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spk07: Good day, and thank you for standing by. Welcome to the Hyliion Holdings third quarter 2023 earnings conference call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question and answer session. I would now like to turn the conference over to Kellen Farris, Hyliion's Director of Investor Relations. Kellen, please go ahead.
spk04: Thank you, and good afternoon, everyone. Welcome to Hyliion Holdings' third quarter earnings conference call. On the call today are Thomas Healy, our Chief Executive Officer, and John Panzer, our Chief Financial Officer. A slide presentation accompanies this conference call and is available on Hylion's Investor Relations website at investors.hylion.com. Please note that during today's call, we will make certain forward-looking statements regarding the company's business outlook. Forward-looking statements are predictions, projections, and other statements about anticipated events that are based on current expectations and assumptions. As such, are subject to risks and uncertainties. Many factors could cause actual results to differ materially from forward-looking statements made on this call. For more information on both factors that may cause the company's results to differ materially from such forward-looking statements, please refer to our presentation and press release, as well as our filings with the Securities and Exchange Commission. You are cautioned not to put undue reliance on forward-looking statements, and we undertake no duty to update this information unless required by applicable law. Thank you, and now I will turn the call over to Thomas.
spk03: Hello, and welcome to Hyliion's third quarter 2023 earnings call. I appreciate everyone joining us today for a business update and third quarter financial report. Last month, we announced that, with the support of strategic expert advisors, we were exploring a range of strategic options for our powertrain business. including engaging with a number of strategic and private equity partners regarding a possible sale or industry merger. In parallel, we also engaged industry experts to help us evaluate the market opportunity and competitiveness of the Carnot generator. As a result, today we are announcing that we have decided, with the support of our board of directors, to wind down the powertrain business while preserving the technology for potential later use or sale. Going forward, we will focus the company's capital resources and efforts on our Carno generator business, an innovative new generator solution. Although this is a difficult decision to make, it is a decision we believe to be in the best interest of the company and its shareholders. We are proud of the progress we've made with the development of our HyperTruck ERX powertrain, as we have regularly publicized we've made consistent progress achieving the development milestones that we laid out almost two years ago. In fact, with the recent receipt of CARB certification, the beginning of extended fleet trials with customers, and building of production trucks, we have completed all the prerequisite steps on our path to commercializing our HyperTruck ERX powertrain. Since I founded the company, Hyliion's mission has been to provide innovative solutions that reduce emissions, from semi-trucks, which was in line with the interest from fleet in adopting electrified trucks and with the development we've accomplished to date. Despite this progress, the environment for companies in the electrified commercial vehicle space has become challenging. Slower than initially expected fleet adoption of electrified vehicles, higher component costs, and evolving regulatory frameworks have put significant pressure on companies like Hyliion. As an example, I was recently speaking with a fleet owner who shared that the cost to buy a conventional natural gas truck has increased by around 45% in the past few years. We have seen increases for nearly all powertrain parts, some by more than $10,000 each. While this is partly due to inflation, it is also driven by the limited number of suppliers and low production volumes for key components, as a result of the immature nature of the electrified powertrain market. last june at our investor event we described additional development work that was necessary to align with changes to the regulatory environment this included integrating and obtaining carb certification for the new cummins 15 liter natural gas engine developing a day cab variant of the hyper truck erx powertrain and reducing the cost and weight of our powertrain while we believe our electric powertrain is the right solution for long-haul trucking and avoid some of the hurdles associated with other electric solutions, such as charging infrastructure, range anxiety, and the high cost of hydrogen. We are now faced with an adoption cycle that is longer than we expected, as fleets are delaying orders until mandates force the adoption of electric trucks. The primary one being CARB ACF, which starts in 2027 and requires additional investment and expense, such as integrating into a day cab, and a new engine. Given these various reasons, it is clear that further development of our powertrain business would require us to raise additional capital at some point. Partly driven by higher interest rates, but also due to the recognition of the industry challenges I have described, our third-party experts have advised that the capital markets are not currently supportive of additional fundraising by companies developing electric commercial vehicles. This has caused financial difficulties for many companies, and some, including Proterra, Lordstown, ELMS, and recently Volta Trucks, have entered bankruptcy. Therefore, we believe it is important to act now, while we are in a position of financial strength, to discontinue spending on the powertrain segment of our business. John will discuss the impact of the wind down of powertrain later in the presentation, but I want to shift to discussion now on our Carno generator business and the go-forward plan. Our goal with Carno has been to develop and commercialize the generator to address the growing demand for electricity with a distributed generator solution that offers clean, efficient, and cost-effective electricity. Carno is an innovative new solution that is powered by a linear heat generator and enabled by recent advancements in additive manufacturing. When we initially acquired the Carnot technology, we saw it as a strong solution for both our hyper truck powertrain as well as the stationary market. Our team has successfully showcased both the vehicle integration and the Carnot's ability to work in a stationary application by providing power back to the grid. As we look at the opportunities ahead, the Carnot generator in the stationary market has become even more compelling. due to its standalone nature and ability to address customers' ever-increasing electricity needs. Commercial fleets that have expressed interest in BEV vehicles are discovering that they are not able to secure sufficient electric power for their recharging infrastructure, and when they do, they are faced with significant capital investments, long lead times, and often encounter above-market electricity rates and incremental demand charges. our Carnot generator is currently being configured to solve each of these issues. It is important to highlight that the Carnot generator is unlike conventional internal combustion or gas turbine driven generators. Powered by a heat engine, the Carnot generator has distinct benefits compared to its conventional counterparts. These benefits include greater efficiency across a broad range of power output levels, lower maintenance costs, high power density, less noise and vibration, and the ability to operate on a broad range of fuel sources, including hydrogen, natural gas, ammonia, propane, and conventional fuels. Carno utilizes a proprietary flameless oxidation technology that results in significantly lower emissions compared to conventional generators. We expect its efficiency to surpass conventional generating systems when employing various fuel sources and even outperforming fuel cell efficiency when operating on hydrogen while generating no carbon emissions. We believe the Carnot generator can compete across a broad range of prime power applications, operating as a substitute for or as a supplement to grid power. We also believe it can compete in markets providing supplemental or backup power, such as peak shaving, electric vehicle charging, or renewables matching. Its ability to operate on a range of fuels, fuel mixtures, or even fuels with impurities is another advantage that enables it to convert waste gases such as flare gas or landfill gas into usable electricity. Over the past couple of years, we have made significant advancements in its development as we prepare for initial commercial deployments later next year. Recently, we highlighted a major achievement of successfully returning power back into the electric grid from our facility in Ohio using a Carno generator unit. In recent months, we have been showcasing Carno technology to potential customers. Through these discussions, we are garnering valuable insights on how the Carno generator can address many of the pain points customers face with grid power. One example is maintenance costs. Internal combustion generators require frequent maintenance, like oil changes, that require downtime and technician support. In contrast, the Carno generator has no oil or lubricants, and with only one moving part per shaft, we expect maintenance to be significantly reduced. As we continue these customer showcases, we expect to announce soon that several of these companies will take deliveries of initial Carno units next year. As we wind down the powertrain business and preserve the technology for potential later use, we have an opportunity to shift certain employees and technology to Carnot development. As an example, the cloud and infrastructure we have developed to capture and analyze vehicle data is readily adaptable for use in systems supporting Carnot generator controls and monitoring. The Hyliion drive processor, which is used on the vehicle for connectivity and advanced algorithms, can similarly be adapted to the Carnot technology. We also see significant overlap in electric architectures and battery systems. We plan to maintain operations in Austin, Texas and Cincinnati, Ohio. Austin will remain our headquarters and will assume more activities related to the industrialization of the Carnot generator and software development. The Ohio team will maintain its focus on R&D technology. As we transition the focus on Carno, we will be able to significantly reduce the amount of cash spent on the business. John will provide financial details, but I want to highlight our initial expectations. We continue to have a strong balance sheet with $324 million of available capital at the close of the third quarter. Our projection for the full year is to have spent $137 million in 2023. leaving us approximately $285 million at year end. For 2024, we expect our cash burn to be reduced to approximately $40 million, or a 70% reduction. Our strong capital position gives us financial flexibility well into the future as we begin commercial deployments of our Carno generator technology next year. I will now turn the call over to John to provide a financial update.
spk02: Thank you, Thomas, and good afternoon. Starting with our financial results for the quarter, we reported $96,000 in revenue from sales of hybrid systems. Operating expenses totaled $33.3 million compared to $62.9 million in the prior year quarter, which included a one-time charge of $28.8 million related to the purchase of Carno last year. Excluding this charge, expenses in 2022 were $34.1 million. Using this more comparable basis, total expenses were down about $1 million in the third quarter, driven by a $2 million reduction in SG&A expenses, partly offset by a $1 million increase in R&D expense. Total cash consumed in the third quarter was about $31 million, compared to $45 million in the third quarter of 2022, including $15 million of cash that was paid as part of the Carnot acquisition, and compared to cash spend of $31 million in the second quarter of this year. We finished the third quarter with $324 million of cash, short-term and long-term investments on our balance sheet. I want to remind everyone that we maintain a significant share of our capital in longer-term investments to take advantage of higher interest rates on longer-dated securities. For example, we currently have about 43% of our capital, or $141 million, categorized as long-term investments. For the first nine months of 2023, revenue from hybrid-related sales was $672,000, down about $300,000 compared to the first nine months of 2022. Year-to-date operating expenses in 2023 were $103.7 million compared to $120.8 million for the same period in 2022, or $92 million excluding the Carno acquisition charge. Year-to-date SG&A expenses were down about $2 million and R&D expenses, excluding the Carnot charge, were up about $14 million. This increase is entirely due to the expensing of powertrain components that were purchased for the first 30 production trucks that we previously planned to sell to customers this year. Most of the cost and cash expenditures we expect for the wind-down of powertrain will be incurred in the fourth quarter of this year, including payments made for truck chassis and other components for the initial 30 production trucks. We estimate that total expenses for the fourth quarter will be around $35 million, including expenses that will be incurred to recognize future payments for contractual component purchases, employee severance agreements, and other expenses related to the wind down of the powertrain business. Total operating expenses for the year will be approximately $140 million, including expenses for discontinued operations. This is a little higher than our previous guidance of $130 million because of the additional powertrain wind-down costs. We expect to finish the year with a total cash and investment balance of around $285 million, or about $10 million higher than our previous guidance, even though we expect no revenue from hyper-truck, ERX, or hybrid systems for the rest of the year. We expect to begin receiving payments from customers for early Carno generator stationary deployments in late 2024. And as Thomas noted, we expect a significant decrease in our cash spending after we wind down powertrain operations. We estimate that total cash expenditures will drop from approximately $137 million this year to approximately $40 million next year. This amount excludes some cash expenditures for powertrain wind down activities that we will incur in 2024 and potential proceeds from powertrain asset sales. It is important to note that with the cash and investments we have on hand today, along with a slower burn rate for Carno development, we expect to be able to commercialize the Carno generator business without the need to raise additional capital. To provide investors with more details on our future plans, we will be hosting a technology fireside chat later this quarter to further highlight the unique capabilities of the Carno generator, business opportunities for near and long-term deployments, and key development milestones. We will update you about this event in the coming weeks. With that, I will turn the call back over to Thomas for closing remarks.
spk03: I want to express my sincere appreciation and gratitude to the entire Hyliion team that has worked tirelessly and passionately on our powertrain solutions. The development of these products has taken great effort, many long nights, and exceptional dedication from our extremely talented team. We take great pride that trucks outfitted with our HyperTruck ERX powertrain have been on the road logging thousands of miles with great success. During extended fleet trials, we received overwhelmingly positive feedback about our powertrain's performance. We have not had a single truck break down, and a fleet was able to drive over 1,000 miles in a day, which speaks to the great potential of this technology and the robustness of the product. This is the reason we plan to maintain the technology for potential later use or sale. Although we are confident that the winding down of the powertrain business is the right move at this time, we are preserving the technology such that if the opportunity arises in the future, it may be reintroduced and utilized to its full potential as the industry matures. For now, we look forward to the great potential of the Carnot generator. Now we will take your questions.
spk07: At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. And your first question comes from the line of Donovan Schaefer from Northland Capital Markets. Your line is open.
spk00: Hey, guys. So my first question is just on the incremental movement of, you know, initially talking about looking at strategic alternatives for the HyperTrack ERX business, and then now committing to a path of winding it down. First, just, you know, is this a case where you did go through conversations or solicit or engage with potential buyers, folks signed, you know, NDAs and went through things and weren't able to, I guess, see the eye to eye on value? Or was this a case where you didn't even actually get to that point and, you know, maybe ran some numbers on a rough valuation or something and decided to not take that next step um and then you know did you get a valuation from a third party of any kind and if you could share that um that's that that that'd be the first question sure so appreciate the questions donovan um so we did run a process we engaged evercore as our bankers to assist us with this process
spk03: And we went out and had discussions with dozens of different groups out there and explored what strategic options there could be. That included looking at potential buyers. That included looking at potential industry roll-ups or mergers. And upon conclusion of the process and looking at what came of it, we decided the best interest for all stakeholders was this wind-down path and preserving the IP for potential later use. With that, I mean, I think that speaks a lot to just where the market is at right now. Through these discussions, as I'm sure you can imagine, we had a lot of discussions with potential strategic partners or acquirers. And what we found was they themselves are even assessing, you know, if they pull back their own spend internally on electrification, just as we're seeing this slowdown in this electric market. People are expecting adoption to take a lot longer. That also equates to people pulling back on their spend on electrification. In terms of others that are in the space, other parties that would be comparable to Hyliion, you know, new entrants into the space, we've seen a lot of them file bankruptcy recently. And then other ones are out trying to actively raise financing and in many instances have not been successful with that. And so All those factors led us to the decision of this wind down.
spk00: Okay. And then, you know, with turning to the Carno, I guess first, would there be the way you've done in the past for HyperCheck ERX, do you see yourselves, you know, maybe this is something you plan to have at the time of the fireside chat, like now that it's the focus maybe giving us a more granular approach and detailed kind of timeline on that path to commercialization, you know, any particular tasks or certifications, if there's the EPA stationary source required stuff, you know, whatever is involved in that, do you think you'll give us, are you planning on giving us a more granular breakdown there? And one more there on Carno is just, how do we not repeat the same situation where with HyperCheck ERX, We talked a lot about excitement from customers. And of course, that changed. Do you have any thoughts around a different approach that could make that stickier this time with Carno? Any color there would be great. Thank you.
spk03: Yeah, absolutely. So let's start with the first one around milestones around Carno. So I just want to highlight a couple here. We expect that by end of this year, we'll start having some discussions around who the initial adoption partners are going to be with the Carno. And then as we go into next year, middle of the year will be kind of final validation of the system that then brings us into actually starting customer deployments in the second half of next year. we probably will come back with some more granularity around that. And whether that's in the fireside chat, we'll probably share some more details there. And then as we go into next year, just to set expectations. So those initial customer deployments, we're looking at low single million, so a couple million of income that would be coming from those, or of revenue that would be coming from those those deployments. So just want to kind of set expectations of those will be the initial entrance into the market. As we think about how to not repeat the situation that we're in with powertrain. So, you know, I think as we look at kind of the customer discussions on the powertrain side of things, the shift is kind of focused to since the cost of electric vehicles are higher up front, Their thought is now they're going to wait till government mandates really come into place in order to force them to adopt it. You know, I think where we were a couple of years ago was even though the costs were more up front, that it was a strong freight market. And employees were saying, yeah, we're going to get ahead of this. We want to focus on ESG and we want to start adopting electric. Now there's more of a pullback. It's a weak freight market. And the weight is or the push is let's wait till government mandates are there. As we look at the generator market, this is already an existing market that we're stepping into versus electric vehicles. There are very few number of electric semi-trucks that are out on the road versus generators. It's a pretty established market already that we're stepping into, and we're bringing a very competitively differentiated solution. This isn't a standard generator. It's not an internal combustion engine. It gives a lot of flexibilities like fuel agnostic, high efficiency, low emissions, low noise, low maintenance. And so it really brings forward a lot of the benefits of what a power plant has, but bringing it into a solution that's the size of a generator. So going after an already existing market, and one where there are pain points from the customer's end where people need electricity now, and they just can't get it from the grid. And they're being told they can't get grid hookups for one, two, three, or even more in some instances, years. And that's the market that we feel like we can step in and address, which has a very prominent need right now.
spk06: Okay, thank you. I'll take the rest of my questions offline.
spk07: Your next question comes from the line of Bill Peterson from JPMorgan. Your line is open.
spk01: Yeah, hi. Good afternoon, and thanks for taking the questions. I'd like to get a little bit more details on the history that led to the decision to kind of wind down the efforts here. I mean, I think back over the last few years, there indeed was a lot of excitement. We had the Founders Program. You know, even four months ago, you were still, I mean, still talking about cost of ownership advantages and infrastructure advantages. So just trying to get a feel for how did, you know, how did this evolve? And apparently, I'm not saying it didn't come out of nowhere. I mean, obviously, the fleet decisions are understandable given their own challenging times. But, you know, just the evolution of that. And then at this stage, looking ahead, how do you see the fleets really adopting any new technologies? Is it really going to be a 2027 story? What do you think about the mix between the various options they have? Again, like the net gas generator option you had did have advantages in that there was a lot of infrastructure versus lack thereof of other infrastructure, especially given the student, you've actually provided such great information across the landscape, whether it be bad fuel cell, hydrogen, and so forth. How should we think of this evolving from here?
spk03: Sure. So a little history on it of kind of getting to this decision. we still like customer interest and engagement and even fleet, you know, we're doing fleet trials. And one thing I want to really reiterate is this was not a decision based on product performance or having reliability issues or things like that. Actually, we've been very, very pleased with how the product was outperforming in fleet's hands. And we were hearing that same feedback from fleet. But I think this is what has really happened is the market has shifted to Fleets are saying, you know, with these vehicles costing a lot more up front than diesel trucks, and as shared, you know, we've been experiencing those price increases as well in our components and, you know, having discussions with fleets about passing those costs on. Fleets are expressing that they're going to really slow down their rate of adoption until they wait for the government mandates to force the adoption. And as you pointed out, that probably is a later this decade type of a situation where And one other thing that gives us concern is there's a lot of discussions out there right now about those government mandates potentially even softening or changing or becoming elongated as to when fleets really need to adopt electric. And so as we look at the position we were in, we're more approaching this from a position of strength as opposed to a position of weakness where we're fortunate that we have a strong balance sheet and a strong cash position. And we have two really strong technologies within the company. We had Powertrain and Carno. and Powertrain is facing some of these hurdles that we mentioned of the demand changing, the cost components going up, and the regulatory side of things. And as we look at the Carno market opportunity, we see it as a more capital-efficient path to market. We're going to be delivering initial customer units next year in the second part of the year. So that's what led us to look at, you know, we've got, as we closed out last quarter, $324 million of cash available to us, and we feel like it's the best decision to focus on the Carnot, go forward, take the powertrain technology, preserve it, put it on the shelf for potential later use, and then for the time being, focus on Carnot.
spk01: Okay. Yeah. Okay. Well understood. On Carnot, just trying to get a more bigger picture view on how you're viewing the competitive landscape for the stationary power market. We're hearing early use cases like around EV charging. I've heard people talk about data center backup. You know, there's different business models and way to approach it, whether it be, you know, turnkey solutions, generator plus fuel. Try to get a feel for how you see the landscape for this and where you're going to be focusing on over the next few years.
spk03: Sure. So there's a couple of different markets when you think about the power generation side of things. And maybe to start off with just clarifying, so we're looking at being a generator of electricity versus some of these solutions that you mentioned, like a battery is more going to help with saving, conserving electricity and then being able to use it at a later date. As we think about what is really needed, we think it is both, but there's a lot of demand for just more electricity production, especially as you think about the EV space. More chargers are being deployed. Substations don't have the electricity available to actually service some of these chargers in some instances, and we're enabling an opportunity where we could just bring a generator out and actually produce electricity locally at that site. There are a lot of other companies in this space. Some are using more conventional internal combustion engines in order to produce that electricity, and then some others are using things like fuel cells in order to produce electricity. What we see as our advantages, you know, an internal combustion engine does not have great efficiency, requires a lot of maintenance, and from an emissions and pollution standpoint, many are still running on diesel fuel, and that's not great for our environment, right? I don't think we want EV chargers that are are sitting there being powered by a diesel generator. So we're looking at the Carnot solution as bringing many benefits from an emissions and pollution standpoint, similar to what a fuel cell brings forward, but we're bringing it with low maintenance and a cost that we are looking at coming in a lot less than where fuel cells are at. So as mentioned before, it's kind of bringing forward many benefits that normally you see in a power plant, but bringing it forward in a size like a conventional generator that can be deployed locally and produce your own electricity at a cost-affordable rate.
spk01: All right, thanks for that. I'll drop back in the queue.
spk07: And again, if you would like to ask a question, press star and the number one on your telephone keypad. Your next question comes from the line of, from Andres Shepard from Cantor Fitzgerald. Your line is open.
spk05: Hey guys, this is Anand for Andres. Thanks for taking our question. So we were just wondering with respect to the Carnot generator, what you would expect revenue to look like into commercialization and prior to commercialization as we're in that period right now.
spk03: Sure. So commercialization will start at the later part of next year. And as mentioned, we're expecting just a couple of million of revenue coming in next year from that solution. As we get further into this transition, obviously, we're just announcing it today. So as we get into next year, the first half of next year, we plan on coming back and being able to share more on what we think the future projections of it are. The generator space, the production of electricity market is a huge market. So this is not a market size issue by any means. This is a huge addressable market we're going after. But we plan on coming back in the first half of next year with projections on what we're expecting from an adoption rate standpoint.
spk05: Got it. Appreciate the color. And with respect to pricing and competitors, how do you expect to see pricing for the Carnot generator and comparable products and services?
spk03: So we'll come back with more granularity on this, but I just wanted to kind of give some directional numbers. So we are going to be more expensive than a conventional diesel engine. an internal combustion engine, but we're looking at being substantially less than some of the other solutions like fuel cells that are coming out to the market. But as mentioned, bringing forward a lot of the benefits of those other solutions like the ability to run on hydrogen, having that low maintenance side of things. So I think this is going to be a pretty attractive and compelling solution for the space. Now, it's going to be important for us to focus on where do we deploy these, right? In the beginning, it doesn't make sense for us to go after market opportunities like standby power generation or emergency operation where the generator kicks on for one or two hours a year. We suspect that the conventional diesel engine is going to still be the solution there, at least for the time being. But we see our opportunity being more prime power applications where someone wants to become less dependent on the grid and actually make their own electricity. We see peak shaving opportunities, the ability to be able to take flare gas and convert that into electricity, take pollution coming off of landfills, produce electricity with that. Operations where you're going to really utilize the generator and have a high uptime of it, that's where we see the Carnot being significantly differentiated. And the great news is there's plenty of opportunities that can utilize that. Think about warehouses, hotels, hospitals, Those are all applications that we see the Carnot generator being a great fit. Got it.
spk05: Appreciate it. And just the last really quick and easy one, if I could. I just wanted to make sure I have this right. You're not expecting to deliver any of the 30 trucks in the order book or hybrid trucks going forward. Is that correct?
spk02: Yeah, that's correct. So we won't generate any more revenue from the powertrain business from selling hybrid systems or the production trucks we talked about. That business is being wound down.
spk05: Gotcha. Sounds good. Thanks again for taking our questions. I'll pass it on.
spk07: Your next question comes from a line of Shanghai from UPS. Your line is open.
spk08: Hi, guys. Thanks for taking my question. So just one more quick question. What will be your sales outlook for Carnot in 2025?
spk03: So sales of the Carnot generator in 2025, we'll come back with more information on that in the first half of next year. At this stage, I've given some directional numbers of a couple million in revenue next year from the Carnot as expected in the second half of next year. But as mentioned, we're just starting this transition now. Obviously, it was just announced today, and so we'll be coming back with more granularity on future projections.
spk02: Just to add to that, so as Thomas mentioned, the units next year are deployments with initial real customers that are going to use them that will provide power benefits. We'll still be doing R&D at the time, but you can imagine after that we'll start ramping up those deployments And as Thomas mentioned, we'll have a little bit better visibility as we make this strategic shift and kind of reevaluate as we're shifting resources over from Powertrain to Carno, what that looks like. But clearly, we're just going to be ramping up from what we expect deliveries to be next year. That'll be a good starting point for continued growth.
spk08: Thank you. Very helpful.
spk07: And this concludes the question and answer portion of today's call. At this time, I would like to turn the conference back over to Hyliion's CEO, Thomas Healy, for some final closing remarks.
spk03: Well, thank you, everyone, for joining today's call. Obviously, a lot of news shared on today's earnings call around the discontinuation of our powertrain business, putting that technology on the shelf, preserving it for potential later use, and the pivot to focusing on the Carnot generator for our go-forward strategy for the time being. We do believe that this is the right shift for the company, for stakeholders and shareholders, and we're excited to go execute on this path forward and look to share this exciting story as we continue on with our shareholder base. So thank you for joining today, and more to come in the quarters ahead.
spk07: Ladies and gentlemen, this does conclude today's conference call. You may all disconnect and have a wonderful day.
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