Ladies and gentlemen, thank you for standing by and welcome to the Mace Security International Q2 2022 earnings call. Currently, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. If you would like to ask a question during today's call, please press star one on your telephone keypad. Please be advised that today's conference is being recorded. Mace has provided instructions to access this recording in their press release. I would now like to hand over the conference to your first speaker for today, Mark O'Connor. Thank you. Please go ahead, Mr. O'Connor. Thank you. Thank you, Caroline, and good morning, everyone. Joining me on the call today is Sanjay Singh, the Chairman and Chief Executive Officer of Mace. Please visit corp.mace.com under Newsroom, where you can find additional materials, including the financial statement and OTCQX report for the Q2 ending June 30, 2022, as well as our Q2 financial review presentation. Before proceeding, I would like to point out that certain statements and information during the conference call will constitute forward-looking statements and based on management's expectations and information currently in the possession of management. When used during our conference call, the words or phrases such as will likely result, are expected to, will continue, is anticipated, estimated, projected, and intended to, or similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks, known or unknown, and uncertainties, including but not limited to economic conditions, limited capital resources, and disruptions in domestic and international supply chains. Such factors could materially adversely affect Mace's financial performance. It could cause Mace actual results for future periods to differ materially from any opinions or statements expressed during this call. I will now turn the call over to Sanjay for some comments about the quarter. Thanks, Mark. Good morning, everyone. The Q2 continued to be very challenging as expected. Our top line revenues continue to trend lower than prior year, although the orders are starting to trend upwards when compared to the prior months. An inflationary environment along with a slowing economy has a direct impact on the spending habits of our customer base. When more discretionary income is needed to pay for basic necessities, it reduces the spend available for impulse purchases such as Mace products at retail locations. The orders from our larger price-sensitive customers have been slower to date, but we are beginning to see an uptick in current orders from our other retailers compared to the last two quarters. We initiated a restructuring in Q2 of this year. This involved cost reductions and a targeted working capital reduction. Those plans and actions have been completed as of June thirtieth. This resulted in a break-even adjusted EBITDA in the month of June 2022. While this by itself is not an accomplishment, we're now moving in the right direction. We also landed two new retailers that is worth an incremental annual revenues of $1.8 million-$2.3 million. We will begin to see orders from these retailers in the back half of this year. Our international sales continue to be higher than last year, mitigating some of the decreases from the retail segment. Our Q2 order performance on mace.com is encouraging as we were up 27% versus last year and 23% when compared to Q1 of 2022. We launched an inside sales effort last quarter. This enabled the company to identify significant opportunities within our base business segment and increase conversions into orders. New B2B opportunities were also identified and are being pursued by our sales team. Last quarter, we mentioned a new line of business that we were targeting to launch at the end of Q2. That launch is slightly delayed because of transitions in our leadership team, but we are targeting a launch in the Q3. We are also working on several co-branding opportunities and expect to formalize agreements in Q3 and Q4. The company's focus continues to be on the following items. Operating to a positive adjusted EBITDA, conversion of new business, including retailers, promoting both our new products to the base business while delivering on our operating efficiencies. I will now turn the call over to Mark to comment on the Q2 2022 financial results. Thank you, Sanjay. Our Q2 net sales were $2 million, a 42% decrease from $3.4 million for our Q2 sales of 2021. Retail sales were off 60%. They were down across all sectors of our retail customers as point-of-sale traffic remained slow. Our e-commerce sales were down 33% in the Q2. We knew that the Q1 of this year was going to be challenging with the inflationary headwinds. Last year, we came into the Q2 still with a second significant order backlog coming out of 2020, resulting in similar sales in quarter two 2021 as in quarter two 2020. We do not have the same level of backlog heading into the Q2 of 2022. Gross profit in the Q2 decreased $539,000 or 41% from our Q2 2021 results. Our margin rate, however, was 40%, up 1 point from 39% rate we achieved in the same quarter of 2021. We received this margin rate increase despite a 42% lower sales volume. We have strongly curtailed our costs and driven up margins through pricing and cost controls. We continue to deal with increases in transportation costs, which negatively impacted us 1.4% in margin. We are seeing component cost increases as well. SG&A expenses for the Q2 decreased by $23,000 to $1.2 million, or 59% of net sales. We have increased our online advertising spend and have generating over 3 times the return on advertising spend. Additionally, our legal fees were up nearly fourfold quarter-over-quarter as we have been addressing the unsolicited interest of a potential buyer and commenced a process to explore and evaluate potential strategies, strategic alternatives for our company. We continue to invest in new product development. Our second new product, the Pocket Hero, was launched by the end of the Q2. We had a reduction in outside sales commissions, but that was directly correlated to the reduction in sales. Salaries and related benefit costs were down in the Q2 of 2022 compared with the same period in 2021 due to the company optimizing its headcount. Our lower sales volume and higher legal costs resulted in a net loss for the quarter of $452 thousand, which was down from our net income of $702 thousand in the Q2 of 2021. Last year's Q2 net income benefited by a $625 thousand gain on forgiveness for our PPP loan. Q2 adjusted EBITDA was a loss of $116 thousand, down $350 thousand from the $234 thousand we had generated in the Q2 of 2021. Adversely, the lower sales volume dropped right to the EBITDA line along with the incremental legal costs, but likewise, as sales climb, it will translate into a quick rise in the EBITDA. We experienced an increase in our borrowing position in the Q2. With this slight change in rates, we had inventory orders that were in process and could not be held without a financial cost or inflation of future inventory order fulfillment. As such, we currently have a lot of our cash tied up in convertible and sellable inventory. 40% of our inventory is finished goods. We have manufactured and assembled products for our typically high-volume movers and have been utilizing targeted promotion for our slower movers and higher inventory positions. In an unusual manner, the supply chain challenges due to our higher inventory levels have better positioned us for a timely order fulfillment and as the selling season ramps up. We have successfully scaled back future purchase orders and we fully expect to begin monetizing our inventory position. I will now turn the call back to Sanjay for additional comments before we take questions. Thank you, Mark. Again, none of us at Mace are happy with the financial results of this quarter, although we are encouraged by the fact that the business has been restructured and we are now operating to an adjusted positive EBITDA. We launched the Pocket Hero at the end of Q2 and have received strong orders from the retailer and mace.com. We are excited to bring our former chairman, Richard Barone, back to Mace's board. His advice on our strategic alternatives project will be very useful. A quick reminder, we will not address or respond to any questions pertaining to the strategic alternative process. The company has retained financial and legal advisors to assist with this process. At this time, I will stop and open the lines for questions. I would ask each caller to limit themselves to one question with one follow-up to allow everyone a chance to participate. If we have additional time, we'll try to get you back into the queue. Caroline, please open the line for questions. Sure. Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, please press star one to ask a question. We will take our first question from the line, Andrew Shapiro from Lawndale Capital Management. The line is open now. Please go ahead. Hi. Thank you. I have to leave this call early, so if you wouldn't mind and give me the flexibility to get three in here, I'd appreciate it. First, these questions are regarding the revenues. You mentioned anticipated orders from a new retailer who last quarter you had said had maybe 36,000 locations, and this release has the potential to add incremental. In your release you said had the potential to add incremental annual gross revenues of $1.5-$2 million. Have any orders been received to date? What leads you to believe, and thus us shareholders to believe, the orders are going to arrive? Andrew, I'll answer that. We have not received any orders yet. The orders are supposed to start this month. I was on a call with the senior vice president, and for the last six weeks, as is typical with a lot of retailers, we've been doing testing on the EDI. That testing is almost done. I think there's just one final test. We had a call on Friday, so we should be squared away this week, and we should start seeing orders from them this month. Which would result in a timing of fulfillment and booking as revenues by when? I mean, the initial booking of revenues. Typically, these retailers ask for about a 30-day lead time, anywhere from 3-4 weeks, depending on the retailer. We expect it this quarter. We already know of specific requirements from an ordering perspective for the Q4, but this, we'll see orders in the Q3 as well. Okay. In June, you announced a new partnership with Mid-States Distributing and its very large network of farm retailers. Did Q2 contain any orders and sales to any of these retailers yet? Here we are halfway through or a third through the current quarter. Have you seen such in the first half of this current Q3 yet? What is the momentum? We saw, yeah, they've been placing orders. It started in late Q2 and we anticipate seeing more orders in the back half from them. Okay. In your slides and your press release, you referred to several revenue-generating co-branding initiatives which will be rolled out in the current Q3. With this quarter again almost half completed, can you give a little more color and detail on some of these initiatives that you can share with us? What I can share is that we have received inquiries from several folks who've come up with you know product personal safety design products, and we vet them out. We get a lot of inquiries. We've been vetting these out, and as they're being vetted out, we have come up with an economic model. Because of our financial situation, it became very clear to us that you know we couldn't really invest a significant amount of funds in R&D, and given the lead times in coming out with new products, we elected to go down this strategy. There are three at the moment that we have an internal pro forma P&L and a marketing plan, and we just need to work through the agreements to get it all signed off. There are a couple more, that are in the pipeline. Great. Thanks. I'll back out in the queue, and hopefully I'll still be around here to be able to come back in. Thank you. We will take our next question from the line, Howard Rosencrans from Value Advisory. The line is open now. Please go ahead. Thank you. Hi, guys. Thank you. I'll remind you that 1 or 2 years ago, you came out with a slew of announcements regarding your retail presence. You had signed up 1 or 2 new national retailers. I'm gonna say it was 21 or 20. They were gonna really contribute in the second half, and you were gonna get more hooks, and you had bear spray and this and that and the other thing. All the sales did or went south, which one would suggest really just speaks to the fact that it's. I won't say the fact, but one could speculate that the only time people buy the product is when there is social unrest. Now we've saturated that and, you know, who knows? If I'm a retailer, I can't imagine possibly doing. I mean, they're not your only retailer with 6,000 stores. I can't imagine possibly doing a couple million dollars in sales. It just sounds, you know. They're gonna have to do $3-4 million in sales for you to do $1-2 million. For you to do $2 million in sales, they do $4 million at retail. It just doesn't sound remotely possible given the track record. Howard, you made a good point about what we have said in the past. I'll just go point by point. Those additional hooks in 2021 that we were highlighting, those didn't happen. Those didn't happen in 2021. It didn't happen in Q1. Two happened in Q2, Mid-States and this other big retailer. We have a target list of $14 million that our new sales manager has come up with. He's a retail expert, and so we're targeting those, that's in our pipeline. In terms of pepper spray being saturated during the social unrest, yes, it did. It went from an impulse purchase to a definitive event driven demand. Just given the number of shootings and the concerns around personal safety, based on the retailers and the reps that we have been talking to, there is a rigorous inquiry around personal safety non-lethal options. We are hearing about it from, you know, schools, retailers, hospitals, hotels. This idea around personal safety has sort of moved up in people's cognitive thinking. It may have been, relatively speaking, much less so maybe two years ago. Forgetting the couple of hooks, didn't you add a major retailer or two in, that was supposed to be a major contributor in 2021? It was this very retailer that we added in Q2, the one with 6,000 locations. That is the one that we had highlighted, but then there was a change in their buyers, and so we had to see it through again this year. You never did add a major retailer. This is the same retailer that you've been alluding to, that you alluded to. It must have been 18 months ago. We did allude to that. We added Cornwell Quality Tools as well in the Q1 of 2022. Now we've added three in 2022. Okay. I have no idea who Cornwell is. If we could just put it in context. How big are these? I guess I can't ask a more defined question. That's okay. All righty. Hats off for improving the solid gross margin despite the horrid sales and for being able to reduce your internal costs. I guess we'll have to hope for the best and it's, I don't know, one way or another, if you haven't, this is the only question I'll ask you about the third party sort of stuff. Is it fair to say that one way or another, by the end of the calendar year, we'll either get something done or we'll move on, or we'll try to make a goal within ourselves? I mean, the reality is that nobody else can really. Andrew Shapiro gave me an education on this. Nobody else can really utilize your NOL meaningfully. That's about the only asset you got. I mean, the core business, we can talk about the global brand until we're blue in the face. This is a business that started in 1990. Thirty-two years later, you're doing, you know, $8 million run rate. We can talk about what a powerful brand you have all day, but the reality is the most alluring thing we have now is all the money you've lost. You know, to sell to somebody else who can't capitalize on our NOL, you know, if you guys are gonna actually turn it around, just doesn't seem so prudent because I know the business itself can't be worth very much money. You know, we've demonstrated that over the years from wherever the stock was trading 100 years ago to, you know, it's been one straight line down and nobody ever showed any interest. The core business can't be worth very much, I mean. I don't know. If the next four or five months we can't do something, are we gonna call it a day and try to capitalize on what I see as your only legit asset? I mean, you guys seem to wanna talk about more optimism, sales going up and da-da-da-ta-da. If you're gonna be able to do this and make this a meaningfully profitable business, why would we look to, you know. Why would we gonna sell out at, you know, $0.40, which makes this. Which would give you ostensibly a market value of, I don't know, $30 million or something? Whereas, you know, you could. If you're gonna turn it around and start making money, then it's gonna be worth more than $30-$40 million. Howard, the strategic review process, you know, continues. The idea was, at the beginning of Q2, to turn the company around. That is somewhat of an internal focus. That has been the play. Again, our Q2 results were not the best, although we were at breakeven for June. Again, that is also not a major accomplishment. The trend has been reversed and we're focusing on the business. That's why we brought in a retail expert to cure our sales problem. We are, as you rightfully said, we are very small and, you know, we're meaningfully looking at landing a few more retailers. I mean, the strategy is to land 3-4 new retailers every year at a minimum, and then continue to grow the direct-to-consumer business, which is growing at a double-digit rate and, you know, get the company back to profitability. If a buyer comes along and is interested, and it's a very good play, of course, we'll look at it. I hope that answers your question. I appreciate the color. Thank you and good luck. Yeah, thank you. Thank you. We will take our next question from the line, Andrew Shapiro from Lawndale Capital Management. The line is open now. Please go ahead. Thank you. Hi. While inventory levels came down slightly from last quarter end, they remain more than elevated. With further substantial conversion of raw materials into finished goods this quarter, how much of the quarter end inventory is against known existing orders? And has some of that already shipped in this quarter so far, and we can expect the inventory level by the end of the quarter to be down? Andrew, it'll take a few quarters for the inventory to come down because you know, our inventory went up significantly in 2021, you know, planning for a you know, very robust year. We started seeing a slowdown midway through that. You're not gonna see that in Q3 in a very meaningful fashion. Although our incoming inventory is highly targeted to a working capital forecast. We are very focused on reducing our overall working capital. Great. Thank you. Thank you. We will take our next question from line Ken Field from Field Capital Management. Thank you. Hey, Sanjay. Hey, Mark. How are you guys doing today? Fine. Thank you for asking. Thanks, Ken. Sanjay, last quarter, I asked a question about you guys highlighting a new product line of business to be evaluated by the end of Q2. Can you elaborate any further on that, Sanjay, now that Q2 is over? Yeah, that's what I had mentioned in the script, in case you missed it. Our intention was to launch that in Q2. That didn't happen. We are in the throes of you know negotiating the agreement and coming up with the content that is gonna drive that business. We expect to launch in Q3. It's gonna launch in Q3. Okay. Wonderful. Wonderful. Yeah. Some of the new products, can we talk about Chameleon? With now a full quarter of Chameleon, can you comment on the experience with this product in your e-commerce channel? It doesn't seem to be so prominent on Amazon. Are you getting much sales traction on it? Where else is Chameleon being offered in the e-commerce channel? Chameleon is being offered on Seller Central, which is our store on Amazon. It's also offered to our base business, and also on mace.com. It has received some traction. It's decent. It's not great. Primarily, the primary reason why you're not seeing it on Amazon Seller Central is because we've had to curtail some of our advertising to only those SKUs that drive a significant return on advertising spend. We're promoting it through mace.com and to our base business. It has also been presented to some of the new retailers that we're looking at. The Pocket Hero, though, that has generated a lot of demand both online and a lot of interest from other retailers as well. Great. Well, I guess I'll pop back under the queue and give somebody else a chance. Thank you. We will take our next question from line Howard Rosencrans from Value Advisory. Hi, guys. Quick follow-up. I guess I was discouraged by the, you know, it's not a point of purchase if somebody's going online to buy. The precipitous falloff in e-commerce was, you know, this was the great part of your business, and your. It was gonna work, and it was doing so well. Now in the quarter was off 33% on the e-com? That is the majority of that is Amazon, which is a proxy for, you know, price sensitive customers. We started seeing a falloff in ad views and with the ranking of the current pepper spray in Q4, late Q3, Q4. It has since started bouncing back, but it wasn't reflected in our shipment number, in our revenue number in Q2. It is still not back to where it was at its peak, which was in the July timeframe. That's when it peaked. If you look at our deck, what you'll find is that our sales to Amazon went from about $1 million to a $5 million run rate by July 2021, and then it dipped back down again slightly. I mean, as you said, 33%. Okay. You know, Mace direct sales are not particularly meaningful. E-com is really an Amazon thing. E-com is mainly an Amazon thing. mace.com is meaningful because of its, you know, contribution to EBITDA is, you know, significantly higher than from other channels. Like 2x higher. That is also very much driven by ad spend, which, you know, we've had to curtail. There's a balance between your ad spend and your return on advertising spend, and it's a constant battle to balance the two. The short answer to your question is mace.com is not like it's, you know, the major driver in e-commerce. It is Amazon. Okay. Thank you very much. Thank you. We will take the next question from line, Ken Till from Sail Capital Management. The line is open now. Please go ahead. Thanks, Sanjay. Just, you were saying that the Pocket Hero is doing really well, so it must have done pretty darn good on your site, the test site at mace.com. You also talked about an initial retailer as of last quarter that was going to give you substantial orders. Can you now reveal who that substantial retailer is? Yes, it's AutoZone. Yeah, they placed an order before. Yeah, it was AutoZone. They placed an order before we had released the product. Great. Are some of those revenues maybe in Q2, or is it more a Q3 thing going forward? Q3. Okay. Wonderful. Back to the Chameleon. Have you made any replacement canister sales yet? I'm interested in that. No. No. Okay. We have not. I think one of the bright spots of this Q2 was international sales. Really nice numbers there. What drove some of those numbers? Was it more the civil unrest that they seem to be having there, or was it maybe greater penetration in some of your dealers? What was the driver? Yes, a couple of things. One was, you know, international sales that kinda dried up, if you remember, in 2021 and during COVID in 2020. Relatively speaking, just a lot of limitations around freight and, those kinds of challenges. Some of it was that, but the other part of what is driving the growth is that we purposefully drove, you know, a lot more calling and contacting, some of our international prospects. We made it a lot more focused, just given what we were seeing with, you know, the retail slowdown. Some of it was that. There is generally, you know, you look at certain countries where we've never done business, like Trinidad. They have expressed interest in our pepper sprays because pepper sprays become legal there. Same in Europe and other countries. In fact, some of the foreign countries want their flags in the Chameleon. They've inquired about it. Great. Do you think that, the Q2 run rate, we can kinda count on that, going forward or even better? We are counting on the run rate. Based on what we are seeing, yeah, international revenues are a big part of our overall strategy. We're seeing a lot of interest in non-lethal sprays. Great. I will step back into the queue, and let's give somebody else a chance. Thank you. We will take our next question from line, Robert King from Advance Can Tech. The line is open now. Please go ahead. Hello. Glad to see that you're doing well in the international market. I've been a longtime stockholder of Mace. Where do you feel your costs are with respect to your competition? Hello? Yeah. Our manufacturing costs are probably in line with our competitors, the ones who actually make the sprays in their facilities. I think our costs on the SG&A side are probably higher, mostly because of the public company expense. I mean, in the last quarter, we have restructured our SG&A cost quite a bit. I think there's still some room to, you know, just being a public company, expenses are a lot higher. Our insurance is a lot higher. Well, one of your competitors is also a public company, SABRE, right? SABRE is not public, no. Yeah, they are. You can buy their stock and they are a public company. The reason I mention it is I have watched how the products are on Amazon, okay? There are many products on Amazon. You have continued to go downhill regarding Amazon. Many competitors, and that was why I was asking the question about your cost. Also, maybe it goes back to inventory. Many of the prices on Amazon, such as the SABRE products, their costs have been cut because they also have some inventory problems. On Amazon, we are mostly a vendor, which is a vendor-centric platform. We do have a seller-centric platform as well, which is our store, but most of our revenues come from being a supplier to Amazon, and they control the price, so are the others, so are folks like SABRE and some of our other competitors. Right. I think there was a comment earlier about, once again, Mace has had a good brand for a long time. Many of the newer products have little or no brand. I'm not sure you're taking total advantage of your brand. I agree that's been a problem in the past. I think we have, you know, the last 4 or 5 years, the company has certainly spent a lot of money promoting the brand, the content, the blog content, the educational content, videos. I think historically, the company has, you know, been a bit undercapitalized to spend a lot of money on marketing, so it's been a little constrained. I agree with your overall comment that that's where we need to continue to have that focus of promoting the brand. Maybe you can do that more effectively now in your international market where you're beginning to have some growth. I agree. Okay. Well, thank you, and looking forward to some progress. Once again, I've been a long time stockholder and all I've seen, as it was mentioned before, is a very big downward slide. I will allow someone else to ask a question. Thank you. Thank you. We will take our next question from line, Howard Rosencrans from Value Advisory. The line is open now. Please go ahead. Thank you. You mentioned something about, I guess I'm confused on international. I was pretty sure you guys were ostensibly pulling out of international a year ago. Did you flip the switch on something there? We did. At that time, I think this goes back probably about 18 months ago. You know, being a small company in terms of allocating focus and resources, our main focus was in North America. When it started slowing down and we started seeing renewed interest, we went after it. Okay. I'm not sure if you said this in the call. Can you size the international business for us? I'm sorry. Could you repeat that question, Howard? I apologize if you said this on the call or if you broke it out in your press release. Could you tell us the size of your international business, please? Rem, do you have the numbers in front of you? As I said, I apologize. Third time. I apologize if you have it in the press release or if you said it in the conference call. Could you tell me what the international sales were in the quarter, please? International sales in Q2 were $73,000. International sales for the year to date, June thirtieth, were $437,000. There was a precipitous fall off between Q1 and Q2 in international sales, if I heard the gentleman correctly? Well, you heard him correctly, but we have several orders still sitting on our dock that have not gone out because we're waiting on their freight forwarders. There is a major freight, you know, issue with international shipments. What he explained was what we actually shipped. We have probably $100,000 or so that still needs to go out. I forget the exact number. They usually pay up front. They pay in advance. Rem, could you also share the 2021 numbers for the first half? $144,000 for the first half. Okay. It's certainly a good comparison. Great. Okay. Thank you very much. Thank you. Thank you. We'll take our next question from line Ken Phil from Phil Capital Management. The line is open now. Please go ahead. A couple follow-ups, Sanjay. With the Pocket Hero and the AutoZone, do you have any visibility on the sell-through yet for Q3? We don't. I mean, those shipments just took place in the last week, last two weeks, actually. They just went out. Okay. When we get weekly reports, we'll be looking for. Yeah, that seems to be a pretty exciting product. Looking forward to that for sure. I agree. The second new product that moves to Q3, do you have any other color on what this product is or maybe what vertical it addresses? Are you talking about the Chameleon or the Twist Lock? No. There was a product that was moved, a new product that was Oh. Moved from Q2 to three. Yes, yes. Yes. I can't really talk about it. It does solve a significant problem in our segment. I'll just leave it at that. If I went any further, I think you would. I'd be providing more details than I probably should be at the moment. Okay, great. On past conference calls, I've asked questions about price increases, and I believe the response was most of the price increases come in Q1. So were all these price increases, new price increases implemented in Q1 or did you implement additional increases in Q2, and what was the timing of these increases during Q2? It was all in Q1, Ken. Okay. Only international was increased in Q2. Those were just released. It's not even baked in our Q2 numbers yet. Okay. Any price increases basically happened in Q1? Right. Okay. Thank you. We'll take our next. You can still hear me? Hello? We can still hear you. It's just I'll fall back into the queue in case there's somebody else in there. Okay. Thank you. We will take our next question from Mark Greenberg. The line is open now. Please go ahead. Thank you very much. I believe it was Howard who inquired about the horizon line for the strategic alternative review process, how long that may be undergoing review. I was curious about a reference earlier to an escalation in legal fees, how much of that may be related to the strategic alternative review process, and how much longer do you think that will continue to be a drain on the company? Thank you. Thank you, Mark. The majority of legal fees that Mark O'Connor reported was related to the project. We don't expect to have that kind of a spend. Certainly at that level, we don't anticipate that. We are still working the strategic review process and realistically, I would think that we should have some kind of a resolution by year-end. We were not working to a formal timeline, though. Okay, thank you. Yeah. Thank you. Thank you. We will take our next question from Howard Rosencrans from Value Advisory. The line is open now, please go ahead. Hi guys. A couple quick questions. First of all, on the press release, the gentleman's name, Mark's name I guess, or Mark's name. I don't have it in front of me. That looks like there's an apostrophe in his email address. I assume that's just a typo. No, sir. We created fully correctly. We co-ex-designed two ghosts with just Mark O'Connor with an ER and Mark O'Connor with an OR, because sometimes people misspell it, and we just tried to build in options in case they needed to reach me. Okay. I just thought there was an apostrophe in. That's correct. There's an apostrophe in the email address. Okay. All right. Yeah. Okay, let me just ask a couple more substantive questions. The NOL utilization that I alluded to before, could you achieve 100% utilization if you put it out as a royalty? Do you have any thoughts in that regard to licensing of your brands? Would that allow you to utilize the NOL? Do you have any ideas along that front? Don't know, Howard. That's a great question. Actually, it was raised by one of our board members. We'll have to look into that. Okay. A different question. Sanjay mentioned in May on the Q1 call that part of an inside sales team was calling all the historical base business and in effect cleaning up the Mace customer database, was a big project and would be able to be scaled back or redirected. Have you finished the scaling of the inside sales team, or redirected this team in any other direction? Have you seen efficiencies kick in as a function of that? The project is complete. We probably touched those customers on average 5-6 times. We got very valuable insight, whether it was, you know, folks in our database that were not doing business anymore or they were out of the non-lethal space, or they were very interested in our business and wanted our catalogs and placed orders. We also were able to clean up the contact info and get that input as well. Those folks now have been redirected to a different initiative so that we can enable conversions. Okay. The allowance for doubtful accounts, is the increased quarterly receivable reserving primarily to a single customer? Or are the reserves, is that at a single customer or a whole class of customers? It looks like the reserve has gone from about 20% in the September quarter to what looks like about 30% in this June quarter. Rem, can you take that? Sure. The reserve applies to a whole number of customers. We calculate a reserve based on the aging of receivables to be conservative. We are pursuing these receivables with those customers. Everyone has their hurdles and hoops that one has to meet, shipment or proof of shipment. Again, it applies to many customers. Okay, great. Just one question that I really should know the answer to. My apologies. Are you booking sales based on sell-through or do you adjust your sales in the quarter based on if the products are not selling through and you're anticipating getting them kicked back or if you anticipate the retailer asking for a discount so they can dump the product at retail or how are you recognizing sales? We recognize sales based on shipments and the transactions. Okay. It's just on sell in. Right. It's just on sell-in. At this juncture, you feel like at this juncture you already indicated a marked uptick in orders, I believe. Did you say they were up 28% or something year-over-year or Q2Q or? No, that statement is not correct. What I said is our e-commerce is up. Mace.com is up. I see. Specifically mace.com. Amazon is up quarter-over-quarter. The overall orders are up slightly quarter-over-quarter. Okay, great. Thank you so much. Thank you. Caroline, I think we're at a bit over the noon mark. We should conclude the Q&A now. Sure, we will conclude the Q&A now. Thank you very much.