Earnings Call: Q3 2020

Nov 9, 2020

Greetings, and welcome to Allied Esports Entertainment Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded. I will now turn the conference over to your host, Lasse Glassen, Investor Relations. Thank you. You may begin. Thank you, operator. Good afternoon, and welcome to the Allied Esports Entertainment 2023rd quarter results conference call. Speaking on the call today is Allied Esports Entertainment's Chief Executive Officer, Frank Ng and Chief Financial Officer, Tony Hung. The company's President and longtime World Poker Tour CEO, Adam Pliska and Jed Hannigan, who is leading the Allied Esports Operations, are also available for the question and answer session. Before I turn the call over to management, please remember that our prepared remarks and responses to questions may contain forward looking statements. Words such as may, will, expect, intend, plan, believe, seek, could, estimate, judgment, targeting, should, anticipate, goal and variations of these words and similar expressions are intended to identify forward looking statements. Actual results could differ materially from those implied by such forward looking statements due to a variety of factors discussed in the company's public filings, including the risk factors discussed in documents filed with the Securities and Exchange Commission. Although the company believes the expectations reflected in such forward looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be attained. The company undertakes no obligation to update any forward looking statement whether as a result of new information, future events or otherwise. In addition, certain of the financial information presented in this call represents non GAAP financial measures. The company's earnings release, which was issued this afternoon and is available on the company's website, presents reconciliations to the appropriate GAAP measure and an explanation of why the company believes such non GAAP financial measures are useful to investors. With that, it's now my pleasure to turn the call over to Allied Esports Entertainment's CEO, Frank Engle. Frank? Thank you, Lasse, and thank you, everyone, for joining us this afternoon. I'm extremely pleased with the resiliency of our business and the solid performance we delivered in the Q3 despite the significant challenges we faced in the first half of 2020 arising from the COVID-nineteen pandemic that persisted throughout the quarter. While strong results in the in person pillar of our business was our primary growth driver for the company prior to the onset of the pandemic. Operational restrictions, including extremely limited social gatherings mandated globally, impacted this part of our business model for both Ally Esports and the WPT during the Q3. In light of this, I continue to be very pleased with our team's ability to adapt to the challenges by successfully pivoting our operational focus to our multiplatform content and interactive services pillars. Solid third quarter revenue growth in multi platform content and interactive services pillars significantly mitigated the impact of the pandemic on our businesses as we continued to serve the esports and poker community. In addition, as Tony will discuss further, we made aggressive strides to pay down our convertible debt principal to RMB 3,100,000. As we look ahead, we believe that the strategic pivot we made as a result of the pandemic has accelerated our ability to monetize all three pillars of our strategy. Importantly, we believe this has put us in a great position to better serve our customers in the future and take full advantage of the significant growth opportunities as the economy continues to recover and the environment normalize. Despite the near term impact the pandemic has had on our financials, we do see a longer term silver lining for Hawaii Sports and WPT. As gamers abide by stay at home restrictions and with fewer entertainment options during the pandemic, gaming is filling the void and its popularity is clearly on the rise. On the Esports side, more time is spent on gaming. The proportions of gamers who spend 5 plus hours per week gaming jumped from 63% to 82% during the pandemic. Similarly, more money is being spent on gaming. The gaming industry has experienced a 39% increase in gaming spend where compared to pre pandemic levels and expected to increase an additional 21% post pandemic relative to spending before COVID-nineteen. And finally, gamers are watching more esports content. Audiences watched 7,500,000,000 hours of content across all live streaming platforms in the 3rd quarter. Year over year, the live streaming industry is up 92% compared to Q3 2019. With that, let's shift gears and review our 3rd quarter results. Total revenues for the quarter of $5,900,000 declined just 2.5% from $6,000,000 in the Q3 last year. Considering the significant restrictions we had in our ability to operate our in person events for both Hawaii Esports and WPG, we are pleased with the results. During the quarter, we generated a strong year over year growth in interactive services revenue as well as a solid increase in revenue from multi platform content. However, this was offset by sharply lower revenue from in person experiences as a result of COVID-nineteen that persisted throughout the Q3. As announced earlier in the year, we took significant actions to reduce our expenses and minimize the negative impact on our financial position results from the pandemic. These actions, which included salary reductions and other cost savings measures, reduced our G and A and selling and marketing expenses by $1,700,000 this quarter versus the same period last year. At the bottom line, our adjusted EBITDA loss of $1,100,000 improved significantly from an adjusted EBITDA loss of $2,100,000 a year ago, marking the Q3 as the best quarterly adjusted EBITDA results since we entered the public markets 1 year ago. Overall, we remain confident in our ability to capitalize on the valuable positions we created in the voyaging esports marketplace. While WPT continues to steadily build its business and we believe has a promising outlook. As we have stated previously, our goal is to maximize the potential of these complementary businesses through a model built around 3 strategic pillars, in person experiences, multi platform content and interactive services. With that, let's turn to our Q3 operational highlights as well as an update on the previously announced strategic partnerships. Beginning with in person experiences, similar to most businesses in the live entertainment and event industry, in person experiences for both Ally Esports and WPT continued to face significant operational headwinds during the Q3. Looking forward at Ally Esports after being forced to completely shut down due to the pandemic on March 17, our flagship HyperX Esports Arena Las Vegas at the Luxor Hotel and Casino successfully reopened on June 25 with certain restrictions and a modified schedule for daily play and weekly tournaments. To ensure the health and safety of guests and team members, Iperic's e force arena has implemented extensive sanitization protocols throughout the venue and has deployed reduced operating hours. Furthermore, enforced physical distancing remained in effect throughout the quarter, lowering customer capacity by approximately 35% of pre pandemic levels with food and beverage service also limited. We believe we have earned the trust of our customers to provide a safe place to play with our enhanced safety and sanitization protocols. That said, since the reopening, the demand we have seen for our weekly tournaments is very encouraging. 3rd quarter highlights included our weekly events at High Price Esports Arena Friday fracs featuring Fortnite and Saturday Night Speedway featuring Mario Kart. Those have shown considerable growth across all viewing metrics in the Q3 by comparison to the Q1 pre pandemic levels. Most notably, unique viewers increased 11 44 percent with Friday fracs and 136% with Saturday Night Speedway as compared to the pre pandemic levels in the Q1 of 2020. While in person events continued to be limited by the pandemic, during the Q3, we are pleased to execute 2 events with the HyperX East Plus truck, including an outdoor event with local Saturday Night Speedway sponsor, Hidden Lake Volkswagen. After a 5 month hiatus, the WPT also resumed the in person pillar of its business during the Q3. In August, the WPT returned to live poker with the record setting WPT Japan event in Tokyo. The event drew 726 players in WPT's first live event since March 2020 and marks the first time WPT secured a mainstream sponsor for WPD Japan with Sega Sammy Corporation. In September, the WPD hosted a second event with PartyProper U. S. Network that featured another record breaking prize pool in the New Jersey market of more than 432,000 for the WPD Online VULGARTA series main event. With the ongoing restrictions of in person events during the quarter, we remained focused on interactive services and multiplatform content. Not only did this help recruit nearly all of the in person revenues loss as a result of the pandemic, we are confident our efforts here will also help strengthen the pipeline of new fans as potential attendees at our live events when the pandemic subsides. Similar to last quarter, the shift to holding events online continued to strengthen our interactive service pillar. In the Q3, we saw strong growth in our proprietary offerings. We extended the Legend Series brand and tournament format to Valorant, completing 5 online Valorant Legend Series tournaments sponsored by Switzerland based home of esports. Our community building efforts in Valorant led us to a partnership with Riot Games on the Valorant Ignition series, where we launched ALA Esports Odyssey, a 6 day event featuring the top teams in Europe. The event set a company viewership record with 1,600,000 live views and 1,100,000 hours watched on Twitch. The success of our events in the Q3 grew our Twitch followers by 3.58 percent. We also became a member of the Esports Integrity Commission and forged strong partnerships with Esports Entertainment Group and GRID Esports that have begun to generate monetization opportunities through esports betting via the licensing of video and data rights. The viadotgg CS GO Legend series ran for 2 weeks in September and delivered 1,700,000 unique viewers across multi platforms, while driving a 400% increase in new users and a 300% increase in deposits on Esports Entertainment Group's Viadotgg platform. The event was historic for Ally Esports, its partners and the State of New Jersey as the New Jersey Division of Gaming Enforcement and the New Jersey Economic Development Authority announced its regulatory approval, allowing our event to be the first to offer legal esports wagering in the state. In addition to Via.gg, the event was carried on several other sportsbook platform, including Drop Kings, PointsBet, Bet 365, Pinnacle, UWin, Yabao, OneWorks and FunBet. We also laid out our vision for continued growth of our online tournament offerings in North America, where we will be hosting the combinations of month long series and single day pop up events to drive participations and viewership. The Valorant Strife series and Rocket League Combustion series both went throughout the quarter with more than 1700 players participating online. The interactive services pillar for the Allied esports business continues to mature. Importantly, the platform we built to host online esports tournaments represent an important foundational building block. In the future, we expect to further develop the platform as an always on subscription based online service where esports players and fans can watch, play and win with other members of the esports community, along with esports personalities and influencers. This online platform will be closely integrated with our offline experiences to create a comprehensive and authentic esports tournament experience for fans. Turning next to WPT. We demonstrate further online success during the Q3. From July through September, WPD hosted the first ever WPD World Online Championships on Party Poker. The series was phenomenally successful with $100,000,000 in guarantees in the festival and 5 WPD champions crowned and their names added to the Mike Saxton WPD Champions Club. The 10,000 buy in 10,000,000 guaranteed WPD main events drew more than 1,000 players and became the largest WPD prize pool of season 18. In addition to being one of the most successful events in WPD history, that this festival underscores the growing brand value of WPD online globally. In addition to the online events, the successful World Poker Tour Interactive Services strategy includes Club WPT, our online membership platform that offers a subscription based poker club with no purchase necessary. Early in the year, Club WPT launched its $100,000 Club WPT Diamond Championship promotion, which has proven very popular with members. Qualify its run from June through October, cumulating in a $100,000 prize pool event in November. This became the largest single day tournament prize pool in Club WPT's history with 1st place taking home $25,000 We also continue to be pleased with the new premium level of Club WPT membership, Club WPT Diamond, which successfully launched in June. Diamond subscribers have exceeded our expectation and comprises a meaningful portion of the overall ClubWPG revenue. Thanks in part to these activities, ClubWPD can point to some impressive growth statistics through the end of Q3, including new registrations increased 29% year over year. Total subscription revenue increased 105% year over year. Daily active users average increased 41% year over year and virtual currency sales on ClubWPD are up 171% compared to the prior year. Rounding out our business model pillars in multiplatform content, where we generated content that is live streamed, post produced or packaged for consumptions on the 20 fourseven basis and retain optionality in monetization of content via direct distribution and sponsorship, use of third party distributors or other various hybrid solutions. World Poker Tour has executed this successfully for many years. Overall, we continue to experience strong demand for our corporate television product. During the Q3, WPT Online Sponsorship revenue from ad sales grew 23% over the prior year period, which is a promising sign as more content opportunity moves online to a global audience. Moreover, WPD Studios began the process of securing syndications for seasons 13 14 of the WPD television series in 2021, with a forecasted 80% clearance. This puts WPD in the position of selling national advertising buys in 2021 and pushing for upfront revenue. I think it is also important to note that linear household viewership in the 3rd quarter was up 77% year over year, while OTT household viewership grew 3 68% over the prior year period. In fact, OTT 3rd quarter viewership of 22,000,000 households surpassed Lineage Television viewership of 17,000,000 households for the first time. Before turning it over to Tony to discuss our Q3 financial in more detail, I would like to provide an update on our strategic relationship with Simon Property Group and Brookfield Property Partners, who we are working with to deliver esports experiences at select Simon and Brookfield properties. Earlier in the year, Simon Mall of Georgia located in the Atlanta Metro area was selected as the location for an Ally Esports venue. While the Simon project is currently suspended due to the pandemic, esports remains a key strategic initiative for Simon and to allow for this, we are talking about further extending the milestone date under the partnership agreements until the COVID-nineteen crisis has ended. With respect to our similar strategic relationship with Brookfield, we are following a similar path to open an on mall Daniel concept at Brookfield retail location once the COVID-nineteen crisis has passed. Although the pandemic delays our timeline with expansion to malls, we remain confident in the prospect of this business initiative and will continue to update you on our progress in future calls. With that, I would like to turn the call over to Tony Han, our CFO, for a more detailed update on our Q3 financial results. Hey, Tony. Thank you, Frank. Good afternoon, everyone, and thank you for joining us today. As Frank mentioned, our Q3 performance demonstrates the resiliency of our business and our ability to pivot our strategic focus within our 3 pillars amidst this dynamic and challenging operating environment. While our in person pillar continued to be impacted by the travel restrictions and social distancing protocols as a result of the pandemic, we made strides on the development of our multi platform content and interactive pillars where we saw strong revenue growth this quarter. As we continue to leverage these two pillars, while diligently working on the recovery of live in person events, our priority remains to manage our expense base and strengthen our positioning ourselves for long term growth. Now turning to our Q3 results. Total revenues for the Q3 of 2020 were $5,900,000 down 2.5% year over year, primarily due to lower in person revenues, which were nearly offset by higher revenues from the multi platform content and interactive services pillars. Looking at these results in greater detail, in person revenues for the Q3 totaled $700,000 compared to $2,600,000 in the prior year period. The decrease of 73.1 percent year over year was a result of postponed events, reduced operating hours and social distancing measures from the pandemic. Multi platform content revenues totaled $1,300,000 compared to $1,000,000 in the prior year period, an increase of 22.6%. This growth was primarily due to an increase in distribution revenue from 2 major customers. Finally, interactive services revenues totaled $3,900,000 for the Q3 compared to $2,400,000 in the Q3 last year or an increase of 62.1%. The increase was primarily attributed to strong growth in ClubWPT subscription and continued success of our new premium Club WPT diamond service. Overall, total revenues in the Q3 of 2020 derived from Allied Esports decreased to $600,000 from $1,900,000 in the Q3 of 2019. Total revenues derived from WPT increased to $5,300,000 from $4,100,000 in the prior year period. While the effects from the pandemic across the globe continue to significantly impact our esports business, Wolf Poker Tour's mature multi platform content and interactive services pillars allowed us to still realize revenue from the transition to online services and events and generate strong year over year growth through the quarter. Total costs and expenses for the Q3 were $9,200,000 down 6.6 percent from $9,900,000 in the prior year period. We significantly reduced our expenses in the in person pillar by 46.5 percent or $600,000 selling and marketing expenses by 76.2 percent or 500,000 dollars and G and A expenses by 23.7 percent or $1,100,000 compared to the prior year period. The decreases reflect our priority to manage expenses during the quarter and actively reduce all non essential spending. The year over year decrease in total costs and expenses were partially offset by several factors. First, expenses in the multi platform content pillar increased 18% or $100,000 to $900,000 Expenses in the interactive services pillar increased 119.5 percent or $700,000 to $1,200,000 compared to the Q3 of 2019. And online operating expenses increased 90.7 percent or $200,000 as we continue to build out online events and production services as the recovery of live in person event continues. Total net loss for the Q3 was $6,500,000 compared to a net loss of $4,300,000 in the Q3 of 2019. Total net loss for the Q3 of 2020 was negatively impacted from a non cash extinguishment loss on acceleration of debt redemption of $1,700,000 that was not incurred in the prior year period. This resulted from the acceleration of monthly payment on the senior secured convertible debt during the period. Moving to our balance sheet. At September 30, 2020, our cash position totaled $10,800,000 including $5,000,000 of restricted cash compared to $12,100,000 at December 31, 2019, which included $3,700,000 of restricted cash. The decrease of cash is primarily due to funding our operating activities and the repayment of our prior bridge notes, partially offset by new funds raised during the year. As of September 30, 2020, we had convertible debt in bridge notes totaling $3,400,000 in gross principal, which matures on February 23, 2022. We also had convertible debt in the gross principal amount of $5,700,000 which is payable in monthly installments through June of 2022 and can also be accelerated at the option of the lender. In total, we reduced the outstanding principal of our convertible debt balance by 3,900,000 from the prior quarter. Subsequent to quarter end, we paid down our convertible debt principal to 3,100,000 dollars In summary, we continue to strengthen our offerings in multiplatform content and interactive services pillars, as evidenced by the significant growth this quarter in those pillars. And the successful WPT model continues to serve as a guide for the expansion of the Allied Sports business. We remain focused on maintaining safety for our employees and customers, while continuing to look for opportunities to optimize our capital, strengthen our balance sheet and create value and growth for the future. With that, we will now open the line for Q and A. Operator? Thank Our first question is from Brian Kinstlinger with Alliance Global Partners. Please proceed. Great, thanks. Just a couple. Thanks for taking my questions. You mentioned on the in person events, your capacity is at about 65%, I think, if I got that right. Can you talk about, first of all, how full the average events are? And then how has that improved, gotten worse, the same? How are the trends in October, November compared to maybe September? John, can you step into this question? I'd be happy to. Thanks, Brian, for your question. So our in person events are limited to 65% of capacity due to social distancing based on how many computer stations we can get on our arena floor. We've seen great numbers as far as the capacity is concerned. We're filling that. We're filling those stations week in and week out on our event nights. And so we remain bullish at if we're able to increase the capacity when social distancing lifts, we will be able to continue to fill those seats. Great. And then in terms of a potential second wave of COVID, just take us through what's happening in Las Vegas, if there is issues at all. And are there do you see any need to make any changes in today's environment, which is every month is different? I'm happy to take that question as well. So the Vegas was one of the strictest places that at the early onset of the pandemic. And they've also been able to open up earlier than many locations out there. And I think what we've recently seen is an increase in the permitted gathering number from 50 up to 250. I think one of the things that the general climate in Vegas is really focused on trying to bring conventions back. And so there's a lot of collaboration, not only with event organizers, but with tech the medical field to be able to create a safe environment. I think that one of the things being an operator in Vegas, having our facility there will tend to benefit from some of those early waves of technology that increase the safety of gatherings. And so what we're seeing right now is not really any kind of change in protocol. We're seeing folks kind of like holding at that number and that number has only increased to 250 recently. So we haven't seen any downward pressure against that number at the moment, but we'll continue to evaluate that going forward. One of the things we've done is we've really earned the trust of our customers who come back to us week in, week out because we've put on a safe we've put out a safe environment for people to play and do that with as little concern as possible given everything that's going on in the world. Great. Switching gears just a little bit in terms of the real gaming model and you had that Jersey event. Can you remind us how you monetize gambling events? Are you taking a VIG, a percentage of the VIG by the operators? Just maybe a quick description on how you'll generate revenue? Jeff? Happy to. Yes. So what we do with is we're selling the we're licensing our data and video rights. So if you think about us as operating events within that game, we're operating a server, which is hosting that game. And so we're leveraging the data and video rights off of our stream and our gameplay and then selling that to and licensing that to operators, sports book operators around the world. And so we'll collect the license fee for them to be able to ingest that information and to create lines and create offerings around our content on their platform. The sports folks around the world will be able to replay events or is that what I understand? They're not live events, they'll replay events and, at sportsbooks you can place back on these events? So they are absolutely live, just to correct. They're absolutely live events. They're taking in a live feed from us. And then ultimately then being able to process that and create lines and in some cases provide that video on their platforms as well behind a paywall. Great. And this is a real experiment. I can add to that. This experiment is what we try to do is create an experience or offering that is custom made for vote makers so that we can create the consistency, the frequency, good few hours block every day so that they can continue to see actions on their book. So it's the trial. I think our partners are very happy about the results so far. Great. Last question I have, you talked about the cost reductions. Yet you still burned $3,000,000 in cash from operations just back in the envelope looking at the cash flow statement. So is more being done to reduce the cash burn or just maybe some thoughts high level on what needs to be done to reduce that burn? Sure, Brian. This is Tony. Why don't I go ahead and take that one? Yes, Q3 was a little bit of an anomaly in that we had some timing issues and some kind of one time items that were kind of part of our normalized burn. There was some timing with regards to the tax withholding payments that we had to make for a bunch of the shares that were issued to a number of our employees. We also had a large D and O insurance premium and a few other things like that. So those all affected the normal operating burn. I would say more from a normalized perspective, we've been doing everything we can to bring those costs down and I think we've done a very good job of those and that you should be able to see continue going forward. Okay. Thanks so much. Our next question is from Derek Soderbergh with Collier Securities. Please proceed. Hi, guys. Thanks for taking my questions. I wanted to start with the World Poker Tour business as it relates to the Club WPT side. Can you give us any details on your expectations for the business from here? And then also how are you guys sizing that opportunity? Yes. So this is Adam speaking. Thanks for the question. So right now, we've launched our new Diamond Club. And so I think we still have a lot of growth in that. And what I can say, just when you go from $24 to $27 up to $150 it's not so much that the margins change because you do have additional price book, but the absolute dollar amount changes. And so it gives us a lot more room. And what it does, it also gives us a lot more room to do affiliate marketing, something that the club at that level really is not as competitive with some of the online gaming affiliate models out there. So what we see is a great opportunity to begin affiliate marketing, something that we have not done, but we are now able to do. And I think that, that provides a good avenue for us as well. And in addition, as real money gaming starts to open up, social gaming is a great entry place for gamers of all locations. And so what we're finding is that we're getting a lot of inward bound inquiries from real money gaming companies, not just in poker, but in sports book and other areas as well, who realize that this is a very valuable database. These are people who are they are coming in, they have an interest in competition, online competition. At the same time, the fact that they're in the social gaming space probably indicates that they're at the portion of their journey, they've not selected a real money gaming partner because that wasn't available in the U. S. So I think that, that provides another avenue of growth in that respect as well. Okay. And then within Interactive, you guys have the virtual product revenue, Zynga and those others. Are those businesses benefiting as well from some of the trends that we're seeing? And then how are those partnerships going? Yes. So I think in general, everybody has benefited from the people being home and people realizing that this is entertainment. And so some more than others in terms of our capital play agreement to play WPT side of the business, that which is far more based on a rev share. I think that we do see some we do see benefit from that. In terms of the relationships, our relationships have been good. Part of the decisions that we have to make going forward is related to database domain. Ultimately, we take great pride in the fact that people want to license the WPT name, but it does present an opportunity. In the future, We might want to consolidate these things and put them just so that all of the names fall under our umbrella as opposed to the licensing model. So we'll see about that. But so far, things have been good and we've enjoyed the partnerships very well. Great. And then my final question is just kind of a broad question on the industry. I know you guys had mentioned some really nice numbers on viewership. And I was wondering if you can provide some additional commentary on how you guys are going to monetize some of that for the online events. Viewership is clearly up. I'm wondering how has revenue per event, particularly online events, has it been trending upwards? Have you seen increased engagement from new customers? Any additional detail on how you guys are monetizing those trends? Sure, sure. Well, it's not apples to apples because before we've always had basically 65 physical events. Suddenly, we had a pandemic. Fortunately, we were prepared to test out our first online event before the pandemic. We just accelerated that. That was the event in May. That proved so successful that we did the world championship with Party Poker, which as Frank mentioned, they put $100,000,000 of guarantees behind it. What is very nice about the online opportunities and we will we're never going to go back to a world where there is no online World Poker Tour event is, first of all, the margins are significantly better. Secondly, the intrinsic value that we bring can be replicated over thousands of people. We still have our hosts having dialogue with the winners at the final table. But now over social media, instead of a stream that might reach several 1,000 people while you're at that time before the TV show goes out, you have a chance to reach many, many, many people who have been playing or watching the news. The other aspect about this is, yes, the viewership is up. But one of the things that I want to point out is for the first time, we saw total viewership online exceeding linear television. So that's a big turning point. And that's relevant in 2 respects. First of all, the World Poker Tour has one of the largest databases of quality poker content. 5 or 6 years ago when the world went on to streaming, the World Poker Tour continued to do high end television, multimillion dollar productions. So we were able to make relationships with say Pluto, where we could come in and say, hey, don't worry, you're not getting a couple of seasons or whatever. We have an entire channel that we can start from day 1 that's going to be quality for what the online platforms are trying to develop. And make no mistake, those online platforms in that respect. The other reason why that's important is because if you think about it, you're watching television and we tell you, we do it like our call outs, we tell you to go club WPT, we want you to watch the show. Historically for the last 15 years, people have watched the show. They get off watching the show. They sign up. Well, you're that much closer and that and much fewer much less friction when you're online, you're watching and you see an ad and you can convert over. And so we think that we will be seeing more and more of that effect as our growth in the online platforms and OTT platforms continue. Also, we have a massive database of some of the greatest moments of poker. Those little clips have become so immensely valuable that we have inbound inquiries for them and we're using them for ourselves because in essence, those are little viral pieces of information. You put them up, you have thousands of people watching. We had over we had over 500,000 views in a few days from one viral clip that we had put out a few weeks ago. And afterwards, you can still put your same ads on those. So we think that the online growth and the fact that we control our database, 100% of our database and we're able to work with the online platforms is a stronger advantage of the company. Great. Thanks. We have reached the end of our question and answer session. I would like to turn the call back over to management for closing remarks. Okay. Thank you for your support and for joining us on today's call. We look forward to speaking with you again when we report our 2024 quarter in March. Thank you again for your time and attention this afternoon and please stay safe and healthy. Thank you. This does conclude today's conference. You may disconnect your lines at this time and thank you for your participation.