Crown ElectroKinetics Corp. (NASDAQ:CRKN) Q4 2021 Earnings Conference Call March 30, 2022 11:00 AM ET
Company Participants
Doug Croxall – Chairman and Chief Executive Officer
Joel Krutz – Chief Financial Officer
Conference Call Participants
Jeffrey Campbell – Alliance Global Partners
Gerry Sweeney – ROTH Capital
James McIlree – Dawson James Securities
Disclaimer*: This transcript is designed to be used alongside the freely available audio recording on this page. Timestamps within the transcript are designed to help you navigate the audio should the corresponding text be unclear. The machine-assisted output provided is partly edited and is designed as a guide.
Operator
0:02 Good day, everyone, and welcome to Crown ElectroKinetics Corporation Earnings Conference Call for the Stub Period Nine Months Ended December 31, 2021. At this time, participants are in a listen-only mode. A question-and-answer session will follow the management’s remarks. This conference call is being recorded. A replay of today’s call will be available on the Investor Relations section of Crown’s website and will remain posted there for the next 30 days.
0:28 I’ll now hand the call over to Henryk Dabrowski (ph) for introductions and the reading of the Safe Harbor statements. Please go ahead.
Unidentified Company Representative
Thank you, Brad (ph). Good morning, everyone, and welcome to Crown’s earning call for the nine months stub period ended December 31, 2021. With us on today’s call are Doug Croxall, Crown’s Chief Executive Officer and Chairman; and Joel Krutz, Chief Financial Officer. Before we begin, I would like to remind you that today’s call contains certain forward-looking statements from our management made within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities and Exchange Act of 1934 as amended.
1:15 Words such as may, should, projects, expects, intense, plans, believe, anticipates, hopes, estimates, and variations of such words and similar expressions are intended to identify forward-looking statements. These statements are subject to numerous conditions, many of which are beyond the control of the company, including those set forth in the Risk Factor section of the company’s Annual Report on Form 10-K for the fiscal year and stub period including the nine months ended December 31, 2021, filed with the SEC.
1:57 Copies of these documents are available on the SEC’s website at www.sec.gov. Actual results may differ materially from those expressed or implied by such forward-looking statements. The company undertakes no obligation to update these statements for revisions or changes after the date of this call, except as required by law.
2:21 Now, at this time, it is my pleasure to introduce Doug Croxall, CEO and Chairman of Crown. Mr. Croxall, please go ahead.
Doug Croxall
2:31 All right. Thank you, Henryk. So thanks, everyone for joining us today. I’ve got about five pages of prepared remarks. I hate reading from a script, so I’m going to do my best to not do that. I’m going to start off by just reviewing Crown’s mission, which is to provide an affordable smart glass solution to get they’ll enable its customers to reduce energy and in turn lower carbon emissions. Our first product as many of you know, it’s called the Smart Window Insert powered by DynamicTint. It’s an affordable solar powered insert which does not require hardwiring and can be easily installed into the interior side of existing windows in commercial office buildings. Our tint which we call DynamicTint is a pigment based thin film was originally developed by HP and is based on our proprietary and patent protected ElectroKinetic Technology. So, at Crown, we recognize that commercial buildings are inefficient. They’re inefficient insulators because glass is inefficient material in which to insulate.
3:38 So Crown is solving a big problem for very large addressable market. Our Smart Window Insert easily installs into a building’s existing window frame, leading the existing window intact, we do not touch the existing window. This transforms a building single-pane window into an energy efficient dual-pane smart window. Once installed, the insert is powered by a solar strip, we do not hardwire to the building’s electrical system. This is a big deal. There are no other inserts that have Smart Glass Technology associated with them. And if they did, they would be hardwired into the building.
4:19 Our inserts absorbs sunlight, thereby reducing the amount of HVAC usage, leading to lower electricity costs and a smaller carbon footprint. Our insert also provides an insulative benefit by effectively adding a second pane to the building’s existing single-pane, allowing heat and air conditioning to stay in the building more efficiently than the existing single-pane window, also a big deal, which means our product is not only important in warm weather climates, but in climates like New York City, where they actually experience [Indiscernible].
4:54 The commercial building sector is under increasing pressure from shareholders, tenants and regulators to reduce their HVAC energy consumption and more importantly reduce their carbon emissions. We’re hitting the market at a really interesting time. Luck is a good thing to have on your side. We’re the only Smart Glass retrofit product in the market. Crown’s Smart Window Insert is priced comparatively with high-end window blinds. We’re not expensive electrochromic windows were priced slightly above a solar shade, which is pretty prevalent in most office buildings.
5:30 Okay, so what I’d like to do now is review our product development and our product release schedule. This summer, we’ll be manufacturing and delivering our first generation Smart Window Insert. That Smart Window Insert will be comprised of 12-inch strips of our DynamicTint film. Today, we cannot make film wide enough to cover the entire insert so we can make however 12-inch strips of our film and we’re making it defect free today.
6:00 So those 12-inch strips will be placed across a single piece of glass. Our framework will encompass that piece of glass. Our have a solar strip that faces exterior in the building, capturing the sunlight to charge a lithium ion battery, the lithium ion power source for allowing the user to transition the film from clear to dark on demand. Each office that has our inserts will have a handheld controller that allows the occupants of that office to easily control the insert. Each insert will be gathering performance and usage data. We will effectively be creating an epidural layer to the building and that layer will be gathering data. That data will be important to help, not only Crown monitor the performance of our insert, but help the building manage their HVAC.
6:57 Our inserts are easily installed and will not require any fasteners for installation and each insert is powered by the sun’s energy through the solar strip. Our product is highly sustainable, and again does not require any hardwiring to the building’s electrical system. We’ll have a limited run of the first generation insert to be sold and distributed three customers Metro Space stations, Hudson Pacific and recently announced Brandywine Realty Trust, those first have a total of 281 buildings, we will strategically place those inserts in a handful of buildings owned by our customers will get feedback and performance, we’ll — we’ll look at the design and the usage and we’ll use that — that iterative approach with our customer to help develop our second generation Smart Window Insert with their feedback.
7:48 The second generation products, again first generation product is coming out this summer. Second generation product will be a single piece of DynamicTint, replacing the 12-inch strips. We expect that there’ll be new features, it’ll be incorporated into the second generation products, including the following potential upgrades, increased data gathering including external weather information, amount of sunlight, internal temperatures, placement of the sun in the sky during the day, whether someone is in or not in their office. The second generation insert can be controlled by either the same handheld device or through an app downloaded to a smart device like a phone or an iPad. We expect it will be able to produce significantly more second generation inserts as compared to the limited router the first generation and maybe get into that next.
8:41 So from for manufacturing update one year ago at this time for those of you who were shareholders and a part of our IPO. One year ago at this time, we actually had a very different strategy around was to produce our film in our R&D lab in Corvallis on our proto production tool and then to teach our contract manufacturing partners we had three at the time to develop and build their our film in their facility. Obviously, that’s not happening today. COVID and business interruption and delayed product launches by our products, our manufacturing partners I should say on our own products caused us to start down a path to vertically previously planned outsource manufacturing.
9:31 I’m thrilled to tell you that today Crown is able to manufacture our own film, it will do so in our Corvallis in Salem, Oregon facilities. I cannot understate the importance of what we’ve achieved in less than one year. We will increase our margins and protect our intellectual property by manufacturing our own film, we now control our own destiny. We’re currently producing our film at a six-inch width, and defect free in our Corvallis R&D lab. We’re working towards producing our film and 12-inch defect free, which will be the basis of our first generation Smart Window Insert this summer. We’ve also developed a technique that will allow us to produce our film up to 72-inch width which is wide enough to satisfy the commercial building market. Let me read that again. We’ve also developed a technique internally owned by us, that will allow us to produce our film up to 72-inch width, which is plenty wide to satisfy the commercial building market. We call this technique stitching and if filed, and we’ll continue to file the proper protections on this invention.
10:46 Our team of engineers and one in particular, have given crown the opportunity to significantly advance our time to market with wide with film, allowing us to approach the commercial market with a product that can have an immediate impact on a building’s cost savings and carbon footprint. Last summer, we embarked upon a process to design a purpose built line. Single line, performing all the necessary steps in making our ElectricKinetic film. The conclusion of that process has provided us with a partner that will build our first purpose built, roll the roll manufacturing our film in any width from 12-inches up to 72-inches. This new production line once up and running at capacity, we believe, we will produce annualized revenues of between $110 and $120 million and has the potential to generate EBITDA of approximately $20 million. So one line in one facility with assembly should be able to produce between $110 $120 million annually and the ability to produce about $20 million of EBITDA annually.
12:03 We’re an active discussions with a number of funding sources that we believe can provide non-dilutive funding for our capital expenditures. These are hard assets that we’re purchasing. There’s a lot of equipment financing out there. We’ve been in discussions, and we’ll continue discussions. As soon as we have something to report we will report.
12:23 Environmental, social and governance. ESG, it’s big trends talk about these days. We obviously are actively pursuing our participation as a key ESG supplier to US based office buildings. The retrofitting that we do for these buildings, allow them to start checking the boxes, and providing meaningful response to the ESG requirements that they all have. Our goal is to help building owners reduce their energy use and reduce their carbon footprint. Crown Smart Window Insert can do that immediately for all existing buildings.
13:01 Let’s talk about customers briefly. As previously stated, we have a new customer that we added to our growing list. Brandywine is our largest customer today with over 170 buildings. Their buildings are primarily in Philadelphia, where they’re headquartered. They’re all — they all see in Austin, Texas. We will be delivering our first generation inserts all three customers this summer, to specific locations as determined by Crown and our customers. We’ll continue to work with other prospective customers in our sales pipeline, and hope to have further announcements in the coming quarters. It should be noted that we are experiencing interest not only from US based building owners, but also from commercial property owners in Europe, Middle East and Asia. Additionally, other markets such as residential and transportation also continued to show interest. In due course, we will address those market opportunities. But for the near term, we’re very focused on providing our products to our current target customer, the US office building market.
14:10 All right, intellectual property. Intellectual property and specifically patents are really difficult asset class for public markets to properly value. We believe the value of our intangible assets were not fully understood by the public market for that purpose. We engaged in an independent org — and we engaged an independent organization to provide us with an updated assessment of our US patents and trade secrets. We’re pleased with these results, which we will announce after this earnings call. The estimated new value should favorably impact our valuation and provide additional assurances as we look to finance Crown’s expansion.
14:49 All right, those are my prepared remarks. I look forward to taking some questions from everyone afterwards. Right now I’m going to hand the call over to Joel?
Joel Krutz
14:59 Thank you, Doug. And good morning, everybody. First remind our investors and the public that we have now transitioned our March fiscal year ends in December, in order to better align our financial and operating calendars. Accordingly, today I’ll be discussing Crown’s financial results for the nine month stub period ended December 31, 2021. Consistent with the MD&A section, and [Indiscernible] which will be filed later today. I’ll be comparing the stub period of 2021, the same nine month period and 2020.
15:37 The results, the company’s net loss for the nine months ended December 31, 2021, was $16.5 million. This included $8.7 million of non-cash stock based compensation expense. This was $3.6 million lower than $21.1 million recorded during the nine months ended December 31, 2020, which included $16.5 million of non-cash compensation and financing expenses. Total operating expenses for the nine months was $16.9 million, which included $8.7 million of non-cash stock based comp. Excluding the impact of this stock-based compensation, often expenses on last year. This was driven by $2.9 million increase in payroll as we ramped up in house manufacturing and publication, functional capabilities. It was a $1.2 million increase in consulting and professional fees and a $1 million increase in operating overheads.
16:39 Other income was point $0.4 million, which related to a PPP loan forgiveness, and this compared to $6 million of expense last year, which primarily related to debt conversion. Net cash used for the nine months was $9.2 million, with $8.6 million deployed for operations and point $0.8 million investment and patents and equipment. As of December 31, 2021, our cash and cash equivalents was $6.1 million and we’ve also recently agreed terms with a financial institution for $10 million outstanding letter of credit, which will provide access to operational financing if required for the next two years.
17:23 Looking ahead to 2022, we will seek organizational streamlining and operational efficiencies. And we’ll continue to pursue the optimal lease diluted financing solutions with which to fund our capital requirements and to strengthen Crown’s balance sheet. That concludes our prepared remarks.
17:43 Now we’ll open the floor for any questions. Operator?
Question-and-Answer Session
Operator
17:47 Thank you, and at this time, we will be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Jeffrey Campbell with Alliance Global Partners. Please proceed with your questions.
Jeffrey Campbell
18:20 Hi, Doug. First of all, I want to say congratulations on the Brandywine and it’s great to see that geographic diversification.
Doug Croxall
18:31 Thank you.
Jeffrey Campbell
18:32 Regarding the move — regarding the move to vertical integration, I thought the stronger IP protection was an interesting point. I just wondered, when did IP become a concern, assuming that was what you were alluding to?
Doug Croxall
18:47 Well, when you – when — a lot of our intellectual properties, not just in the product, but the way we manufacture and process. So a lot of that you’d have to disclose to your contract manufacturing partners in order to teach them how to do it. You put the assurances in place in a written agreement so that they treat your intellectual property with the same respect that you do. But it’s still a risk. There’s still people that come and go from that employer and, there’s — there used to open yourself up to a risk and so by — by vertically integrating which to be honest, it was the only move on the chessboard. I don’t want to break our arms patting ourselves on the back when — when the whole world went to hell during COVID. And all of our manufacturing partners told us that it would be two or three years before they could start focusing on producing our own film. I didn’t think that the investors would want us to sit on our hands for two or three years and wait for those manufacturers to come around.
19:43 So we really didn’t have a choice. And so, but one of the results of doing everything yourself is that you keep doing everything that you keep, all your trade secrets and how you process things to yourself. So it’s definitely an added benefit of vertically integrating along with the other ones that we identified. Better, time to market, better control of your product and your quality, better gross margins, because you’re not sharing anything with the contract manufacturer.
Jeffrey Campbell
20:12 Right? Okay. No, I appreciate that color. When do you expect to be able to provide this 72-inch wide film that you discussed this morning?
Doug Croxall
20:20 Yes, that’s a great question. We’ve — we know, the exact amount of time it will take from once we placed the order, to when the line will be built, let me just kind of give you a little bit of color on that. If we place the order on April 1, we’re not, but if we did, it would take about a month and a half to finish the design phase. And then it would take about five and a half months to actually see build the line. And for the most part, the design phase has been locked down. There’s a period in which they’re starting to order the equipment to build the line. So by the end of about seven months, they built the line, what and they actually build it in their facility, and then they run our film, to our quality control and our specifications, we approve that film and that line, we understand exactly how it works, what the finished product looks like, they then actually disassemble the line, ship it to our Salem, Oregon facility, reassemble it, get it up and running again to the same quality control and specs that they had achieved in their facility. That entire process is right around a 10 month period plus or minus a month.
21:38 So if we started April 1, with the order in the design phase, we would be concluded, sometime in the December with products, up and running either in December or January kind of timeframe. So that — that’s – that’s kind of that’s the schedule, and they’re really good at doing what they do. They’ve been doing it for decades. And we went through a pretty long process to settle with this as these guys as our partner.
Jeffrey Campbell
22:06 Okay. And you said, you’re not actually gonna start on April the 1st. So what’s sort of the getting item to decide when you’re actually going to start to do?
Doug Croxall
22:17 I think called money? So we’re out raising the capital, we’re going to go out, look, this is hard assets. We did our IP valuation to help support collateral. So we’ve been in the market, speaking to effectively credit and debt funds and equipment financing funds to get the capital to acquire this and we’re well down the path with a number. We should — we hope to have something, we wanted to have something to announce for this call. But we hope to have something ready to announce within the next 30 days.
Jeffrey Campbell
22:52 Okay. And the last question I’ll ask and it’s kind of on the same idea, but I wanted to make sure I understand it. He said that when this — when the smoke clears and all this has gone, you’ll be able to make films from 12-inches to 72-inches. I guess what I’m — what I’m wondering is, does that imply any number between 12 and 72? Are possible and maybe be? Is it more likely in the real world that there are certain discrete width that you expect will be ordered over and over again? And what might those be?
Doug Croxall
23:24 Yes, such a great question. Yes, the way that we’ve designed the line, is it will be able to run 12-inch or 13-inch, or 23-inch or 36-inch, or 50-inch or 72-inch, whatever size in between 12 and 72. And the importance of that, Jeffrey is that we have to do this thing called Edge sealing. So we have to cut a little bit of the film on each side, the minimal amount of film you cut on each side increases your yield, it’s less wasted film. So the way we design this sign, I’m sorry, blind is with you killed. With the best yield was able to control the width of the film that you run through the machine based on the customer’s order, you actually increase your yield and should be able to maintain a pretty high yield going forward. So it’s got ramifications not only for the ability to customize, but it’s got positive effects on our P&L as well.
24:25 So, hopefully and as to your question about, what we see like, modes of sizes that will be more prevalent probably I mean, if you look at an office building, in generally speaking, the width and the height of — of office windows are similar, between 45 and 60 inches in width and either eight or 5 feet, 8 feet or 10 feet in height generally speaking obviously not a hard and fast rule. And we haven’t really seen any windows wider than 72-inches. So we feel that that 72-inch width will allow us to capture 90 plus percent of the US Office building market. I mean, there’s always like atrium glass and the one off window, this really, really large those just won’t be our customers, unfortunately.
Jeffrey Campbell
25:19 All right. Okay, well, thanks for all the color and congratulations again.
Doug Croxall
25:26 Thank you, Jeffrey.
Operator
25:30 Our next question comes from the line of Gerry Sweeney with ROTH Capital. Please proceed with your question.
Gerry Sweeney
25:36 Hey, good morning Doug and Joel. Thanks for taking my call. Doug, you mentioned I think you said you’re producing a 6-inch film today in the Corvallis facility, but version of called 1.0 is going to be the 12-inch film. What’s — where are you in that route to a 12-inch film? What steps do you have to go through to get there and then follow up that would be, are there any big challenges or differences in making that jump horse? It’s the same process?
Doug Croxall
26:08 It’s the same process, it’s just a slightly wider stamp, it’s a 12-inch stamp, that will run on our current production tool in Corvallis. We should have that stamp ready to go month, month and a half. So it’s the same process we’re going through right now.
Gerry Sweeney
26:28 Got it? And what’s the capacity at the Corvallis. So I mean, that’s going to be the first facility then you have the purpose built line as you call. But someone’s capacity, that’s the Corvallis facility had?
Doug Croxall
26:43 Yes. So we so the Corvallis facility we believe, could produce between 2,500 and 3,000 inserts a month, not out of the gate, we could we don’t think we’re going to do that many, what we really want to do with our first generation product is produce enough to get two or three buildings, with Hudson and with Brandywine, deploy in a set number of floors, and really learn from the product, engage with our customer, the tenant — our customer, the read, I should say, in learning what they liked, don’t like what they want to see change, and then put the product, put our insert in front of their customer, the tenant and learn from the tenant, what they like, what they don’t like, what they’d like to see change. And it’s an iterative process that we’ll embark upon, on the summer in the fall, that will guide what the product winter.
27:38 So we expect, these are not going to be huge numbers, we expect that we’ll be able to sell between 800 and 1000 fairly easily, frankly. And that — that will be enough, enough of our product in the market to get a good a good data set, to really guide towards generation to generation to that film. Generation to that, we’ll be able to one line, it’ll be able to produce around inserts on a monthly basis. I mean, we won’t start off sprinting, we’ll start off walking and we’ll slowly get to that. And we’ll get to that number over time. But the capacity we have with our current proto production tool pales in comparison to what the capacity will be with the purpose built line.
Gerry Sweeney
28:24 Got it? And did you say how much on the purpose built line? I’m sorry, my phone broke up there for a couple seconds.
Doug Croxall
28:30 Yes, I heard that about 13,000 inserts a month.
Gerry Sweeney
28:35 Got it? Sorry, I apologize for the connection. And then what is the cause of the purpose? Don’t mind?
Doug Croxall
28:41 Yes, I was gonna play. I wasn’t sure if I should put that in my prepared remarks or not, but such yes, question, I’ll answer it. We’re estimating, it’s somewhere between, we know the exact price but I’m putting a little cushion on it. And so it’ll be somewhere between, $11 and $12 million.
Gerry Sweeney
29:01 Gotcha. And any — just a couple little detail questions. Obviously inflation is on everybody’s — tip of everybody’s tongue. Does this impact you at all or in terms of materials, cost, pricing, et cetera?
Doug Croxall
29:16 Not really. I mean, maybe a little bit on our PET and ITO, that’s — that’s the basis of our actual film. But we haven’t — we have — I mean, we’ve — we’ve been told there might be slight pricing increases, but material are meaningful at this point if they do become so Joel will obviously update everybody on our earnings call and in May but right now we don’t see we haven’t experienced.
Gerry Sweeney
29:44 Gotcha and then just final question the [Indiscernible] this coming out today. Today, he said after this call, so it sounds like it’s imminent. And then just to confirm that’s really some of that values the basis of you going after the non-dilutive financing?
Doug Croxall
30:02 Yes, look, we wanted to, you want to, when you’re talking to someone who’s looking at providing, non-equity based financing, which therefore, would be non-dilutive, they want to know what kind of collateral they have, not just in the purpose built line, not just in the rest of the equipment we have in our current facility, but also the intangible asset that we have, on our balance sheet. There’s a lot of value in that. So we went through that process about a month ago. We will be announcing we’ll have a press release come out tomorrow, that will give a little bit more color on the conclusion of that analysis. But we were pretty pleased with the conclusion. But yes, it’s, it serves two purposes to educate our ambassadors and also to educate those potential funding sources.
Gerry Sweeney
30:49 Perfect, I appreciate it. I’ll jump back in line. Sorry for that connection.
Doug Croxall
30:53 Okay.
Operator
30:57 And our next question comes from the line of Jim McIlree with Dawson James. Please proceed with your question.
James McIlree
31:03 Yes, thank you. Good morning. I just wanted to focus a little bit on the gen one products and make sure I understand correctly. So the Brandywine, the Hudson, and the metro spaces, installations, all of those are going to be the gen one products on a 12-inch Tint, is that correct?
Doug Croxall
31:25 That’s correct. The first generation product will have 12 inch strips, as opposed to the second generation product, which will have a single piece of film. That now look, I wouldn’t say one thing Jim, if our customer likes the 12-inch strips, the 12-inch strips, we’ll make that on either our proto production line or our new production line. It because it can go obviously, down to 12-inches, or up to 72. So but the gen one product will be 12-inch strips, for sure.
James McIlree
31:57 And I was going to ask about that aspect of it oftentimes. So once you have the gen two lined up in place, you can still use the gen one line…
Doug Croxall
32:09 We can get.
James McIlree
32:09 Where some projects are additional capacity or something like that?
Doug Croxall
32:17 Yes, we [Indiscernible]. I’m sorry, go ahead, Jim.
James McIlree
32:22 No, that was my question. Go ahead. Okay.
Doug Croxall
32:25 Okay. Yes, we can, we can definitely still use our — our proto production line that we’re using now for — in the future. It was really intended to be a proto production line, not a production line, but we can still certainly use it, we can also use our gen two line to make film is is — is narrow is and then just to give you a sense of kind of capacity, that gen two line, if we run that line at three shifts, five days a week, which we clearly intend to do. That line will be producing film and assembling inserts throughout 2023 and 2024. Just to handle our current [Technical Difficulty] customers. So I doubt this will be buy and build. And there’s some economies of scale in the second line that we would not have to — would not have to pay for since we’ve already done that in the first line. We actually think our second line will be about 60% to 70% of the cost of the first line and still produce the exact same amount of film. So but from a capacity standpoint, yes, we can use our, our protoproduction line in Corvallis going to in the future if need be.
James McIlree
33:51 That’s great. Thank you. And Joel, can you talk about operating expenses going forward and how they compared to what you’ve just done in the summer quarter?
Joel Krutz
34:03 Yes, we’re — we went through a period of really expanding the organization to cater to the in house capabilities that we’ve — we’ve been successful in achieving, where we’re in — our that is to — to manage the year. The organization is — is optimal for the go forward and we would anticipate reporting in the next quarter, a reduced burn on a monthly basis.
James McIlree
34:48 Okay. [Technical Difficulty] All right. Thanks a lot, guys. Appreciate that.
Joel Krutz
34:52 Thanks, Jim.
Operator
34:55 And I see no further questions in the queue. At this time, I’d like to turn the call back over to Mr. Doug Croxall, CEO and Chairman for closing remarks.
Doug Croxall
35:06 Thank you, operator, just a couple of things. So I actually love doing earnings calls. I know a lot of CEOs don’t like it. I know a lot of public companies don’t like to do it. I love it. I love to brag about our company, especially the team of people that work at Crown, what — what we’ve achieved, what we’re going to achieve, is really nothing short of a miracle. And I love working with them. And I love watching them do what they do. And they’re very good at what they do. My wife, and I do this thing with our kids, when we have dinner, which used to be every single night. Now I’ve got two teenagers, and we have fewer and fewer family dinners unfortunately. But we do this thing called roses and thorns. And you go around the table, and you say the best thing that happened to you that day, obviously, the rose and the worst thing that happened to you that day.
36:00 And it’s really interesting to hear, how kids classify the best thing or the worst thing. And I kind of thought about that as I was heading into the office this morning, to do this earnings call. And for me, for the last year. My thorn for the last year is obviously our stock price. I hate it. I wish I could snap my fingers and make it much higher. I wish there was something I could do to affect it directly. There’s simply not. I don’t control when wars breakout. I unfortunately don’t control inflation or monetary policy. And I know that it’s — it’s happening everywhere. And I don’t want that to be an excuse for why our stock price is where it is. What I do control though, which is my rows, we do control the inputs that affect that stock price. We control how hard we in a given day. We control the passion with which we approach our job. We control how smart we are, and how hard we work in the lab to invent things that make this product real.
37:08 And I’m very thankful that my rose is that we vertically integrated this company. We actually control our own destiny. And I can’t tell you how good that. So by controlling the inputs, we will eventually control that output and that thorn hopefully very shortly will become a rose for all of us. I appreciate all this and if there’s any questions, please feel free to email or call. I look forward to talking to all of you in the future. Our next quarterly call which will be in May. Thank you very much.
Operator
37:43 And thank you for participating on today’s conference call. We look forward to keeping you updated on advancements of our business.
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