Australis Capital Inc

Good morning, everyone, and welcome to today's Astralis Capital Conference call discussing the results for the third quarter of fiscal 2022. Listeners are reminded that certain matters discussed in today's conference call or answers that may be given to questions could constitute forward-looking statements related to, among other things, for our future growth. Trends in our industry are financial and or operational results, and our financial or operational performance. Such forward-looking statements are predictive in nature and may be based on current expectations, forecasts, or assumptions involving risk and uncertainties that could cause actual outcomes and results to differ materially from the forward-looking statements themselves. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian security laws. Risks and uncertainties and variable factors are discussed in the company's various public filings at www.cedar.com. Except as required by ethical law, we disclaimed any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Note that on today's call, which is recorded, we will refer to certain non-IFRS financial measures, such as EBITDA, that we believe will provide useful information for investors. The presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with the IFRS. Since we are conducting today's call from our respective remote locations, there may be brief delays or other minor technical issues during this call. We thank you in advance for your patience and understanding. I would now like to introduce Mr. Terry Booth, CEO of Adacia. The call is yours, Mr. Booth. Please go ahead.

Thank you very much. Good morning, everyone, and welcome to our Q3 conference call. It's been an eventful few months as we continue to execute at Audacious. We now not only have a growing footprint in the U.S., but we're also expanding internationally through our partnership with GTH in Thailand and the completion of our project in Australia. Consumers in multiple markets now have access to our award-winning product lines with sales in California growing as our pending acquisition of Herb and our partnership with EASE are supporting our efforts in that market. The quarter itself saw us continue to grow at a high rate. Compared to the same period last year, revenues increased by over 2,400%, clearly showing how our transition from an investment co into an operating co is successful. While sequentially, top line revenues increased relatively modest, 4.4% compared to the last quarter. This is mainly due to us cycling out some older consulting arrangements, such as BodyMind, an investment we now have largely exited. Adjusted for these steps, we saw continued growth in our core business of Alps and cannabis. Alps continued to go from strength to strength. With ESG projects proliferating across the globe, Alps, with its unsurpassed offerings, is often a partner of choice to help growers establish operations. We are helping clients with their project from the Arctic to the desert, as, for instance, our project with Pure Harvest in Kuwait shows. The ALS pipeline continues to grow, and we continue to work on a growing number of large projects that will see us generate significant revenues. Speaking of growth facilities, while at MJBiz.com this last fall, which was very successful for the company, we launched the Audacious Achieve series, and launch the Audacious brand. The Achieve series is a set of standardized facilities powered by Alps. We are in a growing number of discussions on building Achieve facilities for customers, and we already announced that our New York partners, First Americans of the St. Regis Mohawk Tribe, we will be building an Achieve 12. That brings me to what I believe will be one of the more significant projects under development. We announced our partnership with First Americans back in December. The importance of this project is it provides Audacious with a clear early movers advantage in a market that is not expected to fully implement adult consumer use for another 18 months or so. There is, however, some movement on the hemp side and we have our finger on that pulse as well. Our partners, a group of highly accomplished entrepreneurs with a deep background in retail operations. Rick and his team from First American built a thriving commercial hub on the Mohawk territory And Rick was also involved with the establishment of the casino resort that attracts close to 2.5 million people annually. As one of our planned dispensaries will be right opposite this casino, we anticipate significant traffic. New York State is one of the main prizes in cannabis. The fourth most popular state in the U.S. with over 20 million people. This is a market that is expected to generate billions of sales in the coming years. Being able to establish a presence with our brands well before most other companies will be able to start servicing this market provides us with a very significant competitive advantage. We look forward to working with Rick and his team in establishing a thriving cannabis operation in this exciting part of the world. Not only are we movers in New York, we also have a head start in Thailand. Thanks to our partnership with GTH, Golden Triangle, Thailand recently removed cannabis from its narcotics list. While THC for the general market still limits the potency below 0.3%, this is an important step that opens the door for further legalization down the line. In the meanwhile, we will be focusing on the development of our CBD business in Thailand. We will be reporting shortly on our trip our team recently made to Thailand, but suffice to say at this point that with our partners, we've been able to establish significant distribution with major retail chains, and third-party distributors for when we are fully up and running with our production. To this end, we sold hemp seeds to GTH, making us the first North American firm with cannabis-related sales to Thailand. These seeds are growing on the land made available to us by Kohn Cayenne University, one of our partners who are making meaningful contributions to GTH, such as the land in which we grow our hemp and later cannabis, on extraction equipment and with R&D capabilities. Moving quickly, GTH has also already opened four franchise stores under its Hemp House brand. These we plan will eventually be turned into dispensary-type operations once adult consumer use is fully legalized. Until such time, we are likely to convert the Hemp House stores into clinics, as we have a license to grow medical cannabis, which is sold through the government. We will be able to cover the entire industry vertical in Thailand, providing us with an early-move revenge we believe combined with our distribution networks will set us up for the success that we require in this market with 67 million people furthermore thailand is the first asian country to make this move but we anticipate other markets such as malaysia and china to follow having an international distribution network with exceptionally strong connections in the region will set us up we believe to become one of the dominant forces in canada's in this region of incredible potential gth itself is a spinoff from the highly successful ethnic foodstuffs company NR Instant Process PCL, also known as NRF, a Thai public company with a market cap in excess of $400 million and sales across the globe. The reason they wanted to work with us as a partner is because they recognized our operational excellence across the value chain, from cultivation through to manufacturing, derivatives, branding, and our executive team. We are very excited about this partnership as we believe this will become a very material contributor to revenues and margins in the quarters and years to come. We're off to a great start and there's much more to come. While we continue to be very active in the M&A arena, at any given time we have upwards of 40 projects under assessment. We are currently laser focused on driving organic growth. Our efforts in California are a good example of our hybrid approach. On the one hand, we made our entry into the space through the pending acquisition of Herb's Dispensary in San Jose. This is progressing well, and we are close to having a definitive agreement. As we stated previously, through the Herb acquisition, we are also able to enter into a partnership with Eaze, the world's largest legal cannabis delivery service. The beauty of this partnership is that it takes out customer reach well beyond the San Jose area, and the SKUs that we launched in California are available on the Eaze menu statewide. The effect of this has become immediately apparent as the initial batches of loose and provisions products produced in California are completely sold out. The effort of this has become immediately sold out. We are producing a second larger batch which should be available to the market in the next couple of weeks. Our success in California clearly shows that if a company makes great products, they will sell, even in a competitive market such as California. We at Audacious strive to supply customers with products they are looking for. While there is a place for value brought in the market, this is a highly competitive space with little to no customer loyalty. At the higher end, things are different. Shortage of two premium products and consistency of supply of premium products mean that a company able to supply high quality and designer products consistently to the market will be able to carve out market share. This is exactly what we are doing. For instance, even without the heavy spend on marketing and with no advertising, our loose products rank second in their category in California. This reflects both the attractiveness of the loose products to consumers, but also the ability of the loose team to sell. And selling is what they do best. The sales team that came with loose has exceptional connections within the Canada space that have enabled them to ensure our products can be found in a growing number of dispensaries, which comes on top of the success we have had in the East. we are looking to replicate our efforts in other jurisdictions. For instance, in our home market, Nevada, we will be launching loose and Mr. Natural products shortly, as well as further provisions edible wines. Tsunami recently won the inaugural New Woo Cup for Best Extract. Our extraction scientists, under the leadership of Dr. Duke Fu, are second to none, which is also one of the reasons we increasingly are becoming the partner of choice. as Thailand and our new project in New York clearly show. Further activities in Nevada center on increasing production capacity, the development of a cannabis campus on the 23-acre plot of land we own in Sandy Valley near Las Vegas, where we also own the last remaining water rights. On the back of our successes, we now have also gone live with our REC Relief website, www.recrelief.ca. This is an e-commerce site for the sale of our CBD-infused topical pain relief medication. Developed to service our growing audience amongst followers of the PBR, which with over 83 million captive fans and over 2 billion social media impressions, represents a very interesting market for us. With the site now live, we have commenced generating revenues for the Record Leaf brand. There will be many more promotional activities surrounding the Record Leaf brand, for instance, On February 1st, we announced directly 2022 PBR ticket giveaway, in which we are giving away over $10,000 in premium PBR tickets and experiences for 21 lucky winners. The last drawing takes place on April 18th. I would encourage everyone to visit our site and check it out, and perhaps participate in the contest to win a PBR experience. Take it from me, I've watched PBR events, and I'm very confident in stating that these athletes can do with some high-quality pain relief. And what works for them, having Justin thrown up a raging bull, should work for any and many other people too. Before I hand over the call to John, I want to add a few more things on ALPS. In the past, I've gone into great detail on what ALPS does and what makes it so special. I won't repeat all of that here. You can find it in our press releases and call recordings, which are on our ASA-Corp website. What I do want to focus on is how ALPS, which continues to sign new projects, including $1.4 million in fees, for ALPS project in Kuwait, not the most vegetable friendly climate, and that is where ALPS comes in. The quality of projects delivered by ALPS over the years has cemented their brand as the developer of the highest quality facilities that are built to deliver simultaneously on margin economics and sustainability. Consequently, we see strong traction for projects of this kind. Furthermore, being a preeminent innovator in the space, The launch of our APIS suite of compliance and industrial computerized service solutions is making waves. Our first APIS installation is already up and running in Australia, with further suites being developed and delivered to other projects. APIS is unique in the industry and has given ALPS a great competitive advantage as the first mover, and based on years of facility design and growing experience. APIS has started to imitate and outperform. Consequently, interest in the solution and ALPS is high. For example, We were able to enter into a partnership with Priva, the global leader in environmental control solutions for the horticultural sector. Priva has installed customer base, an installed customer base of over 12,500 facilities worldwide. This is a captive audience who we know want to hear more about APIS. I look forward to updating the market once the joint team heads out and starts spreading the gospel on APIS. While at mjbiz.com, we also announced the launch of Adace and Achieve facilities. Without going into too much detail, it is important to note that the Achieve concept delivers high-quality cannabis at low operating costs, but in a standardized format that is quick to develop and build. Consequently, our customers will be able to get their product to market much sooner, while at the same time knowing that they will be fully compliant with all rules and regulations. Those companies looking at overseas markets can also opt for EU GMP compliance, further expanding their economic reach. Our New York project will see an achieved facility being built, and we are in talks with a growing number of companies interested in this concept. Going forward, ALPS is a very active pipeline and potential project. It is in negotiations on many, and we look forward to informing the market as we continue to execute on our sales. On that note, I will hand the mic over to John, who will go over. John Paul?

Thank you, Terry, and Thank you, everyone, for tuning into our call today. As Terry mentioned, lots of exciting things taking place, and Q3 was a pivotal transitional quarter for us as we spent heavily on areas with strong future revenue potential, as Terry discussed, while making moves away from previous revenue streams such as fintech. As we reported after market yesterday, we continue to generate significant growth year-over-year with revenues over a 2,400% above last year's Q3. Even with lower fintech and consulting revenues, as we pivoted away from certain sales channels, we still exceeded last quarter by 4.4% with sales of 2.4 million. As Terry mentioned, we entered the California market and quickly sold out our limited production runs. Based on this success, We advanced ordered key raw materials for much larger production runs that will be scaling up very quickly. Our trailing 12-month performer revenues continue to climb, now at $9.9 million, up 14% from their same 12-month trailing revenue numbers as of the previous quarter in September. The performer numbers include sales from Green Therapeutics, which we acquired last March. We are now in the final stages of the licensing transfer process, which we are confident will get approved by Nevada regulators later this month. Growth profit improved to $1.8 million compared to a $0.2 million loss for Q3 in the prior year. And even more impressively, growth profit is up 49% compared to Q2. The improvement in growth profit over the prior quarter was driven by higher utilization rates and very attractive growth margins on the ALPS services businesses. Operating expenses grew 26% compared to Q3 the prior year, well below the revenue growth rate. Q3 operating costs were 9% higher than Q2, driven by costs related to the company presence at MJBizCon, which Terry mentioned, the Audacious brand launch, annual meeting cost, and offset partly by lower accrued service costs as we finished final settlement with prior management people from the previous management team prior to the proxy fight. Our operating costs dropped 14.7% versus last year. as well as 2% from Q2. The improved gross margin more than offsets the extra spending we've been doing on growth initiatives. During this fiscal year, after nine months, we have made some big capital investments. ALPS has spent $1.7 million developing their APIS service line, as Terry talked about, in addition to cost spent previously. We advanced $2.4 million to Bella Fleur to get their cultivation build-out started prior to winter. We also spent $1.9 million on land and water rights in a future facility in Sandy Valley, Nevada. To help finance this, we raised $3 million in an equity raise from high net worth individuals. We generated $4.1 million from land sales that we no longer need. and reduced our investment in body and mind by $3.5 million, all signs that we are focusing on investing in our operation. Looking ahead with being able to consolidate green therapeutics results in Nevada when the license transfer gets approved, we have several other levers for sales growth. Sales through GTH in Thailand, the expansion in California, further expansion in Nevada, and new projects in the works at ELPS. Thanks everyone for tuning in. I now have the call back to Terry.

Thank you, John. So as you can tell, what we have described so far, Audacious is in good shape. We are growing. We have many initiatives on the grow. We are rapidly becoming the partner of choice. We have a strong position in social equity, diversity, inclusion, and in ESG projects. And we have award-winning brands that truly resonate with consumers. So what can you expect from us as we go forward? First off, obviously, we'll continue to execute on the initiatives that have been announced. We are very excited about our entry into New York. There will be more. Our project with the First Americans will not be our only New York project, and we look forward to sharing details of our expansion in the state before long. Furthermore, as we announced, we made a number of license applications, In Ohio, we are on what I would call a waiting list. The lottery was held. Even though we did not get pulled from the hat, there is still a chance we will win after the winners have been assessed. Furthermore, we are applying in New Jersey and New Mexico, and we are confident on landing something in either state. Obtaining licenses via application obviously is a low-cost entry point into new markets. Otherwise, we would have to finance a project. We will own these and dictate terms if we decide to partner. Furthermore, the relatively low cost of applying for licenses will provide us with time savings compared to having to partner with a license holder. And that said, it will lower our cost of entry, a key element in our strategy. We are also very excited about our partnership with GTH. We believe we were, of course, drawn from this partnership as we have multiple revenue streams in our development. Our partners are exceptionally well connected both within Thailand and in the region. And I truly believe that with GTH, their parent company, NRF, and Audacious, we are building the winner in the region. Tom, the CEO, is full of life, energy, knowledge, and connections in Thailand. Beyond that, with the LDA funding closed and our first transfer being drawn on shortly, we have more resources we can allocate towards organic growth. As we've indicated on multiple calls, our products sell. In fact, we continuously sell out, and in order to grow, we will have to increase capacity. We're assessing multiple options to do so, and we look forward to reporting on our progress in the months to come. We will be launching new product lines, we will enter new markets, and we will develop new revenue streams in this nascent market. With our REC Relief brand now officially launched on our e-commerce site, we believe we will see additional growth coming from this exciting partnership. We have a strong, talented, and dedicated team that is driving this project, and under the auspices of Leo Bailey, our Chief Business Development Officer, whose track record is in CPG and cannabis is exceptionally strong. I believe we have something that will grow into a very meaningful contributor to our growth over time and continue to build the Audacious brand. I'm also very pleased to share that we are about to relaunch Mr. Natural brand. More than anything, this relaunch will benefit veterans, many of whom have consumed Mr. Natural products in the past. Supporting veterans is something we believe in strongly at Audacious, being able to provide them with what I personally consider the best medicine for this truly horrendous condition, PTS, is something that makes me proud to be working in this industry alongside Mr. Natural, Bob Luciano. So in conclusion, Audacious is in robust shape. We have great assets that form the foundation of a truly remarkable company that we believe has everything in place to accelerate growth. This is all in one short year. We will keep a laser focus on our bottom line, and we are implementing measures further to improve our margins. We are also very actively communicating, and I recommend people follow us on various digital properties, such as Twitter, Instagram, and LinkedIn. With the full GT results expected to be consolidated soon, continued ALPS growth across the planet, we anticipate recording strong growth, especially as our other revenue-generating initiatives are starting to pay off. With that, I conclude our prepared remarks and now open the floor for questions. Thank you for your time. And thank you for your support of Audacious. Operator, over to you.

Thank you. If you would like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speakerphone today, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, please press star 1 to ask a question. And we'll pause for just a moment to allow everyone to An opportunity signal for questions.

And we'll take our first question from Matthew Zane.

Hi, good morning, everyone. Mr. Booth, it sounds like there's some really exciting things to look forward to, and I wonder if you might spend a couple of minutes maybe adding some color to Thailand and what that looks like in the future and what your expectations there are.

I'd be happy to. The relationship with Tannin really came from Dr. Duke Fu and his contacts all over Southeast Asia and Asia. And it started out where they just needed some support in the CBD technology space, the derivative, the extraction space. As at the same time, the government were moving very quickly to mirror and to improve the regulatory framework around CBD derived from hemp. And of course, I'm speaking to the ability to ingest CBDs so she could have a dial. So that in itself, I would call it a leapfrog over the U.S. CBD market because there are ingestibles being sold but not approved. But to have them approved in a country that is an entrepreneurial country and with an entrepreneurial company and with excellent contacts in the food space is exciting. If you can imagine CBD and brand names. I don't have to mention them, but you know, the people in the companies that have been very interested in having CBD as part of a ingestible and a beverage. So that was the interest. We then met with them. We saw that they were, I felt anyway, I guess Duke knew, but they were further ahead in the marketplace than I expected. The deal we've done with them is cashless. It's a share swap. with a right to own 25% of the company and a right to control. Duke is online. He can speak more to the intricacies around that contract. But really, we provided them with seeds that will grow in that environment and have grown in that environment. I believe the first harvest is down of the seeds that we've supplied. And they're great genetics and are going to bring an excellent amount of CBD. I don't know that the Thailand market will be able to produce the amount of CBD that's going to be required. We're working on other initiatives with the country of Thailand in getting our CBD imported. That might be just a temporary measure. They obviously want to grow their own hemp and derive their own CBD. With the change in the regulations and this change to the THC reg, which will allow for medical cannabis initially, ultimately adult usage cannabis, they've spoken about it being having the same reciprocity rules as perhaps Nevada, where tourists can obtain cannabis when in Thailand. So it is a – I wouldn't call it a loose system, but it is a friendly system of cannabis with THC. It has been removed from the illicit list. So it's a great step forward. We work closely with them. We just had a team – I'm there for over a week meeting with the health minister. I don't want to say all the good stuff they did because we're going to put it out there. But watch for it, and it will further explain the relationship with Thailand. Does that help you?

Yeah, wonderful. Thank you. And I have another question, please. You referred to New York and having a first mover advantage. Maybe, again, add some color around that. What does that first mover advantage look like? and what are your expectations there?

Sure. Like we mentioned on previous calls and many releases, we've had our finger on the pulse of New York in a great way. We've spent the money and the time and the effort to make sure that the proper people are in our – I wouldn't say in our stable, but in our world, and making sure we have our finger on the pulse of the regulations. Those regulations, the draft regulations, are expected in April or early May, and normally a draft regulation will – set up as the final regulation with minor tweaks. We've done our best to have our input into what those regulations will look like with our experience in Canada and abroad. I've had experience with over 25 countries with regulatory frameworks in place for this very matter, adult usage cannabis and medical cannabis, and making sure that the bar is set high for entry. It's going to be very much a social equity state, for licensing, which we're on top of. We're the only company that I know of that has an independent board for inclusion and social equity. So where are we going in New York for First Mover? Well, with the Indigenous lands, they're not subject to the state rules, and we don't think we haven't checked the boxes of the state, can grow and sell cannabis on those lands. The location of this particular location Community is excellent. As I stated in the earnings release, the number of people that pass by and visit this casino is significant. And that is the first entry mover. Now, one might say, well, what about the hemp, right, with the provisional licenses that just came out? Well, we're on top of that as well. And I think the two will walk side by side and we'll see exactly what and if we're going to have an entry point on the provisional licenses under hemp. They're very limited. The provisional licenses with size, I think it's 20 lights, and that was really meant for your mothers. And then if you picked indoor with 20 lights, you get two-thirds of an acre of outdoor. So you're going to need your auto flowers, and hopefully, you know, I think that they'll be allowing for high-end hoop house. But at this point, you can't be banging out achieved series facilities. So there is a question about what the quality and yields of that bud will look like versus the bud that we expect to be growing with the Mohawk group and First Americans. Now, you might say, are you ever going to sell that Indigenous-grown cannabis or First American-grown cannabis outside? Well, yeah, you can in some cases. There's a thing called a compact. You apply it to your federal government, and then it goes through municipal barriers, and boom, it involves your uncle, and you're selling outside of your property, your land. But I don't expect that until such time that everybody has the ability to sell it in adult usage market but again to think about it the facility is built it's producing cannabis um and it's ready to roll once it receives something like a compact to sell outside its borders so that's um why we believe we have a first mover advantage or one of the first mover advantages in new york state and you know it's a it's a a big state with a lot of people, and there's going to be a lot of cannabis activity. They're limiting the size of the facility, so you won't see these monstrosities like Aurora Sky and whatnot. You'll see 50,000 to 100,000 square foot, I believe, at best, so that's going to create a lot of work. They're going to have a large part of the retail, I believe, will be driven by social equity, and you better do it right. A lot of the states haven't really mastered how to implement those systems, and You better be believing in it. You better be educating. You better be having a proper endgame in place to fully be inclusive and diverse in your operations in New York State. Does that help?

Yes, wonderful. I appreciate your answers, and good luck. Thank you very much. Lots of fun.

Thank you. And once again, if you would like to ask a question, you may do so by pressing star 1, and we'll take our next question. From Mike Edwards with Ree Edwards.

Hi, thank you. I was looking to hear more about what's going on with Oklahoma, Missouri. I know there's a 25%, I think, owned license by GT in one of the states, and I think that's in Missouri. And then the other state, Oklahoma, heard a lot about them for, I think, the past year, just kind of trying to get a timeline on both those states, how we're going to be operating in each state. whether that's dispensaries, manufacturing, or cultivation, kind of what the timeline is for those states. Thank you. Sure.

Sure. I'll let Duke weigh in here, but strategy-wise, Missouri is right around the corner on derivatives and extraction and manufacturing. And Oklahoma would probably be – it might even be after some of these other states that we've applied for as we assess the market in Oklahoma, which – Early indication isn't something we need to jump all over. But, Duke, do you want to weigh in a bit on Missouri and Oklahoma licenses? Sure.

The Missouri facility is an 8,000-square-foot manufacturing facility that's licensed and up and operating. Due to the general dynamics of the market, it's not the most profitable at this point in time, so we're taking a little slow approach and wait and see. However, we do have some technology that we're applying, so we can be much more profitable there. And our expectation is that we're going to start executing with applying some of those technologies in the next coming months. The actual facility has already made products already. The market's new and it's medical still, but we expect also recreational to be coming down the pipeline sometime this year. I think it's going to be a growing state relatively soon.

It should be noted that the Missouri License Partnership, we are doing all of the heavy lifting there with respect to the manufacturing and the facilities and whatnot with our partners, who I believe That was also a social equity license, was it not, Duke?

No, that wasn't specifically a social equity license, but the group is a social equity group. So I got you. Okay. Appreciate it.

Great. Thank you. And then I guess the last question has to do, I guess, with Florida. I know it sounds like there's a couple of deals working in place there. Is that going to be by applying for a license, or would that be kind of by acquisition? I don't know if you can speak to that or not, but any color on that would be great.

Yeah, we can speak to it. The licenses in that state to acquire are very expensive. They've got a piece of paper. Even the ones without any operations are at a very high price. It's a medical state. It's one of the most similar states to Canada, the inability to brand. The other hiccup in Florida is you can only sell the product that you grow. But if Leah's on the call, I'll get her to weigh in on the licensing situation. There are other licenses that are going to be available, and we'll certainly be applying for those, I believe. And at the same time, we are looking at the opportunities that come out of Florida. There are some companies exiting, and if you can milestone weight an acquisition or You know, because of the value that they're asking for these projects, you're looking at certainly something driven by milestones or a SPAC or something that allows a company of our market cap to enter into Florida for an existing license. We're talking north of $50 million, sometimes even higher, on these licenses in Florida. So I do believe that there's more licensing coming out of Florida. Leah, is that correct?

It is correct. I mean, there's some current licenses that we're not qualified for. They're for farmers. But we are looking at that license application very carefully because we believe that will be pretty close to what the full application will look like, and we believe in the next three to six months there will be other applications that will open up, and we will definitely apply for those.

Okay, thank you.

Thank you. And once again, if you would like to ask a question, you may do so by pressing star 1. And once again, we'll pause for just a moment to allow anyone that would like to ask a question to queue up. And we'll take our next question from Jody King with Diamond Bridge Capital.

Hi, thank you. I see the body and mind has been a decent source of learning for you guys. over the last couple of months. Uh, do you know where we stand with that in terms of, uh, what's left?

How much more you guys can pull out of that? Yeah, I can take that. We, uh, thank you for your question.

Yeah, we have, um, right now in the balance sheet as of the, uh, end of December, we have, uh, 2.9 million in, uh, body and mind chairs. And we will be, uh, we're in the process of winding that down. And we, um, probably will be totally out of their investment by the end of our fiscal fourth quarter.

For no other reason, except for we're not an investment company, I like Body of Mind. I like the team. I like their approach. I like what they're doing with their organic growth. Mike's a great CEO. So it's nothing to do with Body of Mind. I'm We were just not an investment co. We don't have the people to sit around and watch other people's stock go up or down. So that was what the investors wanted as part of this, you know, dissident battle that they had. They didn't want it to be a fintech investment co. They wanted us to be a cannabis company. And that's what we're endeavoring to do.

Thank you. Appreciate it.

Thank you.

Once again, if you would like to ask a question, that is star one. And it does appear there are no further questions at this time. I would like to turn the conference back over to your presenters for any additional or closing remarks.

Thank you and everybody be safe out there. Know that your team at Audacious is working very hard in hopefully a COVID-free environment coming up here. I'd like to get around more, meet more people face-to-face in America. It's a wonderful system of 50 different countries, as we like to call it, and we're focused on picking the right prizes in America, and we're well on our way to success. Keep the faith. It won't be long. Thank you for your time.

Thank you, and that does conclude today's teleconference. We do appreciate your participation. You may now disconnect.