Ayro, Inc. (AYRO) on Q2 2021 Results - Earnings Call Transcript
Operator: Ladies and gentlemen, thank you for standing by. Good morning and welcome to the AYRO, Inc. Second Quarter 2021 Financial Results and Corporate Update Conference Call. At this time, all participants are in a listen only mode. After today’s presentation, there will be an opportunity to ask questions. Participants of this call are advised that the audio of this conference call is being broadcast live over the internet and is also being recorded for playback purposes. A webcast replay of the call will be available approximately one hour after the end of the call through November 11, 2021. Now, I would like to turn the call over to Scott Gordon of CORE IR, the Company’s Investor Relations firm. Please go ahead, sir.
Scott Gordon: Thanks, Cole. Good morning and thank you for participating in today’s conference call. Joining me from AYRO’s leadership team are Rod Keller, President and Chief Executive Officer; Curt Smith, Chief Financial Officer. During this call, management will be making forward-looking statements, including statements that address AYRO’s expectations for future performance or operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in AYRO’s most recently filed periodic reports on Form 10-K filed with the SEC, and AYRO’s press release that accompanies this call, particularly the cautionary statements in it. Today’s conference call includes adjusted EBITDA, a non-GAAP financial measure, that AYRO believes can be useful in evaluating its performance. You should not consider this additional information in isolation or as a substitute for results prepared in accordance with GAAP. For a reconciliation of this non-GAAP financial measure to net loss, its most directly comparable GAAP financial measure, please see the reconciliation table located in AYRO’s earnings press release, which is available on its website at www.ayro.com under the Investors tab. The content of this call contains time-sensitive information that is accurate only as of today, August 11, 2021, except as required by law, AYRO disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It is now my pleasure to turn the call over to CEO, Rod Keller. Rod, please go ahead.
Rod Keller: Thank you, Scott. Good morning, everyone on the call. During the second quarter of 2021, we continued to make significant progress in advancing AYRO into a commercial manufacturer of electric vehicles or EVs and doing so at accelerating volumes. As we’ve talked about before, we believe we have built a world-class infrastructure and an ecosystem through our numerous partnerships with best of breed companies like Karma Automotive, Club Car, Gallery and Element Fleet Management. And each of these partners address a key role in our ability to scale rapidly, efficiently and profitably. In June, our partner Club Car officially announced the launch of the Current. And the Current is our next generation purpose-built low-speed utility truck that is ideally suited for universities, campuses and venues. And it comes with upgrades and features and safety over the first generation 411 EV. This is a major milestone for AYRO, and it demonstrates our ability to bring innovative purpose-built EVs to the market. Now, it’s important to understand that the initial shipment of raw materials and parts for the Club Car Current arrived from China late in the second quarter. And when combined with our transition to assembling the Current at Karma’s facility in California, as opposed to the previous generation 411 being manufactured in our Austin, Texas facility, this led to revenues declining sequentially by approximately $265,000, and it unfortunately snapped our streak of six consecutive quarters of sequential revenue growth. However, I think it is critically important for me to emphasize and for our investors to understand that our sequential revenue decline is by no means indicative whatsoever of the future of AYRO or the future demand profile for the Current. In fact, one could say, it’s just the opposite. In fact, purchase orders placed by Club Car in just the first two months, following the Current’s launch, are evaluated at a total of $4.9 million. We are seeing strong demand and anticipate future orders for not only Club Car, but also Gallery and Element, which each also have agreements with Club Car and in effect also serve as additional distribution outlets and vendors approve to sell the Current to their commercial customers. In looking at just college campuses, we believe there is over a 100,000 trucks and light-duty vehicles each year that need replacing, and currently just 10% of those vehicles are EVs. This is an incredible opportunity for AYRO, given the vehicle footprint and the emission advantages of the Current, not to mention the 49% reduction in annual operating expenses per vehicle that we estimate the Current would offer over traditional gas-powered trucks. Now, let me switch to the anticipated rollout we talk about so often of our 311X. The 311X is our next-generation three-wheeled vehicle that will target the last mile and restaurant delivery markets, and we reiterate our expected timeline. We anticipate a soft introduction of the 311X later this year, with expected production to commence in 2022. The restaurant delivery market is a $45 billion opportunity in the U.S. and it is significantly bigger than the campus and the stadium market opportunity we’re pursuing with the Club Car Current. And our efforts to target this large market are not being done in a vacuum. Rather, we are in constant discussions with dozens and dozens of restaurant chains, many of which are household names, but that we won’t disclose for competitive reasons. We are speaking with them about the features they are looking for in a delivery vehicle to wrestle control of the delivery process away from the DoorDashes, The Uber Eats and the Grubhubs of the world, which are drastically cutting into the margin of these restaurants, given the ubiquity of fast food delivery these days. Our partner Element is the world’s largest fleet management company and has extensive relationships with commercial and fleet buyers, and the infrastructure to support all facets of a customer purchase or lease, as well as maintenance, storage and the like. We do not believe any other EV manufacturer on the market today has such a key partnership that can be pivotal in closing negotiations and generating purchase orders. Simply stated, we cannot wait to launch the 311X, and hopefully our ability to launch the Current provides some comfort in and proof of our ability to execute our strategy. Now, moving on to our Electric Vaccine Vehicle or the EVV. The recent surge in the Delta variant shows the vaccinations will continue to play a vital role in returning the country and the world to normalcy, eventually. About a month ago, President Biden announced a greater emphasis going forward on a desire to provide vaccinations at the community level, doing so closer to homes and at locations people are already familiar with, and a shift away from centralized mass vaccination sites. The EVV can be an ideal resource in this, given its small footprint and ability to be an all inclusive distribution site. But as I’ve mentioned before, we’re encouraged by the feedback we’ve received about the EVV, and now, we’re simply having to work with a long sales cycle inherent when dealing with government agencies. Lastly, I think it’s important and I’d like to point out that we had nearly $88 million in cash at the end of Q2 and zero debt at the end of the quarter as well. Now with that, I’ll turn the call over to our CFO, Curt Smith, who will review our financial results. Curt?
Curt Smith: Thank you, Rod, and good morning, everyone. Here’s a summary of our fiscal second quarter 2021 financial results. Revenue for the second quarter ended June 30, 2021 grew 83% to $522,000 from $286,000 from the quarter ended June 30, 2020. The increased revenues were primarily due to our additional sales of our trucks to Club Car, related powered food box sales to Gallery Carts, as well as other vehicle time order options. Gross margin percentage for the quarter ended June 30, 2021 was 17.5% as compared to 28.1% for the quarter ended June 30, 2020. The decrease in gross margin percentage was primarily due to an increase in tariffs on raw materials imported from China, and an increase in shipping costs due to the global COVID-19 pandemic. Vehicle sales prices were included in January -- were increased in January 2021 to partially offset these cost increases. Total operating expenses for the quarter ended June 30, 2021 increased to $7,773,000 from $1,134,000 for the quarter ended June 30, 2020. The increased total operating expenses were primarily due to increase in research and development expenses as we continue to design and develop our next-generation delivery vehicle, as well as higher general and administrative expenses. Research and development expenses rose from $181,000 in the quarter ended June 30, 2020 to $3,042,000 for the quarter ended June 30, 2021. The higher R&D expenses were related to additional personnel costs for our engineering, design and research teams as we expanded the suite of option packages for our vehicles and initiated development of our next-generation delivery vehicle during the first half of 2021. Sales and marketing expense for the quarter ended June 30, 2021 was $669,000, an increase of $430,000 over the $239,000 in expenses during the same period of 2020, arising from an expanded sales and marketing staff, and marketing-related initiatives surrounding our next generation delivery vehicle. General and administrative expenses for the quarter ended June 30, 2021 were $4,062,000 as compared to $715,000 for the same period in 2020. Much of the increased G&A expense was tied to an increase of $1.47 million in stock-based compensation expense during the 2021 period, as well as $1 million in additional professional services to support public company reporting requirements and additional $596,000 in compensation expenses due to corporate expansion. Net loss attributable to common stockholders for the quarter ended June 30, 2021 was $7.66 million on a GAAP basis versus a loss of $1.53 million for the same period in 2020. The aforementioned increase in operating expenses largely drove the increased net loss for the quarter ended June 30, 2021. Our GAAP net loss per share for the quarter ended June 30, 2021 was a negative $0.22 per share versus negative $0.18 per share in the quarter ended June 30, 2020. The weighted average common stock outstanding at June 30, 2021 was 35,315,044 shares as compared to 8,291,351 shares at June 30, 2020. Adjusted EBITDA, a non-GAAP measure, was a negative $5.9 million for the quarter ended June 30, 2021 versus negative $683,000 for the quarter ended June 30, 2020. Adjusted EBITDA for the quarter ended June 30, 2021 included the adjustments of $129,000 in depreciation and amortization expense, and $1.64 million of stock-based compensation. I am pleased to report that, our contracted backlog as of June 30, 2021 was $1,816,000, which we expect to be fulfilled over the next few months. Turning to the balance sheet. Cash at June 30, 2021 was $87.9 million, a $51.1 million increase as compared to $36.8 million in cash at December 31, 2020. The strengthened cash position is due to the two registered direct offerings completed in the first quarter of 2021, offset by the net losses in the first and second quarters of 2021. Total debt at June 30, 2021 was zero versus $22,000 at December 31, 2020. As of June 30, 2021, the Company had 36,304,362 common shares outstanding. This concludes our prepared remarks and I’d like to turn the call back over to Rod for any remaining remarks.
Rod Keller: Thank you, Curt. With each passing quarter, we come closer to commercial sales of meaningful volumes of EVs. The second quarter of 2021 was an important one in this regard, given our launch of the Club Car Current. We expect the Current to increase our revenues in future quarters, and we’re even more eager to launch the 311X into the restaurant delivery market next year. I hope many of you saw the press release we issued yesterday that we received a second purchase order within two months from Club Car of an additional $2.9 million. We’re continuing to build our ecosystem to ensure that our manufacturing and our sales footprints are rapidly scalable, and that we can reach commercial fleet and enterprise customers with the help of our corporate partners, like Club Car, Gallery, and Element Fleet Management. I’d like to thank all our shareholders for their support. And I look forward to sharing additional accomplishments and developments as they unfold. And I think, with that, I’d like to turn the call back over to the operator, so that we can begin the question-and-answer session. Operator?
Operator: And our first question today will come from Barry Sine with Spartan Capital Securities. Please go ahead.
Barry Sine: Hey. Good morning, gentlemen. A couple of questions, if you don’t mind, please. First of all, looking at the expenses you reported on the income statement. Curt, you called out a little bit, and I’m going to hope to get a little bit more detail on both the R&D line about $3 million and the G&A line about $4 million. If you could give a little bit more visibility, what’s going on with each of those? And I know, Curt, you called out some of that was non-cash stock-based compensation. And I know that is broken out in your EBITDA reconciliation. But, if you could give us a rough breakout of how much of that was in R&D and how much was in G&A to kind of help us understand what’s driving those two numbers?
Curt Smith: Sure, Barry. Good to hear from you. On the R&D side, obviously, as you all know, we went public based on -- via reverse merger on May 20th of last year. So, the six months ended June 30, 2020 was as a private company before we were able to obviously start development of 311X, the next generation delivery vehicle. So, the majority of the increase in R&D is very much, I would say 90% of that -- 80% to 90% of that is tied to the development -- design and development of the 311X next generation vehicle, which we’ve been working on for the entire -- the balance of 2021 or the start of -- first half of 2021 here. So, that’s going to be the lion’s share of that. And then, on the -- your question on the G&A side, obviously, yes, a lot of that is stock-based compensation. Again, it’s almost comparing apples to oranges when we talk about that. Because we were a private company for the majority of the first half of 2020, whereas we’re a public company in the first half of 2021. So obviously, the stock-based comp is more of a factor on stock price as you well know, as well as obviously the legal professional fees, all like that we incur as a public company for the first six months of the year here. Obviously, we went through our first 10-K during the first quarter of the year, which is obviously a lot -- much more involved in that than a standard audit for the first quarter of the previous year, so. Anyway, that’s the major differences there.
Barry Sine: And are those two numbers roughly indicative of what we might expect for the next two quarters of the year? $3 million for R&D per quarter and $4 million for G&A per quarter, or will we see that trend higher?
Curt Smith: I think it’s pretty indicative between now and -- from the first half to the second half. That’s going to be pretty close.
Barry Sine: Okay. And then, a couple of questions on just helping us understand revenue visibility for the rest of the year. So, you’ve given us a couple of clues, and I want to make sure I’m interpreting these all correctly. So, number one, we have $4.9 million in orders for the Club Car Current. You mentioned backlog of $1.8 million -- but that was at June 30th. So, that presumably doesn’t include a second quarter. You also mentioned that would be expected to ship over a six-month period. And I know there are supply chain constraints facing everybody globally, not just you. So, when we see a press release, in our minds, how long out should we think about that being reported? And then, on top of the two press releases, you talked about, perhaps additional, what’s the prospect that we might see additional announcements that might get shipped during the course of 2021?
Rod Keller: Yes. Good question, Barry. This is Rod. Yes, the $4.9 million you’ve seen, that was one purchase order that we got in June from Club Car, the initial PO for the new Club Car Current. The $2.9 million in addition to that we got, that does not reflect any incremental demand for Q4, nor does it reflect any incremental demand that we would -- that we might see from Element Fleet Management or Gallery Carts. That was purely orders from Club Car with the visibility that they had for demand that they created themselves. So, nothing from Element, even though we are working closely with, Element has a fairly healthy forecast. But, we are just now shipping demo units through Club Car to Element to get them to some of their key customers. One of the nice things about Element versus a different approach and Club Car, as you know, Element, is the largest fleet management company in the world, formerly part of GE. They manage 100,000 vehicles with one of the largest e-commerce companies in the world. I think we know who they are. And when they find an opportunity, it’s not four or five vehicles, it’s hundreds of vehicles. So, again, it’s -- this $4.9 million, one, it does not reflect any demand from Club Car in Q4, nor does it reflect any demand that we will see -- likely see from Element or Gallery Carts. So, one interesting point for I think the investors and listening is we did $1.6 million all of last year. That was what we did all of last year. These two orders of $4.9 million far surpassed what we did all of last year. And I think you hit the nail on the head. Our challenge is -- and we’re working to do that right now is how do we ensure that we have ample supply to support all of this, which the long pole in the tent is, of course, lithium batteries. So, we’re working that right now with our supply chain, and we’re optimistic, but it is a challenge. I think every EV manufacturer in the world right now is trying to get their own fair share of lithium batteries.
Curt Smith: Hey Barry, let me -- I want to correct or clarify one thing. Your previous question about do we expect that to be steady state -- the spend to be steady state on G&A and R&D side? On the G&A side, yes. R&D, I would expect that to uptick a little bit over the course of the rest of the year. So, just wanted to clarify that.
Rod Keller: But I think -- and Curt comment on this. But I think, it’s important also to note, Barry, that that uptick in R&D is purely a function of development at 311X. As we near completion of that and we go to mass production, that R&D number will come down, of course.
Barry Sine: If I can kind of try and pin you down a little bit more on revenue visibility. So, you mentioned that those orders are not indicative of 4Q. So, it sounds like you’re saying you expect to get that $4.9 million out during the course of 3Q. And then, you also talked about additional orders from Gallery an Element. And I thought Gallery is a Club Car dealer themselves and Element would go through. So, any orders as a result of those two would be additional Club Car orders correct?
Rod Keller: Well, actually, all of them are. Yes, it’s good. For all the listeners, Barry, you may know this a little better than some. Even though Gallery is, yes, a Club Car dealer, but the primary business they have is using the Club Car vehicle, the 411 Current as a platform for building their mobile hospitality vehicles. They create the demand. That is their solution. But yes, they are a Club Car dealer. So, when I highlight -- when I say, it doesn’t include any Gallery volume, it’s because Gallery’s volume is generated by Gallery. It’s not the typical volume that you would see through a traditional Club Car dealer. Element being brand new to the -- but you’re right, all of that volume flows through Club Car because, Club Car has exclusive rights on it, but both Gallery of course, being a dealer of Club Car, and Element now has a contract with Club Car, authorizing them to resell the Club Car Current.
Barry Sine: And then just the timing on that $4.9 million, and that’s all 3Q?
Rod Keller: No. I will tell you this. It’s purely a function of our ability to get the battery supply. We’ve got demand for it, but it will be a function of how successful we are in getting additional lithium supply.
Barry Sine: Okay. And then, on the 311X, you gave us a couple of clues, but I want to start to put those together. So, you talked about a soft launch in 2021. So, 2021 that goes until midnight on December 31st, which I assume you’re not going to wait until then, and then production in 2022. And again, that goes through December 31. So, I assume it’s not going to be that late. And you also talked about the -- Curt mentioned that about 90% of your $3 million in capital spending was to develop that vehicle. So, where are we on that vehicle? I mean, do you still have just paper sketches or CAD/CAM drawings or are there other actual mockups? Does one exist somewhere in an R&D lab as one being driven? Where are we actually in that development process?
Rod Keller: Good question. So, let me start with this. Our expected launch of it, not mass production, but our launch of it will be before Thanksgiving. Anything after Thanksgiving, it’s hard to get anybody’s attention, as we all know. So, it will be very likely before Thanksgiving. We’re about halfway through development. We are working with one of the preeminent automotive engineering firms in the world. We’re negotiating our contract, while we work in parallel with them. But, once we sign that that will be an 8-K event. So, we’ll announce that. You asked -- there was another part of that question. Ask me again, Barry.
Barry Sine: So, where are we? Do we just have paper sketches, do we have CAD/CAM, is there a vehicle, has it been driven?
Rod Keller: So, we will have prototypes for customers to be able to see in late Q4 with the focus of trying to deliver vehicles that some of our key customers that are part of our advisory council can actually look at, touch, feel and test hopefully in Q1. That’s what we’re looking at. I wish I could talk about our automotive engineering partner, because our plan is to take some of these prospective customers, some of these large quick-service restaurant chains and take them to our partner and let them actually experience the vehicle. So, yes, we’re definitely well beyond sketches and drawings. We are far beyond.
Curt Smith: And Barry, to your question, we also have some static -- very static mockups. They’re working on it where we test ergonomics, things like that to finish, like that. So, those are well shrouded at this point.
Barry Sine: Okay. That’s great. That’s a lot more visibility. My last question, you ended the quarter with $87 million in cash -- $87.9 million in cash. Negative EBITDA was just under $6 million. And we talked about G&A is going to be roughly static, but R&D up a bit from 2Q levels. So, where does that cash get us? Hopefully that cash -- I mean, that’s a pretty sizable amount of cash, fully funds remaining developed in of the 311X, getting to unit shipments and getting to profitability, based on unit volume shipments of both the current and the 311X. Could you comment on that?
Curt Smith: Yes. Sure, Barry. It’s Curt. Well, that cash balance, current course and speed that should get us to cash flow positive by Q1 2023. So, that should get us to where we can turn the corner on our own.
Barry Sine: Okay. That’s a nice surprise. I didn’t know that. Thank you very much.
Operator: And our next question will come from Harold Weber with Aegis Capital. Please go ahead.
Harold Weber: Hi. Good morning, guys. In regard to the Club Car orders, would you say this is somewhat indicative of the way the product is ramping? I mean, the token amount getting in a order of 2, $3 million every other month. So, is it feasible to extrapolate anything from that? It seems like a demand is increasing, getting more feedback on that out that might be developing going further from that channel. And if I understood you correctly, basically you’re planning to deliver that stuff this year, depending on, I guess, battery supply is the biggest issue. Is that reasonably right?
Rod Keller: Yes. And I’ll tell you the difference. Because, we signed our contract, our agreement with Club Car in March of 2019. So, it’s been over 2.5 years roughly now. The difference is, the first vehicle that Club Car sold, many of the dealers, to be candid, were a little skeptical. Because it was not a vehicle that Club Car could influence the features and the design, but this new vehicle is. And I think it took some convincing of the dealer channel and Club Car significantly influenced it. We spent almost $2 million in development of this next generation vehicle. It has their design, they own it exclusively or they license it exclusively. And as a result of that, we made many feature changes as a request of them and their channel. And not to mention, they’ve gotten more familiar with it. It originally was a channel that had been in business since 1958, but it primarily sold commercial utility vehicles and golf carts. So, this was a bit of a change for them. But now, two and a half years into it, we’re seeing significant demand. And again, I’d much rather be in the situation where I’m chasing supply then trying to get demand. And not to mention, some of the opportunities, Element’s bringing to us, looking for demos right now, are quite significant, I tell you right now. But yes, I encourage to reach out to Club Car if you like. But, we’re very optimistic that our volumes will continue to grow with them.
Harold Weber: Rod, another question. Can you just comment on the fact that Club Car now has become owned by a different entity and that relationship’s developing in regard to some more transparency between us going forward, do you want to talk about it?
Rod Keller: Yes. That’s a good question. In fact, we had a quarterly business review with them about four or five weeks ago. And I’ve never seen -- I’ve never seen leadership so happy. And the reason why is, when they were under the Ingersoll Rand umbrella, they were very restricted on some things that they could do. And a great example of that is, every time we had a win, they were not allowed to communicate it. I thought initially, it was because they didn’t want to telegraph any wins to their competitor. It had nothing to do with that. The reason why they didn’t want to communicate any wins before is because if they did and the CEO of Ingersoll Rand got a question, he might not know how to answer it. All that’s gone now. They’re now under the umbrella of Platinum Equity. They run autonomously. They’re not part of a bigger company, like Ingersoll Rand. And the management stayed in place and are very excited about it. So, it’s all good. There’s nothing but good as it came out of that transaction.
Operator: And our next question will come from with Cisco. Please go ahead.
Unidentified Analyst: Well, I had a question. Like, I -- we noticed that there is a lot of inside trading, we hear that. Can you try to avoid the inside trading, like pertaining to the stock? Is it -- but we notice like, is it legitimate, we’re not sure. There is a lot of inside trading going on for this stock. That is what we hear for the different firms?
Rod Keller: I didn’t get all of that question. Can you repeat it again, or did the operator hear?
Unidentified Analyst: Okay. Well, can you try to -- like we noticed that a lot of inside trading is going on for this stock? Is there any possibility that you can avoid this inside trading -- insider trading?
Rod Keller: Did you ask about insider trading?
Unidentified Analyst: Yes. That means those whoever holding the Company stocks within premises selling those stocks?
Rod Keller: I mean, I’m not sure I understand the question specifically. We don’t know of any insider trading. I’m not sure of the question. Are you asking about employees or leadership share?
Unidentified Analyst: Yes, employees, yes, yes, employees selling the shares. Yes, those whoever holding few stocks?
Rod Keller: Yes. I’m happy to speak to. You may be referring to me. And I’m happy to address that. You may know that we were a public company until May 28th, as Curt said early, in 2020. And as part of the terms of the reverse merger we completed in is we locked up all employees, when I say locked up, I mean, we restricted them from selling any shares for 12 months. And like many companies do and executives within those companies, I myself and other members of the Board, we filed, what are called 10b5-1 plans, I think many of know what a 10b5-1 plan is, and we filed those months ago. And that’s I think a healthy discipline way to diversify someone’s investment portfolio. And I took advantage of that, because for the first couple of years here, I took a little to no compensation, zero. And as we approach the period of time where we were going to be unlocked or released, I put a 10b5-1 in place back in the spring and did sell some shares as a function of that over a period of time. If that’s what you were asking, I hope that helps you. But at the same time, I do think it’s important. I’ve never been more bullish on this company ever, and I’ve been doing this 39 years. And I will tell you and I mentioned it in the remarks earlier that even though we’re very excited about the growth we’re seeing on our light-duty electric truck, the next-generation Club Car Current, and it’s growing quite nicely for us, and we love the relationship we have, the opportunity to be disruptive in restaurant delivery and farm and grocery delivery, I will tell you is, there is one of the biggest opportunities I’ve seen in our career. And the approach that we’re taking as you’ll see any announcement later this fall, like I said before, Thanksgiving, I think it’s a game-changer. And I don’t say that with any embellishment. I say that with being very, very candid. We’ve got a team here and many of us agree, we’ve worked in early stage industries before, and I will tell you, we are -- I think we’re better positioned than anybody. But because we choose to only announce things when they’re substantive and material that when you hear what we’re doing and then begin to see it next year, I think we’re going to be in a very different place than we are today. So, I hope everyone understands. I am as bullish and excited about this opportunity -- this company, as I’ve ever been about any opportunity, and I’ve had some good ones.
Operator: This will conclude our question-and-answer session. I’d like to turn the conference back of the Rod Keller for any closing remarks.
Rod Keller: Very good. I want to thank all of you for one, investing in us or listening to us and participating on today’s call. Thank you for your interest in AYRO. I was very sincere when I talked about where we are today, but more importantly about where we’re going. I very much look forward to sharing our progress on our next quarterly conference, when we report our third quarter results in November. And thank you very much again for your interest in AYRO. And I look forward to speaking to you again. Have a wonderful day. Thank you.
Operator: The conference is now concluded. Thank you for attending today’s presentation. You may all disconnect your lines at this time.
