Good day, ladies and gentlemen, and welcome to the Greenlane Renewables Q1 2023 Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star 0 for the operator. This call is being recorded on Thursday, May 11th, 2023. I would now like to turn the conference over to Darren Seed. Please go ahead, sir.
Thank you, operator, and good afternoon. Welcome to the Greenlane Renewables Q1 2023 Conference Call. I am joined today by Brad Douville, Greenlane's President and Chief Executive Officer, and Monty Balderston, Greenlane's Chief Financial Officer. Before beginning our formal remarks, we'd like to remind listeners that today's discussion may contain forward-looking statements that reflect current views with respect to future events. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. Greenlane Renewables does not undertake to update any forward-looking statements, except as made by required by applicable laws. Listeners are urged to review the full discussion of risk factors in the company's annual information form, which has been filed with the Canadian Securities Administrators.
Lastly, while this conference call is open to the public and for the sake of brevity, questions will be prioritized for analysts. Now I'll turn the call over to Brad.
Good afternoon. Thank you everyone for participating on today's call. I'd like to start off with a brief recap of our business progress and updated outlook, along with some industry commentary before I turn the call over to Monty for a more detailed review of the numbers. Four years ago, when we launched Greenlane Renewables as a standalone public company, we told investors that RNG demand would grow rapidly due to its attractiveness as a low carbon and carbon negative drop-in substitute for fossil natural gas, which would be supported by the adoption of an increasing number of regulatory incentives, policies, funding mechanisms around the world as governments, industry and consumers recognize the potential of RNG to help meet greenhouse gas reduction targets. We were right.
Global production of RNG has gone from roughly 150 billion cubic feet in 2019 to 250 billion in 2022. The compound annual growth rate of 20%. RNG is now a key global energy asset and will continue to grow and replace fossil fuels using the existing distribution infrastructure. We also told investors that we would offer the three major biogas upgrading technologies: water wash, pressure swing adsorption and membrane separation, building out comprehensive solutions for our customers' needs. We've sold many of each. In fact, over the last four years as a trusted industry technology provider, we have sold 40 systems worth CAD 168 million to customers worldwide across the three product technologies.
In 2022, we added compelling in-house biogas desulfurization technology because every biogas project has hydrogen sulfide, and we saw an opportunity to add more value to our customers. As an established leader in the global RNG industry, and through delivering these projects we've deepened our understanding of the market, and we're taking the opportunity to reflect and refocus how we want to lead in, into our future. Given that growth is never a straight line, we're resetting and we've honed our strategy to target attractive market segments where Greenlane can realize volume opportunities. From a financial standpoint, as part of this trajectory, we're focused on our future and expect to be cash flow positive and Adjusted EBITDA positive in the next 12 months.
We're confident in our capabilities in each of the technologies we offer, and we fine-tuned our product portfolio to deliver configurable systems faster, replicate them across many similar opportunities, optimize costs, and drive measurable value to our customers. Our collaboration with ZEG Biogás, which we announced last month, is a prime example of this strategy in action and offers us the opportunity to create another step change in global RNG production capacity. We've seen the global RNG market evolve through growing consolidation and sophistication in our customer set, with large energy companies continuing to focus on low carbon, or in the case of RNG, carbon negative fuels. For example, oil and gas majors BP and Shell are now integrating recently completed major acquisitions in the RNG sector into their respective businesses with significant plans for growth.
BP, through its acquisition of Archaea Energy, is targeting annual biomethane production of 145 million MMBtus by 2030 from the current 13 million MMBtus through Archaea's significant development pipeline. Shell, through its acquisition of Nature Energy, is looking to scale up its existing RNG business as part of a strategy to build a global integrated biomethane value chain. Against this backdrop, we remain optimistic not only about the future of our industry, but also Greenlane's market position. Circling back to the Brazilian market and the exciting opportunity we have with ZEG Biogás in particular, we've laid a new path forward with a royalty-like business model to establish industrial scale volume production of Greenlane's Totara+ Waterwash Biogas Upgrading product locally in Brazil.
As a reminder, ZEG Biogás is 50% owned by Vibra Energia S.A., one of previously the fuel distribution unit of Petrobras. The Totara+ is one of Greenlane's largest and most popular biogas upgrading products. ZEG Biogás is initially focused on the large landfill and even larger sugar mill-to-waste biomethane opportunities that exist in Brazil. Their goal is to deliver 75 Totara+ systems over the next five years, which would install greater biogas processing capacity than more than 140 units Greenlane has delivered over the last 30 years. Production capacity in Brazil will be phased in by ZEG Biogás over time, with a minimum volume commitment in the first two years. The biomethane opportunities in Brazil are wide open and largely untapped. The Brazilian sugarcane sector is a promising new and immense market opportunity for biomethane.
Today, there are more than 330 sugar mills across the country engaged in the production of sugar and ethanol biofuel. The latter produces vast quantities of a liquid byproduct called vinasse, which is an untapped and ideal feedstock for the production of biomethane. The ethanol biofuel production industry in Brazil dates back to the 1970s, and today the country is the world's second-largest producer. The consumption of ethanol biofuel is equivalent to gasoline volumes in the country's transportation sector. Biomethane production from sugar mill waste across the entire sector has the potential to exceed the total current natural gas consumption in Brazil. I'll now pass the call over to Monty.
Thanks, Brad. Good afternoon, everyone. As a reminder, all figures are in Canadian dollars unless otherwise stated, and all comparisons are for Q1 of 2023 against Q1 of fiscal 2022. Greenlane's revenue in Q1 was CAD 15.5 million compared to CAD 16.3 million in the same period one year ago. System sales revenue accounted for 87% of total revenue in the quarter, which is recognized in accordance with the stage of completion of the projects, with the remaining 13% of revenue coming from aftercare services. We delivered a gross margin in Q1 of 24% or CAD 3.8 million, compared to CAD 4 million or 25% in Q1 of 2022.
We reported an Adjusted EBITDA loss in Q1 of $1.7 million, versus a $30,000 profit in Q1 of 2022. Net loss in Q1 2023 was $2.1 million, compared to a net loss of $2.2 million in the comparative quarter of 2022. During the quarter, the company announced a $7.2 million contract win for a food waste to RNG project in Ohio, United States, for the supply of a biogas upgrading system, and order fulfillment commenced immediately on this contract. As at March 31, 2023, the company's sales order backlog was at $25.1 million. As a reminder, the sales order backlog is a snapshot at one moment in time, which varies from quarter to quarter.
The sales order backlog increases by the value of new system sales contracts and is drawn down over time as the projects progress towards completion, with the amounts being recognized in revenue. Greenlane historically provided an estimate of its active system sales opportunities or sales pipeline to create awareness of the size of the RNG marketplace, but will no longer be doing this now as this goal has been achieved. Our balance sheet remains healthy as we exited the quarter with a cash balance of CAD 16.3 million and no debt, providing ample flexibility for Greenlane to invest and grow in our core RNG business, as well as pursuing other strategic initiatives. In support of our focus strategy, we are also investing in systems, processes, and infrastructure to sustain the business as it scales, and we have made the decision to realign our resources.
While we could not have achieved our historical growth without the dedicated contributions of our employees, we have made the difficult decision to selectively reduce our workforce by approximately 10% and have also implemented other cost containment initiatives to reflect our needs while maintaining a strong core on which to build. By concentrating on our strategic competencies, as Brad mentioned previously, we expect to be cash flow and Adjusted EBITDA positive in the next 12 months or Q1 of 2024. We look forward to keeping our shareholders apprised of our progress on that. And with that, I will open the call to questions. Operator?
Thank you. Ladies and gentlemen, we will now begin the Q&A session. Should you have a question, please press star followed by the one on your touch-tone phone. You will hear a three-tone prompt acknowledging your request. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. The first question comes from Aaron MacNeil of TD Cowen. Please go ahead.
Afternoon, and thanks for taking my questions. Aside from the cost-cutting initiatives that you've introduced today, what needs to happen in order for you to hit your break-even Adjusted EBITDA target in Q1 of 2024? Are you assuming elevated bookings throughout this year that convert into higher revenues beginning in 2024? Maybe if I ask it differently, how can we sort of assess whether or not you're on track to hit that target throughout the remainder of this year? Again, I assume it'll be a function of backlog progression and the run rate of your operating expenses, but maybe you could just give us a sense of what to look for.
Good question. I mean, obviously, we need to land some sales contracts and we do have a significant pipeline of opportunities, but they're not contract wins until they're contract wins. We do have visibility, and we do have expectations on probability.
Of those items. We do need to see obviously some material contract wins over the next number of months to achieve that goal in 2024. On top of that, obviously one of the things that we announced here loosely three or four weeks ago was the contract with ZEG, or the arrangement with ZEG, I should say. As that comes to fruition, we will see obviously revenue and margin contribution start to materialize on that arrangement that we have.
I guess, like maybe to ask more pointedly, is there a certain revenue number that you need to hit in your view that would translate into a break-even EBITDA?
The answer is yes, but we do not provide forward-looking information. I would, you know, directionally, if you would wanna look at kind of our past, you can make some assumptions that, you know, where you saw the break even in the past, you know, it's gonna be in those ranges. A specific number, we're not at liberty to provide that at this time.
Sure. Am I right to assume that AirDep revenues were in the, you know, CAD 3.6 million range this quarter? If so, would you characterize the growth or at least, you know, Q1 run rate as sustainable, or was there something lumpy in there that we should be aware of? Maybe the same question for the aftercare services, which was also up meaningfully from prior quarters.
I mean, AirDep has been a nice tuck-in acquisition. It's contributed nicely. We are seeing some growth. It's both nice from the standpoint of the revenue and then ultimately the EBITDA contribution. I, you know, it's not perfectly straight line, but I do think it's a very stable, you know, quarter-to-quarter number. As aftercare, specifically, we've continued to see growth as we've focused on it. I mean, as our installed base continues to climb, there's more opportunities for aftercare services. It's a natural progression that line should, you know, continue to grow at a, you know, a nice pace here over the next number of quarters and years.
you know, you can obviously, kind of delineate in the MD&A what those margin contributions are. you know, we like it 'cause it's recurring, and we like it because it has strong margins.
Just to confirm, you think that kind of the run rates in both AirDep and the aftercare services are sustainable on a go-forward basis?
Yeah, absolutely. I, you know, I actually, we have a lot of optimism that they will continue to grow at. You know, in the case of aftercare, we've kind of seen it loosely grow at, you know, 15%-20% here over the last couple of years and expect that to expect that trajectory to continue. It won't be straight line, but, like I mentioned, the installed base increases, which gives us the opportunities for aftercare sales. We've seen that, and then obviously there's other areas where we've seen some growth, but that's kind of the magic behind its tailwinds, if you wanna call it that.
Thanks. I'll turn it over.
Thank you.
Thanks, sir.
Thank you. The next question comes from David Quezada of Raymond James. Please go ahead.
Hey, thanks. Good afternoon, everyone. My first question here, just on the comments in the MD&A about plans to rationalize products, I guess it's focused on the dairy sector. I'm just curious, Brad, if there's any color you could provide on that, you know, just in terms of like, how many products you have and if you can say how many you intend to rationalize and how does that contribute to your cost savings targets?
Yeah. Hi, David. Good question. Related to our product strategy, really what we've had the opportunity to do over the last four years since we've grown rapidly and significantly, not only in the top line, but also across the product portfolios in the three technologies. That's put us in a situation where we've learned an awful lot around what the customers are looking for specifically. In the meantime, the market has evolved and matured into a different place, certainly in places like the US, where I think customer recognition of which technologies work and which applications has evolved and matured as well.
For us, what that means specifically is looking across our three technologies and being more targeted across the four main sectors, which we generally think of as wastewater treatment plants, landfills, agriculture, and food waste. If we think about each of those and what each of our core technologies brings, will be more targeted with technologies into each of those sectors. That's a good example of what we just did was our deal with ZEG Biogás in Brazil. For that particular feedstock, for that particular application, the Waterwash Totara+ was the exact right technology, and that's an opportunity that allows us to scale in volume with their goal of 75 units over the next five years.
As I noted in the remarks, I'll just repeat it 'cause it may not have stuck. That installed base of 75 Totara+ units over the next five years represents the same more than what we've installed over the last 30 years with 140 systems. It's a significant opportunity for us that Totara+ is one of our larger and most popular products, and hence why we're seeing a focus for us with where we can win with the core technologies and the right products on volume opportunities. That's really what we meant by the strategy.
That's great color. Thanks for that, Brad. Maybe one just from an industry perspective, and I guess as it relates to the demand you're seeing out of the US. I know last quarter we talked about changes to the LCFS and how, you know, there's some hope around the industry that that would translate into more activity. Have you seen any early evidence of that? I know it wasn't too long ago when we first talked about that. Just curious if that has started to trickle through into the market at all.
Yeah, I think, I think last quarter we also said for the LCFS in particular, with the actions that California Air Resources Board would take, you know, they have a lever to pull, and that's making the compliance targets steeper or in other words, deeper greenhouse gas reduction cuts over a shorter amount of time. That takes some time to work through. The general expectation, at least from the experts who've forecasted what that would result in, is increasing LCFS prices, I guess, throughout 2023, into towards the later part of the year. You know, we're still optimistic that that's, that will happen. I think generally, the feeling in the industry is that's going to occur.
I'd say as of now, you know, we're not seeing exact flow back to the spot pricing. That said, many of our customers who are looking at these as 20-year assets, which they are, they need to take their pro forma number, they generally don't take the spot price value as of today. They take, you know, what they believe the LCFS value will be over the average time period. Generally people are saying it's gonna be somewhere in the $100-$125 range for the LCFS credits.
That's great color. Thanks for that, Brad. I'll turn it over.
Thank you. The next question comes from Sameer Joshi of H.C. Wainwright. Please go ahead.
Yes. Good afternoon, everyone. Thanks for taking my questions. Just wanted to understand the 10% reduction in workforce. Will it translate into 10% reduction in OpEx costs, or how should we look at it?
Good question. Obviously, making those changes takes some time to end up in the numbers. You know, reality is, it's adjusting the go-forward run rate. I think, you know, it's not gonna translate exactly into 10% because obviously there's some larger, salaried individuals and lower salaried individuals. But as a proxy or directionally, I think you could make the assumption that it is going to make a material impact in the operating expense lines.
Got it. In terms of the Brazil contract, or under agreement, what are the expected revenues from that on an annual basis? I mean, I know there are 75 systems over five years, but it's also a partnership, so what amount of monies should we expect you to receive from that? Is the margin profile different for these sales? Just would like to understand that.
Yeah. There's a lot to unpack on this deal, and it is different and distinct from the way we've been transacting business more generally over the past several years. We mentioned that in the in its press release some weeks ago, that it think of it as a royalty-like model. We call it that because there's several components to this. One is that there's a localization activity that ZEG is leading and responsible for. Greenlane retains the design responsibility, but also the provision of parts that are not locally available in Brazil. From a revenue perspective, the revenue accruing to Greenlane would be the value of those parts, plus the royalty, which we've not specifically disclosed in this.
There's also going to be as part of revenue coming out of this arrangement is commissioning services and ongoing service as per normal that we would normally have in any other system sale as part of our portfolio. That's, that's the basic structure of the deal and the arrangement.
You will be able to service the, whatever, maintenance requirements, using your reduced workforce, or will you need to hire as that, business grows? Will you need to hire additional resources for that business?
Yeah, I think we need to be clear that this is a refocusing on those specific market areas where we see volume opportunity.
Okay.
Brazil is certainly one of those markets with this new deal with ZEG. We have recently established a legal entity in Brazil. We've had employees there for some time. We're growing that part of the business in order to direct services. We also have the benefit from having field service team members around the world that we bring in on a time-to-time basis. You can imagine that the activities around commissioning that has peaks and valleys in different parts of the world. We are able to redeploy our subject matter experts to site when we need to. In large part, we will be continuing to grow the Brazilian part of our business to service this upcoming opportunity with Zeg.
Understood. Just one last one, slightly higher level question. In terms of competitive landscape, are you seeing different like higher competition in one as against the other, for example, in agriculture or food waste landfills? Is there a different set of competition that you see and one is more aggressive than the other?
Yeah, interesting way to ask the question. I think, I think we do see a bit of a distinction between all, you know, generalized between anaerobic digestion generally. A project that has a digester versus a landfill, those are two quite different biogas feedstock compositions that require quite a different technology solution from the upgrader perspective. I think it is fair to say that we see a different level of competition between those two broad sectors of digester projects versus landfill projects. I think it's also fair to say, because the, you know, I'll call the AD, the digester gas, a simpler gas to deal with from a technology perspective, you know, given that that's a simpler gas to deal with, there's a, there's a few more competitors that are able to participate in that market.
Just follow up on that. Are you finding more wins in one or the other proportion to the complex competition? I just want to understand like how you are able to grab share of the market.
Well, hopefully that's clear in our press releases and kind of the trending that you're seeing. I think you will have seen, and we've talked about this previously, of the four key sectors that we identify, namely wastewater, landfill, agricultural, which today is mainly dairy in the US, but also food waste. It's the latter one, the food waste, that you will have seen, more activity. Generally in the industry, food waste is seen as the next big feedstock that people want to focus on. It's the largest single stream of feedstock of all the waste streams. However, it does require some adjacent technology that industry partners other than Greenlane offer to do depackaging, separation, pre-digester technology.
There's more going on in a project that's a food waste-based project that needs to happen. We are seeing an uptake in that particular sector, and we're seeing some nice project wins for Greenlane in that space as it begins to take off. I think you'll also see that as the dairy space has been a big driver of the market and by consequence, Greenlane's top line over the last several years. We've had a very solid presence in that market and continue to have going forward. You will have also seen landfill projects, it's really across the board.
All four sectors we continue to sell and, you know, that's been a benefit for us as we can take stock of, you know, where we've had the most success. Obviously the success manifests itself in the contract wins, but more generally, you know, how can we get more targeted and more streamlined in the products that we offer across those four sectors and be more specific around how do we create the right profitability level on a product basis to help improve the operating leverage in the business.
That is a really good color. Thanks a lot. Thanks for that. Thanks, Monty.
Thank you. The next question comes from Nick Boychuk of Cormark Securities. Please go ahead.
Thanks for having me, guys. Looking for a little bit of extra clarity on the 10% cost reduction. Can you expand what areas of the business experience those staff reductions? Also elaborate on the other types of cost initiatives you've looked to take, type magnitude, when those are gonna start to pull through.
Yeah. Obviously, you know, we were selective in some areas of the business where, you know, we felt we either weren't getting traction or, you can only do so many things, and so perhaps you do three things versus four things. You know, those decisions happened throughout the organization, in, in pockets. There isn't any one specific spot per se.
As the other initiatives that we're talking about, you know, we've looked at, you know, we had some strategic things that we were gonna do this year that we're no longer gonna do, and focus on the ones that we believe have the highest probability of success, both in the terms of getting it done and then doing it at a profit level. You know, beyond those broad brush things, I don't think we're really at liberty to disclose the, you know, the strategic items that we're doing.
They'll become transparent when they're executed, but at this point, we don't really want to disclose it due to its competitive nature. Yeah, I guess then after something, can you expand on the types of, I think the documents in the prepared remarks kind of spell out the systems, processes, and infrastructure that you are investing in. Yeah. I mean, the big thing there is. The big thing there is, we're probably halfway or three-quarters of the way through an ERP implementation, which I think is pretty obvious when you talk about systems and processes. We're incurring those costs.
You've seen them in Q4, you've seen them in Q1, you're gonna continue to see them through the balance of the year or a portion of the year. They will start to reap benefits in the form of the implementation costs will fall off in the latter part of the year. In addition to that, we do expect to see some savings in the forms of redundancies that right now we're having to either do manually or maybe not as efficiently as we could. That project is well on its path. We do expect that's part of the expectations in the next 12 months of reducing some of the cost inefficiencies that we have right now.
Okay. Got it. Thanks, guys.
Thanks, Nick.
Thank you. Once again, ladies and gentlemen, if you do have a question, please press star one at this time. The next question comes from Ahmad Shaath from Beacon Securities. Please go ahead.
Hi, guys. Thanks for taking my questions. I guess help us understand, I'm just looking at your working capital movements. There seems to be a good chunk of investment from a cash flow perspective there. Help me understand how should I think about that given the story that you guys have structured your contracts in a sort of a cash neutral way. It seems that this quarter, some investment has occurred, so maybe help us understand what's going on there.
Yeah. So big picture, the biggest movement in the cash was in non-cash working capital, and you hit on it pretty solid right in the middle. It was negative, I shouldn't say negative. It was a decrease in payables and accruals. Obviously some accruals turned into some cash out the door that was larger than perhaps in the past quarters. On the AR side, we do have some lumpiness in our AR because obviously we bill on progress billing, it goes in chunks. It's not specific, but like, you know, 10% or 20% chunks.
Unfortunate, you know, unfortunately from a financial standpoint, we did have some cash land in April versus in March, you'll see the negative impact of that coming through the AR. Our expectation is that the net working capital balance that you can calculate is relatively stable and it's not gonna continue to decrease. Obviously, you know, as new projects come on and old projects come off, there will be some movement in that number. Maybe I'll add, Ahmad, just, you know, you've obviously been at this for a while. The principle is still the same in terms of how we structure our contracts in having the milestone payments from the customers come in ahead of our payments out to customers. Sorry, out to suppliers.
That's a fundamental principle. As Monty said, there was some unique swings this quarter.
Fair enough. Fair enough. I appreciate the color, the color on that. Then maybe from a high-level strategic perspective, any other pockets of geographical pockets, that you see attractive given the slowdown in or the pause at least for this year, in the U.S.? It's nice that you guys expanded in Brazil, but any other pockets of geographical markets that you see potential, maybe a repeat of a similar agreement you had in Brazil, a different structure?
I think it's fair to say that, you know, we continue to focus on the three core geographies that we have been focused on for some time. Obviously, the Latin America one is coming up quickly and high growth with the ZEG Biogás opportunity. The three geographic areas being U.S., Canada being one, Europe being the other, and Latin America being the third, with the latter really starting to take off in our opinion. You know, there's lots of talk about other regions, Asia comes up often. In terms of having the right dynamics to value the resulting RNG, and therefore that translating into system sales, it continues to be for us that focus on those three areas.
I think, you know, it's also a slightly different path to market in all three. You've seen what we've done with the ZEG Biogás deal. It's a unique arrangement with the royalty-like model with a local partner who's taking on obligations and allowing us to de-risk it for us while continuing to enjoy some benefits, like financial benefits from that relationship as that goal of 75 units over the next five years gets fulfilled. In Europe, we've last year of course, we did our deal to purchase the Italian unit for the biogas upgrading system. That's been very successful for us, selling as a component into the biogas space in Europe.
That's, we're continuing to make sure that that thrives. Our system sales general business more generally in the U.S. and Canada. Those continue to be the three markets and pockets of opportunity that we see. We'll continue to monitor other parts of the world. You know, right now as part of our rationalization of our products, the markets in which we're most active allows us to do that and seek out those cost synergies to help with the operating leverage of the business.
Got it. It's helpful, Brad. Maybe a couple more if I, if I may. If the legislation becomes supportive again in California and the U.S., have you guys ran any numbers internally in light of the, let's call them the higher hurdle rates that these projects will have to be operating in? How is the environment look? What level of LCFS prices we need to see to justify investment in new projects given the higher interest rate environment? Is that has been a factor in the slowdown at all from your experience, Brad, in the industry over the last 10, 15 years?
Yeah, I'm not sure we've seen a ton of pushback on high interest rates. I think there's certainly been some. The, you know, there's obviously with some short-term depression of the spot pricing LCFS, we talked about that. However, as I also said, a few minutes ago, that generally the financial pro formas at the project level from our customers, they tended to take a longer term view and it's really just determining what they're going to go at. That's, you know, for the LCFS, is that 100? Is it 125? It's certainly not the 60 or, you know, 70 that it's at today. We also have the ITCs under the IRA in the U.S. The Investment Tax Credits are now coming into the picture that our customers are looking at.
That ends up when they factor that in. I think it's also fair to say that folks are still working through the mechanics as to how to value those and trade those and turn that into value for the project. That is lowering the bar at the pro forma level for projects. In other words, prior to the Investment Tax Credits being available under the IRA, that there'd be a higher hurdle rate than there will be when you factor in those ITCs.
That's very helpful. Thanks, Brad. I'll thanks for answering my questions. I'll jump back in queue.
Thanks a lot.
Thank you. The next question comes from Jim Smith, UK Renewables. Please go ahead. Mr. Smith, your line is open. I'm sorry we cannot hear you. I'm sorry, I'm going to have to place your line back into the queue. Once again, ladies and gentlemen, if you do have a question, please press star one at this time. If there are no further questions at this time, I will turn the call back to Darren Seed for closing remarks.
Thank you for participating on today's call, everyone. We appreciate your questions as well as your ongoing interest and support, and look forward to seeing you on the next conference call. Thank you.
Ladies and gentlemen, this does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.