929,000 as a result of higher revenue for the nine months ended September 30, 2021, as compared to $882,000 for the nine months ended September 30, 2020. Gross profit on a percentage basis was approximately 40% for the nine months ended September 30, 2021, as compared to 45% for the nine months ended September 30, 2020. operating expenses increased approximately 36 percent to $11.9 million for the nine months ended September 30, 2021, as compared to $8.7 million for the nine months ended September 30, 2020. The increase in operating expenses was primarily due to an increase of approximately $1.5 million in professional fees related to the American Robotics acquisition, an increase of approximately $644,000 in depreciation and amortization, expense due to the amortization of American Robotics intangible assets and an increase of approximately $743,000 in development expenses for the nine months ended September 30th, 2021. The company realized an operating loss of approximately $10.9 million for the nine months ended September 30th, 2021 as compared to a loss of approximately $7.8 million for the nine months ended September 30th, 2020. Operating loss increased primarily as a result of an increase of approximately $1.5 million in professional fees due to the American Robotics acquisition, increase of approximately $644,000 in depreciation and amortization expense due to amortization of American Robotics intangible assets, and an increase of approximately $743,000 in development expenses for the nine months ended September 30th, 2021. Net loss was approximately 10.9 million for the nine months ended September 2021, as compared to a net result of 9.4 million for the nine months ended September 30th, 2020. And lastly, the company held cash and cash equivalents of approximately 47.5 million as of September 30th, 2021, as compared to approximately 26.1 million as of December 31st, 2020. Now I'll turn this back over to Eric.

Well, thank you, Stuart. Now let's transition to a more detailed conversation around the key elements of the business plan for on-dust networks in American Robotics as we move through the second half of 2021. I will give an overview and ask Stuart and Reese to provide details. Let's start by, again, highlighting that we have now received the initial commercial purchase order for the Greenfield 900 MHz network. In addition, we, along with Siemens, are finalizing terms with the Association of American Rails, or the AAR, regarding the strategically important NCIOT Rail Lab, which we will discuss in greater detail in a moment as well. Stuart will also provide more insight into the Siemens partnership and the ways it is growing and adding to the value creation at OnDust Networks. In addition, he will summarize where we are at with Aura and the critical technology and intellectual property we have created with our work there. When Stuart is finished, Reese will provide an update on where American Robotics is on the business plan, as we scale operations and deliver for customers at AR. Stuart?

Great. Thanks again, Eric. During the third quarter, OnDisk Networks, along with our strategic partner, Siemens Mobility, officially launched the Siemens New Air Link mission-critical IoT radio platform. This family of software-defined radios is a result of our exclusive partnership with Siemens to bring next-generation wireless products to the North American rail market. and are based on ONDIS's 802.16ST software-defined radio technology. The product launch, which was held at the Railroad System Supplier Show in September, included the announcement of the completion of our first joint development program for the North American rail market. The program has now delivered a full max integrated dual-mode base station and wayside edge radio operating in the newly allocated 900 megahertz band. This radio has simultaneous support for the existing 900 megahertz ATCS spectrum. These radios enable a smooth and flexible migration path for the Class 1 railroads to the new 900 megahertz frequency range. And as Eric just previously shared, we are also excited to announce that Siemens Mobility has now secured its first commercial order from a Class 1 railroad for the new 900 megahertz dual-mode radio products scheduled for delivery starting this December. In addition to the North American products, we continue to advance our second major development program with Siemens for a next-generation radio for the global rail markets, including support for our first onboard locomotive radio. Siemens has identified demand for this product in both North America and in international markets. And Siemens' confidence in us and our technology has now been further demonstrated by awarding on this new development contract to customize the radio solution for a major rail customer in Asia. Our partnership with Siemens continues to broaden in scope and reach as both companies acknowledge that reliable wireless connectivity is a key enabler of the digitalization of railroads and the way for increased automation. We also expect additional joint development programs for global products to be secured by the end of the year. And finally, we expect during the first quarter to continue to build inventory and increase internal human resources to meet an expected increase in product demand for both North American rail and international markets. Now moving on to the MCIoT Rail Lab. ONDIS and Siemens are currently negotiating with the Association of American Railroads for the implementation of the MCIoT Rail Lab to be hosted at our headquarters in Sunnyvale, California. We expect the lab to support not just the 900 megahertz band, but multiple nationwide frequencies held by the railroads and managed by the AAR, as the industry standardizes on the 802.16ST communications protocol. The lab will allow for next-generation application and interoperability testing, optimization of various network configurations, and training of rail network engineers for deployment nationwide. We believe the lab validates the importance of the standard and the coordination of the industry around our technology. Now transitioning to Aura networks. Also in the third quarter, we successfully completed our phase one software and hardware development for Aura. Aura has constructed a private nationwide air-to-ground communications network using dedicated licensed frequencies based on our radio platform. and is actively working with test customers as it pursues commercialization plans with NASA and the FAA. We expect additional orders in the fourth quarter to support their testing and commercialization efforts. Importantly, the new Phase I software release includes significant real-world airborne testing of ONDIS's C2 capability for unmanned aviation. ONDIS's proven C2 capabilities, along with its support, for multiple license frequencies continues to stimulate interest from additional drone operators, as well as our own American Robotics subsidiary. I'll now turn the call over to Reece Moser so he can provide an update and outlook for American Robotics.

Reece?

Thank you, Stuart. American Robotics continues to execute the business plan outlined in the investor call on September 28th. Progress has been made on all fronts. Hiring has accelerated to a steady, on-target growth rate, and headcount has increased over 200% from Q3 of the previous year. We've added key personnel and industry-leading talent at all levels of the organization, including VP of Sales, VP of Operations, VP of Engineering, Director of Talent, Director of Flight Operations, and Director of Products. This increased headcount is enabling American Robotics to accelerate sales, manufacturing and deployment of SCAP systems. Additionally, we have made progress on maturing our supply chain and manufacturing capacity to satisfy existing customer demand. To this end, we have partnered with industry-leading contract manufacturers in the Northeast and have completed the training necessary for those partners to independently manufacture our products. Initial production units from this manufacturing line have been delivered and installed at customer sites. Customer demand remains robust, and our pipeline is growing. We announced the receipt of a purchase order in the third quarter from a Fortune 100 oil and gas company, and the initial unit for this contract has been delivered and installed in the Midwest. This oil and gas customer, ConocoPhillips, fits the characteristics of a franchise customer with the ability to move to fleet deployments. We expect this relationship to grow to additional units and expanded use cases. There are more than 90,000 oil and gas wells in the United States and 835 kilometers of pipeline that require constant monitoring and inspection. We've also secured a purchase order with Syngenta for Q2 delivery and look forward to working with them on ag-specific applications. We've made significant progress with stockpile reports as well. A customer who has contracted for multiple scout systems. We've deployed our Scout platform at a mid-Atlantic location and have been delivering data reliably and repeatedly. We have successfully completed a deep integration of our respective technologies, enabling extremely accurate and reliable information and measurements about their assets multiple times a day. This contract calls for the scaling uh of the deployment of our scout system throughout the united states and we are working with stockpile reports to prepare and operationalize these commitments in the fourth quarter of 2021 and beyond we expect additional fortune 500 industrial companies to provide orders in q4 for delivery in the first half of 2022. we currently have a backlog of customer interest that we expect to build in the coming months as we're able to support increased customer field activity These franchise customers offer the ability to purchase and utilize fleets of Scout systems across the United States and the world. Lastly, we want to highlight a significant strategic relationship we recently established with Dynam AI, a developer of artificial intelligence and machine learning capabilities. This partnership will allow AR to accelerate its product offering of cutting-edge AI and ML techniques to its industrial customers, further increasing the value proposition for these markets and accelerating customer demand. The joint work for this partnership has already begun, and we expect to announce these additional analytics-driven product offerings in the coming quarters. In connection with the AR partnership, Ondas Holdings has made an investment in Dynam AI, We're very excited about the strategic value of this relationship as we continue to develop and enhance our library of proprietary AI-driven analytics features. To summarize, we're very happy with the pace of development at American Robotics. We believe AR is on the cusp of widespread adoption for our market-leading scout system for several critical industries, and we look forward to providing more updates over the balance of the year on additional business accomplishments. Now I'd like to transition back to Eric to wrap up the call before Q&A.

Well, thank you, Reese and Stuart. I'd like to take a minute to wrap up our prepared remarks before we move to Q&A. Andas has made tremendous progress this year, positioning the company for huge growth in large open-ended markets. We have worked extremely hard to deliver on these opportunities for investors, and we are grateful for your support as we execute these business development efforts. While there's clearly more work ahead, we have reached an inflection point in the business for Andas Networks. At Networks, we are transitioning from investment to platform delivery as the 900 megahertz commercial build begins. As we engage in planning with Siemens and our rail customers, visibility on the ramp for wide deployment on the 900 megahertz system will improve. We expect to carve out time for an on-desk networks rail update in Q1, either on the quarterly conference call or perhaps in a separate breakout meeting to provide an updated and more comprehensive view of the rail TAM and the cadence for the 900 megahertz deployment cycle, as well as opportunities that are emerging in international markets. At American Robotics, we are similarly in execution mode. Production of Scout systems is ramping, and more importantly, the customer and field services platform is being scaled to support more customer activity. We are establishing critical business processes to serve our sophisticated customers, ranging from streamlining purchase order documentation and contracts at the time of sale to creating efficient Scout system installations and flight operations. This is all pointing towards preparation for both AR customers and the American Robotics team for fleet deployment by franchise customers. We expect to have a greater and more consistent volume of customer purchasing activity at both ONDOS and American Robotics as we move into 2022. We look forward to wrapping up a strong year with significant strategic accomplishments, and we intend to build on the momentum we have generated for our businesses at both ONDOS networks and American Robotics. Operator, we can now open the call to Q&A.

We will now begin the question and answer session. As a reminder, to ask a question, you may press star then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw it, please press star then two. At this time, we will pause momentarily to assemble our roster. It appears that Our original questioner may have disconnected. I am going to take the next question now from Mike Lattimore with MCM. Please proceed, sir. Okay, thanks.

Yeah, congratulations on all the strong developments there. I guess in terms of the first commercial order, I don't know, can you provide a sense of number of units or size of that order, and then also maybe just a little more color on the type of use case, and is it going to be in, you know, like a specific region? And any more color on that would be great.

Sure. Thanks, Mike. We're not able to share terms at the moment. We need to let Siemens plan the marketing on the details of the orders. As Stuart mentioned earlier, Ondas and Siemens are an active conversation with multiple rails. We do expect additional orders. So, Stuart, would you add anything to that?

No, I think that's right. In terms of applications, it's all the ones we've been talking about, anywhere from crossings to high rail. Basically, the way the rails view our network is it's an IP network for all their advanced applications. Of course, they're going to be supporting their legacy ATCS, the train control system, as they migrate off the band.

Okay, got it. And then... This order is separate from the MCIOT lab order, I believe. I guess, can you talk a little bit more about when you might see that kind of lab order?

Yeah, so as we said, we're finalizing terms and we're targeting a purchase order in Q4. This lab is, I'll add, strategically important for ONDOS. As Stuart described, the lab goes beyond 900 megahertz. It's really an evergreen testing environment for all the Class 1 communications networks, so 450, 160 as well. And it's another validation point for the important role ONDOS and our full max wireless platform has on the technology roadmap for the Class 1 rails. Great.

And then just on American Robotics and Dynam.ai, can you provide a little more detail there? What would be sort of the – first type of analytics we might see or, you know, which vertical might they focus on first?

Yeah, sure.

I can take this. Yeah. You know, the applications for our product are quite broad. So there's a lot of options. And as our business is ultimately about data, there's really an extensive list of opportunities to leverage and monetize the techniques that Dinah brings. But, for example, you know, our focus is going to be on the markets that we're most interested right now, which includes oil and gas, rail, and bulk materials and mining. Okay, great. Thank you.

Thanks, Mike. Our next question comes from Tim Horan with Oppenheimer. Please proceed, sir.

Hey, guys. Congratulations. A couple of questions. One, do you think the rail industry can meet the requirements, the FCC requirements to vacate the 900 megahertz spectrum, you know, on time from, you know, from what you can tell at this point? And can you remind us how large of an overall opportunity that is for you guys? I have a few follow-ups. Thanks.

Yeah, sure. Thanks, Tim. So, yes, it's been publicly disclosed by the FCC. The rails do have a three to five year requirement to retire the legacy 900 megahertz network. And, of course, that clock began in 2020. So, you know, we believe that they're going to have to retire the system by, you know, over 2023 to 2025. Certain portions of the legacy 900 network were negotiated to move sooner than others. And as we talked about previously, we believe the full max to shared architecture is going to drive that network upgrade faster. So it's still the same outlook in terms of the timelines, and we do believe the rails can meet their timelines.

And any update on what the overall revenue could mean to you for this migration?

So we're still – Yeah, so we still see a very big system of 900 megahertz. And, of course, we do want to remind you we have 450 and 160 in the pipeline as well. But that 900 megahertz network is large. It's in the hundreds of millions of dollars in the TAM. And we're planning to share a lot more details on that next quarter as visibility is improving. We're in conversations now with Siemens and railroads on the commercial rollout now.

Great, great, great. And then just on the supply chain issue, will you be able to kind of meet the demand on both the rail side and on the robotic side and – sorry, on the drone side? And can you give us any more color on how rapidly and how many units you can kind of produce on the drone side and the timing on that?

I'll ask Stuart to take it on the supply chain question for networks. Reese, you can do the AR. Thanks. Sure.

Sure. So it's no surprise to anyone that there are supply chain issues, but we've been expecting some of these orders for quite a while. So we've been preparing. There's kind of two, it's two areas. One is hiring the talent and then also acquiring critical parts. And we're feeling confident that we've put in place a team that can secure the orders. So one of the first order here, we're shooting for delivery before end of year. and we feel we're on track for that. But we are ramping up the team and acquisition of parts to make sure we, on the network side, we can hit our goals. Reese, you can jump in for robotics.

Yeah, sure. Yeah, like everybody else, supply chain is something that we're We're managing and thinking about the milestone for us recently has been the completion of the training with our contract manufacturing partners and basically standing up a manufacturing line. And so now we're transitioning to planning, you know, bulk purchases of parts and materials for the rest of this year and into 2022. So that's something we're going to be managing. And I think that looks like, you know, as we'd said in previous updates, tens of systems in the near term and working towards hundreds of systems, you know, by the end of 2022.

Congratulations. And I'm assuming demand is not the problem. Can you just maybe talk about, you know, how much demand you have for how many units? And, you know, is there a way to ramp that system up even faster if the demand is higher?

Yeah, the demand is definitely there. It's an exciting time, and in many ways, it's a bit too expensive. You know, to remind everyone, this automated drone system that we developed is the required solution for about 90% of all commercial drone applications, so extremely expansive. We're trying to take a thoughtful approach on how we grow each one of those markets and making sure that, you know, everything's robust in our supply chain or manufacturing or operations, et cetera. You know, so I'd say, in general, moving as quickly as we can, but certainly reliability and good customer service is on the top of our agenda right now. Thank you.

As a reminder, if you do have a question, please press star then 1 on your touch-tone phone. Our next question comes from Bill Morrison with National Securities. Please proceed.

Hey guys, congrats on the rail order. A couple questions. First of all, can you remind us what the software looks like for AI between Dynam AI and American Robotics? How much of the platform has American Robotics developed for AI and ML?

Sure. So, yeah, the engagement with Dynam I think could be grouped into two categories. One is One is the development environment to produce each analytics feature more quickly, which we think is an important and competitive advantage. And then the other is just specific analytics products for each one of these markets. So the work has already begun with Dynam, and we are developing a set of projects that are going to make Are use cases more valuable to our customers? So, you know, that conversation will be pretty long. Again, there's a lot of different use cases. But I hope that answered your question. I could probably give a bit more detail if you want to follow up.

Yeah, I'll follow up offline. And then, you know, just a little more color on the ramp for the rails. So how does that look going into 2022, you know, with 900 megahertz and 450 megahertz, and how many rails would you envision deploying in 22?

Bill, you know, I'd like to give you as much information as we can on that, but we're still in active conversations and planning with Siemens and the customers, so I think we've got to defer, and I expect to have more visibility on that the next time we speak.

All right, good. Look forward to it. Thanks.

All right. Great. Thanks, Bill.

At this time, we are showing no further questions in the queue, and this ends our question and answer session. I would now like to turn the conference back over to Mr. Eric Brock for any closing remarks.

All right. Thank you, Operator. We can end the call now. As we do, I want to thank you again for joining us this morning. And I also want to express gratitude on behalf of the entire team at ONDOS for your support. We do have momentum at both ONDOS Networks and American Robotics, and we're going to remain incredibly focused on accelerating our business activity. We look forward to continuing to share updates on our key initiatives going forward and Again, thank you for joining us this morning. Have a great day.

The conference has now concluded. Thank you for attending today's presentation. And you may now disconnect.