Caladrius Biosciences Inc

LSE:0HS8

Earnings Call Transcript 2021-Q4

[Operator]

Welcome to the Caladrius Biosciences Fourth Quarter and Full Year 2021 Financial Results and Business Update Conference Call. [Operator Instructions] As a reminder, this call is being recorded today, Tuesday, March 22, 2022.

I'll now turn the call over to John Menditto, Vice President of Investor Relations and Corporate Communications at Caladrius. Please go ahead, sir.

[John Menditto, executive]

Thank you, operator, and good afternoon, everyone. Welcome to Caladrius' Fourth Quarter and Full Year 2021 Conference Call to discuss our financial results and provide a business update. Joining me today from our management team are Dr. David Mazzo, President and Chief Executive Officer; Dr. Kristen Buck, Executive Vice President of Research and Development and Chief Medical Officer; and James Nisco, Vice President of Finance and Treasury.

Shortly before this call, we issued a press release announcing our fourth quarter and full year 2021 financial results, which is available under the Investors & News section of the company website, along with the webcast replay of this call. If you have not received this news release or you would like to be added to the company's e-mail distribution list, please e-mail me at [e-mail].

Before we begin, I will remind you that comments made by management during this conference call will contain forward-looking statements that involve risks and uncertainties regarding the operations and future results of Caladrius. I encourage you to review the company's filings with the Securities and Exchange Commission, including, without limitation, its Forms 10-K, 10-Q and 8-K, which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements.

Furthermore, the content of this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, Tuesday, March 22, 2022. Caladrius Biosciences undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call.

With that, I will now turn the call over to Dr. Mazzo. Dave?

[David Mazzo, executive]

Thank you, John, and good afternoon, everyone. Thank you for joining us today on our fourth quarter and full year 2021 business update and conference call. Despite the challenges of the COVID-19 pandemic and difficult financial markets, we successfully navigated 2021 with advancements across our development programs while strengthening our balance sheet, giving us the confidence and means to fund operations for the next several years based on our current development portfolio. Notably, we further diversified and strengthened our management team with the addition of several highly qualified and experienced personnel, including the appointment of Kristen K. Buck, MD, as Executive Vice President of Research and Development and Chief Medical Officer.

In addition, Caladrius continued and continues its concerted efforts to identify and evaluate strategic development opportunities with the aim of consummating transactions that will deliver additional value to our shareholders beyond our current development pipeline.

I'll now turn the call over to James Nisco, our Vice President of Finance and Treasury, to review and provide commentary on our fourth quarter and year-end financial results. James?

[James Nisco, executive]

Thanks, Dave. I'm pleased to join you today to present a summary of our fourth quarter and year-end financial results.

Starting with operating expenses. Research and development expenses for the fourth quarter of 2021 were $4.2 million, a 43% increase compared with $2.9 million for the fourth quarter of 2020; and $17.7 million for the year ended December 31, 2021, compared to $9.3 million for the year ended December 31, 2020, representing an increase of approximately 91%.

Research and development activities in both the current year and prior year periods focused on the advancement of our ischemic repair platform and related to: expenses associated with efforts to continue execution and acceleration of enrollment of the FREEDOM trial, XOWNA, CLBS16; and expenses associated with the planning, preparation and initiation of the Phase I proof-of-concept trial for CLBS201 as a treatment for diabetic kidney disease; and ongoing expenses for the development of HONEDRA as a treatment for critical limb ischemia and Buerger's disease in Japan associated with maintenance of manufacturing facility and personnel qualification, as well as contract research organization engagement despite no subject treatment execution due to the COVID-19-imposed states of emergency in Japan throughout the year.

General and administrative expenses, which focus on general corporate-related activities, were $2.7 million for the 3 months ended December 31, 2021, representing an increase of 6% compared to $2.5 million for the 3 months ended December 31, 2020; and $11.4 million for the year ended December 31, 2021, representing an increase of 15% compared to $9.9 million for the year ended December 31, 2020. This increase was primarily due to an increase in directors and officers liability insurance premiums, something that generally has been experienced throughout the health care industry and strategic consulting expenses.

Overall, net losses were $27.5 million and $8.1 million for the years ended December 31, 2021, and 2020, respectively.

Turning now to our balance sheet and cash flow. As previously announced in January 2021, we successfully closed on a $25 million capital raise through the sale of the company's common stock and warrants to several institutional and in credited investors in a private placement priced at the market under NASDAQ rules. Shortly thereafter, in February 2021, the company announced that it closed a $65 million capital raise through the sale of its common stock and warrants to several institutional and accredited investors and 2 registered direct offerings priced at the market under NASDAQ rules. It is worth repeating that we consummated all of these transactions with at-the-market pricing despite the volatile financial markets experienced at the time.

In May 2021, we announced that we received $1.4 million in nondilutive funding as an approved participant of the Technology Business Tax Certificate Transfer Program sponsored by the New Jersey Economic Development Authority. Additionally, we announced earlier this month that we received another $2.3 million of nondilutive capital from that same program. This program enables qualifying New Jersey-based biotechnology or technology companies to sell a percentage of their New Jersey net operating losses and research and development tax credits to unrelated qualifying corporations.

Even in the midst of the COVID-19 pandemic, while many small biopharma companies continued to experience difficulties and heavy competition for capital, we successfully secured $90 million in new capital gross proceeds in 2021. These resources have afforded us the financial security to focus on the execution of our current business plan while simultaneously looking for opportunities to enliven our future prospects.

As of December 31, 2021, we had cash, cash equivalents and marketable securities of approximately $95 million. Based on existing programs and projections, the company projects that its current cash balances will fund operations based on the current development portfolio for the next several years. Because of this favorable cash position, the company continues its concerted efforts to identify and acquire additional development assets to diversify our portfolio of product candidates and to enhance the opportunity for shareholder value creation.

That completes the financial overview. With that, I will now turn the call over to Dr. Buck for the review of our exciting clinical development pipeline. Kristen?

[Kristen Buck, executive]

Thank you, James, and good afternoon, everyone. As those of you who have participated in our quarterly conference calls before know, Caladrius is currently focused on the development of autologous cellular therapies designed to treat or reverse disease. Based on human clinical trial data generated to date, our therapies have shown strong signs of efficacy and durability with an excellent safety profile, unlike many allogeneic therapies. Importantly, we believe that curative cell therapy products, when applied to the right indication and at the right price, they can restore human health and potentially improve quality of life with a single administration, as compared to a treatment that requires frequent readministration.

Our CD34+ cell therapy technology has led to the development of therapeutic product candidates designed to address diseases and conditions caused by ischemia, a condition in which the supply of oxygenated blood to the healthy tissue is restricted. Previously published preclinical and human clinical studies have demonstrated that administration of CD34+ cells induces angiogenesis of the microvasculature. That is these cells prompt the development of new blood capillaries, thereby, contributing to the prevention of tissue death by facilitating blood flow to the area of ischemic insult.

We believe that several conditions caused by underlying ischemic injury can be improved through the application of our CD34 cell technology, including, but not limited to, critical limb ischemia, or CLI, and Buerger's disease as well as coronary microvascular dysfunction, CMD, and diabetic kidney disease, DKD.

With that as a general background, I will now expand on each of our clinical programs in numerical order, kicking off with CLBS12, also known as HONEDRA in Japan, our product candidate for the treatment of CLI and Buerger's disease. HONEDRA was awarded a SAKIGAKE designation from the Japanese regulatory authorities for the treatment of CLI and Buerger's disease, which is an orphan-sized subset of CLI. The SAKIGAKE designation is akin to a regenerative medicine advanced therapy designation, or RMAT designation, in the United States.

SAKIGAKE designation affords the recipient prioritized regulatory consultation, a dedicated review system to support the development and review process, including the option of rolling registration submission as well as reduced review time of 6 months for the registration application once it's filed. Additionally, under Japan's regenerative medicine guidelines, products such as HONEDRA are eligible for early conditional approval and possibly full approval in Japan based on the assessment of the data from the trial or trials designed in direct collaboration with the Japanese Pharmaceuticals and Medical Devices Agency, the PMDA.

Note that conditional approval of SAKIGAKE products only requires the demonstration of a trend toward therapeutic effect, together with an acceptable safety profile. As you might expect, the SAKIGAKE designation is a highly sought regulatory classification in Japan, and we hope that this, coupled with our positively trending data from our trial, will make HONEDRA an attractive product for partnering to a Japanese pharmaceutical company.

The company's study of HONEDRA in Japan for the treatment of CLI and Buerger's disease has shown positive results to date. The initial responses observed in the subjects who have reached an endpoint in this study are consistent with our expectations of therapeutic effect and safety based on previously published clinical trials in both Japan and the U.S. However, as discussed in prior quarters, the multiple states of emergency declared by the Japanese government during 2020 and 2021 due to the COVID-19 pandemic have made incremental enrollment exceedingly challenging.

While the trial is demonstrating positive trends in both safety and efficacy, which are the key criteria for consideration of conditional approval in Japan under the SAKIGAKE designation, we have concluded that it is in the company's and our shareholders' best interest to suspend our enrollment efforts. The objective of such suspension is to minimize the operational and financial burden that we have incurred and continue to incur due to enrollment delays and the lack of visibility on the time to completion.

The company has turned its focus to securing a partner in Japan to complete the study by enrolling the 4 remaining no-option CLI subjects, if deemed necessary, and/or to explore the possibility of submitting the existing data to the Japanese regulatory authorities under the SAKIGAKE designation.

Over the past several months, we have collaboratively engaged the PMDA on their best -- on the best path forward for the HONEDRA program. In accordance with their recommendation, we are currently preparing an analysis of the HONEDRA study to share with the PMDA at a preconsultation meeting mid-2022. We anticipate having clarity on the next steps for this program during the formal consultation meeting with a development partner in the second half of 2022.

As discussed in previous quarters, we reported that the United States Food and Drug Administration, the FDA, granted orphan designation to CLBS12 as a treatment for Buerger's disease. Based on guidance from the FDA, we believe that a clinical program of some size and cost would be required for U.S. approval, especially since the FDA felt that the existing data out of Japan would not be representative of the Buerger's disease patients in the United States. That said, and as previously announced, we have decided not to pursue the development of CLBS12 in Buerger's disease in the United States at this time.

Turning now to XOWNA, CLBS16 for the treatment of coronary microvascular disease, CMD. Coronary microvascular disease, or CMD, it's a disease that continues to be under-diagnosed and potentially afflicts millions annually, a vast majority of whom are female with no current treatment options. In May of 2020, Caladrius announced the full data results from the Phase II ESCaPE-CMD trial at the Society for Cardiovascular Society for Cardiovascular Angiography and Interventions 2020 Scientific Sessions Virtual Conference showing a highly statistically significant improvement in coronary flow reserve correlating with symptom relief for patients with CMD after a single intracoronary injection of XOWNA.

Subsequently, the company initiated and is currently treating patients in a rigorous Phase II clinical trial known as the FREEDOM trial, which, to our knowledge, is the first regenerative medicine trial in CMD in the United States. The FREEDOM trial is a double-blind, randomized, placebo-controlled trial designed to assess the efficacy and safety of delivering autologous CD34 cells or XOWNA to subjects with coronary microvascular disease and without obstructive coronary artery disease.

Initially, investigator and potential subject response to the FREEDOM trial was favorable, and early enrollment in the trial proceeded as planned with the first patient treated in January of 2021. However, since the inception of the trial, new technology has been introduced and validated for the diagnosis of CMD. If these new technologies are not widely available, nor are they associated -- nor are the associated diagnostic parameters widely accepted.

Further compounding situation is the discontinuation by the manufacturer of the diagnostic equipment that was originally specified in the FREEDOM trial to qualify patients for the study. This complication, coupled with the impact of the COVID-19 pandemic in the United States, has contributed to a general slowing of enrollment that continues to this day.

Caladrius has taken steps to accelerate enrollment by expanding the number of participating investigational sites as well as modifying the study protocol to make study inclusion criteria more flexible. But despite these efforts, the company is unable to provide an accurate projection on when enrollment will be completed but anticipates the study to run into 2023, if continued as planned.

Final data from the study are expected approximately 6 months after the last patient's last visit in the study. Caladrius continues to monitor the progress of the study, and we will consider additional future protocol and/or execution changes as appropriate.

Lastly, our most recently proposed development plan, CLBS201 for the treatment of diabetic kidney disease, or DKD. The company initiated a Phase I open-label, proof-of-concept trial evaluating CLBS201, a CD34+ regenerative cell therapy investigational product for intrarenal artery administration in patients with diabetic kidney disease. The development program focuses on patients that exhibit rapidly progressing Stage 3b or 4 kidney disease. The scientific rationale for the program is based on the association of progressive kidney disease with attrition of the microcirculation of the kidney.

Preclinical studies in kidney disease and injury models have demonstrated that protection or replenishment of the microcirculation results in improved kidney function. However, proof-of-concept protocol provides for a staggered sequentially dose cohort of 6 patients, overseen by an independent data safety monitoring board, with the objective of determining the tolerance of intrarenal cell therapy injection in DKD patients, as well as the ability of CLBS201 to regenerate kidney function. A key readout of data will occur at the 6-month follow-up visit for all patients. The company anticipates the first patient to be treated in this study within the next several weeks with top line data from all subjects available by the first quarter of 2023.

Finally, as I mentioned on the last quarterly call, we are in the midst of a concerted effort to identify and secure an additional development asset or assets to complement our current portfolio of product development candidates. Fortunately, many of the members of the Caladrius' development and executive team have deep experience in the development of drug products across all development phases in many clinical indications as well as many therapeutic modalities. This breadth of development expertise allows us to consider many new product development candidates, including those not based on cell therapy and/or those focused on cardiovascular disease.

Based on the quality and wide range of available opportunities as well as the continued advancement of our existing portfolio, I am really excited about our prospects and see a very bright future ahead for Caladrius.

With that, I'll now turn the call over to Dave.

[David Mazzo, executive]

Thanks, Kristen. Overall, we are pleased with the corporate and development achievements we made in 2021. Unlike many life science companies of similar size and stage of development, we are financially sound and to date have generated and continue to generate positive clinical data in indications of high unmet medical need while also building out a team of highly and broadly qualified seasoned experts.

Although our share price has traded over the last 12-plus months in line with relevant indices and the stock market in general, we, and I'm sure all of you, continue to be frustrated by the lack of value recognition afforded our company beyond that of our balance sheet. As a result, while we continue to work to create shareholder value based on our existing development pipeline, we are really looking toward a broadening of our development portfolio to revitalize and significantly increase interest in our company, as indicated by our share price, as we advance all of our programs toward value inflection points in 2022 and beyond.

And with that, over to you, operator, we are now ready to take questions.

[Operator]

[Operator Instructions] Your first question comes from the line of Kumar Raja with Brookline Capital Markets.

[Kumaraguru Raja, analyst]

First, with regard to the strategic development options. You guys mentioned a little bit about the flexibility in terms of indications. But in terms of stage of development, how are you guys thinking about it? Is it more like late stage or Phase II or where you already have proof of concept? And also, where you are in terms of the time lines for licensing these assets?

[David Mazzo, executive]

Kumar, thanks very much for your questions, and thanks for being on the call today. So as it relates to the assets, we're looking at things quite broadly, but our strong preference is for assets that already have been and remain in the clinic. So ideally, they will have at least Phase I data, proof-of-concept data would be best, and are in the stages of development where the experiences of our team can add materially to the development plan for the rest of the activities leading to registration. So we're looking broadly, but clearly, we're preferring clinical assets.

As it relates to where we stand in the process, we've been -- as we've mentioned on this call, for quite some time, we've been at this for quite a while. There are many, many assets and actually companies available due to the financial volatility of the markets. And we've been looking at quite a few of them. In fact, we've looked at hundreds of assets over the course of the last 12-plus months. I would say that without being specific about timing, that I feel like we're zeroing in on a number of very attractive possibilities. And if things continue to go well, I'm hopeful that we can consummate a transaction perhaps sometime during the course of 2022.

[Operator]

Your next question comes from the line of Joe Pantginis with H.C. Wainwright.

[Unknown]

This is Lander on for Joe. So I wonder -- regarding HONEDRA, I wonder if you could -- I wonder if you're considering alternative avenues other than securing a partner in Japan.

[David Mazzo, executive]

So Lander, as it relates to HONEDRA, we're looking at it as a broad and opportunistic strategy as possible. We have been enrolling this program for quite some time. But as we mentioned on the last call, we've experienced approximately an 18-month delay due to the states of emergency in Japan and the inability during that time for studies like ours to enroll patients during the pandemic.

So we've, as Kristen mentioned, gone back to the PMDA, and we're in, I think, a collaborative discussion with them now about what the next steps could be and whether it's even required to enroll 4 more patients in the trial. Since this trial was never designed to be statistical in its analysis, it's really to look at trends, and certainly, we can establish strong trends with the data that we have. So depending upon what PMDA says, as it relates to the need for additional patients and how they view the data analysis that we will provide for them, we may be in a position to move the discussions with potential partners forward at a much more accelerated rate.

Clearly, we're looking for ways to monetize this asset to see value created from the good work that's been done in Japan over the last several years, and we'll continue to look broadly at ways to do so. But we are fairly convinced that spending more money that is Caladrius capital on additional work in Japan at this time is probably not to our benefit, and that we should focus on using the data that we've generated and the SAKIGAKE designation as a means to generate value for this program.

[Operator]

Your next question comes from the line of Pete Enderlin with MAZ Partners.

[Peter Enderlin, analyst]

The first one is just financially, what's likely to be the near-term trend of R&D with now lower spending for HONEDRA and with, of course, on the other hand, a fairly limited scale-up on the CKD program?

[David Mazzo, executive]

Pete, it's Dave. So as it relates to -- I mean, you've just said it yourself, we are -- we haven't provided specific guidance on exact R&D spending specifically because we're unable to predict the rate of enrollment for XOWNA at the moment, and that's the major R&D spend for the company for the rest of this year. But as you've already pointed out, we've essentially completed the capital spend on HONEDRA in Japan. And the DKD study is anticipated to cost in total only a few million dollars. So we would expect that we would be conserving capital as we continue to advance the programs according to the plan that we described today.

[Operator]

You have a follow-up question from the line of Kumar Raja.

[Kumaraguru Raja, analyst]

So with regard to the CMD program, maybe you can talk a little bit about the different factors and how you think when we will have clarity in terms of how the enrollment is going to proceed. Obviously, with regard to COVID, we are seeing like a lot of opening up, and most people are vaccinated. So when do you think we will get more clarity on how the enrollment is going to go? And in terms of the additional sites, what are you seeing there?

[David Mazzo, executive]

Again, thanks, Kumar, for your question. So the -- and I appreciate this because it gives me the opportunity to augment what Kristen has already said about the program and perhaps do so in more layman's terms. So we have several factors that have impacted enrollment in FREEDOM, all of which were unexpected. Of course, the first was COVID and the pandemic, and the fact that we had a Delta wave that seemed to be going away and everything seemed to fall back into place. And then we had an Omicron wave, and perhaps there'll be an Omicron BA.2 wave at some point or some other variant in the future.

The bigger issue, though, is not what people think. It's not so much that the pandemic has reduced the interest of patients, where their desire to come in to participate in the study. The bigger impact has been on the institutions, the hospitals themselves and staffing and their ability to provide clinical coordinators and facilities dedicated to clinical trials, while many other institutions have had to revert to handling largely unexpected waves of COVID patients.

So that's been really the issue. And we hope that, that will get better with time, but a lot of nurses and even physicians are a bit burned out, if you will, and clinical trials such as ours, which require the use of a catheter lab, interventional cardiologists, anesthesiologists, radiologists, coordinating nurses, et cetera, it's a very labor-intensive and they're more difficult to execute when staffing issues exist. So that's the first bit, and we hope that, that will get better, but I can't tell you exactly when it will get better.

The second bit has to do with the technology issues that Kristen referenced during her dialogue. When we started this study, there was really 1 principal technique that was utilized to diagnose CMD, at least as defined by many of the KOLs that helped us design our trial. And that technique was made by 1 specific provider. Just after we started the program, that supplier unexpectedly announced the discontinuation of that particular technology and instrumentation because they planned to introduce a new generation of CMD diagnostic tools. That new generation is not yet completely validated, not in the market. Certainly, it's not readily available.

So in the meantime, Kristen and her team had to seek other diagnostic means that were available to diagnose CMD. And they identified a number of varying techniques. So we've looked at Doppler techniques that measure coronary flow reserve. We've looked at PET, MRI and a number of other techniques. And we found that a variety of them exist, but there's not a generally accepted correlation for the various results that you get from these techniques that allows you to be certain that you're consistently enrolling the same population of patients. And so it's been a bit confounding to have to open up the enrollment of the trial to patients who are diagnosed by a variety of means of coronary flow reserve and still find ways to ensure that they're all part of the same population that we're trying to treat in a controlled clinical trial.

The other thing is that these techniques are not widely available. They're typically not available in smaller or community hospitals. They're only available in large teaching hospitals, and they're often very expensive. And so that's been another compounding factor. And we've made adjustments to the protocol to allow us to have greater flexibility for inclusion criteria but still maintain some level of control. But that's had an impact on the sites that are now available to treat patients because many of them don't have these technologies and also, the variety of -- excuse me, the interventionalists, who are willing to participate. Because many of them aren't trained on these technologies or aren't well coordinated with the radiology groups in the departments in order to make these kinds of things happen.

So for these reasons, and I realize this is a lot of operational detail, but I want people to understand the complexity, it's very difficult for us to make an accurate prediction about how enrollment is going to proceed over the course of the next several months. What we can say is what we've already said, which is that the team is looking at this literally on a daily basis, and proposing adjustments to the protocol that provide for the greatest flexibility of patient inclusion with the hope of seeing enrollment rates return to what were predicted as normal rates prior to the start of the study and the impact of the pandemic and these technology changes.

So I think we'll be in a position, maybe by the end of the summer, early fall, to give a much clearer indication about when things might be completed.

[Operator]

You have a follow-up question from the line of Pete Enderlin.

[Peter Enderlin, analyst]

Given that your stock is extremely depressed, and I understand that you want to maintain flexibility to pursue other assets and so on, but why not repurchase a little bit of the stock at about half of the cash alone of the company at this point? You would, thereby, increase the cash per share without having to use a lot of cash to do that.

[David Mazzo, executive]

Well, there are a couple of reasons why we don't do that. And I think it's atypical in general for biotech and biopharmaceutical companies of our size anyway to repurchase their own stock. We're development companies. And the best way to create value for our shareholders, we believe, is to develop things. And so it's better to spend that money on development opportunities than simply, what I would say, artificially trying to, by financial means, if you will, increase the share price.

In the end, our share price, as I mentioned in my opening remarks, is really a function of our cash balance at this point in time. Frustratingly, that's the case. So by repurchasing our own shares, I'm not sure that, that will change the overall valuation of us in the long run. If our market cap is a function of our cash balance, almost doesn't matter how many shares are outstanding.

Sure, the price per share could vary, but the overall value of the company isn't going to change. And our goal is to see the value of the company increase substantially. And we believe the best way for that to happen is to achieve value inflection milestones in attractive development programs, those that we have today and those that we hope to acquire in the future.

[Peter Enderlin, analyst]

Fair enough. Are there other people in queue or just about out of time? Or can I sneak in another one?

[David Mazzo, executive]

Go ahead and sneak in one, Pete. I'll give you a pass.

[Peter Enderlin, analyst]

When you talk about wanting to get more strings to your bow, so to speak, you mentioned either assets -- early clinical-stage programs or maybe possibly the company itself, a corporate entity. So is there any sense of which way you're more likely to go on that?

[David Mazzo, executive]

It's really going to depend on the situation. The reason I mentioned companies is because so many companies are single-asset companies. And so if you buy the asset or you try to buy the asset, you have to buy the whole company. Otherwise, they have nothing left, and so there's no point in them staying.

What we're trying to do is to find that needle in the haystack, that perfect match where either we can acquire an asset and just the asset or assets, or if we buy a company that the staffing and the additional things that come along with it are completely necessary and complementary to us. And as you can imagine, that's a difficult water to fill. But we've got our eyes on a couple of things that might actually fit the bill, and we'll see how the rest of the year unfolds as we continue our evaluations.

[Operator]

This concludes the question-and-answer portion of the presentation. And now I will turn the call back to Dr. Mazzo for closing remarks.

[David Mazzo, executive]

Well, again, thank you all for participating on today's call. We look forward to speaking with you again during our next quarterly conference call and to continuing to provide updates on our achievements and progress. We remain grateful for your continued interest in and support of Caladrius Biosciences. Please stay well, and have a good evening. Thank you, and good night.

[Operator]

Ladies and gentlemen, this concludes today's conference call. We thank you for your participation. You may now disconnect.