Good afternoon, everyone. Welcome to Aurora Cannabis conference call. Listeners are reminded that certain matters discussed in today's conference call or answers that may be given to questions asked could constitute forward-looking statements that are subject to risks and uncertainties relating to Aurora's future financial or business performance. Actual results can differ materially from those anticipated in these forward-looking statements. The risk factors that may affect results are detailed in Aurora's annual information form and other periodic filings and registration statements. These documents may be accessed via SEDAR and EDGAR databases. I'd like to remind everyone that this call is being recorded Thursday, February 6, 2020. I would now like to introduce Mr. Michael Singer, Executive Chairman and Interim CEO of Aurora Cannabis. Please go ahead, Mr. Singer.
Good afternoon, and thank you for joining us today on short notice. Joining me on the call today is Glen Ibbott, our CFO. I'm pleased to be addressing you in this new role, and I want to thank the board of directors for placing their trust in me to lead Aurora during this important period in our journey. Glen and I plan to take you through the CEO succession plan and the independent board appointments we announced after market close. We will also detail our business transformation plans to significantly reduce SG&A and capital expenditures near-term as we work to better align our resources to current market conditions. Finally, we will discuss our preliminary quarterly results, certain accounting decisions taken, and amendments to our credit facility before taking your questions. In terms of succession, the board has asked me to execute our plan until a permanent CEO is appointed.
This change has Terry's full support, and he recognizes that the next leg of our journey will be best led by a CEO with a different skill set. I am excited to help execute our near-term plans, which we believe are necessary to position Aurora for long-term shareholder value creation. The board has already hired an executive search firm and efforts are underway to find the best possible candidate to be the permanent CEO. Many of you know Terry and his tremendous legacy at Aurora. Terry deserves an immense amount of credit as an icon and visionary in the cannabis industry, and for building what we believe is the world's leading cannabis company. On behalf of the board of directors and our entire team, I want to thank Terry for his leadership over the years. He will remain on the board during this transition.
Part of our succession plan includes expanding the board to ensure proper governance, oversight, and skills. Aurora's strong market position enabled us to attract Lance Friedmann and Michael Detlefsen to join our board, which will increase to 10 directors, seven of which will be independent. We are excited to welcome Lance and Michael, and eager to leverage their extensive consumer packaged goods experience. We expect to see cannabinoids grow as a category and believe Lance's tenure at Kraft and Mondelez will be helpful as we drive brand growth. Michael brings extensive strategic transformation and optimization experience that will add an important and new dimension to our board. These decisions at the executive and board levels are designed to provide our stakeholders comfort that we have carefully planned for this transition and have the support of the whole organization for the business shifts we are about to execute.
It is important for our investors to know that these changes represent the start of a fundamental change in focus for Aurora as we look to generate sustainable, profitable growth, which is even more important in the context of our business rationalization. As you know, we have been building Aurora to capitalize on a global opportunity, which meant investing in infrastructure and people and allocating capital to projects around the world. We remain firmly of the opinion that a tremendous global opportunity still exists, but Aurora needs to rationalize the business today and drive as quickly as we can to generating positive cash flow. Consequently, we intend to significantly reduce SG&A and capital spending and have taken a hard look at our balance sheet.
While Glenn will provide more details on each of these items, as a whole, we believe they will dramatically improve our P&L even on our current revenue run rate and should result in an improved balance sheet. We believe they will also help us conserve cash near term, which should result in a balance sheet that better reflects the environment today. Speaking of the market, let's start with Canada. We believe Canada is a solid market with lots of potential, but one that will take time to develop. We have discussed most recently in our Q1 call in November of last year that the Canadian cannabis industry has been facing a number of headwinds, including slow rollout of retail stores in key provinces, changes to inventory and purchasing patterns of the provincial distributors, and changing consumer preferences in the dried flower segment.
All of these challenges have persisted into our fiscal Q2 and are largely still headwinds today. While the pace of retail openings is out of our control, today, we are planning to fix the things within our control to enable Aurora to be a sustainable company regardless of market dynamics at play. For example, we plan to begin distribution to the provinces next week for our new dried flower brand, Daily Special, to compete in the value segment of the market. We believe this brand will offer consumers some of the highest quality dried flower at a competitive price point. However, we believe the most impactful actions we can take are those that reset our cost structure, which will allow us to thrive under any market conditions. The international opportunity is also developing, and we believe we are uniquely positioned to capitalize on it over time.
We recently announced EU GMP certification has been received at our third facility in Bradford, known as Aurora River, and that we've resumed sales into Germany after a short pause due to a regulatory process. We believe the international opportunity is as exciting as the opportunity we see in Canada. However, similar to what we're experiencing in Canada, the market evolution in countries like Germany is progressing slower than we or the industry had previously expected. There is tremendous potential, and we're prudently allocating the right level of resources to enable us to capture it today. This will allow us to better capitalize and take advantage of the long-term international opportunity from a position of strength in the future. In summary, we believe our succession plan, expansion of the board, and the rationalization of our business will make Aurora much stronger and more focused than ever before.
We believe these are the right moves at the right time and put our shareholders in the best position for value creation. At this point, let me turn the call over to Glen.
Thank you, Michael, and good evening, everyone. Let me first begin with an overview of the cost rationalization initiatives we announced in our press release this evening. To better align our business with the current cannabis market conditions in Canada, we are making transformational changes to our expenses and cash requirements, including plans for significant decreases in SG&A expenses and a reduction in capital investments. These changes will help improve our balance sheet and, importantly, support our focus on creating a sustainable platform for long-term growth. We view this opportunity not only as a reset of our company but, quite frankly, also as a reset of our relationship with investors and the broader capital markets. In the coming quarters, we expect to demonstrate the tangible results of this plan and look forward to building a record of delivering on what we say we're going to do.
Focusing on SG&A, we now plan to manage the business to an SG&A range of CAD 40 million-CAD 45 million per quarter, which we expect to achieve as we exit our fiscal Q4 2020. Clearly, this represents a substantial decrease from our Q2 unaudited preliminary SG&A range of CAD 98 million-CAD 108 million. To achieve this, management will focus the business on its core operations in the Canadian consumer market, the Canadian medical market, and established international medical markets. We will also continue to pursue our U.S. strategy in a manner that is consistent with financial discipline we are outlining here today. As part of our planned operational changes, we are eliminating almost 500 full-time equivalent positions across most departments and locations, but mainly focused on corporate staff, where we are reducing approximately 25% of existing positions.
This was an incredibly difficult decision and not one taken lightly, but it is a critical step in our plan to put Aurora on a near-term path to profitability. Both Michael and I would like to take this opportunity to thank the impacted employees for their dedicated service to Aurora. Severance and other one-time charges related to these cost reductions are expected to be approximately CAD 2 million-CAD 4 million and have been incurred across both our fiscal second and third quarters of this year. In addition to the staffing reductions, we are also restructuring spending plans on information technology projects, sales and marketing initiatives, contractors and professional services, and other non-revenue-generating third-party costs. An important part of this initiative is to instill a culture of financial discipline across all of our operations.
As such, we believe there may be further opportunity to reduce the complexity of our organization and find additional medium-term cost efficiencies. Over the last several weeks, our leadership team has done an extensive evaluation of our existing capital projects and made difficult decisions with respect to either continuing or ratcheting back further investment in each. In terms of capital expenditures for the second half of our fiscal 2020, we expect to reduce the level to below CAD 100 million. This compares to the almost CAD 225 million in the first half of 2020. To be clear, this reduction in our capital investment does not mean we don't intend to grow, but it does mean that generally, we believe our assets today are sufficient to supply the Canadian market for the foreseeable future. Future capital allocation decisions will be scrutinized first and foremost through a lens of optimizing near-term investor returns.
Once we have established and proven our ability to generate cash flow, we will be in a better position to evaluate projects that are more strategic in nature, but always through the lens of profitability and return on investment. As our press release outlined, today we're also announcing amendments to our secured credit facilities, which we believe will better align the company's balance sheet and cash flow expectations with current market conditions. We believe the amendments will also give us much greater financial flexibility and provide clarity for our investors as it relates to the stability of our balance sheet and the timeline to being EBITDA positive. I'd like to thank our banking partners for their continued strong support of the company.
The amendments include the complete removal of all EBITDA ratio covenants, which had originally been set to commence in the period ending September 30th, 2020. The complete removal of the fixed charge coverage ratio covenant. An adjustment of the total funded debt to equity covenant to 0.2-to-1, commencing in our fiscal third quarter 2020 from the 0.25-to-1 that had been in place till now. Also, a reduction of the total facility size available by CAD 142 million, which includes canceling Facility D, which had been tagged for the full Aurora Sky project, and use of the restricted cash of CAD 45 million to pay down the Facility C term debt. Currently outstanding on the secured debt, following the Facility C pay down is CAD 162 million. Also, there's an introduction of a new minimum liquidity covenant of CAD 35 million.
Finally, there's the introduction of a covenant requiring Aurora to achieve positive EBITDA thresholds beginning in fiscal Q1 2021 that we believe are consistent with today's announced changes. These thresholds are mid-single digits for the first couple of quarters of fiscal 2021, increasing in the back half to a total of CAD 51 million of positive EBITDA cumulative for the entire fiscal 2021 year. We've also announced today that we've undertaken a thorough review of business operations and current public market valuations and have concluded that certain of our assets and goodwill values as at December 31st, 2019, warranted revaluation and adjustment. Therefore, when we report our second quarter next week, we will record impairments on certain intangible assets and property, plant, and equipment in the range of CAD 190 million-CAD 225 million, and will write down goodwill in the range of CAD 740 million-CAD 775 million.
The good news is that following these non-cash charges, we believe we have a much more conservative balance sheet and will remain compliant with our revised total debt to equity covenant. The impaired assets are primarily associated with our operations in South America and Denmark, where the markets are taking much longer to develop than we had originally anticipated. It is important to note that our core Canadian cannabis assets are not impacted by these non-cash charges. We believe that the long-term opportunity for Aurora remains very compelling, despite a slower than anticipated rate of industry growth in the near term. We also believe our approach to rationalizing the business and conservatively improving our balance sheet positions Aurora in a more stable position for sustainable growth going forward.
Finally, I would like to take a moment to talk about how all of these changes will help to address our liquidity position. As at December 31st, 2019, our consolidated cash position was CAD 156 million, excluding the CAD 45 million of restricted cash. We have utilized our at-the-market financing program and have raised gross proceeds of $325 million in our 2020 fiscal year to date and have approximately $200 million remaining under that facility. Our announced reductions in CapEx and SG&A here should provide comfort to investors that we are laser-focused on the health of our balance sheet, and that our plan is to generate cash from our cannabis operations as soon as possible. We expect that utilization of the remaining ATM capacity will be sufficient to fund operations and remaining capital expenditures to the point where positive EBITDA and free cash flow are achieved.
I'd now like to review certain unaudited preliminary fiscal second quarter financial results. For our Q2 2020, we expect cannabis revenues to be approximately CAD 62 million-CAD 66 million net of excise tax. We then expect to record provisions for returns, price reductions, and future provisions of approximately CAD 12 million. Almost all of this provision relates to products that were sold in previous quarters, for the most part in the first half of calendar 2019. Therefore, net cannabis revenue, after giving effect to these offsets, are expected to be between CAD 50 million-CAD 54 million. These revenue results reflect consistency in our Canadian medical revenues, a decrease in international revenues for the short-term German supply interruption, and much lower bulk sales. It is worth noting that Aurora's consumer cannabis revenues reflect modest quarter-over-quarter growth prior to applying these offsetting return and price reduction allowances.
In terms of costs, we expect our Q2 cash cost to produce per gram of dried cannabis to remain below CAD 1. While sales and marketing expenses are expected to be between CAD 28 million and CAD 32 million, and general and administrative expenses are expected to be between CAD 70 million and CAD 75 million. Finally, I'd like to provide a bit of color on our outlook for fiscal Q3. Our expectation for cannabis revenue in the third quarter is that it is likely to continue to be impacted by the general industry headwinds mentioned above. Although, as Michael noted earlier, we are launching a strong brand into the value segment. We think it's best to be prudent in our expectations for the next while. As such, we expect Q3 will likely show little to no growth relative to fiscal Q2's cannabis revenues of CAD 62 million-CAD 66 million prior to the Q2 return provisions.
In summary, while we are bullish on the long-term potential of the global cannabis market, we are cautious in our short-term outlook for the Canadian market. Until we see material growth in Canadian retail store licensing, we are being careful with our revenue growth expectations and are managing our business to achieve positive EBITDA under a very low growth scenario for the next few quarters. We will report our full fiscal 2020 second quarter financial results on February 13th, next week. With that, I will turn things back to Michael.
Thank you, Glen. In closing, our organization is focused on the execution of our transformational business plan. We are best positioning Aurora for sustainable long-term growth, and the opportunities we have ahead are robust, particularly in Canada and internationally, but we need to manage our business for the realities of today's market. Aurora remains uniquely positioned in the cannabis industry and is poised for future success with our robust, low-cost, high-scale cultivation capabilities, high-potency premium cannabis with strong brand positioning, and a track record of product development and innovation to connect with new and existing consumers, strengthening our competitive advantage. Our leadership team, along with the support of our board of directors, is focused on creating value for shareholders, and today is an important step forward towards that objective. We look forward to updating you on our progress. We appreciate your participation on today's call.
Glen and I are now available to take your questions. We would like to keep the questions focused on the information we're announcing today, and we'll speak more about Q2 when we host our formal conference call next week. Operator?
Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Vivian Azer with Cowen and Company. Please proceed.
Hi. Good evening. Thank you. Just two questions, please. Michael, a strategic one for you, and then Glenn, a financial one for you. Michael, heard you loud and clear on the geographic priorities. It makes sense. Canada, your home market, where you've committed a lot of infrastructure, definitely generate the operating leverage there. Can you be a little bit more specific in terms of how you define developed international and then, outside of developed international, how are you thinking about what you're going to do with those assets? Because with South America and Denmark developing more slowly than anticipated, it could present risk of further asset write-down. Thanks.
Sure. Hi, Vivian. We obviously believe in the core part of our business, which is why we're focusing our business today and rationalizing our business towards those opportunities. International opportunities continue to be important, but again, we're focusing on those markets that we believe will provide near-term value for us. Any investment of our capital or our shareholders' capital has to be with an eye on bringing near-term positive returns for our investors. In additional markets that, like you say, we may have certain assets. Part of the write-downs today that we've taken are certainly with regards to our Latin American operation.
It's not to say that we don't believe in those markets and the potential in the future, it's just that we're taking a pause, and until we see that demand significantly increase, we're certainly taking a view of focusing again more on our core business and key international markets where we see the initial return and less focused on those new market opportunities until that global demand picks up.
Vivian, it's Glen. I'm just going to jump in quickly to respond to one thing you mentioned there. We've tried to be very conservative. The write-downs that you've seen are taking pretty much most of the book value off for, say, the South American and Danish assets. As we've gone through this exercise of looking at our balance sheet, we've really tried to be prudent, I think, in looking at forecasts over the next number of years, regionally in Canada, et cetera, with the eye to, I'm going to say, minimizing the likelihood of write-downs in the near future. Listen, we all know that this is a volatile market, so I'm not making promises, but part of our consideration was to err on the conservative side and not to be shy about taking an impairment where impairment was warranted.
Thanks, Glen and Michael, both. That was really helpful. Then just Glen, back to you. I guess it's actually two questions. I apologize. The price reductions and the future provisions and the returns, what types of products does that apply to specifically, please?
Yeah, it was the lower potency dried cannabis products for the most part. Vivian, we've talked before, there was a lot of inventory put into the channels mid-2019 by most of the LPs. We saw it just as we got towards the end of the year, and they're rationalizing, they're driving their inventories down. It was a product like one of our strains called Banana Split that we're not producing anymore, was a 14% THC, and it just wasn't selling. We either offered price reductions to the provinces, which is reflected in the allowance, or took returns. We may repackage and use them in extraction so that it's not completely wasted. This is a provision that almost wholly relates to product that were not sold in Q2. It was in prior quarters.
I'm just trying to make that point so that people understand that this isn't a provision against our Q2 revenues, even though that's the first time we've set it up. It looks kind of large in relation to Q2 revenues. Most of it is for that product that was sold in the spring and early summer of 2019.
Since you're not growing Banana Split, the risk of another wave of return provisions on low-potency dried flowers specifically would be what?
Yeah, it's quite low and again, in the spirit of being very conservative and prudent, we actually went through all of the inventory sitting with the provincial distributors with an eye to anything that looked like it was moving slowly or low potency and set up a provision for it. That also includes a few things that came back in January. All that's captured in our Q2 provision. I'd say we tried to scrub it pretty thoroughly, Vivian, and make sure that, again, while we're kind of resetting the company and resetting the balance sheet that we're not looking at. We're trying to be conservative. I'll leave it at that.
Okay. That's nice to hear. I'll jump back in the queue. Thanks.
Thanks.
Thank you.
Our next question is from Tamy Chen with BMO Capital Markets. Please proceed.
Hey, Tamy.
Hi, Tamy.
Tamy, you may be on mute.
Sorry, can you hear me?
Yeah. Now we can.
Sorry. Can you hear me?
Yes.
Okay, thanks. My first question is on the write-downs you've taken for goodwill, some intangibles, and some PP&E. You said that most of it related to the international businesses. I'm just wondering, it seems apparent that from both your news today and from some of the peers, that the outlook and the dynamics in the Canadian market has certainly changed and not generally lived up to expectations. I'm just wondering, did you take a look at the goodwill and other asset values that relate to the Canadian business? Just wondering why there was not impairments taken from the Canadian side, given how the dynamics have changed in the Canadian market?
Yeah, sure, Tami. Listen, yes, of course, we scrubbed everything in this quarter. To be quite frank, as we all know, when you look at valuations, a lot of the value is being driven on the long-term potential of these markets. As we look at the Canadian market, I haven't seen anybody backing off of the long-term potential here. We all know that there's an accessible market, which is pretty large. The question is, how long is it going to take to get there? How long until we can actually access that? When we looked at our forecast in the Canadian market, and believe me, we used lots of valuation experts, and we've gone through this with our auditors.
We made sure we were being very conservative and prudent, particularly over the next number of years, and that we're using all the third-party data and the consensus of market sizes and when they'll be there and being very kind of cautious on what share of that market we're going to take. When you peel all that back, Tami, the Canadian market potential is still there. What you're really seeing is just it's going to take us longer to get there, and therefore, when you do the value, it looks a little bit lower. None of our assets, the MedReleaf, the CanniMed and the Aurora assets, Whistler included, our core cannabis assets are still doing very well, and we believe are going to serve us well for the long term. That's what's underpinning the valuation.
Just not to get too technical, but of course, we always need to pay attention to the market capitalization. The market is right when they look at a company, and so when we looked at December 31st, despite our positive attitude towards the long term, we and the market recognized that in the short term there's some headwinds, as Michael said. That's what's reflected, I think, in the goodwill write-down. But the assets themselves are operating really well. I think I mentioned today we continue to produce at sub CAD 1 in our production costs. That piece of the business is very healthy.
Okay, thanks. Just a follow-up. On the permanent CEO search, just wondering if to the extent that you can, if you can provide a bit more color in terms of anticipated timeline. You mentioned that the board has already engaged a search firm, the scope of the search, just a bit more color on that search would be helpful. Thank you.
Sure, Tami. Yeah, as I noted earlier, we've engaged, obviously, a global firm several weeks back and are currently in an active process for that. At this time, I think, we're not going to provide much color, but we are certainly looking for a new permanent CEO that certainly will fit right into where we see the industry growing into. It's likely somebody with CPG experience, and ability to sort of take the company. It's going to have a much stronger balance sheet and be in a much stronger financial position to sort of leverage that into a more global opportunity as we see demand picking up, if you want, in the later quarters.
Our next question is from David Kideckel with AltaCorp Capital. Please proceed.
Hi, David.
Hi, David.
Hi, thanks for taking my call. A couple of questions here. The first I want to say is congrats, Michael Singer, on your new Interim CEO appointment. You mentioned at the outset, you fundamentally bring a different skill set versus the previous CEO, Terry Booth. I'm just wondering because a lot of our investors are asking, like, what is the different skill set that we can communicate with your skills versus Terry Booth's?
Sure. Look, the plan that we've laid out, the strategic plan that we've presented to our investors today is one where we're really sort of pivoting as an organization, and we have to become more financially disciplined than ever before. This is an exciting time for the company. Obviously, I think I've been a CFO in the pharmaceutical industry for almost 20 years, obviously operating from a financial discipline point of view, really ensuring that we drive this company in a much more mature manner towards near-term profitability, something that obviously I have more experience doing, and why the board felt very confident in putting me into that role. We're going to work very closely with our management team. Everybody is aligned here internally in terms of what we need to do to ensure that we drive this company to profitability.
My background and my skill set is one where I can ensure that we are going to sort of stay focused in ensuring we meet that key objective, which is what we've laid out today.
Okay, that's very helpful. Thanks, Mike. My next question is just going back to the U.S. opportunity here, and if I'm reading out your press release, Aurora's press releases, Canada still seems to be the major focus of interest, although there are plenty of international, including United States opportunities. How should analysts and the general investor community be thinking about Aurora? Is this the short term Canadian play as far as derivatives are concerned? And once that comes online, is the U.S. as far as any legal opportunities come around, like hemp, for example? What is the storyline for Aurora right now?
Well, look, the U.S. market is an incredible large market with tremendous opportunity and one that we continue to have our eye on. It isn't something that we are certainly going to ignore, even though we're focused on driving this company to profitability. What I can tell you is the opportunities that we're going to explore and we continue to look at are ones that are going to be accretive to Aurora as we reposition the company, and one that is cash flow positive. In other words, anything that we look at has to meet certain key criteria that we've laid out today, which will continue to strengthen our balance sheet and not put us in a position where we have to dig deeper into our pockets.
We see the U.S. market and a number of opportunities fit that specific sort of criteria, which is at minimum the things we're looking at, but things that are complementary to Aurora as we're positioned today. That effectively remains sort of the criteria that we would consider for furthering those opportunities.
Okay, thank you. Just to go back then to the Canadian market, is it fair to assume for analysts and investors that Canada, for derivatives in particular, is still your primary focus or should we be shifting our sights to other markets?
Hey, David, it's Glen. Listen, I think we're all aware that Canada is probably the most advanced opportunity for us. We have the market share, the production facilities. I'll go so far as to say if we think about all of our opportunities over the next short while, this is where we'll generate the cash. This is where we'll generate the profit. We have to make sure that we stay focused on that opportunity. As you know, in this industry globally, there is a lot of things to look at and pay attention to, but fundamentally, we need to drive that cash and profitability. That's why we're kind of re-emphasizing the focus on the core. As Michael described, if there are, and there are, opportunities in the States or globally that make sense and fit our criteria, then of course, we'll proceed with those.
The criteria being focused on in financial discipline and returns, short-term returns. I think that's the way you should think about it. Don't read us in our emphasis on Canada as thinking that we've stopped growing. What we're doing is focusing on this opportunity to generate cash and profit and then making sure that we make decisions that are prudent use of our capital. That's it.
Our next question is from Chris Carey with Bank of America Merrill Lynch. Please proceed.
Hi, Chris.
Hi, Chris.
Hi, good evening. Can you hear me?
We can.
Yes, we can.
Okay, thanks. I guess I'm just trying to square some numbers. If I take your cash ex restricted last quarter of about CAD 150 million and you've got about CAD 150 million this quarter and you've issued about CAD 260 million in stock under the ATM, I guess I get free cash burn of over CAD 250 million in the quarter. Number one, maybe I'm wrong there, but it seems like that's what the math is suggesting. The credit facility has been reduced by about CAD 140 million. Is there anything remaining on that facility? Because I had understood it was about CAD 200 million tapped as of last quarter.
I guess what I'm getting at here is if I look at the free cash burn this quarter and some of the initiatives that you're announcing are really going to be hitting in the fiscal Q4 and you've only got $200 million left on the ATM, it seems like cash is still going to be pretty tight. Maybe just help me plug the gap a little bit. Am I wrong on some of those numbers? I guess I'm just trying to get a sense of the cash bridge, and it still seems like things are going to be really lean into the fiscal year-end. That's my first question.
Yep. Hey, Chris. Yeah, I know exactly what you're trying to get at here. Yeah, just to be clear, I mentioned CapEx of CAD 100 million. That's meant over the second half, so that's like Q3 and Q4. Then we did say in terms of operating results that Q3 will probably look like Q2. We haven't told you what we expect for Q4. We're just trying to be cautious and prudent. I would say that I think you're tossing out a number of CAD 200 million in the quarter. I don't get to that number. It could certainly be if you do your math over the half, where you might get to numbers like that. I'm not going to tell you for a moment that it's not tight. We are operating this because we recognize the current market conditions, so we're driving the costs down.
We talked about our exit rate in Q4. I think you probably picked up from our comments, but a lot of that has happened today. It's just that there are some initiatives that take a little bit of time to implement, and they're going to play out over the next quarter or so. We're trying to not sort of overpromise here, but we let go almost 500 people, most of them today, and we've reset all our budgets internally, most of it today. We expect, kind of here we are mid-quarter in Q3, that we will start to see some improvement. What we were talking about in terms of where the quarter is going, we were talking about top line. We're trying to be prudent on the top line on the revenue side.
Chris, yes, we're not flush with cash, but we think that with the access to the ATM and these changes here should allow us to get to the cash flow positive situation that we're trying to get to.
Okay. Thanks, Glen. Just to confirm on that, how much is left on that. That's not my second question, but just, it was in the first. How much is left on the credit facility? Is there anything left, said another way?
Yeah. Listen, as you saw in our press releases, we have reduced the amount under the term debt facilities.
Mm-hmm.
The loan that we're going to back off of. There is some left on the revolver, I'm going to say, probably accessible right now in the $25 million range. It's not a huge amount there, Chris. The ATM, there's about CAD 200 left on that as we stand here today. That's the, I guess, basic sources of cash. Yeah, I'll leave it there.
Chris, this is where this new mindset in our organization, this notion of financial discipline is really important and why the board felt confident in offering me the opportunity to lead this initiative. We are going to be very diligent in ensuring that we are very careful about how we allocate resources. Any resource that we allocate has to provide that near-term return, or it's just not worth the investment today. There'll be a point in time where we could think a little differently about how we're allocating resources. Today, it is really focused on driving exclusively this company to being cash flow positive. We are confident that we have laid out a plan, and have access to the funding gap that we need to get this company to meet that objective.
Our next question is from Michael Lavery with Piper Sandler. Please proceed.
Thank you. Good evening.
Good evening.
When you talk about, excuse me, Canada Rec, Canada Medical, the Established Medical, and the U.S., I guess in terms of anything of any consequence, there's not much else. How much in terms of costs would that long tail have had? Is that a real source of savings more significant than it may seem?
I hope I'm interpreting your question properly. There's a lot of complexity in our business, and that's really what we've been actively trying to reduce here. We have built the company over the last number of years with a lot about optionality, if you will, and basically burning out our fingers in pretty much every pie, waiting to see where the value in this industry would obviously be created. I think that's become increasingly clear over the last year or so. Certainly in the consumer market, for instance, the value brand or the value segment is really kind of. Basically, the market's taken a hard turn to the value segment. If you show up with good potent product at a great price point, you're going to sell a lot of cannabis.
As we look at those sorts of situations and clarity about how we'll generate cash flow and profit, it does mean that we can look at the rest of our business and reduce the complexity. Just as an example and anecdote, we had about 85 different information technology projects on the go because we were expanding kind of all over the globe. Now we pulled back in a few places like we've talked in South America and Denmark, just to pause and wait for those markets to develop a lot. That actually has a really important impact in the organization just in terms of the sheer effort and amount of money that it costs to do everything all at once. Part of this is just focus on the core and reduce the complexity, and it's actually quite amazing how much cost that drives out.
Beyond that, though, we have driven costs out across the organization where we have to say that there is a set of skills, a number of functions that are important to get Aurora to where it is today. If you take out your white sheet of paper and say, "What do I need to go forward?" You need either less of those functions or a reduced part of those functions. That's some of the decisions we made today, is we need to spend less in certain areas and really focus on the core Canadian cannabis to get the cash flow.
No, that's helpful. A little bit maybe following up on Tami's question, did you look at any capacity rationalization in Canada, in your core markets? If so, why not any announcements there? Do you feel like you've got the right footprint? What kind of utilization are you running at in terms relative to your obviously pretty large size?
Yeah. I'll just kind of harken back to Michael's introduction of himself. I think the financial discipline we'll take here, we'll continually look at our organization to determine what's needed to go forward. Yet to be determined is how big of a share we pick up in the value segment, for instance. We built this Ferrari to be able to race in exactly this situation. We are a very automated, low cost, high scale producer. Time to take advantage of that. We'll see as we move forward and how much of that capacity we can actually utilize or how much of the share of the market we can capture. It's yet to be seen, and we're being prudent in our growth assumptions. It's heartening to hear Doug Ford in Ontario last week claiming that they'll soon have more stores in Ontario than the rest of Canada.
I know it's a little bit of political hyperbole, but the point is, we're not planning for that growth, but when it comes, we'll be ready for it. I guess what I'm saying in summary is, there's still things to be proven in terms of how much capacity we need, but we will take that financial discipline and as the situation warrants, then we'll make the decisions that are most prudent.
Our next question is from Douglas Miehm with RBC Capital Markets. Please proceed.
Hi, Doug.
Thanks very much.
Hi. Two questions. The first one really has to do with the pacing of revenues. I'm glad you laid it out the way you did. To have sort of flat or almost flat growth between Q2 and Q3 on a fiscal basis, can you explain how your 2.0 sales look relative to your dried flower then? Or are you actually going to see growth, but you're just being conservative?
Yeah. Doug, listen, I think, by and large, we had a pretty good launch into 2.0. We were first into some of the markets. That was great. A lot of our products seem to be well-received. We are trying to be prudent. There's not a lot of retail out there. I think I mentioned, quarter-over-quarter in our kind of consumer revenue did grow, and we saw most of that in December, a little bit 2.0, some of it growth in flower. Quite honestly, I think what I'll be keeping my eye on very closely is our success in the value segment. It's amazing how hard the market has turned over the last few months into the value segment. There seems to be a complete abdication of the middle of the market by consumers. They're either willing to pay for a premium product or they're going hard.
They're walking into the cannabis store and asking for, "Give me something over 18%, and I want it at the lowest price you got." Again, we're built for that situation, so we'll see. I think that we are trying to be very cautious in getting too far ahead of ourselves here. We're resetting, Doug. Like clearly resetting the organization. The worst thing in the world is to plan for something that may take longer to develop than we hope. If things play out and the revenue really takes off, that's great. That'll just be more money on the bottom line for us. That's the way we're thinking about it. Plan for a low growth scenario. If it exceeds that, we'll see more money underneath the line, and that would be delightful.
Okay, perfect. Just a follow-up question is, when you talk about, I guess, Q1 of 2021 having a positive EBITDA, can you give us an indication of, I guess number one, what retail store count you're expecting in Ontario at that point to get to, I guess. What's the revenue for that quarter need to be to have positive EBITDA?
Okay. I'll back into this. In the game plan, we're trying to plan for a low growth scenario. We have internal forecasts, and that's all great, and that's what our sales team's running hard after. What we're planning for as a company and what we're talking about with the analysts, we'll plan for low growth. If we grow only modestly over the next number of quarters, and we need to either meet or exceed the target, we'll make sure we do. Back to financial discipline. There is a way to operate companies. Yes, we're in the cannabis industry, but we've all, Michael and I and the rest of us are all the same age. We've got lots of gray hair here. We know how to operate and drive this company to profitability.
We think we've taken the steps now to get us there, and we'll continue to look at reducing complexity. It's not so much about revenue, it's about controlling the cost in the organization. We're quite comfortable with those EBITDA thresholds that I outlined to you.
Our next question is from Graeme Kreindler with Eight Capital. Please proceed.
Hi, Graeme.
Yeah, hi. Hi there. Thanks for taking my question. I guess, that's a good follow-up in terms of the previous question that was asked. I just want to, as a housekeeping, make sure I heard that right, that the covenant on EBITDA for fiscal 2021, that's CAD 51 million cumulative for the year. Is that correct?
Yeah, it is, but it's 80% back-end loaded. I said mid-single digits for Q1 and Q2. It's 5% and 5% for Q1 and Q2. We basically say that's pretty modest. I have to say, our banking syndicate has been incredibly supportive. We had unanimous support on the changes we made to our debt agreement. You can imagine, everybody's worried about the current market climate. They still believe in us, and they believe in what we're doing, and so they've signed up for this. What they're just looking for is just, again, hold our feet to the fire, as Michael says, and we're all aligned in the same objective. We will get to EBITDA positive. They just want to see that progress. Start off modestly, and then build up so that when the debt matures at the end of that term, we'll be cash flow positive.
The maturity is not an issue when you're showing the bank positive EBITDA. Yeah, I'll just add, Michael, that the nice thing about our relationship with our banking syndicate is we found a very creative way to sort of match the new covenants to our strategic plan, and it's consistent, which we're very confident in. This drives to our notion of ensuring that financial discipline. We are going to keep a very close eye on that to ensure that we at minimum meet, and our objective would be to significantly beat those expectations. That'll give, obviously, our banking syndicate confidence.
As you can see, by virtue of some of the changes we've made today with our lending syndicate, they're incredibly supportive of our story, and they're great partners, and they just want to effectively see us execute on the strategic plan, which is what Glen and I are laser focused on.
Yeah. Okay. Understood. I appreciate that commentary. Then as an area of follow-up, there was commentary about, I guess, the quarter-over-quarter changes in revenue, and there was a bit of a decrease in the revenue on the international side, mentioning particularly Germany. I guess to follow up on the questions about the overall, taking a look at the international portfolio, you mentioned two specific jurisdictions here, but was there a discussion at all in terms of the German portfolio and what that could look like in terms of carrying value versus expectations, given that the revenues from there have been a bit softer as of late?
Yeah. Interestingly, there isn't a lot of, I'd say, capital invested in Germany. We've got lots of folks over there, but we kind of built that up from a fairly small operation over the last couple of years. In terms of carrying value, it's not a significant issue for us. That's back online. I think we did mention we had a bit of an interruption for regulatory process, but it's back online as of the end of January, and then we expect them to get back quickly to the rate they were at before and then continue to grow from there. It's not the size of Canada by any means at all. It is a healthy place to be in Europe, and we'll certainly continue to support that. We didn't see any particular concerns there other than just this short interruption.
Our next question is from Matt Bottomley with Canaccord Genuity. Please proceed.
Hi, Matt.
Just wanted to-
How you guys doing?
Just wanted to follow up a little more on the impairment charges that are going to be recorded, so just in that range of CAD 740-CAD 775. Can you give us any more color on how much, whether it's purchase price allocation or actual CapEx invested, has gone into South America and Denmark in relation to the quantum of that write-off?
Yeah. I'll just touch this briefly, and then, honestly, we've got a full conference call next week we can go into lots of detail on, as you would like on our Q2. We're trying to give you some highlights here. Yeah, South America, you remember that we bought a company called ICC a year and a bit ago. That was issued shares worth at that time over CAD 200 million. Obviously, if we did it today, the number of shares, it would be worth significantly less. Anyway, we were carrying a fair amount of value, which was attributed mainly to licenses and some extraction capacity there. As Michael said, we still think that there's an opportunity there. You see a medical market being established in Brazil. We're being cautious.
We just want to make sure that we see it develop and understand it completely before we get too far ahead of ourselves. The impairment there was mainly around writing down the value of the licenses. In Denmark, basically, we wrote down our Aurora Nordic facility that we have, as well as the second facility. We have some of the construction, but we've put a hold on it, and we'll wait until we actually see that we need that capacity before we ever look at restarting that. That was written down a little bit to kind of a market value for what we've constructed there. That's what's going on there.
Got it. Thanks. Maybe just a quick follow-up just on the search for new leadership here. Is there any other roles or anything on sort of the corporate side or the strategic side that will be included outside of just the CEO position? You guys have had a number of C-suite changes as of late with Neil and Cam and now Terry. I'm just wondering if there's a broader search going for other strategic things that the companies might be looking at, or is this just isolated to the next CEO?
Thank you. Yeah, no, it is just isolated to finding a new permanent CEO. What I can tell you, and I think I alluded to this earlier, is we've got, I think, a tremendous executive team. Our team are completely unified here in terms of our strategy going forward. Everybody is going to be keenly focused on ensuring we meet this objective. I think this is a great team to be able to bring in a new CEO, and I think we've got a talented team and a skill set that will be able to surround that new CEO with the knowledge of our industry and certainly the knowledge of Aurora, so that we give our new CEO, he or she, when she does join or he joins our company, the ability to really take off immediately from the time that that individual starts.
Our next question is from John Chu with Desjardins Capital Markets. Please proceed.
Hi. I guess my first question is just looking at where the industry sales are and then the guidance you're giving for the quarter and then going forward, it looks like you're starting to lose market share then, and maybe comment in terms of, is it really going to be the Daily Special dry flower that's going to help turn that or are you starting to rationalize some of the product lines to help get back up in market share?
Sure. Yeah. Listen, a couple of things. Yes. You're probably seeing the same thing we are. Since probably the fall, let's say September, the market has shifted and shifted hard every month into the value segment. We have lost market share in that mid-tier. Because we don't currently have a value brand, as Michael said, it starts shipping next week. We have lost some market share in the dried flower. That's an important segment still, the biggest segment. We're looking forward to the introduction of that. That is important. You're right, there was some share loss there, so we expect to recover that. Beyond that, I think we continue to look at our brand portfolio for some of those that were targeted at that mid-tier that seems to be disappearing. We'll look at whether we need to phase those out.
There are certain cultivars for sure that we have phased out. They're just clearly not selling. I should tell you, though, we have continuing progress at some of our major facilities like Sky, where month-over-month, we're getting even better potencies out of our products. Very reliable, high-potency products, which gives us a lot of confidence as we launch in the value brand that we can deliver those 18% or higher potencies that the consumers are looking for THC. And again, given the scale and the low-cost production, be able to do it at a very compelling price point while still having very healthy margins for Aurora. Yeah, I don't want to tap dance around it. Without the value brand, we're losing some share. Again, I think we're optimistic that we'll see some recovery there over the next couple of months.
All that being said, and I hope that you take this to heart, we're just being very cautious in our estimates for revenues. It's been the story of the last year and a half in this industry where expectations have run way ahead of reality. We're just trying to work with reality here. Again, as I mentioned, I think Doug asked the question. We set the business to that reality, and it happens to come in stronger in terms of revenues. Excellent. If it falls to the bottom line, we'll all be happy. Don't take it as us being too pessimistic. Just take it as us trying to be realistic and working for the Show-Me State. As it arrives, I'll believe it. Until that point, I'll wait to see.
Okay, great. Just my second question. In addition to just the covenants that have been imposed, are there actually any restrictions to whether or not you can actually go into the U.S. or internationally above and beyond the covenants that are in place by the syndicate?
I would say, as long as it's federally legal, certainly those are opportunities that would be more than satisfactory to our lending syndicate, but they're partners. So we're certainly going to work with our partners, the banking syndicate, to ensure they're comfortable. The opportunities we're looking at would certainly, without a doubt, be things that they would be considered or they would feel comfortable with and obviously fit within the federal legal landscape. That is an absolute minimum criteria for us.
Our next question is from Pablo Zuanic with Cantor Fitzgerald. Please proceed.
Duan, my question is actually going to be top-line related. I appreciate everything you've said about the cost rationalization and the CapEx cutbacks. Number one, the fact that the market is moving into value in the case of flower, what does that say and bode for 2.0 products, right? Because derivatives obviously are more expensive and most of us had expected the industry to get a lift from 2.0. Given the shift in the consumer to value, does that mean that 2.0 really won't be that big a deal for the industry? I have a follow-up, but if you can answer that first.
I apologize if I haven't been clear on this. When I've been talking about the value brand, I've been talking about the flower.
No, I understand.
Now, listen, the 2.0, we haven't found the lid on demand yet for our gummies and mints and things like that. It's still a young market, so we'll test that, and we'll see. So far, so good. As we deliver, they sell. They seem to be well-received. I would think that over time, you would see similar sort of sentiment even in the 2.0 products. There's going to be people that are always happy to pay for a premium product, and then there are going to be people that come in with minimum criteria and say, "I want a gummy that delivers this, and I want it at the lowest price possible." This is only a month old, so we haven't seen that yet.
When I talk to our marketing folks and our sales folks, they came up with something that we are planning for, is I think you will see a market shift at some point. That, Pablo, just to be clear, that doesn't mean that there's any diminishment in the expectations for the revenue potential or the volumes here. It's to recognize that consumer preferences, like the rest of this market, evolve quickly, and so you need to be kind of nimble. That's why we're playing a little catch-up on our value brand in the flower side to try and anticipate going forward. Scale matters, low cost of production matters, all of that.
As we look at our business, you're talking about financial discipline, there's still areas where we need to continue to drive costs out of our manufacturing and operations as well, so finding ways to continue to reduce packaging and logistics and things like that. These are all things that make sense as any industry rationalizes them, and they'll be part of that drive to both value and premium, even on the 2.0 products. Way too early to see those trends yet, but we are planning for them.
Right. Just a quick follow-up. Would you have a rough estimate of the flower market right now, percentage-wise? What would be the value? I mean, is it 60%, 70% to a flower market now is what you would call value?
Yeah, I don't know. We don't get great information on our competitors. Some provinces don't share data. I really, I'd just be speculating. Probably don't want to go there. Sorry.
Our next question is from Adam Buckman with Scotiabank. Please proceed.
Hey, Adam.
Hi, guys.
Thanks for taking my question, and apologies if this comes across a bit blunt. I just wanted to go back to the inventory provisions and returns in Q2. Obviously last quarter, many of your peers took inventory provisions while you guys didn't. At the time, I think the team might have said something along the lines that they're comfortable with the current inventory position. I'm just wondering what happened Q-over-Q to change this view, and then how confident you are on a forward basis in your current inventory position.
Yeah. What happened. I think what happened is the provinces just continued to drive even harder than we expected for price reductions and returns. This was flower that wasn't moving, and depending on the province, they operate under some sort of cap, whether it's a working capital maximum that they can have in inventory or physical constraints. Was that November we were talking, I think at that point, we were still working with the provinces and we were satisfied that we had plans in place even for slower moving product, that it would play out. That didn't happen. I think, we got into the harder negotiations with provinces in December. We saw returns in December. We saw returns in January. That's what the provision's reflecting. I hear you. Obviously, you know that our provisions are not of the magnitude of some of our peers.
They're still there. That's that. I mentioned, I think Vivian Azer asked the question, we did do a pretty thorough scrub of all the inventory sitting out with the provinces to make sure that we took price reductions where warranted and have a provision for any returns that we think might be at risk.
I'll just add that, as Glen said, he's taken a real hard look at that. The purchasing patterns now of the provincial governments have changed dramatically. They're no longer purchasing and buying significant inventory, so months of inventory. They're actually buying more frequently. That actually reduces the risk of product that's going to be sitting on their shelves. They're almost very minimum order quantities. Those are moving, and then of course, they then reorder. The likelihood of, I think across the industry, you're not going to see the level of returns that have probably popped up over the last couple of quarters just because of the way the provinces are now purchasing from the licensed producers.
Okay. That's great color. Thanks. Secondly, just on the value strategy. Again, obviously a couple of your peers started to launch value brands in November and December. I'm just kind of wondering what sort of steps you had to go through to get a value brand out there, and why it wasn't launched earlier, just in a reaction to your peers.
Yeah. I mean, I'm not going to get in too much depth. I mean, we want to launch a product that is going to be well-received by the consumers. That means consistent potency and not making too wide a claim in terms of potency. You can make a claim that says it's somewhere between 14%-22% on your label, and we weren't doing that at all. I mentioned just a short while ago, we're seeing just a very consistent level of potency in some of our larger, in Sky in particular. Two things. One, I'm going to be completely honest, it probably took us a month or two to really see the trend and to react to it. Then we actually had to go through a process with Health Canada in terms of approvals and things like that to list it with the provinces.
Actually, process-wise, took a little bit longer. I'm going to say that is an area that we could have done better in terms of how quickly we got to market. I will say I'm really eager to see it start shipping next week because I'm really Actually, I'm trying to be very cautious on this call, but I am quite excited about where we're pricing this thing. From our analysis of those that launched in the late fall, in October, November, if you price this right with the right potency, you capture a pretty nice share quickly. We'll see. I hope I'm being as transparent as I can.
Our next question is from Chris Blake with Laurentian Bank Securities. Please proceed.
Good afternoon, guys. I just wanted to follow up on the balance sheet with respect to, I know you mentioned earlier in the call about having limited cash balances going forward and access to it. Do you have any sense of any, or in terms of asset sales, any potential on that or excess land that you can utilize to shore up your balance sheet a little further?
For instance, we've got our Exeter Greenhouse in Ontario up for sale, I think. It became a surplus asset for us as we kind of looked at our business. We'll look at that. Michael and Glenn, you got a reformed CFO and a current CFO, lots of experience. Just so you know, Michael's been in this industry since 2013 with Bedrocan, so it's not like he's new to the industry. He talks about being a CFO, hopefully as a reformed CFO. As one of the early guys in the industry, so lots of industry experience. You got a couple of financial minds looking at this. Of course, we'll comb through and as we talked about, reducing the complexity of the business, we'll look for any opportunities for non-dilutive sources of cash. I think I'll just leave it there for now.
Okay, that's helpful. Just lastly, in your commentary with respect to the introduction of a new minimum liquidity covenant of CAD 35 million, can I assume, or is that CAD 35 million restricted cash, the definition of the minimum liquidity covenant? Or is that working capital?
Well, it is cash, but technically, it's not restricted. They're saying, "When we measure you at the end of the quarter, you need to have CAD 35 million cash in the bank." I can tell you that I wouldn't be sleeping at night if we're at a CAD 35 million cash in the bank. Because it's a quarter-end measurement or a period-end measurement, it gives us a little flexibility should we ever be there. That's certainly not our intention to be down there. That's what it is. It's not technically restricted, it's just saying, "You need to have some cash in the bank at your period end.
Okay, great. That's it for me. Most of my questions have been answered. Thanks.
Thank you.
Thank you.
Our next question is from Glen Santangelo with Ladenburg Thalmann. Please proceed.
Hi. Thanks. Most of my questions have been answered already. Curious, on the ATM, that's still kind of overhanging a little bit. Investors don't necessarily love it when ATMs are hanging out there. Can you talk about, is that something you intend to tap when necessary, or is it something you intend to tap immediately and as quickly as possible? Lastly, I'll just add, and this will be the last thing if I ask is that have you looked at any private placements, strategic investors? Is there any discussions going on with potential investor on that kind of front? Thanks.
Yeah. Glen, let me be clear. We're talking about the ATM because we want you to think in your model that we're going to use that ATM, where we got CAD 200 million there. Chris was asking a little bit earlier, I think it was Chris asking about how do we close the funding gap. We're trying to be very transparent here. We expect to use most of that ATM. You should expect that. Don't look at it as an overhang. Look at it as a part of our plan to fund this and have our cash flow positive. I hope I'm being really crystal clear there. Wait a second now. I forgot the second half of your question.
Sorry, the second half is just about.
Go ahead.
If you looked at strategic investors, if there's been any discussions, is there anything that we should consider as we think about going forward?
Yeah. No, I don't think we would talk about that if we were talking to a potential strategic investor. I wouldn't be able to talk to you about it on that call. If you're asking, is there an Altria-like investor sitting on the sidelines? Not as of today. I'm not sure that we would go there. Again, we'll look at all opportunities.
Yeah, we always explore every potential opportunity. That type of capital is probably expensive, and we have access to capital that we think is less expensive. We will be very mindful of how we raise capital for our shareholders. As Glen laid out, I think our ATM certainly gives us comfort that we've got, as part of our plan, the ability to fill that funding gap with that existing sort of channel.
Our next question is from David Kideckel with AltaCorp Capital. Please proceed.
Hi, David.
Hi, David. You're back. You may be on mute.
David, check if you have your line muted, please.
Not hearing anything, David.
Oh, hello. Sorry.
There he is.
Hi, David. Just wondering, based on all the analysts' comments that we've heard so far, is there any other way? I'm just thinking more high level here. How does the market want to hear about Aurora, and what is their core competency here? Is it Canada? Is it international? Is it U.S.? What is Aurora's position on this?
Well, what's our core competency? Obviously, our ability to produce high quality, low cost
Cannabis based on our Aurora Sky facilities, which was the vision Terry's had from day one. That is a massive competitive advantage and frankly, a key component to working off of as a platform. Our core markets are clearly Canada, both the medical and the rec markets, which are certainly markets that we're paying very close attention to, and very focused international markets like Germany, which we believe are sort of asset-light opportunities where we see the ability to realize revenues, maybe grow revenues without a significant investment at this point.
Yeah. David, just to expand quickly on Michael's comment about Terry's vision. Purpose-built, low cost, highly automated, high-scale facilities. With our EU GMP certification of our Bradford facility, we've got over 30,000 kilograms a year of capacity for exports, plus we've got all the capacity for the Canadian market. When you think of core competency, think about the ability to deliver great quality cannabis and extracted or derivative products at a very low cost. I think that's fundamentally what stands us in good stead and what we want to focus on generating cash flow from. Then we'll add to that as the opportunity makes sense.
Thank you. This does conclude our question and answer session. I would like to turn the call back over to management for closing remarks.
Well, we want to thank everybody for obviously taking the time this afternoon to join our conference call and hopefully understand the strategic plan that we've put out in front of you. We're very excited about the opportunity here and our chance to really level set our organization and our spending to the current realities. We look forward to providing investors with updates as time continues. We're, again, very optimistic about the plan that we've put in place today. Thank you very much for joining the call. Have a great evening.
Thank you. This does conclude today's conference. You may disconnect your lines at this time and thank you for your participation.